Bandhan Nifty Alpha Low Volatility 30 Index Fund Review
Launch & Fund Overview
The Bandhan Nifty Alpha Low Volatility 30 Index Fund (open-ended, growth option) was launched during its New Fund Offer (NFO) period from 8 to 20 January 2025, aiming to replicate the Nifty Alpha Low Volatility 30 Index. The scheme officially commenced operations around 23 January 2025, depending on the plan—some sources indicate 23 Jan 2025 as the launch date.
The fund adopts a multi-factor index strategy, combining Alpha (upside potential) and Low Volatility (downside protection), blending both growth and relative stability within a single passive framework.
Investment Objective & Strategy
Investment Goal: To closely track the performance of the Nifty Alpha Low Volatility 30 Index by investing in the same constituents in matching weightings, subject to tracking error.
Methodology: The index selects 30 stocks across the Nifty 100 and Nifty Midcap 50, balancing high alpha potential and low price volatility to deliver superior risk-adjusted returns compared to single-factor or broad market indices.
Suitability: Targeted at investors interested in wealth creation through equity, with high risk appetite and a preference for multi-factor exposure rather than reliance on a single indicator.
Key Characteristics
| Attribute | Details |
|---|---|
| Risk Level | Very High (as per SEBI riskometer). |
| Fund Manager | Abhishek Jain — managing the scheme since early 2025. |
| Expense Ratio | ~1.00% for Regular Plan (as of mid-2025); Direct Plan has a lower TER of ~0.25%. |
| Minimum Investment | Lump sum ₹1,000; SIP ₹100. |
| Exit Load | 0.25% if redeemed within 15 days; no exit load after. |
| AUM | Approximately ₹9–10 crore as of mid-2025. |
Performance Since Launch (≈7–8 Months)
Regular Plan (Growth)
Since Inception Return: Around –0.94% to –1.7%.
Trailing Returns (as of mid-August 2025)
1 Month: –2.54%
3 Months: +1.39%
6 Months: +2.06%
YTD: ~0%
Quarterly NAV performance:
Q1: –3.78%
Q2: +9.36% (best quarter)
Q3: –4.35%.
Direct Plan (Growth)
NAV Snapshot: ₹9.91 as of 12 August 2025.
CAGR Since Inception: Approximately 0.16%.
AUM & Investment Details mirror the Regular Plan figures but with better cost efficiency due to lower TER.
Analysis & Investor Considerations
Pros:
Transparent Passive Strategy: Clear index-based rules with exposure to dual factors (alpha + low volatility).
Cost Advantage (Direct Plan): TER of 0.25%, making it more affordable compared to peers.
Potential for Risk-Adjusted Outperformance: The index’s design aims for smoother returns than momentum or value-only products.
Reasonable Short-Term Bounce: Strong Q2 performance indicates responsiveness to recovery phases.
Cons:
Minimal Track Record: Launched only in January 2025, there isn’t enough data for meaningful multi-year performance analysis.
High Risk Category: Equity invested, high volatility fund—mostly suitable for aggressive investors.
Mixed Performance: Slight decline since launch, and underperformance compared to Nifty 50 in some quarterly stretches.
Low AUM: Early-stage fund with modest asset base, may face liquidity or tracking inefficiencies.
Should You Invest?
Short Term ( < 3 years ):
Given the limited track record and volatile performance so far, it’s wise to approach cautiously. Better suited for investors who can tolerate swings and are seeking exposure to a novel multi-factor strategy.
Long Term ( ≥ 3–5 years ):
If you’re looking to diversify your exposure through a rules-based, multi-factor index, and willing to hold through volatility cycles, this fund (particularly the Direct Plan) could offer value—especially due to its lower expense ratio.
For long-term investors, the fund’s design—balancing growth potential with defensive low-volatility sectors—makes it an interesting part of a diversified core equity portfolio. But until a longer track record is established, combining it with stable large-cap or flexi-cap funds may offer better stability.
Conclusion
he Bandhan Nifty Alpha Low Volatility 30 Index Fund presents an intriguing multi-factor passive equity investment—blending alpha potential with defensive volatility control. Launched in January 2025, its short tenure offers preliminary yet mixed returns, with some recovery mid-year and a net negative since inception. While risk remains high, the fund’s cost advantages (especially in the Direct Plan) and strategic design show promise for long-term wealth creation.
Recommendation: Aggressive or diversification-focused investors might consider allocating a small portion to this fund—preferably via the Direct plan—and monitor performance as it builds a multi-year record. Conservative investors may want to wait and observe further outcomes before committing.
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