Nippon India Mutual Fund launches Active Momentum Fund
Nippon India Mutual Fund has announced the launch of Nippon India Active Momentum Fund, which is an open-ended equity scheme that will attempt to generate long term capital appreciation. The scheme would make best endeavours to achieve this goal through investment in diversified holdings of equity and equity related instruments based on a multi-factor quantitative model.
The New Fund Offering of the scheme will be launched for subscription on February 10, 2025, and close on February 24, 2025. Subsequently, the scheme will be available for continuous sale and repurchase from March 6, 2025. Minimum investments are set at Rs.500 for investment in Active Momentum Fund, though more investments are permissible in multiples of Re. 1. The benchmark index for the scheme is the Nifty 500 TRI.
Nippon India Mutual Fund – Investment Strategy and Risk Management of New Fund
The Active Momentum Fund employs a strategy that takes into account technical (price momentum) and fundamental (earnings revision) factors to select potential investment opportunities. The strategy will maximize returns with minimal volatility while responding to changing market cycles. In addition to price momentum and earnings revision, the strategy includes Minimum Volatility and Beta, which reduce the risk of declining markets and maximize performance during a bull run.
The methodology followed by the Active Momentum Fund is unique because it changes according to market conditions through “Risk ON” and “Risk OFF” phases. The Active Momentum Fund improves its performance potential through the Beta factor when the market conditions are favorable in a “Risk ON” scenario. On the other hand, in “Risk OFF” phases, when volatility in the market is high, the fund has minimum volatility with an aim to reduce risk. The Active Momentum Fund rebalances monthly in order to adapt dynamically to shifts in the market.
Nippon India Mutual Fund – Active Momentum Fund’s differentiated approach to Investment
By combining price momentum and earnings momentum (Revision factor), the fund is in a position to differentiate between the quality of stocks having high and low momentum. This factor-based approach is, in fact what allows the fund to better tackle the market fluctuation while at the same time holding the ideal risk-reward balance. The strategy would be to expose investors to the momentum investing idea while incorporating some risk mitigation techniques to enhance overall investment experience.
The Active Momentum Fund has been the product of Nippon India Mutual Fund’s attempt to provide varied investment solutions that cater to various types of investors and their respective risk profiles as well as their long-term financial objectives. This fund seeks to benefit from the market trends in a systematic and data-driven manner while delivering returns adjusted for risks to investors.
