NFO Analysis: Motilal Oswal Nasdaq Q50 ETF
Motilal Oswal Mutual Fund offers various types of schemes such as equity-oriented, debt-oriented, hybrid, Fund of Funds, ETFs and index funds. The total assets under management of the Motilal Oswal AMC are Rs 33,544.41 crore as of September 2021, which is launching Exchanged Traded Fund. This is an open-ended fund that seeks to invest and correspond the returns to the performance of the NASDAQ Q-50 Index.
Subscription Date: The NFO was launched on December 10, 2021, it will close on December 17, 2021.
Objective of the scheme: The scheme objective is to get the investment returns that resembles (before fees and expenses) the performance of the benchmark NASDAQ Q-50 TRI which is subject to tracking error and forex movement.
Investment Strategy: The investment strategy will include investment offering the returns that mirror to NASDAQ Q-50 Index. The scheme aims to invest in the constituents of NASDAQ Q-50 TRI, in the range of 95 per cent to 100 per cent. The scheme will also invest in units of liquid/debt schemes, debt and money market instruments, international equity ETF (VictoryShares Nasdaq Next 50 ETF) in the range of 0 per cent-5 per cent.
Index Composition: The following table depicts the top 5 constituents of the NASDAQ Q-50 Index as of October 31, 2021.
|
Security Name
|
Weight
|
|
Airbnb, Inc Cl A Cmn
|
4.34 per cent
|
|
Fortinet, Inc.
|
4.21 per cent
|
|
Zscaler, Inc. Cmn
|
3.63 per cent
|
|
Datadog Inc.L A Cm
|
3.33 per cent
|
|
Old Dominion Freight
|
3.29 per cent
|
Historical Index Performance: The following table depicts the performance of benchmark i.e., NASDAQ Q-50 TRI for 1, 3, 5, 10-year and since inception:
|
Period
|
Annualized Returns of benchmark
|
|
1-year
|
20.8 per cent
|
|
3-year
|
28.4 per cent
|
|
5-year
|
22.9 per cent
|
|
10-year
|
23.6 per cent
|
|
Since inception (April 2008)
|
20.9 per cent
|
Fund Managers: Ankush Sood and Abhiroop Mukherjee (Debt component).
This fund will be suitable for investors with high-risk appetites as the fund manager of this scheme will allocate the majority of capital towards equity and equity-related instruments. Investors willing to diversify their portfolio and want to include foreign stocks can go by investing in their indices which is offered by this fund. NFO is not the best option to invest in as there is no historical data available to track the performance. As this is a new scheme, one can invest in the same, if they are ready to take up the risk. Otherwise, investors who are willing to invest but does not have a high-risk appetite should wait for at least one year to see how this scheme is performing.