Investors looking for a new mutual fund opportunity can consider the new NFO launched by Kotak Mahindra Asset Management Company.
The Kotak Nifty Alpha Low-Volatility 30 Index Fund has opened for subscription from May 29, 2026, and investors can invest in the scheme until June 12, 2026.
This is an open-ended index fund that tracks the Nifty Alpha Low-Volatility 30 Index. The fund invests in 30 companies selected using a combination of Alpha and Low Volatility factors.
What Is Kotak Nifty Alpha Low-Volatility 30 Index Fund?
The Kotak Nifty Alpha Low-Volatility 30 Index Fund is designed to mirror the performance of the Nifty Alpha Low-Volatility 30 Index.
Its goal is to generate returns similar to the total returns of the index before expenses. However, actual returns may vary slightly due to tracking errors.
The fund focuses on 30 carefully selected stocks that aim to offer a balance between growth potential and lower market volatility.
Alpha and Low Volatility Explained
What Is Low Volatility?
Low Volatility is considered a defensive investment factor. Stocks with lower volatility generally experience smaller price swings and may perform relatively better during market downturns.
This factor aims to provide better risk-adjusted returns and reduce the impact of sharp market fluctuations.
What Is Alpha?
Alpha is a growth-oriented factor that tends to perform well during bullish market conditions.
It focuses on stocks that have the potential to outperform the broader market. These are often growth and momentum-driven companies that can generate higher returns when market sentiment is positive.
How Are Stocks Selected for the Index?
The Nifty Alpha Low-Volatility 30 Index follows a rules-based stock selection process.
The selection begins with a pool of 150 companies from the Nifty 100 Index and the Nifty Midcap 50 Index.
Each stock is evaluated using two factors:
Alpha Score, calculated using Jensen’s Alpha
Low Volatility Score, based on stock price volatility
Both factors are given equal importance with a 50:50 weightage. The 30 stocks with the strongest combined scores are selected for the index.
To maintain diversification, the weight of any single stock in the index cannot exceed 5%.
Minimum Investment and Fund Details
Investors can start investing in this NFO with a minimum amount of ₹1,000. After the initial investment, additional investments can be made with any amount.
For those choosing the SIP route, the minimum SIP investment is ₹500.
The fund’s performance will be benchmarked against the Nifty Alpha Low-Volatility 30 Index (TRI).
The scheme will be managed by Devender Singhal, Satish Dondapati, and Abhishek Bisen.
For investors seeking a mix of growth potential and lower volatility through a passive investment strategy, this new NFO may be worth exploring.
