Upcoming NFO: Motilal Oswal Mutual Fund Files Draft for BSE Clean Environment Index Fund

Motilal Oswal Mutual Fund has submitted a draft scheme document for the Motilal Oswal BSE Clean Environment Index Fund. The proposed scheme is an open-ended index fund that will track the BSE Clean Environment Total Return Index.  

The fund is to deliver returns in line with the index, before expenses, though outcomes may vary due to tracking differences. The document is dated April 7, 2026, and has been filed in line with SEBI (Mutual Funds) Regulations, 2026.  

Investment Approach and Allocation 

The scheme will follow a passive investment strategy, replicating the index composition rather than taking active positions. It proposes to invest 95% to 100% of its assets in index constituents and up to 5% in money market instruments or liquid schemes.  

Equity derivatives may be used for short-term purposes such as rebalancing, with exposure capped at 20% of net assets. The fund will not invest in securitised debt, credit default swaps, or overseas securities.  

Subscription, Pricing and Costs 

Units will be offered at ₹10 during the New Fund Offer (NFO) period, which will remain open for a minimum of 3 working days and a maximum of 15 days. Investors can subscribe or redeem units at NAV-based prices on business days after the fund reopens.  

The minimum investment is ₹500 for lump sum applications. An exit load of 1% will apply if redeemed within 15 days, with no charge thereafter. The total expense ratio is capped at 0.90% of daily net assets.  

Operations and Risk Parameters 

The scheme will disclose its NAV on all business days, with updates expected before 11 pm. Redemption proceeds are to be dispatched within 3 working days.  

Tracking error is expected to remain within 2% per annum under normal conditions, although deviations may arise due to expenses, cash holdings, or changes in index composition.  

Fund Positioning 

The fund is a new offering and does not have any performance history. The draft document states that it is not a modification of an existing scheme but a separate product within the fund house’s passive portfolio.  

Read More: Upcoming NFO: Invesco Mutual Fund Files Draft for India BSE Sensex Index Fund! 

Conclusion 

The filing adds to the range of index-based offerings focused on thematic exposure. The scheme will track an environment-focused index, with performance linked to its ability to replicate the benchmark within stated limits. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.