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A Year’s Perspective

Most Shares M50 ETF has completed its first year, but has yet to build its case…

It has been a year since Motilal Oswal Mutual Fund debuted with the launch of MOSt Shares M50 ETF – an open ended actively managed exchange traded fund (ETF). MOSt Shares M50 is a proprietary index made of the Nifty constituents but weighted differently. The weight in each stocks is based on pre-defined methodology, based on the stock’s fundamentals such as return on equity (ROE), net worth, share price and retained earnings.

No one can fault this fund for not being daring. MOSt Shares M50 ETF was launched as a fund with a strong belief. But a year down the road, its performance is patchy at best. Granted, it may be too early to evaluate this fund on its first anniversary, but there is nothing spectacular about its performance so far. The Nifty is up 2.13 per cent while M50 ETF is down 3.09 per cent since the launch of the fund (as on July 29, 2011).

At its launch MOSt Shares M50 ETF raised Rs 236 crore and now (June 30, 2011) its net assets stands at Rs 142 crore, a decline of around 40 per cent. Nevertheless, the fund has been able to generate healthy volumes despite its decreasing size. The median and average traded quantity stood at 29,979 units and 1.3 lakh units respectively (ranging between 2,381 units and 78 units)