Kotak MF launches NIFTY Midcap 150 Momentum 50 Index: All you need to know

Kotak Mahindra Asset Management Company Ltd (Kotak Mutual Fund) on Thursday announced the launch of its latest offering, the Kotak NIFTY Midcap 150 Momentum 50 Index Fund. This open-ended scheme is designed to replicate or track the performance of the NIFTY Midcap 150 Momentum 50 Index, giving investors a new opportunity to focus on midcap stocks showing recent positive price trends, Kotak MF said in a press release. The scheme opened for public subscription on September 19 and will close on October 3, 2024.

Subscription details

Scheme opened for public subscription on September 19

Closes on October 3, 2024

Scheme re-opens for ongoing transactions: October 11, 2024

Amount: Investors can make a minimum investment of Rs 100 and any amount thereafter

Type of scheme: Open-ended scheme replicating/tracking the Nifty Midcap 150 Momentum 50 Index

Risk: Investors must understand that their principal will be at very high risk, as per risk-o-meter

Benchmark: Nifty Midcap 150 Momentum 50 Index (Total Return Index - TRI)

Suitability: This product is suitable for investors seeking:

* Long-term capital growth

* Returns that correspond to the performance of the Nifty Midcap 150 Momentum 50 Index, subject to tracking errors

What does the NIFTY Midcap 150 Momentum 50 Index track?

The NIFTY Midcap 150 Momentum 50 Index comprises the top 50 midcap companies from the broader Nifty Midcap 150 Index. These companies are selected based on their momentum scores, with momentum investing being a strategy that focuses on stocks that have shown a positive price trend over the past 6 and 12 months. This approach provides investors with a systematic way to invest in companies with strong upward movement.

Focus on midcap growth and momentum

Nilesh Shah, Managing Director of Kotak Mahindra AMC, said the launch of this index fund aligns with the company’s focus on offering products that cater to a wide range of investor risk appetites and investment horizons. "This index fund allows investors to invest in a rule-based index that focuses on midcap companies selected through the momentum strategy," he explained.

Shah added that the combination of midcap companies with a momentum strategy could provide an attractive option for investors who are looking to tap into high-growth opportunities without the hassle of frequent monitoring or adjustments.

Potential benefits for growth-seeking investors

The fund's momentum focus has historically performed well compared to other midcap indices, according to Devender Singhal, Executive Vice President & Fund Manager at Kotak Mahindra AMC. "The NIFTY Midcap 150 Momentum 50 Index has historically outperformed other midcap indices. By focusing on momentum stocks, this fund offers investors a way to potentially benefit from price trends in a passive and disciplined manner," Singhal said.

He also mentioned that the fund offers an opportunity for growth-seeking investors who are willing to handle some level of risk, while maintaining a systematic, rule-based approach. "This strategy is ideal for those looking to access the high-growth midcap segment without needing to make constant adjustments to their portfolio," Singhal added.

The scheme will be benchmarked against the Nifty Midcap 150 Momentum 50 Index - TRI, and will be managed by a team comprising Devender Singhal, Satish Dondapati, and Abhishek Bisen.

With this new index fund, Kotak Mutual Fund is offering investors a chance to focus on the high-growth midcap segment while keeping an eye on positive performance trends, through a passive and structured approach.

Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd