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Baroda BNP Paribas Mutual Fund has launched an innovative new fund offer Baroda BNP Paribas Nifty200 Momentum 30 Index Fund which opens on 25th September 2024 and closes on 9th October 2024. The scheme is designed to tap into the power of momentum investing, offering investors a smart, passive strategy to leverage the top 30 momentum stocks from the Nifty 200 Total Return Index.

Highlights:

* The fund willtrack the NIFTY 200 Momentum 30 Index by investing in a portfolio of 30 companies that are part of NIFTY 200 Momentum 30 Index.

* These 30 companies are selected from the NIFTY 200 Indexbased on their normalized momentum scores.

* The Nifty 200 Momentum 30 Index has consistently outperformed the NIFTY 50 Index by a significant margin since its inception.

* Assume one lakh invested at the inception in April 2005 of the Nifty 200 Momentum 30 Index TRI might have grown to 46 lakhs; while the same amount invested in the Nifty 50 TRI might have grown to 15.5 lakhs; the Nifty 200 Momentum 30 Index giving ~3X higher returns than the Nifty 50 TRI over this time. Past performance may or may not be sustained in future and is not a guarantee of any future returns

* The NFO period of the fund opens on September 25, 2024, and closes on October 9, 2024.

The Baroda BNP Paribas Nifty200 Momentum 30 Index Fundseeks to offer investors an opportunity to add momentum to their portfolio. The fund's momentum-based strategy aims to target stocks with tailwinds, with the hypothesis that those already performing well will continue to do so in the future. With the universe restricted to the NIFTY 200 constituents (the largest 200 companies by market capitalization), the fund aims to reducerisk by avoiding exposure to the smaller companies that tend to be more volatile and therefore risker.

“Our Baroda BNP Paribas Nifty200 Momentum 30 Index Fundseeks to offer the best of both worlds—cost-efficiency of passive investing and the potential for outperformance by taking advantage of factor-based investing,” says Suresh Soni, CEO, Baroda BNP Paribas AMC.Factor investing, which is a concept under passive investing, at the core tries to identify the factors that contribute to superior stock performance. “Our analysis of factors indicate that momentum factor has one of the best performance track record in India. This approach has shown goodresults in back-testing, with the Momentum strategy (as represented by the NIFTY 200 Momentum 30 Index) outperforming the Nifty 50 Index consistently,” adds Soni^.

Analysing the data over the past 15 years, shows that the Nifty 200 Momentum 30 Index TRI has grown at CAGR of 22% per annum, compared to the 13% per annum of the Nifty 50 TRI^#. (Source nseindia.com, Data as on 31^st August 2024). Factor investing removes human bias and follows rule-based investing by replicating the Nifty 200 Momentum 30 Index.

Nifty 200 Momentum 30 Index– Significant outperformance over Nifty 50 Index

Source: Niftyindices.com, MFI explorer. Data as on Aug 31, 2024. Daily Rolling Returns calculated from 03-Apr-2005 to 31 Aug 2024. Above returns are CAGR (Compound Annual Growth Rate) returns. Baroda BNP Paribas Mutual Fund does not guarantee returns on investments in the scheme. Past performance may or may not be sustained in future and is not a guarantee of any future returns. Returns do not take into account expenses and taxes, if any. Nifty 50 being a broad market bellwether index and also recommended by AMFI as additional benchmark for all equity schemes has been used for comparison.

The top 10 stocks of this scheme differ quite markedly from the top 10 constituents of the Nifty 200 Total return index as can be seen from the table below. This means that investors buying this scheme will get a truly differentiated portfolio with the potential to outperform

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