Mirae Asset Unveils Hybrid Index Fund: Targeting Growth by Merging High-Momentum Stocks with Stable Government Securities

Mirae Asset Unveils Hybrid Index Fund: Targeting Growth by Merging High-Momentum Stocks with Stable Government Securities​

Mirae Asset Mutual Fund has launched a new hybrid index fund, the Mirae Asset Nifty200 Momentum 30 Plus 8-13yr G-Sec 75:25 Index Fund. This Equity oriented - Hybrid Index Fund is designed to capture returns commensurate with its underlying benchmark while providing a strategic mix of equity market momentum and fixed income stability. The fund serves investors looking for a sophisticated, passively managed portfolio that aims for long-term growth.

The product is specifically set up to track the Nifty200 Momentum 30 Plus 8-13 yr G-Sec 75:25 Index. This index measures the performance of a balanced portfolio, comprising 75% exposure to equity and 25% dedicated to government securities (G-Sec). The objective remains clear: generating growth through disciplined tracking while mitigating risk via diversification into debt instruments.

Strategy Behind the Nifty200 Momentum 30 Index​

The fund's significant equity portion is managed passively, focusing on the Nifty200 Momentum 30 Index. This index selects and tracks the top 30 companies within the Nifty 200 based on their Normalized Momentum Score. The methodology for this component is highly precise: stock weights are determined by combining the company’s free-float market capitalization with its Normalized Momentum Score.

The equity portfolio is designed for sustained, high-quality growth, as it emphasizes momentum over short-term speculative gains. This focus ensures that investments align with stocks exhibiting strong upward trends. The index undergoes rebalancing semi-annually in June and December to maintain optimal exposure levels.

Stabilizing the Portfolio with G-Sec Exposure​

The fund's debt allocation is focused on the Nifty 8-13 yr G-Sec Index, which provides a broad representation of critical government bonds. This segment aims to capture the performance of the most liquid bonds maturing between 8 and 13 years. By allocating up to 5% of net assets here, the fund introduces stability to an otherwise dynamic equity portfolio.

The strategy for the debt portion involves strict replication guidelines. The portfolio duration must replicate the underlying index within a maximum permissible deviation of +/- 10%. This ensures that the fixed income component actively supports the overall objectives while managing interest rate risk.

Asset Allocation and Risk Mitigation​

Under normal circumstances, the scheme's investment is heavily concentrated in securities forming part of the Nifty200 Momentum 30 Plus 8-13 Yr G-Sec 75:25 Index, with a minimum allocation requirement of 95%. This structure emphasizes adherence to the index methodology.

The fund adheres to rigorous risk control protocols across multiple domains. The management has established detailed strategies to mitigate market volatility and credit risk within fixed income. For instance, the debt portion will primarily invest in Government of India Bonds, which are perceived as relatively safe due to their government ownership status.

Financial Commitments and Key Personnel​

The fund's expenses are transparently disclosed to investors. The Maximum Base expense ratio (BER) is estimated up to 0.90% of the daily net assets. Importantly, the scheme has set a Nil Exit Load for all units, ensuring that investors do not face punitive charges upon redemption or switching schemes.

The fund is managed by two dedicated professionals. Ms. Ekta Gala, with seven years of experience in the equity portion, and Ms. Pranavi Kulkarni, who brings 16 years of experience in debt management, head the investment strategy. This combination of specialized expertise ensures disciplined execution across the hybrid portfolio structure.

Investment Safeguards and Regulatory Compliance​

The scheme’s operational commitments are supported by strict regulatory guidelines. The fund is restricted from investing in specific high-risk areas, including short selling and bespoke or complex debt products. Furthermore, the fund maintains clear limits on exposure to derivative instruments, with a cumulative gross exposure not exceeding 100% of net assets.

The AMC has implemented comprehensive monitoring protocols for portfolio stability. Should any deviation occur from the prescribed asset allocation, the scheme is required to rebalance within seven calendar days. This commitment helps maintain alignment with the fundamental investment objective at all times.