Fund Outlook – UTI S&P BSE Low Volatility Index Fund<\/strong><\/p>\n\n\n\nUTI S&P BSE Low Volatility Index Fund aims to mirror the performance of the S&P BSE Low Volatility index, where the index construction is based on the “Low Volatility” within the universe of S&P BSE LargeMidcap Index. The scheme endeavours to hold a diversified portfolio of stable companies within the Large and Midcap segment, subject to tracking errors.<\/p>\n\n\n\n
The S&P BSE Low Volatility index has higher exposure than S&P BSE LargeMidcap index to relatively stable sectors, such as Consumer Goods, Automobile, Pharma, among others. The underlying index has lower exposure to sectors with higher volatility, such as Financial Services, IT, and Oil and Gas. By investing only in companies that generate economic value, the fund will endeavour to generate wealth for investors in the medium to long term.<\/p>\n\n\n\n
As an Index fund, it will follow a passive investing approach and reduce the risk of stock selection, but this could pose a concentration risk due to limited exposure to 30 lower volatility stocks. Although the scheme invests in “Low volatile” companies that generally have lesser impact of market volatility, it is still prone to high market risks related to the volatile nature of equities.<\/p>\n\n\n\n
In addition, the looming threat of omicron variant plus the monetary policy action and stance amidst the inflationary pressures taken by the RBI may pose a risk to economic growth. The margin of safety appears to be narrow, and a clear direction for the equity market from the current elevated levels is unknown. These, among many other factors, may affect the scheme’s performance, and the portfolio may face intensified volatility in the near term.<\/p>\n\n\n\n
Thus, this scheme is suitable for investors looking to take exposure in relatively stable companies with low volatility within the universe of S&P BSE LargeMidcap Index. Ensure that you hold a high-risk appetite, a long investment horizon to sustain market volatility, and an investment objective that aligns with the fund.<\/p>\n\n\n\n
This article first appeared on PersonalFN\u00a0here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Volatility is the measure of the frequency and impact of price movement in a given market; for instance, investment in equities is considered to be highly volatile. Low-volatility investing aims on providing better risk-adjusted returns over time with less volatility; it is a relatively effective way to invest in equities. Low-volatility stocks generally tend to…<\/p>\n","protected":false},"author":7,"featured_media":4153,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/4151"}],"collection":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/comments?post=4151"}],"version-history":[{"count":1,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/4151\/revisions"}],"predecessor-version":[{"id":4155,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/4151\/revisions\/4155"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media\/4153"}],"wp:attachment":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media?parent=4151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/categories?post=4151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/tags?post=4151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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