Can these low-volatility equities reduce portfolio volatility, according to the Nifty @20K?

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Can these low-volatility equities reduce portfolio volatility, according to the Nifty @20K?

When stock markets are rising and analysts anticipate a correction, smart-beta funds, which are centered on the Nifty100 Low Volatility 30 Index, seek to lower volatility. However, diversified funds also buy these equities.

A portfolio of less volatile equities is offered by smart beta funds that follow the Nifty100 Low Volatility 30 Index. When the equity markets are traded with extreme volatility, these funds frequently do well. The top 100 blue-chip equities that traded with very little volatility in the previous year are the stocks that make up the basket. The standard deviation is used to calculate the volatility in this situation. Given their comparatively less aggressive stock selection strategy, these funds have been able to outperform the broad market indexes over the long term with a respectable margin thanks to their improved performance during downturns. Here are the top 10 equities in the Nifty100 Low Volatility 30 Index basket along with a breakdown of how many diversified funds own each one.

Sun Pharmaceutical Industries Weightage: 4.1% Sector: Pharmaceuticals Active equity schemes that held the stock: 266

Sun Pharmaceutical Industries
Weightage: 4.1%
Sector: Pharmaceuticals
Active equity schemes that held the stock: 266

ICICI Bank Weightage: 3.9% Sector: Banks Active equity schemes that held the stock: 407 Also see: PMS managers exited from these midcap stocks: Check your portfolio

ICICI Bank
Weightage: 3.9%
Sector: Banks
Active equity schemes that held the stock: 407

Nestle India Weightage: 3.8% Sector: Food Products Active equity schemes that held the stock: 120

Nestle India
Weightage: 3.8%
Sector: Food Products
Active equity schemes that held the stock: 120

Hindustan Unilever Weightage: 3.7% Sector: FMCG Active equity schemes that held the stock: 225 Also see: How have India’s oldest MF schemes rewarded investors?

Hindustan Unilever
Weightage: 3.7%
Sector: FMCG
Active equity schemes that held the stock: 225

Kotak Mahindra Bank Weightage: 3.6% Sector: Banks Active equity schemes that held the stock: 183

Kotak Mahindra Bank
Weightage: 3.6%
Sector: Banks
Active equity schemes that held the stock: 183

Dr. Reddy's Laboratories Weightage: 3.6% Sector: Pharmaceuticals Active equity schemes that held the stock: 104 Also see: Microcaps that are fund house favourites but yet to unlock their potential

Dr. Reddy’s Laboratories
Weightage: 3.6%
Sector: Pharmaceuticals
Active equity schemes that held the stock: 104

Larsen & Toubro Weightage: 3.5% Sector: Construction Project Active equity schemes that held the stock: 317

Larsen & Toubro
Weightage: 3.5%
Sector: Construction Project
Active equity schemes that held the stock: 317

HDFC Bank Weightage: 3.5% Sector: Banks Active equity schemes that held the stock: 420 Also see: Risk mitigation strategy: low volatile largecap stocks held by smallcap funds

HDFC Bank
Weightage: 3.5%
Sector: Banks
Active equity schemes that held the stock: 420

Indian Oil Corporation Weightage: 3.5% Sector: Petroleum Products Active equity schemes that held the stock: 24

Indian Oil Corporation
Weightage: 3.5%
Sector: Petroleum Products
Active equity schemes that held the stock: 24

ITC Weightage: 3.5% Sector: FMCG Active equity schemes that held the stock: 233 Also see: 13 Smallcap Gems That Infrastructure Mutual Funds Love to Hold

ITC
Weightage: 3.5%
Sector: FMCG
Active equity schemes that held the stock: 233

credit by DHURAIVEL GUNASEKARAN

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