Motilal Oswal AMC announces launch of Motilal Oswal 5-year G-Sec Fund of Fund
The NFO will open on September 24, 2021, and will close on September 30, 2021. The minimum application amount during NFO is Rs 500.
September 23, 2021 / 05:45 PM IST
Motilal Oswal Asset Management Company (MOAMC) on September 23 announced the launch of Motilal Oswal 5-year G-sec Fund of Fund.
This low-cost open-ended fund of fund scheme will be investing in the units of Motilal Oswal 5-year G-sec ETF. The minimum application amount during NFO is Rs 500.
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The NFO will open on September 24, 2021, and will close on September 30, 2021. Through this fund of fund, the firm is seeking investment return via investment in units of Motilal Oswal 5-year G-sec ETF. The firm also added that the total assets under management (AUM) for the passive fund schemes of Motilal Oswal AMC stands at approximately Rs 12 crore.
“The launch of Motilal Oswal 5 Year G-Sec Fund of Fund is in response to growing demand from investors who do not have Demat or Trading accounts. With low correlation to equities, this Fund of Fund is ideal for investors looking for capital preservation with reduced portfolio volatility,” MOAMC MD and CEO Navin Agarwal said.
MOAMC's Head of Passive Funds Pratik Oswal said that the underlying G-Sec is one of the most liquid securities with a cushioning of ‘No default’ risk. "Given the duration of Nifty 5 Yr. Benchmark G-Sec Index, it falls in the sweet spot between short and long duration G-Sec," Agarwal added.
The firm opines that the Nifty 5-year benchmark G-Sec Index can be good alternative to traditional fixed deposits, considering the no lock-in, indexation benefit, and historical higher pre and post tax returns over fixed deposits.
According to current regulations, the Motilal Oswal 5-year G-Sec Fund of Fund is treated as a ‘non-equity' fund and consequently taxed similar to a debt scheme. If the investment is held for more than three years, it qualifies for long term capital gains tax at 20 percent, along with the option to avail indexation benefit.
An investor can purchase or redeem units of the scheme through a financial advisor or by log-in to www.motilaloswalmf.com. The indicative total expense ratio of the regular plan fund of fund is 0.10 percent per annum and of the direct plan fund of fund is 0.03 percent per annum, the firm added.