Axis Mutual Fund launches new consumption ETF, targets Rs 25 crore

Axis Mutual Fund on Monday launched a consumption ETF (exchange-traded fund) with a target to raise Rs 25 crore.

The new open-ended ETF, tracking Nifty consumption index stocks, opened on Monday and closes on September 13. It allows exposure to the consumption theme in a neatly packed bite-sized ETF.

Given that this is a specialised product, we are looking at a boutique launch and to grow it organically over time. We expect to collect around Rs 25 crore from the fund, Raghav Iyengar, the chief business officer at the fund house told PTI.

The new fund offers long-term wealth creation solutions and targets to achieve returns by investing in a basket of Nifty consumption index stocks, the fund house said.

A key beneficiary in the overall economic growth is consumption, as the country is the largest growth prospect for a consumption economy after China. As median incomes rise, the expenditure pie for families are likely to increasingly pivot to discretionary spending, which includes entertainment, travel, consumer appliances and even property, it added.

This has already resulted in significant growth in many B2C businesses across a variety of sectors. An indicator of this performance is the Nifty consumption index which comprises a diversified grouping of the largest consumption-oriented companies across sectors like consumer non-durables, healthcare, auto, telecom services, pharma, hotels, media & entertainment etc.

The two most popular vehicles for passive investing are index funds and exchange-traded funds. Apart from being cost-effective, ETFs let investors invest at real-time prices as opposed to end of day prices by sector funds, thus help protect their investments from the inflows and outflows of short-term investors.

Chandresh Nigam, managing director and chief executive of Axis AMC, said, with the launch of the Axis consumption ETF, we aim to provide our consumers with an investment option that has proof of growth and strong returns.