Benchmark equity indices closed in light red in the trading session of September 13. Sensex closed down 72 points at 82891 and Nifty closed down 32 points at 25357. In such a situation, talking about the future movement of the market, MoPratik Oswal, Chief of Passive Fund Business, Tilal Oswal AMC (MOAMC) Talking to CNBC-Awaaz, he said that our focus is on momentum driven stocks. In this market, we are taking advantage of sector and cap rotation. He said that there is a boom in utility, infrastructure and manufacturing sectors.
You can subscribe to MO Nifty 500 Momentum 50 Index from 4-18 September. This is an open-ended equity fund. This fund tracks the Nifty 500 Momentum 50 Total Return Index.
Talking about the strategy of the fund, he said that it will provide a better option for capital growth in the long term. We focus on momentum-driven stocks through the fund. Stocks are selected from the range of Nifty 500 index. It is suitable for investors with moderate to high risk. This fund helps in creating a diversified equity portfolio. Factor investing is new in India. Momentum investing is growing rapidly in India. This fund captures momentum from all 3 segments – large, mid, small-cap.
Opinion on the market
Prateek Oswal further said that the condition of the Indian market is very strong. The situation is expected to remain good in the coming 2-3 years. He says that the growth of small companies has been good. The growth of small companies is expected to increase further in the next 3-4 years. There is a possibility of growth in the utility, infrastructure, manufacturing sectors. Sector growth has been good due to industrial and capital goods. The balance sheet of many sectors has been very good. There is a positive outlook on the market.
Strategy on Active Funds
Talking about the strategy on active funds, he said that the fund manager actively manages the fund. The fund manager decides in which asset class to invest. He decides to buy, sell or rebalance the portfolio. Study and analysis are necessary to prepare a strategy. There is an effort to get better returns than the market index. Decisions related to buying and selling of stocks are taken quickly. More transactions are done in active investing. Research expenses on active funds are higher than passive funds. Capital gains tax is higher on active funds.
Passive Fund Strategy
He said that the fund manager does not have much role. Passive funds track the market. There is less volatility as compared to active funds. It is good for investors who take less risk. Passive funds do not require much research. They track the underlying benchmark. Expense ratio is quite low. There is less risk and return as compared to active funds. Less capital tax is levied on passive funds.
