Synthetic ester based Mg (OH) 2 nanofluids were prepared by employing Mg (OH)2 nano ceramic powders at different weight percentage (0.001 to 0.005 wt%) under ultrasonication. The single phase nature Mg (OH) 2 ceramic was confirmed by X-ray diffraction (XRD) and the morphology features by Scanning electron microscopy (SEM) respectively. Thermogravimetric Analyses (TGA) revealed that both Mg (OH)2 ceramics and the nanofluids are stable upto 300°C. The nanofluids were characterized for the critical parameters such AC breakdown voltage, Loss Tangent, Resistivity, Flash point, Acidity, Viscosity and for the thermal conductivity. As expected, addition of Mg(OH) 2 ceramics in the ester upto 0.005 wt %, improvement in the AC Breakdown voltage, Thermal conductivity and Flash point characteristics were achieved. The nano fluid with 0.005 wt % of Mg (OH) 2 had showed enhancement in the AC Breakdown voltage by 38%, thermal conductivity by 25 % and the Flash point by 19% respectively. The nanofluids were also evaluated for the critical parameters after subjected to accelerated ageing as per ASTM D1934. Interestingly, aged nanofluids exhibited further improvement in AC breakdown voltage (16%). Both nanofluids, (before and after ageing) are highly stable upto 72 hr without any sediments / agglomeration. The nanofluids thus developed are considered the next generation of insulating fluids.