Motilal Oswal Mutual Fund (MOMF) has launched four index funds — ‘Motilal Oswal Nifty MidSmall Healthcare Index Fund’, ‘Motilal Oswal Nifty MidSmall IT and Telecom Index Fund’, ‘Motilal Oswal Nifty MidSmall India Consumption Index Fund’, and ‘Motilal Oswal Nifty MidSmall Financial Services Index Fund’. The four NFOs by Motilal Oswal Mutual Fund opened for subscription on 29th October and closes on 6th November.
According to a research by MOAMC, in the last 5 years, Midcaps and Smallcaps have grown at a faster rate as compared to Largecaps. The profitability of Mid and Small cap companies has grown by 25.2% and 35.4%, respectively, compared to the Large-cap companies which has grown by 22.1%. During the same period the market cap of Mid and Small cap companies has grown by 25.7% and 28.0% while large-cap companies have grown by 19.1%.
These index funds cater to risk-taking investors aiming for higher returns by tapping into the growth potential of mid and small-cap sectors. Though more volatile than large-caps, they offer substantial upside for those prepared to handle market fluctuations.
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Commenting on the launch, Prateek Agrawal, MD & CEO, Motilal Oswal Asset Management Company Ltd, said, “The AUM of the Indian MF industry has grown from Rs. 9.16 trillion (US$ 110.63 billion) in 2014, to Rs. 64.97 trillion (US$ 780.70 billion) in July 2024, growing ~6x in a span of 10 years, showcasing potential of the industry. We believe Mid and Small cap stocks have potential to perform well in long term considering that the market cap of Mid-Small companies has grown at a faster rate as compared to large cap companies.”
Pratik Oswal, Chief of Business Passive Funds, Motilal Oswal Asset Management Company Ltd, said, “India benefits from a large cross-utilization of channels to expand the reach of financial services. With 2,100 fintechs currently operating, India is positioned to become one of the largest digital markets, driven by rapid mobile and internet expansion. As the economy grows, so does consumer spending, particularly in discretionary sectors, with the healthcare market expected to reach $638 billion and IT and telecom, consumption, and financial services sectors each set for significant growth by 2025. While these sectors offer high growth potential, mid and small-cap investments in these areas come with heightened volatility, making them ideal for risk-tolerant investors prepared for market fluctuations.”
Fund Details:
1) Motilal Oswal Nifty MidSmall Healthcare Index Fund is an open-ended fund replicating / tracking the Nifty MidSmall Healthcare Total Return Index. The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by Nifty MidSmall Healthcare Total Return Index, subject to tracking error. The scheme is benchmarked against Nifty MidSmall Healthcare Total Return Index.
2) Motilal Oswal Nifty MidSmall IT and Telecom Index Fund is an open-ended fund replicating / tracking the Nifty MidSmall IT and Telecom Total Return Index. The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by Nifty MidSmall IT and Telecom Total Return Index, subject to tracking error. The scheme is benchmarked against Nifty MidSmall IT and Telecom Total Return Index.
3) Motilal Oswal Nifty MidSmall India Consumption Index Fund is an open-ended fund replicating / tracking the Nifty MidSmall India Consumption Total Return Index. The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by Nifty MidSmall India Consumption Total Return Index, subject to tracking error. The scheme is benchmarked against Nifty MidSmall India Consumption Total Return Index.
4) Motilal Oswal Nifty MidSmall Financial Services Index Fund is an open ended fund replicating / tracking the Nifty MidSmall Financial Services Total Return Index. The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by Nifty MidSmall Financial Services Total Return Index, subject to tracking error. The scheme is benchmark against Nifty MidSmall Financial Services Total Return Index.
All the four NFOs will be managed by Swapnil Mayekar (for equity component) and Rakesh Shetty (for debt component). The funds are suitable for investors who seek long-term capital growth.