Motilal Oswal MF floats 25-company 'Focused' fund

The fund will limit the number of companies it invests in to a maximum of 25

Motilal Oswal Asset Management Company has announced the launch of a new equity fund with a mandate to limit the number of companies it invests in to a maximum of 25.

The ‘Most Focused 25 Fund’ looks to invest in "up to 25 companies with long term sustainable competitive advantage and growth potential," according to a statement from the company.

The company stated that the mutual funds which invest in less than 25 stocks account for only Rs 2,100 crore or around 1% of equity mutual fund assets.

The fund is open for subscription from April 22, 2013 to May 6.

Taher Badshah, senior vice president and co-head of equities will manage the fund alongwith Abhiroop Mukherjee, senior manager-fixed income.

A minimum of 65% of the fund will be invested in the top 200 listed companies. The fund can invest a maximum of 25% in companies beyond the top 200, however, these companies must have a market capitalization greater than Rs 1,400 crore.

Interestingly, the fund is a ‘no-load’ fund, which would mean that investors are free to enter or exit without charges.

The distributors would be paid trail commission and initial marketing expenses would be borne by the company, according to Aashish Somaiyaa, chief executive officer of the firm.

Raamdeo Agrawal – Joint Managing Director at Motilal Oswal Financial Services stated that they would be looking to tap investors beyond the top 15 cities.

"We have a network of distribution across 250 cities. We will also have tie—ups with some wealth management companies for distribution," he said.