Motilal Oswal BSE 1000 Index Fund NFO: Should you invest?

Motilal Oswal has launched India’s first index fund tracking the BSE 1000 Total Return Index (TRI). This new offering aims to give investors one-stop access to the entire listed equity market, spanning everything from blue-chip large caps to tiny micro caps. The New Fund Offer (NFO) opened for subscription on June 5, 2025, and will close on June 19, 2025. Motilal Oswal BSE 1000 Index Fund NFO snapshot Parameter Details Fund name Motilal Oswal BSE 1000 Index Fund Fund type Open-ended index fund Benchmark BSE 1000 Total Return Index (TRI) Fund managers Swapnil Mayekar, Dishant Mehta (Equity) andRakesh Shetty (Debt) Exit load 1% if redeemed within 15 days; nil thereafter Taxation Gains taxed at 20 per cent if sold within a year. If sold after a year, gains beyond Rs 1.25 lakh are taxed at 12.5% What makes BSE 1000 TRI different? The BSE 1000 TRI is designed to capture the performance of the top 1,000 listed companies in India, covering about 94 per cent of the country’s total listed market capitalisation. That makes it the most expansive passive index currently available. Unlike narrow benchmarks such as the Nifty 50 or even the Nifty 500, the BSE 1000 reaches deeper into the market—investing in micro-cap companies as well. Micro caps refer to the smallest listed companies by market cap, often under-researched and less liquid, but with high growth potential and volatility. In this index, they occupy the 501st to 1000th rank. The index is rebalanced semi-annually and uses free-float market cap weighting to ensure investability and liquidity. However, while the index will invest in more companies, the actual weightings reveal a familiar story. The index seems to be large-cap heavy. Market segment Weight in BSE 1000 (in %) Large caps 70.9% Mid caps 16.0% Small caps 8.9% Micro caps 4.2% As of May 30, 2025 Source- BSE So, while the index does extend into micro caps, their influe