Latest news with #BSE1000IndexFund
Time of India
13-06-2025
- Business
- Time of India
Can BSE 1000 Index Fund offer all-weather portfolio to beat Nifty? Pratik Oswal explains
When most investors think passive investing, they think Nifty 50. The bold ones might venture into Nifty 500. But what if the real opportunity lies in the 500 companies they're missing? Pratik Oswal , Chief of Passive Business at Motilal Oswal Asset Management Company , believes India's investment story is incomplete without accessing its broadest equity universe. The firm's latest offering, the BSE 1000 Index Fund, covers 94% of India's listed market capitalization—a stark contrast to the Nifty 50's focus on just the top 50 companies. "The BSE 1000 has outperformed Nifty 50 in 10 of the last 17 years," Oswal reveals, attributing this edge to something most investors overlook: the untapped potential of microcaps and mid-caps that make up the broader market ecosystem. Edited excerpts from a chat: The BSE 1000 Index Fund is Motilal Oswal AMC's latest passive offering. What was the core idea behind launching this product now? India's equity markets have evolved significantly — from being dominated by a few companies to a vibrant ecosystem of over a thousand listed businesses across sectors and sizes. The BSE 1000 Index Fund was launched to help investors participate in India's full growth story — not just the top 50 or 100 companies. With broader indices correcting slightly and valuations moving closer to long-term averages, we believe this is a strategic moment to introduce a product that combines stability, diversification, and long-term potential in a single, passive format. Investors are very familiar with indices like Nifty 50 and Nifty 500. Why did you choose the BSE 1000 — and what unique advantage does it offer over these traditional benchmarks? The BSE 1000 is India's broadest equity index, covering ~94% of the listed market cap. While indices like Nifty 50 or Nifty 500 focus on depth, the BSE 1000 brings both breadth and depth. Key advantages over traditional indices: Wider market representation — includes the top 1000 companies vs. 500 or fewer. Inclusion of Microcaps – Early-stage, high-growth companies not part of Nifty 500. Sectoral diversity — covers all 22 sectors, while Nifty 50 covers around 15. Lower concentration risk — more balanced exposure to both old and new economy themes. Performance edge — the index has outperformed Nifty 50 in 10 of the last 17 years and delivered better SIP outcomes over the long term. The BSE 1000 covers nearly 94% of India's listed market cap. Does this wide representation help reduce concentration risk, which is often a concern with passive strategies? At the same time, isn't it over-diversification? Absolutely, the broad coverage is a strength, not a drawback. In fact, the BSE 1000 is designed to reduce single-stock and sector-level risks, which are more pronounced in narrower indices. And rather than 'over-diversification,' this is actually smart diversification. The index provides meaningful exposure to segments like midcaps and microcaps — which are driving growth — without overexposing investors to their volatility. In fact, the BSE 1000 shows lower volatility over the last 15 years than a highly concentrated index like Nifty 50. The result is a more balanced, all-weather portfolio . The index spans large, mid, small, and micro caps. In an environment where mid and smallcaps are trading at elevated valuations, how does this fund manage risk without active selection? Being a passive fund, we don't actively select stocks — but the index structure itself helps manage risk through diversification. Large caps provide the base stability. Mid and smallcaps contribute alpha during market upcycles. Microcaps, while having higher beta, unlock hidden growth opportunities Importantly, valuations in the broader market have cooled slightly in recent months, and the current P/E levels of the BSE 1000 are near long-term medians — indicating fair valuations across the spectrum. Microcaps are a significant part of the index — and typically under-researched. What would you say to investors worried about liquidity or volatility in that segment? It's true that microcaps carry higher volatility — but they make up only around 5% of the total index. Interestingly, over the past 5 years: Microcaps' share in total market cap has doubled. Average market cap of microcap companies has grown sixfold. Their average daily trading volumes have surged 13x — reflecting rising investor participation, mobile trading, and index inclusion (e.g., BSE Next 500). Yet, 87% of these companies have 5 or fewer analysts tracking them, meaning there's real potential for discovery. For investors, this means measured exposure to high-growth companies — without needing to pick individual names. You've highlighted the long-term performance edge of the BSE 1000 over the Nifty 50. What's driving this outperformance — is it purely the breadth or something more structural? It's both. Breadth plays a role, but the structural edge comes from: Participating in early-stage growth from mid and microcap companies. Better sector rotation and thematic representation — like manufacturing, digital, and financial inclusion. Lower concentration — avoiding overexposure to a few dominant