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Edelweiss MF launches Nifty Alpha Low Volatility 30 Index Fund: Should you invest?
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The Nifty Alpha Low Volatility 30 Index Fund is designed to invest primarily (95-100%) in equity and equity-related securities that mirror the Nifty Alpha Low Volatility 30 Index.
Edelweiss Mutual Fund on Friday (April 26) launched the Nifty Alpha Low Volatility 30 Index Fund. The New Fund Offer (NFO) of the scheme is open for subscription till May 10.
The Nifty Alpha Low Volatility 30 Index Fund is designed to invest primarily (95-100%) in equity and equity-related securities that mirror the Nifty Alpha Low Volatility 30 Index.
This index comprises 30 selected stocks from the top 150 listed on the NSE, emphasising both Alpha and Low Volatility factors.
The index has outperformed the Nifty 100 TRI by over 5% in the past 10 years, the mutual fund house said.
The index follows a factor-weighted approach, rebalanced semi-annually in June and December.
Stock weights are determined based on high Jensen Alpha and Low Volatility over the past year, ensuring a dynamic and responsive investment strategy.
The Nifty Alpha Low Volatility 30 Index Fund will provide investors with both regular and direct plans, offering growth and Income Distribution cum Capital Withdrawal (IDCW) options.
Managed by Bhavesh Jain, Co-Head of Hybrid & Solutions Funds at Edelweiss AMC, the fund will allocate 0-5% to debt and money market instruments, ensuring a balanced approach to wealth accumulation.
A look at returns of peer funds
| Fund name | 1-year return |
| Nippon India Nifty Alpha Low Volatility 30 Index Fund – Direct Plan | 54% |
| UTI Nifty200 Momentum 30 Index Fund – Direct Plan | 69.9% |
| DSP Nifty 50 Equal Weight Index Fund – Direct Plan | 40.89% |
| UTI Nifty 50 Index Fund – Direct Plan Invest Online | 28.17% |
| HDFC Index Fund Nifty 50 Plan – Direct Plan Invest Online | 28.15% |
(Source: Value Research)
Investment considerations
According to Radhika Gupta, MD & CEO of Edelweiss Mutual Fund, this fund is
an ideal solution for investors seeking to invest in large-cap-oriented strategy which can outperform the broader market.
“This multi-factor approach, blending Alpha and Low-Volatility factors, aims to
deliver performance while mitigating volatility, thereby enhancing risk-adjusted returns for investors,” she said.
However, like all investments, this fund carries inherent market risks, including fluctuations in stock prices and unforeseen macroeconomic events that could impact performance.
Additionally, past performance is not indicative of future results, and investors should be mindful of the dynamic nature of financial markets.
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