Description

Axis Mutual Fund modifies scheme name from 'Axis US Treasury Dynamic Bond ETF Fund of Fund' to 'Axis US Specific Treasury Dynamic Debt Passive ETF FOF' with expanded investment options effective July 17, 2025.

Summary

Axis Mutual Fund Trustee Limited has announced modifications to the Axis US Treasury Dynamic Bond ETF Fund of Fund, including a name change to “Axis US Specific Treasury Dynamic Debt Passive ETF FOF” effective July 17, 2025. The changes expand investment options to include overseas Index Funds in addition to ETFs, while maintaining the same asset allocation pattern of 95-100% in US treasury securities and 0-5% in debt and money market instruments.

Key Points

  • Scheme name changed from “Axis US Treasury Dynamic Bond ETF Fund of Fund” to “Axis US Specific Treasury Dynamic Debt Passive ETF FOF”
  • Investment scope expanded to include overseas Index Funds in addition to ETFs
  • Sub-category updated to “Country specific Debt FOF” under “Overseas FOF” category with “Passive Option”
  • Asset allocation pattern remains unchanged: 95-100% in overseas securities, 0-5% in domestic debt/money market
  • Underlying securities limited to maximum 15-year residual maturity
  • Intended investment amount of US $100 million within industry limits

Regulatory Changes

The scheme has been reclassified under SEBI regulations with updated category structure:

  • Category: Overseas FOF
  • Sub-category: Country specific Debt FOF
  • Option: Passive Option

Investment guidelines updated to comply with Para 12.19 of SEBI Master Circular for Mutual Funds, allowing investments in both overseas ETFs and Index Funds.

Compliance Requirements

  • Scheme Information Document (SID) and Key Information Memorandum (KIM) to be updated with new features
  • Minimum 95% investment in overseas Index Funds and/or ETFs comprising US treasury securities
  • Compliance with SEBI overseas investment limits of US $300 million per fund within industry limit of US $1 billion
  • Investment restrictions: residual maturity of underlying securities not to exceed 15 years

Important Dates

  • Effective Date: July 17, 2025 - All proposed scheme feature changes become effective
  • Validity Period: Investment limits valid for six months (specific end date not mentioned in available content)

Impact Assessment

The changes primarily affect scheme documentation and expand investment flexibility without altering core investment strategy. Existing investors will benefit from broader investment options while maintaining the same risk-return profile focused on US treasury securities. The passive investment approach and allocation patterns remain consistent, minimizing disruption to current investment objectives.

Impact Justification

Scheme name change and feature modifications affect existing investors but do not materially alter core investment strategy or allocation patterns