NFO subscription: Axis Mutual Fund has recently launched the Axis Momentum Fund, which is an open-ended equity scheme that utilises the momentum investment strategy. The New Fund Offer (NFO) commenced on November 22, 2024, and will conclude on December 6, 2024.
The primary objective of this fund is to achieve long-term capital appreciation by investing in equity and equity-related securities that demonstrate strong price momentum. The fund will follow a structured, model-driven approach to identify high-momentum stocks spanning various sectors. It will assess securities based on price momentum trends, incorporating risk metrics to maintain a well-balanced portfolio.
Key details:
> The investment process involves diversification across sectors, reducing concentration risks, and optimising position sizes to enhance performance and control risk.
> The fund will be compared to the NIFTY 500 TRI index. It will be managed by Karthik Kumar and Mayank Hyanki. The minimum investment amount is Rs 100, with subsequent investments in multiples of Re 1.
> There will be no exit load for 10% of the investment if redeemed or switched within 12 months of allotment. For the remaining investments, a 1% exit load will apply.
> No exit load will be charged if redeemed or switched after 12 months from the date of allotment.
> Momentum investing is a strategy that emphasizes pinpointing and leveraging underlying securities showing robust upward trends. In contrast to traditional methods of targeting undervalued stocks or high-growth companies, momentum investing adheres to the concept of “buying high to sell higher.”
> The fund utilises a framework to screen securities based on data availability and liquidity, then assesses them according to price momentum trends. The portfolio construction process is optimised using Composite Rank, Risk of the Stock, and Portfolio Constraints, as stated in the fund house’s release.
> Using a structured and model-based approach to create a robust framework, the scheme aims to achieve long-term capital appreciation for investors through a portfolio of equity and equity-related securities focused on the momentum theme.
“Momentum investing, while offering return potential, requires a disciplined and data-driven approach to manage risk effectively. The Momentum Fund employs a robust risk management framework that combines quantitative screens, advanced technical indicators, and rigorous fundamental analysis to identify high-conviction opportunities. Our portfolio construction process focuses on sector diversification to mitigate systemic risks, while maintaining a strict risk-to-reward ratio for each position. We have designed this fund to serve as both a standalone investment vehicle and a powerful portfolio diversification tool, particularly valuable in today’s market where sector leadership and growth drivers are constantly evolving,” said Ashish Gupta, CIO, Axis Mutual Fund.
PGIM India Healthcare Fund
PGIM India Mutual Fund unveiled the PGIM India Healthcare Fund, an open-ended equity scheme designed to target the healthcare and pharmaceutical industries.
> The fund, which tracks the BSE Healthcare TRI, started accepting subscriptions on November 19, 2024, and will continue to do so until December 3, 2024.
> Beginning December 11, 2024, investors will have the opportunity to buy and sell shares of the fund on an ongoing basis.
> Investment strategy: The fund aims to capitalise on the expansion of India’s healthcare sector by primarily investing in pharmaceutical and healthcare companies, allocating a minimum of 80% of its assets to this sector. The remaining 20% may be allocated to other equities, debt instruments, money market instruments, REITs & InvITs, and foreign securities, such as overseas ETFs.
> Focus on healthcare industry: PGIM India aims to encompass a wide range of sectors within the healthcare industry, including healthcare services like pharmacies, diagnostics, hospitals, and health insurance.
The coverage also extends to healthcare manufacturing, such as CRAMS (Contract Research and Manufacturing Services), medical devices, specialty chemicals, and API (Active Pharmaceutical Ingredient) manufacturing.
> Suitability for Investors: This fund may be suitable for long-term investors seeking exposure to the healthcare sector, which is expected to see growth due to the increasing income levels, shifting attitudes towards preventive healthcare, and rising government expenditure projected to reach 2.5% of India’s GDP by 2025.
> Risk Factors: As with any sector-specific fund, investing in healthcare carries risks associated with market fluctuations and sector-specific factors. Investors should carefully consider the unique risks associated with healthcare and pharmaceuticals, such as regulatory changes, fluctuating demand, and potential competition from global markets. The risk level of this fund is classified as “Very High”.
> Benchmark Risk Level: The benchmark for this scheme is the AMFI Tier 1 Benchmark – BSE Healthcare TRI, which is also rated as “Very High” risk.
