Navi MF Files Draft with SEBI for Nifty Smallcap250 Momentum Quality 100 Fund

Introduction

Navi Mutual Fund has recently filed a draft with SEBI for the Navi Nifty Smallcap250 Momentum Quality 100 Index Fund, an open-ended index fund that seeks to replicate or track the Nifty Smallcap250 Momentum Quality 100 Total Return Index (TRI). This fund is designed to provide investors an opportunity for capital appreciation by investing in equity securities with a combination of momentum and quality characteristics.

Category and Type

This is an index fund under the “Other Schemes” category. It is an open-ended scheme, meaning it allows for continuous buying and selling at applicable NAV prices, providing liquidity and flexibility to investors.

Fund Objective

The primary objective of the fund is to achieve returns equivalent to the Nifty Smallcap250 Momentum Quality 100 Index by investing in the stocks comprising the index, subject to tracking error. The fund endeavors to maintain low tracking error to effectively match the index’s performance, although it offers no assurance of achieving its investment goal.

Benchmark Index

The fund’s benchmark is the Nifty Smallcap250 Momentum Quality 100 TRI, which comprises the top 100 companies from the Nifty Smallcap250 index. Selection is based on momentum (price movement over 6-12 months) and quality (financial metrics such as ROE, leverage, and earnings growth). This ensures that the portfolio is a blend of companies exhibiting high momentum and quality.

Who Manages the Fund?

The scheme will be managed by Aditya Mulki and Ashutosh Shirwaikar, both experienced in handling equity-related investments. Aditya has a background in managing multiple Navi index and hybrid funds, while Ashutosh has extensive experience across sectors like automotive, pharmaceuticals, and chemicals.

Asset Allocation

• Equities: 95%-100% in equities covered by the Nifty Smallcap250 Momentum Quality 100 TRI.
• Debt & Money Market Instruments: Up to 5% for liquidity purposes.

Key Features

• Plans & Options: Offers both regular and direct plans with a growth option.
• Liquidity: Investors can buy or redeem units daily, providing ample liquidity.
• Exit Load: There is no exit load for redeeming units, which adds to the fund’s flexibility for investors.
• Minimum Investment: Minimum purchase amount is Rs. 10, making it accessible to a broad audience of retail investors.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.