SBI Mutual Fund has opened the New Fund Offer (NFO) for its Nifty Midcap 150 Momentum 50 ETF Fund of Fund, running until August 5, 2026. This scheme focuses on 50 midcap stocks showing strong price trends with a minimum investment of ₹5,000.
Detailed Coverage
SBI Mutual Fund has expanded its passive investment portfolio with the launch of the SBI Nifty Midcap 150 Momentum 50 ETF Fund of Fund (FoF). The New Fund Offer (NFO) period for this open-ended scheme began on July 27, 2026, and is scheduled to close on August 5, 2026. This fund is designed to provide investors with a way to participate in momentum-based strategies without needing a demat account, as it invests in the units of an underlying Exchange Traded Fund (ETF).
Strategy and Asset Allocation
The core objective of this FoF is to track the performance of the Nifty Midcap 150 Momentum 50 Index. To achieve this, the fund will invest 95% to 100% of its total assets into the SBI Nifty Midcap 150 Momentum 50 ETF. The remaining portion, up to 5%, will be kept in liquid assets such as government securities or other liquid mutual funds to manage daily redemptions and cash flow needs. By utilizing an FoF structure, the fund house allows investors to gain exposure to the underlying ETF through the regular mutual fund route.
The underlying index specifically selects 50 companies from the Nifty Midcap 150 universe that have demonstrated strong price performance over a specific look-back period. Momentum investing is a strategy based on the idea that stocks that have performed well in the recent past may continue to do so in the near future. However, this strategy also carries the risk of sharp reversals if market sentiment changes suddenly or if the underlying midcap sector faces a broad correction.
Fund Management and Investment Terms
Viral Chhadva, who has been managing passive products at SBI Mutual Fund since late 2020, will oversee this new scheme. Investors can participate in the NFO with a minimum initial investment of ₹5,000. Following the NFO period, the fund will remain open for ongoing subscriptions and redemptions. The scheme also offers various Systematic Investment Plan (SIP) options, ranging from daily to annual frequencies, providing flexibility for retail investors looking to build their positions over time.
Sector and Market Context
Investors should note that momentum-based funds can experience higher volatility compared to broad market indices. Midcap stocks are generally more sensitive to market cycles and economic changes than large-cap stocks. While momentum strategies can perform well during bull markets, they often underperform when market trends shift or during periods of high volatility. As with any equity-oriented mutual fund, the performance of this FoF will be directly influenced by the performance of the 50 stocks within the Nifty Midcap 150 Momentum 50 Index. Investors should monitor the portfolio turnover and the tracking error of the underlying ETF, which determines how closely the fund mimics the index returns.