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NEW DELHI: ICICI Prudential MF has launched the Nifty200 Momentum 30 ETF and the Nifty200 Momentum 30 Index Fund. The ETF and the Index Fund will replicate the Nifty200 Momentum 30 Index which comprises 30 companies selected from the Nifty 200 index based on their normalised momentum score and free-float market capitalisation. The ETF will be listed on both the National Stock Exchange and the BSE.
The new fund offer opens on 22 July and closes on 2 August. According to Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC, both the offerings will allow investors to capitalise on market trends by investing in stocks that have shown upward price momentum. Momentum investing strategy aims to capitalise on the continuance of existing trends in the market.
Data from the AMC shows that Nifty 200 Momentum 30 TRI outperformed the Nifty 200 TRI and the Nifty 50 TRI 8 out of 10 times between calendar year 2012 and 2021. For example, in 2021, the Momentum Index returned 53.8% compared to 28.9% by the Nifty 200 TRI and 25.6% by the Nifty 50 TRI. The index is trading at a price-to-earnings ratio of 19.2 times versus 19.7 times for the Nifty 200 TRI and 19 times for the Nifty 50 TRI.
The Nifty 200 Momentum 30 Index is overweight on some fast-growing high momentum stocks from sectors such as metals, consumer services, chemicals, power and capital goods. Top holdings in the index include Reliance Industries, NTPC, ONGC, ITC and Mahindra & Mahindra as of 30 June. The Nifty 200 Momentum 30 Index is constructed by selecting stocks from the parent index using their normalized momentum score which is based on their 6-month and 12-month price return, adjusted for volatility. The shortlisted stocks are weighted based on a combination of the stock’s normalized momentum score and its free-float market capitalisation.
