Motilal Oswal Multi Asset Fund

 Motilal Oswal Multi Asset Fund NFO

Motilal Oswal mutual funds has launched Multi Asset Fund that opens for subscription on 15 July, 2020.

Multi asset mutual funds would invest in investment classes like equity, debt and gold. There is mixed reaction about such mutual funds category.

This is an open-ended equity fund.

This scheme would open for subscription on 15 July, 2020.

This scheme would close for subscription on 24 July, 2020.

Since this is an open ended scheme, it would again open for subscription after 5 working days from the date of closure of the initial NFO period.

This scheme is available in both regular and direct plans.

This plan offers both growth option and dividend option.

This scheme is available for lump sum and SIP investment.

Minimum investment is Rs. 500

Minimum investment is Rs. 500 per month for monthly SIP and for a tenure of 12 months.

The NAV of the fund is Rs 10 per unit during the NFO initial subscription.

There is no entry load to invest in this fund.

There is an exit load of 1% if redeemed within 3 months from the date of allotment of units.

This scheme is classified as MODERATELY HIGH RISK scheme.

Scheme total expense ratio (TER) is estimated at a maximum of 2%.

The investment objective of this MF scheme

The investment objective is to generate long term capital appreciation by investing in a diversified portfolio comprises of Equity, International Equity Index Funds/ Equity ETFs, Debt and Money Market Instruments and Gold Exchange Traded Funds.

There is no assurance or guarantee that the investment objective of the scheme will be realized.

Eligible to invest in this mutual fund scheme

The following can invest in this scheme.

 Indian resident adult individuals, either singly or jointly.

 Minors through Parents/Lawful Guardian.

 Hindu Undivided Family (HUF) through its Karta.

 Partnership Firms in the name of any one of the partners.

 Proprietorship in the name of the sole proprietor.

 Non-Resident Indians (NRIs) / Persons of Indian Origin (PIO) on full repatriation basis or on non-repatriation basis;

Complete list of eligible participants who can invest can be checked in prospectus of this new fund offer.

The fund managers of this scheme.

Mr. Siddharth Bothra – Fund Manager – Equity

 Mr. Abhiroop Mukherjee – Fund Manager – Debt Component

 Mr. Herin Visaria – Fund Manager – International Equity

 Mr. Swapnil Mayekar – Fund Manager – Gold

The benchmark for this scheme?

The benchmark for this scheme is 30% Nifty 50 TRI + 50 % Crisil Short Term Gilt Index + 10% Domestic Price of Gold + 10% S&P 500 Index (TRI).

 The allocation pattern in this mutual fund

 It would invest 10% to 50% in equity, equity related instruments and international equity index funds/ equity ETFs. The risk profile in this segment is high.

It would invest 40% to 80% in debt, money market instruments. The risk profile in this segment is medium.

It would invest 10% to 20% in the gold Exchange Traded Funds. The risk profile in this segment is medium.

Risk factors

If an investor wants to invest separately in such asset classes, they can pick-up right equity mutual funds or debt mutual funds or gold investment options. In this case, the investor has to depend on just one fund and cannot pick-up any quality funds from various asset classes.

These funds are taxed as debt funds if their equity allocations do not meet the 65% limit, with STCG being taxed at the investor tax slab rate and LTCG being taxed at 20% with benefits of indexation.

 Since it invests in debt funds, these would have interest rate risks (interest rate increases, bond yield fall and vice versa).

 It would invest in international equity and debt where there is country risk, i.e. would have an impact due to foreign country rules and regulations.

 It would invest in international equity or debt and would have an impact due to forex fluctuations.

It would invest in unlisted securities where there could be a liquidity issue.

Now, let us look at some of the best performing Multi Asset Funds in India. These top 10 multi asset funds gave 5% to 8% annualized returns in the last 5 years.

Reasons to invest 

This new fund would not restrict to invest in just equity, but it would invest in all there three assets classes i.e. equity, debt and gold. If you are one among such investor who want to invest in all these three asset classes, you can invest in such funds. It also would invest in international equity. 

 This fund would invest in pre-defined limit in all these three asset classes. One would not miss out any gains that is arising from any of the asset classes.

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