Motilal Oswal AMC launches Nifty200 Momentum 30 ETF and index fund
Premium- These are open ended schemes replicating or tracking the performance of Nifty200 Momentum 30 Index. The date of allocation will be 10 February
Motilal Oswal Asset Management Company has announced the launch of its momentum factor-based ETF and index fund - Motilal Oswal Nifty200 Momentum 30 ETF (Exchange Traded Fund) and Motilal Oswal Nifty200 Momentum 30 index fund.
These are open ended schemes replicating or tracking the performance of Nifty200 Momentum 30 Index. The momentum factor refers to the tendency of winning stocks to continue performing well in the near term.
As per the AMC, globally Momentum Factor has caught investor attention over last decade. Among the key attributes of the index is its ability to catch market trends early with dynamic sector rotation which has largely been skewed towards Large-caps.
The Nifty200 Momentum 30 index selects top 30 companies with the highest 6 months and 12 months ‘momentum’ as defined in index methodology. The constituents need to be part of Nifty 200 index and should also be available for trading in F&O segment with a minimum listing history of one year.
The maximum weight of stock is capped at 5% and index gets rebalanced semi-annually in June and December.
The indicative total expense ratio of the funds is 1% for Index Fund regular, 0.4% for direct plan and 0.35% for ETF. The date of allocation will be 10 February 2022.
In terms of index composition as of Dec 31, 2021, the top 10 stocks constitute nearly 50% of the Nifty200 Momentum 30 index weight with almost all top 10 stocks with ~ 5% cap.
In terms of index composition, IT constitutes 30.7% of the overall composition, followed by commodities (19.4%), consumer (17.6%), financial services (10%), utilities (5.6%), healthcare (5.1%), telecommunications (5%), manufacturing (3.1%) services (2.8%) and energy (0.8%). Since December 2017, The IT sector has seen the highest sector exposure by the index.
As per the fund house, the historical index composition has been predominantly large caps stocks with index weight in excess of 65% while mid-caps govern rest of the index
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