Motilal Oswal Multi Asset NFO – An All-Weather Investment Product

motilal nfo

In current market scenario, where investors are facing real dilemma of choosing the investment asset class.
Investors are unwilling to invest 100% in traditional instruments as they currently offer meager returns, averse to invest all in equity as it carries high risk; also, not going all hog on gold as they think that the rally for gold is over & not investing in debt instruments as the risk of credit default has gone up amid current environment.

Is there any product which can allow investor to invest in all the above asset classes with the changing market dynamics, high downside protection and which aims for reasonable returns?

Interestingly, playing to this opportunity, Motilal Oswal mutual fund is launching a New Fund Offer based around the asset diversification- “Motilal Oswal Multi Asset”. Quick look at the features – open-ended, Multi asset.

Asset Allocation of Motilal Oswal Multi Asset Fund is as follows:

1

Every asset class has its “season”, and an investor whose portfolio is dynamically aligned to shift into said asset class, is poised to win most. All asset classes have their designated role ranging from generating alpha to acting as hedge, thus helping portfolio to maximize diversification benefits.

The Asset class correlation matrix is as follows:

Different levels of correlation among different asset classes provide the portfolio with an effective hedge

The Result of having the right mix of asset classes, in the right proportion, has led to Multi-Asset as a MF category to outperform its peers across various time periods. Table below highlights category average performance of MF categories.

Investor Takeaways:

The fund deserves an allocation in your portfolio for those who desire marginally better & consistent returns without
taking higher risk and looking to make an entry into the prevailing uncertain market.

The fund is suitable for those who are having an average indicative horizon up to five years & more.

In case you wish to understand more about the opportunity or simply discuss the prospects of the funds, feel free to
connect with us and we would be glad to have a chat.

Fund Details

NFO details

Opportunity to invest in Public Sector Bonds – Edelweiss Bharat Bond NFO

Public sector bond NFO

Of late, there has been quite a flurry of new funds being launched by mutual funds – many of which are for the fund house to offer a new product category or to play a theme. While we are constantly on the lookout for not just interesting, but for funds that hold real promise in terms of potential to create investor wealth.

PSUs are known to have laid founding stones to economic success. Their access to capital,  regulatory clearances and domain expertise have been instrumental in strengthening the businesses.

Times like now, when the private sectors are hitting a slump (almost), and the economy is turning towards the government for aid, PSUs stand strong.

PSUs covered in the CPSE basket are typically backed by state/central government and offer very high-rated debt instruments. These score well from a safety-against-default parameter

Here is the NFOs which have piqued our interest & the fund name is “Edelweiss Bharat Bond FoF”.

About Edelweiss Bharat Bond FOF

The NFO is open from 14th July 2020 to 17th July 2020. The Fund will be launched with two different maturities i.e. Bharat Bond FOF – 2025 and Bharat Bond FOF – April 2031

Edelweiss Bharat Bond FOF will invest in Bharat Bond ETF which will then invest the money in a bond issued by Public Sector companies.

• Portfolio will be majorly focused on PSU bonds issued by CPSE, CPFI or statutory body dominated in India

• Portfolio will have a conservative rating of AAA and will mature within 12 months period preceding the maturity date of the index.

• Fund does not have any lock in. Investor can entry and exit at any time.

• Investor will get the indexation benefit if he stays invested for a horizon of more than 3 years.

Food for thought:

Earlier issue (December 2019) of Bharat bond FoF April 2030 has generated a return of 10.41% (Data as on 13th July 2020) since inception while Bharat bond FoF April 2023 has generated 7.73% (Data as on 13th July 2020) returns since inception- more than most of the traditional instruments available.

Bottomline:

Investors with a conservative to low-rated risk profile and an investment horizon equivalent to that of the issue may choose to invest in the fund. The fund is a good constituent to fit into the debt allocation basis asset allocation.

In case you wish to understand more about the opportunity or simply discuss the prospects of the funds, feel free to connect with us and we would be glad to have a chat.

Edelweiss Bharat Bond FOF fund details:

details of NFO