Nippon India Mutual Fund has introduced two new index funds – the Nippon India Nifty 500 Low Volatility 50 Index Fund and the Nippon India Nifty 500 Quality 50 Index Fund.
Both funds are now available for subscription, which started on April 16, 2025, and will remain open until April 30, 2025.
These funds are designed for long-term equity investors who want to minimize risk and expenses while still achieving good returns.
Both funds are managed by Jitendra Tolani. Let’s dive into the details of these funds, including their investment strategies and who they are best suited for.
Nippon India Nifty 500 Low Volatility 50 Index Fund
This fund is tailored for investors who prefer low-volatility stocks. It aims to track the performance of the Nifty 500 Low Volatility 50 TRI index, which selects the 50 least volatile stocks from the Nifty 500 index. Due to this selection, the fund aims to maintain lower volatility compared to the broader market.
Key Features:
Category: Open-Ended Thematic Index Funds
Minimum Investment: Rs 1,000
Entry and Exit Load: Nil
Risk Level: Very High
Investment Strategy: Passive investing strategy, following the index exactly, with 95% of investments made in proportion to the index.
Who Should Consider This Fund?
This fund is ideal for long-term investors with a moderate risk appetite who want to invest in equities with low volatility.
It’s also a good choice for those who prefer a more structured, disciplined approach over actively managed funds.
Risks: While the fund invests in low-volatility stocks, it still carries market risk, tracking error, and potential risks from derivative use.
Nippon India Nifty 500 Quality 50 Index Fund
The second fund, the Nippon India Nifty 500 Quality 50 Index Fund, tracks the performance of the Nifty 500 Quality 50 TRI Index.
This index includes the top 50 companies selected based on quality metrics, such as high return on equity, stable earnings, and low debt.
This selection makes it an attractive option for investors seeking to invest in some of the strongest companies in India.
Key Features:
Category: Open-Ended Index Funds
Minimum Investment: Rs 1,000
Entry and Exit Load: Nil
Risk Level: Very High
Investment Strategy: Passive management strategy, with portfolio rebalancing in line with the index. Limited use of derivatives is allowed.
What Makes This Fund Special?
This fund offers an opportunity to invest in companies with strong fundamentals and stable performance. It is a good choice for investors looking for long-term wealth creation through quality stocks at a low cost.
Risks: Despite focusing on high-quality companies, this fund still faces market risks, tracking errors, and risks associated with derivative use and portfolio rebalancing.
Conclusion: Which Fund is Right for You?
Both of these index funds provide a low-cost, transparent, and risk-managed way for investors to participate in the equity market.
The Low Volatility 50 Index Fund focuses on stability and low risk, while the Quality 50 Index Fund focuses on long-term growth through quality companies.
Both are suitable for investors with a tolerance for equity market risks and those who prefer passive investment strategies for long-term wealth creation.
