Motilal Oswal MF Files Papers with SEBI for Nasdaq 100 FoF

Motilal Oswal MF has filed papers with SEBI for a new domestic fund of fund scheme – the Motilal Oswal Nasdaq 100 Fund of Fund (MOFN100FOF). This scheme will primarily invest in the Motilal Oswal Nasdaq 100 ETF, a top performing exchange traded fund managed by Motilal Oswal AMC. This fund of fund will operate as an open-ended scheme, allowing you to purchase scheme units and redeem them whenever markets are open.

The scheme will allow you to invest in securities tracking the US-based NASDAQ index. This option was earlier only available to individuals with demat and trading accounts who could buy units of Motilal Oswal Nasdaq ETF on the stock exchanges. However even for such people liquidity in the Motilal Oswal Nasdaq ETF was poor. The launch of Motilal Oswal Nasdaq 100 FoF will allow even those investors who do not have demat and trading accounts to invest in the Nasdaq Index. Liquidity will also cease to be a problem because they will be able to buy and sell units directly with the AMC.

Motilal Oswal Nasdaq 100 Fund of Fund will invest 95% or more of its assets in the Motilal Oswal Nasdaq 100 ETF. This is one of the top performing ETFs in India with 1 year, 3 year and 5 year returns of 41.53%, 22.80% and 20.99% respectively. The remainder of scheme assets (up to 5%) will be invested in units of liquid/debt schemes of Motilal Oswal MF, various debt and money market instruments, G-Secs as well as cash and cash at call investments. As per the filing, this scheme is not allowed to invest in foreign securities, GDR (Global Depository Receipt), ADR (American Depository Receipt) or securitized debt.

This new domestic fund of fund from Motilal Oswal will be benchmarked against the US-based NASDAQ-100 Index. This international index is ideally suited to be the scheme’s benchmark as the major investment of the scheme is the Nasdaq 100 ETF which tracks the NASDAQ 100 Index. As of 29th June 2018, the NASDAQ 100 Index had recorded 1 year, 3 year and 5 year returns of 26%, 18% and 21% respectively. Leading components of this tech-heavy index include top US-based tech giants including Apple, Amazon, Microsoft, Facebook, Alphabet, Intel, Cisco and Netflix.

Motilal Oswal Nasdaq 100 Fund of Fund will be jointly managed by Ashish Agrawal and Abhiroop Mukherjee. They currently manage (either individually or co-manage) schemes such as Motilal Oswal Midcap 100 ETF, Motilal Oswal Ultra Short Term Fund and Motilal Oswal Multicap 35 Fund. Though the fund manager’s role is limited when determining an ETF’s performance, the Motilal Oswal Midcap 100 ETF is one of the top performers in its category having posted 5 year returns of over 21%.

Other Funds by Motilal Oswal Asset Management

{Data as on Feb 20, 2020; Source: Value Research}