FEATURES: An open-ended debt fund with a medium to long-term investment objective that aims to invest in a portfolio of debt securities having modified durations of two to seven years.

FOR WHOM: With a Rs 5,000 minimum investment condition, the NFO can be considered for investment purpose by all investors provided they are seeking exposure to a medium to long-term debt fund with an investment horizon of at least a year. Although, the fund is open-ended, investors have an option to exit anytime.

ASSET ALLOCATION: The fund's scheme information document (SID) states it will invest 0-100 per cent in debt and money market securities. Unlike many income funds, there is no separate allocation in debt securities and money market instruments.

INVESTMENT PROFILE: In addition to the usual type of debt securities, such as corporate bonds, government securities, commercial papers, bank certificates of de posits (CDs), AIF's debt portfolio can very well include securitised debt up to 30 per cent of its corpus. Securitised debt includes securitised mortgages, pass-through certificates and single sell downs. Not unlike some other income funds, AIF can also invest up to 50 per cent of its corpus in any debt-based foreign securities other than foreign securitised debt. Exposure to debt-based derivatives can be as high as 75 per cent for AIF, again not unusual for many income funds. Among debt securities, AIF is open to investing in both -fixed and floating rate debts.

UNTOUCHABLE INVESTMENTS: None in the arena of debt instruments, except foreign securitised debt.

CHARGES: Exit load of 0.75 per cent is applicable for redemptions in less than a year. Annual recurring charges will be up to the highest allowed by Sebi for such funds, which is 2.25 per cent. NFO expenses will not be charged for the scheme as per Sebi's prohibition, but instead, borne by Axis AMC.

The track record of Axis MF's debt schemes is only about two years, but that should not be a constraint. What is noteworthy is despite the fund's SID stating AIF to be unique in characteristics among other Axis funds, the asset allocation percentages matches exactly with that of Axis Dynamic Bond Fund (ADBF), and the only difference is the active management of modified duration of ADBF, which can get below one year with ease. As per Capitaline NAV India database, ADBF's performance has been above-average in two year returns, but below-average in one-year returns among dynamic bond funds. Such mixed results cannot be ruled out for AIF investors.