Nippon India launches two new index funds targeting low volatility and quality stocks amid market uncertainty
These passive investment products track specific factor-based indices. (AI image)
Nippon India Mutual Fund
has introduced two
passive investment funds
as straightforward choices for investors navigating through present market instability and sector-wide negative performance.
The company has rolled out a pair of open-ended
index funds
: the
Nippon India Nifty 500 Low Volatility
50 Index Fund alongside the
Nippon India Nifty 500 Quality 50 Index Fund
, each utilising factor investment methodology.
These New Fund Offers (NFOs) have commenced and will continue accepting subscriptions until April 30, 2025.
"These funds are positioned as a hedge in the current volatile market environment," said Nippon India, highlighting their intention to provide steady returns and stability for investors with long-term objectives.
These passive investment products track specific factor-based indices. They deliver advantages including portfolio diversification, reduced expense ratios, and clear investment visibility through index replication.
The
Nifty 500
Low Volatility 50 Index Fund aims to invest in the 50 companies showing minimal volatility within the Nifty 500, providing protection against market fluctuations. The fund utilises quantitative analysis to identify stocks demonstrating the lowest price variations over a one-year period.
"The low volatility strategy has provided significant historical returns and has proved to be an anomaly to the theory of higher risk equals higher returns," the fund house noted, citing its resilience during previous periods of market turmoil.
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The Nifty 500 Quality 50 Index Fund, the second offering, focuses on selecting financially robust companies through quality-focused parameters. The selection process evaluates key financial indicators including return on equity (ROE), debt-to-equity ratio, and earnings per share (EPS) stability to select the top 50
quality stocks
from the broader index.
"Factor investing combines passive and active methods of investing, offering a rule-based, data-driven approach to portfolio construction," Nippon India said. These funds are being introduced when investors are seeking defensive investment options amidst ongoing market volatility and economic uncertainties.
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