Nippon India Mutual Fund has floated a new fund offer Nifty 500 Momentum 50 Index Fund, under its index fund vertical. Nifty 500 Momentum 50 Index Fund is an open-ended fund that has been created to offer investment returns that align with the overall returns of the securities tracked by the Nifty 500 Momentum 50 Index, before any expenses are taken into account.
The fund's investment approach aims to mirror the performance of the Nifty 500 Momentum 50 Total Return Index (TRI). By investing in a diverse array of stocks from the Nifty 500 Index spanning different market capitalisations, the fund affords investors with the advantages of portfolio diversification. Emphasizing stocks with momentum, the fund potentially boosts returns. Being an index fund, it generally boasts lower expense ratios in contrast to actively managed funds.
Top points
1. Nippon India Nifty 500 Momentum 50 Index Fund by Nippon India Mutual Fund would operate as a passively managed index fund, meaning its investment strategy is designed to mirror the performance of the Nifty 500 Momentum 50 Total Return Index (TRI).
2. The fund aims to provide investors with returns that closely resemble those of the underlying index by investing in a diversified portfolio of securities included in the Nifty 500 Momentum 50 TRI.
3. It will invest in Nifty 500 Momentum 50 Index, Equity Derivatives, cash equivalents and money market instruments.
4. The fund places a significant emphasis on momentum-driven stocks with the goal of potentially boosting returns.
5. Being an index fund, this fund generally maintains lower expense ratios in comparison to actively managed funds.
6. The New Fund Offering (NFO) can be subscribed to from September 11 to September 25.
7. Following the initial subscription period, the schemes will reopen for continuous sale and repurchase within five Business Days from the date of allotment. The fund provides systematic investment solutions such as Systematic Investment Plan (SIP) and Systematic Withdrawal Plan (SWP) to establish a flexible investment strategy.
8. The minimum subscription amount is Rs 1,000/- and can be made in multiples of any amount thereafter.
9. Risk associated: Very high level of risk. Investors seeking high-risk investment opportunities may consider investing in the Nippon India Nifty 500 Momentum 50 Index Fund for a duration of 5 to 7 years.
"Nippon India Nifty 500 Momentum 50 Index Fund offers investors a diversified exposure to India's growth story, while focusing on companies exhibiting strong upward momentum. Building on our distinguished track record in passive investments, we remain committed to deliver innovative and robust solutions that align with our customers' evolving financial goals," said Sundeep Sikka, ED and CEO, Nippon India Mutual Fund.
What are momentum index funds?
Momentum funds are investment vehicles that align with the performance of stocks showcasing robust growth historically. They utilize a blend of fundamental and technical analyses to pinpoint such promising stocks. Opting to invest in momentum funds can present a lucrative opportunity for investors seeking substantial returns. For instance, the Nifty 500 Momentum 50 Index monitors the progress of 50 specific stocks meticulously chosen through normalized momentum scores derived from the Nifty 500 index. The momentum score assigned to each company is calculated considering its 6-month and 12-month price returns, factoring in volatility adjustments.
Similar funds
Bandhan Nifty200 Momentum 30 Index Fund AUM: Rs 135 crore Edelweiss Nifty Midcap150 Momentum 50 Index Fund AUM: Rs 637 crore ICICI Prudential Nifty 200 Momentum 30 Index Fund AUM: Rs 438 crore Tata Nifty Midcap 150 Momentum 50 Index Fund AUM: Rs 575 Crs UTI Nifty200 Momentum 30 Index Fund AUM: Rs 7,980 Crs Motilal Oswal Nifty 200 Momentum 30 Index Fund AUM: Rs 831 Crs
Motilal Oswal Mutual Fund recently introduced the Nifty 500 Momentum 50 Index Fund through a new fund offer (NFO). Potential investors can subscribe to this scheme until September 18, after which it will re-open for continuous sale and repurchase on September 30. The fund aims to mirror the total returns of the securities included in the Nifty 500 Momentum 50 Total Return Index, with the caveat of a tracking error.
Investors can choose between direct and regular plans, both featuring growth options exclusively. Early redemption (within 15 days of allotment) will incur an exit load of 1%. The fund will predominantly allocate 95-100% of its assets to the Nifty 500 Momentum 50 Index constituents, with the remaining 0-5% directed towards units of liquid schemes and money market instruments.