Motilal Oswal Innovation Opportunities Fund – Direct (G) : NFO Details

An open-ended equity plan based on innovation themes will be the Motilal Oswal Innovation Opportunities Fund – Direct (G). By investing primarily in equities and equity-related instruments of businesses that will profit from the adoption of creative techniques or by adhering to the innovation theme, the scheme's investment aim will be to generate long-term capital appreciation. The Nifty 500 TRI will serve as the scheme's benchmark. 0–20% will be allocated to debt and money market instruments (including cash and cash equivalents), 0–20% to mutual fund liquid and debt schemes, 0–10% to units of REITs and InvITS, and 80–100% to equity and equity-related instruments of companies that will benefit from the adoption of innovative strategies or following the innovation theme. The plan will be appropriate for investors who want to invest primarily in equity or equity-related investments of businesses that will profit from the adoption of creative tactics or by adhering to the innovation theme and who are looking for long-term capital appreciation.

Details of the NFO: Motilal Oswal Innovation Opportunities Fund – Direct (G)

Investment Objective and Strategy

Objective:

To achieve long term capital appreciation by predominantly investing in equity and equity related instruments of companies that will benefit from the adoption of innovative strategies or following the innovation theme.

However, there can be no assurance that the investment objective of the scheme will be realized.

Investment Strategy:

The Motilal Oswal Innovation Opportunities Fund – Direct (G) aims to generate returns by predominantly investing in stocks of companies that will benefit from the adoption of innovative strategies or following the innovation theme. The Fund will invest in companies engaged
in innovation through the development of new products, processes, services, solutions, platforms, or business models. The Fund will target companies categorized as Innovators (developing new products, services, or technologies), Enablers (providing tools or infrastructure for innovation), and Adaptors (adopting new technologies or strategies to enhance competitiveness). The Fund will focus on firms that drive market share growth through research and development (R&D) and patent development, benefiting from technological advancements. 

Companies that have access to global parents who are pioneers of technology or part of some big industrial group which makes their access to new products/technology easier. The scheme would also invest in units of Liquid/
debt schemes, debt and money market instruments as stated in the asset allocation table.
The Fund seeks to invest in companies that are either leading or adapting to emerging innovation trends, targeting growth opportunities in sectors poised to influence the future of business and technology. With an active and
flexible management approach, the Fund aims to select high-quality companies that exhibit strong growth potential. The objective is to generate long-term returns by investing in companies well-positioned to benefit from
technological advancements and industry disruptions.

The fund will focus on key factors when selecting securities, including the business fundamentals, industry structure, competitive strength within the sector, management quality, sensitivity to economic factors, financial stability, and primary earnings drivers. Given the importance of disciplined risk management, the AMC will implement appropriate safeguards to manage portfolio risks. Additionally, risk will be mitigated through effective diversification, spreading investments across various industries and sectors.

The key objective of innovation is to improve productivity, reduce cost, increase competitive edge, improve/sustain brand value, acquire new client or new partnership & overall increase turnover and profitability of the company. The Scheme may also invest in companies which assist in providing or development of new products, services or solutions to other businesses.

What Type of Investor Should Invest in Motilal Oswal Innovation Opportunities Fund – Direct (G)?

The Motilal Oswal Innovation Opportunities Fund – Direct (G) is ideal for investors seeking long-term capital appreciation by investing in equities of companies benefiting from innovation. This fund suits those with a high-risk appetite who want exposure to sectors driven by technological advancements, innovative business models, and industry disruptions. It is designed for investors looking to capitalize on emerging innovation trends and willing to invest for a longer time horizon to achieve significant growth potential.

Risk Associated with This NFO

Investing in the Motilal Oswal Innovation Opportunities Fund – Direct (G) comes with risks typical of equity investments, including market volatility, sectoral concentration, and economic sensitivity. Since the fund focuses on innovation-driven companies, there is a higher risk associated with the performance of emerging and evolving sectors. Additionally, the fund’s allocation to equities may result in short-term fluctuations, and the targeted innovative companies might face risks related to technological adoption, competition, and execution challenges.