Motilal Oswal Mutual Fund Launches Nifty Capital Market Index Fund
Motilal Oswal Mutual Fund (MOMF) has launched a new fund offer (NFO) called the Motilal Oswal Nifty Capital Market Index Fund. The NFO opened for subscription on November 26, 2024, and will remain open until December 10, 2024.
Investment Focus and Objectives
The fund aims to provide investors exposure to India’s capital market sector by investing in 15 companies, including those that are constituents of the Nifty 500 index. It seeks to replicate the performance of the Nifty Capital Market Total Return Index, subject to tracking errors and expenses.
The index includes companies integral to the capital markets ecosystem, such as stockbrokers, depositories, wealth management firms, exchanges, and mutual fund companies. By targeting these businesses, the fund plans to capture significant growth potential in the sector.
This is a high-risk investment strategy designed for investors with a very high-risk appetite who seek long-term capital appreciation. While the sector offers considerable growth prospects, it is also prone to volatility due to its dynamic nature.
Key Highlights of the Scheme
- Investment Objective: To generate returns aligned with the Nifty Capital Market Total Return Index, subject to tracking error.
- Benchmark: Nifty Capital Market Total Return Index.
- Portfolio Strategy: High-growth strategy, ideal for investors willing to take on higher risks for long-term returns.
- Investor Profile: Suitable for long-term investors seeking exposure to India’s capital market sector.
Performance and Market Dynamics
The Nifty Capital Market Total Return Index has demonstrated strong performance, delivering a 96.9% return over the past year and 31.9% over the last three years (as of October 31, 2024).
India’s capital market has been bolstered by rising domestic savings, growing retail participation, and digitization. As of September 2024, the number of Demat Accounts in the country stood at 17.5 crores, reflecting a compound annual growth rate (CAGR) of 29% over the past eight years.
SIP inflows have also increased substantially, growing from Rs. 3,698 crore in 2016 to Rs. 24,509 crore in 2024. Additionally, India’s IPO market has been vibrant, with 209 IPOs raising Rs. 64,000 crore in 2024, achieving a CAGR of 46% since the financial year 2019.
Despite these advancements, stock market participation in India remains relatively low, with only 8 crore individuals investing in the market. The fund aims to bridge this gap by focusing on companies central to the capital market ecosystem, making investments more accessible to a broader population.
Fund Management
The fund will be managed by a team of experienced professionals, with equity investments overseen by an expert in the field and debt investments managed by a seasoned professional.
Conclusion
The Motilal Oswal Nifty Capital Market Index Fund presents a compelling opportunity for investors to participate in the growth of India’s capital markets. Its focus on high-growth potential and sector-specific investments makes it an attractive choice for long-term investors with a high-risk appetite. Such funds are poised to play a pivotal role in empowering retail investors and enhancing wealth creation while contributing to the growth of India’s financial ecosystem.
