Motilal Oswal Asset Management Company on Monday announced the launch of India’s first-of-its-kind “Motilal Oswal 5 Year G-sec ETF”.

The exchange-traded fund by Motilal Oswal AMC is expected to provide strong asset allocation opportunity. For those investing in ETFs, this fund comes in addition to the Motilal Oswal ETF suite which comprises Nifty 50 ETF, Nifty Midcap 100 ETF, Nasdaq 100 ETF. The NFO will open on November 23 and close on December 2, 2020.

A statement from the fund house said that the latest ETF seeks investment return that closely corresponds (before fees and expenses) to the total returns of the securities as represented by the “Nifty five year Benchmark G-Sec Index”, subject to tracking error. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.

The ETF offers investors an attractive low-cost alternative to fixed deposit as it has practically no default risk, no lock-in, and historically attractive pre- and post-tax returns, the statement added. “The launch of Motilal Oswal 5 Yr G-Sec ETF adds to our repertoire of investor centric products and deepens our product offering for the investor community,” said Navin Agarwal, MD and CEO Motilal Oswal Asset Management Company Ltd.

“The Motilal Oswal 5 year G-Sec ETF will invest in underlying constituent of Nifty 5 year Benchmark G-sec Index. The index falls in a sweet spot between short duration and long duration G-Sec indices..With safety being a primary need of debt investors today, the ETF fits well for investors who are looking for safety along with better tax advantages compared to traditional fixed income products.” Pratik Oswal, Head of Passive Funds, Motilal Oswal Asset Management Company Ltd added.

The minimum application amount during NFO is Rs 500.