Suspense Crime Sach Ka Dam
The Indian stock market continues to witness a great uptrend. Due to this, many stocks have registered a big rise. In this uptrend, many other stocks have been left far behind. If you want to take advantage of this uptrend, then you will have to change your strategy. Market experts say that when there is a good uptrend in the market, smart-beta funds create an opportunity to capitalize on this market momentum. NSE data shows that in terms of returns in FY24, the broad-based Nifty 50 performed less than strategy-based indices. While Nifty 50 has given a return of 31%. Some strategy-based index funds like Nifty 500 Value 50 gave a return of 65%. Nifty Alpha 50 gave a return of 61% and Nifty 100 Alpha 30 gave a return of 67%. Interestingly, Nifty Low Volatility 50, Nifty 100 Low Volatility 30, and Nifty Quality Low Volatility 30 delivered higher returns than Nifty 50 with less volatility than the broad-based index. Smart beta funds select stocks using momentum, volatility, quality, and value strategies.
Opportunity for investors to invest money
Nippon India Mutual Fund’s Nippon India Nifty 500 Momentum 50 Index Fund NFO opened on September 11 and will close on September 25, 2024. The fund’s strategy is ‘buy low, sell high’. The Nifty 500 Momentum 50 Index offers investors an opportunity for wealth creation in the medium to long term using a buy high and sell high strategy. The Nippon India Nifty 500 Momentum 50 Index Fund tracks the Nifty 500 Momentum 50 TRI, which comprises the top 50 stocks with the highest momentum score based on six and 12-month price returns adjusted for volatility. The index comprises stocks from 13 sectors. It is reconstituted in June and December each year.
Why is investing in the momentum factor beneficial?
Vishal Ahuja of Blue Lake Capital Management says that it combines the features of passive investing. It is rule based and selects with active investing using technical factors like momentum factor. The basic principle governing momentum index funds is that stocks have performed relatively strong in recent times and vice versa. This helps a lot in protecting the interests of investors. The most important part is that the index does not include stocks with low liquidity. Companies, where promoter pledges are more than 20% and non-F&O stocks that circuit more than 20% in a trading day, are also excluded from it. This protects investors and also provides scope for better returns.
