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Motilal Oswal Mutual Fund launches two large cap index funds

equity funds
Motilal Oswal Asset Management Company, one of the fastest growing boutique fund houses in the country, has launched two large cap Index funds: Motilal Oswal Nifty 50 Index Fund and Motilal Oswal Nifty Next 50 Index Fund.

The NFO for these two funds will be open between December 3 and December 17.

These two new funds are pure index funds, based on the most popular indices in India, Nifty 50 and Nifty Next 50.

Speaking on the launch, Aashish Somaiyaa, MD & CEO, MOAMC said, “These launches are in continuation of our recent efforts to retailize passive investing through investor-friendly open-ended index fund formats with ability to size at a bite size as low as Rs 500.”

“We have received enthusiastic response to our index fund launches as they have gained prominence amongst digitally savvy DIY investors as well as distributors and advisors who take low cost tools for asset allocation and financial planning very seriously,” he added.

The likely performance of large cap mutual funds have been a cause for concern since the re-categorisation exercise carried out by Sebi two years ago. After the exercise, these schemes were mandated to invest in top 100 stocks by market capitalisation.

Mutual fund advisors and analysts fear that the restricted investment universe would cap the alpha-generating capabilities of large cap mutual funds.

The narrow rally in the market in the last one and half years also resulted in many actively-managed large cap schemes losing out to passively-managed large cap index funds by a wide margin.

These factors have contributed to the active vs passive investment strategy in the large cap space. The timing of two large cap index schemes by Motilal Oswal Mutual Fund, therefore, comes at a very crucial phase. The fund house also launched a host of index funds recently.

Pratik Oswal, Head of passive funds, MOAMC, 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). Investors looking for exposure to index funds can now do so with our extensive product bouquet.”

Swapnil Mayekar is the fund manager of these two Index funds.
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