Nippon Launches Low Volatility Index Fund NFO – Stability Meets Growth from April 16

Nippon India Mutual Fund has launched a new open-ended Flexi Cap equity scheme, with the issue open from 16-Apr-2025 to 30-Apr-2025. Managed by Jitendra Tolani, an experienced professional with an MBA in Finance and a background at Motilal Oswal and Asit C Mehta, the fund offers Growth and IDCW plans with a minimum investment of ₹1,000. The scheme carries no lock-in period or exit load, and is classified as Very High Risk, benchmarked against the Nifty 500 Low Volatility 50 TRI. The fund house is Nippon Life India Asset Management Ltd, and the registrar is KFin Technologies Ltd.

Key Features: Nippon India Nifty 500 Low Volatility 50 Index Fund – Direct (G)

Investment Objective and Strategy:

The investment objective of the Nippon India Nifty 500 Low Volatility 50 Index Fund – Direct (G) is to provide investment returns that commensurate to the total returns of the securities as represented by the Nifty 500 Low Volatility 50 Index before  expenses, subject to tracking errors. However, there is no assurance that the investment objective of the Scheme will be achieved.

What are the Investment Strategies of Nippon India Nifty 500 Low Volatility 50 Index Fund?

• The Nippon India Nifty 500 Low Volatility 50 Index Fund – Direct (G) adopts a passive investment approach to replicate the Nifty 500 Low Volatility 50 TRI, without active stock selection or market timing.
• The scheme invests at least 95% of its assets in the same proportion as the index, ensuring close alignment.
• It does not assess the investment merit of the securities and avoids economic or market-based predictions. The fund may invest in money market instruments for liquidity and expense needs.
• Additionally, it may use derivative instruments like index options/futures and stock options/futures, within SEBI’s regulatory framework, to optimize performance. Portfolio turnover will primarily stem from index rebalancing and corporate actions.

Check out other upcoming NFOs

What are the Risks Associated with Nippon India Nifty 500 Low Volatility 50 Index Fund?

• As a passively managed equity scheme, the fund’s performance is directly tied to the Nifty 500 Low Volatility 50 Index, making it vulnerable to any downturns in the underlying index.
• Though it aims for lower volatility, investments in equity and related instruments inherently carry a very high risk, including potential capital loss. Also, the tracking error—the difference between fund and index returns—could impact returns.
• The use of derivatives, while strategic, introduces leverage-related risks, potentially amplifying both gains and losses.
• Therefore, investors must have the risk appetite to withstand market fluctuations, and the fund is not suitable for conservative or short-term investors.

What Does the Nippon India Nifty 500 Low Volatility 50 Index Fund Offer?

• This fund provides investors an opportunity to gain exposure to 50 of the least volatile stocks from the broader Nifty 500 universe—targeting a balance of growth and stability.
• It is an open-ended scheme with no entry or exit load, making it easy to buy or redeem units at will.
• The fund is available in Growth and IDCW plans and offers a low-cost solution for investors looking to ride the equity wave with lesser volatility.
• Managed by Jitendra Tolani, it seeks to mirror the performance of its benchmark index as closely as possible, with no active management bias, making it an efficient tool for long-term wealth creation.

Nippon India Nifty 500 Low Volatility 50 Index Fund is for What Kind of Investor?

Ideal for long-term investors seeking:

• Equity exposure with lower volatility
• Moderate risk takers

and those wanting passive investing options in a diversified low-risk index.