Motilal Oswal introduces four index funds. Should you invest?

It's raining new fund offers (NFOs) at Motilal Oswal AMC . This year alone, it introduced 12 NFOs, which raised a staggering Rs 5,731 crore (excluding Motilal Oswal Digital India Fund ). And now, the fund house seems to have extended this streak with the launch of not one but four new passively managed sectoral and thematic funds. Subscriptions to these schemes opened on October 29, 2024, and will remain available until November 6, 2024. These NFOs will target the mid- and small-cap companies in the Financial Services, Healthcare, IT, Telecom and Consumption sectors. They will invest in stocks from the Nifty 400 universe, which includes companies under the Nifty Midcap 150 and Nifty Smallcap 250 indices. Barring the Healthcare fund, the rest three funds will be one of a kind. Being index funds, they will mirror their respective indices, investing in the same companies and proportions. For instance, if Company A holds 5 per cent of the index, the fund will also allocate 5 per cent to it. Below are the key details of these funds. Motilal Oswal Nifty MidSmall Financial Service Index Fund Category Sectoral (Index) Benchmark Nifty MidSmall Financial Services TRI Portfolio composition The index holds 30 stocks versus 20 in the Nifty Financial Services Index. Nearly 50 per cent of its weight lies in the top 10 stocks, with no overlap in the top holdings between the two indices. How has the index performed in the past? From October 2019 to 2024, it lagged behind the Nifty 400 TRI on a five-year daily rolling basis. It outperformed the Nifty Financial Services TRI only 11 per cent of the time. The most recent outperformance came in September 2023, primarily due to the absence