Motilal Oswal Launches Innovative Business Cycle Investment Fund
Motilal Oswal Mutual Fund has announced the launch of its new investment option ‘Motilal Oswal Business Cycle Fund’. This fund is an open-ended equity scheme. It aims to leverage different phases of the business cycle to maximize returns for investors. A new fund offer (NFO) will be available for subscription from August 7 to August 21. The primary objective of Motilal Oswal Business Cycle Fund is to generate wealth by dynamically allocating investments across various sectors and stocks according to the current stage of the business cycle.
This strategic approach allows the fund to adjust its portfolio based on whether the economy is in a phase of growth, slowdown or somewhere in between thus optimizing the potential for returns. The fund will be benchmarked against the Nifty 500 TRI, providing a broad market comparison. Fund’s management team includes experienced professionals such as Ajay Khandelwal Niket Shah, Santosh Singh Atul Mehra, Rakesh Shetty and Sunil Sawant who will oversee investment strategy and decisions.
Investment allocation for funds is structured to ensure a diversified yet focused approach. The fund will invest a minimum of 80% and up to 100% in equities and equity-related instruments selected based on the business cycle theme. Up to 20% can be invested in other equity instruments debt and money market instruments including cash and cash equivalents. Furthermore, the fund allows for a maximum of 10% investment in units issued by REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts). Up to 5% can be in units of mutual funds with provisions for risk mitigation.
This fund is particularly suitable for investors seeking long-term capital appreciation. It focuses on investments predominantly in equities and equity-related instruments selected based on business cycles. By concentrating on various phases of economic growth and contraction fund aims to capitalize on emerging opportunities while mitigating risks effectively.
Prateek Agrawal Managing Director and CEO of Motilal Oswal Asset Management Company, highlights that the Indian economy is currently in the expansion phase. This reflects in improving corporate profitability increased credit availability and government support for various sectors. As a result, domestic demand and consumption have seen significant improvement over the past three years. Business Cycle Fund aims to harness this positive momentum by investing in businesses poised to perform well during this expansion phase.
Niket Shah Chief Investment Officer of Motilal Oswal Mutual Fund, explains that the Business Cycle Fund is designed to identify and invest in emerging sectors and themes early on. By using a concentrated approach and focusing on top investment ideas across different market segments fund seeks to maximize wealth creation potential. This agile strategy allows the fund to adjust its investments dynamically. It seizes new opportunities and optimizes returns.
Understanding the business cycle is crucial for this investment strategy. The business cycle consists of alternating periods of economic growth and decline. This can be observed through indicators like GDP growth. Each phase affects companies and sectors differently. This presents unique opportunities and risks. For instance, during expansion phases, sectors like Capital Goods and Realty tend to perform well because of increased infrastructure investment. Conversely, during economic slowdowns, sectors like FMCG (fast-moving consumer goods) show resilience. Essential consumption remains steady during these times.
By comprehending these dynamics investors can make informed decisions that align with the business cycle. This potentially leads to higher returns. Motilal Oswal Business Cycle Fund offers a strategic investment option for those looking to capitalize on varying phases of the economy. With a team of experienced fund managers and a flexible investment approach, this fund aims to optimize returns by adapting to evolving market conditions.
In conclusion, Motilal Oswal Business Cycle Fund presents a unique opportunity for investors to benefit from the natural ebb and flow of the economy. By strategically positioning investments according to the business cycle, the fund seeks to achieve long-term capital appreciation. This approach aims to provide investors with robust tools for wealth creation.
