UTI Nifty200 Momentum 30 Index Fund NFO – Should you invest?

UTI Nifty200 Momentum 30 Index Fund NFO - ReviewUTI Nifty200 Momentum 30 Index Fund NFO – Review


UTI Mutual Fund is launching the first Momentum Index Fund in India i.e. Nifty200 Momentum 30 Index Fund that would open for subscription on 18th February, 2021. As the name indicates UTI Nifty200 Momentum 30 Index Fund would invest in the Nifty200 Momentum 30 Index, which was launched a few months back. This index performs well in bull run and would wash away your investments during deep market corrections. Should you invest in UTI Nifty200 Momentum 30 Index Fund NFO? What are the risk factors in this mutual fund?

Also Read: Can we expect 15% annualized returns from Nippon India Midcap 150 Index Fund NFO?

UTI Nifty200 Momentum 30 Index Fund – NFO Issue Details

This is an open-ended index fund replicating / tracking Nifty200 Momentum 30 Index. Here are the NFO issue details.

UTI Nifty200 Momentum 30 Index Fund NFO – Issue Details
Scheme Opens 18-Feb-21
Scheme Closes 04-Mar-21
Scheme reopens for continous purchase/sale Within 5 working days from closure of NFO
Minimum Lumpsum Rs 5,000
Minimum SIP Rs 1,000 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load Nil
Risk Moderately High Risk
Max Total expense Ratio (TER) 1.00%
Benchmark Nifty200 Momentum 30 Index

Download UTI Nifty200 Momentum 30 Index Fund SID

What is the investment objective of UTI Nifty200 Momentum 30 Index Fund?

The investment objective of the scheme is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.

There is no assurance or guarantee that the investment objective of the scheme will be realized.

What is the allocation pattern in this index fund?

Here is how the index fund would invest:

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Type of instruments Min % Max % Risk Profile
Securities covered by
Nifty200 Momentum 30 Index
95% 100% Medium to High
Debt/Cash/Money Market instruments including Triparty Repo and units of Liquid Mutual Fund 0% 5% Low

What does Nifty200 Momentum 30 Index contain?

The Nifty200 Momentum 30 Index aims to track the performance of 30 high momentum stocks across large and mid-cap stocks. The Momentum Score for each stock is based on recent 6-month and 12-month price return, adjusted for volatility.

Here is the list and their weightage in this index by sector and top constituents as of now.

Nifty200 Momentum 30 Index - Sector representation

Nifty200 Momentum 30 Index - Top Constituents by Weightage

Why to invest in UTI Nifty200 Momentum 30 Index Fund?

Here are a few reasons to invest in such index funds.

1) It is the first fund in India that invests this index, which has 30 momentum stocks which are part of NIFTY200.

2) This fund invests in an index that outperformed in the last 10-15 years. Such index gave 19% returns since inception of 15 years and 18% returns in the last 10 years.

3) This index performs aggressively during bull run (e.g. Bull run, we have seen in 2020 and seeing in 2021) and investors can enjoy superior returns.

Some key risk factors you should consider before you invest in such funds

One should consider some of these risk factors / negative factors before investing.

1) This fund invests in index which has heavy momentum that are largecap and midcap stocks. While in bull run, investors enjoy high returns, during the bear phase or during stock market corrections, investors money would get washed away.

2) This index fund has heavy momentum and does not provide downside protection. This makes such fund as high risk.

3) Investors should not assume any guaranteed returns from such index schemes.

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4) Investors should read the SID / KIM / prospectus before investing in such mutual funds.

How is the Performance of Nifty 50 Value 20 Index Fund?

Now, let us look at the performance of the underlying index where this fund would going to invest. Total returns include dividends, interest and rights received by the shareholders (if any).

Nifty200 Momentum 30 Index Performance Table

Here is the performance chart of the NAV value movement of this index since inception.

Nifty200 Momentum 30 Index Performance Chart

Also Read: Consistent Performing Largecap Stocks to invest in 2021

Should you invest in the UTI Nifty200 Momentum 30 Index Fund?

UTI Nifty200 Momentum 30 Index Fund invests in high momentum stocks which are part of NIFTY20 and among largcap and midcap segments. Such funds perform well in a bull run, but can ruin investment during the bear phase or during stock market corrections. There is no downside protection in such index funds. This is for aggressive investors who want to create wealth in the long term. Moderate to low risk investors can stay away from such index funds.

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Suresh KP

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