UTI Nifty200 Momentum 30 Index Fund - New Fund Offer
Nifty 200 Momentum 30 Index is an index constructed to track the performance of 30 high momentum stocks which are part of Nifty200 Index. It has been created and maintained by NSE Indices Ltd., a subsidiary of the National Stock Exchange of India Limited (NSE), with a base value of 1,000 on 1 April 2005. The index is reviewed and rebalanced on a semi-annual basis in June and December each year.
Highlights of Nifty200 Momentum 30 Index
The stocks forming part of the Nifty200 Index and which are also part of derivative segment are eligible for inclusion in Nifty200 Momentum 30 Index. Further, stocks based on their 6 months and 12 months’ volatility adjusted returns - known as normalized momentum score - are considered to be part of the overall portfolio. Top 30 stocks having highest normalized momentum score make the Nifty200 Momentum 30 Index. Weight of each stock is decided based on factor tilt method i.e. at the time of rebalance, weight is decided based on momentum score and free float market capitalization. The weights are capped at an upper limit of 5% at the time of rebalancing. Detailed methodology is available at www.niftyindices.com
Capturing the market trend and momentum, 13 out of 16 calendar year period, Nifty200 Momentum 30 TRI1 have been able to deliver better returns as compared to its parent index Nifty 200 TRI.
Data as on Jan 29, 2021. TRI i.e. ‘Total Return Index’ consider reinvestment of dividends issued by companies forming part of Index. Source: MFI Explorer & Nifty Indices Limited. Point to Point and Monthly Investment returns are calculated considering last working day of the month. Returns over one year are of compounded annualized growth rate (CAGR). Monthly return is calculated considering RATE() function in MS Excel. Such monthly return is annualized. Investors cannot invest directly into an index. However, they can expect similar returns using ETF or Index Fund, subject to tracking error and cost. ^ - YTD = Year to date i.e. up to as on date mentioned here and not considered in comment due to very short period @ From April 1, 2005 to December 31, 2005 and considered as one CY in comment as period is 9 months. Past performance does not guarantee future performance of the scheme
Who may consider momentum investing?
Momentum is aggressive investment style and is relatively riskier as compared to broad market indices and other factor based investment styles. It may undergo period of relative underperformance when there is sharp change in market cycles like sharp recovery or sharp drop. New investors may consider investing in broad market indices like Nifty 50 or Nifty Next 50 before investing in such smart beta or factor based investment products.
Investment Options available to track Nifty200 Momentum 30 Index
Globally Momentum is well accepted investment style. In India it is available through alternative investment products. With the launch of UTI Nifty200 Momentum 30 Index Fund, this investment strategy will be available to investors under Mutual Fund route that too at a low cost and reasonable investment amount.
Highlights of UTI Nifty200 Momentum 30 Index Fund NFO
The scheme is passively managed mutual fund scheme, tracking/replicating Nifty200 Momentum 30 index. The NFO will be open for subscription from 18 February 2021 to 4 March 2021. The fund will re-open for subscription/ redemption on 12 March 2021. Investors can invest in the NFO with a minimum investment of Rs. 5,000 and in multiple of Rs. 1 thereafter. The scheme has regular and direct plan and has only growth option.
Taxation applicable to the fund
As UTI Nifty200 Momentum 30 Index Fund is equity-oriented scheme, equity taxation will be applicable. Capital gain arising within 1 year will be eligible of short-term capital gain tax and capital gain arising after 1 year, will be eligible for long term capital gain tax. Tax will be applicable as per prevailing rules and regulation.