The NFOs will remain open for subscription from February 19 to March 5, 2021, and the date of allotment is March 12.
From the context of tax implications, unlike equity taxation, given the current regulations, both FoFs will be taxed as debt instruments.
Motilal Oswal Asset Management Company (AMC) has come out with two New Fund Offers (NFOs) – Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive, and Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative. The NFOs will remain open for subscription from February 19 to March 5, 2021, and the date of allotment is March 12.
With an ‘investor first’ philosophy, the country’s first 100% passive multi asset FoFs from Motilal Oswal AMC will provide allocations across Equity, International Equity, Fixed Income and Commodity, offering investors an opportunity to take exposure in low-cost and diversified assets as per risk appetite or investment goal. Investors looking for a moderate portfolio could invest 50:50 in both funds. Both funds play on the advantage of investing into historically-low correlated asset classes, according to the company.
As per the company claims, what also sets these funds apart from most multi-asset and hybrid schemes is that they follow strategic rebalancing, eliminating market timing risk. There is no fund manager risk or credit risk involved. The equity portion (Nifty 500) also removes size and sector bias out of the portfolio since it captures 95%+ of entire equity market.
From the context of tax implications, unlike equity taxation, given the current regulations, both FoFs will be taxed as debt instruments. A long-term investor who holds this fund could claim indexation benefits which significantly bring down the overall tax implication.
The indicative asset allocation pattern of the funds is as follows:
Explaining the reasoning and benefit of investment in these funds, Pratik Oswal, Head-Passive Funds, Motilal Oswal Asset Management Company, said, “In our endeavor to continuously simplify investing, we are launching to two passive multi-asset funds catering to two-risk profiles – aggressive and conservative. Customers opting for a moderate option could simply combine both funds (50:50). These FoFs offer a complete portfolio solution in a single fund with periodical rebalancing. With the thousands of investment options today – we believe this single fund is sufficient for an investor’s needs.”