Bajaj Allianz Life launches Nifty Alpha 50 Index Fund: Check details

The fund aims to provide capital appreciation by investing in equities that are part of the Nifty Alpha 50 Index

Bajaj Allianz Life has launched the Bajaj Allianz Life Nifty Alpha 50 Index Fund, a unit-linked insurance plan (ULIP) that aims to provide investors with exposure to “high-alpha stocks". The new fund offer (NFO) period for the fund began on July 1 and will end on July 15, 2024.

The NFO 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 capitalisation.

It will aim to replicate the performance of the Nifty Alpha 50 Index, which uses Jensen Alpha to calculate the excess returns for the stocks.

 

Jensen Alpha (α) refers to the excess return generated by a stock or investment over and above the expected return using the capital asset pricing model (CAPM).

Bajaj Allianz Life’s performance is benchmarked on the performance of NIFTY Alpha 50 Index. The minimum investment under the NFO is Rs 2,000. Over a 10-year period, the benchmark index has demonstrated robust performance with an average annual return of 26.40 per cent. This strong performance has been even more pronounced over five years, where the index has delivered an impressive average annual return of 32.90 per cent. These figures highlight the index's substantial growth and potential for investors seeking long-term returns.

The Bajaj Allianz Life Nifty Alpha 50 Index Fund is suitable for investors with a higher risk appetite and who are looking to capitalise on the growth potential of high-alpha stocks and diversify their portfolios, said the company.

“India’s economic growth story continues to be robust, presenting numerous opportunities for investors. As investors seek to capitalise on this growth journey, they realise 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,” said Sampath Reddy, chief investment officer at Bajaj Allianz Life Insurance.

Investors should be aware that the Bajaj Allianz Life Nifty Alpha 50 Index Fund presents a higher risk compared to broader market funds, due to its concentrated portfolio of high-alpha stocks.