IDFC Mutual Fund has announced the launch of the IDFC Nifty200 Momentum 30 Index Fund, an open-ended index scheme that will consist of 30 high momentum large- and mid-cap stocks replicating the Nifty 200 Momentum 30 Index.
The new fund offer (NFO) will open on August 19, 2022, and will close on August 26, 2022.
According to IDFC Mutual Fund, this product is suitable for investors who are seeking to create wealth over the long term, as well as invest in equity and equity-related instruments belonging to Nifty200 Momentum 30 Index.
The three main reasons that makes this fund suitable, according to IDFC Mutual Fund are that the returns outperform the broader indices, the fund follows a strategy of buying securities when prices are rising and sell them at their peak, and lastly, the risk-adjusted return vs broader indices is the highest.
The minimum amount required for subscription during the NFO is Rs. 5,000 and in multiples of Re. 1 thereafter. Additional purchase can be made for Rs. 1,000 and in multiples of Re.1. For investment through systematic investment plan (SIP), the minimum amount required will be Rs. 100 and in multiples of Re. 1 thereafter for minimum six instalments. For systematic transfer plan (STP), the amount will be Rs. 100 and any amount thereafter.
There is no exit load.
IDFC Mutual Fund said that the investments in securities of the Nifty200 Momentum 30 Index will be in the same proportion/weightage with the aim to provide returns before expenses that closely correspond to the total return of Nifty200 Momentum 30 Index, subject to tracking errors.
The benchmark is the Nifty200 Momentum 30 TRI index.
Vishal Kapoor, CEO, IDFC AMC highlighted why investors should consider including IDFC Nifty200 Momentum 30 Index Fund in their portfolio.
“Momentum investing has proven to be a highly rewarding factor strategy over the last several years. It has also outperformed the broader indices, for instance, the Nifty200 Momentum 30 Index has outperformed the Nifty 100 as well as the Nifty 200 indices in eight out of the last 10 calendar years. It follows a structured, quantitative-led process of buying securities when their price is rising, and importantly, selling them when prices appear to have peaked,” he says.
“Historically, returns per unit of risk for the momentum index have been higher than broader indices. The diversification offered through this differentiated investment style, through a cost-efficient index fund, makes our fund an attractive opportunity for smart, long-term equity investors,” he adds.
The 10-year per unit of risk, as of July 31, 2022, for Nifty200 Momentum 30 Index was 1.11 vs. 0.87 for the Nifty 200 Index, and 0.86 for the Nifty 100 Index. Additionally, the Nifty 200 Momentum 30 Index aims to capture the swift movement across stocks and sectors.
Investors can subscribe through licensed mutual fund distributors, advisors, and online platforms as well as directly on the IDFC MF website, the press release further announced.