How Angel One Nifty Total Market ETF Reduces Risk?

Angel One Asset Management Company has launched its maiden new fund offer (NFO) with the Angel One Nifty Total Market Index Fund, which is currently open for subscription and will close on February 21, 2025.

This open-ended scheme replicates and tracks the Nifty Total Market Index, providing investors an opportunity to participate in India’s growth story while avoiding the complexities of stock selection and portfolio management.

Additionally, the fund house has introduced the Angel One Nifty Total Market ETF, which is India’s first ETF tracking the Nifty Total Market Index.

These funds offer investors exposure to the broader Indian equity market through a single investment, ensuring sector diversification and reducing risks associated with over-concentration in specific industries.

How Does The Angel One Nifty Total Market ETF Reduce Risk?

The Angel One Nifty Total Market ETF reduces risk by offering broad diversification across 93% of the total market capitalisation, which helps mitigate sector-specific and stock-specific risks. By replicating the Nifty Total Market Index, it provides exposure to large, mid, and small-cap stocks.

This diversification helps smooth out volatility, as mid and small-cap stocks can enhance returns, albeit with higher short-term fluctuations. Over the long term, this strategy aims to offer competitive returns while managing risk through widespread market exposure.

How Nifty Total Market ETF Performed in Comparison to Nifty 50?

Over the past year, the Nifty 50 delivered a return of 7.99%, compared to the Nifty Total Market Index’s 7.41%. Over 3 years, the Nifty 50 saw a compounded annual growth rate (CAGR) of 11.23%, while the Nifty Total Market Index achieved a higher CAGR of 13.56%.

Looking at the 5 years, the Nifty 50 posted a CAGR of 14.93%, whereas the Nifty Total Market Index delivered a higher CAGR of 17.49%.

Over the last 10 years, the Nifty 50 had a CAGR of 11.59%, while the Nifty Total Market Index outperformed with a CAGR of 12.89%.

This comparison shows that while the Nifty 50 offers stability and is suitable for risk-averse investors, the Nifty Total Market Index has delivered higher returns over longer periods.

The latter benefits from exposure to mid and small-cap stocks, which can enhance returns but come with added volatility.

Benefit Of Investing in Angel One Nifty Total ETF

Angel One’s new offerings cater to a diverse range of investors by providing options that balance risk and reward, making them suitable for both conservative and aggressive investors.

With the Angel One Nifty Total Market ETF and Index Fund, investors can participate in India’s growing equity market while benefiting from diversification, reduced sector-specific risks, and long-term wealth creation opportunities.

These funds provide exposure to large, mid, and small-cap stocks, ensuring a well-rounded investment approach that aligns with various financial goals and risk appetites.

Conclusion

In conclusion, the Angel One Nifty Total Market ETF and Index Fund offer investors a diversified, low-risk way to participate in India’s equity market.

By tracking the Nifty Total Market Index, these funds provide broad exposure to large, mid, and small-cap stocks, making them ideal for long-term wealth creation and aligning with different investment goals and risk profiles.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.