Motilal Oswal Asset Management Company Ltd. (Motilal Oswal AMC), one of India’s fastest growing boutique AMC launches its first open ended Motilal Oswal Equity Hybrid Fund (MOFEH), to offer growth potential of equities but with significantly lower volatility.
Motilal Oswal Equity Hybrid Fund is an open ended hybrid scheme investing predominantly in equity and equity related instruments.The scheme NFO will open from August 24, 2018 and will close on September 07, 2018. The scheme is benchmarked against the CRISIL Hybrid 35+65 Aggressive TRI.
Motilal Oswal AMC will endeavour to keep the exposure restricted to a narrow band of 65%-70% in equity and the balance in debt.The fund will have a mixture of 65% -80% in equity, a multi-cap portfolio with large cap bias. The fund will have a Bottom up stock picking approach with “Buy Right- Sit Tight” Investment Philosophy. The debt portion will consist around 20%-35% with an optimum mix of corporate bond and market instruments. It will be high quality short duration accrual instruments maintaining high liquidity; there is no intent to take credit or duration risk. Investors choosing to invest into equity oriented funds even have the choice of investing in small and midcap funds but given that they choose hybrid funds it’s an imperative that the equity be managed with low beta and the fixed income be conservative in credit and duration to return in a stable range.
Speaking on the launch, Aashish Somaiyaa, CEO- Motilal Oswal AMC said,“Equity Hybrid Funds have the potential to deliver equity like performance with significantly reduced volatility by way of regular rebalancing in favour of 65:35 equity debt split. Motilal Oswal AMC has launched this fund without Dividend option instead, we enabled cash flow plan for those investors who want a regular cash flow for their planned needs. This plan will provide a regular source of funds from their invested corpus at a chosen rate and frequency – because equity markets can be volatile, your cash flows need not be”
Explaining on the equity component for the fund manager Siddharth Bothra said, “This fund is aimed at addressing long term investor’s need to more effectively deal with market volatility and risk. It aims to moderate investor’s risk profile by having a defined prudent equity & debt mix of 65:35, investing in QGLP stocks with large cap bias in equities and abstaining from taking long duration calls on debt.”
