Momentum Investing: Axis Nifty500 Momentum 50 Index Fund NFO opens today

Axis Mutual Fund launches Nifty500 Momentum 50 Index Fund NFO; here is all you need to know

Axis Mutual Fund's new fund offer (NFO), Axis Nifty500 Momentum 50 Index Fund NFO, opens for subscription today, January 24, 2024. The NFO, which tracks the Nifty500 Momentum 50 TRI, will remain available until February 7, 2025.

 

The scheme carries a very high risk profile, which is in line with its benchmark that also has a very high risk. Sachin Relekar and Karthik Kumar serve as the fund managers for the Axis Nifty500 Momentum 50 Index Fund NFO.

 

Momentum investing focuses on identifying winning stocks that are likely to continue performing well in the near term. It captures emerging trends across stocks, sizes, and sectors based on recent performance. The fund leverages momentum to capture and ride market trends, adapting to market conditions by aligning with top-performing sectors and stocks.

 

As per the Scheme Information Document (SID), the fund follows a passive investment strategy, tracking the Nifty500 Momentum 50 Index. The index comprises the top 50 stocks, selected based on momentum, from the universe of large-, mid-, and small-cap stocks forming part of the Nifty500 index. Momentum is measured based on a stock’s recent (6-month and 12-month) price returns, adjusted for volatility.

 

The scheme, as outlined in the SID, will invest in equity and equity-related instruments covered by the Nifty500 Momentum 50 Index, debt and money market instruments (as per the asset allocation pattern), derivatives, units of debt and liquid mutual fund schemes, and short-term deposits. "The Scheme shall invest in any other instruments as may be permitted by Sebi/RBI from time to time, in line with the investment objective of the Scheme."

 

The minimum application amount for the Axis Nifty500 Momentum 50 Index Fund NFO is Rs 100, with subsequent investments in multiples of Re 1. An exit load of 0.25 per cent will apply if redeemed or switched out within 15 days from the date of allotment. However, the exit load will be nil if redeemed after 15 days from the date of allotment.

 

The scheme will re-open for continuous subscription and redemption within five business days from the date of allotment.

 

Axis Nifty500 Momentum50 Index Fund NFO: Should you invest? 

Axis Nifty500 Momentum 50 Index Fund NFO, as outlined in the SID, is suitable for investors seeking long-term wealth creation. "It is also ideal for investors looking for an index fund that seeks to track returns by investing in a basket of Nifty500 Momentum 50 stocks and aims to achieve the returns of the stated total return index, subject to tracking error."