Both the Motilal Oswal Developed Market Ex US ETFs Fund of Funds and the Motilal Oswal NASDAQ 100 ETF offer Indian investors exposure to international equities, but their investment focus and underlying holdings differ significantly.
Investment Focus and Portfolio Construction
Motilal Oswal Developed Market Ex US ETFs Fund of Funds:
- Focus: Invests in developed markets excluding the US.
- Portfolio: Primarily comprises units of global ETFs like the iShares MSCI EAFE ETF (74.26%) and the SPDR Portfolio Developed World ex-US ETF (24.65%). These ETFs offer broad exposure to large-, mid-, and small-cap stocks across developed economies in Europe, the Pacific, and Canada.
- Sector Allocation: While specific sector allocations can vary, the fund generally provides exposure to sectors like Financial Services, Industrials, Healthcare, and Consumer Cyclicals, reflecting the broader developed markets outside the US.
Motilal Oswal NASDAQ 100 ETF:
- Focus: Invests in the 100 largest non-financial companies listed on the NASDAQ stock exchange.
- Portfolio: Concentrated in large-cap US technology and growth companies. Top holdings include NVIDIA Corp (10.03%), Microsoft Corp (9.17%), and Apple Inc (7.17%).
- Sector Allocation: Heavily weighted towards the technology sector, along with significant allocations to Consumer Discretionary, Healthcare, and Communication Services, as these sectors dominate the NASDAQ 100.
Fund Management and Investment Strategy
Motilal Oswal Developed Market Ex US ETFs Fund of Funds:
- Fund Type: Fund of Fund (FoF) that invests in underlying global ETFs.
- Management: Passively managed, tracking the S&P Developed Ex-U.S. BMI TRI benchmark index.
- Expense Ratio: Relatively low, at 0.15% for the Direct Plan (as of July 31, 2025).
Motilal Oswal NASDAQ 100 ETF:
- Fund Type: Exchange Traded Fund (ETF).
- Management: Passively managed, tracking the NASDAQ-100 Index.
- Expense Ratio: Higher than the Developed Market ex US fund, at 0.58% (as of July 31, 2025).
Investment Considerations
- Diversification: The Developed Market ex US fund offers broader diversification across developed economies outside the US, while the NASDAQ 100 ETF is concentrated in the US technology sector.
- Risk Tolerance: The NASDAQ 100 ETF’s concentration in technology makes it potentially more volatile, while the Developed Market ex US fund may offer slightly more stability due to its broader market exposure.
- Investment Objective: Investors seeking exposure to specific sectors or a particular region should consider their investment objective and risk tolerance.
- Returns: Past performance can be an indicator of future returns, but it’s important to note that both funds have historically performed well. As of August 23, 2025, the Motilal Oswal Developed Market Ex US ETFs Fund of Funds has delivered an annualised return of 22.20% over the past year, while the Motilal Oswal NASDAQ 100 ETF has returned 22.51% over the same period.
- Investment Horizon: Both funds are suitable for long-term investments, but the NASDAQ 100 ETF’s higher volatility may require a longer investment horizon to ride out potential market fluctuations.
Investment Strategy Considerations
- Expense Ratios: The Developed Market ex US fund’s lower expense ratio can contribute to better long-term returns compared to the NASDAQ 100 ETF.
- Expert Opinions: While some experts recommend both funds, it’s essential to consider expert opinions in the context of your individual investment goals and risk profile.
Conclusion
Both the Motilal Oswal Developed Market Ex US ETFs Fund of Funds and the Motilal Oswal NASDAQ 100 ETF offer distinct investment opportunities for Indian investors seeking global equity exposure. The best choice depends on individual investment preferences, risk tolerance, and investment horizon.
Motilal Oswal Developed Market Ex US ETFs Fund of Funds vs. Motilal Oswal NASDAQ 100 ETF: A Detailed Comparison