The open-ended fund offers will close for subscription on April 30.
Nippon India Mutual Fund has launched two new passive fund offers of Nifty 500 Low Volatility 50 Index Fund and Nifty 500 Quality 50 Index Fund which follow a factor investing approach to invest in low volatility and quality stocks amid the current volatile markets environment.
The open-ended fund offers will close for subscription on April 30. Both the passive offerings will track an index to give diversification through a single unit, come with a lower expense ratio and are transparent since they replicate the index they follow.
The Nippon India Nifty 500 Low Volatility 50 Index fund is based on the concept of low volatility investing and invests in 50 companies from the Nifty 500 index which have low volatility, thus providing better risk adjusted returns.
The fund will select the top 50 companies based on low volatility scores calculated using 1 year daily trailing prices.
Low volatility
The low volatility strategy has provided historical returns and has proved to be an anomaly to the theory of higher-risk equals higher-returns. Notably, the low volatility strategy has proven to be superior to most other strategies during periods of turmoil.
Similarly, the Nippon India Nifty 500 Quality 50 Index fund will combine passive and active methods of investing and follows a rule-based approach while considering a single or multiple set of factors for selecting stocks to form part of an index which include smart beta factors such as alpha, dividend yield, low volatility, equal weight, value, momentum and quality.
The Nippon India Nifty 500 Quality 50 Index fund will invest in financially healthy companies, based on their profitability, low leverage and earnings stability. The fund will analysze financial metrics such as return on equity, debt to equity Ratio and consistency of EPS growth to select the top 50 quality stocks from the Nifty 500 index.
Published on April 21, 2025
