When it comes to investing in mutual funds, the debate between passive and active management is a constant topic of discussion. The Motilal Oswal Nifty 500 Momentum 50 Index Fund stands out as a prime example of how passive strategies, particularly momentum-based index funds, can outperform actively managed funds.
This index fund tracks the Nifty 500 Momentum 50 index, which selects the top 50 stocks based on momentum, allowing investors to capitalize on market trends without the hefty fees and potential pitfalls associated with active management. The Nifty 500 Momentum 50 is launched by NSE with backtested data from 2005.
For investors seeking a long-term growth strategy, this fund offers a cost-effective, disciplined approach with consistent performance.
Historical data has shown that momentum-based funds can often surpass actively managed funds in terms of both returns and risk-adjusted performance, making this a compelling option for those looking to maximize gains while minimizing unnecessary fees.
In this guide, we’ll analyze how Motilal Oswal Nifty 500 Momentum 50 Index Fund and we’ll break down the rolling returns of this index fund across 1, 3, 5, and 10-year periods, and compare its performance to relevant benchmarks. We’ll also dive into key metrics like average returns, volatility (standard deviation), and the Chance of Beating the Market (COB), so you can better understand if this fund fits your investment goals.
What Are Rolling Returns and Why Do They Matter?
Before diving into the performance of the Motilal Oswal Nifty 500 Momentum 50 Index Fund, it’s important to understand what rolling returns are. Rolling returns measure a fund’s performance over a set period, such as 1, 3, or 5 years, and give you an average over different entry points. This helps smooth out the highs and lows to give a more accurate picture of how a fund performs consistently. Rolling returns are an excellent metric for long-term investors because they show consistency rather than just one-off performance spikes.
Nifty500 Momentum 50 1-Year Rolling Returns
- Nifty500 Momentum 50: The fund delivered an average return of 27.97% with a maximum of 157.90% and a minimum of -66.58%. The standard deviation was 16.97%.
- Nifty 500: The benchmark index had an average return of 17.26%, with a maximum of 118.55% and a minimum of -59.78%. The standard deviation was 8.25%.
Analysis: The Nifty500 Momentum 50 fund outperformed the Nifty 500 index in terms of average return but also exhibited higher volatility. The fund’s maximum return was significantly higher, indicating potential for larger gains, but also a higher risk of larger losses.
Nifty500 Momentum 50 3-Year Rolling Returns
- Nifty500 Momentum 50: The fund’s average return was 21.24% with a maximum of 66.62% and a minimum of -15.14%. The standard deviation was 19.26%.
- Nifty 500: The benchmark index had an average return of 13.17%, with a maximum of 38.31% and a minimum of -9.46%. The standard deviation was 12.62%.
Analysis: Over the three-year period, the Nifty500 Momentum 50 fund continued to outperform the Nifty 500 index in terms of average return but maintained a higher level of volatility.
Nifty500 Momentum 50 5-Year Rolling Returns
- Nifty500 Momentum 50: The fund’s average return was 20.51% with a maximum of 36.25% and a minimum of -4.39%. The standard deviation was 21.03%.
- Nifty 500: The benchmark index had an average return of 12.80%, with a maximum of 23.56% and a minimum of -1.54%. The standard deviation was 18.63%.
Analysis: The fund’s performance remained relatively consistent over the five-year period, outperforming the benchmark index in terms of average return but with slightly higher volatility.
Nifty500 Momentum 50 10-Year Rolling Returns
- Nifty500 Momentum 50: The fund’s average return was 21.00% with a maximum of 28.34% and a minimum of 11.18%. The standard deviation was 19.71%.
- Nifty 500: The benchmark index had an average return of 12.79%, with a maximum of 18.05% and a minimum of 4.98%. The standard deviation was 16.48%.
Analysis: Over the 10-year period, the Nifty500 Momentum 50 fund consistently outperformed the Nifty 500 index in terms of average return, demonstrating its long-term growth potential. However, the fund’s volatility remained higher compared to the benchmark.
The Nifty500 Momentum 50 Index Fund has exhibited consistent outperformance over various time periods compared to the Nifty 500 index. However, investors should be aware of the fund’s higher volatility. If you have a long-term investment horizon and can tolerate higher risk, the fund may be a suitable option.
Nifty500 Momentum 50 average Returns
When comparing the Nifty500 Momentum 50 to the Nifty 500 Index across various timeframes, it’s clear that the Momentum 50 consistently outperforms its benchmark. Here’s a breakdown of average returns over 1, 3, 5, 7, and 10-year periods.
- 1-Year Performance:
The Nifty500 Momentum 50 delivered an impressive return of 71.71%, significantly outpacing the Nifty 500’s 45.74%. This excess return of 25.97% demonstrates the momentum strategy’s ability to capture short-term market trends. - 3-Year Performance:
Over three years, the Momentum 50 posted a return of 26.64%, compared to the Nifty 500’s 18.36%, yielding an excess of 8.28%. This indicates that the fund maintains its edge even in medium-term market movements, benefiting from the compounding effect of high-performing stocks. - 5-Year Performance:
In the five-year timeframe, the Momentum 50 outperformed with an average return of 33.67%, while the Nifty 500 returned 21.38%, providing an excess of 12.29%. This long-term outperformance highlights the robustness of momentum investing in capturing sustained stock rallies. - 7-Year Performance:
The Momentum 50 posted 23.26%, surpassing the Nifty 500’s 16.19%, with an excess of 7.06%. The fund’s ability to beat the index over this extended period suggests strong, consistent stock selection. - 10-Year Performance:
Over the decade, the Momentum 50 returned 23.20%, compared to 15.02% for the Nifty 500, giving it an excess of 8.18%. This shows that the momentum strategy is effective in driving long-term growth, making it an attractive option for patient investors.
Across all periods, the Nifty500 Momentum 50 has consistently provided excess returns over the Nifty 500, proving its ability to outperform in both short and long-term horizons.
Nifty500 Momentum 50 Portfolio
The Nifty500 Momentum 50 Portfolio focuses on high-performing stocks with strong momentum, offering a dynamic, growth-oriented investment strategy. Here is the list below :
Nifty 500 Momentum 50 Nav and Performance:
Conclusion: Rolling Returns & Average Returns
The Nifty500 Momentum 50 consistently outperforms the Nifty 500 Index in both rolling and average returns across 1, 3, 5, and 10-year periods. With higher average returns over every timeframe, the momentum fund captures strong short-term gains and long-term growth. The rolling returns also demonstrate stability, with minimal fluctuations and consistent outperformance.
Final Verdict: Risk & Returns
While the Momentum 50 fund carries higher volatility, indicated by a larger standard deviation, its ability to generate significantly higher returns makes it a compelling choice for growth-focused investors willing to tolerate increased risk for superior long-term gains.
