NFO Alert: Axis Mutual Fund launches Axis Income Plus Arbitrage Passive FOF

Axis Mutual Fund today announced the launch of the Axis Income Plus Arbitrage Passive FOF, an innovative open-ended scheme designed to offer investors a blend of stability, predictability, and tax efficiency.

The new fund offer or NFO of the scheme will open for subscription on October 28 and will close on November 11.

The fund is managed by Devang Shah, Aditya Pagaria, Hardik Satra, and Karthik Kumar. The performance of the fund will be benchmarked against 65% NIFTY Short Duration Debt Index + 35% Nifty 50 Arbitrage TRI


Also Read | Smallcap mutual funds fall up to 5% in 3 months. Should investors consider this a warning sign or buying opportunity?

This new offering is tailored for investors seeking to optimize their post-tax returns while maintaining a conservative risk profile. The fund strategically combines investments in passive debt-oriented mutual fund schemes with arbitrage funds, creating a hybrid structure that aims to deliver consistent returns over a medium-term horizon.

“At Axis Mutual Fund, our focus has always been on delivering innovative, investor-centric solutions that combine performance with simplicity. The Axis Income Plus Arbitrage Passive FOF is a testament to this philosophy—offering a unique blend of stability, transparency, and tax efficiency. In a market where predictability and post-tax returns matter more than ever, this fund is designed to empower investors with a smarter way to approach fixed income investing,” said B. Gopkumar, MD & CEO, Axis AMC.

The scheme is structured to invest approximately 50–65% of its portfolio in passive debt-oriented mutual fund schemes, targeting high-quality - instruments. The underlying schemes would follow a roll-down strategy, which allows investors to benefit from accrual income while minimizing interest rate risk.

The remaining 35–50% of the portfolio is allocated to arbitrage funds, which involve fully hedged equity positions. This component is designed to generate returns with minimal volatility, as it avoids directional market exposure. The combination of these two components ensures that the fund delivers debt-like returns with enhanced tax efficiency.

The fund offers high liquidity with T+2 redemption payouts and no exit load, making it a flexible option for investors. Additionally, the fund’s structure ensures no tax liability on rebalancing of the underlying schemes, further enhancing its efficiency. The minimum application amount is Rs 100 and in multiples of Re 1 thereafter.

Why invest in Axis Income Plus Arbitrage Passive FOF

This fund is ideally suited for corporates, high-net-worth individuals (HNIs), and retail investors who are looking for a low to moderate risk investment that aims to offers fairly stable returns over a medium-term horizon. The use of passive roll-down strategies in the debt component provides visibility into returns when held to maturity, while the arbitrage allocation adds a layer of return enhancement with minimal incremental risk.

One of the most compelling reasons to invest in this fund is its tax efficiency. Unlike traditional debt mutual funds or fixed deposits, which are taxed at the investor’s slab rate, the Axis Income Plus Arbitrage Passive FOF qualifies for long-term capital gains (LTCG) taxation at just 12.5% if held for more than 24 months, according to the release by the fund house.

Also Read | Top 5 states contribute over 67% to MF AAUM, Maharashtra contributes maximum in September: ICRA Analytics

“With the current market environment offering attractive accrual opportunities and investors increasingly seeking tax-efficient alternatives to traditional fixed income products, the Axis Income Plus Arbitrage Passive FOF can be a timely solution,” said Ashish Gupta, CIO, Axis AMC.

“By leveraging passive roll-down strategies and fully hedged arbitrage exposure, the fund is designed to offer a predictable and transparent investment experience,” Gupta added.