Motilal Oswal Asset Management Company (MOAMC) has announced its international offering - Motilal Oswal MSCI EAFE Top 100 Select Index Fund. This first-of-its-kind fund provides investors exposure to top 10 countries ("EAFE10") based on their weight in MSCI EAFE (Europe, Australia & Far East) Index. MSCI EAFE Index is designed to represent performance of 21 developed markets across Europe, Australasia and Far East excluding US and Canada.
Indian investors have traditionally taken exposure to only domestic markets. With such a narrow focus, investor tends to lose out on the Global large opportunity set. Even while diversifying internationally, US takes the prominence all across. MOAMC was the first one to offer Nasdaq 100 based ETF and S&P 500 based Index Fund in India. Similarly, this time MOAMC comes up with 1st ever Index fund for other Developed markets - Motilal Oswal MSCI EAFE Top 100 Select Index Fund. Diversifying your portfolio across different geographies can help reduce volatility as compared to Indian Equities.
MSCI EAFE Top 100 Select Index is curated out of parent index and is the underlying of this fund. The Fund has selected 100 companies out of EAFE 10 universe based on adjusted market capitalization. MSCI EAFE Top 100 Select Index has maximum 10 countries and 100 constituents. The top 10 constituents account for 25.8% of the total, with the greatest constituent accounting for 4.1%. The fund will be rebalanced quarterly with cap on Country Weight at 40%.
Motilal Oswal MSCI EAFE Top 100 Select Index Fund is the only fund that is a culmination of investing into 10 most innovative economies around the world (Switzerland, Germany, Sweden, Netherlands, Japan, France, U.K., Australia, Spain and Hong Kong). The fund's most heavily weighted countries are U.K. (20.4%), Japan (19%), France (15.2%), Switzerland (14.7%) and Germany (11.2%), making it India's most well-diversified fund offering. It invests in 10 sectors with Financials, Health Care, Consumer Discretionary, Consumer Staples, Industrials, and Information Technology accounting for 83% of the fund's sectoral exposure.
The NFO will be open on November 15, 2021 and close on November 25, 2021.
"This Fund is another attempt to help our investors create a well-diversified portfolio from global assets. Motilal Oswal MSCI EAFE Top 100 Select Index Fund provides investors a different basket of investing where they could access markets outside U.S. which provide diversification benefit due to different return drivers. The Fund will be suitable for investors looking to diversify their portfolio across different geographies which can be used as diversification tool in to hedge volatility in Indian Equities." said Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd.
"The fund targets to give exposure to renowned global brands present across developed markets excluding US & Canada." said Pratik Oswal, Head of Passive Funds, Motilal Oswal Asset Management Company Ltd. "The fund will cover key regions such as Europe, Australia and far East which have shown high stability with low country risk.
In addition, while the US and emerging markets have more exposure to the technology sector, MSCI EAFE is more broadly diversified. The fund gives debt taxation with indexation benefits after 3 years."