NFO Pick – (SBI Nifty100 Low Volatility 30 Index Fund)

21 Jul 2025 , 01:34 PM

HOW NIFTY100 LOW VOLATILITY 30 TRI SCORES OVER NIFTY 50

The Nifty100 Low Volatility 30 Index Fund is a passive fund benchmarked to low volatility factor. Let us look at how the low volatility factor fund outshines the Nifty 50.

• Average returns on the Nifty100 Low Volatility 30 TRI on 3-year rolling basis was 15.76%, compared to just 12.47% on a 3-year rolling basis.
• Average returns on the Nifty100 Low Volatility 30 TRI on 5-year rolling basis was 15.94%, compared to just 12.47% on a 5 year rolling basis.
• The standard deviation of the Nifty100 Low Volatility 30 Index was lower than the Nifty 50; both on 3-year rolling and 5-year rolling basis.
• The probability of earning 12-18% over 5-year holding period in the Nifty100 Low Volatility 30 Index was 11.36 percentage points higher than Nifty 50. The probability of earning more than 18% over 5 years was 12.5 percentage points higher for the former.

Let us quickly look at the composition of the fund.

COMPOSITION OF THE SBI NIFTY100 LOW VOLATILITY 30 INDEX FUND

Out of the total corpus of the fund, anywhere between 95-100% of the investment will be in stocks covered by the Nifty100 Low Volatility 30 Index. The balance up to a maximum of 5% of the portfolio overall can be invested in government securities,  tri-party repos and in units of liquid mutual funds. Normally, such passive funds maintain the underlying index portfolio and their respective proportions in the index.

The objective of the fund is to mirror the performance of the Nifty100 Low Volatility 30 Index TRI. There will be no attempt to beat the index and the fund manager will focus on minimizing the tracking error of the fund to the bare minimum. However, this is not a static index fund but a factor index fund and hence portfolio churn will be relatively more aggressive, in this case.

HOW LOW VOLATILITY FUNDS PERFORMED IN INDIA?

Here is a quick look at the performance of existing low-volatility factor funds in India.

Scheme Name	Return (%) 1 Year	Return (%) Inception	Daily AUM (₹ in Crore)
ICICI Prudential Nifty Alpha Low- Volatility 30 ETF	-7.92	18.84	1,794.53
Nippon India Nifty Alpha Low Volatility 30 Index Fund	-8.44	17.03	1,416.79
Bandhan Nifty100 Low Volatility 30 Index Fund	1.93	17.01	1,591.43
UTI BSE Low Volatility Index Fund	-1.86	16.54	576.88
Motilal Oswal BSE Low Volatility Index Fund	-2.04	16.39	116.26
ICICI Prudential Nifty100 Low Volatility 30 ETF	2.69	14.75	3,742.48
Kotak NIFTY100 Low Volatility 30 Index Fund	1.83	6.42	110.68
HDFC NIFTY100 Low Volatility 30 Index Fund	2.11	3.30	319.01
Edelweiss Nifty Alpha Low Volatility 30 Index Fund	-8.55	-1.02	154.82
Data Source: AMFI

There are a total of 15 funds with low-volatility factor theme, of which we have only considered 9 funds with a track record of more than 1 year. Low volatility factor funds manage nearly ₹10,238 Crore as AUM and the returns on these funds have shown wide variation. Hence, average returns on these funds may not be too relevant.

GLANCE AT THE SBI NIFTY100 LOW VOLATILITY 30 INDEX FUND NFO

Here are key details of the SBI Nifty100 Low Volatility 30 Index Fund NFO.

• NFO opened on July 08, 2025 and closes on July 22, 2025. It is an index factor fund that is intended to replicate the Nifty100 Low Volatility 30 Index. The fund will endeavour to provide returns that mirror the TRI returns on the index.
• On the risk-o-meter, SBI Nifty100 Low Volatility 30 Index Fund is classified as “Very High Risk,” due to its predominant equity allocation. Despite being an index factor fund, the risk of applying the low volatility factor to the Nifty100 adds to the churn risk.
• The SBI Nifty100 Low Volatility 30 Index Fund is best suited to investors looking to create wealth in the long run through a factor index where the returns on the generic index are enhanced by applying the low volatility factor to it.
• The Fund offers Regular and Direct plans. It also offers Growth option and IDCW option to investors. Viral Chavda will be the designated fund manager. Fund performance is benchmarked to the Nifty100 Low Volatility 30 TRI.
• Minimum application amount in NFO is ₹5,000 and multiples of ₹1 thereof. Subsequent additional investments will be of minimum ₹1,000. The fund structure supports SIPs, SWPs, and STPs too. There is no guarantee that fund will offer index TRI returns.
• There is an exit load of 0.25% of applicable NAV, if redeemed within 15 days from the date of allotment. Any redemption beyond 15 days does not attract exit load. However, investors are advised to take a 5-7 years approach for best results.

SBI Nifty100 Low Volatility 30 Index Fund is classified as an equity fund for tax purposes. Hence, LTCG will be taxed at 12.5% above ₹1,25,000 per financial year. STCG will be taxed at 20.8% (including cess). The cut off for long term will be a holding period of 1 year or more.