The new fund offer (NFO) of the scheme will close for subscription on February 4. These schemes replicate the performance of the Nifty200 Momentum 30 index.
The Nifty200 Momentum 30 index selects the top 30 companies with the highest six-month and 12-month ‘momentum’ as defined in the index methodology. The constituents need to be part of the Nifty 200 index and should also be available for trading in the F&O segment with a minimum listing history of one year. The maximum weight of stock is capped at 5% and the index gets rebalanced semi-annually in June and December, Motilal Oswal AMC said.
On a historical basis, Momentum has been one of the best performing factors, generating sizable excess returns. Some of the strongest returns for momentum have traditionally been generated in bull-markets and expansionary business cycles, Motilal Oswal AMC said.
The fund house pointed out that the Nifty200 Momentum 30 index has outperformed the Nifty 200 TRI on the basis of a risk-adjusted return over the last 15 years; in fact, the index has outperformed the Nifty 200 TRI in 12 out of the last 15 calendar years. The average 3-year Rolling Returns of the Nifty200 Momentum 30 TRI is higher than Nifty 200 TRI by 5.90% at 16.7%.
Pratik Oswal, Head of Passive Funds, Motilal Oswal AMC, said, “As India scripts its economic recovery from the pandemic influenced disruption, businesses are seen planning capex led expansion and overall earnings are expected to be on an upward trend. This is expected to channelize bull related market scenario which makes it conducive for Momentum Factor to be the lead performer. We recommend investors to use our momentum-focused fund as a satellite allocation approach to enhance their portfolio’s risk-adjusted returns.”