Motilal Oswal AMC Launches Nifty200 Momentum 30 ETF and Index Fund

These are open ended schemes which mimic or track the performance of Nifty 200 Momentum 30 Index. Momentum factor refers to the tendency of winning stocks to continue performing well in the near term.

According to AMC, the momentum factor globally has attracted investors’ attention over the past decade. The key features of the index are its ability to quickly capture market trends with dynamic sector rotation which is largely sloping towards large-caps.

The Nifty 200 Momentum 30 Index selects the top 30 companies with the highest 6 month and 12 month ‘momentum’ as defined in the index methodology. The constituents should be part of the Nifty 200 Index and should also be available for trading in the F&O segment with a minimum listing history of one year.

The stock’s maximum weighting is capped at 5% and the index gets rebalanced semi-annually in June and December.

The fund’s nominal total expense ratio is 1% for Index Fund Regular, 0.4% for Direct Plan, and 0.35% for ETF. The date of allotment will be 10 February 2022.

In terms of index composition as of December 31, 2021, the top 10 stocks constitute almost 50% of the Nifty 200 Momentum 30 index weight, with almost all the top 10 stocks with ~5% cap.

In terms of index composition, IT accounts for 30.7% of the overall structure, followed by commodities (19.4%), consumer (17.6%), financial services (10%), utilities (5.6%), healthcare (5.1%), telecom ( 5%), manufacturing (3.1%), services (2.8%) and energy (0.8%). Since December 2017, the IT sector has seen the highest sector exposure by the index.

According to the fund house, the historical index structure has primarily been large-cap stocks with an index weighting above 65%, while mid-caps control the rest of the index.