Motilal Oswal Asset Management Company (MOAMC) on Thursday announced the launch of factor-based funds called Motilal Oswal S&P BSE Quality ETF & Motilal Oswal S&P BSE Quality Index Fund and Motilal Oswal S&P BSE Enhanced Value ETF & Motilal Oswal S&P BSE Enhanced Value Index Fund.
In a press release, MOAMC said that the former fund is an open-ended scheme that tracks the performance of the S&P BSE Quality Index, and the latter one tracks the performance of the S&P BSE Enhanced Value Index.
An official from the fund house has confirmed to Outlook Money that the tentative expense ratio for both the ETFs will be 0.30%. While for the index funds, it will be 1% (Regular) & 0.35% (Direct).
The NFO opens on July 29 and closes on August 12, 2022.
During the NFO of these funds, investors can invest a minimum of Rs. 500/-, and thereafter, in multiples of Rs. 1/-. On a continuing basis, investors can purchase or redeem scheme units through a financial advisor or by visiting www.motilaloswalmf.com.
Motilal Oswal S&P BSE Quality ETF and Motilal Oswal S&P BSE Quality Index Fund
According to the fund house, Motilal Oswal S&P BSE Quality ETF & Index Fund is a single factor-based investment strategy that seeks to incorporate the top 30 "Quality" equities based on rule-based factors. The index constituents are chosen from the S&P BSE LargeMidCap Index Universe. The basis of identification for quality stocks are companies with high earnings or better quality of earnings and lower debt. Over time, it has been observed that such high-quality stocks tend to outperform low-quality stocks because they are better equipped to withstand adverse economic conditions, MOAMC noted.
Motilal Oswal S&P BSE Enhanced Value ETF and Motilal Oswal S&P BSE Enhanced
Motilal Oswal S&P BSE Enhanced, Value ETF & Index Fund are single factor-based investment strategies that aim to include 30 ‘Value’ stocks that are most attractive in valuations based on rule-based parameters.
The index constituents are selected from the universe of the S&P BSE LargeMidCap Index. The Value stocks are identified based on low Price to Earnings, Price to Book and Price to Sales ratios. Value investing is one of the oldest and best-known styles of investing. It is predicated on the idea that stocks with relatively favourable values, or "Low value stocks," typically outperform stocks with higher valuations over the long term.
Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd, said, “To cater to the evolving needs of the investors, we have introduced ETFs & index funds in the factor investing segment. These new funds are based on quality and value factors. We aspire to build a unique brand positioning by establishing ourselves as a fund house to drive the factor investing category in India. With the launch of both these funds, it will complete our bouquet of single-factor-based passive offerings.”
“These single factor-based funds are suitable for investors looking to diversify their portfolio & gain exposure to the Quality or Value factor. The quality funds aim to invest in companies that are generally resilient to setbacks & perform well in various market conditions, especially during bear and recovery markets. At the same time, the Value funds aim to invest in companies that are trading at relatively attractive valuations based on parameters like low Price to Earnings, Price to Book and Price to Sales ratios. This strategy has historically worked well during times of market recovery”, said Pratik Oswal, Head of Passive Funds, Motilal Oswal Asset Management Company Ltd.