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IDFC Mutual Fund has launched IDFC Nifty100 Low Volatility 30 Index Fund, an open-ended index scheme that comprises 30 least volatile stocks from the large cap universe replicating the Nifty100 Low Volatility 30 Index.
In a press release, Vishal Kapoor, CEO, IDFC MF said, “The low-volatility strategy offers high return potential of equities while aiming to reduce volatility, helping investors stay true to their overall investment goals. This Index has provided a compelling risk-reward opportunity over the years, yielding relatively higher returns with relatively lower risk as against major stock indices.”
The underlying index Nifty100 Low Volatility 30 Index follows a process of assigning a higher weight to lesser volatile stocks. The company said, “As on August 30, 2022, the index yielded a relatively higher return of 15.4% p.a. as against 14.6% p.a. for Nifty 100 Index and 14.0% p.a. for Nifty 50 Index over a rolling 10-year timeframe. At the same time, it has demonstrated a stronger ability to withstand the impact of volatility where the return per unit of risk is 1.05 for Nifty100 Low Volatility 30 Index against 0.85 for Nifty 100 Index and 0.83 for Nifty 50 Index.”
