AXIS MUTUAL FUND LAUNCHES MOMENTUM FUND

Published on Nov 25, 2024 14:49

Axis Mutual Fund has launched the Axis Momentum Fund, a new open-ended equity scheme that aims to capitalize on the momentum investing strategy. The New Fund Offer (NFO) is open for subscription until 6 December 2024.

The fund seeks to generate long-term capital appreciation by investing in equity and equity-related securities exhibiting strong price momentum. It will be benchmarked against the NIFTY 500 TRI and managed by experienced fund managers Karthik Kumar and Mayank Hyanki.

The minimum investment amount is Rs 100, with subsequent investments in multiples of Rs 1. An exit load of 1% applies to redemptions within 12 months, excluding the first 10% of the investment.

Momentum investing, a globally recognized strategy, focuses on stocks with strong upward trends. Unlike value investing, it prioritizes price momentum over valuation metrics.

The Axis Momentum Fund employs a structured, model-based approach to select stocks with strong momentum. Historically, this strategy has outperformed benchmarks over the long term. Over the past 15 years, the strategy has outperformed its benchmark 12 times, with an average outperformance of 6.62%. On a three-year rolling return basis, it has delivered positive returns 96% of the time, with a significant edge over the benchmark in nearly 77% of instances in the last 11 years.

The fund aims to invest in a portfolio of high-performing stocks, actively managed to align with momentum trends. Up to 20% of the portfolio may be allocated outside the momentum theme based on market opportunities and strategic considerations.

The fund`s active management approach enables the fund manager to control exposure to factors like sector/stock concentration, market cap skewness, liquidity risk, etc., within the portfolio. This helps manage volatility, which is traditionally higher in momentum strategies.

The fund selects stocks based on price momentum trends, optimizing the portfolio considering factors like composite rank, risk, and portfolio constraints. Stocks are screened for data availability, liquidity, and red flags before inclusion.

By incorporating a dynamic, rule-based approach, the fund actively manages risks, ensuring controlled volatility despite the inherent nature of momentum strategies.

For investors with the appropriate risk appetite and a long-term investment horizon, the Axis Momentum Fund offers an opportunity to capitalize on market trends and high-performing stocks. By combining robust data analysis with active management, the fund aims to provide consistent outperformance.