Motilal Oswal launched the two factor-based funds namely Motilal Oswal S&P BSE Quality ETF and Motilal Oswal S&P BSE Quality Index Fund and Motilal Oswal S&P BSE Enhanced Value ETF and Motilal Oswal S&P BSE Enhanced Value Index Fund.
As it is evident, they are passively-managed schemes. The funds will remain open for subscription until August 12.
Before we proceed, let us first deconstruct the concept of a new fund offer.
New Fund Offer
A New Fund Offer (NFO) is the process through which an asset management company (AMC) creates a new fund on a first-subscription basis to facilitate the purchase of securities.
The fund house collects funds from the general public through an NFO in order to buy securities such as equity shares, bonds, and other financial instruments on the market. As a newcomer to the market, NFO is less expensive than the current funds.
According to the AMC, the Motilal Oswal S&P BSE Quality ETF & Index Fund are single factor-based investment strategies that aim to include the top 30 ‘Quality’ stocks based on rule-based parameters, the mutual fund house said in a release.
“These companies tend to have durable business models and sustainable competitive advantages. The index constituents are selected from the universe of the S&P BSE LargeMidCap Index,” AMC added.
One the flip side, the Motilal Oswal S&P BSE Enhanced, Value ETF & Index Fund are single factor-based investment strategies that aim to include 30 ‘Value’ stocks that are most attractive in valuations based on rule-based parameters. The index constituents are selected from the universe of the S&P BSE LargeMidCap Index, Motilal Oswal said in the release.
Five sensex index funds that demonstrated best performance in past three years
|Name of schemes||3 year trailing returns (%)|
|ICICI Pru S&P BSE Sensex Index Fund||14.63|
|HDFC Index Fund-S&P BSE Sensex||14.38|
|Nippon India Index Fund-S&P BSE Sensex Plan||14.3|
|LIC MF S&P BSE Sensex Index Fund||13.91|
|Tata S&P BSE Sensex Index Fund-Reg||13.78|
During the NFO period, investors can invest ₹500 per subscription application and in multiples of Re 1 thereafter. On an ongoing basis, investors can purchase or redeem units of the scheme through a financial advisor or through the company website.
Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd. said, “With an objective to cater the evolving needs of the investors, we have introduced ETFs & index funds in the factor investing segment. These new funds are based on the Quality and Value factors.”
“We aspire to build a unique brand positioning by establishing ourselves as a fund house to drive the factor investing category in India. With the launch of both these funds, it will complete our bouquet of single-factor based passive offerings,” Agarwal added.