Tata Mutual Fund launches Nifty Midcap 150 Momentum 50 Index scheme
PremiumTata Nifty Midcap 150 Momentum 50 Index Fund aims to provide returns, before expenses, commensurate with the performance of Nifty Midcap 150 Momentum 50 Index
Asset management company Tata Mutual Fund has launched an open-ended index scheme that tracks Nifty Midcap 150 Momentum 50 Index.
The new fund offer (NFO) for the fund opened on 4 October and will close on 17 October.
Tata Nifty Midcap 150 Momentum 50 Index Fund aims to provide returns, before expenses, commensurate with the performance of Nifty Midcap 150 Momentum 50 Index (TRI), subject to tracking error.
The fund will invest in securities covered by Nifty Midcap 150 Momentum 50 Index with 95%-100% allocation, debt and money market instruments up to 5% allocation and will be benchmarked against Nifty Midcap 150 Momentum 50 Index (TRI).
Sailesh Jain, fund manager, Tata Asset Management, said, “Momentum strategy takes into consideration the past price performance of the stock over a defined period. We believe that price outperformance of a stock captures a lot of good around the stock, hence once a trend is well-established, it may be likely to continue. A carefully crafted investing strategy may provide the confidence necessary to continue with the methodology in all time frames of the market. Our cost-efficient offering through an Index Fund, makes an opportunity for long-term equity investors."
The exit load is 0.25% of the applicable net asset value, if redeemed on or before 90 days from the date of allotment. The minimum subscription amount is ₹5,000 per application and in multiples of Re 1 thereafter. The minimum application amount is applicable for switch-ins as well.
Anand Vardarajan, business head-banking, alternate products and product strategy added, “Over the past 5 and 10 years, many mid-cap stocks have turned into multi-baggers. However, the midcap segment exhibits a large dispersion of returns, creating the need for a filter to select potential outperformers. This is where Momentum Investing comes in. The simple physics definition of Momentum: Momentum = Mass * Velocity. In fund parlance it will be Stock weights * Price performance adjusted for volatility. Midcap coupled with momentum as a filter has shown remarkable results and that is what we wish to replicate here. This can be a great addition to benefit from the opportunity in Midcap space in a differentiated approach of looking at Momentum as a factor for selection. We look at the last 6 and 12-month price performance adjusted for volatility and free float (liquidity) to arrive at Momentum."
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