Motilal Oswal AMC (MOAMC) today announced the launch of its open ended equity fund called MOSt Focused 25 Fund. The NFO opens on April 22 and closes on May 6. The scheme aims to generate long term capital appreciation by investing in companies with long term sustainable competitive advantage and growth potential.
Raamdeo Agrawal, Joint Managing Director, MOAMC, said “The fund would invest in companies with enduring economic moats that will ensure long term franchise value and continued growth potential.” Explaining the rationale of the fund he said “Only 10 percent of companies are capable of outperforming their benchmark. The major problem of equity fund is that they have low quality stocks in their portfolio.”
He further said “everybody in the market is talking about last five years performance of equity funds but all of them have forgotten about returns in the last 10 years. Equity MFs provide a better opportunity to grow your investment than any other investment options especially in long term”, added Agrawal.
Aashish Somaiyaa, CEO MOAMC, said “The fund will follow ‘buy and hold’ strategy. Even in bullish conditions we will follow the same strategy as the CAGR of last 10 years in Enduring Economic Moats (EMC’s) is around 25 percent which is higher than other investment avenues.” He also said that the portfolio churning of the fund would be less which would reduce its expense ratio The fund is targeting Rs 400 crore at the end of year from the retail investors, he added.
“As the name ‘MOSt Focused 25 Fund’ suggests, we are focusing only on 25 odd companies of the CNX Nifty benchmark having market capitalization of more than Rs 1400 crore. It will be a lot more effective if we do research and analysis of only 25 emerging companies rather than targeting 50 companies.”, said Tahir Badshah, Co-Head of Equities as well as fund manager of this fund.
The benchmark of the fund is CNX Nifty. No exit loads will be charged in the scheme. The minimum application amount is Rs 10,000. The fund will be co-managed by Tahir Badshah and Abhiroop Mukherjee, Senior Manager, Fixed Income of MOAMC. Presently, Axis MF and DSP BlackRock also have similar funds.
