After the launch of 5 Year G-Sec ETF, Motilal Oswal Asset Management Company (MOAMC) has announced the launch of its 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 total Assets under management for the passive fund schemes of Motilal Oswal AMC stands at 12,100 crore (August 2021). (Source: MOAMC internal data)
The NFO will be open on September 24, 2021 and shall close on September 30, 2021.
The Motilal Oswal 5 year G-Sec Fund of Fund seeks investment return through investment in units of Motilal Oswal 5 Year G-Sec ETF, it said in a press release.
“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.” said Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd.
“The underlying G-Sec is one of the most liquid security with a cushioning of ‘No default’ risk.” said Pratik Oswal, Head of Passive Funds, Motilal Oswal Asset Management Company Ltd. “Given the duration of Nifty 5 Yr. Benchmark G-Sec Index, it falls in the sweet spot between short and long duration G-Sec.”
As per 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 3 years it qualifies for Long Term Capital Gains Tax @ 20 percent, along with option to avail indexation benefit. Any investment horizon lower than 3-years, would attract the Short Term Capital Gain Tax and taxed as per the applicable tax bracket.
The minimum application amount during NFO is Rs.500. On ongoing basis investor can purchase/redeem units of the Scheme through financial advisor or by log-in to www.motilaloswalmf.com. The indicative total expense ratio of Regular plan Fund of Fund is 0.10 percent per annum and of Direct plan Fund of Fund is 0.03 percent per annum, it said.
