Nippon India Mutual Fund has announced the launch Nippon India Nifty Alpha Low Volatility 30 Index Fund. The NFO will open on 1 August 2022, and close on 12 August 2022. The scheme will provide exposure to 30 stocks via a low-cost index fund. It will also allow non-Demat account holders to seek exposure to large and mid-cap stocks via investing in this fund.
The investment objective of the scheme is to provide investment returns closely corresponding to the total returns of the securities as represented by the Nifty Alpha Low Volatility 30 Index before expenses, subject to tracking errors.
However, you as an investor should know that there can be no assurance or guarantee that the investment objective of the scheme will be achieved.
The index fund will include the top 30 stocks selected and weighted based on a factor score of Alpha (50%) + Low Volatility (50%). Stock weights have been capped at 5% or 5 times the weight of the stock in the index based only on free float market capitalization. Some of the top constituents of this index fund scheme is Nestle, Britannia Sun Pharma, SRF, NTPC, TCS, ITC, Airtel, SBI Life Insurance, Cipla, Mahindra, Dabur etc.
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According to the Scheme Information Document (SID), the index will be rebalanced semi-annually in June and December. Investors can avail benefit of the Systematic Investment Plan (SIP).
Mehul Dama has been appointed as the fund manager of Nippon India Nifty Alpha Low Volatility 30 Index Fund.
During the NFO, you can invest a minimum of Rs 1000 and thereafter in multiples of Re 1 in this fund. The scheme offers two plans – Growth Plan and Income Distribution cum Capital withdrawal plan.
Benefits of index fund
- Index funds track an index
- These are open-ended mutual fund
- It allows investment diversification through even a single unit.
- Index funds have generally lower expense ratio compared to an active equity fund.
- Index funds are more transparent as they mimic the index.
What should investors do?
Mutual funds are subject to market risks. You should read all details of the scheme and consult your financial advisor before making any investment decision.