Tata Nifty Midcap 150 Momentum 50 Index Fund launched — Sailesh Jain says right time to invest in midcaps

Sailesh Jain of Tata Asset Management believes the right strategy at this time is to invest in midcaps as returns will be 5-7 percent higher than Nifty over the long term like the China+1 and Europe+1 themes.

"My view is that, because this will be a broad-based index, it will eventually cover a lot of strategies which are there from the PLI or the themes with China Plus One or the Europe Plus One among the sectors," he told CNBC-TV18.

According to Tata Mutual Fund, the new scheme is suitable for investors with a high-risk profile looking for long-term capital growth and those who want to invest in equity and equity-related instruments comprised in the Nifty Midcap 150 Momentum 50 Index.

“The investment objective of the scheme is to provide returns, before expenses, that commensurate with the performance of NIFTY Midcap 150 Momentum 50 Index (TRI), subject to tracking error,” the company said.

It, however, clarified that there is no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme does not assure or guarantee any returns.

The fund house said that 95 percent of the securities covered under the new scheme would be allocated to index securities and up to 5 percent in debt and money market instruments.

The minimum subscription amount of the scheme is Rs 5,000 and thereafter, in multiples of Re 1. This minimum amount is also applicable for switch-ins. Also, the scheme's exit load is 0.25 percent of the relevant net asset value (NAV) if redeemed on or before 90 days from the date of allotment.

The scheme would invest in stocks comprising Nifty Midcap 150 Momentum 50 Index in the same proportion (weightage) as in the Index. It may take an exposure to equity derivatives of constituents of the underlying index for short duration when securities of the index are unavailable, insufficient or for rebalancing at the time of change in index or in case of corporate actions, as permitted subject to rebalancing within seven calendar days, Tata Mutual Fund said.