This new fund presents a unique opportunity for investors to capitalize on the growth potential of high-alpha stocks, diversify their portfolios, and enjoy the benefits of an index-based investment approach, along with a life cover.
Bajaj Allianz Life has announced the launch of Bajaj Allianz Life Nifty Alpha 50 Index Fund that will be available for investors looking to purchase ULIP products. According to the company, this new fund presents a unique opportunity for investors to capitalize on the growth potential of high-alpha stocks, diversify their portfolios, and enjoy the benefits of an index-based investment approach, along with a life cover.
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The NFO period for Bajaj Allianz Life Nifty Alpha 50 Index Fund starts on 1st July and ends on 15th July, 2024.
Nifty Alpha 50 Index considers Jensen Alpha while calculating excess returns for the stock. Jensen Alpha (α) refers to excess return generated by a stock/investment over and above the expected return by using capital asset pricing model. The fund aims to provide capital appreciation by investing in equities that are part of the Nifty Alpha 50 Index, which includes the 50 stocks with the highest alpha from the top 300 stocks by free-float market capitalization.
Commenting on the launch, Sampath Reddy, Chief Investment Officer at Bajaj Allianz Life Insurance, said, “India’s economic growth story continues to be robust, presenting numerous opportunities for investors. As investors seek to capitalize on this growth journey, they realize the importance of diversifying their portfolios across different market cap segments. The Bajaj Allianz Life Nifty Alpha 50 Index Fund is designed to capture high alpha returns by investing in top-performing stocks across market segments.”
“A historical study of the past four years suggests that the Nifty Alpha 50 Index has been mid-cap and small-cap oriented, as most of the alpha has come from companies in these segments. Over the medium to long term, the Nifty Alpha 50 Index has generated significantly better returns compared to the broader market,” he added.
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The Nifty Alpha 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 companies based on Alpha values. Bajaj Allianz Life Nifty Alpha 50 Index Fund offers several compelling advantages, by investing in a diversified portfolio of stocks across various sectors.
The fund aims to replicate the performance of the benchmark index (Nifty Alpha 50 Index), subject to tracking error. It is reviewed on a quarterly basis using data from top 300 companies by average free-float market capitalization and average daily turnover for the last six months ending February, May, August, and November.
With the launch of the Bajaj Allianz Life Nifty Alpha 50 Index Fund, Bajaj Allianz Life reinforces its commitment to providing innovative insurance solutions that cater to the evolving needs of its customers. Bajaj Allianz Life ULIP products with underlying Nifty Alpha 50 Index Fund enable policyholders to achieve their life goals, powered by the security of a life cover and the opportunity for wealth creation.
Investors should, however, note that their investments are subject to higher market risk and volatility. Therefore, the Bajaj Allianz Life Nifty Alpha 50 Index Fund is suited for investors with a higher risk appetite.
