Nippon India Mutual Fund has launched an index fund. Its name is Nifty 500 Momentum 50 Index Fund. This fund will invest in those stocks which show strong bullish signals. Investments can be made in this New Fund Offer (NFO) till September 25. After that the units of this scheme can be bought and sold at any time.
This fund will invest in momentum stocks
Nippon India Nifty 500 Momentum 50 Index Fund Is a passive managed scheme. It is based on the Nifty 500 Momentum 50 Total Return Index (TRI) will track. Its primary objective is to invest in momentum stocks. This means that this scheme will invest in shares of those companies whose prices have shown a sharp rise. Nippon India Mutual Fund has said that this fund gives investors an opportunity to invest in 50 high-momentum stocks of Nifty 500.
Good for portfolio diversification
This fund is good for diversification of investors’ portfolio. The strategy of investing in momentum shares is helpful in achieving high returns. But, there are more fluctuations in it. Since it is a passively managed index fund, it has a lower expense ratio as compared to actively managed funds. Therefore, it gives investors an opportunity to invest in shares at low cost.
Minimum investment Rs 1,000
A minimum investment of Rs 1,000 can be made in this fund. People with lower income can also invest in this fund. This fund also has the option of systematic investment like SIP and SWP. This gives the investor an opportunity to easily make long term investments. Experts say that investing in mutual fund schemes over the long term gives good returns.
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Should you invest in this fund?
If you want to invest in this fund, it would be better to first understand its risk profile. There is a lot of risk in investing in this. Momentum stocks perform well in bullish markets but perform poorly in volatile or bearish markets. If you are ready to take more risk for higher returns then only you should invest in this fund. Second, you will get good returns only if you invest in this fund for a long period. Investors who cannot take much risk and want stable returns should not invest in this fund.