For creating an index, one has to group some stocks from the list of stocks with similar characteristics. It measures price movement and market performance. Recommended Read: How to Invest in Nifty 50? What is an Index?Ī stock index is a measurement of the changes that take place in the stock market. It has a variety of financial products like index funds, index futures and options, stock futures and options, etc. IISL is an Indian specialized company which focuses on an index as its focus product. It is owned and managed by India Index Service & Products Limited (IISL). This index was founded in 1992 and started trading in 1994. The National Stock Exchange of India introduced it. The top seven sectors with the highest exposure in the Nifty Midcap 150 Momentum 50 Index include capital goods, consumer services, chemicals, information technology, power, realty, and textiles.Nifty is a popular stock index. In the last three years, the former returned 38 per cent and the latter 29 per cent. According to data provided by the fund house, the Nifty Midcap 150 Momentum 50 TRI returned 20 per cent annually compared to 14 per cent of Nifty Midcap 150 TRI in the last 15 years. Stocks ranked between 101 and 250 based on their market cap on the National Stock Exchange (NSE) are categorized as mid-caps. Also, portfolio rebalancing would be done semi-annually in June and December. In addition, the stocks must have at least one year of listing history to track their six-month and one-year momentum. Thus, it seeks to catch trends that "gather pace and solidify over time." The fund will track the performance of the top 50 companies with high momentum in the Nifty Midcap 150 Index. Stocks that performed relatively poorly in a specified period are avoided. Momentum is a rule-based investing system that buys and sells based on past returns in a defined period. He said the fund would look at the last six to 12-month price performance for volatility and free float to determine momentum. The fund house noted that many mid-cap stocks have turned into multi-baggers over the past five to 10 years, but the segment sees "a large dispersion of returns." Hence, there is a need for a filter to select the potential outperformers in this case, momentum investing could be helpful.Īnand Vardarajan, business head, banking, alternate products, and product strategy, added, "Midcap coupled with momentum as a filter has shown remarkable results. Also, the scheme's exit load is 0.25 per cent of the relevant net asset value (NAV) if redeemed on or before 90 days from the date of allotment. This minimum amount is also applicable for switch-ins. The minimum subscription amount of the scheme is Rs 5,000 per, and thereafter, in multiples of Re 1. He explains that a stock's strong performance could capture "a lot of good around the stock." Hence, once that trend is established, it may likely continue. The fund house said the allocation would be around 95 per cent in index securities and up to 5 per cent in debt and money market instruments.ĭetailing the scheme, fund manager Sailesh Jain said the momentum strategy considers the stock's past price performance over a defined period. The fund will invest in securities covered by the NIFTY Midcap 150 Momentum 50 Index (TRI) and aims to provide returns, before expenses, based on the index's performance, subject to tracking error. The new fund offer (NFO) opened on October 4 and will close on October 17. Tata Mutual Fund has announced an open-ended equity scheme named Tata Nifty Midcap 150 Momentum 50 Index Fund that replicates the NIFTY Midcap 150 Momentum 50 Index.
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