Kotak’s New Nifty Midcap 150 Momentum 50 Index Fund: What You Need to Know

The Kotak Mahindra Mutual Fund is in the process of launching its new product called the Nifty Midcap 150 Momentum 50 Index Fund. This open-ended scheme will replicate the Nifty Midcap 150 Momentum 50 Index and will open for Subscription on 19th September and close on 3rd October 2024. 

What’s the Fund About? 

The premise of this fund is very clear. It intends to make a profit by simulating the returns of the Nifty Midcap 150 Momentum 50 Index. This index consists of the top 50 firms from the Nifty midcap 150 Index which have the highest momentum scores. In other words, it is a concentrated and high growth investment in mid-cap stocks where investors get to experience the momentum in such stocks. And, it is an index fund which means it will also be inexpensive when compared to actively managed funds.

Key Fund Details

You can start with the investment in the scheme during the New Fund Offer (NFO) period with a minimum investment of Rs.100. The fund will be managed by experienced fund managers namely, Devender Singhal, Satish Dondapati and Abhishek Bisen, which will undergo biannual rebalancing in keeping with the momentum strategy. It also covers 14 different sectors, hence, a balanced exposure to mid-caps.

Market Position & Performance

Over the past, the Nifty Midcap 150 Momentum 50 Index has performed better when compared to overall market indices. Infact, it outperformed the Nifty Midcap 150 TRI in 8 out of 12 different market phases. As of August 2024, the index’s 1-year CAGR soared to a hefty 50.1% making it a good option for people interested in high-growth investments in the mid-cap segment.

Conclusion: So, for investors looking to tap into high-growth mid-cap companies with a momentum-driven strategy, this fund could be considered. It offers a low-cost, systematic investment approach that aims for long-term capital gains. However, the volatility of mid-cap stocks does bring some risks. It’s worth consulting with a financial advisor to see if it fits well with your portfolio strategy.

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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.