Baroda BNP Paribas Mutual Fund Launches Baroda BNP Paribas Nifty 200 Momentum 30 Index Fund

MUMBAI:
Baroda BNP Paribas Mutual Fund has launched an innovative new fund offer Baroda BNP Paribas Nifty200 Momentum 30 Index Fund which opens on 25th September 2024 and closes on 9th October 2024. The scheme is designed to tap into the power of momentum investing, offering investors a smart, passive strategy to leverage the top 30 momentum stocks from the Nifty 200 Total Return Index.

Highlights:
· The fund will track the NIFTY 200 Momentum 30 Index by investing in a portfolio of 30 companies that are part of NIFTY 200 Momentum 30 Index.
· These 30 companies are selected from the NIFTY 200 Index based on their normalized momentum scores.
· The Nifty 200 Momentum 30 Index has consistently outperformed the NIFTY 50 Index by a significant margin since its inception.#
· Assume one lakh invested at the inception in April 2005 of the Nifty 200 Momentum 30 Index TRI might have grown to 46 lakhs; while the same amount invested in the Nifty 50 TRI might have grown to 15.5 lakhs; the Nifty 200 Momentum 30 Index giving ~3X higher returns than the Nifty 50 TRI over this time. # Past performance may or may not be sustained in future and is not a guarantee of any future returns
· The NFO period of the fund opens on September 25, 2024, and closes on October 9, 2024.

The Baroda BNP Paribas Nifty200 Momentum 30 Index Fund seeks to offer investors an opportunity to add momentum to their portfolio. The fund’s momentum-based strategy aims to target stocks with tailwinds, with the hypothesis that those already performing well will continue to do so in the future. With the universe restricted to the NIFTY 200 constituents (the largest 200 companies by market capitalization), the fund aims to reduce risk by avoiding exposure to the smaller companies that tend to be more volatile and therefore risker.

“Our Baroda BNP Paribas Nifty200 Momentum 30 Index Fund seeks to offer the best of both worlds—cost-efficiency of passive investing and the potential for outperformance by taking advantage of factor-based investing,” says Suresh Soni, CEO, Baroda BNP Paribas AMC. Factor investing, which is a concept under passive investing, at the core tries to identify the factors that contribute to superior stock performance. “Our analysis of factors indicate that momentum factor has one of the best performance track record in India. This approach has shown good results in back-testing, with the Momentum strategy (as represented by the NIFTY 200 Momentum 30 Index) outperforming the Nifty 50 Index consistently,” adds Soni#.

Analysing the data over the past 15 years, shows that the Nifty 200 Momentum 30 Index TRI has grown at CAGR of 22% per annum, compared to the 13% per annum of the Nifty 50 TRI#. (Source nseindia.com, Data as on 31st August 2024). Factor investing removes human bias and follows rule-based investing by replicating the Nifty 200 Momentum 30 Index.