Low-volatility ETF can be part of your core portfolio

But investors should wait until ICICI Pru's new smart-beta offering develops a track record

Smart-beta exchange-traded funds (ETFs) are gaining popularity globally with assets under management (AUM) worth $700 billion. ETFs based on market-cap weighted indices invest in stocks that have the largest market capitalisation, with the disadvantage that their valuations are already rich. Smart-beta indices, on the other hand, are based on fundamental investment parameters, such as dividend yield, earnings growth, valuation, etc. ICICI Prudential Mutual Fund recently launched a smart-beta product called ICICI Prudential Nifty Low Vol 30 iWin ETF. The low-volatility strategy is already popular abroad, with AUM of about $180 billion globally.

This ETF is based on the Nifty100 Low