Nippon India MF launches Nifty Alpha Low Volatility 30 Index Fund

As the name suggests, the index fund will replicate the returns of Nifty Alpha Low Volatility 30 TRI (Total Return Index). This will provide investors with exposure to two factors – alpha and low volatility – through an index.

Minimum investment during NFO is 1,000 and in multiples of 1 after that.

The index consists of top 30 stocks selected from Nifty 100 and Nifty Midcap 50 based on factor scores of alpha (50%) and low volatility (50%) using past one year prices. The weights of the stocks are derived from the alpha and low volatility factor scores, with the individual stock weighting 5%. Only stocks available for trading in the Derivatives segment (F&O) and stocks with a minimum listing history of one year will be considered for inclusion in the index. The index will be rebalanced twice a year.

As of June 30, the index had returned from zero 16% year to date and zero to 5% in one year. Index returns have been around 17% since inception (all returns mentioned here are price returns only).

As of June-end, the top constituents of Nifty Alpha Low Volatility 30 Index were Nestle India, Britannia Industries, Sun Pharmaceutical Industries, SRF and NTPC. Their total weight was about 21%. In terms of sector exposure, FMCG had the largest share of around 31%. It was followed by Information Technology at 10%, Healthcare at over 9%, Power at 7.7% and Chemicals at just over 7%.

ICICI Prudential Mutual Fund also has a scheme based on the same factor index. Fund house Nifty Alpha Low Volatility 30 ETF and Fund of Funds (FOF) offer investments in this ETF, which was launched in September 2021.

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