Motilal Oswal Asset Management Company Ltd. (MOAMC) is a public limited company incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered Office at 10th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025.
Motilal Oswal Asset Management Company Ltd. has been appointed as the Investment Manager to Motilal Oswal Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 21, 2009, executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset Management Company Ltd.
Motilal Oswal 5 Year G-Sec Fund of Fund (G) - 9.9592Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive (G) - 10.6534Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive-Dir (G) - 10.7332Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative (G) - 10.527Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative-Dir(G) - 10.6092Motilal Oswal Dynamic Fund (Div-A) - 11.9698Motilal Oswal Dynamic Fund (Div-Q) - 10.5136Motilal Oswal Dynamic Fund (G) - 14.0408Motilal Oswal Dynamic Fund-Dir (Div-A) - 12.2869Motilal Oswal Dynamic Fund-Dir (Div-Q) - 10.8157Motilal Oswal Dynamic Fund-Dir (G) - 15.0187Motilal Oswal Equity Hybrid Fund - Direct (G) - 14.8712Motilal Oswal Equity Hybrid Fund - Regular (G) - 13.9931Motilal Oswal Flexi Cap Fund(D) - 20.9632Motilal Oswal Flexi Cap Fund(G) - 29.9237Motilal Oswal Flexi Cap Fund-Dir(D) - 21.175Motilal Oswal Flexi Cap Fund-Dir(G) - 32.3121Motilal Oswal Focused 25 Fund - Direct (D) - 18.1033Motilal Oswal Focused 25 Fund - Direct (G) - 33.1693Motilal Oswal Focused 25 Fund (D) - 16.0845Motilal Oswal Focused 25 Fund (G) - 29.3929Motilal Oswal Large and Midcap Fund - Dir (D) - 13.8546Motilal Oswal Large and Midcap Fund - Dir (G) - 14.8866Motilal Oswal Large and Midcap Fund (D) - 13.2592Motilal Oswal Large and Midcap Fund (G) - 14.2283Motilal Oswal Liquid Fund - Direct (Div-D) RI - 10.0077Motilal Oswal Liquid Fund - Direct (Div-F) RI - 10.0087Motilal Oswal Liquid Fund - Direct (Div-M) - 10.0345Motilal Oswal Liquid Fund - Direct (Div-Q) - 10.0078Motilal Oswal Liquid Fund - Direct (Div-W) RI - 10.0103Motilal Oswal Liquid Fund - Direct (G) - 11.4945Motilal Oswal Liquid Fund - Regular (Div-D) RI - 10.0055Motilal Oswal Liquid Fund - Regular (Div-F) RI - 10.0085Motilal Oswal Liquid Fund - Regular (Div-M) - 10.0343Motilal Oswal Liquid Fund - Regular (Div-Q) - 10.0077Motilal Oswal Liquid Fund - Regular (Div-W) RI - 10.0173Motilal Oswal Liquid Fund - Regular (G) - 11.4338Motilal Oswal Long Term Equity Fund (D) - 16.9139Motilal Oswal Long Term Equity Fund (G) - 23.1172Motilal Oswal Long Term Equity Fund -Dir (D) - 20.3751Motilal Oswal Long Term Equity Fund -Dir (G) - 25.5248Motilal Oswal Midcap 30 Fund (D) - 24.3293Motilal Oswal Midcap 30 Fund (G) - 42.6801Motilal Oswal Midcap 30 Fund-Dir (D) - 25.4259Motilal Oswal Midcap 30 Fund-Dir (G) - 47.2994Motilal Oswal MSCI EAFE Top 100 Select Index Fund (G) - 9.2879Motilal Oswal Multi Asset Fund - Direct (G) - 10.7379Motilal Oswal Multi Asset Fund (G) - 10.4477Motilal Oswal Nifty 200 Momentum 30 Index Fund - Direct (G) - 8.2651Motilal Oswal Nifty 50 Index Fund - Direct (G) - 13.271Motilal Oswal Nifty 50 Index Fund (G) - 13.1331Motilal Oswal Nifty 500 Fund - Direct (G) - 15.2937Motilal Oswal Nifty 500 Fund (G) - 15.0159Motilal Oswal Nifty Bank Index Fund - Direct (G) - 12.2285Motilal Oswal Nifty Bank Index Fund (G) - 12.0001Motilal Oswal Nifty Midcap 150 Index Fund (G) - 17.6914Motilal Oswal Nifty Midcap 150 Index Fund-Dir (G) - 18.0494Motilal Oswal Nifty Next 50 Index Fund - Dir (G) - 13.019Motilal Oswal Nifty Next 50 Index Fund (G) - 12.8028Motilal Oswal Nifty Smallcap 250 Index Fund (G) - 17.7904Motilal Oswal Nifty Smallcap 250 Index Fund-Dir(G) - 18.134Motilal Oswal S&P 500 Index Fund - Direct (G) - 13.9855Motilal Oswal S&P 500 Index Fund (G) - 13.7937Motilal Oswal S&P BSE Low Volatility Index Fund (G) - 9.8777Motilal Oswal Ultra Short Term Fund - Dir (Div-D) - 10.232Motilal Oswal Ultra Short Term Fund - Dir (Div-F) - 10.2569Motilal Oswal Ultra Short Term Fund - Dir (Div-M) - 10.2391Motilal Oswal Ultra Short Term Fund - Dir (Div-Q) - 10.3876Motilal Oswal Ultra Short Term Fund - Dir (Div-W) - 10.2441Motilal Oswal Ultra Short Term Fund - Dir (G) - 14.4984Motilal Oswal Ultra Short Term Fund (Div-D) - 10.1328Motilal Oswal Ultra Short Term Fund (Div-F) - 10.1451Motilal Oswal Ultra Short Term Fund (Div-M) - 10.1346Motilal Oswal Ultra Short Term Fund (Div-Q) - 10.2806Motilal Oswal Ultra Short Term Fund (Div-W) - 10.1378Motilal Oswal Ultra Short Term Fund (G) - 13.9559

