Motilal Oswal Mutual Fund has launched a new fund offering (NFO) for Motilal Oswal Liquid Fund, a new open-ended debt scheme that will invest in money market securities having maturity of up to 91 days. The NFO period for the scheme began on December 11, and will end on December 18, 2018. The scheme will reopen for subscription and redemption of units within five business days from allotment date.
Liquid funds are regarded as relatively low-risk instruments due to low volatility with regard to interest rate changes. However, liquid funds are not completely free of risk. An instance of this was seen in September this year when NAVs for few liquid funds fell after IL&FS debt ratings were downgraded by ratings agencies.
Motilal Oswal Liquid Fund will allow investors to do Systematic Transfer Plans (STPs) into some of the popular Motilal Oswal equity funds like Motilal Oswal Long Term Equity Fund or Motilal Oswal Multicap 35. The scheme will invest up to 100 percent of its assets in money market instruments with a maturity of upto 90 days. These include instruments like tri party repo, treasury bills, cash management bills, cash deposits of scheduled commercial banks. The scheme may engage in short-selling.
Motilal Oswal Liquid Fund will be benchmarked against the CRISIL Liquid Fund Index. The benchmark index tracks the performance of a debt portfolio consisting of CBLO, commercial papers and certificates of deposit.
| Index Name | 1-yr Returns (%) | 3-yr Returns (%) | 5-yr Returns (%) |
| CRISIL Liquid Fund Index | 7.45 | 7.24 | 7.86 |
*Returns data as of Nov. 2018
The fund will be managed by Abhiroop Mukherjee, fund manager for fixed income at the fund house. Mukherjee also manages schemes like Motilal Oswal Ultra Short Term Fund, Motilal Oswal Equity Hybrid Fund and Motilal Oswal Nasdaq 100 FOF. The ultra short term fund has given three-year returns of 4.29 percent. (As on Dec. 10, 2018)
Key information about the Motilal Oswal Liquid Fund NFO:
| NFO period | December 11 – December 18, 2018 |
| Minimum application amount | Rs. 500 |
| Exit load | Nil |
| Benchmark | CRISIL Liquid Fund Index |
| Fund manager | Abhiroop Mukherjee |
Other Funds by Motilal Oswal Asset Management
| Scheme Name | 3Y Returns (%) | AUM(Rs. Cr.) | Category |
| Motilal Oswal Long Term Equity Fund | 12.94 | 1044.84 | ELSS |
| Motilal Oswal Multicap 35 Fund | 9.83 | 13131.17 | Multi Cap Fund |
| Motilal Oswal Focused 25 Fund | 12.59 | 1079.59 | Large Cap Fund |
| Motilal Oswal Midcap 30 Fund | 9.34 | 1333.36 | Mid Cap Fund |
| Motilal Oswal Ultra Short Term Fund | 1.23 | 966.51 | Ultra Short Duration Fund |
| Motilal Oswal Dynamic Fund | 10.27 | 1745.1 | Dynamic Asset Allocation |
{Data as on Feb 20, 2020; Source: Value Research}