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Chandigarh: Axis Mutual Fund, one of India’s most prominent asset management companies, has announced the launch of a new and innovative investment offering – the Axis Income Plus Arbitrage Passive Fund of Fund (FOF). This open-ended scheme is designed to address the evolving needs of today’s investors who are seeking stable, tax-efficient, and low-volatility investment options, especially in a market where interest rate movements and equity volatility continue to shape investor sentiment.
The New Fund Offer (NFO) will be available for subscription from October 28, 2025 to November 11, 2025.
This hybrid fund brings together passive debt-oriented mutual fund schemes and arbitrage funds, offering a unique combination of predictable returns and tax efficiency – making it especially attractive to corporates, HNIs, and retail investors with conservative to moderate risk tolerance.
What Makes This Fund Unique?
The Axis Income Plus Arbitrage Passive FOF strategically invests:
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50–65% in passive debt mutual fund schemes
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35–50% in arbitrage funds
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0–5% in money market instruments
The debt portion follows a roll-down strategy, ensuring accrual-based returns with reduced interest rate risk, while the arbitrage component seeks to generate equity-linked income through fully hedged positions—minimizing volatility.
The scheme is benchmarked against:
65% NIFTY Short Duration Debt Index + 35% Nifty 50 Arbitrage TRI, accurately representing its hybrid structure.
It offers complete flexibility with zero exit load and T+2 liquidity, allowing investors easy redemption without penalties.
Tax Efficiency: A Key Attraction
One of the biggest advantages of this fund is its long-term capital gains (LTCG) tax benefit. If held for more than 24 months, the gains are taxed at just 12.5%, making it far more tax-efficient compared to traditional fixed deposits or regular debt mutual funds that are taxed as per individual income slab rates.
According to Ashish Gupta, CIO at Axis AMC, “In today’s environment, where investors are seeking predictable returns without compromising on tax efficiency, this solution can serve as a timely and effective strategy to build stable portfolios.”
Investor-Centric Innovation
Commenting on the launch, B. Gopkumar, MD & CEO, Axis AMC, emphasized the company’s commitment to innovation:
“The Axis Income Plus Arbitrage Passive FOF blends stability, transparency, and tax benefits into a single product. With market predictability becoming essential for financial planning, this fund is suited for investors who want fixed-income-like stability with smarter taxation benefits.”
Why This Fund Stands Out: The ‘5P’ Advantage
The scheme addresses the modern investor’s key concerns through its “5Ps” philosophy:
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Problem of Plenty – Simplifies fund selection by offering a ready-made hybrid structure.
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Predictability – Passive roll-down strategy gives clarity on potential returns.
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Portfolio Transparency – Fully passive allocation ensures clear visibility of holdings.
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Post-Tax Returns – Designed to maximize net gains through tax-efficient structure.
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Protection from Credit Events – Focus on high-quality debt instruments reduces default risk.
For Whom is This Fund Ideal?
This fund is particularly suitable for:
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Retirees and conservative investors looking for steady income
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HNIs seeking diversification with tax benefits
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Corporates aiming to optimize treasury management
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Retail investors transitioning from traditional FDs to smarter mutual fund options
With a minimum investment of just ₹100, the fund is also inclusive, giving small investors access to an evolved hybrid strategy usually reserved for high-ticket institutional portfolios.
Market Outlook Favorable for Launch
With interest rates expected to stabilize and equity markets showing signs of volatility, the timing of this launch is strategic. Arbitrage opportunities are abundant in current market conditions, while passive debt strategies provide a cushion against interest rate swings.
Hardik Satra, one of the fund managers, remarked that the fund is engineered to perform across cycles:
“By combining predictable debt returns with arbitrage volatility insulation, this fund is structured to deliver consistent performance irrespective of market movements.”
Conclusion
The Axis Income Plus Arbitrage Passive FOF represents a new-age solution for investors prioritizing capital preservation, consistent earnings, and tax efficiency. With its low entry barrier, no exit load, and professionally managed hybrid allocation, it has the potential to become a preferred choice in the conservative investment category.
As India’s mutual fund industry sees a sharp rise in participation from both metros and smaller towns, funds like these are well-positioned to cater to the growing demand for intelligent fixed-income strategies.
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