Kotak Mahindra Asset Management Company (Kotak Mutual Fund) has launched its latest New Fund Offer (NFO) – the Kotak Nifty Midcap 150 Momentum 50 Index Fund. This open-ended scheme is designed to track the Nifty Midcap 150 Momentum 50 Index, offering investors an exciting opportunity to invest in midcap companies with strong momentum. The NFO opened for subscription on 19th September 2024 and will close on 3rd October 2024.
Key Details of Kotak Nifty Midcap 150 Momentum 50 Index Fund
- Launch Date: 19th September 2024
- Closing Date: 3rd October 2024
- Type: Open-ended equity scheme
- Minimum Investment: Rs 100
- Benchmark: Nifty Midcap 150 Momentum 50 TRI
- Lock-in Period: None
- Exit Load: None
This new scheme allows investors to benefit from the midcap segment, known for its high growth potential, while focusing on stocks that have shown recent positive price trends.
Investment Strategy: Momentum-Based Approach
The Kotak Nifty Midcap 150 Momentum 50 Index Fund is built on the momentum investing strategy. It tracks the top 50 midcap companies from the Nifty Midcap 150 Index based on their momentum score. Momentum investing targets stocks that have consistently shown positive price trends over the past 6 to 12 months. This systematic approach enables investors to tap into midcap companies that are currently experiencing growth.
According to Nilesh Shah, Managing Director of Kotak Mahindra AMC, this index fund caters to different types of investors, depending on their risk tolerance and financial goals. The combination of midcap stocks and momentum investing offers a unique opportunity for investors seeking growth without the need to constantly monitor the market.
Strong Performance of Nifty Midcap 150 Momentum 50 Index
Historically, the Nifty Midcap 150 Momentum 50 Index has outperformed other midcap indices, delivering strong returns over various timeframes:
- 1-year return: 66.1%
- 3-year return: 32.3% per annum
- 5-year return: 39.9% per annum
- 7-year return: 26.1% per annum
- 10-year return: 27% per annum
In comparison, the broader Nifty Midcap 150 Index has shown robust growth too, but at slightly lower levels:
- 1-year return: 50.1%
- 3-year return: 27.9% per annum
- 5-year return: 31.9% per annum
- 7-year return: 20.7% per annum
- 10-year return: 20.8% per annum
Why Invest in Kotak Nifty Midcap 150 Momentum 50 Index Fund?
This fund is ideal for investors who are looking to benefit from the fast-growing midcap segment without actively managing their investments. Devendra Singhal, Executive Vice President and Fund Manager at Kotak Mahindra AMC, emphasizes that the fund provides a passive and disciplined way to invest in momentum-driven stocks, offering the potential for higher growth while maintaining a structured investment approach.
By focusing on stocks with strong momentum, the fund allows investors to benefit from positive price trends and capitalize on the growth of midcap companies. This makes it a suitable option for those seeking long-term growth with a rule-based investment strategy.
Investors looking to diversify their portfolios and participate in the growth of midcap companies should consider this fund. The momentum strategy ensures that the fund remains focused on high-performing stocks, providing an opportunity to maximize returns in a systematic manner.
(Note: Past performance may or may not be sustained in future. The index performance shown does not in any way indicate the performance of the scheme, hence investors are advised to consult their financial expert before taking any investment decision.)
