MidSmallCap 400 Momentum Quality 100 Index

The MidSmallCap 400 Momentum Quality 100 Index is a specialized stock index that selects high-momentum, high-quality stocks from the Nifty MidSmallcap 400 universe. Designed to capture growth-oriented mid and small-cap companies, the index prioritizes stocks with strong liquidity, stability, and minimal promoter pledges. This makes it an ideal tool for investors targeting robust growth potential in the Indian mid and small-cap markets.

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What is the MidSmallCap 400 Momentum Quality 100 Index?

The MidSmallCap 400 Momentum Quality 100 Index is a specialized index designed to capture the performance of high-quality, high-momentum stocks within the mid and small-cap segments of the market. It selects stocks from the Nifty MidSmallcap 400 index, focusing on companies that meet stringent criteria for liquidity, turnover, and promoter stability, making it an appealing option for investors seeking quality growth in the mid-small cap space.

Key Features of the MidSmallCap 400 Momentum Quality 100 Index

Below are the key features of the MidSmallCap 400 Momentum Quality 100 Index:

  • Momentum: The index selects stocks based on their 6-month and 12-month price returns, adjusted for volatility.

  • Quality: Stocks are chosen based on their financial health, including Return on Equity (ROE), financial leverage (Debt/Equity Ratio), and Earnings Per Share (EPS) growth variability over the past 5 years.

  • Index Composition:

    • The index comprises 100 stocks from the Nifty MidSmallcap 400 index.

    • It includes 50 stocks from the Midcap universe (Nifty Midcap 150) and 50 from the Smallcap universe (Nifty Smallcap 250).

    • Stock weights are determined by a combination of momentum-quality score and free-float market capitalization, with a cap of 5% per stock.

  • Rebalancing: The index is rebalanced semi-annually to ensure it aligns with its selection criteria.

Highlights of the MidSmallCap 400 Momentum Quality 100 Index

Particulars Details
Launch Date February 08, 2024
No. of Constituents 100
Base Date April 01, 2005
Base Value 1000
Calculation Frequency End of day
Methodology Alpha Based Weighting
Alpha Calculation Trailing one-year prices adjusted for corporate actions, ranked in descending order.
Index Rebalancing Semi-Annually
Index Governance A professional team manages all NSE indices. There is a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.

[Source: nseindia.com] Data updated as of November 12, 2024.

Performance of MidSmallCap 400 Momentum Quality 100 Index

Index Name  3-Year Return  5-Year Return  10-Year Return
NIFTY MidSmallCap 400 Momentum Quality 100 23.5% 33.6% 22.5%
NIFTY MidSmallCap 400 21.1% 28.9% 18.1%
NIFTY 50  11.0% 16.3% 12.4%
NIFTY Midcap 150 20.7% 28.2% 18.9%
NIFTY Smallcap 250 21.6% 30.3% 16.3%

[Source: nseindia.com]Data updated as of November 12, 2024.

Which are the Constituent Stocks of the MidSmallCap 400 Momentum Quality 100 Index?

Company's Name  Weightage (%)
Dixon Technologies (India) Ltd 4.46%
Cummins India Ltd. 4.39%
CG Power and Industrial Solutions Ltd. 3.13%
HDFC Asset Management Company Ltd. 2.79%
Voltas Ltd. 2.54%
Persistent Systems Ltd. 2.51%
Oil India Ltd. 2.30%
Torrent Power Ltd.  2.09%
Rail Vikas Nigam Ltd.  2.06%
Coforge Ltd.  2.00%

[Source: nseindia.com] Data updated as of October 31, 2024.

What are the Sectors Included in the MidSmallCap 400 Momentum Quality 100 Index?

Top Sectors Weightage of Invested Assets
Capital Goods 25.88%
Financial Services 12.15%
Information Technology 9.89%
Healthcare 8.19%
Consumer Durables 7.35%
Oil, Gas & Consumable Fuels 6.11%
Metals & Mining 6.03%
Construction 4.88%
Chemicals 4.82%
Power 3.83%
Automobile and Auto Components  3.09%
Services 2.23%
Fast Moving Consumer Goods 2.13%
Realty 1.32%
Consumer Services  0.82%
Telecommunication 0.79%
Media, Entertainment & Publication 0.48%

[Source: nseindia.com] Data updated as of October 31, 2024.

What Are the Returns of the MidSmallCap 400 Momentum Quality 100 Index?

