Surfing market waves isn’t that simple. You need to know how to pick the right stocks to make momentum work for you. Know about an easy way to access the momentum investing style with Hari and Vandana in this episode.
[00:00:00] Welcome to Axis Moneynomics by Axis Mutual Fund. In the world of investing, we usually suggest buy low and sell higher. What if I say buy high, sell higher? Doesn't that sound intriguing? Now imagine doing this without having to actively pick stocks, yet simple and cost-effective.
[00:00:27] And did I just pick your curiosity? Well, wait no more, because that's what we are here to discuss today with our guest, Vandana Trivedi. Hello and welcome to another exciting episode of Axis Moneynomics. This is Hari from Axis Mutual Fund.
[00:00:56] Hello Vandana, welcome. Vandana is the Head of Institutional Business and Passives at Axis Mutual Fund. Hey Hari, thanks for having me here. Today Vandana, I want you to tell our viewers about the buy high, sell higher strategy, or what we normally call as momentum. Can you explain how does that work? Sure Hari, momentum investing is based from the concept that revolves around the momentum factor.
[00:01:25] This factor builds on the belief that stocks that have done well recently will tend to keep performing well, at least for a while. So Vandana, is it like surfing a rising wave? Yes, pretty much. Unlike the traditional investing approaches, momentum investing does not get into a company's fundamentals like earnings, revenue growth or balance sheets.
[00:01:50] Instead, it sticks to its principle of buy high and sell higher. So you buy a stock that has begun its upward journey and capitalize on the upward trend to make potential gains. Sounds really interesting Vandana. But my sense is that picking such momentum stocks can be a challenge, isn't it? So is there a simple way to do this? Well, that's what mutual funds are for.
[00:02:15] One such fund that we are launching Hari is the Axis Nifty 500 Momentum 50 Index Fund. The new fund offer starts from the 24th of Jan and closes on the 7th of Feb, 2025. Axis Nifty 500 Momentum 50 Index Fund. Can we just break this down for us Vandana? Absolutely Hari.
[00:02:37] So the Axis Nifty 500 Momentum 50 Index Fund is designed to combine the momentum strategy with the simplicity of passive investing. It tracks the Nifty 500 Momentum 50 Index, which identifies the top 50 stocks based on momentum score from large, mid and small cap stocks that are a part of the broader Nifty 500 Index.
[00:03:04] The momentum score is identified based on stock price returns over the last 6 months and 12 months adjusted for volatility. The index rebalances twice a year in June and December. And to reiterate, the stock selection process is completely rule-based. It's data driven with no emotional influence. So Vandana, you're saying that this is like getting access to the market's top momentum stock. That sounds superb.
[00:03:34] But what is this part about passive investing? That's what I want you to talk about. And what makes combining momentum with passive so powerful? Well, the beauty of this fund is how it blends the best of both strategies. To take momentum first, it focuses on currently high-performing stocks. Now on to passive investing. It keeps things simple, transparent and relatively cost effective.
[00:04:03] So in effect, it's like getting access to trending stocks while letting the strategy work automatically. No emotional decisions, no constant monitoring and it is cost efficient. But that sounds really interesting, Vandana. And it's already got me excited to consider investing in this fund.
[00:04:23] To sum this up, Axis Nifty 500 Momentum 50 Index Fund allows investors to invest in stocks that are gaining momentum while they are currently doing well. And one more thing, the Nifty 500 Momentum 50 Index is very dynamic in terms of adopting to emerging trends in stocks, sectors as well as capitalization, which is large cap, mid cap and small cap. That's very impressive, Vandana.
[00:04:52] And I always ask this question, who is this fund suitable for? Well, according to historical data from Nifty Indices, the Nifty 500 Momentum 50 Index has outperformed the Nifty 500 Index over longer term. Therefore, the Axis Nifty 500 Momentum 50 Index Fund may be suitable for longer term investors who are looking for wealth creation, as well as for those who are looking to complement their portfolios with a diverse strategy.
[00:05:18] Also, passive investing can work for beginners too because it's simple and transparent. And since there's no active management, the costs are lower compared to active funds. That really makes a lot of sense. And with this, we come to the end of today's episode. Thank you so much, Vandana. This has been super insightful. Thanks for having me, Hari. It's been a pleasure. For our listeners, if you're looking to write the stocks that are trending with the advantage of passive investing,
[00:05:45] do consider the Axis Nifty 500 Momentum 50 Index Fund NFO. However, please also note that this fund comes with very high risk and you must always consult with a financial advisor before making any investment decision. Investors understand that their principal will be at a very high risk. And that's a wrap for today.
[00:06:12] If you found this episode valuable, make sure to follow Axis Moneynomics. Do share this episode with your friends and family to help them in making their investment journey easier. Until next time, this is your host, Hadi, signing off.
[00:06:51] Virtual Fund Investments are subject to market risk. Read all scheme related documents, California.