UTI Momentum Index Fund NFO

Within a few days of launch of Nifty 200 Momentum 30 Index from NSE, UTI AMC has filed draft prospectus with SEBI for the launch of UTI Momentum Index Fund.

Scheme Details: 

UTI Momentum Index Fund will be an open-ended Index Fund tracking the Nifty 200 Momentum Index.
 
During the NFO period, the units of the scheme will be sold at the Face Value of Rs.10/- per unit.
NFO open from Feb 18-March 4. 

Benchmark: Nifty 200 Momentum 30 Index. 
Entry / Exit load - Nil.
 
Minimum initial investment is Rs. 5,000/- and subsequently Rs.1,000/-
Expense Ratio - Not Available.
 
Scheme performance and drawdowns:

Nifty 200 Momentum 30 Index Fund 5 year Rolling Returns

UTI Nifty 200 Momentum 30 Index Fund

The monthly rolling returns suggest that, 98% of the times the index has delivered better returns than Nifty 200 and Nifty 50 index.

Nifty 200 Momentum 30 Index Fund Drawdown

Nifty 200 Momentum 30 Index Fund
image credit: uti mf


As you can see from the above picture, the drawdowns are higher than the broad market index Nifty 50. Momentum is aggressive investment style and is relatively riskier as compared to Nifty 200 and Nifty 50. It may undergo period of relative underperformance when there is sharp change in market cycles like sharp recovery or sharp drop.

Summary: Investment in this index through an Index Fund route may help investors in generating potentially higher returns as compared to broad market indices. 

However, investors should be ready to take higher volatility and higher risk also in their portfolio. Further, investors looking for passive way of taking exposure to Momentum factor, may consider investing in this index. 

A detailed review of this index is done here Nifty 200 Momentum Index 30