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Motilal Oswal Asset Management Company to launch Motilal Oswal Multi Asset Fund

by News Monks

NFO Start Date: July 15, 2020. NFO End Date: July 27, 2020. Allotment Date: July 30,
In the current market scenario a conservative investor is faced with a real
dilemma of where to invest. If one opts for the safety of fixed deposits the returns are too
low. If one wants a little higher return, the risks are too high. What if there are downgrades?
Are low yields compensating for the risks? Equities on the other hand have been highly
volatileand gold prices have rallied very quickly.
The situation is akin to batting in a low scoring test match with very tough conditions. In
such a scenario if you keep rotating the strike you will score the runs and win the game.
Motilal Oswal AMC launches Motilal Oswal Multi Asset Fund with an aim to help
conservative investors survive the tough conditions of equity markets and lackluster interest
rates in fixed income markets by keeping your scoreboard ticking with the help of a
diversified basket of four asset classes.
An open ended fund belonging to multi asset allocation category, the fund’s investment
objective is to generate long term capital appreciation by investing in a diversified portfolio
comprising of Equity, International Equity Index Funds/ Equity ETFs, Debt and Money
Market Instruments and Gold Exchange Traded Funds. Having a right asset allocation is the
key to navigate such volatile periods.
The fund will be open for subscription from July 15, 2020.
Different asset classes react differently to business cycles, changes in economy & geo-
political realities and hence have different levels of risk. Allocating funds solely to a single
asset class is not prudent as it is prone to behave inconsistently, go through its own cycles
and may not garner efficient inflation and risk adjusted returns. Asset allocation tries to
balance the risk by dividing assets among investment vehicles. Low correlation among
different asset classes provide the portfolio with an effective hedge lowering the volatility of
the portfolio.

The asset allocation pattern of the Scheme is as follows:

Instruments Allocations (% of total assets)Risk Profile
MinimumMaximumHigh / Medium / Low
Equity, Equity related instruments and International Equity Index Funds/  Equity ETFs^1050High
Debt, Money Market Instruments4080Medium
Gold Exchange Traded Funds1020Medium

^As per SEBI Circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 6, 2017, Foreign Securities will not be treated as a separate asset class and accordingly International Equity Index Funds/Equity ETFs have been included in Equity and Equity related instruments. The scheme intends to invest in International Equity Index Funds/Equity ETFs upto 20% of net assets.

Key Highlights

  • Fund aims to invest in four asset classes, namely,  Equity, International Equity, Debt and Gold
  • Lower correlations among assets helps to reduce portfolio volatility
  • Favourable Risk adjusted returns over any individual asset class
  • Investments in Gold and International Equities : to provide a hedge against inflation & diversification

Indian Equities: A high quality portfolio of large cap stocks selected based on proven Q-G-L-P philosophy.

Debt and Money Market Instruments: A high quality AAA portfolio with a 3-5 year average maturity, heavy on G-Sec and SDL’s.

International Equities: Through an allocation to units of Motilal Oswal S&P 500 Index Fund

Gold: Through units of a Gold ETF Fund.

The benchmark for the fund is 30% Nifty 50 TRI + 50 % Crisil Short Term Gilt Index + 10% Domestic Price of Gold + 10% S&P 500 Index (TRI) and investors can invest in the fund throughlumpsum or SIP mode with minimum subscription of RS 500/- during NFO and ongoing period.

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

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