IDFC Mutual Fund launched the new fund offer (NFO) on August 19 namely IDFC Nifty200 Momentum 30 Index Fund. The fund offer will stay open for investors until August 26, 2022.
The asset management company projects it as an open-ended index scheme that will consist of 30 high momentum large and mid-cap stocks replicating the Nifty200 Momentum 30 Index. The fund manager who will manage the mutual fund scheme will be Nemish Sheth.
Before we proceed, let us first deconstruct the concept of a new fund offer.
A New Fund Offer (NFO) is the process through which an asset management company (AMC) creates a new fund on a first-subscription basis to facilitate the purchase of securities.
The fund house collects funds from the general public through an NFO in order to buy securities such as equity shares, bonds, and other financial instruments on the market. As a newcomer to the market, NFO is less expensive than the current funds.
Fund Objective
The investment objective of the scheme is to replicate the Nifty200 Momentum 30 index by investing in securities of the Nifty200 Momentum 30 Index in the same weightage with an aim to provide returns before expenses that closely correspond to the total return of the Nifty200 Momentum 30 Index, subject to tracking errors.
However, there is no assurance or guarantee that the objectives of the scheme will be realized and the scheme does not assure or guarantee any returns, according to the AMC.
Fund Overview
According to the press release, the 10-year per unit of risk, as of July 31, 2022, for Nifty200 Momentum 30 Index was 1.11 vs. 0.87 for the Nifty 200 Index and 0.86 for the Nifty 100 Index.
Vishal Kapoor, CEO, IDFC AMC said, “Momentum investing has proven to be a highly rewarding factor strategy over the last several years. It has also outperformed the broader indices, for instance, the Nifty200 Momentum 30 Index has outperformed the Nifty 100, and Nifty 200 indices in 8 out of the last 10 calendar years.”
However, this scheme is suitable for investors who are seeking to create wealth over the long term, as per the press release.
Investors can simply invest in the scheme through licensed mutual fund distributors, advisors, and online platforms as well as directly on the IDFC MF website link https://idfcmf.com/idfc-nifty200-fund-nfo/.
