Motilal Oswal launches clean environment index fund NFO

MUMBAI: Green may be the new gold, and fund houses are wasting no time placing their bets. Motilal Oswal Mutual Fund (MOMF) has launched the Motilal Oswal BSE Clean Environment Index Fund, a new fund offer (NFO) aimed at giving investors passive exposure to India’s rapidly expanding clean economy. The NFO opens on 5 June 2026 and closes on 19 June 2026, tracking the BSE Clean Environment Total Return Index through a rules-based, passive investment strategy.

At the heart of the offering is India’s first diversified clean economy index, designed to capture long-term opportunities emerging from the country’s energy transition, environmental commitments and growing sustainability-focused investments.

The index comprises around 25 companies spanning five key themes renewable energy, electric vehicles, water treatment, recycling and waste management. Renewables dominate the basket with approximately 86 per cent of the index weight, while the balance is allocated across the other clean-environment segments.

The launch comes as India accelerates investments in clean infrastructure and energy independence. According to the fund house, the country currently spends around $150 billion annually on oil and coal imports, creating a significant opportunity for capital to shift towards domestic clean-energy ecosystems.

The scheme seeks to provide returns that correspond to the performance of the BSE Clean Environment Index, subject to tracking error. Investors can enter the fund with a minimum investment of Rs 500, while an exit load of 1 per cent will apply if units are redeemed within 15 days of allotment.

The fund is positioned for investors seeking long-term capital appreciation through thematic exposure to sustainability-linked businesses. However, as a passive index fund, performance will remain closely tied to policy developments, technology adoption, regulatory support and capital expenditure cycles within the clean economy.

The fund will be managed by Swapnil Mayekar and Dishant Mehta for the equity component, while Rakesh Shetty will oversee the debt allocation.

The launch also reflects growing investor appetite for thematic and ESG-linked products, particularly as sectors such as renewable energy, EVs and waste management move from policy ambitions to large-scale commercial opportunities.

For investors looking to align portfolios with India’s environmental transition, the latest NFO offers a low-cost route into a segment increasingly viewed as one of the country’s most significant long-term growth stories.