Mid-caps in Momentum | These stocks make way into momentum mutual fund hotlist There are two mutual fund (MF) schemes that follow the momentum strategy by keeping an eye on the market trends for faster returns. To reduce fund manager risks, these come wrapped in a factor-based approach. UTI Nifty200 Momentum 30 Index Fund and Motilal Oswal Nifty 200 Momentum 30 ETF are the two MF schemes that follow this strategy
July 22, 2022 / 09:21 AM IST
Traditional equity investors select stocks based on a company’s profitability track record, management zeal, market share and so on. But those who wish to make money slightly faster keep an eye on the stock market trends and choose more of what’s doing well in the markets. This is called momentum investing. There are two mutual fund (MF) schemes that follow the momentum strategy. To reduce fund manager risks, these come wrapped in a factor-based approach. UTI Nifty200 Momentum 30 Index Fund and Motilal Oswal Nifty 200 Momentum 30 ETF are the two MF schemes that follow this strategy. To reduce fund manager risks, these are passive fund. They are benchmarked against the Nifty200 Momentum 30 Index (NM30). The NM30 captures the performance of the top 30 companies with high momentum within the Nifty 200 Index. The index is rebalanced twice a year. The latest exercise was done in June 2022. Here are the new midcap additions.
The Nifty200 Momentum 30 Index aims to track the performance of 30 high momentum stocks across large and mid-cap stocks. The Momentum Score for each stock is based on recent 6-month and 12-month price return, adjusted for volatility. Performance as measured by the five-year rolling return shows that the Nifty200 Momentum 30 Index managed to outperform the main benchmarks most of the time frames by huge margins. These schemes are suitable for investors with a high risk profile and an investment horizon of more than five years.
Page Industries: Stock of this garments company was one of the newly added midcap stocks in the basket of NM30. Stock brokers such as Axis direct and Chola Wealth direct have given hold calls on the stock (based on the reports issued over the last 2-3 months). There were 123 other mutual fund schemes too had exposure to the stock as of June 30, 2022.
The Indian Hotels Company: Stock of the Indian Hotels Company, a subsidiary of Tata group was newly added in the basket of NM30. Broking firms such as IDBI capital and Motilal Oswal gave buy call in the stock. There were 122 other mutual fund schemes too held exposure to the stock.
AU Small Finance Bank: Apart from these two passive funds, five other equity diversified schemes also added the stock of this small finance bank in their portfolio in last month. Stock brokers like Axis direct and Motilal Oswal gave buy recommendation on this stock on April 2022.
Trent: Stock of the Tata Group retail company was also added newly by seven other equity diversified schemes in June 2022. Brokers such as ICICI Direct and Motilal Oswal too gave buy call on this stock last month.
Cummins India: Stock of the manufacturer of diesel and alternative fuel engines was newly added in the basket of NM30. Stock broker HDFC securities gave 'buy' recommendations on the stock.
ABB India: Stock of this heavy electrical equipment company was newly added in the NM30. Stock broker Prabhudas Lilladhar gave buy call in the stock while HDFC securities recommended to sell the stock (based on the reports issued in May 2022).
Coromandel International: Shares of the Fertilizers company were also preferred by 88 other equity schemes (as of June 2022).
Aditya Birla Fashion and Retail: Stock of this specialty retail company was one of the midcap stocks added newly by the NM30 index in June 2022. Broking firms Anand Rathi and Emkay gave buy call in the stock in May 2022.
Some of the large-cap stocks that were newly added in the basket of NM30 in June 2022 including Reliance Industries, NTPC, Oil & Natural Gas Corporation, ITC, Power Grid Corporation Of India and Mahindra & Mahindra.