You've probably seen the charts. The Nasdaq 100 looks like a vertical line over the last decade, and if you’re sitting in India, the Motilal Oswal Nasdaq 100 ETF (popularly known by its ticker MON100) is the oldest, most direct bridge to that Silicon Valley growth. But honestly? Most people buying into this fund don't actually understand the "triple whammy" they're signing up for.
It isn't just a tech bet.
When you buy this ETF, you aren't just betting that Nvidia will sell more chips or that Apple will launch a foldable phone. You're making a currency play, a diversification play, and—thanks to some recent messy tax changes—a very specific tax play.
The Reality of Owning the "Tech Giant" ETF
The Motilal Oswal Nasdaq 100 ETF launched back in 2011. Back then, it was a tiny experiment. Today, it manages over ₹11,000 crores (as of early 2026). It tracks the Nasdaq 100 TRI, which basically means it buys the 100 largest non-financial companies listed on the Nasdaq.
Think Microsoft. Think Alphabet. Think Amazon.
As of January 2026, the fund's NAV is hovering around ₹226.21. If you look at the 3-year trailing returns, they are sitting at a staggering 36.42%. That sounds great on paper, but there is a nuance most beginners miss: the "Price vs. NAV" gap.
Because this is an ETF traded on the Indian exchanges (NSE and BSE), the price you pay in your Zerodha or Groww app isn't always the actual value of the underlying stocks. Sometimes you pay a "premium" because there aren't enough sellers. Other times, you get it at a "discount." If you aren't checking the iNAV (Indicative Net Asset Value) before clicking 'buy,' you might be overpaying by 1-2% without even realizing it.
Why the Rupee is Your Secret Best Friend (or Enemy)
Here’s the thing. When the US market goes up 10%, but the Indian Rupee falls 5% against the US Dollar, your return isn't 10%. It’s closer to 15%.
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Historically, the Rupee has depreciated against the Dollar by about 3-4% annually. This has acted as a massive tailwind for MON100 investors. You’re getting paid just for holding a Dollar-denominated asset. But if the Rupee ever strengthens significantly? Your returns will get shaved down even if the Nasdaq is booming.
That Pesky Tax Situation
Let’s talk about the elephant in the room. Taxation.
Until recently, international funds were taxed like debt funds. Then the rules changed, and then they changed again. As we move through the 2025-26 fiscal year, here is the current reality for the Motilal Oswal Nasdaq 100 ETF:
- Holding Period: To qualify for Long-Term Capital Gains (LTCG), you generally need to hold for more than 12 months, just like domestic equity.
- The Rate: LTCG is now 12.5% for gains exceeding ₹1.25 lakh in a financial year.
- Short-Term: If you sell within a year, you’re looking at a 20% tax on the profit.
Wait. There's a catch. Because MON100 invests more than 65% in foreign equities (obviously, it's 100%), it doesn't always get the same "Equity" treatment as a Nifty 50 fund in every tax bucket. For a while, these were taxed at your income tax slab rates regardless of holding period. Always verify the current month's circular before selling, because the Indian government has been tinkering with international fund taxation like a nervous mechanic.
The "Concentration" Risk Nobody Likes to Discuss
People call it a "diversification" tool. I call it a "concentration" tool.
If you already own the Nifty 50, you have a lot of banks and energy. Adding the Nasdaq 100 gives you tech. That's good. But look at the holdings. As of late 2025, the top 10 companies make up about 50% of the entire fund.
- Nvidia: ~9.04%
- Apple: ~8.02%
- Microsoft: ~7.17%
If Microsoft has a bad quarter, this ETF feels it. If there’s a regulatory crackdown on AI in the US, this ETF bleeds. You aren't buying 100 equal slices of a pie; you're buying a few giant chunks and a lot of crumbs.
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Expense Ratios and The Tracking Error
Passive investing is supposed to be cheap.
The expense ratio for the Motilal Oswal Nasdaq 100 ETF is roughly 0.58% to 0.59%. Compared to a Nifty 50 ETF (which might charge 0.05%), this is expensive. Why? Because the fund house has to pay licensing fees to Nasdaq, deal with currency conversion, and manage the 12-hour time difference between Mumbai and New York.
Then there’s the Tracking Error.
Ideally, the ETF should move exactly like the Nasdaq 100. In reality, it swerves. The tracking error for MON100 has recently been around 0.05% annually—which is actually quite good. It means the fund manager, Sunil Sawant (who has been at the helm since 2014), is doing a solid job of keeping the car in the lane.
Is the Fund of Fund (FoF) Better?
Motilal also offers a "Fund of Fund" version.
Basically, you buy a mutual fund, and that mutual fund buys the ETF. Why would you do that?
- No Demat required: You can invest via a simple SIP.
- Liquidity: You don't have to worry about the "Price vs. NAV" gap on the exchange. The AMC gives you the NAV price directly.
- Ease of use: You don't need to be awake during market hours to place orders.
The downside? You pay an extra layer of expenses. The FoF has an expense ratio of around 0.22% for the direct plan, which is on top of the underlying ETF's expenses. It adds up.
Actionable Strategy for 2026
If you’re looking to jump in, don’t treat this like a lottery ticket. The US markets are at all-time highs, and the P/E ratios of the "Magnificent Seven" are... let's say "optimistic."
1. The 15% Rule
Most financial planners suggest keeping international exposure between 10% and 20% of your total equity portfolio. Anything less doesn't move the needle; anything more makes you too dependent on the US Federal Reserve's mood swings.
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2. Avoid Lumpsums Right Now
With the NAV at record highs, a "Systematic Transfer Plan" (STP) or a simple monthly SIP is much smarter than dumping ₹10 lakh in at once.
3. Check the "Market Depth"
If you are buying the ETF (not the FoF), always look at the buy/sell bid spread. If the gap between the buying price and selling price is more than 0.5%, walk away and wait for a more liquid time of day (usually between 11:00 AM and 2:00 PM IST).
4. Tax-Loss Harvesting
Before March 31st every year, check your gains. If you're sitting on a profit, you might want to sell and immediately repurchase to "reset" your cost basis and utilize that ₹1.25 lakh LTCG exemption. It’s legal, and it’s one of the few ways to beat the taxman.
The Motilal Oswal Nasdaq 100 ETF remains the most efficient way for an Indian investor to own the future of AI and global tech. Just remember that you’re buying a volatile, dollar-denominated, concentrated beast. Treat it with respect, keep your allocation sane, and stop checking the price every five minutes. Focus on the 5-year horizon, and the currency depreciation alone might pay for your next US vacation.
Practical Steps to Take Now
- Check your current overlap: Use a portfolio analyzer to see if your existing "Flexi Cap" funds already have heavy US exposure. Many Indian funds now invest 10-15% in US stocks anyway.
- Compare the iNAV: Before your next buy order, visit the Motilal Oswal AMC website to see the real-time iNAV and ensure you aren't paying a massive premium over the actual stock values.
- Set a "Rebalance" Trigger: If the Nasdaq 100 grows so fast that it becomes 40% of your portfolio, sell some and move it back to Indian equities or gold to maintain your original risk profile.