Sir,
My name is Ankit and i am 32 year old. Sir i invest 3000rupees per month for next 5 year in Axis max Nifty 500momentum 50 fund.
Is it right to invest in this fund for a long time?
Ans: Your investment of Rs. 3,000 per month in Axis Nifty 500 Momentum 50 Fund for the next 5 years needs careful evaluation. Since you are 32 years old, your investment horizon can be long-term.
Let’s assess whether this fund is the right choice.
Understanding Your Investment
Fund Type: Index-based momentum fund
Investment Style: Follows momentum strategy within Nifty 500
Your SIP Amount: Rs. 3,000 per month
Investment Tenure: 5 years (as per your plan)
Your Age: 32 (long-term horizon possible)
Momentum funds invest in stocks that have recently shown strong performance. These funds can outperform in bullish phases but may underperform in volatile or bearish markets.
Is This Fund Suitable for Long-Term Investment?
1. Momentum Strategy is Cyclical
This fund invests in stocks that have performed well recently.
If market trends change, it may struggle to maintain returns.
Not ideal as a core long-term portfolio holding.
2. High Volatility and Risk
Momentum funds have higher risk than diversified equity funds.
In falling markets, momentum stocks drop sharply.
3. Index-Based Strategy Limits Flexibility
This fund is passively managed and cannot adjust based on market trends.
Actively managed funds can perform better in different cycles.
4. 5-Year Horizon is Short for Equity
Equity investments work best for 7+ years.
If you need money in 5 years, debt funds or balanced funds are better.
Better Approach for Your Investment
1. Diversify into Actively Managed Funds
Instead of relying on a single index-based momentum fund, diversify.
Large & multi-cap funds can provide stability with growth.
Mid-cap & flexi-cap funds can generate higher returns with controlled risk.
2. Extend Investment Horizon
Instead of stopping after 5 years, consider SIP for 10+ years.
Equity needs long duration to generate wealth.
3. Review and Rebalance Annually
If fund performance is inconsistent, shift to a better option.
Avoid locking yourself into one strategy for too long.
Final Insights
Axis Nifty 500 Momentum 50 Fund is not ideal as a standalone long-term investment.
Momentum strategy works in bull markets but struggles in volatility.
Instead of investing in only one fund, diversify into actively managed funds.
If your horizon is just 5 years, equity funds carry risk. Debt or hybrid funds can be better.
Review your goals and adjust your investment accordingly.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment