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Motilal Oswal Mutual Fund (MOMF) has announced the launch of its latest new fund offer, “Motilal Oswal Diversified Equity Flexicap Passive Fund of Funds”. The scheme is an open-ended Fund of Funds investing in passive funds, designed to provide diversified exposure across large-cap, mid-cap and small-cap segments through a structured allocation framework.

The Motilal Oswal Diversified Equity Flexicap Passive FoFs seek to address a common challenge faced by equity investors—deciding which market-cap segment to invest in and when. Historically, leadership across large, mid, and small caps has rotated over market cycles, with no single segment maintaining long-term leadership. Predicting these rotations can be difficult, often leading investors to follow recent outperformers or exit segments prematurely.

The scheme adopts a simple yet structured strategy—starting with equal allocation (one-third each) to large, mid, and small cap segments. Allocations are reviewed quarterly and rebalanced only if any segment deviates by at least ±5% from its target weight. This framework allows the portfolio to automatically trim outperforming segments and reallocate to underweighted segments, embedding a “buy low, sell high” discipline without relying on market forecasts or discretionary calls.

By investing through passive index funds and ETFs, the scheme offers broad exposure across market capitalizations, avoiding the structural large-cap bias that has historically been observed in many flexicap strategies. This approach allows investors to participate across established market leaders, emerging businesses, and high-growth companies transitioning across market-cap segments—within a single fund.

Key Fund Details:

NFO Period: January 2, 2026 and closes on January 15, 2026

Investment Objective: The investment objective of the scheme is to generate long term growth/capital appreciation by predominantly investing in passive funds such as ETFs/Index Funds of equity and equity related instruments that offers diversified exposure across all market capitalization segments. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved.

Benchmark: Nifty 500 Total Return Index

Investor Profile: This product is suitable for investors seeking long-term capital growth through investment predominantly in passive funds such as ETFs or Index Funds of equity and equity-related instruments, providing diversified exposure across all market-capitalization segments..

Minimum application:

During the NFO:

Lumpsum Rs. 500 and multiples of Rs. 1 thereafter

Ongoing basis:

Lumpsum – Rs 500/- and in multiples of Re 1/- thereafter

Exit load:

1% - If redeemed on or before 15 days from the date of allotment. Nil thereafter.

Exit Load will be applicable on switch amongst the Schemes of MOMF. No Load shall be imposed for switching between Options within the Scheme. Further, it is clarified that there will be no exit load charged on a switch-out amongst the plans within the same scheme.

According to MOAMCs internal research, market-cap leadership cycles have varied over time, with large caps often showing relative stability during periods of stress, while mid and small caps have shown higher growth during economic expansions and recovery phases. A diversified, equal-weight approach provides structured exposure across all market-cap segments as described above.

India’s equity markets continue to evolve, with mid and small caps representing a growing share of overall market capitalization and showing higher profit growth over recent years—alongside higher volatility. A structured flexicap strategy provides a framework to maintain exposure across market-cap segments while managing concentration across segments.

Pratik Oswal, Chief of Business – Passive Funds, Motilal Oswal Asset Management Company (MOAMC) said, “Market-cap leadership keeps changing, and trying to predict which segment may outperform next is challenging. The Motilal Oswal Diversified Equity Flexicap Passive Fund of Funds is designed to remove this guesswork by allocating equally across large, mid, and small caps. It allows investors to participate in market rotations automatically through a transparent, disciplined framework while the strategy remains subject to the fund manager’s discretion.”

Mr Swapnil Mayekar will manage the fund for the Equity Component and by Mr Rakesh Shetty for the Debt Component.

Motilal Oswal Diversified Equity Flexicap Passive Fund of Funds

(An open-ended fund of funds scheme investing in passive funds)

(Scheme Code: MOTO/O/O/FOD/25/09/0088)

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