#MWM Vs UTI Momentum Index Fund.

One of the most common questions we get asked is to explain the difference between UTI momentum Index fund and our signature momentum offering #MWM (MysticWealth Momentum)

Prior to this fund, mutual funds were known to select stocks on the basis of research and analyses done on fundamentals and financials of the company. This is the first time they have ventured into our domain. (Actually not the fist time as technically even Nifty50 is a momentum product only) but as a feasible strategy only looking at ROC and not size (marketcap), this is a first genuine attempt. Its very common in US , US, ‘Momentum ETFs’ have approximately $14 billion in assets under management as of June 2020.

So lets pen down the difference to make the decision easy for you. There is no right or wrong answer, Each product has its market as the target audience is totally different.

TAX TREATMENT

So UTI Momentum 1 MWM 0

Transaction cost.

In #MWM, all buys and sells will incur transaction costs. In the world of discount brokerage, its not much, but still it ALL ADDS UP.

A total of 980 trades were done in 10 years and would add up to some transaction cost, although we do not include dividends in our performance and it should offset some of the transaction costs but its there.

so UTI Momentum 2 MWM 0

Ease of execution.

With UTI momentum fund, its fill it, shut it, forget it. You just need to buy it once.

so UTI Momentum 3 MWM 0

Size

#MWM runs fine with 1 crore capital or less however beyond that you might get into illiquid pockets where it becomes hotel california. (You can get in when you want, not too sure about getting out, lol)

So UTI Momentum 4 MWM 0

You must be wondering 4 great points in favor of Index fund, why would anybody in his sane mind opt for #MWM.

There are only 02 reasons and These 02 reasons are/can be bigger that 100 reasons on other side.

Alpha

Since April 2017 to today, Nifty 200 Top 30 index has generated a return of 99% compared to 59% of Nifty. That is a WIN fair and square.

How much did we generate. Well, a little more than double of it.

At 230% return, #MWM is attempting at creating wealth vs beating inflation.

Point # 2.

Drawdown.

Drawdown is a game changer. If its not within your uncle point (point where you throw in the towel and start blaming destiny) you will not be able to stick to a strategy and leave it at worse possible time.

CONCLUSION.

If you have a huge corpus to park with zero intervention and no time for markets but still want to do better than index funds and mutual funds, feel free to buy UTI Momentum index fund.

Hope this helped. Cheers!!

Comments are welcome.

Insights for DIY investors on Risk management, Option strategies, Special Situations & Momentum.