Motilal Oswal launches India’s first 500 Momentum 50 Index fund: Details | Personal Finance #IndiaFinance

The index has delivered 75.2% returns in the last 1 year & 35.9% in the past 5 years as of July 31, 2024. While Nifty 500 Momentum 50 exhibits strong performance potential, it may also experience higher volatility.

Key Features:

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  Momentum Strategy: The fund invests in stocks that have exhibited strong price performance over the past 6 months and 1 year.
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  Diversification: The Nifty 500 Momentum 50 index includes stocks from all three market capitalization segments: large-cap, mid-cap, and small-cap.
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  Historical Performance: The index has delivered impressive returns of 75.2% in the last year and 35.9% in the past five years.
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  Low-Cost Structure: The fund offers a low-cost, rules-based approach to investing.

Why Invest in Nifty 500 Momentum 50 Index Fund?

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  Strong Historical Performance: The index has consistently outperformed the broader market in recent years.
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  Diversification: Investing in the Nifty 500 Momentum 50 index provides exposure to a diversified portfolio of high-performing stocks.
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  Systematic Approach: The fund’s rules-based strategy reduces the risk of emotional or biased decision-making.
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  Potential for Outperformance: The index’s focus on momentum stocks can lead to strong returns in upward-trending markets.

Fund Management:

The fund will be managed by Mr. Swapnil Mayekar and Mr. Rakesh Shetty, who have extensive experience in the industry.

Investment Objective:

The fund aims to provide returns that correspond to the total returns of the Nifty 500 Momentum 50 Index, subject to tracking error.

NFO Details:

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  The NFO opens on September 4, 2024, and closes on September 18, 2024.
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  Investors should consult with their financial advisors to determine if this fund is suitable for their investment goals.
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  The launch of the Motilal Oswal Nifty 500 Momentum 50 Index Fund offers investors an opportunity to participate in the growth of high-momentum stocks within the Indian equity market.

“Factor investing is relatively new in India, within which momentum investing growing rapidly. As of Q1 FY25, out of a total AUM of Rs 35,954 crore in factor funds, momentum funds hold the largest share at INR 10,353 crore, highlighting the rapid expansion of momentum investing in the country. This growth can largely be attributed to momentum’s ability to adapt to trending sectors, as the Nifty 500 Momentum 50 TRI captures market trends early through dynamic sector rotation. Consequently, the Nifty 500 Momentum 50 TRI has outperformed the Nifty 50 TRI in 12 of the last 19 calendar years,” said Prateek Agrawal, MD and CEO of Motilal Oswal Asset Management Company.

About Nifty 500 Momentum 50

The Nifty 500 Momentum 50 index is based on the momentum investing strategy, which involves investing in stocks that have demonstrated strong performance over a recent period. The idea is that stocks that have performed well recently will continue to do so in the near future. The index is constituted considering the strong price performance of stocks in the previous 6 months and 1 year period. Further, stocks are selected from the universe of Nifty 500, thus unlike its predecessor Nifty 200 Momentum 30 Index, this index also includes stocks from the Small-cap segment.

“Historically it has been observed that the Momentum strategy works well in the bull and the recovery phase whereas may face challenges during the bear market phase. The Nifty 500 Momentum 50 has strongly outperformed the Nifty 50 which can be primarily attributed to the recent rally in the mid-cap and small-cap space which show how the Index broadly captures the momentum from all the 3 segments. Overall, the Nifty500 Momentum 50 TRI has significantly outperformed the Nifty 50 TRI over the last 15 years. The index SIP returns for the Nifty 500 Momentum 50 TRI have been 82% over 1 year, 45.6% over 3 years, 41.1% over 5 years, and 27.4% over 10 years. In comparison, the Nifty 50 TRI has delivered returns of 35.8%, 21.6%, 21.5%, and 16.3% respectively, for the same period from August 1, 2014, to July 31, 2024,” said Motilal Oswal in a release.

First Published: Sep 04 2024 | 3:20 PM IS