Bajaj Allianz Life has introduced a new fund offer (NFO), the Bajaj Allianz Life Mid Cap Index Fund. The fund aims to capture the growth opportunities presented by mid-cap equities and invest in the constituents of the Nifty Midcap 150 Index. The NFO period for the fund ends on November 28, 2023.
Bajaj Allianz Life said in a press statement that the fund offers several benefits to investors.
It aims to provide investors with the opportunity for capital appreciation by strategically focusing on mid-cap equities, which are known for their higher growth potential. The fund is well diversified as it is investing in a broad spectrum of stocks from the Nifty Midcap 150 Index, thus spreading risk across different sectors and companies. Lastly, there is also transparency, as it’s an index fund, and thus, investors can easily monitor the fund’s portfolio and performance.
Sampath Reddy, chief investment officer, Bajaj Allianz Life Insurance, said: “Historical data shows that mid-cap indices have helped in wealth creation for investors over the long term and managed to outperform the large-cap indices by a substantial margin. As of September 2023 end, the Nifty Midcap 150 index has delivered a return of 21.2 per cent compound annual growth rate (CAGR) over a 10-year period, while the Nifty 50 index has returned 13.1 per cent (CAGR) over the same period. Therefore, investors are realising the need to diversify their portfolio and have exposure to different market-cap segments as per their risk profile and investment horizon.”
Bajaj Alliaz Life further said that India continues to showcase robust economic growth and is currently the fifth largest economy in the world. The Indian markets has been one of the top performing markets globally, over the long term.
It added that investors wanting to invest in mid-cap stocks should note that these are subject to higher market risk and volatility. As such, the midcap index fund is more suited to investors with a higher risk appetite and longer investment horizon. Historical data also shows that mid-cap indices generally tend to outperform in bull-markets and tend to underperform or see relatively higher drawdown (downside risk) during market corrections, it further said.