NFO Alert! Motilal Oswal Launches Small Cap Fund After A Gap of 7 Years

Motilal Oswal Asset Management Company (MOAMC) on Monday announced the launch of its new fund offering (NFO), the 'Motilal Oswal Small Cap Fund.' After seven years, MOAMC is returning with an active fund. The open-ended equity plan has been deliberately crafted to offer investors a distinctive chance to leverage the potential of the small-cap market.

The fund seeks to have a well-balanced portfolio with a minimum of 65% exposure to small-cap firms. For tactical and liquidity reasons, the fund also carefully allocates a portion of its portfolio to large-cap equities. With an investment horizon of 5-7 years, the Motilal Oswal Small Cap Fund is perfect for investors looking for long-term capital appreciation. The Nifty Small Cap 250 TRI will serve as the benchmark for the fund's performance.

Mr. Navin Agarwal, MD & CEO, MOAMC notes that "the company's significant 22% investment in this segment, showcasing a rich history of wealth creation. The financial landscape is continually evolving providing various investment opportunities to investors. We are committed to staying ahead of the curve and delivering innovative solutions. Our previous ventures into active funds have demonstrated our ability to navigate markets effectively, and with the Motilal Oswal Small Cap Fund, we are poised to continue this legacy."

Mr. Prateek Agrawal, Executive Director, Motilal Oswal AMC said, "At Motilal Oswal, we believe in the power of active management to uncover value and capitalise on emerging opportunities, which have opened up due to India's growing economy. The Motilal Oswal Small Cap Fund is not just an addition to our product suite, it is a reflection of our strategic vision and expertise in small-cap investments. We look forward to empowering our investors with the new opportunities in capital markets."

Mr. Ajay Khandelwal, Fund Manager, Motilal Oswal AMC, who will manage this fund said, "In the last 2-3 years, we've witnessed a remarkable surge in small-cap fund flows, and this trend indicates a structural shift in investor preferences. Small caps, with their agility and growth potential, have become a focal point for discerning investors looking beyond conventional avenues. The Motilal Oswal Small Cap Fund is crafted with a meticulous approach, seeking out companies with visionary leadership, strong execution capabilities, and a commitment to corporate governance."

Ajay Khandelwal will be in charge of managing the Motilal Oswal Small Cap Fund. Mr. Niket Shah will co-manage this fund for the equity segment together with Mr. Rakesh Shetty handling the debt component and Mr. Ankush Sood handling the foreign equity component.

The NFO period of Motilal Oswal Small Cap Fund will run from December 5, 2023 to December 19, 2023. The nature of the fund is an open-ended equity scheme predominantly investing in small-cap stocks for long-term capital appreciation.

As seen by the 38X rise in the market capitalization of the top small-cap firms over the previous 20 years, small-cap funds have the potential to generate substantial earnings growth. The small-cap market is a rich source of alpha creation, with about 537 companies having a market capitalization of more than Rs 2,000 Cr. Better balance sheets and less volatility have also resulted from the small-cap earnings growth, which has compounded by 49% over the past three years.