Axis Mutual Fund is launching its first goal-based investment plans with the Axis Children’s Gift Fund. Investments can only be made for a minor, represented by a parent or a legal guardian.

The NFO opens on November 18 and will close on December 2.

The fund has also received special exemption from equities and commodities market regulator SEBI that allows for a ‘donor’ (a grandparent or a scholarship fund, for instance) to gift units of the fund to the minor’s account. There’s no cap on such gifts.

Chandresh Nigam, MD and CEO, Axis AMC, believes taking a loan at a future date to fund a child’s education is far more expensive than investing systematically over the long term. Also, he added, inflation in the cost of education is far ahead of consumer price inflation rates. For example, the cost of a management degree from an IIM, he said, has risen 600 times over three decades.

The fund will invest in equity and equity derivatives (between a minimum of 40 per cent and maximum of 60 per cent), debt and debt derivatives (between 25 per cent and maximum of 55 per cent), and cash future arbitrage (between 5 per cent and 15 per cent).

Sub-plans The fund comes with direct and distributor-led regular plans, both offering two sub plans – compulsory lock-in and no lock-in. Under each sub plan, the scheme would offer growth and dividend options. Exit loads are applicable under the no lock-in plan for withdrawals before the end of three years.

In case of compulsory lock-in, the investment will be locked in till the child turns 18 years old or three years from the date of investment, whichever is later. The minimum application amount is ₹5,000.

The fund’s performance will be benchmarked against a customised benchmark, 50 per cent Nifty 50 + 50 per cent Crisil Composite Bond Fund Index.

The fund will be managed by Pankaj Murarka (equity) and Kedar Karnik (debt). The scheme will reopen for ongoing subscription from December 14.

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