Investor wealth rises 9 times over past 10 years in Motilal Oswal Nasdaq ETF

MUMBAI: An Exchange Traded Fund (ETF), by Motilal Oswal Mutual Fund and tracking the Nasdaq 100 index, has grown about nine times since its launch on 29 March 2011, delivering a return of 24.17% (CAGR). Apple Inc is its top holding, with a weight of 11.16% followed by Microsoft (9.51%) and Amazon (8.46%). It has assets under management worth Rs2,989 crore.

“It is the top performing fund over 3,5 and 10 years in India at a 24%+ CAGR,” said Pratik Oswal, head of Passive Funds, Motilal Oswal Asset Management Company.

Some of the fund’s high returns are a result of rupee depreciation. The Indian rupee has declined from around 44 to a dollar in March 2011 to 72.60 at present.

According to experts, however, coming decade may see emerging markets outperforming the US. “It has good prospects going forward but they may not be as much as the last decade,” said Oswal. “I have no idea about emerging markets vs Nasdaq but yes people should also look to diversify there,” he added.

Motilal Oswal has announced plans of launching an Emerging Markets ETF next month. The fund house launched a Fund of Funds (FoF) tracking the Nasdaq 100 ETF in November 2018 in order to make it possible for investors without demat and trading accounts to invest in the Nasdaq Index and followed it up with an index fund tracking the S&P 500 on 28th April 2020. The latter is up 28.46% since launch.

"Passive Funds such as ETFs should definitely be a part of every investor's portfolio. This includes both ETFs tracking Nifty/Sensex and global indices. I generally allocate around 10% of my client's portfolios to the Nasdaq 100 ETF,” said Viral Bhatt, founder, Money Mantra, a Mumbai based mutual fund distributor.