IDFC Mutual Fund launches Nifty100 Low Volatility 30 Index Fund

NEW DELHI: IDFC Mutual Fund has announced the launch of its Nifty100 Low Volatility 30 Index Fund. The new fund offer (NFO) will be open from 15-23 September.

The fund will replicate the Nifty100 Low Volatility 30 Index which consists of the 30 least volatile large cap stocks. It considers turnover of the underlying Nifty 100 stocks while assigning weights to them. The least volatile stocks receive the highest weights and vice versa.

As of 30 August, Nestle India, Britannia Industries and Pidilite Industries were the three highest-weighted stocks in the index with respective weights of 4.7%, 4% and 4%. Sector-wise, FMCG, information technology, and financial services are the top three sectors with weights of 25.4%, 14.6% and 13.4% respectively.

“The low-volatility strategy provides investors an opportunity to benefit from the high return potential of equities while aiming to reduce volatility, helping investors stay true to their overall investment goals. This Index has provided a compelling risk-reward opportunity over the years, yielding relatively higher returns with relatively lower risk as against major stock indices,” says, Vishal Kapoor, CEO, IDFC AMC.

As per IDFC Mutual Fund, as of 30 August, the Nifty100 Low Volatility 30 Index had yielded 15.4% p.a. as against 14.6% p.a. for the Nifty 100 Index and 14.0% p.a. for the Nifty 50 Index over a rolling 10-year timeframe. Alongside, the Nifty100 Low Volatility 30 Index has shown better ability to withstand the impact of volatility over this period. The index had lower annualised volatility of 14.7% versus 17.2% for the Nifty 100 Index and 17% for the Nifty 50 Index.

This, according to the fund house, makes it an effective investment opportunity for long-term equity investors, enabling them to benefit from both– relatively higher returns over the long term combined with relatively lower volatility.

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