Publish Date:
Motilal Oswal Mutual Fund has launched Motilal Oswal Digital India Fund
It is an open-ended equity scheme investing in Digital space, focusing on Technology, Telecom, Media, Entertainment and other related ancillary sectors
[Read: Best IT Sector Mutual Funds: ICICI Pru Technology Fund vs. Tata Digital India Fund]
The primary investment objective of the scheme is to generate long term growth of capital by predominantly investing in digital and technology dependent companies, hardware, peripherals and components, software, telecom, media, internet and e-commerce and other companies engaged in or leveraging digitisation.
However, there can be no assurance that the investment objective of the scheme will be realized.
India's Digital Space
India's IT sector has been a pivotal contributor to the nation's economic growth. From expanding internet access to the rise of digital services and innovation, India's digital journey has been defined by rapid growth and innovation.
The internet made its debut in India in 1995, but adoption was initially slow due to high costs and limited infrastructure. During this period, India witnessed a surge in IT services with the rise of companies like Infosys, TCS, and Wipro, laying the groundwork for the digital revolution.
The Indian government launched the ‘Digital India' initiative in 2015 to improve digital infrastructure and connectivity. It aimed to boost online services, e-governance, and promote digital literacy across rural and urban areas. COVID-19 accelerated India's digital transformation. Remote work, e-learning, telemedicine, and e-commerce became essential as more people moved online.
As of 2024, India boasts over 900 million internet users, making it the second-largest internet market globally. India's digital landscape in 2024 reflects its journey from a slow adopter to a global leader in digital transformation. With ongoing investments in 5G, AI, and digital infrastructure, the future promises continued growth, expanding digital inclusion, and a thriving digital economy.
Investing in India's digital economy can be complex, especially given the sector's dynamic nature and the need to select companies with high growth potential. Sectoral/Thematic mutual funds provide a simpler and more diversified way for investors to gain exposure to the digital sector, offering several advantages.
How will the scheme allocate its assets?
Under normal circumstances, Motilal Oswal Digital India Fund will hold an allocation of 80% to 100% in Equity & Equity related instruments of technology driven companies engaged in the digitization space, 0% to 20% in Equity & Equity related instruments of Other than above companies, 0% to 20% in Debt and Money Market instruments (including cash and cash equivalents), 0% to 10% in Units issued by REITs and InvITs and 0% to 5% in Units of Mutual Funds.
Exit Load: 1% - If redeemed on or before 3 months from the date of allotment. Nil - If redeemed after 3 months from the date of allotment.
What is the investment strategy of Motilal Oswal Digital India Fund?
The Motilal Oswal Digital NFO focuses on technology-driven companies in sectors like hardware, software, telecom, media, e-commerce, and businesses benefiting from digitization, including FinTech and IT services.
The Investment strategy would be active in nature, the Scheme will seek to invest in companies operating in digital space and companies dependent on digital and technology. The scheme intends to invest under sectors which are digitization dependent companies such as: software services, products, BPO, hardware, internet and e-commerce, media and entertainment, telecommunication services and equipment's and technology enabled companies.
The portfolio will essentially follow MOAMC's QGLP philosophy; following Hi-Quality Hi-Growth Investing and invest in Quality businesses with high growth potential and with sufficient Longevity of that growth potential at an acceptable Price.
The fund will generally practice a focused, high-conviction active portfolio strategy. It will typically select companies across market capitalization i.e., large cap, mid cap and small cap. A portion of the scheme may also be invested in IPOs and other primary market offerings that meet the Scheme's investment criteria based on the asset allocation.
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Motilal Oswal Digital India Fund is benchmarked against the BSE Teck TRI
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Motilal Oswal Digital India Fund will be managed by Mr
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Motilal Oswal Digital India Fund is open for subscription from October 11, 2024 to October 25, 2024. The fund will reopen for continuous sale and repurchase within 5 Days from the date of allotment
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The minimum subscription amount is Rs 500/- and in multiples of Re. 1 thereafter. For Additional Purchase, Rs 500/- and in multiples of Re. 1/- thereafter.
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The fund offers Direct Plan and Regular Plan. Under each plan the fund offers Growth and Income Distribution cum Capital Withdrawal (IDCW) option.
Should investment in Motilal Oswal Digital India Fund be considered?
Motilal Oswal Digital India Fund is designed as a thematic fund, aiming to achieve long-term capital appreciation by investing in equity and equity-related instruments of companies harnessing the power of digital transformation. The focus is on businesses that are navigating and benefiting from various stages of business cycles, particularly those thriving due to digitization.
India's digital economy is set to surge to USD 900-1000 billion by 2030, fueled by increasing internet and smartphone usage. The scheme is positioned to invest in market leaders of the digital space, ensuring that investors can ride this wave of digital transformation as India's digital economy continues to expand.
The fund is a thematic investment focusing on digital transformation. It invests heavily in companies within the IT, telecom, and digital sectors. While these sectors have significant growth potential, they can also be volatile and cyclical. The scheme holds a higher risk profile due to its thematic focus. It may experience sharp fluctuations based on global and domestic factors affecting the digital and technology sectors.
Additionally, the persistent macroeconomic uncertainty may keep short-term market volatility high. The performance of the scheme might therefore be impacted by these variables, among others, and may affect negatively if these sectors move out of favour.