Motilal Oswal MSCI EAFE Top 100 Select Index Fund - NFO Details, Review and Risk Factors

Motilal Oswal MSCI EAFE Top 100 Select Index Fund (NFO) – An Opportunity to invest in Global Brands beyond Tech

Motilal Oswal MSCI EAFE Top 100 Select Index Fund - NFO Details, Review and Risk FactorsMotilal Oswal MSCI EAFE Top 100 Select Index Fund – NFO Issue Details, Risk Factors and Review

Are you bored of investing in regular mutual funds and tech funds and looking beyond India and US? How about investing in large non tech companies like Nestle, Airbus, Honda, GSK, Hitachi, Sony, Toyota etc.? Motilal Oswal has launched MSCI EAFE Top 100 Select Index Fund, which invests in an index fund that invests in companies which are global brands beyond tech. The underlying index has generated 12.8% annualized returns in the last 5 years. Should you invest in Motilal Oswal MSCI EAFE Top 100 Select Index Fund NFO? What are the risk factors of investing in such international mutual funds?

Also Read: Edelweiss Launches Large and Midcap Index Fund – Underlying index delivered 17% annualised returns

Motilal Oswal MSCI EAFE Top 100 Select Index Fund – NFO Details

This is an open-ended mutual fund scheme. This NFO is now open for subscription and closes for initial subscription on Thursday, 25th November, 2021. Here are the NFO details.

Scheme Opens 15-Nov-21
Scheme Closes 25-Nov-21
Scheme reopens for continuous purchase/sale Within 5 business days
Minimum Lumpsum Rs 500
Minimum SIP Rs 500 for 12 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load 1% if redeemed within 15 days
Risk Very High Risk
Benchmark MSCI EAFE Top 100 Select Index)
Fund Manager Mr. Ankush Sood (Foreign Securities)
Mr. Abhiroop Mukherjee (Debt component)
Max TER 1% for regular and 0.5% for direct

Motilal Oswal MSCI EAFE Top 100 Select Index FundNFO SID

What is the investment objective of Motilal Oswal MSCI EAFE Top 100 Select Index Fund?

The investment objective is to generate long term capital appreciation by investing in securities of MSCI EAFE Top 100 Select Index subject to tracking error.

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

What is the allocation pattern in this mutual fund scheme?

This fund investment pattern is as follows:

Type of instruments Min % Max % Risk Profile
Equity and Equity Related Securities of MSCI EAFE Top 100 Select Index 95% 100% High
Units of Liquid schemes / Money Market Instruments / iShares Core MSCI EAFE ETF (IEFA), iShares MSCI EAFE ETF (EFA), iShares Core MSCI International Developed Markets ETF (IDEV), Vanguard FTSE Developed Markets ETF (VEA) 0% 5% Low
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Can NRI invest in this MF scheme?

NRIs can invest in this scheme. They can invest on repatriation or non repatriation basis.

What does MSCI EAFE Top 100 Select Index contain?

Since this fund invests in MSCI EAFE Top 100 Select Index, it is important for us to understand the underlying index details. EAFE refers to Europe, Australasia and Far East.

The MSCI EAFE Top 100 Select Index is designed to measure the performance of the top 100 companies, selected from 10 large developed markets, out of the MSCI EAFE Index.

It has exposure to 10 largest developed markets.

It contains stocks which are diversified across sectors and geographies.

Since this fund invests in companies which are outside India, it has a low correlation to Indian equities.

This index would have exposure to multiple currencies.

Top 10 Stocks from this index

Motilal Oswal MSCI EAFE Top 100 Select Index Fund - Top 10 stocks from index

Performance of MSCI EAFE Top 100 Select Index

This fund invests in MSCI EAFE Top 100 Select Index. Let us check how this index performed in the last 10 years, both in terms of annualized returns and SIP returns.

Motilal Oswal MSCI EAFE Top 100 Select Index Fund - Index Performance

Motilal Oswal MSCI EAFE Top 100 Select Index Fund - SIP Performance

Why to invest in the Motilal Oswal MSCI EAFE Top 100 Select Index Fund?

Here are a few reasons to invest in this fund.

1) This fund invests in top non tech companies which are outside India and US. These large companies include Nestle, Asml holding, Roche Holding, Astra Zeneca, Toyota Motor, Novartis etc., Investors can get an opportunity to invest in such companies by investing in this fund.

2) While one can invest in Indian mutual funds and US based mutual funds, investing in non tech index funds can provide portfolio diversification.

3) This fund invests in index fund which has low correlation with Indian equity markets. Means if SENSEX is under performing, this international fund would have low impact.

4) Currently the index is largest non US theme by AUM.

5) The underlying index has performed well and generated 11.5% annualized returns in last 10 years and 12.8% annualized returns in the last 5 years.

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Major risk factors you should consider before investing in such funds

One should consider some of these risk factors / negative factors before investing.

1) This underlying fund would invest in companies listed listed outside India and not related to technology. If you observe, technology companies has been outperforming in the medium to long term compared to non technology companies. You might get disappointed comparing it with the performance of tech companies.

2) Since it invests outside India, this is classified as an international mutual fund and there are geopolitical risks and currency risks.

3) This fund invests in an index. There could be tracking error. If such tracking error is high, there could be high gap between index performance and fund performance.

4) Investors should read all risk factors from the scheme information document before investing in such funds.

Also Read: Should you invest in Nippon India Taiwan Equity Fund?

Should you invest in Motilal Oswal MSCI EAFE Top 100 Select Index Fund?

Motilal Oswal MSCI EAFE Top 100 Select Index Fund is an international fund that invests in non tech companies outside India and US. The underlying index has generated 11.5% annualized returns in last 10 years and 12.8% annualized returns in last 5 years. While investing in tech companies can provide high growth in investments, non tech companies can provide stable growth. High risk investors can invest in this fund. Moderate to low risk investors should stay away from such funds.

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Suresh KP

3 thoughts on “Motilal Oswal MSCI EAFE Top 100 Select Index Fund (NFO) – An Opportunity to invest in Global Brands beyond Tech”

  1. Suresh,
    I think high risk investors look for higher returns. But there is no such high returns from this index. So then why would anyone invest in this fund?

    1. Pradeep, This fund invests in non tech non India/US stocks. Such funds can be as used for diversification. Since it is global fund and invests majorly in global non tech companies, it is termed as high risk.

      1. Suresh,
        I understand diversification, but past history of returns does not show any high degree of outperformance against US or Indian markets.
        If US markets gave 20% and Indian markets gave 15% but this index gave only 12% during a certain period in the past, what’s the point of investing in this index?
        I can just invest in US and Indian markets which gives me higher returns.

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