Synopsis
Motilal Oswal has unveiled a first-of-its-kind passive fund. It is an open-ended fund tracking the total returns of the Nifty Micro-Cap 250 Index. The premise is promising but the fund lacks history, feel experts. While the fund house believes the product is unique and would work, a lot depends on how low the AMC can contain the tracking error.
Small and micro-cap stocks are extremely risky. But that is where you have the potential to make the most money.Nippon Small Cap Fund has 270 stocks, out of which top 10 (stocks) account for 16% of the portfolio. There are hardly any stocks this fund holds more than 4%, and that is deliberate. The fund manager does not want to take oversized bets in the small and micro-cap space as liquidity is a prime concern. The size of the fund is INR29,000
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