NFO alert: ITI Large & Mid Cap Fund, Nifty 500 Momentum 50 Index Fund, Tata Nifty200 Alpha 30 Index Fund in focus. Check details

NFO alert: ITI Asset Management Company Ltd (ITI AMC) has introduced the ITI Large & Mid Cap Fund, an open-ended equity scheme designed to capitalise on India's growth prospects. The fund's investment strategy focuses on the top 250 companies operating in key sectors that are fueling the nation's economic progress. Interested investors can subscribe to the fund starting from August 21, 2024, with the subscription window closing on September 4, 2024.

As per the details, the ITI Large & Mid Cap Fund is designed to offer long-term capital growth by investing in a blend of large and mid-cap companies.

Investment aim & details

> The aim is to strategically invest in companies that are well-positioned to capitalise on the continuous structural, cultural, and digital transformations taking place in India. These transformations are fostering urbanization, elevating income levels, and fueling discretionary spending across the country.

> The minimum investment for the ITI Large & Mid Cap Fund is Rs 5,000, with the option to invest through a Systematic Investment Plan (SIP) starting at Rs 500. 

> The scheme will not have any entry load, while an exit load of 0.5% will be applicable if units are redeemed or switched within three months from the date of allotment.

> The fund will be managed by Vishal Jajoo and Rohan Korde. 

Vishal Jajoo said: “India is one of the fastest-growing economies in the world. Growth companies continue to command a premium due to their earnings visibility. With a bottom-up approach, we identify companies with strong fundamentals that are likely to show significant improvement in return ratios in the near future. These companies could offer substantial value to investors as part of our fund.”

The large and mid-cap segment in India is highly favoured by investors due to its unique characteristics. Large-cap companies are renowned for their stable market positions, guaranteeing consistency and reliability. On the other hand, mid-cap companies are renowned for their remarkable growth potential, which appeals to long-term investors seeking a balance of growth and stability in their investment portfolios.

Nifty 500 Momentum 50 Index Fund

Max Life Insurance Company has floated the Nifty 500 Momentum 50 Index Fund under the Unit Linked Insurance Plan (ULIP) segment. The new fund offer (NFO) will remain open until September 1, 2024, with units priced at Rs 10 each, applicable only during the NFO period.

The Nifty 500 Momentum 50 Index Fund follows the performance of the Nifty 500 Momentum 50 Index. This particular index comprises the top 50 companies within the Nifty 500, carefully chosen based on their Normalised Momentum Scores. By merging the flexicap and momentum investing strategies, the fund aims to achieve optimal returns for its investors.

Marking itself as Max Life's second momentum-focused fund, the Nifty 500 Momentum 50 Index Fund follows the Midcap Momentum Index Fund, which was introduced in January 2024.

This new offering from Max Life caters to the surging demand for flexicap funds, known for their ability to adapt to market shifts. By providing a shield against the cyclical nature of market capitalisation schemes, the fund strives to capitalise on evolving market trends and deliver stable returns for its investors.

Till the end of Q1 FY25 (June 2024), the benchmark index was composed of 60% large-cap, 27% mid-cap, and 13% small-cap stocks, providing a diversified approach to wealth creation.

Investment aim and details

The Nifty 500 Momentum 50 Fund targets investors seeking wealth creation over the medium to long term. It follows a "buy high, sell higher" approach, aiming to capture ongoing price trends. The strategy is expected to deliver higher returns compared to traditional index investing, the insurance company said.

Sachin Bajaj, Chief Investment Officer at Max Life Insurance, said: "Employing a momentum investing strategy, the fund is designed to cater to the modern customers’ quest for high growth potential across India’s top 500 companies."

The Nifty 500 Momentum 50 Fund aims to provide aggressive growth opportunities by offering a diversified portfolio for investors. This fund is particularly appealing to those who believe in the momentum strategy, which involves focusing on stocks with strong recent performance. It is crucial to acknowledge the risks inherent in momentum investing, as it may result in increased volatility within the portfolio.

The Nifty 500 Momentum 50 Fund can be accessed through various ULIP products, including the Online Savings Plan, Shikhsha Plus Super, and Flexi Wealth Advantage Plan. Following the New Fund Offering (NFO) period, it will also be made available with other Max Life plans like the Platinum Wealth Plan and Smart Flexi Protect Solution, ensuring accessibility to a wide range of customer segments.

Tata Nifty200 Alpha 30 Index Fund

Tata Asset Management has introduced the Tata Nifty200 Alpha 30 Index Fund, which would track the top 30 companies with the highest alpha within the Nifty200 Index. The new fund offer (NFO) of the scheme is available till September 2.

The fund will re-open for subscriptions on or before September 11, 2024.

The minimum application amount during the NFO is Rs 5,000, and there is no entry load.

However, an exit load of 0.25% applies if units are redeemed within 15 days of allotment.

Overall, the Tata Nifty200 Alpha 30 Index Fund offers a novel approach for investors looking to leverage alpha-based investing, but they should consider the associated risks and potential for underperformance in declining markets.

The fund employs an alpha-based passive investment strategy, which adjusts to market conditions by increasing exposure to stocks and sectors that are performing well and reducing weightage in those that are underperforming.

The fund's strategy focuses on excess returns generated by its portfolio compared to the Nifty200 Index, after adjusting for risk and volatility. By selecting stocks that outperform both the broad market and risk-free returns, the Tata Nifty200 Alpha 30 Index Fund aims to capture superior returns.

Historically, the Nifty200 Alpha 30 Index has outperformed market cap-weighted indices like the Nifty200 during market upturns, although it may underperform during downturns.