Grow Mutual Fund has launched Grow Nifty 500 Momentum Fund. It is an open-ended exchange-traded fund (ETF) that will track the Nifty 500 Momentum 50 Index.
The New Fund Offer (NFO) of this fund will be open for subscription from April 3 to April 17, 2025. During this period, investors can invest a minimum of Rs 500 and more. After this, it can be bought and sold anytime from May 5. This fund will be managed by Nikhil Satam.
Will this fund follow momentum investment strategy?
Momentum investing means buying stocks whose prices are already going up and not selling those stocks as long as the rise continues. At the same time, as soon as the prices of the stocks show signs of falling, they are sold. This strategy is usually based on the price trend, not on the basic fundamentals of a company. In momentum investing, it is believed that what is already rising can rise further.
Top-50 stocks from Nifty 500 are included in this index
The Nifty 500 Momentum 50 Index selects 50 stocks from the Nifty 500 that are experiencing the highest price appreciation. This appreciation is measured on the basis of 6-month and 12-month price returns, and also takes into account the volatility of the stocks. The index is revised every six months to include the fastest growing stocks depending on the market conditions.
Who should invest in this ETF?
Momentum investing strategies have historically outperformed major indices such as Nifty 50 and Nifty 500 many times, especially when the market was going through a recovery phase. Statistics show that when the market is recovering, momentum investing has given good returns in 70% of the cases.
This strategy has been able to deliver good returns relative to risk in the long term, which can be beneficial for investors. But keep in mind, momentum investing is a high-risk strategy as stock prices can change quickly and the trend can reverse.
