Baroda BNP Paribas Mutual Fund has launched an innovative new fund offer Baroda BNP Paribas Nifty200 Momentum 30 Index, an open-ended scheme replicating the Nifty200 Momentum 30 Total Returns Index.
The fund, which opens on 25th September 2024 and closes on 9th October 2024, is designed to tap into the power of momentum investing, offering investors a smart, passive strategy to leverage the top 30 momentum stocks from the Nifty 200 Total Return Index.
Baroda BNP Paribas Nifty 200 Momentum 30 Index Fund highlights:
The fund will track the NIFTY 200 Momentum 30 Index by investing in a portfolio of 30 companies that are part of NIFTY 200 Momentum 30 Index.
These 30 companies are selected from the NIFTY 200 Index based on their normalized momentum scores.
The Nifty 200 Momentum 30 Index has consistently outperformed the NIFTY 50 Index by a significant margin since its inception.
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Rs 1 lakh invested at the inception in April 2005 of the Nifty 200 Momentum 30 Index TRI might have grown to Rs 46 lakh, while the same amount invested in the Nifty 50 TRI might have grown to Rs 15.5 lakh.
However, investors must remember that past performance may or may not be sustained in future and is not a guarantee of any future returns.
The Baroda BNP Paribas Nifty200 Momentum 30 Index Fund seeks to offer investors an opportunity to add momentum to their portfolio. The fund’s momentum-based strategy aims to target stocks with tailwinds, with the hypothesis that those already performing well will continue to do so in the future.
With the universe restricted to the NIFTY 200 constituents (the largest 200 companies by market capitalization), the fund aims to reduce risk by avoiding exposure to the smaller companies that tend to be more volatile and therefore risker.
“Our Baroda BNP Paribas Nifty200 Momentum 30 Index Fund seeks to offer the best of both worlds—cost-efficiency of passive investing and the potential for outperformance by taking advantage of factor-based investing,” says Suresh Soni, CEO, Baroda BNP Paribas AMC.
Factor investing, which is a concept under passive investing, at the core tries to identify the factors that contribute to superior stock performance.
“Our analysis of factors indicate that momentum factor has one of the best performance track record in India. This approach has shown good results in back-testing, with the Momentum strategy (as represented by the NIFTY 200 Momentum 30 Index) outperforming the Nifty 50 Index consistently,” he adds.