Motilal Oswal Asset Management Company (MOAMC) has unveiled the Motilal Oswal Nifty 500 ETF, a new investment opportunity for Indian investors. This exchange-traded fund (ETF) is designed to provide exposure to over 90% of India’s listed market capitalization, giving investors a chance to participate in India’s growth story.
Index Tracking
The Motilal Oswal Nifty 500 ETF aims to track the total returns of the Nifty 500 Index. This index is specifically curated to gauge the performance of the top 500 companies in India based on their market capitalization. Unlike the Nifty 50 Index, which is more top-heavy with its top 10 holdings accounting for 58%, the Nifty 500 Index offers a broader and more balanced diversification, with the top 10 holdings representing only 37%.
Diverse Sector Exposure
One of the key advantages of this ETF is its diversified exposure. It covers 21 different sectors, including textiles, consumer services, media, and forest materials, which are not included in the Nifty 50 Index. This diversified exposure provides a well-rounded blend of Largecap (75%), Midcap (16%), and Smallcap (9%) stocks.
Historical Performance
Over the past three years, the Nifty 500 Index has demonstrated robust performance, delivering an impressive 25% annualized return as of August 31, 2023. Additionally, over the medium to long term, historical data shows that the Nifty 500 Index has outperformed the Nifty 50 Index, thanks to its strong performance in the mid and small-cap segments.
Balanced Risk Profile
Despite including midcap and smallcap stocks, which are typically considered more volatile, the Nifty 500 Index has displayed either comparable or lower risk, as measured by standard deviation. This balanced risk profile adds to the attractiveness of the ETF for investors seeking diversified exposure with controlled risk.
The Motilal Oswal Nifty 500 ETF is set to be listed on the National Stock Exchange (NSE) on October 6, 2023, under the trading symbol ‘MONIFTY500.’ This launch offers investors a compelling opportunity to access a broad spectrum of India’s listed companies and potential growth prospects.
