Bajaj Allianz Life has launched Small Cap Quality Index new fund offer (NFO) which aims to leverage the growth opportunities in small-cap equities. The fund’s objective is to provide investors capital appreciation by investing in companies listed in the Nifty Small Cap 250 Quality 50 Index.
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The NFO period for Bajaj Allianz Life Small Cap Quality Index Fund starts on March 1 and ends on March 15, 2024.
The Nifty Small Cap 250 Quality 50 index has shown superior performance than the broader market indices over the medium to long term.
The fund focuses solely on the top 50 small-cap companies based on quality scores, considering factors such as return on equity (RoE), financial leverage (debt/equity ratio), and earnings (EPS) growth, Bajaj Allianz Life said.
This approach has the potential to lower risk compared to a pure small-cap strategy, the insurer added.
Sampath Reddy, Chief Investment Officer at Bajaj Allianz Life, highlighted the historical outperformance of the Nifty Small Cap 250 Quality 50 Index against broader market benchmarks.
He stated, "This fund is designed for investors seeking exposure to the dynamic small-cap space while prioritising quality and effectively managing risk."
As India continues its growth path, the Bajaj Allianz Life Small Cap Quality Index Fund NFO provides investors an attractive opportunity to participate in this growth journey, the insurer said.
With its focus on quality small-cap stocks and a diversified portfolio across sectors, the fund aims to deliver attractive returns while effectively managing the risk.
Investors in the small cap space should note that they are subject to higher market volatility, considering the high risk profile of small-cap equities.
Hence, the small-cap quality index fund is well suited to investors with a higher risk appetite and long-term investment horizon.
