SBI mutual fund launches the less volatile SBI Quality Fund: Closes Feb 11

SBI Mutual Fund has launched the SBI Quality Fund. This is an open-ended equity scheme based on the quality factor theme. The New Fund Offer (NFO) for this fund opened for subscription on January 28 and will close on February 11.

What is Quality Investing?

Quality investing focuses on the right process, discipline, and long-term benefits rather than short-term results, where lasting value is determined by quality, not quantity. According to the fund house, like the best coffee beans, quality businesses are also carefully crafted, based on strong fundamentals, supported by competitive forces, and built to handle changing market environments over time.

The investment objective of this scheme is to achieve long-term capital appreciation by investing in equity and equity-related instruments of companies selected based on the quality factor. According to the fund house, however, there is no guarantee or assurance that the investment objective of the scheme will be achieved.

Why invest in a Quality Fund?

Strong Long-Term Performance: The Nifty200 Quality 30 Index has given 93% more returns than the Nifty 50 in the last 20 years.

Lower Volatility: The Nifty200 Quality 30 Index is 10% less volatile than the NSE 500 and 30% less volatile than the Nifty 200 Value 30 Index.

Lower Drawdowns: Fell less than other indices during every market crash.

This scheme will primarily invest at least 80% and up to 100% of its assets in equity and equity-related instruments (including REITs) that are identified based on the quality factor. The remaining assets will be allocated as follows: up to 20% in other equity and equity-related instruments (including REITs), up to 20% in debt securities and money market instruments, and up to 10% in units issued by InvITs, with the exposure being accordingly.