From the context of tax implications, in contrast to equity taxation, offered the existing regulations, each FoFs will be taxed as debt instruments.
Motilal Oswal Asset Management Company (AMC) has come out with two New Fund Offers (NFOs) – Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive, and Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative. The NFOs will stay open for subscription from February 19 to March 5, 2021, and the date of allotment is March 12.
With an ‘investor first’ philosophy, the country’s 1st one hundred% passive multi asset FoFs from Motilal Oswal AMC will provide allocations across Equity, International Equity, Fixed Income and Commodity, providing investors an chance to take exposure in low-price and diversified assets as per threat appetite or investment purpose. Investors searching for a moderate portfolio could invest 50:50 in each funds. Both funds play on the benefit of investing into historically-low correlated asset classes, according to the enterprise.
As per the enterprise claims, what also sets these funds apart from most multi-asset and hybrid schemes is that they stick to strategic rebalancing, eliminating marketplace timing threat. There is no fund manager threat or credit threat involved. The equity portion (Nifty 500) also removes size and sector bias out of the portfolio given that it captures 95%+ of whole equity marketplace.
From the context of tax implications, in contrast to equity taxation, offered the existing regulations, each FoFs will be taxed as debt instruments. A lengthy-term investor who holds this fund could claim indexation advantages which considerably bring down the all round tax implication.
Explaining the reasoning and advantage of investment in these funds, Pratik Oswal, Head-Passive Funds, Motilal Oswal Asset Management Company, stated, “In our endeavor to continuously simplify investing, we are launching to two passive multi-asset funds catering to two-risk profiles – aggressive and conservative. Customers opting for a moderate option could simply combine both funds (50:50). These FoFs offer a complete portfolio solution in a single fund with periodical rebalancing. With the thousands of investment options today – we believe this single fund is sufficient for an investor’s needs.”