New fund offer of Bandhan Nifty Alpha Low Volatility 30 Index Fund closes today

New fund offer (NFO) of maiden multi-factor smart beta fund of Bandhan mutual fund – Bandhan Nifty Alpha Low Volatility 30 Index Fund (BALV30) will close today. The investors can buy the units of the scheme after it opens for continuous subscription.

The NFO opened on January 8. BALV30 intends 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 the Nifty Alpha Low Volatility 30 Index, subject to tracking errors.

The Nifty Alpha Low Volatility 30 index picks stocks from the universe of top 150 stocks by market capitalisation after accounting for the alpha generated by the stock and the volatility exhibited by the stock price. The weight of the stock is capped at the lower of 5% or five times the stock’s weight in the free-float market capitalisation index.

Average three years and five years rolling return for the index as on November 30, 2024 were 17.5% and 17.9% respectively. Over the same period Nifty 100 has given on an average three and five years rolling returns of 12.9% and 12.7% respectively.
BALV30 can be a way to own a stock portfolio of relatively large stocks that have done well on the bourses with low volatility. This can work for long term investors keen to invest in such stocks in a tax efficient manner. The scheme charges an exit load of 0.25% if the units are sold within 15 days from the date of allotment.