Motilal Oswal Q50 ETF Jumps 41% as US Holdings Fall 2.6% — SkimNews
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- Motilal Oswal Nasdaq Q50 ETF rose 41% on the exchange (₹141.99 to ₹199.89) between 4 and 10 September, while the 50 stocks in its portfolio fell 2.6% over the same period, per Value Research.
- The ETF's premium to NAV climbed from 19.5% on 4 September to 83% on 9 September before settling at 72.8% on 10 September, when NAV stood at ₹115.69 against a ₹199.89 closing price.
- Trading volume spiked to about ₹43 crore on 9 September, compared with an average daily volume of around ₹1.4 crore in the prior period.
- India's overseas investment limit for ETFs was reached in April 2024, blocking new unit creation and leaving existing supply unable to absorb rising demand.
- A 7 September rule change shifted the ETF price-band reference from the two-day-old NAV to the previous day's traded price, allowing each day's higher close to set the next day's ceiling; Motilal Oswal Mutual Fund calculated the Q50's 7 and 8 September caps would have been ₹142.60 and ₹142.48 under the old framework versus ₹170.32 and ₹196.91 under the new one.
- Other India-listed international ETFs have also seen market prices move above their NAVs due to the same unit-creation constraint, though the magnitude varies across funds.
Why it matters: Investors buying the Q50 ETF at ₹199.89 are paying roughly 1.7x the actual value of the underlying portfolio (NAV ₹115.69), and the new price-band rule means each session's inflated close sets the next session's trading ceiling, embedding the premium rather than letting it revert.
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