Motilal Oswal Mutual Fund files for India Defence Index Fund

Introducing the Motilal Oswal Nifty India Defence Index Fund: A Closer Look

In a move signaling strategic investment opportunities, Motilal Oswal Mutual Fund has taken a significant step by filing a draft document with the Securities and Exchange Board of India (SEBI) for the launch of its India Defence Index Fund. Named the Motilal Oswal Nifty India Defence Index Fund, this open-ended fund is designed to replicate and track the Nifty India Defence Total Return Index, providing investors with a unique avenue for potential capital growth.

Fund Overview: What Investors Need to Know

The Motilal Oswal Nifty India Defence Index Fund offers a compelling proposition for investors who are keen on aligning their returns with the performance of the Nifty India Defence Total Return Index, albeit subject to tracking error. Furthermore, this product is tailored to cater to the long-term capital growth objectives of investors, making it an attractive option for those with a strategic investment horizon.

Scheme Details: Unveiling the Plan

Categorized as an Index Fund, the Motilal Oswal Nifty India Defence Index Fund aims to raise a target amount of Rs 5 crore during its New Fund Offer (NFO) period. The scheme offers two distinct plans to investors: the Regular Plan and the Direct Plan, each catering to different investor preferences and requirements.

Exploring Plan Options

Under both the Regular and Direct Plans, investors are presented with the Growth option. This option allows all income earned and realized profit in respect of a unit issued under the plan to remain invested until repurchase. Such reinvestment is deemed to have remained within the respective option itself, a feature that is reflected in the Net Asset Value (NAV) of the fund.

Navigating Charges: Entry and Exit Load

Investors will be pleased to note that the Motilal Oswal Nifty India Defence Index Fund imposes no entry load, ensuring a smooth entry process into the fund. However, an exit load of 1% is applicable if units are redeemed on or before 15 days of allotment, with no load thereafter, offering flexibility and convenience to investors.

Understanding Risk Factors: A Prudent Approach

As with any investment opportunity, it is essential to be aware of the associated risks. Standard risk factors include fluctuations in the price, value, and interest rates of the securities in which the scheme invests, thereby impacting the overall value of investments.

Special Considerations: Equities and Beyond

The Motilal Oswal Nifty India Defence Index Fund carries specific risks associated with investing in equities. Since the scheme invests in securities comprising the Underlying Index in the same proportion, the risks inherent in the Underlying Index are applicable to the scheme. Importantly, the fund follows a passive management approach, guided by the criteria and policies of the Underlying Index, rather than active selection of securities.

Final Thoughts

In conclusion, the launch of the Motilal Oswal Nifty India Defence Index Fund marks an exciting development in the mutual fund landscape, offering investors a structured avenue to align their investments with the defense sector’s growth potential. With its unique proposition, transparent fee structure, and prudent risk management approach, this fund holds promise for investors seeking long-term capital growth opportunities.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.