names. Over time, this combination of more sectors, more companies, and more growth engines leads to better compounding — as reflected in its historical performance vs. Nifty 50. Passive investing has gained huge traction in India over the last few years. How do you see this trend evolving, especially in a market like ours that's still heavily actively managed? India is still early in its passive journey. But we're seeing a shift: More investors are embracing cost-efficiency and transparency. Many active funds are struggling to consistently outperform broad indices — especially in large caps. New themes like factor investing and broad-based indices (like BSE 1000) are making passive products more relevant. We believe passive AUM in India could double in the next 3–4 years, driven by both retail and institutional adoption. Given the current market phase — soft corrections, pockets of froth — do you think it's the right time for investors to consider broad-based passive products? Yes — in fact, this is precisely the time to look at broad-based passive investing. Markets have corrected ~5–10% from peaks. Valuations are near long-term averages. Volatility has increased — and passive strategies reduce decision-making stress. Broad based funds reflect the economy better during uncertain times. For long-term investors, timing the market is less important than time in the market — and broad-based index funds like BSE 1000 are built to ride through cycles while capturing India's growth. Lastly, what's the tracking error you're targeting for this fund, and how will you ensure efficient execution given the wide base of 1000 stocks? We have a strong track record of managing passive funds efficiently, even those with complex or deep indices: Our Nifty 500 Fund maintains a tracking error of just 8 bps. Our Nifty Microcap 250 Fund — despite lower liquidity — is managed with just 60 bps tracking error. For the BSE 1000 Index Fund, we expect tracking error to remain broadly in line with our Nifty 500 Fund — with a marginal increase owing to the inclusion of microcaps. This is possible due to experienced trading and quant teams, strong counterparty relationships for execution and rigorous internal tracking systems. We believe scale, systems, and specialization are key to maintaining low tracking error — even in a 1000-stock fund.
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Business Standard
05-06-2025
- Business
- Business Standard
Motilal Oswal MF launches BSE 1000 Index Fund: Here's all you need to know
Motilal Oswal BSE 1000 Index Fund: Motilal Oswal Mutual Fund has launched its Motilal Oswal BSE 1000 Index Fund, an open-ended scheme tracking BSE 1000 Total Return Index. The new fund offer (NFO) will open for subscription today, June 5, 2025, and close on Thursday, June 19, 2025. The fund provides broad-based exposure to India's equity markets by tracking the BSE 100 Total Return Index, which covers around 94 per cent of the country's listed market capitalisation. It includes companies across large, midcap, smallcap, and micro-cap segments, representing diverse sectors and industries. The index offers a mix of established companies as well as fast-growing smaller firms from 22 different sectors. To reduce concentration risk, the top 10 stocks are capped at around 33 per cent of the total weight. It also includes micro-cap companies, whose market size and trading activity have grown from 5 times and 14 times, respectively, over the last five years. The index is passively managed, based on free-float market value, and is rebalanced twice a year. According to the Scheme Information Document (SID), the scheme aims to provide returns that, before expenses, correspond to the total returns of the securities as represented by BSE 1000, subject to tracking errors. However, there can be no assurance or guarantee that the investment objectives of the scheme will be achieved. According to SID, if the units are redeemed on or before 15 days from the day of allotment, an exit load of 1 per cent will be charged. However, no exit load will be charged if units are redeemed after 15 days from the date of allotment. According to the riskometer, the principal invested in the scheme will be at very high risk. ALSO READ | Swapnil Mayekar, Dishant Mehta, and Rakesh Shetty are the designated fund managers for the schemes. Pratik Oswal, chief of passive business at Motilal Oswal Asset Management Company (MOAMC), said that this fund provides a diversified exposure to India's corporate sector and is a natural evolution for investors seeking a passive investment option. "As pioneers in passive investing, our goal is to offer simple, low-cost, and scalable investment options, and this launch aligns with that objective," he added. During the NFO and ongoing basis, investors can invest a minimum amount of ₹5,000 and in multiples of ₹1 thereafter. The minimum amount and frequency vary for investments through a Systematic Investment Plan (SIP). Motilal Oswal BSE 1000 Index Fund: Who should invest? According to the SID, the fund is suitable for investors seeking long-term capital growth and return that corresponds to the BSE 1000 Total Return Index, subject to tracking error. However, investors should consult their financial advisers if in doubt about whether the product is suitable for them.
