Axis Mutual Fund launches IT-focused exchange traded fund

Axis Mutual Fund on Wednesday launched an exchange-traded fund focused on technology stocks.

The new fund, Axis Technology ETF, opens on Thursday and closes on March 23. It will track the Nifty IT index, and offers investors an opportunity to invest in the biggest IT companies, the fund house said.

It said globally, passive funds have been the fastest growing investment segment over the past several years as investors have warmed up to their simplicity and low cost-efficient structures.

Passive investing has been gaining ground over the last few years in the domestic market as well, primarily due to wider participation of retirement trusts and greater investor awareness and maturity.

Passive funds are essentially designed to track the performance of an index by replicating the portfolio of the underlying index.

The new fund is designed in a manner that it tracks the performance of the Nifty IT index, tracking the 10 largest IT companies by free float market capitalization.

On the rationale for choosing the IT sector, the fund house noted that the sector plays a major role in the economy being the largest services exporter.

Also, the Nifty IT index has been a long-term wealth creator outperforming the Nifty over the long term, Axis AMC head Chandresh Kumar Nigam said.