NFO Update: Motilal Oswal Mutual Fund launches Motilal Oswal Contra Fund

Synopsis

Motilal Oswal Mutual Fund has launched the Motilal Oswal Contra Fund, an open-ended equity scheme based on a contrarian investment strategy. The NFO opens on May 8 and closes on May 22. The fund aims for long-term capital appreciation by investing in undervalued companies with turnaround potential across market cycles.

Motilal Oswal Mutual Fund has announced the launch of its new fund offer (NFO), Motilal Oswal Contra Fund, an open-ended equity scheme following a contrarian investment strategy.

The new fund offer or NFO of the fund will open for subscription on May 8 and will close on May 22.

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The investment horizon of the fund is to achieve long-term capital appreciation by predominantly investing in equity and equity-related instruments through a contrarian strategy. The performance of the fund will be benchmarked against the Nifty 500 Total Return Index and will be managed by Varun Sharma, Bhalchandra Shinde, Ankit Agarwal, Rakesh Shetty, and Swapnil Mayekar.

During the NFO and on a continuous basis, the minimum investment amount for lumpsum amount is Rs 500. The additional application amount is Rs 500.

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A contrarian strategy is an investing style which typically invests against prevailing market trends. Contrarian investing seeks to identify investment opportunities in companies that are currently out of market favour or undervalued temporarily, yet exhibit strong fundamentals and a turnaround potential over the long term.

By adopting a long-term investment horizon over a complete market cycle, a contrarian approach allows investors to take a differentiated market exposure, benefiting from market inefficiencies such as price-value dislocations, while enabling portfolio diversification.

As leadership rotates across sectors such as metals, real estate, banking, or auto, over various phases of market cycles, the need for diversified and differentiated investment exposure across such sectors has become increasingly important.

The Motilal Oswal Contra Fund aims to capitalise on this by identifying emerging opportunities early in their lifecycle, offering investors a disciplined, research-driven approach to long-term capital creation.

This product is suitable for investors seeking capital appreciation over the long term, investing predominantly in equity or equity-related investments through a contrarian strategy.

“Market mispricings often persist due to behavioural biases and structural factors, and during periods marked by volatility, a contrarian strategy helps look beyond temporarily prevailing narratives and focuses on long-term business fundamentals,” said Prateek Agrawal, MD & CEO, Motilal Oswal Asset Management Company (MOAMC).

“The Motilal Oswal Contra Fund is designed to identify these early signals and opportunities and invest in companies with relatively reasonable valuations. We maintain a high-conviction, actively managed exposure, diversified across market capitalisations, to benefit patient investors who are willing to stay invested over a full market cycle of three to five years, for true portfolio diversification,” Agrawal further said.

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“The persistent behavioural gap between a business’ intrinsic value and its market price is not an anomaly but a recurring feature that can create opportunities across market cycles. The Motilal Oswal Contra Fund focuses on building a high conviction portfolio of 30-35 stocks with strong operating cash flows, attractive valuations, and identifiable turnaround potential. Backed by a robust risk management framework and disciplined exit process, the approach aims to deliver style diversification while managing downside risks across market phases,” said Bhalchandra Shinde, Fund Manager, Motilal Oswal Asset Management Company (MOAMC).

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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