@sandeep17 Thank you for your reply.
I was also wondering why mutual funds keep the rebalancing period of 6 months. In this momentum strategy keeping such a long rebalance period is not good as it will start facing momentum decay. To corroborate the evidence, i simply checked the current portfolio of UTI nifty 200 momentum 30 fund and Tata Midcap150 momentum 50 fund.
I checked charts of all these 80 companies, and what I found is, almost 80% companies are either consolidating or they are even in downward slope. Inspite of this, these funds have given more than 60% and 50% returns in last 1 year. So my contention is that, if we apply smaller rebalancing period, we can definitely outsmart these guys.
Also these mutual funds are following that particular indexes, so they have to do 6 monthly rebalancing as the underlying index does that. And being a larger size funds, it is difficult for them to entwr and exit the stocks without impact costs, like we do. May be thats the reason. But certainly its along period for the strategy. Also now Motilal has come out with NFO for Nifty 500 momentum fund, even in that they are having same 6 month rebalancing. And in 6 months, entire momentum world chnages a lot.
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