IDFC MF launches IDFC Nifty200 Momentum 30 Index Fund. Key highlights

IDFC Mutual Fund on Thursday announced the launch of the IDFC Nifty200 Momentum 30 Index Fund. This new fund offer will open on August 19 (tomorrow) for subscription and will close on August 26. Investors can invest through licensed mutual fund distributors, advisors, and online platforms as well as directly on the IDFC MF website. The new index aims to capture the swift movement across stocks and sectors.

The IDFC Nifty200 Momentum 30 Index Fund is an open-ended index scheme that will consist of 30 high momentum large and mid-cap stocks replicating the Nifty200 Momentum 30 Index.

The new fund offer will be from August 19 to August 26 and investment can be allowed through licensed mutual fund distributors, advisors, and online platforms along with IDFC MF.

The index has outperformed the Nifty 200 and Nifty 100.

Explaining why investors may consider including IDFC Nifty200 Momentum 30 Index Fund in their portfolio, Vishal Kapoor, CEO, IDFC AMC said “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, and Nifty 200 indices in 8 out of the last 10 calendar years”

As per the statement, the 10-year per unit of risk, as of July 31, 2022, for the Nifty200 Momentum 30 Index was 1.11 vs. 0.87 for the Nifty 200 Index and 0.86 for the Nifty 100 Index.

Kapoor added, “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. 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.”

Giving an example, IDFC AMC stated that the relatively higher weight in the defensive FMCG sector stocks during the first six months of the calendar year 2020, helped cushion the impact of pandemic-related sell-off across the rest of the portfolio. The same period witnessed a change in market leadership with Healthcare stocks outperforming; the Momentum Index adapted to this change at the time of the next rebalancing and increased its exposure to stocks in this sector.

“The dynamic nature of the index makes investing beneficial for the investor over the long term,” it said thus.

IDFC AMC is one of India’s Top 10 asset managers with over 1,18,000 crore Average Asset Under Management (AAUM) in July 2022. With a seasoned management team, the AMC has an on-ground presence in over 50 cities and serves investors across over 750 locations in India.

The AMC offers a range of prudently constructed investment products – across equities, fixed income, hybrid, and liquid alternatives – that aim to provide performance consistent with their well-defined objectives.

 

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