Motilal Oswal Mutual Fund has launched its open ended balanced fund Motilal Oswal Equity Hybrid Fund (MOFEH).
The scheme NFO will open for subscription from August 24, 2018 and close on September 07, 2018.
Benchmarked against the CRISIL Hybrid 35+65 Aggressive TRI, the scheme aims to keep the exposure restricted to a narrow band of 65%-70% in equity and the rest in debt. The fund will have a mixture of 65% -80% in equity, a multi-cap portfolio with large cap bias. The fund will follow a bottom up stock picking approach.
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, according to the company.
In a press release, 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.”
Highlighting about cash flow option or SWP, the fund house said, “Many investors have been opting for dividend plans thinking that dividends are a bankable instrument to receive regular cash flow. But introduction of 10% distribution tax on equity mutual fund dividends clearly reduces the attractiveness of dividends as a mechanism to fulfil cash flow requirements. Our cash flow plan is clearly more tax efficient and predictable about periodicity and amount of cash flows as it provides a regular source of funds from returns generated and capital invested. This option enables meeting of cash flow requirements for sustenance and at the same time leaves potential for capital appreciation.”
Siddharth Bothra, Akash Singhania and Abhiroop Mukherjee will co-manage this fund.
