Income Plus Arbitrage FoFs are being positioned as the flagship retail debt offering by the MF industry due to their tax efficiency (for 2 yr+ holding period), relatively lower volatility and ability to nimbly move into the right spaces in the debt market at the right time to deliver superior investor outcomes.
Axis has gone one step further with its Income Plus Arbitrage FoF, by making it open architecture – which means the actively managed 65% debt component will not just be allocated within the Axis debt fund range, but across a universe that includes debt funds of the top 10 debt fund houses in the industry.
What this enables Axis to do is to position its Income Plus Arbitrage FoF as a single solution for an investor’s entire debt portfolio – a solution that includes best in class debt funds from best in class debt fund houses, selected on the basis of alignment with its in house macro view, fund performance and costs.
The debt portion of this fund – which was entirely invested in longer duration funds 6 months ago, is now entirely invested incorporate bond funds from 3 fund houses and may likely change colour 6 months later to a more accrual focused strategy, based on evolving macro conditions.
What this fund offers is a one-stop solution to retail investors with the promise that Axis MF will do everything that investors would otherwise need to do – decide on product categories based on market conditions, then decide on the right managers within each product category and then diligently monitor portfolios for performance as well as alignment with changing market conditions.
Devang believes the Income Plus Arbitrage FoF category –which has grown from just Rs.1000 crs in Jan 2025 to over Rs.16,000 crs today, will rapidly expand to Rs.200,000 crs within the next 3 years.
Axis MF’s positioning of its Income Plus Arbitrage FoF is aimed at garnering a sizeable chunk of this growing fund category, on the back of a customer-convenience proposition that is yet unmatched by peers.