Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G): NFO Details

Investment Objective and Strategy

Objective:

The investment objective of the Scheme is to replicate the Nifty Alpha Low Volatility 30 Index by investing in securities of the Nifty Alpha Low Volatility 30 Index in the same proportion/weightage with an aim to provide returns before expenses that track the total return of Nifty Alpha Low Volatility 30 Index, subject to tracking errors.

However, there is no assurance or guarantee that the objectives of the scheme will be realized and the scheme does not assure or guarantee any returns.

Investment Strategy:

The Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G) follows a passive investment strategy, replicating the Nifty Alpha Low Volatility 30 Index. It invests in 30 stocks selected for their high alpha (excess returns) and low volatility, ensuring better risk-adjusted returns. The fund is well-diversified, periodically re-balanced, and cost-efficient, making it ideal for long-term investors seeking stability and growth. 

Why Invest in Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G)?

Invest in Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G) for:

Balanced Growth & Stability: Combines high alpha stocks with low volatility for superior risk-adjusted returns.
Diversification: Broad exposure to 30 high-quality stocks across sectors.
Cost Efficiency: Passive management ensures lower expenses.
Simplicity: Tracks a transparent, rule-based index.
Long-term Potential: Ideal for investors seeking consistent growth with reduced market risk.

Strength and Risks – Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G)

Strengths:

Strengths of Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G):

Risk-Adjusted Returns: Focuses on stocks with high alpha and low volatility, offering better risk-adjusted performance compared to broader indices.

Diversified Portfolio: 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.

Risks:

Risks of Bandhan Nifty Alpha Low Volatility 30 Index Fund – Direct (G):

Market Risk: As an equity fund, it is subject to fluctuations in stock prices due to market volatility.

Tracking Error: While the fund aims to replicate the index, there may be slight deviations in performance due to expenses or re-balancing delays.

Concentration Risk: Limited to 30 stocks, which may lead to higher exposure to specific sectors or companies.

Factor Risk: Dependence on alpha and low volatility factors may under-perform during periods when these factors are out of favor.

No Active Management: The fund does not take advantage of opportunities beyond the index, potentially limiting returns in dynamic markets.

Re-balancing Costs: Frequent adjustments to align with the index composition may lead to transaction costs, impacting returns.

Limited Upside in Bull Markets: The low-volatility approach may cap returns in strongly bullish market conditions.