Motilal Oswal Mutual Fund has launched the BSE Midcap 150 Momentum 30 Index Fund, open for subscription from July 3 to July 17. The scheme aims to track 30 midcap stocks based on price performance and volatility. Investors can enter with a minimum of ₹500, though the fund carries specific risks associated with momentum strategies and midcap volatility.
What Happened
Motilal Oswal Mutual Fund has launched a new index fund, the Motilal Oswal BSE Midcap 150 Momentum 30 Index Fund. This is an open-ended scheme that seeks to track the performance of the BSE Midcap 150 Momentum 30 Index. The New Fund Offer (NFO) period began today, July 3, and will remain open until July 17, 2026. The fund is designed to provide investors with exposure to 30 midcap companies chosen through a rules-based momentum strategy rather than active stock picking.
How The Strategy Works
The fund selects its 30 stocks from the broader BSE Midcap 150 Index. The primary filter for selection is 12-month price performance, adjusted for volatility. By using this systematic approach, the fund aims to capture stocks that show strong price trends. To maintain the accuracy of this strategy, the portfolio will be rebalanced every quarter. This ensures that stocks that lose their momentum are removed and replaced by new leaders in the midcap space.
Historical Context and Performance
The strategy is based on the BSE Midcap 150 Momentum 30 Total Return Index. According to data provided by the fund house as of May 29, 2026, this index has shown strong historical growth, recording a five-year compounded annual growth rate (CAGR) of 30.46%. For comparison, the broader BSE Midcap 150 TRI grew by 18.31% and the Nifty 50 TRI by 9.88% over the same period. While this historical data highlights the potential of the strategy, it is important to remember that past performance does not guarantee future results.
Investment Details and Costs
Investors can participate in this NFO with a minimum investment amount of ₹500, with subsequent investments also possible in multiples of ₹1. The fund house has implemented an exit load of 1% on redemptions made within 15 days of the allotment date. After this 15-day window, no exit load will be charged. The equity portion of the fund will be managed by Swapnil Mayekar and Dishant Mehta, while Rakesh Shetty will manage the debt component.
Understanding The Risks
While the fund offers a passive and cost-effective way to access midcap stocks, it carries distinct risks. Momentum investing relies on the assumption that stocks performing well will continue to do so; however, these trends can reverse quickly during market downturns. Additionally, midcap stocks are generally more volatile than large-cap stocks. Because the fund is concentrated in only 30 stocks, it may also face sector concentration issues, where a downturn in one specific industry could significantly impact the portfolio performance. Investors should also be aware of potential liquidity risks and impact costs inherent in midcap trading.