This fund is the first in India to track the Nifty 500 Momentum 50 Total Return Index.
This offers a new avenue for investors looking for high momentum stocks in the large, mid and small cap segments.
About Nifty 500 Momentum 50 Index Fund
He Motilal Oswal Nifty 500 Momentum 50 Index Fund It is designed to replicate the performance of the Nifty 500 Momentum 50 TRI.
This index includes 50 stocks selected based on their recent strong performance, spanning the entire spectrum of market capitalizations within the Nifty 500 index.
Key details
NFO Period: September 2, 2024 to September 16, 2024
Fund Managers: Swapnil Mayekar and Rakesh Shetty
Benchmark: Nifty 500 Momentum 50 TRI
Minimum Investment: ₹5,000 initially, with subsequent investments starting from ₹1,000
Available plans: Regular and Direct Plans, both offering only the growth option
Load structure: No load input or output
The Nifty 500 Momentum 50 index has shown decent returns, up 75.2% over the past one year and 35.9% over the past five years (as of July 31, 2024).
However, the fund may experience higher volatility due to its momentum-based strategy.
Why consider the Nifty 500 Momentum 50 Index Fund?
The Nifty 500 Momentum 50 Index uses a momentum-based investment strategy, focusing on stocks with strong recent performance.
This strategy tends to work well in bull markets and recovery phases, but can be more volatile during bear markets.
Prateek Agrawal, Managing Director and CEO of Motilal Oswal Asset Management Company Ltd., highlighted the growing interest in momentum-based investing.
He noted that momentum funds account for a significant share of factor funds in India, thanks to their ability to adapt to trending sectors.
Pratik Oswal, Head of Passive Funds Business, added: “The Nifty 500 Momentum 50 TRI has demonstrated exceptional growth and outperformance. This fund offers a transparent and low-cost investment option with the potential to deliver significant returns in uptrend markets.”
Benefits
Strong historical performance: The index has outperformed the broader Nifty 50 TRI in 12 of the last 19 calendar years.
Broad exposure: includes stocks from large, mid and small cap segments.
Systematic approach: uses a transparent, rule-based method, which reduces the risk of emotional problems. Investment decisions.
Disadvantages
Volatility: Momentum strategy can generate higher volatility in the short term.
Market Phases: It performs better in rising markets than in falling ones.
Investment Considerations
The Motilal Oswal Nifty 500 Momentum 50 Index Fund could be a solid investment option for those seeking exposure to high momentum stocks across various market capitalizations.
It offers the potential for high returns, especially in a bull market.
However, investors should be aware of its potential volatility and consult financial advisors to determine whether it aligns with their investment objectives.
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