IGI Logo

Motilal Oswal Asset Management Company (MOAMC) today announced the launch of its latest new fund offer “Motilal Oswal Business Cycle Fund”. The new thematic fund by MOAMC is an open-ended equity scheme that following business cycles-based investing theme.

Key Fund Details:

NFO Period: 7 th August 2024 to 21st August 2024 Investment Strategy: This investment strategy focuses on generating wealth by investing in companies through dynamic allocation between various sectors and stocks at various stages of business cycle.

Benchmark: Nifty 500 TRI

Portfolio Strategy: The fund will invest minimum of 80% and maximum of 100% in Equity and Equity related instruments selected on the basis of business cycle theme, Maximum of 20% in Equity & Equity related instruments other than above and Debt and Money Market instruments (including cash and cash equivalents) respectively. Maximum of 10% in Units issued by REITs and InvITs. Maximum of 5% in Units of Mutual Funds with provision for risk mitigation.

Investor Profile: This product is suitable for investors who are seeking capital appreciation over long term by investing predominantly in equities and equity related instruments selected on the basis of business cycle.

Mr. Prateek Agrawal, MD and CEO of Motilal Oswal Asset Management Company said, “Indian economy is in an expansion phase which reflects in the improving corporate profitability, credit and CAPEX pick up, and government support to various sectors. This also resulted in improvement in India’s domestic demand and consumption during the past 3 years, which has led to improving business prospects, driving investments in business capacity, and improvement in household assets. With the business cycle strategy, we want to capitalize on this virtuous time for Indian corporates, by selecting businesses that are most likely to do well during this expansion phase.”

The business cycle illustrates the natural ebb and flow of the economy, characterized by alternating periods of growth and decline, as reflected in metrics like real GDP growth and various economic indicators. Each phase of the cycle impacts companies and sectors differently, with distinct opportunities and risks emerging at various stages.

Mr. Niket Shah, CIO, Motilal Oswal Mutual Fund said, “Our Business Cycle Fund is strategically designed to capitalize on emerging sectors and themes, allowing early exposure and maximizing the potential for wealth creation from upcoming trends. Utilizing HI-Growth & Hi-Conviction investing, the fund leverages a concentrated allocation of top house ideas across the market spectrum. Its agile approach ensures dynamic investment allocation across all market caps, adapting to evolving opportunities and optimizing returns”

“In business cycle investing, strategic positioning during different phases can significantly impact returns. During expansionary phases, such as 2004-07 and 2021-24, sectors like Capital Goods and Realty have outperformed defensive sectors due to increased capex and infrastructure development. Conversely, during slowdowns like 2009-12, FMCG sectors demonstrated resilience as essential consumption remained steady, outshining sectors like Realty. Similarly, in the trough phase of 2013- 20, Consumer Durables surpassed Metals as consumption began to rebound. Understanding these dynamics, wherein market returns are driven by earnings growth and shifts in sentiment, can guide investors in making informed decisions aligned with the business cycle”, added Mr. Niket Shah.

The Fund Management Team:

1. Niket Shah, CIO and Fund Manager, MOMF

2. Ajay Khandelwal, Co-Fund Manager, MOMF

The Additional Fund Management Team:

1. Santosh Singh, Fund Manager, MOMF

2. Atul Mehra, Fund Manager, MOMF

3. Rakesh Shetty, Fund Manager, MOMF – (Debt Component)

4. Sunil Sawant, Fund Manager, MOMF – (Overseas Component)

Data Source: MOIE, RBI, Ministry of Commerce, ICRA, MOAMC Internal Research

Product Labelling:

Product labelling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made.

Above views are of the author and not of the website kindly read disclaimer