Motilal Oswal Mutual Fund has launched a brand new index fund that goals to copy the efficiency of one of many broadest fairness indices in India – the BSE 1000 Index. With publicity to 1,000 listed firms throughout largecap, midcap, smallcap, and microcap segments, this fund guarantees unparalleled diversification within the Indian fairness area.Let’s perceive the important thing options of this new fund supply (NFO), why one might think about investing in it, related dangers, and whether or not this needs to be part of your funding portfolio.
Motilal Oswal BSE 1000 Index Fund NFO – Subject Particulars
- Scheme Opens: fifth June 2025
- Scheme Closes: nineteenth June 2025
- Fund Sort: Open-ended fairness scheme replicating/monitoring the BSE 1000 Index
- Benchmark: BSE 1000 TRI (Complete Return Index)
- Minimal Funding: ₹ 500 and in multiples of Re 1 thereafter
- Fund Supervisor: Abhiroop Mukherjee
- Exit Load: Nil
- Expense Ratio: More likely to be within the vary of 0.3%-0.5% for the direct plan (actual determine to be disclosed later)
What’s the BSE 1000 Index?
The BSE 1000 Index is India’s broadest fairness index, masking the highest 1,000 listed firms based mostly on full market capitalization. It presents illustration throughout:
- Largecap (High 100)
- Midcap (Subsequent 150)
- Smallcap (Subsequent 400)
- Microcap (Remaining 350)
The index covers roughly 94% of India’s listed market capitalization and represents 57 industries, starting from financials and manufacturing to specialty chemical substances, IT {hardware}, and digital media.
How is the efficiency of underlying index up to now?
Whereas the mutual fund is new, the underlying index efficiency is spectacular. Right here is the comparability between Nifty 50 index returns Vs BSE 1000 Index Returns up to now.
Why to Spend money on Motilal Oswal BSE 1000 Index Fund?
- Intensive Diversification:
This fund supplies publicity to 1,000 firms, providing traders an all-in-one resolution that captures the breadth of the Indian fairness market. You’re not simply investing in largecaps but in addition tapping into the potential of midcaps, smallcaps, and microcaps. - Participation in India’s Progress Story:
With India poised to grow to be a $5 trillion economic system within the coming years, broader participation throughout sectors and corporations is predicted to drive the following leg of progress. This fund permits traders to journey that wave with a single funding. - Passive, Low-Value Investing:
Since that is an index fund, there isn’t a energetic inventory choice by a fund supervisor. The fund merely replicates the BSE 1000 Index, thereby decreasing administration prices. Traditionally, passive funds have outperformed many energetic funds in the long term, particularly as a consequence of decrease bills. - Publicity to Underneath-Researched Microcaps:
About 250 firms on this index are microcaps, which are typically under-researched and fewer adopted by analysts. This supplies potential for worth discovery and long-term returns. - Clear and Rule-Based mostly Method:
Index funds comply with a clear methodology. Buyers can see the index constituents and perceive how the fund will behave underneath varied market situations.
Threat Elements to Think about
- Volatility Resulting from Small and Microcaps:
Whereas publicity to microcap and smallcap firms can present excessive returns in bull markets, they can be extremely risky throughout market corrections. The presence of 750 firms past the largecap area will increase the fund’s threat throughout bear phases. - Greater Monitoring Error:
Rebalancing 1,000 shares might lead to comparatively larger monitoring error in comparison with narrower index funds (like Nifty 50 or Nifty Subsequent 50). - Restricted Suitability for Conservative Buyers:
As a result of excessive volatility and wider sectoral publicity, this fund might not be appropriate for ultra-conservative traders or these with a short-term horizon.
Who Ought to Make investments?
This fund is greatest suited to:
- Buyers in search of a single fund that provides publicity to all the Indian fairness market.
- These with a long-term funding horizon of 5 to 10 years or extra.
- Buyers preferring passive investing with a diversified publicity.
- People who don’t wish to handle a number of funds throughout totally different market caps (massive, mid, small).
The best way to Apply for This NFO?
You’ll be able to make investments on this NFO by means of the next channels:
- Immediately through Motilal Oswal Mutual Fund web site or app.
- Via on-line platforms like Zerodha Coin, Groww, Paytm Cash, Kuvera, or MF Central.
- By way of your monetary advisor or distributor.
- Via your financial institution’s mutual fund funding service.
Guarantee your KYC is up to date earlier than making use of.
Ought to You Spend money on Motilal Oswal BSE 1000 Index Fund NFO?
Motilal Oswal BSE 1000 Index Fund presents a novel alternative to achieve publicity to the total spectrum of Indian equities – from massive established firms to rising microcaps. Its diversified construction, passive low-cost mannequin, and long-term progress potential make it a pretty possibility for traders who wish to take part in India’s progress story with out actively managing a number of funds.
Nonetheless, this fund is just not with out dangers. The inclusion of smallcap and microcap shares will increase its volatility. Buyers ought to solely think about this fund if they’re comfy with short-term fluctuations and have a long-term funding view.
In case you are a long-term investor with average to excessive threat urge for food and in search of a single fund that gives broad market protection, this NFO may very well be a worthy addition to your portfolio. Conservative traders or these in search of steady short-term returns might think about different largecap or multi-cap index funds.
At all times align your funding resolution together with your monetary targets, threat profile, and time horizon.
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