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Business Standard
04-06-2025
- Business
- Business Standard
E-commerce giant Flipkart offloads 6% stake in ABFRL; sells 73 mn shares
Carlyle Group affiliate firm, C A Dawn Investments, on Wednesday sold its entire 10.20 per cent in Indegene for ₹1,447 crore BS Reporter Flipkart Investments on Wednesday offloaded 6 per cent stake in Aditya Birla Fashion & Retail Ltd (ABFRL) for ₹588 crore. The e-commerce giant sold 73.17 million shares at ₹80.32 apiece. Shares of ABFRL fell nearly 11 per cent in secondary market trading to end at ₹76.8. Carlyle Group affiliate firm exits Indegene Carlyle Group affiliate firm, C A Dawn Investments, on Wednesday sold its entire 10.20 per cent in Indegene for ₹1,447 crore. It sold nearly 24.5 million shares at ₹591 apiece. Shares of Indegene fell 4.7 per cent to end at ₹590. Founder Kunhikannan sells 1.76% in Kaynes Ramesh Kunhikannan, founder, Kaynes Technology on Wednesday divested his 1.76 per cent stake in the firm. He sold 11.25 million shares at ₹5,551 apeice to raise ₹623 crore. Shares of Kaynes fell about a per cent to close at ₹5,730 crore. BS reporters Motilal Oswal Mutual Fund (MF) launched the first passive fund tracking the BSE 1000 index. The scheme Motilal Oswal BSE 1000 Index Fund, representing top 1000 listed companies offers exposure to about 94 per cent of the country's listed market capitalisation. The index at present has firms across 22 sectors. The top-10 stock weight is capped at 33 per cent to reduce concentration risk. Motilal Oswal is also in the process of finalising its plan to launch a scheme under the newly-introduced specialised investment fund (SIF) category in the next 6 months. Sekhmet Pharma appoints Santosh Mahil MD & CEO Private equity consortium led by PAG Sekhmet Pharmaventures has appointed Santosh Kumar Mahil (pictured) as the managing director (MD) and chief executive officer (CEO). Sekhmet is an investment platform that helps India's next generation of active pharmaceutical ingredient (API) companies. Mahil has nearly three decades of experience, having held leadership roles at Lupin, USV, Unichem, and Shilpa Medicare. BS reporter
Time of India
04-06-2025
- Business
- Time of India
NFO Update: Motilal Oswal Mutual Fund launches BSE 1000 Index Fund
Motilal Oswal Mutual Fund has announced the launch of its latest new fund offer 'Motilal Oswal BSE 1000 Index Fund', an open-ended fund replicating/tracking the BSE 1000 Total Return Index, India's First Index fund tracking BSE 1000 Total Return Index, representing top 1000 listed companies - offering a wide market representation within a single index. The new fund offer or NFO of the scheme will open for subscription on June 5 and will close on June 19. Also Read | Smallcap mutual funds emerge as top performers in May with average return of 8%. Opportunity or time for caution? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by BSE 1000, subject to tracking error. The scheme will be benchmarked against the BSE 1000 Total Return Index and will be managed by Swapnil Mayekar, Dishant Mehta, and Rakesh Shetty. Live Events Motilal Oswal BSE 1000 Index Fund provides broad-based exposure to India's equity markets by tracking the BSE 1000 Total Return Index, which covers approximately 94% of the country's listed market capitalization . The index includes companies across large, mid, small, and micro-cap segments, representing diverse sectors and industries -from traditional industries to cutting-edge technology. It offers exposure to a mix of established market leaders and emerging companies across 22 sectors, with the top-10 stock weight capped at 33%, thereby helping to reduce concentration risk. The index also includes micro-cap companies, whose market capitalization and liquidity have grown approximately 5× and 14× respectively over the past five years. All within a passive, free-float weighted structure with semiannual rebalancing. 'India's growth story is gaining real momentum, fueled by strong domestic demand, policy reforms, and growing confidence in capital markets. As growth managers, we focus on identifying long-term structural trends and building portfolios that capitalise on India's evolving economic landscape. The Motilal Oswal BSE 1000 Index Fund is an extension of our philosophy, offering investors access to a diverse range of listed companies in India across various sectors and market capitalisations. It is a simple, yet effective way to participate in India's long-term growth through a diversified and resilient framework,' said Prateek Agrawal, MD & CEO, Motilal Oswal Asset Management Company. This product is suitable for investors who are seeking long-term capital growth and return that corresponds to the BSE 1000 Total Return Index, subject to tracking error. Also Read | Which mutual funds are scoring high on value, quality and momentum factors: Insights from MF scorecard The minimum amount for lumpsum investment is Rs 500 and multiples of Re 1 thereafter. For the Systematic Investment Plan (SIP), the minimum instalment amount, frequency, number of instalments, and choice of SIP date/day are different and as specified in the Scheme Information Document 'We are proud to launch India's first index fund tracking the BSE 1000 Total Return Index, giving investors access to India's largest and most inclusive equity index. This fund aims to captures the performance of 1,000 companies spanning large, mid, small, and micro-cap companies across 22 sectors. It provides a diversified exposure to India's corporate sector and is a natural evolution for investors seeking a passive investment option. As pioneers in passive investing, our goal is to offer simple, low-cost, and scalable investment options, and this launch aligns with that objective,' said Pratik Oswal, Chief of– Passive Business, Motilal Oswal Asset Management Company.
