Motilal Oswal Asset Management Company (MOAMC) has launched Momentum FACTOR-based ETF and Index Fund - Motilal Oswal Nifty200 Momentum 30 ETF (Exchange Traded Fund) and Motilal Oswal Nifty200 Momentum 30 Index Fund.
These are open-ended schemes replicating the performance of Nifty 200 Momentum 30 Index. The momentum factor refers to the tendency of winning stocks to continue performing well in the near term.
Globally, factor investing and particularly Momentum Factor, has caught investor attention over the last decade. Amongst the key attributes of the index is its ability to catch market trends early with dynamic sector rotation which has largely been skewed towards Large-caps. The Nifty200 Momentum 30 index selects the top 30 companies with the highest 6-month and 12-month ‘momentum’ as defined in the index methodology.
The constituents need to be part of Nifty 200 index and should also be available for trading in F&O segment with a minimum listing history of one year. The maximum weight of stock is capped at 5% and the index gets rebalanced semi-annually in June and December.
"Some of the strongest returns for momentum have traditionally been generated in bull-markets and expansionary business cycles. The Nifty200 Momentum 30 index has outperformed the Nifty 200 TRI on the basis of a risk-adjusted return over the last 15 years; in fact, the index has outperformed the Nifty 200 TRI in 12 out of the last 15 calendar years.
The average 3-year Rolling Returns of the Nifty200 Momentum 30 TRI is higher than Nifty 200 TRI by 5.90% at 16.7%. The NFO will open on January 21, 2022 and closes on February 4, 2022. Indicative Total Expense Ratio of the funds: For Index Fund Regular: 1.00%, Direct: 0.40%; for ETF is 0.35%. The date of allocation will be 10th February 2022. In terms of index composition as of Dec 31, 2021, the top 10 stocks constitutes nearly 50% of the Nifty200 Momentum 30 index weight with almost all top 10 stocks with ~ 5% cap," states the release.
From the macro-economic sector coverage, IT constitutes 30.7% of the overall composition, followed by commodities (19.4%), consumer (17.6%), financial services (10%), utilities (5.6%), healthcare (5.1%), telecommunications (5%), manufacturing (3.1%) services (2.8%) and energy (0.8%).
The NFO will open on January 21, 2022, and closes on February 4, 2022.
Indicative Total Expense Ratio
- Index Fund Regular: 1%
- Direct: 0.40%
- ETF: 0.35%
Date of allocation
February 10, 2022
