Motilal Oswal Mutual Fund has announced the launch of its new open-ended equity scheme, the Motilal Oswal Active Momentum Fund, designed to capitalize on market momentum for long-term capital appreciation.
The new fund offer (NFO) is currently open for subscription and will close on 10 March 2025, with the scheme reopening for continuous sale and repurchase on 21 March 2025.
The fund's primary objective is to generate long-term growth by investing predominantly in equity and equity-related instruments, utilizing a momentum factor-based approach for stock selection. The fund will be benchmarked against the Nifty 500 Total Return Index.
The fund will employ a proprietary momentum strategy based on Motilal Oswal's QGLP (Quality, Growth, Longevity & Price) framework. Stock selection will be driven by momentum scores, with governance and fundamental screening implemented.
The fund will maintain a diversified portfolio of approximately 30 stocks, selected from the top 500 companies by market capitalization. These stocks will be equal-weighted and rebalanced monthly based on momentum scores. The fund will be managed by Ajay Khandelwal, Varun Sharma, and Rakesh Shetty.
The minimum investment amount for both lumpsum and monthly SIP is Rs 500. An exit load of 1% will be applicable if units are redeemed within three months of allotment, with no exit load thereafter. The fund will allocate 80-100% to equity and equity-related instruments related to the momentum theme. As with all equity investments, this fund carries market risk.
With its dynamic, momentum-driven approach, the Motilal Oswal Active Momentum Fund aims to outperform the Nifty500 Momentum 50 TRI index, making it an attractive choice for investors seeking equity exposure with a data-backed momentum strategy.
Momentum investing can yield significant returns in trending markets, but it is crucial to understand the potential for volatility during market downturns. The fund's monthly rebalancing and use of the QGLP framework are designed to mitigate some of these risks.