Bajaj Allianz Life, one of the leading private life insurers, has launched the Bajaj Allianz Life Small Cap Quality Index Fund NFO which aims to leverage the growth opportunities in Small Cap Equities. The fund objective is to provide investors capital appreciation by investing in companies listed in the Nifty Small Cap 250 Quality 50 Index.

The NFO period for Bajaj Allianz Life Small Cap Quality Index Fund starts on 1st March and ends on 15th March 2024.

The Nifty Small Cap 250 Quality 50 index has shown superior performance than the broader market indices over the medium to long term. The fund focuses solely on the top 50 small cap companies based on quality scores, considering factors such as Return on Equity (ROE), financial leverage (Debt/Equity Ratio), and Earnings (EPS) growth. This approach has the potential to lower risk compared to a pure small-cap strategy.

Also Read: 6 money mistakes to avoid when starting a new job

Sampath Reddy, Chief Investment Officer at Bajaj Allianz Life, said, “The launch of Bajaj Allianz Life Small Cap Quality Index Fund NFO reflects our commitment to offering diversified investment solutions that align with the evolving needs of investors. Historically, the Nifty Small Cap 250 Quality 50 Index has outperformed broader market indices (including the market benchmark Nifty 50 Index) by a considerable margin over the medium to long term. This fund is designed for investors seeking exposure to the dynamic small-cap space while prioritizing quality and effectively managing the risk.”

“We believe this fund offers investors a unique opportunity to capitalize on the compelling potential of quality small-cap companies and participate in India’s long-term growth story, in addition to the existing portfolio offerings,” he added.

National Statistics Office (NSO), India’s official statistical body projects strong GDP growth of 7.3% in FY24, which is the highest growth estimate among the major global economies. The Indian equity markets have consistently outperformed global markets over the medium to long term, reflecting the superior growth prospects of the country.

With supportive macroeconomic indices, India is well placed to retain its position as an attractive investment destination in the coming years. As India continues its growth path, the Bajaj Allianz Life Small Cap Quality Index Fund NFO provides investors an attractive opportunity to participate in this growth journey. With its focus on quality small-cap stocks and a diversified portfolio across sectors, the fund aims to deliver attractive returns while effectively managing the risk.

Investors in small cap should note that they are subject to higher market volatility considering the high-risk profile of small cap equities. Hence, the small cap quality index fund is well suited to investors with a higher risk appetite and long-term investment horizon.