Motilal Oswal Asset Management Company (MOAMC) has announced the launch of its 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 or tracking the performance of the Nifty200 Momentum 30 Index. The momentum factor refers to the tendency of winning stocks to continue performing well in the near term. Globally factor investing 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 top 30 companies with the highest 6 months and 12 months ‘momentum’ as defined in the index methodology. The constituents need to be part of the Nifty 200 index and should also be available for trading in the F&O segment with a minimum listing history of one year. The maximum weight of the stock is capped at 5% and the index gets rebalanced semi-annually in June and December.
On a historical basis, Momentum has been one of the best performing factors, generating sizable excess returns. 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 based on a risk-adjusted return over the last 15 years 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. “Motilal Oswal AMC is one amongst the largest AMC in India in the international funds segment and only fund
house to have passive funds across major key segments. With an objective to bring products in accordance to the evolving needs of the investors, we will be introducing a slew of the funds in the factor investing segment. Out first product in this category will be the Motilal Oswal Nifty200 Momentum 30 ETF and Index Fund which
will be suitable for investors looking for exposure to factors. We aspire to build unique brand positing by establishing ourselves as a fund house to drive the factor investing category in India,” said Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd.