Nippon India Mutual Fund has announced the launch of its Nifty 500 Low Volatility 50 Index Fund, a passive investment scheme designed to replicate the performance of the Nifty 500 Low Volatility 50 Total Return Index (TRI). This open-ended index fund is aimed at investors seeking long-term capital growth through investments in a low-volatility equity portfolio.
The scheme’s primary goal is to provide returns that correspond closely to the total returns of the Nifty 500 Low Volatility 50 Index, subject to tracking errors. While the fund is designed to follow the index, there is no guarantee of achieving perfect alignment due to operational and market factors.
The fund uses the Nifty 500 Low Volatility 50 TRI as its benchmark. This index comprises 50 stocks selected from the Nifty 500 universe based on their low volatility over the past year, aiming to offer a more stable equity investment experience.
This is an Index Fund under the equity-oriented scheme category. It is open-ended, allowing investors to subscribe and redeem units on any working day.
The scheme will predominantly invest 95–100% of its assets in securities comprising the Nifty 500 Low Volatility 50 Index, ensuring high fidelity to the benchmark. Up to 5% may be allocated to money market instruments and cash equivalents for liquidity purposes.
The scheme will passively track the index by investing in its constituents in the same proportion as in the index. There will be no active stock selection. The strategy aims to minimise tracking error, which under normal conditions is expected to be capped at 2% per annum. The fund may also use equity derivatives for temporary rebalancing or liquidity management, restricted to 20% of the equity portfolio.
The scheme is managed by Mr Jitendra Tolani, who has over 18 years of experience in equity trading and fund management.
The fund offers both Direct and Regular Plans, each with:
The fund offers daily liquidity, allowing purchases and redemptions on any working day. NAV will be published daily by 11:00 PM on both the AMFI and Nippon India websites.
The fund’s total annual recurring expenses are capped at 1% of daily net assets, as per SEBI norms. No NFO expenses will be charged to the scheme.
As with all equity investments, the scheme is subject to market risks. Additional risks include:
The scheme does not attempt to outperform the benchmark or adopt defensive positions in bearish markets.
The Nippon India Nifty 500 Low Volatility 50 Index Fund is designed for investors seeking a low-volatility equity experience through a diversified passive portfolio. While it offers exposure to stable companies within the Nifty 500 universe, investors must consider market risks and the passive nature of the scheme before investing.
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.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 28, 2025, 3:31 PM IST
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