You've probably seen the headlines about the US tech giants. NVIDIA hitting new highs, Apple pivoting to some AI-first future, and Microsoft basically running the corporate world. If you're sitting in India, it's tempting. You want a piece of that action. But honestly, buying individual US stocks from Mumbai or Delhi is a massive headache. The paperwork? Ugh. The currency conversion fees? They'll eat you alive.
That is exactly why the Nasdaq 100 ETF Motilal Oswal (often called MON100) has become a staple in so many Indian portfolios. It's essentially a bridge. You pay in Rupees, you buy on the NSE or BSE just like a regular stock, and suddenly, you own a slice of the 100 largest non-financial companies listed on the Nasdaq.
But here’s the thing: most people treat it like a "set it and forget it" machine without actually looking under the hood. There are quirks to this fund—especially regarding taxes and liquidity—that can catch you off guard if you aren't careful.
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What is this ETF actually doing?
At its core, this ETF is a passive fund. It doesn't have a hotshot manager trying to "beat the market" by picking the next hidden gem. Instead, it just mimics the Nasdaq 100 Index.
Think of it as a mirror. If the Nasdaq 100 goes up, your ETF units should, in theory, go up by the same amount. As of early 2026, the fund is managing over ₹11,200 crore (AUM). That is a lot of trust from Indian investors.
The portfolio is basically a "Who's Who" of Silicon Valley. You're looking at heavy hitters like:
- NVIDIA Corp: Usually the biggest chunk lately, around 9%.
- Apple Inc: Hovering near 8%.
- Microsoft: Around 7%.
- Amazon and Tesla: Rounding out the top tier.
The tech sector makes up roughly 50% of the weightage. But don't be fooled; it’s not just tech. You’ve got PepsiCo, Costco, and even Starbucks in there. It’s a bet on "Modern Consumption" more than just "Coding and Chips."
The "Dirty" Little Secret: Tracking Error
If you're a perfectionist, tracking error will annoy you. It’s the difference between what the actual Nasdaq 100 did in the US and what your Motilal Oswal units did in India.
Why does this happen? Well, the fund has expenses. The expense ratio for the Motilal Oswal Nasdaq 100 ETF is roughly 0.59%. That might sound small, but over a decade, it adds up. Then there’s the timing. The US market opens when we are sleeping. This time-zone lag, combined with the way the fund handles cash and dividends, means you’ll never get a perfect 1:1 match.
Kinda frustrating? Maybe. But for most of us, a tracking error of around 0.13% to 0.26% is a fair price to pay for the sheer convenience of not having to open a US brokerage account.
Let’s Talk Taxes (The 2026 Reality)
This is where people get tripped up. Because this ETF invests in foreign stocks, the Indian Taxman treats it differently than your local Nifty 50 funds.
As of now, if you sell your units within a year, you’re looking at Short Term Capital Gains (STCG) at a flat 20%.
If you hold for more than a year, it’s Long Term Capital Gains (LTCG). The rate is 12.5% on gains above ₹1.25 lakh, and no, you don't get the indexation benefit anymore. It used to be different, but the rules shifted. It's basically treated like an unlisted equity or a foreign asset for tax purposes. Honestly, it’s still better than the old "taxed at slab rate" nightmare we had for a while, but it's something to calculate before you dive in.
Is there a liquidity trap?
This is a valid fear. Since you buy and sell this ETF on the Indian stock exchange (NSE symbol: MON100), you need someone on the other side to buy it from you when you want to exit.
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For the most part, liquidity is high. You’ll see thousands of units being traded daily. However, during times of extreme market stress—like a global crash—the "spread" (the difference between the price you want to sell at and the price someone is willing to pay) can widen.
If you are planning to move ₹50 lakh at once, you might find that the market price on the exchange is slightly higher or lower than the actual NAV (Net Asset Value). Professional tip? Check the iNAV (indicative NAV) provided by Motilal Oswal on their website before hitting that "Sell" button. If the market price is way off the iNAV, you're getting a bad deal.
The Currency Play: A Double-Edged Sword
Most people forget that when they buy the Nasdaq 100 ETF Motilal Oswal, they aren't just betting on tech stocks. They are betting on the USD-INR exchange rate.
If the Nasdaq stays flat but the Indian Rupee weakens against the US Dollar (which, let's be real, happens quite often), your investment value in Rupees actually goes up. It's a built-in hedge. If the Rupee somehow gets super strong, it could eat into your stock gains. It’s a layer of complexity that makes this fund more than just a "tech fund."
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Why bother with the ETF instead of the Fund of Funds (FoF)?
Motilal Oswal also offers a "Fund of Funds" version. You can invest in that like a regular mutual fund via an SIP.
- The ETF: Lower expense ratio, but you need a Demat account and you have to deal with market volatility and spreads.
- The FoF: Slightly higher expense ratio (because it's a fund that buys the ETF), but you don't need a Demat, and you can automate it with a ₹500 SIP.
If you’re a disciplined investor who likes to automate things, the FoF is probably better despite the higher cost. But if you’re a bit of a hawk and want the lowest fees possible, stick with the ETF.
Actionable Steps for Your Portfolio
So, is the Nasdaq 100 ETF Motilal Oswal right for you? It depends on your "home bias." Most Indians are 100% invested in India. That’s risky. Adding US exposure via this ETF is one of the easiest ways to diversify.
Here is how to actually do it:
- Check your Asset Allocation: Don't put your life savings here. Tech is volatile. A 10-15% allocation to international equity is usually the "sweet spot" for most moderate investors.
- Use Limit Orders: When buying MON100 on the exchange, never use "Market Orders." You might get a nasty price if the liquidity dips for a second. Always set a "Limit Order" near the current NAV.
- Think Long Term: Because of the 20% STCG tax, flipping this ETF for a quick 5% gain is a bad move. This is a 5-to-10-year play.
- Monitor the iNAV: Before you trade, go to the Motilal Oswal AMC website. Look for the "Indicative NAV." If the stock price on your Zerodha or Upstox app is more than 1% away from that iNAV, wait.
The US market is a beast of its own. It operates on different cycles than India. While the Nifty might be sideways because of local inflation, the Nasdaq might be soaring on a breakthrough in quantum computing. Having a foot in both worlds isn't just smart—at this point, it’s basically necessary. Just keep an eye on those tax changes and don't let the tracking error surprise you.