Bajaj Life rolls out ‘Nifty 500 Low Volatility 50 Index Fund’ for ULIP investors: All you need to know

Bajaj Life Insurance on Thursday announced the launch of its new fund offer (NFO) — Bajaj Life Nifty 500 Low Volatility 50 Index Fund. The fund is aimed at serving unit-linked insurance plan (ULIP) customers seeking stable, predictable, and long-term capital appreciation. The NFO, set to open on 16 April, will remain open for subscription until 30 April 2026.

The primary objective of this fund is to combine a well-thought-out equity investment strategy with life insurance coverage. It will offer its subscribers and policyholders an opportunity to benefit from market-linked returns while navigating the associated market volatility.

The fund will track the Nifty 500 Low Volatility 50 Index. This index comprises 50 stocks selected from the broader Nifty 500 universe; the selection is based on relatively stable price movements.

Focus on stability and long-term growth

The fund's investment approach is defensive. This is because it aims to allocate about 79% of its portfolio towards large-cap stocks. The remaining allocation is spread across mid- and small-cap segments of the market. The aim here is to provide stable and diversified portfolio returns. This approach helps reduce market volatility, fluctuations, and rapid movements in portfolios over time.

Furthermore, the index aims to follow a rule-based, transparent approach to shortlist stocks based on low volatility scores. These scores are derived from one-year trailing price returns. To sustain market volatility and downturns, the index undergoes semi-annual reconstruction in June and December. Finally, the individual weightage is capped at the lower of 5%, i.e., five times each stock’s free-float market capitalisation weightage. This helps in limiting the risk of underperformance due to concentration risk.

CIO highlights the advantage of a low-volatility strategy

Commenting on the launch, Srinivas Rao Ravuri, Chief Investment Officer at Bajaj Life Insurance, said, “In an environment of heightened market uncertainty, we believe a low-volatility passive strategy offers a compelling proposition for long-term investors. The Bajaj Life Nifty 500 Low Volatility 50 Index Fund applies a disciplined, data-driven methodology to select stocks that have demonstrated price stability, offering a smoother investment experience without compromising the opportunity to participate in India's equity growth story. We believe this fund can serve as an effective core allocation for investors looking to build wealth steadily over time.”

The fund can therefore be considered a suitable option for long-term investors seeking a planned and systematic equity investment with relatively lower volatility than the broader market indices. It aligns with Bajaj Life Insurance’s focus on delivering customer-centric innovation-led financial solutions.

Important factors to consider before investing

Given the fund's features, it is prudent for you to have a discussion with your certified financial advisor, so that you can understand the pros and cons before locking in with investments in this fund or any other asset class. Professional guidance can go a long way to help you prepare the best possible investment portfolio for yourself and reap the benefits of the same in the years to come.

Disclaimer: Investments in ULIPs and market-linked funds are subject to market risks. Past performance of indices or strategies does not guarantee future returns. Please read all scheme-related documents carefully and consult a qualified financial advisor before making any investment decisions.