Nippon India Mutual Fund has launched two new fund offers (NFOs) in the market. Both these are passive funds, one is a Nifty 500 low volatility 50 index fund and the other is the Nifty 500 quality 50 index fund. These NFOs are currently open for investment and can be invested by April 30, 2025.
Why is this discussion about NFO?
The stock market instability has increased after the tariff announcement of US President Donald Trump. Although a positive attitude has been seen in the market in recent times, the perception of investors remains weak. Investors are looking for quality and low instability shares due to the upheaval in the financial markets. At such a time, Nippon Life India Asset Management Limited has announced the launch of two new NFOs.
What are these two NFOs?
-Nippon Idea Nifty 500 low volatility 50 index fund
-Nippon India Nifty 500 Quality 50 Index Fund
Both these fund factor adopt investment approaches and invest in low volatility and high quality shares. This fund can become a safe option for investors in the current unstable market.
Investment period
These open-ended NFOs are currently open for investment and investment opportunity will be available till April 30, 2025. During the NFO, investors can invest a minimum of Rs 1,000, and then invest more in multiples of Rs 1.
Benefits of passive funds
Both these NFOs provide many benefits as these are passive index funds. These funds are designed to monitor the index, provide diversification through a single unit and be transparent with low expense ratio.
Nippon India Nifty 500 low volatility 50 index fund
This fund is based on the principle of low instability investment and invests in 50 companies with a lower instability than the Nifty 500 index. This fund selects top 50 companies based on the low instability score calculated based on the daily values of one year. Low instability strategies have historically given significant rewards and challenged the high risk-high rewarding theory. In particular, this strategy has proved better than other strategies during unstable period.
Nippon India Nifty 500 Quality 50 Index Fund
This fund is also based on factor investment and adopts a ‘smart beta’ approach. It focuses on quality investment, ie investing in financially strong companies.
Company selection criteria
This fund selects companies that:
Return (ROE) on its equity is high, which means it makes good earnings.
– There is low loan (equity ratio from loan).
– There is a continuous EPS increase.
This fund offers investors the opportunity to invest in large, medium and small market capitalization and top 50 quality companies in different sectors. This fund adopts a rule-based approach for stock selection and uses quality factors.
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