Nifty 500 Momentum 50 ETF: Groww Mutual Fund has launched this amazing investment opportunity—the Groww Nifty 500 Momentum 50 ETF. This is an open-ended exchange-traded fund (ETF) that seeks to track the performance of the Nifty 500 Momentum 50 Index, thereby giving such the opportunity to investors in becoming part owners of high-growth stocks.
This New Fund Offer (NFO) is open between April 3 and April 17, 2025, with a restriction of a minimum investment amount of ₹500 only. The ETF shall start trading like all the other exchange-traded funds starting May 5, 2025, under the stewardship of Nikhil Satam, after the NFO closure.
Understanding the Momentum Investment Strategy
The Groww Nifty 500 Momentum 50 ETF applies a momentum buying strategy. It means buying stocks that have already been on an upward path and holding them for as long as momentum keeps coming through. The stock will have to be sold as soon as it shows any downward movement.
Unlike traditional investing, which analyzes company fundamentals, the momentum strategy is more oriented toward price trends and market behavior. The fundamental argument lying here is that stocks going up today have a higher likelihood of still going up.
How does the Nifty 500 Momentum 50 Index work?
Nifty 500 Momentum 50 Index is made up of a chosen sample of 50 stocks from the Nifty 500. It is formed on the basis of their 6-month and 12-month price returns and the relative volatility of each of those stocks.
It is rebalanced every six months to ensure only the fastest-growing stocks occupy it, thus adapting itself to changing requirements of the market.
For whom is this ETF suitable for investment?
Momentum investing has historically shown bigger gains than nifty indices like nifty 50, nifty 500, especially following market recovery. Studies show that in 70 instances out of a hundred, it generated substantial returns when the markets rebounded.