Nifty @20K: Can these low volatile stocks cushion your portfolio volatility?
Smart-beta funds, focussed on Nifty100 Low Volatility 30 Index, aim to reduce volatility when equity markets ride high and experts predict a correction ahead. But even diversified funds invest in such stocks
Smart beta funds that track Nifty100 Low Volatility 30 Index offer a portfolio of less-volatile stocks. These funds tend to do well when the equity markets are traded with high volatility. The stocks in the basket are chosen from the top 100 bluechip stocks that were traded with relatively low volatility in the last one year. Here, the volatility is measured using the standard deviation. Given the relatively less-aggressive stock selection approach, these funds have managed to deliver better performance in downturns that help them to outperform the broader market indices with a decent margin over the long run. Here are the top 10 stocks within the basket of the Nifty100 Low Volatility 30 Index and a look at how many diversified funds hold them. Stocks list was as of September 29, 2023. Source: Niftyindices.com and ACEMF
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Sun Pharmaceutical Industries Weightage: 4.1% Sector: Pharmaceuticals Active equity schemes that held the stock: 266
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ICICI Bank Weightage: 3.9% Sector: Banks Active equity schemes that held the stock: 407
