Axis Mutual Fund has launched a new passive equity fund called the Axis Nifty500 Low Volatility 50 Index Fund. The fund will focus on 50 stocks from the Nifty 500 that have shown relatively lower price volatility in the past. The New Fund Offer, or NFO, will open on September 9, 2026 and close on September 22, 2026.
The fund will track the Nifty500 Low Volatility 50 TRI. Its aim is to deliver returns that match the index, before fund expenses and after taking tracking error into account. Since this is an index fund, the fund house will follow a set index method rather than use the fund manager’s own stock-picking views.
The fund has a minimum investment of ₹100. The NFO offer price is ₹10. The fund managers are Nandik Malik and Rohit Gautam.
What does low volatility mean?
The term “low volatility” may sound like a promise of low risk. That is not what it means.
In simple terms, volatility tells us how much a stock’s price has moved up and down in the past. A stock with smaller price movements has lower volatility than a stock with large and frequent price changes.
The Nifty500 Low Volatility 50 Index looks at the stocks within the Nifty 500 and selects 50 based on their low-volatility scores. The index uses the standard deviation of daily price returns over the previous one year for this calculation.
So, the fund does not simply pick the 50 biggest companies in India. It looks for stocks that have shown a relatively smoother price path over the selected period.
How the index selects stocks
The process follows a set of rules. Stocks from the Nifty 500 form the main universe. The index also has liquidity rules, which means stocks with weak liquidity may not qualify.
A stock must have at least one year of listing history. There are also rules for stocks outside the futures and options segment if they hit upper or lower price circuits too often. These rules help keep the index focused on stocks that can support a practical investment portfolio.
After the eligible stocks are checked, 50 stocks with the best low-volatility scores enter the index.
The weight of each stock is not based only on its volatility score. It uses a mix of the stock’s low-volatility score and its free-float market capitalisation. This means the index does not give every stock an equal share.
The index gets rebalanced twice a year, in June and December. This allows its portfolio to change as the volatility pattern of stocks changes.
What stocks can investors get?
The underlying Nifty500 Low Volatility 50 Index has exposure across several parts of the Indian market. As per the NSE factsheet dated April 30, 2026, the largest sector weights were Automobile and Auto Components at 18.29%, Financial Services at 15.21%, Healthcare at 13.01%, Oil, Gas and Consumable Fuels at 11.14%, and Fast Moving Consumer Goods at 10.06%.
Other sectors included Information Technology, Power, Consumer Durables, Telecommunication, Construction Materials, Chemicals, Textiles and Consumer Services.
The top stocks by weight in that factsheet were Coal India at 5.44%, Power Grid Corporation of India at 5.42%, Bajaj Finance at 4.87%, Bharti Airtel at 4.66%, and Asian Paints at 4.63%. Other major names included Maruti Suzuki India, Oil & Natural Gas Corporation, Bajaj Auto, Tata Consultancy Services and Eicher Motors.
The actual portfolio of the Axis fund can change as the index changes.
This is still a high-risk equity fund
One of the most important points for investors is that the word “low” in the fund name does not mean low investment risk.
The fund is an equity index fund and has a Very High risk level. Its purpose is to select stocks with lower historical price volatility compared with other stocks in its parent universe. It does not protect investors from market falls.
For example, a low-volatility stock can still fall when the wider market drops. A portfolio of 50 such stocks can also see a sharp decline during a major market correction.
Therefore, investors should not treat this fund like a debt fund, fixed deposit or capital-protection product.
What does the index record show?
The Nifty500 Low Volatility 50 Index has a base date of April 1, 2005, with a base value of 1,000. The current index itself was launched on December 20, 2024.
As per the NSE factsheet dated April 30, 2026, the index had a one-year total return of 7.38%, a five-year total return CAGR of 16.60%, and a 17.56% total return CAGR since inception. These figures belong to the index and are not past returns of the new Axis fund.
The index had a standard deviation of 12.21% for one year, 12.31% for five years, and 16.14% since inception. Its beta versus the Nifty 50 was 0.83 for one year, 0.79 for five years, and 0.71 since inception.
Past index performance does not guarantee future returns.
What are the costs and exit load?
The minimum investment in the Axis Nifty500 Low Volatility 50 Index Fund is ₹100. The NFO will remain open from September 9 to September 22, 2026.
The fund has an exit load of 0.25% if units are sold within 15 days. There is no exit load after 15 days. Investors should still check the latest scheme documents for the full cost structure before they invest.
Since this is a passive fund, another important factor is tracking error. The actual return of the fund can differ from the index because of expenses, cash balances, transaction costs and other factors. The fund’s stated objective itself is subject to tracking error.
Who may consider this fund?
This fund may suit investors who want long-term equity exposure but prefer a factor that focuses on stocks with lower historical price movement.
It may also appeal to investors who already understand index funds and want something different from a plain Nifty 50 or Nifty 500 fund.
However, investors should not buy it only because the words “low volatility” sound safer. The strategy can behave very differently from the broader market. It may perform well during some market phases but may lag more aggressive parts of the market during strong bull runs.
The fund also has only 50 stocks, so it is more focused than a broad Nifty 500 index fund.
A different way to access Indian equities
The Axis Nifty500 Low Volatility 50 Index Fund gives investors access to a specific factor strategy through a mutual fund structure. Instead of asking a fund manager to pick stocks based on personal research, the portfolio follows the rules of the Nifty500 Low Volatility 50 Index.
That makes the approach easy to understand: start with the Nifty 500, apply the index rules, select 50 lower-volatility stocks, and update the portfolio twice a year.
For investors with a long time horizon, this can be an interesting option to study. But it should be judged as an equity factor fund, not as a safe investment.
The key question is therefore not whether low volatility is good or bad. It is whether this particular factor fits an investor’s portfolio, risk level, time horizon and existing equity exposure.
ALSO READ: Japanese Yen Hits 7-Month High at 153.53 – Market Insiders
