Motilal Oswal’s Nifty India Defence Index Fund NFO Sets a Record of Collecting Rs 1,676 crore

Record-Breaking Collection

Motilal Oswal Nifty India Defence Index Fund, the first domestic passive fund focused on the defense sector, has achieved a record collection of Rs 1,676 crore during its New Fund Offer (NFO) period. This impressive collection marks the highest ever for an equity index fund during its NFO period, the asset management company announced on July 4.

Investor Participation and Fund Allocation

The open-ended fund, which tracks the total returns of the Nifty India Defence Index, garnered participation from 2,48,000 unique investors across 16,900 pin codes in India. The NFO was open from June 13-27, with units allocated on July 3. The scheme will reopen for further subscriptions and redemptions from July 9.

A Milestone for Self-Reliance in Defence

Prateek Agrawal, Managing Director and Chief Executive Officer of Motilal Oswal Asset Management Company stated, “India’s strides towards Atmanirbharta (Self-Reliance) in defence is paving the way for significant growth and innovation. This fund is a testament to the faith that investors have in Motilal Oswal AMC’s products. This fund is set to capitalize on India’s significant progress in defence technology and infrastructure, allowing our investors to actively participate in the country’s defence sector growth.”

Bullish Stance on Defence and Passive Funds

The strong collection numbers reflect investors’ bullish stance on the domestic defence theme and the passive fund category. The Nifty India Defence Index is designed to mirror the performance of defence companies involved in manufacturing and servicing defence projects. This index includes 15 companies that are also part of the Nifty total market.

Impressive Growth Rates

As of the end of May, the Nifty India Defence Index has shown an impressive annual growth rate of 177% over the past year and 89.5% over the past three years. This performance highlights the potential for significant returns in the defence sector.

Limited Alternatives in Defence Funds

Currently, there is only one other scheme based on the defence theme in India, the HDFC Defence Fund, which was launched in June 2023. This limited competition further underscores the unique opportunity presented by the Motilal Oswal Nifty India Defence Index Fund.

Sectoral and Thematic Fund Trends

Recent data indicates that Indian investors have shown a growing interest in sectoral and thematic funds. In the past six months, the mutual fund industry has seen the highest-ever inflows for any six-month period, totaling Rs 1.42 lakh crore from December 2023 to May 2024. Sectoral/thematic funds received the lion’s share of these inflows, with Rs 54,370 crore, followed by Large & Mid Cap Funds at Rs 16,077 crore and Small Cap Funds at Rs 14,877 crore.

Conclusion

The Motilal Oswal Nifty India Defence Index Fund’s record-breaking NFO highlights the strong investor confidence in India’s defence sector and the potential for significant returns from passive investment strategies. As India continues to advance its defence capabilities, investors in this fund are well-positioned to benefit from the sector’s growth and innovation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.