Axis MF launches Nifty500 Low Volatility 50 Index Fund: Key details, risks and what investors gain

Axis Mutual Fund has launched the Axis Nifty500 Low Volatility 50 Index Fund, giving investors a passive equity option focused on stocks that have historically shown relatively lower price volatility. The open-ended index fund will track the Nifty500 Low Volatility 50 TRI, subject to tracking error, and its New Fund Offer (NFO) will open on September 9 and close on September 22, 2026.

For investors, the key change is the availability of a factor-based passive strategy that does not simply invest in the largest companies by market capitalisation. Instead, the underlying index selects 50 stocks from the Nifty 500 universe based on their historical price volatility.

What is different about this fund?

The Nifty500 Low Volatility 50 Index is designed to identify stocks that have demonstrated relatively lower fluctuations in their prices. After applying liquidity criteria, stocks from the Nifty 500 are ranked on a low-volatility score, with the 50 lowest-volatility stocks selected for the index.

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

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According to Axis Mutual Fund, the strategy has historically delivered a combination of lower volatility and competitive returns. For the 20-year period ended July 31, 2026, the Nifty500 Low Volatility 50 TRI delivered a 16% CAGR, compared with 13% for the Nifty 500 TRI. Its annualised volatility during the period was 15.6%, versus 19.9% for the Nifty 500 TRI.

However, past performance does not guarantee future returns, and a low-volatility strategy can still lose money during equity market declines.

What investors should know

The fund is aimed at investors looking for equity exposure through a rules-based approach, particularly those who want to reduce the intensity of portfolio fluctuations rather than attempt to identify stocks or time the market.

The minimum application amount is ₹100, with investments allowed in multiples of ₹1 thereafter. The exit load is 0.25% if units are redeemed or switched out within 15 days of allotment, while there is no exit load after 15 days.

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Nandik Mallik and Rohit Gautam will manage the fund.

For investors already holding conventional Nifty 50 or Nifty 500 index funds, the new scheme offers a way to add a low-volatility factor exposure rather than simply increasing broad-market exposure. The strategy may therefore be considered as a complementary allocation within an equity portfolio, depending on an investor’s risk profile, investment horizon and existing holdings.

The fund does not aim to eliminate equity-market risk or outperform the broader market in every phase. Its central proposition is to provide market exposure through a portfolio constructed around the historical low-volatility characteristic.

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