Motilal Oswal Asset Management Company (MOAMC) has announced the launch of Motilal Oswal Nifty Microcap 250 Index Fund, India’s only passive fund offering exposure to microcap stocks. The fund aims to provide investors an opportunity to participate in the growth potential of microcap stocks. Motilal Oswal Nifty Microcap 250 Index Fund is an open-ended fund replicating/tracking the total returns of the Nifty Microcap 250 Index. The NFO period commences on 15th June and closes on 29th June 2023.
The minimum application amount for Motilal Oswal Nifty Microcap 250 Index Fund is ₹500 and in multiples of Re 1 thereafter.
Navin Agarwal, MD & CEO, of Motilal Oswal Asset Management Company Ltd said, “We have been pioneering in many passive funds in India. Our latest Microcap-based index fund offering will further expand our wide range of passive funds. By launching the Motilal Oswal Nifty Microcap 250 Index Fund, we offer investors a natural extension of the Motilal Oswal Nifty 500 Index Fund, complementing our existing range of broad-based index funds.”
Pratik Oswal, Head of Passive Funds, Motilal Oswal Asset Management Company Ltd said, “With the Motilal Oswal Nifty Microcap 250 Index Fund, we lead the charge in unlocking the untapped potential and opportunities of this distinctive investment category. We believe that the segment holds immense potential and unique investment opportunities that have been overlooked by many in the industry.”
Pratik Oswal further added that “Microcaps have a compelling track record of delivering higher returns compared to its counterparts, albeit at a higher risk. Investors are encouraged to consult their financial advisors, a prudent allocation of 5-10% to this fund may help enhance overall portfolio returns”.
The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by the Nifty Microcap 250 Index, subject to tracking error. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved. The Indicative Base Total Expense Ratio of the fund: Regular – 1.00%, Direct – 0.40%.
The Nifty Microcap 250 Index is designed to measure the performance of the top 250 companies excluding those already present in the Nifty 500 constituents. The index is well-diversified, with its top 10 holdings accounting for only 11% as against 59% in the Nifty 50 Index. Further, it provides diversified exposure to sectors like Industrials, Consumer Discretionary, Commodities, and Healthcare that are usually underweight in broad-based market indices.
Over the last 3 years, the Nifty Microcap 250 Index has delivered 58% on an annualized basis. While microcaps exhibit strong performance potential, they may also experience higher volatility and extended periods of underperformance to broad-based market indices.
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Updated: 15 Jun 2023, 03:00 PM IST