Union Active Momentum Fund NFO now open for Subscription; Things Investors Must Know
Union Mutual Fund has launched the Union Active Momentum Fund, an open-ended equity scheme, based on the momentum investing strategy. This fund will open for subscription from November 28 and will close on December 12. After the NFO period, it will reopen for buying and selling within five business days of allotment.
The fund will be based on the momentum theme and goals to invest in stocks exhibiting strong momentum characteristics. It will follow a systematic, rule-based strategy to eliminate emotional biases, ensure flexibility, and allow for timely corrective actions through continuous monitoring of market outcomes.
The performance of the fund will be benchmarked against the Nifty 500 Index (TRI).
The scheme will be managed by two experienced fund managers, who will actively manage investments based on momentum indicators.
There will be an exit load of 1% for units redeemed or switched out within one year from the date of allotment. However, after one year from the date of allotment, there will be no exit load.
The minimum lump sum investment for the fund is Rs.1,000, with subsequent investments in multiples of Re 1. For Systematic Investment Plans (SIPs), the minimum investment is Rs.500, with the requirement of a minimum of six installments.
This fund will invest 80-100% of the assets in equity and equity-related instruments that are positioned on momentum themes. In debt and money market instruments, the fund will invest between 0-20%. That includes units of debt-oriented mutual funds. Units issued by REITs and InvITs will also be given to the fund, ranging between 0-10%.
The fund would emphasize investment in long-term capital appreciation through investment in stock characterised by momentum-type characteristics. Its strategy revolves around identifying the companies to be invested with strong momentum.
This fund is suitable for investors who are looking for long-term capital appreciation through an actively managed equity scheme. It is ideal for people who want exposure to momentum-based stocks and are comfortable with a rule-based, disciplined investment approach.
The Union Active Momentum Fund comes under the emerging Smart Beta strategy, as opposed to market timing or emotional approach. The promoter group of Union Mutual Fund has a subsidiary focused on rule-based investing, reflecting the rising interest in such investment strategies.
The strategy seeks to achieve results by active management and investing in stocks with high momentum. This will be able to benefit investors through the trends of the market and provide long-term potential for growth.
The Union Active Momentum Fund is quite an exciting new entry into factor-based investing, especially considering the theme of momentum. The fund, with a rule-based approach, ensures flexibility and discipline for better market timing for investors in the quest for higher long-term returns.
