Page 15 - Banking Finance October 2022

MUTUAL FUND

Mutual Fund

ICICI Prudential Mutual equally to its components. According stock indices," said Vishal Kapoor, CEO,
to the press release, the scheme exhib- IDFC AMC.
Fund launches Nifty50
its smart-beta characteristics as the
The Nifty100 Low Volatility 30 Index
Equal Weight Index Fund index intends to have no size bias. The follows a disciplined process of assign-
index is less concentrated and helps in
ICICI Prudential Mutual Fund has ing a higher weight to less volatile
providing stability to the portfolio.
launched the ICICI Prudential Nifty50 stocks and a lower weight to high vola-
Equal Weight Index Fund. The scheme tility stocks. Nifty100 Low Volatility 30
will invest in the constituents of the IDFC Mutual Fund laun- Index yielded a relatively higher return
Nifty50 Equal Weight Index. of 15.4% p.a. as against 14.6% p.a. for
ches Nifty100 Low Volatil-
the Nifty 100 Index and 14.0% p.a. for
The scheme will be managed by
ity 30 Index Fund the Nifty 50 Index over a rolling 10-
Kayzad Eghlim and Nishit Patel.
IDFC Mutual Fund has launched the year timeframe. At the same time, it
"Since indices perform differently un- has demonstrated a stronger ability to
IDFC Nifty100 Low Volatility 30 Index
der variable market conditions, it is withstand the impact of volatility
Fund, an open-ended index scheme
prudent to diversify across indices with where the return per unit of risk is
that will consist of the 30 least volatile
different weightage methodology. 1.05 for Nifty100 Low Volatility 30 In-
stocks from the large cap universe rep-
Nifty50 Equal Weight Index is less con- licating the Nifty100 Low Volatility 30 dex against 0.85 for Nifty 100 Index
and 0.83 for Nifty 50 Index, clearly
centrated in the top 5 sectors as com- Index.
demonstrating its advantage.
pared to the Nifty 50 Index, thus pro-
"As Indians move from being savers to
viding an excellent diversification op-
becoming investors, stock market vola- HDFC Mutual Fund laun-
portunity. Also, there is no size bias as
tility could be unnerving for many new
the index tries to reduce the impact of ches three Smart Beta ETFs
investors, often leading to impulsive re-
bigger companies on the index perfor-
actions, unjustified investment deci- HDFC Asset Management Company
mance," says Chintan Haria, Head- has launched three Smart Beta ETFs -
sions and regret. The Low-volatility
Product Development & Strategy, ICICI NIFTY100 Quality 30 ETF, NIFTY50
strategy provides investors an oppor-
Prudential AMC. Value 20 ETF, and NIFTY Growth Sec-
tunity to benefit from the high return
According to the fund house, the Nifty potential of equities while aiming to tors 15 ETF.
50 Equal Weight Index invests in the reduce volatility, helping investors stay Smart Beta investing involves stock se-
top 50 stocks in India based on market true to their overall investment goals. lection and weighting that is done
capitalization. An equal weight index This Index has provided a compelling based on pre-defined factors. These in-
has empirically higher dividend yield as riskreward opportunity over the years, vestment strategies endeavor to pro-
compared to a market capitalization yielding relatively higher returns with vide better risk-adjusted returns than
weighted index as it allocates funds relatively lower risk as against major broad market cap weighted indices.
BANKING FINANCE | OCTOBER | 2022 | 15