5 Mins

Motilal Oswal Mutual Fund has launched a new index fund, Motilal Oswal S&P BSE Low Volatility Index Fund, that replicates the S&P BSE Low Volatility Index.
The New Fund Offer (NFO) period for the Motilal Oswal S&P BSE Low Volatility Total Return Index Fund is from March 4th 2022, to March 16th 2022. The scheme re-opens for continuous repurchases and sale after five days from the date of allotment.

Objective
The fund’s investment objective is to offer investment returns that closely correspond to the total returns of the securities that are part of the S&P BSE Low Volatility Total Return Index before expenses, subject to tracking errors. However, the scheme does not guarantee that the investment objective will be met.

Motilal Oswal S&P BSE Low Volatility Index Fund NFO Details

NameMotilal Oswal S&P BSE Low Volatility Index Fund
NFO Opening DateMarch 4th 2022
NFO Closing DateMarch 16th 2022
Re-open DateAfter five days from the date of allotment
Type of FundOpen-ended equity scheme
Fund ManagerMr Swapnil MayekarMr Abhiroop Mukherjee
Minimum Investment AmountINR 500 and in multiples of INR 1 thereafter
Minimum Additional Purchase AmountINR 500 and multiples of INR 1 thereafter
Exit LoadNil
SuitabilityVery High
BenchmarkS&P BSE Low Volatility Total Return Index
Plans and OptionsRegular Plan & Direct Plan
NOTE:
  • All the investment amounts should be multiple of INR 1/-
  • Minimum SIP/SWP/STP for monthly frequency is INR 500/- and quarterly frequency is INR 1500/-.

Who Should Invest in Motilal Oswal S&P BSE Low Volatility Index Fund?

Motilal Oswal S&P BSE Low Volatility Index Fund best suits investors who wish to earn benchmark returns and closely track them. However, the volatility strategy involves buying stocks with higher stability in price movements based on past returns. This pure equity fund can be a starting point for many investors. Especially those who are looking for maximum wealth creation with minimal risk in a highly volatile market. Moreover, buying low volatile stocks tend to perform in the long term. Therefore, investors who are worried about the volatility in the equity markets can consider investing in this fund.

Fund Manager

  • Mr Swapnil Mayekar: Mr Mayekar will manage the equity portion of this fund. He has over ten years of experience in the financial services industry. For the last five years, he has been part of the fund management and product development team at Motilal Oswal AMC. His expertise is quantitative analysis, creating customised indices, model testing, and building a research database. Mr Mayekar was previously associated with Business Standard Limited. He holds a postgraduate degree in Commerce (Finance Management) from the University of Mumbai.
  • Mr Abhiroop Mukerjee: Mr Mukherjee is currently the AVP and Fund Manager – Fixed Income at Motilal Oswal AMC. He will manage the debt portion for this fund. He has over six years of experience in Fixed Income Securities trading. Before joining Motilal Oswal MF, he was associated with PNB Gilts Ltd. Mr Mukherjee has a PGPBF (Finance) from the National Institute of Bank Management, a B.Com (Hons.) from Calcutta University.

Asset Allocation

Motilal Oswal S&P BSE Low Volatility Index Fund aims to closely replicate the benchmark index with minimum tracking error. The following is the indicative asset allocation of the fund.

Types of InstrumentsIndicative Allocation MinimumIndicative Allocation MaximumRisk Profile
Constituents of S&P BSE Low Volatility Index95%100%Very High
Liquid schemes, debt schemes or money market instruments 05%Low

As per the SEBI Regulations, the scheme may participate in securities lending. The following are limits for stock lending –

  • Not more than 20% of the net assets are deployed in stock lending.
  • Not more than 5% of the net assets can be deployed in stock lending to any single approved intermediary.

The asset allocation will be in the same proportion as the benchmark composition. The fund managers intend to maintain a low tracking error by managing the portfolio according to the index.

Concluding Remarks

Motilal Oswal S&P BSE Low Volatility Index Fund replicates the S&P BSE Low Volatility Index performance. This fund primarily invests in the same stocks and proportions as the S&P BSE Low Volatility Index. Hence, it aims to closely track the benchmark’s return with minimum tracking error. Since the fund invests in low volatile stocks, it is a low-risk investment option. Investors with a long term investment approach and worried about market volatility can invest in this fund. Also, the volatility strategy is most effective during weak market conditions.
Investors who understand and can closely monitor the performance of the market can consider investing in this scheme. Also, they should have an understanding of the risk towards index funds. Furthermore, experts advise monitoring the investment in this fund as it does not guarantee returns. This helps investors evaluate their progress towards their financial goals.

Other Funds by Motilal Oswal