Should you invest in Motilal Oswal's micro-cap fund?

If the thrills and spills of small-caps and mid-caps weren't getting your juices flowing, Motilal Oswal fund house 's latest offering is sure to do so. By introducing its Nifty Microcap 250 Index Fund , Motilal Oswal is opening - or rather, re-opening - the doors to a whole new world. The new fund is open for subscription until June 29, 2023. But before you do that, let us put the micro-cap universe under the lens. What are the Nifty Microcap 250 index and the stock eligibility criteria? The Nifty Microcap 250 index comprises the top 250 companies beyond the NSE 500 companies. Essentially, these companies are the 501st to 750th-largest companies in the country (based on their market capitalisation). To be eligible for inclusion in this index, stocks need to meet certain criteria: The stocks should be listed and traded on the National Stock Exchange. The top 1,000 companies/stocks are ranked based on their average daily turnover and daily full market capitalisation over the past six months. This ranking helps determine the most actively-traded and valuable stocks. Stocks must have an average impact cost of less than 1 per cent during the past six months. Impact cost is a measure of market liquidity and indicates how easy it is to buy or sell a stock without causing significant price changes. The index is rebalanced twice a year, in March and September. Top 5 constituents of Nifty 250 Microcap Index Stocks Weight (in %) Religare Enterprises Ltd 1.53 Karnataka Bank Ltd 1.4 Ujjivan Financial Services Ltd 1.3 Procte