Aditya Birla SL Launches Momentum 50 Index Fund NFO Tracking BSE 500 Quality Stocks

The Aditya Birla SL BSE 500 Momentum 50 Index Fund is a new open‑ended index fund that tracks the BSE 500 Quality 50 Total Return Index, aiming to offer investors exposure to 50 high‑quality companies selected from the broader BSE 500 universe. Launched by a leading asset manager, the fund targets stocks with strong fundamentals—companies characterised by high return on equity, low debt, and stable earnings. Its units are offered at ₹10 each during the NFO period, with ongoing access at NAV thereafter. With a disciplined, low-cost, passive investment approach, it is designed for those seeking long‑term capital growth via a rule‑based equity strategy that limits tracking error and provides diversified exposure across industries.

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Key Features of Aditya Birla SL BSE 500 Momentum 50 Index Fund

• Opening Date: July 21, 2025
• Closing Date: August 4, 2025
• Exit Load: For redemption/switch out of units on or before 15 days from the date of allotment -0.10% of applicable NAV•For redemption/switch out of units on or after 15 days from the date of allotment -NIL
• Minimum Investment Amount: ₹500

Objective of Aditya Birla SL BSE 500 Momentum 50 Index Fund

The Aditya Birla SL BSE 500 Momentum 50 Index Fund-Dir (G) primary objective is to provide returns that closely match the total returns of the BSE 500 Quality 50 Total Return Index, before expenses, while minimising tracking error. It seeks to capture long‑term capital appreciation through investment in a concentrated portfolio of 50 high-quality companies.

Investment Strategy of Aditya Birla SL BSE 500 Momentum 50 Index Fund

Replicate index composition by investing 95–100% of assets in the 50 index constituents
Rebalance holdings within seven calendar days of index changes.
Hold 5% or less in cash, money‑market or liquid mutual fund instruments to manage liquidity and expenses.
Limit portfolio turnover, focusing on passive tracking rather than active stock picking.

Risks Associated with Aditya Birla SL BSE 500 Momentum 50 Index Fund

• Tracking Error Risk: Performance may deviate from the benchmark due to delays, liquidity issues or differing closing prices.
• Concentration Risk: Holding just 50 stocks may cause price fluctuations if one stock underperforms.
• Market Risk: Subject to equity market volatility and sector-specific downturns.
• Liquidity Risk: Some quality stocks may have lower trading volumes, impacting ease of entry or exit.
• Passive Strategy Risk: No active defence in declining markets — fund follows index without flexibility.

Risk Mitigation Strategy by Aditya Birla SL BSE 500 Momentum 50 Index Fund

To limit risks, the Aditya Birla SL BSE 500 Momentum 50 Index Fund-Dir (G) uses strict replication of the BSE 500 Quality 50 index and performs regular rebalancing aligned with index updates. A small buffer of up to 5% in liquid instruments ensures cash is readily available for redemptions while smoothing expenses. Constraints on portfolio turnover help reduce transaction costs. The fund does not leverage derivatives or foreign assets, focusing instead on domestic equities with clear quality filters, thereby reducing complexity and volatility.

What Type of Investor Should Invest in Aditya Birla SL BSE 500 Momentum 50 Index Fund?

• Investors seeking low-cost, rule-based equity exposure
• Long‑term growth seekers are comfortable with moderate volatility
• Those wanting diversified holdings across top-quality mid- and large-cap firms
• Passive fund investors prioritising transparency and disciplined investment

Where Will the Aditya Birla SL BSE 500 Momentum 50 Index Fund Invest?

• In equities and equity-related securities of the 50 stocks in the BSE 500 Quality 50 index
• Up to 5% in liquid/money‑market instruments for liquidity support and expense coverage