3 MOMENTUM Indexes for HIGH Returns - LONG TERM Investing - Rahul Jain Analysis #index #investing

Summary

In this video, Rahul Jen discusses the power of momentum index investing, comparing three indices: Nifty 500 Momentum 50, Nifty 200 Momentum 30, and Nifty Midcap 150 Momentum 50. He highlights their historical returns, volatility, and sector allocations, emphasizing that while momentum indices may be more volatile in the short term, they have outperformed traditional indices over longer periods. Rahul also provides guidance on how to invest in these indices through index funds and urges viewers to conduct their research.

Takeaways

• ?Í? The Nifty 50 has given around 18.94% yearly returns in the last 5 years, representing the top 50 stocks on the Indian Stock Exchange.
• 💵 The Nifty 500 Momentum 50 index has outperformed, yielding approximately 35.77% CAGR returns in the same period, nearly double the return of the Nifty 50.
• 💲 A comparison of returns shows that investing 10 lakh Rupees in the Nifty 500 Momentum 50 index could yield around 34 lakh Rupees, compared to 14 lakh Rupees with the Nifty 50.
• 💱 The video discusses three momentum indexes and their returns, risks, and strategies to educate viewers on momentum index investing.
• 💲 Nifty 500 Momentum 50 index has shown higher returns and higher volatility in the short term, but its long-term volatility is comparable to the Nifty 50.
• 💵 The Nifty 200 Momentum 30 index selects top momentum stocks from the Nifty 200 and has shown better returns than the Nifty 200 over various periods.
• 💲 Historical data indicates that the Nifty 200 Momentum 30 index has outperformed the Nifty 200 in 14 out of 19 years and has a higher Sharpe ratio, indicating better risk-adjusted returns.
• 💱 Volatility for the Nifty 200 Momentum 30 index is higher in the short term but aligns with the Nifty 200 over longer periods.
• 💵 The Nifty Midcap 150 Momentum 50 index focuses on midcap stocks with recent momentum and has shown better returns than the Nifty Midcap 150 index.
• 💲 The video suggests that there is little overlap between the Nifty Midcap 150 Momentum 50 index and the first two indexes discussed, making it a potentially good choice for diversification.

Q & A

What is the average yearly return of the Nifty 50 index in the last 5 years?

The Nifty 50 index has given around 18.94% yearly returns in the last 5 years.

How much higher is the CAGR return of Nifty 500 Momentum 50 index compared to Nifty 50 in the last 5 years?

The Nifty 500 Momentum 50 index has given around 35.77% CAGR return in the last 5 years, which is almost 16% higher than the Nifty 50 index.

What would be the difference in gains if one invested 10 lakh Rupees in Nifty 50 versus Nifty 500 Momentum 50 index 5 years ago?

If invested in Nifty 50, the gains would have been around 14 lakh Rupees, but in Nifty 500 Momentum 50 index, the gain would have been around 34 lakh Rupees.

What is the significance of the beta value in the context of Nifty 500 Momentum 50 index?

The beta value of Nifty 500 Momentum 50 index is 1.28 on a one-year basis, indicating it is more volatile than the Nifty 50 index, which has a beta value of 1.

How does the volatility of Nifty 500 Momentum 50 index compare to Nifty 50 over different time periods?

On a one-year basis, Nifty 500 Momentum 50 is more volatile, but over a longer period (5 years, 20 years, 25 years), its volatility is lower than Nifty 50.

What is the reason behind the better returns of Nifty 500 Momentum 50 index compared to Nifty 50?

Nifty 500 Momentum 50 index selects top 50 stocks showing momentum in the previous 6 months to 12 months, suggesting that winning stocks may continue to perform well.

What is the sector allocation percentage for capital goods in Nifty 500 Momentum 50 index?

The capital goods sector has a 31.2% allocation in Nifty 500 Momentum 50 index.

How does the sector allocation in Nifty 50 differ from Nifty 500 Momentum 50 index?

Nifty 50 is driven by market cap, with financial services as a major contributor at around 32%, whereas Nifty 500 Momentum 50 index is driven by momentum.

Which index fund is available for investing in Nifty 500 Momentum 50 index?

Maul Oswal offers an index fund for Nifty 500 Momentum 50 index.

What is the one-year return percentage of Nifty 200 Momentum 30 index compared to Nifty 200 index?

Nifty 200 Momentum 30 index has given around 68.91% returns in the last one year, compared to 4.39% returns by Nifty 200 index.

How does the Nifty Midcap 150 Momentum 50 index perform in terms of returns compared to Nifty Midcap 150 index?

Nifty Midcap 150 Momentum 50 index has given slightly better returns than Nifty Midcap 150 index in the last one year and over a 5-year period.