Tata AIA launches NIFTY Alpha 50 Index Fund with ULIP: Should you invest

In addition to market-linked returns, consumers can avail of life cover and health & wellness benefits

Tata AIA Life Insurance Co. Ltd. (Tata AIA) has launched a fund as part of its unit-linked insurance offering. Tata AIA NIFTY Alpha 50 Index Fund will invest in stocks that comprise the Nifty Alpha 50 Index, focusing on delivering market-linked returns along with life cover and health and wellness benefits.

 

The new fund offering (NFO) is open until September 30, with units priced at a NAV of Rs 10 during the offering period. The NFO is designed to provide policyholders with a "unique opportunity to secure their loved ones while potentially benefiting from the growth of high-performing stocks", said Tata AIA in a statement.

 

Investment strategy

 

The Tata AIA NIFTY Alpha 50 Index Fund is a multi-cap investment vehicle that allows policyholders to gain exposure to high-performing stocks. By replicating the performance of stocks listed on the NSE, the fund presents policyholders with opportunities for higher returns through a focus on benchmark-beating stocks.

 

The fund will allocate 80 per cent-100 per cent of its assets to equity and equity-related instruments, with the remaining 0 percent-20 per cent invested in cash and money market securities. This strategic allocation ensures a balanced approach to risk and return for policyholders.

 

“With India's economy expanding multifold over the next few decades, the Indian equity market presents significant wealth creation opportunities. Our policyholders can capture market trends effectively by focusing on high-performing stocks across market caps. With the Tata AIA NIFTY Alpha 50 Index Fund, consumers can look forward to exciting investment opportunities and a fikar-free life,” said Harshad Patil, Executive Vice President and Chief Investment Officer (CIO) of Tata AIA.

 

Policyholders can invest in the NIFTY Alpha 50 Index Fund through Tata AIA’s popular unit-linked insurance plans, including the Tata AIA Param Rakshak (PR) ++ series and Tata AIA Pro-Fit plan+++. These plans provide not only long-term growth potential through equity investments but also essential life and health insurance coverage for consumers and their families.

 

The company gave reasons for to consumers to in the NIFTY Alpha Index Fund in a press release:

 

It is a multi-cap market-linked investment fund, enabling policyholders to take exposure in high performing stocks that are part of different market cap segments.

 

It will replicate the performance of stocks listed on NSE and generate high alpha. This will allow policyholders with the opportunity to earn higher returns given the focus on benchmark beating stocks.

 

According to Morningstar, as of July 2024, 95.55 per cent of Tata AIA’s Assets Under Management (AUM) have been rated as 4 or 5 stars. This performance is evidenced by the Multi Cap Fund, which has achieved a compound annual growth rate (CAGR) return of 31.23 per cent over the past five years, significantly outperforming its benchmark return of 20.10 per cent.