Axis Mutual Fund launches Nifty500 Low Volatility 50 Index Fund

Axis Mutual Fund on Monday announced the launch of the Axis Nifty500 Low Volatility 50 Index Fund, an open-ended index fund that will track the Nifty500 Low Volatility 50 Total Return Index (TRI), subject to tracking error.

The New Fund Offer (NFO) will open for subscription on September 9 and close on September 22. The scheme will offer investors a passive, rules-based approach to equity investing by focusing on 50 stocks that have historically demonstrated relatively lower price volatility.

Focus on lower volatility

Commenting on the launch, B Gopkumar, MD and CEO, Axis AMC, said, “As participation in equity markets broadens, the conversation around risk is also evolving. For many investors, the challenge is having the conviction to stay invested when markets fluctuate.”

“We believe investment solutions should increasingly recognise this behavioural dimension of investing. A strategy that can moderate the intensity of market movements can potentially make it easier for investors to remain focused on their long-term goals, rather than reacting to every phase of the market cycle,” he added.

Gopkumar said low-volatility-based passive strategies can play an important role in portfolios by offering equity exposure while focusing on stocks with historically lower price fluctuations.

“Low volatility investing does not seek to outperform the market in every phase. Instead, it takes a more measured approach to equity exposure by focusing on stocks that have historically experienced lower price volatility,” he said.

Index performance and methodology

According to Axis Mutual Fund, the Nifty500 Low Volatility 50 TRI has historically recorded lower volatility than the Nifty 500 across multiple periods. For the 20-year period ended July 31, 2026, the index delivered a compound annual growth rate (CAGR) of 16%, compared with 13% for the Nifty 500 TRI. Its annualised volatility stood at 15.6%, against 19.9% for the Nifty 500 TRI.

The index has also recorded relatively lower drawdowns during major market corrections, which allowed the strategy to begin subsequent recoveries from a relatively higher base, the fund house said.

The index selects its constituents from the Nifty 500 after applying liquidity criteria. Stocks are then assessed based on historical price behaviour, with the 50 securities recording the lowest volatility scores selected for inclusion.

Stock weights are determined using the low-volatility score and free-float market capitalisation, subject to prescribed caps. The index is rebalanced twice a year, in June and December.