Upcoming NFO: Motilal Oswal Mutual Fund Filed Draft for Financial Services Fund

Motilal Oswal Mutual Fund has filed draft documents for a new sectoral equity scheme titled Motilal Oswal Financial Services Fund.  

The scheme will be launched as an open-ended fund and offered at a face value of ₹10 per unit during the New Fund Offer (NFO). The NFO dates are yet to be disclosed. 

Scheme Classification and Purpose 

The fund is categorised as a sectoral fund focused on financial services. Its stated objective is to seek long-term capital appreciation by investing in equity and equity-related instruments of companies earning most of their revenue from financial services businesses.  

As with all equity schemes, there is no assurance that the stated objective will be achieved. 

Asset Allocation Details 

According to the draft Scheme Information Document, the fund will invest a minimum of 80% and up to 100% of its assets in equity and equity-related instruments of financial services companies.  

Up to 20% of the portfolio may be allocated to equities outside the sector, debt and money market instruments. Investments in REITs and InvITs are capped at 10%, while exposure to units of mutual funds is limited to 5% of net assets. 

Scope of Investments 

The investment universe covers listed companies across banking, non-banking finance, insurance, housing finance, asset management, stock broking, exchanges, fintech platforms, and other financial intermediaries.  

The scheme may also invest a small portion in overseas securities, subject to regulatory limits specified by SEBI. 

Benchmark and Liquidity Provisions 

The scheme will be benchmarked against the Nifty Financial Services Total Return Index (TRI). Units of the fund are not proposed to be listed on any stock exchange.  

Post launch, subscriptions and redemptions will be available on all business days, with redemption proceeds to be paid within three working days as per regulations. 

Plans, Exit Load and Investment Thresholds 

The fund will offer Direct and Regular plans, each with Growth and Income Distribution cum Capital Withdrawal (IDCW) options. An exit load of 1% will be charged if units are redeemed within 90 days of allotment. No exit load will apply after this period. 

The minimum application amount during the NFO and on an ongoing basis is ₹500. SIP investments start at ₹100 for daily frequency and ₹500 for weekly and monthly options. 

Read More: Mutual Funds Deploy ₹11,779 Crore Across 10 IPOs in November; Few Companies Attract Over ₹1,000 Crore Each! 

Conclusion 

The Motilal Oswal Financial Services Fund is a new offering providing sector-specific equity exposure to financial services companies. As a newly proposed scheme, it does not have a performance track record, with further operational details expected closer to the NFO launch. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.