Motilal Oswal launches two passive index funds

Our Bureau Mumbai | Updated on December 03, 2019 Published on December 03, 2019

Motilal Oswal Asset Management Company has launched two large-cap passive index funds-- Motilal Oswal Nifty 50 Index Fund and Motilal Oswal Nifty Next 50 Index Fund.

The NFO of these two funds will be open for investment till December 17.

These two new funds are pure index funds, based on Large-Cap Nifty 50 and Nifty Next 50.

Large-Cap Index funds have a purity of allocation to large caps and provide stability as they are large in size, dominant in their sectors and generally have good customer reputation. It provides additional income in the form of dividends as many large-caps generally pay steady dividends. Large-Cap index companies are more transparent in terms of statements and workings that leads to easy decision making for long term investors.

The large-cap index fund may be expected to give returns closest to Index as the active Large-Cap funds include some percentage of midcap and small cap companies in their portfolios.

In the recent past, midcap and small cap companies have underperformed significantly and in any case, for investors desirous of managing a pure allocation, mixing of market caps to beat indices is not ideal because it increases their risk.

Aashish Somaiyaa, Managing Director & CEO, Motilal Oswal AMC said, “These launches are in continuation of our recent efforts to revitalise passive investing through investor friendly open ended index fund formats with minimum investment of Rs 500.

Pratik Oswal, Head of passive funds, Motilal Oswal AMC said with the launch of the Nifty 50 and Nifty Next 50 index funds – Motilal Oswal AMC is now able to provide low-cost asset allocation building blocks across all categories – large, mid, small, multi-cap, international (Nasdaq) and sectoral (Bank Index).

Published on December 03, 2019
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