Investment Objective
Nippon India Nifty 500 Momentum 50 Index Fund aims to generate returns, which closely corresponds to the total returns of the Nifty 500 Momentum 50 Index, before accounting for expenses and subject to tracking error.
Investment Strategies
- The fund aims to passively invest in companies showing an uptrend in performance of the top 50 stocks within Nifty 500 based on Normalized Momentum Score, based on its 6-month and 12-month price return after adjusting for volatility.
- The following parameters are considered while including stocks in this index fund:-
- The stock must have a minimum listing history of 1 year as of the cut-off date.
- Non-F&O stocks hitting the circuit filter on more than 20% of the trading days in the last 6 months as on cut-off date are not included in the index.
- Companies where promoter shareholding pledge exceeds 20% are excluded from the index.
- Stocks that fall under the bottom 10 percentile based on 6-month average daily turnover or turnover ratio within the investment universe are excluded from the Nifty 500 Momentum 50 Index.
- Stock weights are determined by multiplying the free float market capitalization with the Normalized Momentum Score. These weights are capped at the lower of 5% or 5 times the free float market capitalization weight in the index. The capping is applied semi-annually.
Who Should Invest
- Investors seeking long term capital appreciation through exposure to high momentum stocks without any market cap bias.
- Investors seeking passive exposure to the Nifty 500 Momentum 50 Index to earn similar returns as the index itself.