Factor Investing: Bridging Active and Passive Investing
'Factors' might sound new, but the concept has been part of investing for years. Active fund managers have long used these factors to manage portfolios.
Factor Investing aims to deliver superior risk-adjusted returns by selecting stocks based on specific attributes, providing a balanced approach to investing.
Understanding Factor Investing
Factor Investing targets specific characteristics (factors) in stocks to potentially enhance returns and reduce risk. Here are the six most common factors used in investment strategies:
Momentum
Stocks that have shown recent strong performance
Value
Stocks trading below their intrinsic value
Low Volatility
Stocks with stable prices and fewer fluctuations
Quality
Stocks with strong financial health and low debt
Alpha
Stocks that have outperformed the index
Size
Stocks with lower market capitalisation
Introducing Bandhan Nifty 500 Momentum 50 Index Fund
- Invests in stocks with recent strong performance, aiming to capture continued momentum.
- Like choosing a top-rated restaurant, trusting it will continue to offer a great experience.
- Replicates the Nifty 500 Momentum 50 Index tracking the performance of 50 stocks which are selected based on normalised momentum score from the Nifty 500 index.
- Seeks to capture market trends, potentially offering higher returns compared to broader indices.
Bandhan Nifty 500 Momentum 50 Index Fund: The Methodology
Momentum Score is calculated using 6-month & 12-month returns, adjusted for volatility.
Source/Disclaimer- NSE. Data as of the end of 31st August 2024. Performance results may have inherent limitations and no representation is being made that any investor will or is likely to achieve. Past performance may or may not be sustained in the future.
#1 Proven Historical Outperformance
- The Nifty 500 Momentum 50 Index outperformed broader indices across various timeframes.
- While this strategy can experience higher volatility, it typically offers better risk-adjusted returns.
#2 Effective Sector Rotation
The momentum strategy captures sector rotation effectively by rebalancing semi-annually in June and December. This enables the fund to move into sectors that are gaining momentum and avoid those that are losing ground.
#3 Harnessing Market Momentum Across Market Caps
The strategy captures momentum across different market capitalisation segments, allowing the fund to potentially benefit from strong-performing companies regardless of size.
Who Should Consider This Fund?
Investors with a higher risk tolerance who are comfortable with short-term volatility.
Long-term investors looking to benefit from established market trends.
Those seeking to add an aggressive strategy to their portfolio for potential enhanced returns.
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Make an informed decision. Learn more about investing in Bandhan Nifty 500 Momentum 50 Index Fund
Fund Facts
Type of Scheme
An open-ended scheme tracking Nifty 500 Momentum 50 Index
NFO Period
14th to 24th October, 2024
Benchmark
Nifty 500 Momentum 50 TRI
Fund Manager
Mr. Nemish Sheth
Plans/Options
Regular/Direct Plan: Growth Option
Exit Load
0.25% - if redeemed on or before 15 days from the allotment date.
Nil - if redeemed after 15 days from the allotment date
Minimum Investment
During New Fund Offer
₹ 1,000
And in multiples of Rs. 1/- thereafter
Investment Objective
The investment objective of the Scheme is to replicate the Nifty 500 Momentum 50 Index by investing in securities of the Nifty 500 Momentum 50 Index in the same proportion/weightage with an aim to provide returns before expenses that track the total return of the Nifty 500 Momentum 50 Index, subject to tracking errors. However, there is no assurance or guarantee that the objectives of the scheme will be realised and the scheme does not assure or guarantee any returns.
Fund Manager
Nemish Sheth
Associate Vice President - EquitiesBandhan AMC Limited
Mr. Nemish Sheth is a Fund Manager at Bandhan AMC (Erstwhile IDFC AMC) since November 2021. He comes with an experience of over a decade in fund management and Dealing in Equity, Derivatives, and Passive Funds. His prior stint includes Nippon AMC and ICICI Prudential AMC, as Dealer for Equity, Derivative and Passive Funds. Mr. Sheth completed his post-graduation in Management Studies with a specialization in Finance from IES Management College (Mumbai).
Product info
Bandhan Nifty 500 Momentum 50 Index Fund
(An open-ended scheme tracking Nifty 500 Momentum 50 Index)
This product is suitable for investors who are seeking*:
- To create wealth over a long term.
- Investment in equity and equity related instruments belonging to Nifty 500 Momentum 50 Index.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