Five reasons why millennials should pick passive funds

Blog Blog Details
  • September 02, 2021
  • Pratik Oswal|
  • Head of Passive Funds Business

I meet a lot of potential investors during these minars and education programmes that I conduct. Very few of them do not want to invest. But they are all worried about the time and energy it takes to keep track of the market and of course they are wary of the risks. For such millennials who are looking for a safe mode to park their funds and are patient, passive investing can come in handy. 


First let me explain what passive investing is. A passive fund mimics the growth of an index say Sensex or Nifty and replicatesits returns to the investors. For example, if one invests in a five year oldNifty50 fund, the returns of the fund and that of index will be the same. And,indices seldom fail.  


We have two types of passive funds - ETFs or exchange traded funds and Index Funds.


In India, passive funds make for a measly 5% of the total money invested, while in the US, it is at around 50%. Here are five reasons why millennials should consider them: 

1. They’re simple and easy to understand 

After the 2008 crisis, investors have realized that there is much they do not know about the complicated products that are sold to them --- like credit default swaps. Hence, they should and must invest in products they can understand. Passive funds are as simple as they can get.They invest in an index and the fund will choose stocks that will provide the same collective returns as the index. It can be Midcap50 or Nifty50 or Nifty100so on and so forth. 

2. It will not ‘cost’ you

Yet another brilliant advantage of a passive fund is that it is chosen by an algorithm. As the Scheme is not actively managed but is passively managed hence the costs are low. On the contrary, active investing would require continuous research and constant churning of the portfolio, and there are fees associated with it - at around 1%. 


If an investor goes for a 15 year time frame,the 1% fees gets heavy. It would compound over time and could be as high as half the portfolio. For long-term investments, the lower the cost the better as it would determine the quality of returns. With passive funds, an AMC only charges the expense ratio. Also, most AMCs like us, are going in for more and more automation and any savings in this regard will be ploughed back to the investor. 

3. You can manage risks better 

After every Mutual Fund ad, the disclaimer says- mutual funds are subjected to market risks. In truth, a typical fund is subjected to both fund manager risk and market risk. In a passive fund, it is pure market risk as a fund manager’s stressed decisions will never affect them.The fund will keep picking stocks that are best performers in the underlying index. 


They are much safer since passive funds can ride the downturns well especially if invested for the long term. We have observed that markets correct every seven to ten years. Irrespective of corrections, an index always grows over most comparable periods and investors will receive the returns.  


Even for active investors who deal directly in the markets, investing a part of their portfolio in passive funds helps. These funds are more about managing risk better and bringing in discipline rather than returns. Over time however if the investors let the magic of compounding work, they do deliver. 

4. The bad apples can be weeded out 

Since passive funds invest in the best performers of a market, it is possible that troubled stocks and some such might be automatically added. This is the question that most people have about passive funds. But let me put such doubts to rest. The indices weed such stocks out as they under perform and slip down. When this happens, the fund too automatically pulls them down so the average returns over time stays the same.It is like this - one stock crashing won’t affect the index for too long.Passive funds are similar. 


Also, the effect of one stock over 200 others gets cancelled out in most cases. Passive funds are capable of absorbing these shocks. 

5. Best among equals 


Most active investors long for a diverse portfolio which passive funds can offer by default. In earlier days, Nifty50 was full of industrial companies, infrastructure, oil and gas and utilities.Today around 35% of it belongs to financial services. So it automatically picks the best performing stocks and no matter what happens to a certain sector,passive funds provide an opportunity to have the best of the best in the kitty. 




Views and opinions contained herein are for information purposes only and should not be construed as investment advice/recommendation to any party or solicitation to buy, sale or hold any security or to adopt any investment strategy. It does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The recipient should exercise due caution and/ or seek professional advice before making any decision or entering into any financial obligation based on information, statement or opinion which is expressed herein. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully

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