Motilal Oswal Nifty MidSmall Healthcare Index Fund - Direct (G): NFO Details

The Scheme- Motilal Oswal Nifty MidSmall Healthcare Index Fund Direct (G), in general, will hold all the securities that comprise of underline Index in the same proportion as the index. Expectation is that, over a period of time, the tracking error of the Scheme relative to the performance of the Underlying Index will be relatively low.

The Investment Manager would monitor the tracking error of the Scheme on an ongoing basis and would seek to minimize tracking error to the maximum extent possible. There can be no assurance or guarantee that the Scheme will achieve any particular level of tracking error relative to performance of the Underlying Index.

Details of the NFO: Motilal Oswal Nifty MidSmall Healthcare Index Fund – Direct (G)

Investment Objective and Strategy

Objective:

The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by Nifty MidSmall Healthcare Total Return Index, subject to tracking error.

However, there can be no assurance or guarantee that the investment objectives of the scheme will be achieved. However, there is no assurance that the objective of the scheme will be achieved.

Investment Strategy:

The investment strategy would be Passive in nature offering investment returns that are similar to the total returns of Nifty MidSmall Healthcare Total Return Index before fees / expense and subject to tracking error.

The scheme aims to invest in the constituent of Nifty MidSmall Healthcare Total Return Index, in the range of 95% to 100% and in units of Liquid schemes/ debt schemes, debt and/or money market instruments, in the range of 0% to 5%

1. Securities Lending

Subject to the SEBI Regulations as applicable from time to time, the Scheme may, participate in securities lending. For investments as may be required under Regulation 28(4) of the Regulations, the AMC may invest in the Scheme during the New Fund Offer (NFO) or continuous offer period subject to the SEBI (MF) Regulations. However, AMC shall not charge 1ny fees on such investments.

2. Investment of Subscription Money:

Motilal Oswal Nifty MidSmall Healthcare Index Fund – Direct (G) may deploy NFO proceeds in TREPS before closure of NFO period. However, AMCs shall not charge any investment management and advisory fees on funds deployed in TREPS during the NFO period. The appreciation received from investment in TREPS shall be passed on to investors. Further, in case the minimum subscription amount is not garnered by the Scheme during the NFO period, the interest earned upon investment of NFO proceeds in TREPS shall be returned to investors, in proportion of their investments, along-with the refund of the subscription amount.

3. Portfolio Turnover

Portfolio Turnover is defined as the lower of sales or purchase divided by the average corpus during a specified period of time. The Scheme, being an open ended Scheme, it is expected that there would be a number of subscriptions and redemptions on a daily basis. However, it is difficult to measure with reasonable accuracy the likely turnover in the portfolio of the Scheme.

4. Tracking Error

Tracking error is defined as the standard deviation of the difference between the daily returns of the Underlying Index and the NAV of the Scheme. Theoretically, the corpus of the Scheme has to be fully invested in the securities comprising the Underlying Index in the same proportion of weightage as the securities have in the Underlying Index. However, it is not possible to invest as per the objective due to reason that the Scheme has to incur expenses, corporate actions pertaining to the Index including changes to the constituents, regulatory policies, ability of the Fund Manager to closely replicate the Underlying Index, lack of liquidity, etc.

Risk of the Motilal Oswal Nifty MidSmall Healthcare Index Fund – Direct (G)

Risk Factors relating to Portfolio Rebalancing

In the event that the asset allocation of the Scheme deviates from the ranges as provided in the asset allocation table in this SID, then the Fund Manager will rebalance the portfolio of the Scheme to the position indicated in the asset allocation table. However, if market conditions do not permit the Fund Manager to rebalance the portfolio of the Scheme then the AMC would notify the Board of the Trustee Company and the Investment Committee of the AMC with appropriate justifications.

Index Fund

The Scheme being an index scheme follows a passive investment technique and shall only invest in Securities comprising one selected index as per investment objective of the Scheme. The Fund Manager would invest in the Securities comprising the underlying index irrespective of the market conditions. If the Securities market declines, the value of the investment held by the Scheme shall decrease.

Who should consider investing in the Motilal Oswal Nifty MidSmall Healthcare Index Fund Direct (G)?

The Motilal Oswal Nifty MidSmall Healthcare Index Fund Direct (G) is an open-ended scheme that aims to replicate the performance of the Nifty MidSmall Healthcare Total Return Index. It is ideal for investors looking for exposure to the healthcare sector, particularly in mid and small-cap stocks. Those who believe in the long-term growth potential of healthcare companies and are comfortable with market volatility may find this fund attractive.

This Motilal Oswal Nifty MidSmall Healthcare Index Fund Direct (G) may suit investors with a moderate to high-risk appetite who prefer a passive investment strategy. It is also beneficial for individuals seeking diversification within their portfolio, especially if they already have significant investments in large-cap stocks or other sectors. Moreover, investors who can commit their funds for a longer duration (beyond 15 days to avoid exit loads) may maximize potential returns. However, it is crucial for investors to be aware of the inherent risks associated with equity investments and the specific focus of this fund on the healthcare sector.