NFO Update: Bandhan Mutual Fund launches index fund

Bandhan Mutual Fund has announced the launch of Bandhan Nifty Alpha Low Volatility 30 Index Fund, an open-ended scheme tracking Nifty Alpha Low Volatility 30 Index.

The new fund offer or NFO of the scheme will open for subscription on January 8 and close on January 20. The scheme will reopen for continuous sale and repurchase on January 28.

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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.

The scheme will be benchmarked against Nifty Alpha Low Volatility 30 Index and will be managed by Nemish Sheth.

An 0.25% will be applicable, if redeemed on or before 15 days from the allotment date. The exit load will be nil, if redeemed after 15 days from the allotment date.

The minimum amount for lumpsum purchase is Rs 1,000 and in multiples of Re 1 thereafter. For SIP, the minimum amount is Rs 100 and in multiples of Re 1 thereafter with a minimum of six instalments. The minimum amount for STP is Rs 500 and any amount thereafter.

This index fund will allocate 95-100% in securities belonging to the Nifty Alpha Low Volatility 30 Index (including stock and index derivatives) and 0-5% in debt and money market instruments.

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The scheme will be managed passively with investments in stocks in proportion to the weights of these stocks in the Nifty Alpha Low Volatility 30 Index. The investment strategy would revolve around reducing the tracking error to the least possible through rebalancing the portfolio, considering the change in weights of stocks in the index as well as the incremental collections/redemptions from the ccheme.

The scheme is suitable for investors seeking to create wealth over the long term and want investment in equity and equity-related instruments belonging to the Nifty Alpha Low Volatility 30 Index.