Fund Outlook – IDFC Nifty200 Momentum 30 Index Fund<\/strong><\/p>\n\n\n\nIDFC Nifty200 Momentum 30 Index Fund aims to invest in securities comprising the Nifty 200 Momentum 30 Index and generate parallel returns, subject to tracking errors. The scheme endeavours to benefit from factor investing through a momentum factor strategy.<\/p>\n\n\n\n
The Nifty200 Momentum 30 Index consists of 30 companies selected from the Nifty 200 index based on their normalised momentum score. The underlying index aims to capture the swift movement across stocks and sectors. Amidst the pandemic uncertainties, the momentum index adapted to the market swings at the time of the next rebalancing and increased its exposure to suitable stocks and sectors accordingly. The dynamic nature of the index makes investing beneficial for the investor over the long term.<\/p>\n\n\n\n
The underlying index is overweight on some of the fast-growing high momentum stocks from the sectors like Metals, Consumer Services, Chemicals, Power and Capital Goods. The scheme endeavours to capitalise on volatile market trends by investing in stocks that are on their way up and selling them before the prices start falling as per the underlying index. The momentum method is a risky and aggressive investment strategy built on the premise that stocks and sectors with a recent track record of success will continue to do so and vice versa.<\/p>\n\n\n\n
This makes these schemes high-risk, high-return investment propositions, as the funds focusing on momentum investing may go through a period of underperformance if there is any sharp change in market dynamics. In addition, the scheme is prone to high market risk due to the persistent repercussions of the Russia-Ukraine conflict, rising interest rates, and spiralling inflation which may pose a significant risk to economic growth. The margin of safety appears to be narrow, and the clear direction for the equity market from the current elevated levels is unknown. These factors, among many others, may affect the scheme’s performance, and the portfolio may face higher volatility in the near term.<\/p>\n\n\n\n
The fortune of this scheme depends on the performance of the underlying index. Thus, the scheme is suitable for refined investors with a high-risk appetite and a long investment horizon of at least 5-7 years to sustain various market phases.<\/p>\n\n\n\n
This article first appeared on PersonalFN\u00a0here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Factor investing can assist boost diversification, lower volatility, and improve portfolio performance. In India, the momentum factor has attracted investor sentiments and is slowly gaining traction. Momentum investing is the practice of buying and selling assets depending on the strength of current market movements. It is based on the concept that if a price move…<\/p>\n","protected":false},"author":7,"featured_media":4638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/4637"}],"collection":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/comments?post=4637"}],"version-history":[{"count":1,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/4637\/revisions"}],"predecessor-version":[{"id":4639,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/4637\/revisions\/4639"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media\/4638"}],"wp:attachment":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media?parent=4637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/categories?post=4637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/tags?post=4637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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