Baroda BNP Paribas Nifty200 Momentum 30 Index Fund Set to Launch

Baroda BNP Paribas Mutual Fund is set to launch its new fund offer (NFO) for the Baroda BNP Paribas Nifty 200 Momentum 30 Index Fund, opening on September 25, 2024, and closing on October 9, 2024. This fund is specifically designed to capitalize on the momentum investing strategy, targeting the top 30 momentum stocks within the Nifty 200 Total Return Index.

Investment Strategy & Performance

The fund aims to boost investor portfolios by focusing on stocks that demonstrate strong upward trends. By selecting these stocks based on their normalized momentum scores from the Nifty 200 Index—comprising the largest companies by market capitalization—the fund mitigates risks associated with smaller, more volatile firms.

Performance Comparison

Here’s a summary of the performance metrics comparing the Nifty 200 Momentum 30 Index TRI with the Nifty 50 TRI:

Historical performance data highlights the fund’s potential, with the Nifty 200 Momentum 30 Index significantly outperforming the Nifty 50 Index since its inception in April 2005. An investment of Rs.1 lakh in the Nifty 200 Momentum 30 Index TRI would have grown to approximately Rs.46 lakhs, compared to just Rs.15.5 lakhs for the same amount in the Nifty 50 TRI, indicating nearly three times higher returns. Over the last 15 years, the Nifty 200 Momentum 30 Index TRI has exhibited a compound annual growth rate (CAGR) of 22%, far surpassing the 13% CAGR of the Nifty 50 TRI.

Insights from Baroda BNP Paribas AMC

Suresh Soni, CEO of Baroda BNP Paribas AMC, emphasized that this fund offers the benefits of cost-effective passive investing alongside the potential for better returns through factor-based investing. The momentum factor has shown one of the best performance records in the Indian market, according to their analyses.

Conclusion: With its focus on momentum investing, the Baroda BNP Paribas Nifty 200 Momentum 30 Index Fund will surely attract investors seeking growth in their portfolios. The historical performance and focus on high-cap companies provide a good foundation for potential long-term gains.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.