BSE Low Volatility Index

S&P BSE Low Volatility Index

The S&P BSE Low Volatility Index Fund is an open-ended scheme designed to replicate the S&P BSE Low Volatility TRI. Its investment objective is to provide returns that, before expenses, closely correspond to the total returns of the securities represented by the underlying index, subject to tracking error. It's important to note that there is no guarantee or assurance that the investment objective of the scheme will be achieved.

The S&P BSE Low Volatility Index portfolio presents a strong investment opportunity for individuals looking for lower-risk exposure to the Indian stock market. By concentrating on stocks with the least volatility, the index strives to offer a more stable investment experience with potentially reduced downside risk. Whether through direct stock investment, mutual funds, ETFs, or index funds, investors have a range of options to take advantage of the benefits of low-volatility investing.

Features of S&P BSE Low Volatility Index

The following are the features of the S&P BSE low volatility index:

• Diversification: Diversification enables the creation of a varied portfolio spanning multiple sectors, which minimizes individual stock volatility's effect on the overall index.
• Emphasis on Low Volatility: The index comprises firms exhibiting the least realized volatility during a specific timeframe, providing investors access to more secure and less risky stocks.
• Periodic Rebalancing: The index undergoes periodic rebalancing to maintain its alignment with the performance of the least volatile stocks. This rebalancing usually takes place twice a year.
• Open Approach: We choose and evaluate stocks straightforwardly, following precise criteria to ensure the index acts as a trustworthy standard for stable, low-risk growth.
• Building Longevity Wealth: Through investing solely in firms that create economic returns, the fund aims to build wealth for its investors over a period stretching from a few years to many.

Eligibility Criteria of S&P BSE Low Volatility Index Fund 

Following is the eligibility criteria:

1. Stocks are selected from the S&P BSE LargeMidCap Index, which includes the largest and most liquid stocks on the Bombay Stock Exchange (BSE).
2. Stocks are screened based on their historical volatility, and only the least volatile stocks are included in the index.
3. The stocks must meet certain liquidity criteria to be eligible for inclusion, ensuring that the index components are easily tradable.
4. To ensure diversification, there may be limits on the maximum weight of any single sector within the index.
5. The stocks are weighted by the inverse of their volatility, meaning that stocks with lower volatility receive higher weights in the index.

How to Invest in the S&P BSE Low Volatility Index 

Here’s how to invest in this fund:

• It is necessary to have a brokerage account to invest in individual stocks, ETFs, or index funds. Select a broker who provides access to the Bombay Stock Exchange.
• Choose between investing in index funds that track the S&P BSE Low Volatility Index, individual stocks, mutual funds, and exchange-traded funds (ETFs).
• After selecting your investment vehicle, you can use your brokerage account to place your purchase.
• To keep your intended asset allocation and risk profile, maintain a check on your investments and rebalance your portfolio as necessary.