Discover the latest updates on the Nifty 200 Momentum 30 Index rebalancing. The Nifty 200 stocks list comprises a diversified portfolio of 200 leading Indian companies. This article highlights the inclusion of 11 new mid-cap stocks in the index, which have shown impressive momentum over the past year.
The June 2023 rebalancing exercise by the National Stock Exchange (NSE) replaced 16 stocks, including 11 mid-cap stocks, in the Nifty 200 Momentum 30 Index. These mid-cap stocks demonstrated impressive momentum and outperformed their peers.
Learn how momentum strategy is employed by fund houses to manage risk and explore the growing popularity of momentum index funds.
Key Highlights
- Nifty 200 Momentum 30 Index (NM30) undergoes a semi-annual rebalancing exercise in June 2023.
- 11 mid-cap stocks have been newly added to the NM30 basket, showcasing strong momentum.
- The Momentum strategy involves buying rising securities and selling them as prices decline.
- Mutual funds offer schemes that follow a momentum strategy, with 11 passively managed schemes currently available.
- NM30, consisting of 30 stocks, is tracked by eight schemes as a benchmark for momentum-based investing.
- Stocks are selected based on momentum scores calculated from their recent 6-month and 12-month price returns.
- Rebalancing aims to maintain the effectiveness of the index by replacing underperforming stocks.
How Momentum Strategy Manages Risk
Fund houses utilise momentum strategy as a risk management tool in their investment approach. By employing this strategy, they aim to identify stocks that are exhibiting upward momentum and capitalise on their potential for continued price appreciation. This helps fund houses mitigate risk by focusing on securities that have already demonstrated a positive trend.
Mutual funds provide schemes that solely rely on this strategy. Presently, there are 12 such schemes, with 11 being passively managed. Eight of these schemes use the Nifty 200 Momentum 30 Index (NM30) as their benchmark. NM30 comprises 30 stocks selected based on momentum scores calculated from their recent price returns adjusted for volatility.
Newly Added Mid-cap Stocks in NM30
The latest rebalancing exercise in June 2023 resulted in the inclusion of 11 new mid-cap stocks in the NM30 index. These stocks have demonstrated strong momentum and outperformed their peers within the Nifty 200 basket over the past year.
Here are the newly added mid-cap stocks:
- Apollo Tyres – Sector: Auto Components – Actively managed MF stocks: 40
- Astral – Sector: Industrial Products – Actively managed MF stocks: 69
- Aurobindo Pharma – Sector: Pharmaceuticals – Actively managed MF stocks: 49
- Dalmia Bharat – Sector: Cement – Actively managed MF stocks: 61
- Mahindra & Mahindra Financial Services – Sector: Finance – Actively managed MF stocks: 80
- Polycab India – Sector: Industrial Products – Actively managed MF stocks: 75
- Power Finance Corporation – Sector: Finance – Actively managed MF stocks: 74
- REC – Sector: Finance – Actively managed MF stocks: 38
- Syngene International – Sector: Healthcare Services – Actively managed MF stocks: 62
- The Ramco Cements – Sector: Cement – Actively managed MF stocks: 52
- Zydus Lifesciences – Sector: Pharmaceuticals – Actively managed MF stocks: 68
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Scope for Investors of the Stock Market- How can you Invest?
Investing in the Nifty 200 Momentum 30 Index is possible through passively managed mutual fund schemes or exchange-traded funds (ETFs) that track the index. Investors can participate in the index’s performance and potentially benefit from the strong momentum of the included mid-cap stocks.
Conclusion
The Nifty 200 Momentum, 30 Index rebalancing, introduces 11 new mid-cap stocks with impressive momentum, offering potential opportunities for investors. As a smart investor, make sure you thoroughly research, check, and compare before participating in these stocks.
Sources: moneycontrol.com
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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.