Index Returns (%) QTD YTD 1 year 5 years Since Inception
Price Returns -6.08 25.12 49.01 28.55 22.26
Total Returns  -6.07 26.11 50.49 29.82 23.85

# QTD, YTD and 1-year returns are absolute returns. Returns for greater than one year are CAGR returns

Is it Smart to Invest in the MidSmallCap 400 Momentum Quality 100 Index Benchmark?

The MidSmallCap 400 Momentum Quality 100 Index Benchmark offers an exciting opportunity for investors seeking growth and diversification in their portfolios. Here's why:

  • Focus on Quality and Momentum: The index carefully selects stocks based on a combination of momentum and quality factors. This means it targets companies with strong recent performance and sound financial fundamentals. This dual focus can potentially lead to superior long-term returns.

  • Exposure to High-Growth Potential: Mid and small-cap stocks often represent companies with significant growth potential. By investing in this index, you gain exposure to a diverse range of businesses that may be poised for significant expansion.

  • Diversification Benefits: The index comprises 100 stocks across various sectors, reducing concentration risk. This diversification can help mitigate the impact of individual stock volatility, leading to a smoother investment experience.

  • Professional Management: Investing in an index fund tied to this benchmark allows you to benefit from professional management. Fund managers actively track the index, rebalancing the portfolio as needed to maintain its composition.

  • Cost-Effective Investment: Index funds are generally more cost-effective than actively managed funds. This means you can potentially achieve higher returns with lower expense ratios.

  • Tax Efficiency: Index funds often have lower turnover rates compared to actively managed funds. This can lead to lower capital gains taxes over time

MidSmallCap 400 Momentum Quality 100 Index Fundamentals

P/E* P/B** Dividend Yield 
32.66 6.0 0.97

*P/E: Price-to-Earnings Ratio **P/B: Price-to-Book Ratio *Data updated as of October 31, 2024.

MidSmallCap 400 Momentum Quality 100 Index Methodology

  1. Eligibility Criteria for Inclusion:

    • Only stocks in the Nifty MidSmallcap 400 index at the time of review are eligible, with the following restrictions:

      • Non-F&O Stocks Exclusion: Stocks that are not in the Futures and Options (F&O) segment are excluded if they hit the upper or lower circuit (price band) on more than 20% of trading days in the past six months.

      • Promoter Share Pledge Limit: Companies with over 20% of promoter shares pledged are ineligible.

      • Turnover-Based Exclusions: The lowest 10 percentile stocks by turnover ratio and by six-month average daily turnover within the Midcap and Smallcap segments are excluded.

  2. Stock Selection and Weighting:

    • Selection: The index includes the top 50 stocks based on a composite percentile score within the eligible universe.

    • Weighting: Each stock's weight in the index is calculated by multiplying its free-float market cap by a composite factor score.

  3. Rebalancing and Reconstitution:

    • The index undergoes rebalancing and reconstitution semi-annually in June and December, based on data from the last trading day of May and November. Any changes are announced to the market four weeks in advance to ensure transparency.

FAQs

  • How are stocks selected for the index?

    Stocks are selected based on a combination of momentum and quality factors. Momentum is measured by the stock's 6-month and 12-month price returns, adjusted for volatility. Quality is assessed based on financial metrics like Return on Equity (ROE), financial leverage (Debt/Equity Ratio), and Earnings Per Share (EPS) growth variability over the past 5 years.
  • What are the benefits of investing in this index?

    Investing in this index offers several benefits, including:
    • Potential for Higher Returns: The focus on momentum and quality factors can lead to superior long-term performance.

    • Diversification: The index is diversified across various sectors and market capitalizations, reducing risk.

    • Professional Management: Index funds tracking this benchmark are professionally managed, ensuring efficient portfolio management.

    • Cost-Effective: Index funds are generally more cost-effective than actively managed funds.

    • Tax Efficiency: Lower turnover rates can lead to lower capital gains taxes.

  • How often is the index rebalanced?

    The index is rebalanced semi-annually to ensure it aligns with its selection criteria.
  • Is it suitable for all investors?

    While the MidSmallCap 400 Momentum Quality 100 Index offers significant potential, it's important to remember that investing in stocks always carries some risk. It's advisable to consult with a financial advisor to determine if this index aligns with your specific investment goals and risk tolerance.
  • What is the minimum investment required to invest in this index?

    The minimum investment required to invest in this index can vary depending on the investment vehicle you choose. You can invest through various investment products. Check with your financial advisor or the specific investment product provider for details.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*Past 10 Year annualised returns as on 01-12-2024
*All savings plans are provided by the insurer as per the IRDAI approved insurance plan. Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
**Returns are based on past 10 years' fund performance data (Fund Data Source: Value Research).

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