PremiumBuying 500 stocks requires a huge corpus. If we have inflows of only ₹20-30 lakh a day, deploying that becomes inefficient. In such cases, we deploy that amount in Vanguard ETF and once that becomes big, we switch it over to stocks, said Pratik Oswal of Motilal Oswal AMC
Motilal Oswal S&P 500 Index Fund, which recently suspended investments, including existing SIPs, currently has about 3% exposure to Vanguard S&P 500 ETF units.
“Buying 500 stocks requires a huge corpus. If we have inflows of only ₹20-30 lakh a day, deploying that becomes inefficient. In such cases, we deploy that amount in Vanguard ETF and once that becomes big, we switch it over to stocks," said Pratik Oswal, head - passive funds, Motilal Oswal AMC.
Further, after the markets regulator Sebi restricted overseas investments by mutual funds (MFs) in January, the inflows from the continuing SIPs until now have been directed to Vanguard ETF; investing in ETFs has a separate limit.
Oswal said that they can keep the S&P 500 fund open even now as they can invest in Vanguard ETF, but decided to suspend it to have uniformity with closing other overseas funds.
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