NFO alert: Tata AIA NIFTY Alpha 50 Index Fund, AQUA Dollar Fund in focus. Check details

NFOs at present: Tata AIA Life Insurance has floated a new fund offer Tata AIA NIFTY Alpha 50 Index Fund. The new index fund is a unit-linked insurance product (ULIPs) and is available for subscription until September 30, 2024.

During the New Fund Offering (NFO) period, units will be offered at an initial price of Rs 10 per unit. This fund focuses on investing in high-performing stocks that are part of the Nifty Alpha 50 Index. By investing in the top 50 stocks based on performance, the Tata AIA NIFTY Alpha 50 Index Fund aims to generate returns higher than the benchmark.

Policyholders have the option to invest in the NIFTY Alpha 50 Index Fund through Tata AIA’s Unit Linked Insurance Plans, such as the Tata AIA Param Rakshak (PR) and Tata AIA Pro-Fit plans. Some of the top-performing funds, as noted by Tata AIA Insurance, include:

> Multi Cap Fund: Achieving a 31.23% CAGR over the last five years, surpassing the benchmark return of 20.10%.
> Top 200 Fund: Delivering a 31.25% CAGR over five years, outperforming the benchmark return of 20.10%.
> India Consumption Fund: Achieving a 30.54% CAGR, once again surpassing the benchmark return of 20.10%.

Key points

Diversified investment: The fund provides access to top-performing stocks across various market sectors.

Strong alpha creation: The fund aims to mirror the performance of the Nifty Alpha 50 Index, concentrating on stocks with significant alpha potential.

Well-rounded portfolio: The fund intends to invest 80%-100% in equities and equity-linked instruments, while holding 0%-20% in cash and money market securities.

Harshad Patil, Executive Vice President and Chief Investment Officer at Tata AIA, said: The equity market offers substantial wealth creation opportunities for policyholders. With Tata AIA NIFTY Alpha 50 Index Fund, our policyholders can capture market trends and earn long-term returns while benefiting from life cover and health insurance." 

AQUA Dollar Fund

PL Asset Management, the asset management division of PL Capital – Prabhudas Lilladher, has introduced the AQUA Dollar Fund. This innovative fund is India's first quantamental, style-agnostic, and adaptive multifactor strategy. The flexicap quant-based investment approach provides global investors with easy access to India's growing equity markets through dollar-denominated investments. Individuals (foreign nationals and NRIs) and institutions worldwide can participate in this fund via the CAT I FPI route, with a minimum investment of $125,000. 

The AMC said the open-ended, long-only equity fund combines PL’s deep research expertise with state-of-the-art quantitative technology. The result is a strategy that aims to deliver superior risk management and sustainable alpha (outperformance) across macro and market cycles.

The company said the launch of this fund comes at a time when India is on a remarkable economic trajectory as the world’s fastest-growing emerging economy and the fifth-largest market globally. "With resilient macroeconomic indicators, strong domestic consumption, and favourable demographics, India offers a highly attractive investment landscape. This fund provides global investors with a unique and timely opportunity to capitalise on these growth drivers through a meticulously crafted, quant-based investment vehicle," the AMC said.

Key points: 

> Style & sector adaptability: The strategy is designed to shift its investment style between quality, value, growth, low risk, or momentum, while also adjusting its sectoral exposures across cyclicals and non-cyclicals, based on prevailing market and macro conditions.
> Holistic Multi-Factor Approach: It integrates fundamental, technical, valuation, macro, risk, sector, and sentiment analytics to objectively evaluate and rank securities, ensuring a robust stock selection process.
> Flexicap Strategy: It dynamically diversifies across large, mid, and small caps, adjusting allocations based on risk-reward opportunities across market cycles, irrespective of benchmark allocations.
> Responsive Risk Management using Periodic Rebalancing: The portfolio is restructured bi-monthly to align with changing market risk conditions by adjusting its asset and market cap mix, investment style, sector exposures, or beta levels.
> Equal-Weighted Portfolio for Optimal Diversification: The strategy allocates equally across 25-30 stocks, minimising concentration risk while ensuring repeatable performance through a systematic strategy. 

Siddharth Vora, Fund Manager, Head of Quant Investment Strategies at PL Asset Management, said: “The AQUA Dollar Fund is a significant milestone in bringing our quantitative investing expertise to a global audience. It follows the remarkable success of our AQUA PMS, which delivered 63.98% returns since inception in June 2023 (as of 31 August 2024), compared to 40.07% for the BSE 500 TRI – an outperformance of 23.91%. It also consistently ranked among India’s top-performing flexicap funds. We believe that the AQUA Dollar Fund will also deliver impressive returns while managing risks effectively.”

He added: “As one of India’s pioneering 100% quant-based asset management firms, our strategies employ rigorously tested, rules-based, and data-driven systems to eliminate traditional behavioural biases like greed, fear, hope, and regret, ensuring disciplined, objective, and emotionless decision-making.”