Edelweiss Asset Management introduces its latest NFO, offering investors a chance to tap into quality and momentum-driven stocks with two new funds.
Edelweiss Mutual Fund has launched two new schemes—Edelweiss Nifty500 Multicap Momentum Quality 50 Index Fund and Edelweiss Nifty500 Multicap Momentum Quality 50 ETF. These new fund offers (NFOs) opened for subscription on October 11, 2024, and will remain open until October 25, 2024. The main feature of these funds is their focus on both quality and momentum factors, allowing investors to gain exposure to strong-performing companies in the Indian stock market.
What Makes These NFOs Stand Out?
The Edelweiss Nifty500 Multicap Momentum Quality 50 Index Fund and ETF are based on a smart combination of two factors—momentum and quality. These funds track the performance of 50 companies from the Nifty 500 index that have demonstrated strong fundamentals and price momentum. By combining these two factors, the fund aims to replicate the Nifty 500 Multicap Momentum Quality 50 Index, subject to tracking errors.
This unique approach offers investors the opportunity to invest in a diversified portfolio of large-cap, mid-cap, and small-cap companies, all selected based on their financial health, earnings stability, and strong market performance.
Impressive Long-Term Performance
For those looking at long-term investments, the Nifty500 Multicap Momentum Quality 50 Index has shown excellent growth over the years. From April 1, 2005, to August 31, 2024, the index has delivered a compound annual growth rate (CAGR) of 23.79%. This means that an investment of Rs 1 lakh in 2005 would have grown to more than Rs 63 lakh by 2024.
Here’s a comparison of how other indices performed during this period:
- Nifty 50 TRI: 15.18% CAGR (Investment of Rs 1 lakh grew to Rs 15.56 lakh)
- Nifty 500 TRI: 15.57% CAGR (Investment of Rs 1 lakh grew to Rs 16.64 lakh)
- Nifty500 Multicap Momentum Quality 50 TRI: 23.79% CAGR (Investment of Rs 1 lakh grew to Rs 63.17 lakh)
Clearly, the performance of the Nifty500 Multicap Momentum Quality 50 Index outshines many other benchmarks, making it an attractive option for investors seeking strong returns.
Why Choose This Fund?
Radhika Gupta, Managing Director and CEO of Edelweiss Mutual Fund, highlighted that this new fund combines the quality and momentum factors, both of which have been performing well in recent times. This fund carefully selects stocks with solid financials and strong fundamentals, while also capturing market trends to minimize risks, particularly in mid-cap and small-cap stocks.
The 50 stocks in the portfolio are chosen based on their momentum and quality, ensuring a balanced mix of large-cap, mid-cap, and small-cap companies. This approach helps reduce risk while maximizing potential returns.
Minimum Investment and Fund Management
The Edelweiss Nifty500 Multicap Momentum Quality 50 Index Fund offers flexible investment options. Investors can start with a minimum investment of Rs 100 for a lump sum or systematic investment plan (SIP), and additional investments can be made in multiples of Re 1. For those opting for the ETF, the minimum investment is Rs 5000, followed by multiples of Re 1.
The fund is managed by Bhavesh Jain and Bharat Lahoti, both Co-Heads of Factor Investing at Edelweiss Mutual Fund. The ETF will also be managed by Bhavesh Jain, ensuring a seamless management strategy for both funds.
What Are Multicap Funds?
Multicap funds are diversified equity mutual funds that invest in stocks across different market capitalizations—large-cap, mid-cap, and small-cap companies. According to SEBI regulations, multicap funds must invest at least 75% of their portfolio in equity. However, fund managers have the flexibility to adjust the allocation between different market caps as needed.
For investors who are uncertain about where to invest—whether in large-cap, mid-cap, or small-cap stocks—multicap funds offer a solution by providing a balanced mix of all three. Large-cap stocks offer stability, while mid-cap and small-cap stocks have the potential to deliver higher returns, making multicap funds a well-rounded option for long-term growth.
Why Invest in Edelweiss NFO?
These new funds from Edelweiss offer a unique opportunity to tap into quality and momentum-driven stocks, which have shown strong historical performance. The combination of large-cap stability and mid-cap/small-cap growth potential ensures that the portfolio remains diversified and risk-adjusted. For investors looking to benefit from strong market trends and solid financial fundamentals, this NFO is worth considering.
