Bandhan Nifty Alpha Low Volatility 30 Index Fund
The Bandhan Nifty Alpha Low Volatility 30 Index Fund is an open-ended equity index fund that aims to replicate the performance of the Nifty Alpha Low Volatility 30 Index. This index focuses on stocks that combine high alpha (excess returns over the benchmark) with low volatility, seeking to provide superior risk-adjusted returns.
NFO Details:
- Fund Name: Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G)
- Fund Type: Open-ended
- Category: Index Fund
- NFO Open Date: January 8, 2025
- NFO Close Date: January 20, 2025
- Minimum Investment Amount: ₹1,000 and in multiples of ₹1 thereafter
- Entry Load: Nil
- Exit Load:
- 0.25% if redeemed on or before 15 days from the allotment date
- Nil if redeemed after 15 days from the allotment date
- Fund Manager: Mr. Nemish Sheth
- Benchmark: Nifty Alpha Low Volatility 30 Index
Investment Objective and Strategy:
The fund seeks to replicate the Nifty Alpha Low Volatility 30 Index by investing in its constituent securities in the same proportion. This passive investment approach aims to provide returns that closely track the total return of the index, subject to tracking errors. The index comprises 30 stocks selected for their high alpha and low volatility, ensuring better risk-adjusted returns. The portfolio is well-diversified, periodically rebalanced, and cost-efficient, making it suitable for long-term investors seeking stability and growth.
Sectors of Investment:
The Nifty Alpha Low Volatility 30 Index includes stocks from various sectors, providing broad market exposure. While the specific sector allocation may vary based on the index composition, the diversification across sectors helps reduce concentration risk and enhances portfolio stability
Pros of the Fund:
- Risk-Adjusted Returns: Focuses on stocks with high alpha and low volatility, offering better risk-adjusted performance compared to broader indices.
- Diversification: Includes 30 stocks across various sectors, reducing concentration risk and enhancing stability.
- Cost Efficiency: Being a passively managed fund, it has lower expense ratios compared to actively managed funds.
- Rule-Based Investment: Tracks the Nifty Alpha Low Volatility 30 Index, ensuring transparency and discipline in stock selection and weightage.
- Resilience in Volatile Markets: The low volatility focus provides stability during market downturns, making it suitable for conservative equity investors.
- Periodic Rebalancing: Aligns with changes in the underlying index, ensuring the portfolio remains up-to-date with evolving market conditions.
- Ease of Access: Provides investors with a simple and cost-effective way to invest in a unique combination of growth and stability-focused stocks.
Cons of the Fund:
- Market Risk: As an equity fund, it is subject to fluctuations in stock prices due to market volatility.
- Tracking Error: The fund’s performance may deviate from the underlying index due to tracking errors.
- Limited Flexibility: Being an index fund, it lacks the flexibility to adjust holdings in response to market conditions beyond the index composition.
How to Invest:
Investors can participate in the New Fund Offer (NFO) period from January 8, 2025, to January 20, 2025, through various platforms:
- Online Platforms: Invest through online mutual fund platforms or the official website of Bandhan Mutual Fund.
- Financial Advisors: Consult with financial advisors or distributors to facilitate the investment.
- Demat Account: Invest through your Demat account via stockbrokers offering mutual fund services.
Who Can Invest:
The fund is suitable for:
- Long-Term Investors: Seeking capital appreciation through a diversified portfolio of high-quality stocks.
- Conservative Equity Investors: Looking for exposure to equities with a focus on low volatility to minimize downside risks.
- Cost-Conscious Investors: Preferring a passive investment approach with lower expense ratios.
Initial Investment Amount:
- Lump Sum Investment: Minimum of ₹1,000 and in multiples of ₹1 thereafter.
- Systematic Investment Plan (SIP): While specific SIP details are not provided in the available information, typically, SIPs in mutual funds can start with amounts as low as ₹500 per installment. Investors should check the fund’s official documents or consult with financial advisors for precise SIP details.
Future Outlook
The Bandhan Nifty Alpha Low Volatility 30 Index Fund offers a strategic blend of high alpha and low volatility stocks, aiming for superior risk-adjusted returns. Its diversified and cost-effective approach makes it a compelling option for investors seeking long-term growth with reduced market risk.
However, as with all investments, it’s essential to assess individual financial goals and risk tolerance before investing.
To read more detailed information about this NFO Click Here.
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