Your Questions Answered: What is the Nifty 100 Low Volatility 30 Index and its pros and cons?

livemint.com:

Nitesh Vasvani, Raipur, Chhattisgarh The Nifty 100 Low Volatility 30 Index is an index developed by the National Stock Exchange of India, designed to track the performance of the 30 least volatile stocks within the Nifty 100 index. This index is particularly appealing to investors who are risk-averse yet seek exposure from the equity markets, as it aims to reduce the impact of market fluctuations on the investment.

The constituents of this index are selected based on their volatility figures over the last year, with the least volatile stocks receiving the highest weightage. This method of weightage ensures that the index is skewed towards those stocks that have shown the most stability in a typically turbulent market.The index is recalibrated semi-annually, which allows for the inclusion of stocks that have newly qualified as 'low volatility' and the exclusion of those that no longer meet the criteria.

This dynamic approach ensures that the index remains reflective of the current market conditions.

Also Read: Your Questions Answered: What are pros and cons of investing in Nifty MidSmallcap400 Momentum Quality 100 Index?The Nifty 100 Low Volatility 30 Index is not just a theoretical construct; it serves as a benchmark for various financial products, including exchange-traded funds (ETFs) and index funds offered by prominent asset management companies like HDFC Mutual Fund, ICICI Prudential Mutual Fund, and Kotak Mahindra Mutual Fund, among others.

Investors interested in this index can gain exposure through these mutual funds, which aim to replicate the performance of the index before expenses. The Nifty 100 Low Volatility 30 Index is a specialised index designed to track the performance of the 30 least volatile stocks