Everything you need to know about the all new Axis Nifty500 Quality 50 Index Fund

Whether you’re building your home or portfolio, one thing we all look for is: Quality. In a home, it’s the strength of the cement, the durability of the bricks, the reliability of the paint. In investments, quality plays the same role. Axis Nifty500 Quality 50 Index Fund offers investors a structured way to include such quality to construct their investment portfolios.

What is Axis Nifty500 Quality 50 Index Fund?
This fund aims to match the performance of the Nifty500 Quality 50 TRI index. In simple words, this fund tracks and invests in top 50 “quality” companies ranked on the basis of “quality score” from the Nifty 500 universe.

The score is calculated based on metrics like:

• Return on Equity (ROE): Measures how efficiently the business is using its capital for generating profits.
• Debt to Equity ratio: Lower borrowings usually indicates better stability.
• Earnings Growth Stability: Profit growth consistency over the last few years.

Only companies with the highest quality scores across such measures make it into the portfolio.

Key Features of the fund:

• Top 50 Quality Stocks: Passive fund with easy access to top 50 quality stocks lowering human and emotional bias in stock selection.
• Diversification: The mix of companies is spread across various sectors such as Industrials, Financial Services, IT, FMCG, Energy and other sectors
• Low-Cost: Lower expenses compared to active funds.
• Historical outperformance: Nifty 500 Quality 50 TRI had a CAGR of 15.6% compared to 12.1% of Nifty 50 TRI in the last 15 years.

Why Invest Axis Nifty500 Quality 50 Index Fund?

Investors often face the challenge of tracking and choosing from 100s of companies across the Nifty 500 universe leading to difficulty in understanding their financial reports, news, industry updates and take quick decisions. Axis Nifty500 Quality 50 Index Fund helps investors manage these by:

• Systematic & Transparent Selection: Rule-based index methodology ensures stock selection is consistent and objective.

• Flexicap Investment: This index invests in 50 high-quality companies, selected based on quality scores and spread across all market capitalizations—large, mid, and small caps.

• Lower volatility to Nifty 50: The Nifty500 Quality 50 Index has been less volatile (15.1%) than the Nifty 50 Index (16.6%) over the past 15 years.

• Manage bear market downside: Quality businesses across market caps are more likely to survive economic downturns and recover faster when markets stabilize.

• Convenient: Provides easy equity market exposure without the need for investors to have or gain stock-picking or research expertise

Who should invest in the NFO?

The fund is suitable for:

• Long term investment horizon: Investors who are seeking long-term equity exposure with a focus on financially strong companies.

• Passive investment: Investors who are looking for a passive, low-cost investment strategy.

• New investors: New investors looking to simplify investing while starting their investment journey and are looking for exposure to high-quality companies across market caps.

• Portfolio balance: Investors aiming for better downside protection during market volatility.

Conclusion

Investment is a long-term commitment, often going through its own ups and downs. Times of turmoil require a clear rule-based process for your investments with focus on proven fundamentals and a track record of resilience. Axis Nifty500 Quality 50 Index Fund aims to deliver a balance of growth potential and stability to investors who value a transparent and cost- efficient index fund.

Statutory Details: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.

This article represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

NSE Disclaimer: The scheme is not sponsored, endorsed, sold or promoted by NSE INDICES LIMITED. NSE Indices Limited does not make any representation or warranty, express or implied, to the owners of the scheme or any member of the public regarding the advisability of investing in securities generally or in the Product(s) particularly or the ability of the underlying index to track general stock market performance in India. NSE INDICES LIMITED does not have any obligation to take the needs of the Issuer or the owners of the Product(s) into consideration in determining, composing or calculating the Nifty IT TRI . NSE INDICES LIMITED is not responsible for or has participated in the determination of the timing of, prices at, or quantities of the Product(s) to be issued or in the determination or calculation of the equation by which the Product(s) is to be converted into cash. NSE INDICES LIMITED do not guarantee the accuracy and/or the completeness of the underlying index or any data included therein and NSE INDICES LIMITED shall not have any responsibility or liability for any errors, omissions, or interruptions therein. For complete disclaimer, refer to the SID.

The fund manager(s) may or may not choose to hold the stock mentioned, from time to time. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s).

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.