HDFC Life
MidCap Momentum Fund

Understanding The Basics

• What is the objective of HDFC Life Midcap Momentum Fund?

The Fund aims to generate long-term capital appreciation from a portfolio of mid-cap stocks that are aligned to the MidCap Momentum Index.

• How is the index different from Midcap index¹?

The index chooses to invest in the top 50 companies within the Nifty midcap 150 index based on momentum score. The companies in the index are selected based on on its 6-month and 12-month price return, adjusted for volatility. Stock weights are based on a combination of the stock’s Normalized Momentum Score and its free-float market capitalization. On the other hand, companies in the midcap index are purely based on free float market capitalization.

• What is the investment philosophy of launching HDFC Life Midcap Momentum Fund?

Given that midcap segment offers compounding returns as few companies of todays would become larger cap companies of tomorrow’s, the investment philosophy is to combine the same with Momentum Investing, that is rule-based investing system that invests in companies that have been doing well in terms of stock performance and select those potential outperformers. Momentum investing is based on the investing into stocks that have been doing well in the past. Outperforming stocks generally attract more investors and this trend further solidifies, these stocks potentially outperform the broad midcap market further.

Top Reasons For Customers To Select This Fund

• Long Term Capital appreciation:

  Midcap funds are in the growth phase offering significant growth potential and some of them are likely to become large companies in future. Hence investing for a longer period in Midcap funds offers superior returns. Investing into midcap companies create compounding benefits.

• Momentum investment:

  Momentum investing broadly means investing into stocks that have been performing well both in terms of price and company performance and it often leads to higher returns particularly during bull markets. Momentum investing is based on the investing into stocks that have been doing well in the past. Outperforming stocks generally attract more investors and this trend further solidifies, these stocks potentially outperform the broad midcap market further.

• Diversification:

  Diversification means spreading your capital among various sectors and stocks. Since the fund invest in portfolio of stocks into various sectors and stocks, it reduces the risk of concentration into single stock or sector. All the sectors do not outperform / underperform at the same time. Every sector has its own market dynamics and sector tailwinds / headwinds do not always coincide with market upcyle / downcycle.

Historical Returns Of This Index - Comparison With Midcap Index Returns¹

Data as of 31st January, 2024

Nifty Midcap 150 Momentum Index, has generated higher returns than both Midcap and Large cap indices over 1Y / 3Y / 5Y / 10Y periods.

Sector Allocation Split²

Data as of 29th February, 2024