Motilal Oswal Launches BSE 1000 Index Fund Nfo – Should You Invest?

Motilal Oswal Mutual Fund has launched a new index fund that aims to replicate the performance of one of the broadest rights in India – the bse 1000 index. With Exposure to 1,000 Listed Companies Across Largecap, Midcap, Smallcap, and Microcap Segments, This Fund Promises Unparalylled Diversification in the Indian Equity Space. Features of this new fund offer (nfo), why one may consider investment in it, Associated Risks, and Whicher this should be a part of your investment portfolio.

Motilal Oswal BSE 1000 Index Fund Nfo – Issue Details

• Scheme opens: 5th June 2025
• Scheme closes: 19th June 2025
• Fund Type: Open-Eded Equity Scheme Replicating/Tracking The BSE 1000 Index
• Benchmark: BSE 1000 Tri (Total Return Index)
• Minimum investment: ₹ 500 and in multiples of re 1 thereaFter
• Fund manager: Abhiroop mukherjee
• Exit load: Nil
• Expense ratio: Likely to be in the range of 0.3% -0.5% for the direct plan (Exact Figure to be disclosed later)

What is the bse 1000 index?

The BSE 1000 index is India’s broadest equity index, covering the top 1,000 listed companies based on full market capitalization. It offers representation across:

• Largecap (Top 100)
• Midcap (Next 150)
• Smallcap (Next 400)
• Microcap (Remaining 350)

The Index Covers Approximately 94% of India’s Listed Market Capitalization and Represents 57 Industries, Ranging from Financials and Manufacturing to Specialty Chemicals, It Hardware, It Hardware, and Digital Media.

How is the performance of underlying index in the past?

While the Mutual Fund is New, The Underling Index Performance is impressive. Here is the Comparison Between Nify 50 Index Returns vs BSE 1000 Index Returns in the past.

Why to invest in Motilal Oswal BSE 1000 Index Fund?

1. Extensive diversification:
   This fund provides Exposure to 1,000 companies, offering investors an all-in solution that captures the breadth of the Indian equity market. You’re not just investment in largecaps but also tapping into the potential of midcaps, smallcaps, and microcaps.
2. Participation in India’s growth story:
   With India Poised to become a $ 5 trillion economy in the coming years, Broader Participation Across SECTORS and Companies is Expected to Drive the Next Leg of Growth. This fund allows investors to ride that wave with a single investment.
3. Passive, low-cost investment:
   Since this is an index fund, there is no active stock selection by a fund manager. The Fund Simply Replicates The BSE 1000 Index, Thereby Reducing Management Costs. Historically, Passive Funds have outperformed many active funds in the long run, especially due to due to lower expresses.
4. Exposure to under-resurched microcaps:
   About 250 Companies in this Index are microcaps, which tend to be under-resurched and less followed by analysts. This provides potential for price discovery and long-term returns.
5. Transparent and rule-based approach:
   Index Funds Follow a Transparent Methodology. Investors can see the Index Constituents and Understand How the Fund will behave under various market conditions.

Risk factors to consider

1. Volatibility due to small and microcaps:
   While Exposure to Microcap and Smallcap Companies Can Provide High Returns in Bull Markets, they can also be highly Volatile Volaital during Market Corrections. The presence of 750 companies beyond the largecap space increases the fund’s risk during bear phase.
2. Higher tracking error:
   Rebalancing 1,000 stocksques should result in relatively Higher Tracking Error Compared to Narrower Index Funds (Like Nifty 50 or Nifty Next 50).
3. Limited Suitation for Conservative Investors:
   Due to the high valati and wider sectorral expert, this fund may not be suitable for Ultra-Conservative Investors or that with a Short-Term Horizon.

Who Should Invest?

This fund is best suited for:

• Investors Looking for a Single Fund that Gives Exposure to the Entre Indian Equity Market.
• That with a long-term investment Horizon of 5 to 10 years or more.
• Investors Preferring Passive Investing with a Diversified Exposure.
• Individuals who do not want to manage multiple funds Across Different Market Caps (Large, Mid, Small).

How to apply for this nfo?

You can invest in this nfo through the following channels:

• Directly via Motilal Oswal Mutual Fund Website or App.
• Through online platforms like Zerodha Coin, Groww, Paytm Money, Kuvera, or MF Central.
• Via your Financial Advisor or Distributor.
• Through your bank’s mutual fund investment service.

Ensure your kyc is updated before applying.

Should you invest in Motilal Oswal BSE 1000 Index Fund Nfo?

Motilal Oswal BSE 1000 Index Fund offers a Unique Opportunity to Gain Exposure to the full Spectrum of Indian Equites – From Large Establed Companies to Emerging Microcaps. Its Diversified Structure, Passive Low-Cost Model, And Long-Term Growth Potential Make it an attractive option for investors who want to participate in India’s’ Multiple Funds.

However, this fund is not without risks. The inclusion of smallcap and microcap stocks increases its valati. Investors should only consider this fund if they are comfortable with short-term fluctations and have a long-term investment view.

If you are a long-term investor with moderate to high risk appetite and look for a single fund that offers wide market coverage, this nfo could be a Worty added to your Portfolio. Conservative Investors or that looking for stable short-term returns may consider other largecap or multi-cap index funds.

Always Align Your Investment Decision with your Financial Goals, Risk Profile, and Time Horizon.

Suresh kp is a seasoned financial expert with over 20 years of experience. He is nism Certified Investment Adviser and Research Analyst. For more about his Expertise and Certifications, Visit About Suresh Kp

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