The Axis Nifty 50 ETF is an exchange-traded fund (ETF) designed to replicate the performance of the Nifty 50 Total Return Index (TRI), which includes dividends reinvested. This ETF offers investors exposure to the 50 largest and most liquid companies listed on the National Stock Exchange of India (NSE).
Key Details:
- Fund Size: As of September 30, 2024, the Axis Nifty 50 ETF managed assets worth ₹684.09 crore.
- Expense Ratio: The ETF has a low expense ratio of 0.08%, making it a cost-effective option for investors.
- Liquidity: Units of the Axis Nifty 50 ETF are listed on the NSE, allowing investors to buy or sell units on trading days at prevailing market prices.
- Minimum Investment: The minimum investment required is ₹5,000, with a minimum additional investment of ₹100. There is no minimum for Systematic Investment Plan (SIP) investments.
- Fund Managers: The ETF is managed by Ashish Naik and Karthik Kumar.
Performance:
The Axis Nifty 50 ETF aims to closely mirror the performance of the Nifty 50 TRI. As of January 10, 2025, the ETF’s price is ₹257.07.
Portfolio Composition:
The ETF holds a diversified portfolio of 50 stocks across various sectors, including financial services, information technology, oil and gas, consumer goods, and automotive. The top constituents typically include companies like Reliance Industries, HDFC Bank, Infosys, and Tata Consultancy Services.
Investment Objective:
The primary objective of the Axis Nifty 50 ETF is to provide returns that closely correspond to the total returns of the Nifty 50 TRI, subject to tracking errors. This makes it a suitable option for investors seeking passive exposure to the Indian equity market.
Axis Nifty 50 Index Fund a Good Investment?
The Axis Nifty 50 Index Fund is generally considered a solid investment for those seeking passive exposure to India’s equity market, especially if you want to mirror the performance of the Nifty 50 Index. Here’s a breakdown of the factors to consider:
Advantages of Axis Nifty 50 Index Fund:
(1) Low-Cost Investment:
- The expense ratio of the Axis Nifty 50 Index Fund is relatively low, making it a cost-effective way to invest in a broad basket of India’s top 50 companies.
- Low costs can have a significant positive impact on long-term returns.
(2) Diversified Exposure:
- It gives you exposure to the 50 largest companies across various sectors of the Indian economy. This diversification helps spread the risk.
(3) Historical Performance:
- Historically, the Nifty 50 index has delivered solid returns in the long term, reflecting the growth of India’s top companies. This fund aims to replicate that performance.
(4) Simplicity:
- As an index fund, it’s a passive investment, meaning there is no active management of the portfolio. It follows the Nifty 50 index closely, which means you don’t need to worry about picking individual stocks.
(5) Long-Term Growth Potential:
- India’s economy is expected to grow, and investing in the largest companies in the country can be a good way to benefit from this growth over time.
Disadvantages of Axis Nifty 50 ETF:
(1) Market Risk:
- As with any equity investment, the Axis Nifty 50 ETF is subject to market volatility. A downturn in the Indian stock market will result in a loss for the ETF, as it mirrors the performance of the Nifty 50 Index.
(2) Tracking Error:
- While the tracking error for Axis Nifty 50 ETF is generally low, it can still exist. Tracking error refers to the small difference in returns between the ETF and the actual index. However, Axis has a history of maintaining minimal tracking error.
(3) No Active Management:
- The ETF’s passive nature means that it doesn’t actively select stocks or manage risk, which can be a disadvantage during times of market stress when active management could potentially minimize losses.
Who Should Invest in Axis Nifty 50 Index Fund?
- Long-Term Investors: If you’re looking for a simple, low-cost way to invest in India’s growth, this fund could be a good fit.
- Risk Tolerant Investors: If you’re comfortable with market volatility and understand the cyclical nature of the stock market, this fund can be a good option.
- Beginner Investors: For those starting their investment journey, this fund is an easy way to gain exposure to the Indian stock market without the need for stock-picking skills.
Conclusion:
The Axis Nifty 50 Index Fund is a good investment option for long-term investors who want broad market exposure to India’s largest companies. Its low expense ratio and ease of investment make it attractive, but as with any equity investment, it’s subject to market risks, so it’s important to be prepared for volatility, especially in the short term. If you’re looking for a simple, cost-effective way to invest in India’s economy, it could be a suitable addition to your portfolio.
Axis Nifty 50 ETF Returns
The Axis Nifty 50 ETF aims to track the performance of the Nifty 50 Total Return Index (TRI), which includes both the price returns and the dividends reinvested. The returns of the Axis Nifty 50 ETF are closely aligned with the returns of the Nifty 50 TRI, although there might be minor tracking errors.
Here are some important aspects to consider regarding its returns:
Historical Returns:
While the exact returns may vary over time, here is a rough estimate of the annualized returns of the Nifty 50 TRI and the Axis Nifty 50 ETF based on the last few years:
- 1-Year Returns (as of Jan 2025): The 1-year returns for the Nifty 50 index have been volatile due to market conditions but typically range between 10%-15% in positive growth years, though market declines may result in negative returns.
- 3-Year Returns (as of Jan 2025): Historically, the 3-year returns for the Nifty 50 TRI have averaged around 12%-15% annually, driven by India’s overall economic growth and the performance of the top 50 companies.
- 5-Year Returns (as of Jan 2025): The 5-year annualized returns of the Nifty 50 TRI have been in the range of 11%-13% on average, reflecting the steady growth in India’s largest companies.
Performance Tracking:
- The Axis Nifty 50 ETF generally delivers returns very close to the Nifty 50 TRI since it is a passively managed fund designed to replicate the index.
- The tracking error of the Axis Nifty 50 ETF is usually minimal, but it may slightly underperform or outperform the Nifty 50 TRI due to factors like transaction costs, fund management expenses, or market liquidity.
Key Factors Impacting Returns:
- Market Conditions: The overall performance of the ETF depends on the market conditions and how the Nifty 50 stocks perform.
- Tracking Error: Although the tracking error is low, slight variations in the fund’s returns compared to the index are possible due to operational factors.
Investment Horizon:
- Long-Term Returns: The returns of the Axis Nifty 50 ETF are expected to be favorable for long-term investors who can ride out market fluctuations and benefit from the overall growth of India’s top companies.
Example of Returns (from a past year):
For example, in 2021, the Nifty 50 TRI delivered approximately 24% returns, and the Axis Nifty 50 ETF closely tracked this performance, with a slightly lower return due to minor tracking errors and expenses.
Here is a Summary of the ETF’s Historical Returns:
The Axis Nifty 50 ETF is designed to replicate the performance of the Nifty 50 Total Return Index (TRI), which includes both price movements and dividends reinvested. As of January 9, 2025, the Net Asset Value (NAV) of the Axis Nifty 50 ETF is ₹255.30.
| Time Period | Annualized Return |
| 1 Year | 12.76% |
| 3 Years | 12.08% |
| 5 Years | 15.6% |
| Since Inception | 14.11% |
These returns are based on the ETF’s performance and are subject to market conditions. The expense ratio of the Axis Nifty 50 ETF is 0.08%, which is relatively low and contributes to its overall returns.
Conclusion:
The Axis Nifty 50 ETF offers strong returns that are aligned with the Nifty 50 TRI, making it a solid choice for investors looking for passive exposure to India’s top companies. However, the exact returns will depend on market conditions, so past performance should be considered as one of many factors when evaluating its potential. If you’re planning for the long term and comfortable with market volatility, the Axis Nifty 50 ETF could be a good option for steady growth.
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