Motilal Oswal 5 Year G-Sec ETF NFO

Motilal Oswal Asset Management Company has announced the launch of Motilal Oswal 5 Year G-sec ETF. 

The Scheme seeks investment return that closely corresponds (before fees and expenses) total returns of the securities as represented by the Nifty 5 yr Benchmark G-Sec Index (Underlying Index), subject to tracking error. 

NFO Details:

  • The NFO will be open on November 23, 2020 and shall close on December 2, 2020. 
  • Benchmark - Nifty 5 yr Benchmark G-sec Index.
  • Minimum Investment - During the NFO: Rs 500/-and in multiples of Re 1/-thereafter.
  • Ongoing Basis: On Exchange: Investors can buy/sell units of the Scheme in round lot of 1 unit and multiples thereof.
  • Total Expense Ratio - 0.22%
Illustrative Calendar year returns: Fixed Deposits and 5 yr. G-sec:

Motilal ETF

Comparing pre & post tax CAGR of Fixed Deposits & Nifty 5 Year Benchmark G-Sec Index over three blocks of ‘5-year’ periods, Nifty 5 yr Benchmark G-sec index has noted higher pre and post tax returns. 
Motilal NFO
Images: Motilal

Historically the Nifty 5 Yr Benchmark G-sec Index has delivered better returns than the longer-term G-sec indices. Also, the Nifty 5 yr Benchmark G-sec has experienced lower drawdowns compared to other G-Sec indices except Nifty Short Duration G-sec Index.

Summary: The ETF offers investors an attractive low cost alternative to fixed deposit since it has practically no default risk, no lock-in, and historically attractive pre- and post-tax returns.