NFO Alert: Motilal Oswal Mutual Fund launches Nifty 500 Momentum 50 Index Fund

The new fund offer (NFO) for the scheme is open for subscription until September 18. The scheme will re-open for continuous sale and repurchase on September 30.

The investment objective is to provide returns that, before expenses, correspond to the total returns of the securities represented by the Nifty 500 Momentum 50 Total Return Index, subject to tracking error.

The scheme will be benchmarked against the Nifty 500 Momentum 50 Total Return Index and will be managed by Swapnil Mayekar and Rakesh Shetty.


It will offer both direct and regular plans with growth options only. An exit load of 1% will apply if redeemed on or before 15 days from the date of allotment.
The minimum investment amount for a lump sum investment is Rs 500, with subsequent investments in multiples of Rs 1. For weekly, fortnightly, and monthly SIPs, the minimum amount is Rs 500, with subsequent investments in multiples of Rs 1, and a minimum of 12 installments is required.

The scheme will allocate 95-100% of its assets to the constituents of the Nifty 500 Momentum 50 Index and 0-5% to units of liquid schemes and money market instruments.

“Factor investing is relatively new in India, within which momentum investing is growing rapidly. As of Q1 FY25, out of a total AUM of INR 35,954 crore in factor funds, momentum funds hold the largest share at INR 10,353 crore, highlighting the rapid expansion of momentum investing in the country,"said Prateek Agrawal, MD and CEO of Motilal Oswal Asset Management Company.


He added that this growth can largely be attributed to momentum's ability to adapt to trending sectors, as the Nifty 500 Momentum 50 TRI captures market trends early through dynamic sector rotation. "Consequently, the Nifty 500 Momentum 50 TRI has outperformed the Nifty 50 TRI in 12 of the last 19 calendar years."

Pratik Oswal, Chief of Business - Passive Funds, Motilal Oswal Asset Management Company said: "The Nifty 500 Momentum 50 TRI may remain a strong investment option due to its low-cost, rules-based, and transparent approach, its exposure to high-momentum stocks across Large, Mid, and Smallcap segments, and its potential to outperform in upward-trending markets. Since April 2005, the Nifty 500 Momentum 50 TRI has achieved an exceptional 76x growth, focusing on top-performing stocks across these segments."

The scheme follows a passive investment strategy, aiming to invest in the constituents of the Nifty 500 Momentum 50 Total Return Index. It seeks to achieve returns that are equivalent to the benchmark, subject to tracking error. Additionally, the scheme will invest in units of liquid schemes and money market instruments as outlined in the asset allocation table.

The scheme is suitable for investors seeking returns that correspond to those of the Nifty 500 Momentum 50 Total Return Index, subject to tracking error, and who are aiming for long-term capital growth.