Baroda BNP Paribas Launches Momentum Index Fund

Mumbai, India – Baroda BNP Paribas Mutual Fund has introduced a new investment avenue for Indian investors: the Baroda BNP Paribas Nifty200 Momentum 30 Index Fund. This open-ended scheme is designed to replicate the performance of the Nifty200 Momentum 30 Total Returns Index, offering investors a passive approach to capitalize on momentum investing.

NFO Period and Investment Strategy The New Fund Offer (NFO) for the scheme opened on September 25 and will close on October 9. Investors can subscribe to the fund during this period.

The Nifty200 Momentum 30 Index Fund aims to capture the potential of momentum stocks within the Nifty 200 universe. By focusing on the top 30 momentum stocks, the fund seeks to provide investors with a concentrated exposure to companies that have exhibited strong recent price appreciation.

Investment Objective and Benchmark The primary objective of the scheme is to generate returns that closely correspond to the total returns of the Nifty200 Momentum 30 Total Returns Index, subject to tracking errors, fees, and expenses. The scheme will be benchmarked against this index.

Portfolio Allocation To achieve its investment objective, the fund will allocate 95-100% of its assets to equity and equity-related securities of companies included in the Nifty200 Momentum 30 Total Returns Index. The remaining 0-5% will be invested in money market instruments, units of liquid schemes, and cash and cash equivalents.

Fund Management The Baroda BNP Paribas Nifty200 Momentum 30 Index Fund will be managed by Neeraj Saxena. Mr. Saxena brings a wealth of experience in managing equity investments and will oversee the fund’s portfolio construction and management.

Benefits of Momentum Investing Momentum investing, a popular investment strategy, focuses on identifying stocks that are experiencing upward price movements. By investing in these stocks, investors hope to capitalize on the continuation of their price appreciation. Momentum investing can offer several potential benefits, including:

Enhanced Returns: Historically, momentum strategies have often outperformed traditional market benchmarks.
Reduced Risk: Momentum investing can help mitigate downside risk by focusing on stocks that are already showing positive momentum.
Diversification: By investing in a momentum index fund, investors can diversify their portfolios and reduce exposure to individual stock risk.

Conclusion The Baroda BNP Paribas Nifty200 Momentum 30 Index Fund presents an attractive opportunity for investors seeking to add a momentum-based strategy to their portfolios. By investing in this fund, investors can gain exposure to the top 30 momentum stocks within the Nifty 200 universe, potentially benefiting from their continued price appreciation.