Axis Mutual Fund has launched the Axis Dynamic Equity Fund, an open-ended equity scheme which will use a systematic rule-based model to dynamically adjust its equity allocation over time. The scheme will open for subscription on July 11 and close on July 25.

The fund house is targeting to collect ₹1,000-1,500 crore.

Traditional equity funds tend to remain fully invested across market cycles and have delivered great returns over the long term. However, equity markets are cyclical in nature and exhibit intermittent episodes of market fluctuations leading to sharp fall in returns. Consequently, many investors tend to redeem or stop investing during challenging market periods and subsequently miss out on the long-term benefits, said Axis MF.

In fact, according to a study by the fund house conducted during 2003-16, investors lost out on 6.3 per cent of returns a year compared to the average returns of equity funds over this period. It took two years for the fund house to get SEBI approval for the new fund offering.

Chandresh Kumar Nigam, MD, Axis AMC, said the investment principles of the new fund offering have already been tested and followed by the fund house for the last five years and these has consistently delivered.

Cautioning investors not to compare the new fund with balanced fund, he said at any given point in time it will invest up to 65 per cent in equity and related products and the remaining in short-term debt schemes.

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