Motilal Oswal Mutual Fund has launched the Motilal Oswal Nifty Midcap150 Plus 8–13 Yr G-Sec 70:30 Index Fund, an open-ended index fund that will invest in a combination of midcap stocks and government securities.
The new fund offer (NFO) opened on October 12 and will close on October 26. The fund will track the Nifty Midcap150 Plus 8–13 Yr G-Sec 70:30 Index, with a fixed allocation of 70% to equities and 30% to government securities, subject to tracking error.
The equity component will track the Nifty Midcap 150 Index, comprising 150 companies ranked between 101 and 250 by full market capitalisation within the Nifty 500. The debt component will track the Nifty 8–13 Yr G-Sec Index, which comprises government securities with residual maturities of eight to 13 years, selected based on specified liquidity and outstanding-amount criteria.
The portfolio will be rebalanced monthly to maintain the prescribed 70:30 allocation. As an index fund, its objective is to replicate the performance of the underlying hybrid index rather than actively select investments to outperform it.
According to Motilal Oswal Asset Management Company, the underlying hybrid index delivered annualised returns of 12.2% over five years, 14% over 10 years and 15.1% over 15 years. The corresponding returns for the Nifty 50 Total Returns Index were 6.4%, 11.5% and 12%, respectively.
The fund house also said the hybrid index recorded lower annualised volatility than the Nifty 50 TRI over the same periods. However, these figures relate to the historical performance of the index and do not represent returns generated by the newly launched fund. Past performance does not guarantee future returns.
The minimum lump-sum investment is ₹500, with additional investments in multiples of ₹1. The scheme will charge an exit load of 1% if units are redeemed on or before 15 days from allotment. No exit load will apply to redemptions after 15 days, subject to the scheme’s terms.
Swapnil Mayekar will manage the equity component, with Dishant Mehta as associate fund manager for equity. Rakesh Shetty will manage the debt component.
The scheme’s investment objective is to provide returns corresponding to the performance of its benchmark index, subject to tracking error. Investors should note that the equity component is exposed to market risk, while the debt component is subject to interest-rate risk.
The fund’s returns are not guaranteed, and the combination of the two asset classes does not eliminate the possibility of losses.
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Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.