SBI Nifty200 Momentum 30 Index Fund NFO: Launch Dates, Investment Details & Key Highlights

SBI Nifty200 Momentum 30 Index Fund is a passive equity mutual fund that aims to mirror the performance of the Nifty200 Momentum 30 Index. This index selects 30 stocks from the Nifty 200 universe based on their recent price momentum, making it a smart-beta strategy. The fund offers investors a low-cost, rule-based approach to gain exposure to high-momentum stocks, ideal for those seeking growth potential through market trends while maintaining a diversified equity portfolio.

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Key Features of SBI Nifty200 Momentum 30 Index Fund

Opening Date: June 23, 2025
Closing Date: July 3, 2025
Exit Load: 0.25% for redemption within 15 days
Minimum Investment: ₹5,000
Benchmark Index: Nifty 200 Momentum 30 Index

Objective of the SBI Nifty200 Momentum 30 Index Fund

The investment objective of SBI Nifty200 Momentum 30 Index Fund - Dir (G) is to provide returns that correspond to the total returns of the securities as represented by the underlying index, subject to tracking error. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.

Investment Strategy of SBI Nifty200 Momentum 30 Index Fund

The SBI Nifty200 Momentum 30 Index Fund follows a passive investment strategy, aiming to replicate the performance of the Nifty200 Momentum 30 Index. Here's a summary of its strategy:

• Index Tracking: It invests in the same 30 stocks that are part of the Nifty200 Momentum 30 Index, in the same proportion.
• Momentum-Based Selection: The index selects stocks from the Nifty 200 based on momentum scores, which consider 6-month and 12-month price returns, adjusted for volatility.
• No Active Stock Picking: The fund does not actively manage its holdings; it simply mirrors the index.
• Periodic Rebalancing: The portfolio is rebalanced semi-annually, in line with index changes.

In essence, the fund provides exposure to high-momentum stocks within the Nifty 200 universe through a low-cost, rule-based strategy.

Risks Associated with SBI Nifty200 Momentum 30 Index Fund

Here are the key risks associated with the SBI Nifty200 Momentum 30 Index Fund in short:

• Momentum Risk: Stocks selected based on momentum may underperform during market corrections or sideways markets.
• Market Risk: Being an equity fund, it is exposed to overall stock market volatility and downturns.
• Sector Concentration: Momentum strategies can lead to higher exposure to specific sectors, increasing sector-specific risk.
• Tracking Error: The fund may not perfectly replicate index returns due to costs or rebalancing delays.
• Lack of Downside Protection: As a passive fund, it doesn’t adapt to market conditions or manage downside actively.

In summary, while it can offer high returns in trending markets, the fund is also prone to sharp drawdowns and volatility.

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Risk Mitigation Strategy by SBI Nifty200 Momentum 30 Index Fund

The SBI Nifty200 Momentum 30 Index Fund follows a passive investment approach, so direct risk mitigation is limited. However, the fund incorporates certain built-in strategies to help manage risk:

• Diversification: It invests in 30 momentum-driven stocks across various sectors from the Nifty 200 universe.
• Semi-Annual Rebalancing: Regular rebalancing ensures only stocks with sustained momentum stay in the portfolio, reducing prolonged exposure to underperformers.
• Volatility-Adjusted Selection: The index considers volatility when scoring stocks, helping reduce risk from overly volatile picks.
• Large & Mid Cap Focus: It draws from relatively stable and liquid companies, avoiding small caps with higher risk.

Overall, while it does not actively manage risk, its rule-based and diversified structure offers some level of risk control.

What Type of Investor Should Invest in the SBI Nifty200 Momentum 30 Index Fund?

The SBI Nifty200 Momentum 30 Index Fund is suitable for:

• Growth-Oriented Investors: Those seeking higher returns by riding market momentum trends.
• Experienced Equity Investors: Individuals who understand market cycles and can handle volatility.
• Long-Term Investors: Those with a 5+ year horizon, aiming to benefit from momentum over time.
• Passive Strategy Believers: Investors preferring low-cost, rule-based investing over active stock picking.
• Risk-Tolerant Individuals: Suitable for investors who can withstand short-term fluctuations and drawdowns.

It's not ideal for conservative or first-time investors due to its higher volatility and lack of downside protection.