How beneficial is the Low Volatility Strategy of ETF? There are two ways to invest in mutual funds – active and passive. Under the active option, the fund manager actively manages the funds of the scheme, while passive funds invest in schemes that track a particular index like Sensex and Nifty.
For example, Exchange Traded Fund i.e. ETF. A new strategy is rapidly emerging in ETFs which is called smart beta. This strategy is a mix of active and passive strategies that select stocks based on specific factors like momentum, value, volatility and quality. One such strategy is low volatility – ETFs following this strategy track the Nifty Nifty100 Low Volatility 30 Index. These indices track the performance of 30 stocks out of the 100 companies included in the Nifty100 index which have had the least volatility in the last one year.
These ETFs are suitable for such investors who do not want to take much risk in the market and also want to invest.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.) The advantage of Smart Beta strategy is that it tries to give better returns by reducing the risk. One strategy of Smart Beta fund is Low Volatility. How does Low Volatility Strategy work? How does it protect investors from the ups and downs of the stock market? Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