Mint
29-04-2025
- Business
- Mint
Should you consider a fund tracking 1,000 stocks?
Motilal Oswal Asset Management Company's proposed new fund—Motilal Oswal BSE 1000 Index Fund—will be passively managed and track the newly launched BSE 1000 index. But should investors consider putting their money into a fund tracking a 1,000-stock index? First, let's look at the numbers. Motilal Oswal's new fund will invest in BSE 1000 stocks according to their weight in the index. Hence, the index's historical performance can indicate how Motilal Oswal's fund might perform compared with other index funds. Over the past 10 years, the BSE 1000 index has delivered annualised returns of 13.42%, slightly better than the BSE 500's 13.17% returns over the same period. Their returns are similar over three-year and five-year periods as well. Over a three-year period, the BSE 1000 has delivered returns of 14.17%, and the BSE 500, 13.75%. Over five years, the BSE 1000 delivered returns of 26.92% against the BSE 500's 26.3%. These are all total return index returns, which capture both price appreciation and dividend gains from the constituent stocks. The BSE 1000's outperformance over the BSE 500 is only marginal. This can be attributed to indices being market-cap weighted, which means companies with larger market capitalizations dominate the returns. The total market capitalization of the BSE 500 is ₹ 379 trillion, which is 94% of the total market capitalization of the BSE 1000 index. In terms of returns, which are measured as standard deviation, the numbers are more or less similar across three-year, five-year, and 10-year periods for both indices. The differences here are slightly more pronounced in favour of the 1,000-stock index. The BSE 1000's 10-year annualized returns of 13.42% is higher than the Nifty 50's 12.28%. Over a five-year period, the Nifty 50 clocked returns of 23.52%, lower than the 26.92% returns of the BSE 1000. Over three years, the Nifty 50 returned 12.27%, compared with the BSE 1000's 14.17%. However, the Nifty 50 has lower volatility, with a standard deviation of 16.06% versus the BSE 1000's 20.18%. A broad market index like BSE 1000 can be an alternative way for investors to participate in mid- and small-cap stocks while ensuring lower volatility than that of mid- and small-cap funds. 'Today's small-caps were micro-caps of yesterday. Such a fund allows investors to participate from the lowest end of (the) market cap spectrum to the highest," said Kavitha Menon, founder of Probitus Wealth. 'As the size of the market and company's market-caps grow, there is a need for a product that allows retail to participate in an otherwise high-risk space like small-caps." Ravi Kumar T.V., co-founder of Gaining Ground Investment Services, said the BSE 1000 index will give investors exposure to more sectors and businesses that wouldn't be available higher up the market cap chain. 'Investors get more sectors to participate in (the) BSE 1000 index. Nifty 50 or BSE Sensex 30 index's returns can get heavily influenced by (the) performance of one or two index heavyweights," he said. But while diversification is usually a good idea, it could have a limited impact on returns and risks beyond a certain point. Investors looking for a broad, passively managed fund can consider the Motilal Oswal BSE 1000 Index Fund. However, this may or may not meaningfully outperform other index funds linked to the BSE 500 or Nifty 500. Investors who have already built a passive fund portfolio with Nifty 50, BSE 500, or Nifty 500 index funds can stick with those. Those starting their investment journey can consider the BSE 1000 index fund to get a taste of the stock markets.
