Groww launches momentum investing plan tracking Nifty 500 Momentum 50

Scheme will allocate its assets primarily to constituents of the Nifty 500 Momentum 50 Index

Groww Mutual Fund has launched an open-ended exchange-traded fund (ETF) that will track the Nifty 500 Momentum 50 Index - TRI. Groww Nifty 500 Momentum 50 ETF will be open for subscription from April 3 to 17.

 

The new fund offer will allocate its assets primarily to constituents of the Nifty 500 Momentum 50 Index, with a minimum allocation of 95 per cent and a maximum of 100 per cent. The remaining portion may be invested in money market instruments, debt securities, or units of debt and liquid schemes of domestic mutual funds, said Groww. Additionally, asset allocation will account for subscription and redemption cash flows that may remain “undeployed” due to factors such as dividends from underlying securities, rebalancing requirements, operational costs, or rounding-off adjustments during execution.

 

 

Nifty 500 Momentum 50 Index

 

The Nifty 500 Momentum 50 Index is composed of the top 50 stocks from the Nifty 500, selected based on their momentum scores. These scores are determined using the stocks' six-month and 12-month price returns, adjusted for volatility. The index undergoes semi-annual rebalancing to ensure it reflects the most promising stocks driving market momentum.

 

What is momentum investing

 

It is a strategy that involves buying stocks that exhibit strong upward price trends and selling them before the trend reverses. This approach is based on the idea that stocks experiencing upward momentum are likely to continue their positive trajectory, fueled by market sentiment and investor behavior. Unlike fundamental investing, momentum investing primarily focuses on price movements rather than company fundamentals.

 

Historical performance and market recovery

 

Data from the National Stock Exchange (NSE) suggests that the Nifty 500 Momentum 50 Index has historically outperformed broader indices such as the Nifty 50 and Nifty 500 over various time periods. Additionally, momentum investing has demonstrated resilience during market recovery phases, outperforming or matching the broader market in approximately 70 per cent of such periods.

 

Key investment details

 

The investment objective of the Scheme is to generate long-term capital growth by investing in securities of the Nifty 500 Momentum 50 Index in the same proportion/weightage with an aim to provide returns before expenses that track the total return of Nifty 500 Momentum 50 Index, subject to tracking errors. However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved.

 

Minimum investment: Rs 500 and in multiples of Rs 1 thereafter.

 

Fund manager: Nikhil Satam

 

Subscription period: April 3-17, 2025

 

Indicate load separately: Nil

 

Note: Please read the scheme information document carefully and consult your financial advisor before investing.