Looking to invest in a specialized sector? The Motilal Oswal Nifty India Defence ETF might be an appealing option. This ETF, offered by Motilal Oswal Mutual Fund and managed by Motilal Oswal Asset Management Company Limited (MOAMC), aims to track the Nifty India Defence Total Return Index. Scheduled for its New Fund Offer (NFO) from August 19 to August 21, 2024, at an NFO price of Rs.500 per unit (with further investments in multiples of Rs.1), this ETF provides a unique opportunity for investors. In this comprehensive Motilal Oswal Nifty India Defence ETF review, we delve into its key features, investment strategy, and potential risks.

What Is the Motilal Oswal Nifty India Defence ETF?

The Motilal Oswal Nifty India Defence ETF is designed to mirror the performance of the Nifty India Defence Total Return Index. This index tracks companies within the Indian defense sector, offering investors targeted exposure to this industry. The ETF aims for long-term capital growth by closely aligning its returns with the index, subject to tracking errors.

Key Features of the Motilal Oswal Nifty India Defence ETF

1. Investment Strategy and Allocation

In this Motilal Oswal Nifty India Defence ETF review, it’s crucial to note that the fund will allocate 95-100% of its assets to the constituent stocks of the Nifty India Defence Index. Additionally, up to 5% of the assets will be invested in liquid schemes and money market instruments to maintain liquidity. This strategic allocation ensures that the ETF closely follows the performance of the index while maintaining operational flexibility.

2. How to Invest

If you miss the NFO period, you can still invest in the ETF starting August 27, 2024, when it reopens. You can purchase units at the net asset value (NAV) price through your demat account by searching for “Motilal Oswal Nifty India Defence ETF” or by investing directly via the AMC’s platform. Click the investment banner provided to start your investment journey.

Investment Objective and Risks

1. Fund Objective

The primary objective of the Motilal Oswal Nifty India Defence ETF is to provide returns that closely match those of the Nifty India Defence Total Return Index, after accounting for expenses and tracking error. However, investors should be aware that there are no guarantees the fund will achieve its investment goals.

2. Risk Factors

Investors should consider several risks associated with this ETF:

• Tracking Error: The ETF may not perfectly replicate the index’s performance due to tracking errors.

• Market Volatility: The ETF is susceptible to fluctuations in the broader market, which can impact its returns.

• Liquidity Risk: There could be trading suspensions due to market conditions or regulatory actions.

• Price Fluctuations: Changes in interest rates and market dynamics can affect the ETF’s value.

Who Should Invest?

The Motilal Oswal Nifty India Defence ETF is ideal for investors seeking long-term capital growth with a high-risk tolerance. It’s particularly suitable for those who are interested in gaining exposure to the defense sector and believe in its growth potential.

Fund Management

This ETF is managed by seasoned professionals:

• Swapnil Mayekar

• Rakesh Shetty

Their expertise is essential in ensuring that the ETF aligns closely with the Nifty India Defence Index while managing associated risks.

Conclusion

The Motilal Oswal Nifty India Defence ETF presents a focused investment opportunity in the Indian defense sector. By tracking the Nifty India Defence Total Return Index, it offers specialized exposure for those interested in this niche market. As always, it is important to assess your financial goals, risk tolerance, and investment horizon before investing. For detailed insights and expert guidance on ETF investments, Finowings Training Academy provides valuable resources and training. Their expertise can assist you in making well-informed investment decisions and developing a robust investment strategy.

Disclaimer: This review is intended for informational purposes only and should not be considered as investment advice. Conduct thorough research and consult with a financial advisor before making any investment decisions.