Bajaj Allianz Life launches Small Cap Quality Index Fund, NFO closes March 15

Private life insurance company Bajaj Allianz Life has launched the Bajaj Allianz Life Small Cap Quality Index Fund NFO which aims to leverage the growth opportunities in Small Cap Equities. At the launch, the company stated that the fund objective is to provide investors capital appreciation by investing in companies listed in the Nifty SmallCap 250 Quality 50 Index. 

Bajaj Allianz Life launches Small Cap Quality Index Fund: NFO period

The NFO period for Bajaj Allianz Life Small Cap Quality Index Fund starts on March 1 and ends on March 15, 2024.

The insurer has stated that as 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. And adds that this approach has the potential to lower risk compared to a pure small-cap strategy.

Reflecting on the launch, Sampath Reddy, Chief Investment Officer at Bajaj Allianz Life, said, "The launch of Bajaj Allianz Life Small Cap Quality Index Fund NFO reflects our commitment to offering diversified investment solutions that align with the evolving needs of investors. Historically, the Nifty Small Cap 250 Quality 50 Index has outperformed broader market indices (including the market benchmark Nifty 50 Index) by a considerable margin over the medium to long term. This fund is designed for investors seeking exposure to the dynamic small-cap space while prioritizing quality and effectively managing the risk. We believe this fund offers investors a unique opportunity to capitalize on the compelling potential of quality small-cap companies and participate in India's long-term growth story, in addition to the existing portfolio offerings."

Investors in small cap 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.