‘Axis Nifty500 Momentum 50 Index Fund’ (An Open-Ended Index Fund tracking Nifty500 Momentum 50 TRI)

Bengaluru, January 22, 2025: Axis Mutual Fund, one of India’s fastest-growing fund houses, has introduced the Axis Nifty500 Momentum 50 Index Fund—an open-ended Index Fund tracking the Nifty500 Momentum 50 TRI. The New Fund Offer (NFO) period will be open from January 24 to February 7, 2025 and the fund is benchmarked against the NIFTY500 Momentum 50 TRI.

This new offering reflects Indian investors’ increasing interest in passive strategies within India’s investment landscape, as investors look to capitalize on stocks that are in momentum with a more simplified and cost-effective solution. The investment objective of the scheme is to provide returns before expenses that correspond to the Nifty500 Momentum 50 TRI subject to tracking error. However, there is no assurance that the investment objective of the scheme will be achieved.

Momentum investing, which capitalizes on the continuation of existing price trends, has historically proven to be a powerful strategy in global markets, and India is no exception. The Nifty500 Momentum 50 Index is designed to measure performance of stocks demonstrating strong momentum. The momentum is measured based on stocks last 6 month and 12 months returns adjusted for volatility. By focusing on high-performing stocks, this index fund offers investors an opportunity to ride the stocks that have performed well in recent history, potentially enhancing future returns. The Axis Nifty500 Momentum 50 Index Fund aims to tap into this opportunity by providing investors with exposure to a top 50 stocks exhibiting high momentum. The key feature of Nifty500 Momentum 50 Index is that it selects stocks across large, mid and small caps, thereby eliminating need for the investors to invest in different momentum strategies based on size.

Speaking about the launch, Mr. B Gopkumar, MD & CEO, of Axis Mutual Fund said, “We are excited to launch the Axis Nifty500 Momentum 50 Index Fund as part of our ongoing commitment to providing investors with innovative investment solution. With passive strategies continuing to gain popularity, we believe that this fund will offer a unique opportunity to invest in India’s most promising momentum-driven stocks, all while keeping costs low and ensuring broad diversification. It is an ideal product for investors looking to benefit from market trends without having to make stock-picking decisions.”

Axis Nifty500 Momentum 50 Index Fund

The Axis Nifty500 Momentum 50 Index Fund is managed by Mr. Karthik Kumar (Equity Fund Manager) and Mr. Sachin Relekar (Senior Equity Fund Manager). The minimum application amount is Rs. 100 and in multiple of Re.1/- thereafter. The scheme follows a passive investment strategy, investing in stocks comprising the Nifty500 Momentum Index.

Mr. Ashish Gupta, CIO, Axis Mutual Fund asserted, “The Nifty500 Momentum 50 Index has shown resilience in India’s dynamic market environment, often outpacing broader market indices by identifying stocks that are poised for growth. This momentum-driven approach aims to capitalize on stocks with a strong upward trajectory in recent history. Given this context, the Axis Nifty500 Momentum 50 Index Fund is a simplified passive strategy designed to offer investors a simple yet effective way to participate in the growth story of a broad spectrum of Indian companies. We believe that the fund’s broad-based approach, coupled with the potential for sustainable long-term returns, will serve as a robust vehicle for wealth creation over the long term, making it an attractive option for both new and experienced investors.”

Key Features of the Axis Nifty500 Momentum 50 Index Fund

• Trend Following: Momentum investing focuses on identifying and investing in stocks that have shown upward price trends. It dynamically adopts to the emerging trends in the markets across large, mid and small caps. This helps eliminate need to invest in different momentum strategies that may create potential confusion and stress in the mind of investors.
• Stocks selection based on recent stock performance: Momentum investing typically select stocks in the portfolio that have performed well in recent history such as over last 6 to 12 months.
• Behavioural Finance: The momentum effect can be attributed to investor biases and the tendency to overreact or underreact to information. As investor behaviour often deviates from perfect rationality, these market inefficiencies present opportunities for momentum strategies to capitalize on trends arising from these anomalies.
• Complements Other Strategies, Enhancing Portfolio Potential: Designed to complement other strategies, enhancing portfolio performance by integrating a disciplined momentum strategy
• Lower Expenses: As a passively managed index fund, it usually comes are lower expense ratio, providing a cost-effective investment option