Navi Nifty Smallcap 250 Momentum Quality 100 Index Fund - Direct (G): NFO Details

Navi Nifty Smallcap 250 Momentum Quality 100 Index Fund - Direct (G) is an open-ended index fund designed to replicate the performance of the Nifty Smallcap 250 Momentum Quality 100 Index, subject to tracking error. The fund offers investors a structured way to gain exposure to small-cap stocks with strong momentum and quality factors while maintaining a passive investment approach.

While the fund aims to match the index’s returns, there is no assurance that the investment objective will be achieved.

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Investment Objective and Strategy

Objective:
The scheme seeks to achieve returns equivalent to the Nifty Smallcap 250 Momentum Quality 100 Index by investing in stocks that form part of the index, while maintaining a low tracking error. The fund will follow a passive investment strategy, closely replicating the weightages of index constituents.
 

Asset Allocation:
The fund follows a structured investment methodology, incorporating:

• 95% to 100% in equities and equity-related securities covered by Nifty Smallcap 250 Momentum Quality 100 TRI.
• 0% to 5% in debt and money market instruments to manage liquidity.

Risk Factors - Navi Nifty Smallcap 250 Momentum Quality 100 Index Fund - Direct (G)

Equity Market Risks:

• Investments in small-cap stocks are inherently volatile and prone to daily price fluctuations due to market conditions, economic trends, and government policies.
• Market downturns can impact the value of small-cap stocks more significantly compared to large-cap stocks.
   

Index Fund Risks:

• As a passive index fund, the scheme does not attempt to outperform the benchmark but merely replicate its performance.
• The fund manager will invest in the same securities as the underlying index, regardless of market conditions.
• If the small-cap segment experiences a downturn, the fund's value will decline in line with the index.
   

Tracking Error Risks:

• The scheme aims to reinvest dividends received from index constituents, but delays in dividend reinvestment may cause slight tracking error.
• Fund performance may deviate from the benchmark due to transaction costs, cash holdings, and other factors.
   

Fixed Income Risks:

• The portion of assets allocated to debt and money market instruments is subject to interest rate risks, credit risks, and liquidity risks.
   

Why Invest in Navi Nifty Smallcap 250 Momentum Quality 100 Index Fund?

• Exposure to Small-Cap Momentum & Quality Stocks: The fund invests in small-cap companies that exhibit strong price momentum and financial quality.
• Systematic Passive Investment Approach: Investors can participate in small-cap growth without active stock selection, as the fund mirrors the benchmark.
• Low Investment Requirement: The fund has a minimum investment amount of ₹100, making it accessible to all investors.
• Diversification Across Small-Cap Companies: The fund spreads risk by investing across multiple high-growth potential stocks in the small-cap segment.

Conclusion

The Navi Nifty Smallcap 250 Momentum Quality 100 Index Fund is an option for investors looking to gain exposure to high-growth small-cap companies with strong momentum and quality factors. As an index fund, it follows a passive investment strategy, making it suitable for long-term investors who prefer low-cost diversification.

However, investors should be aware of the volatility risks associated with small-cap stocks and understand that market downturns can significantly impact performance.

Disclaimer: This article is for educational purposes only and does not constitute investment advice. Investors should conduct their own research before making any investment decisions.