Motilal Oswal Financial Services Fund

Motilal Oswal Services Fund: Capitalize on India’s Services Boom with Nivesh

The Motilal Oswal Financial Services Fund aims to capture India’s services sector on the rise since it is becoming vital to the national economy. At Nivesh, investors are equipped to make good choices with our professional guidance and NFO (New Fund Offer), custom solutions, and cutting-edge tools. The fund will open on May 20th, 2025, and close on June 3rd, 2025. This blog highlights how this fund has the potential to revolutionize your portfolio by aligning with India’s ongoing economic transformations while promoting responsible investing. With the evolution of workplaces, employees have begun experiencing a greater degree of financial stress than ever before. One recent study revealed:

·   57% of Indian employees report monetary issues as their primary source of stress.

·   30% of high-income earners continue to live precariously from one paycheck to another.

·   74% of employees now believe financial wellness support should be offered by their employers.

·   Employees suffering from financial stress are 2.2x more likely to quit.

This financial stress has transformed into a business risk, marking a shift from personal burden. Inadequate financial wellness affects productivity, attrition, morale, and even the perception of the company’s brand by its employees.

Companies who invest in their employees’ financial wellness in India are reaping the benefits of loyalty, performance, and engagement.

This is exactly where Nivesh For Teams offers value, by combining employee money concerns with education, consultation, and action through one integrated platform.

What is the Motilal Oswal Financial Services Fund?

The fund focuses on firms that obtain most of their revenue from services in India, mainly from IT, healthcare, tourism, financial fields, logistics, education and media. In line with its long-term capital appreciation purpose, the NFO (New Fund Offer) uses structural catalysts of the sector, including technology, increasing consumer income and an increase in global outsourcing demand. Experts at Motilal Oswal Financial Services , NFO (New Fund Offer) use bottom-up research and awareness of international trends to select companies that will do well.

Nivesh’s Role: We help you evaluate your progress toward your financial goals with risk profiling with NFO (New Fund Offer), a look at your history and simulations of your portfolio. If you wish to earn 12–15% a year over 7–10 years, this fund can be combined with important investments like large-cap equity or hybrid funds

Why Invest in India’s Services Sector?

1. GDP Contribution: IT exports, healthcare and fintech have pushed the portion of services in India’s GVA to 55% in FY25, compared with 50% in FY15.
   
2. Employment Driver: Employs 30% of India’s workforce (over 150 million people), with sectors like e-commerce and logistics adding 8–10% jobs annually.
   
3. Global Integration: Ranks 7th globally in services exports ($340 billion in FY24), led by IT/ITeS (55% share) and professional services.
   
4. High Growth: The sector grew at 8.3% CAGR from FY23–FY25, outpacing agriculture (3.5%) and industry (5.2%).

Nivesh Insights: Our research tools highlight emerging trends, such as:

1. Healthcare: Telemedicine and diagnostics expanding at 20% CAGR.
2. Financial Services: Fintech transaction value to hit $2.1 trillion by 2030.
3. Tourism: Foreign tourist arrivals are expected to double to 20 million by 2030.

Key Features of Motilal Oswal Financial Services Fund

• Sector Focus

The fund targets high-growth sub-sectors:

1. IT & Tech: Cloud computing, AI, and SaaS (e.g., TCS, Infosys).
2. Healthcare: Hospitals, diagnostics, and health tech (e.g., Apollo, Dr. Lal PathLabs).
3. Financial Services: NBFCs, fintech, and insurance (e.g., Bajaj Finance, Policybazaar).
4. Consumer Services: Food delivery, edtech, and OTT platforms (e.g., Zomato, BYJU’S).
   
   

• Expert Management

Led by the team which uses a “Quality Growth” framework to select companies with:

1. ROCE/ROE > 20% (indicating capital efficiency).
2. Debt/Equity < 1 (low leverage).
3. Revenue growth > 15% CAGR (sustainable momentum).
   
   

• Risk Management

1. Portfolio Capped at 35 Stocks: Avoids over-diversification; top 10 holdings may constitute 40–50% of assets.
2. Liquidity Filters: Excludes stocks with average daily turnover < ₹5 crore.
3. Diversification: Spreads exposure across 8+ sub-sectors and market caps (60% large-cap, 30% mid-cap, 10% small-cap).

5 Reasons to Consider This NFO (New Fund Offer)

1. Growth Potential: Targets sectors poised for 20%+ CAGR, like food delivery (25% growth) and digital payments (35% growth).
2. Quality Focus: Prioritizes companies with consistent ROE > 18% and strong cash flows (e.g., HDFC Bank, Divi’s Labs).
3. Economic Tailwinds: Backed by policies like Make in India (boosting logistics), Digital India (accelerating fintech), and National Health Mission (expanding healthcare access).
4. Diversification: Reduces concentration risk by investing in IT (30%), healthcare (25%), financial services (20%), and emerging segments (25%).
5. Long-Term Vision: Aligns with India’s goal to become a $5 trillion economy by 2027, where services will contribute ~60% of GDP.

Risks & How Nivesh Helps To Mitigate Them

1. Sector-Specific Risks: Returns depend on the services sector’s performance.
   Nivesh’s Solution: Diversify with sector-agnostic funds (e.g., flexi-cap) to offset cyclicality.
   
   
2. High Volatility: The Riskometer indicates “Very High Risk” due to mid/small-cap exposure.
   Nivesh’s Solution: Use SIPs to average costs during market swings.
   
   
3. Market Fluctuations: No guaranteed returns.
   Nivesh’s Solution: Regular portfolio reviews and rebalancing alerts via our app.

Final Thoughts

The Motilal Oswal Financial Services Fund offers a strategic gateway to India’s services revolution, blending sectoral expertise with rigorous risk management. While its focus on high-growth industries promises outsized returns, investors must stay mindful of volatility.

Nivesh simplifies this journey with data-driven insights, personalized advice, and seamless tracking tools. Consult our advisors today to align this NFO (New Fund Offer) with your wealth goals.

Disclaimer: Mutual fund investments are subject to market risks. Read all scheme-related documents carefully. Past performance is not indicative of future returns.

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FAQs: Simplified by Nivesh

Q1. What is the minimum investment amount?

A: ₹500 for lump-sum/SIP. Nivesh offers flexible options like daily/weekly SIPs and tactical top-ups during market dips.

Q2. How does the fund handle downturns?

A: Active rebalancing (e.g., shifting to defensive stocks like hospitals or IT during recessions) and holding 5–10% cash liquidity to buy undervalued assets.

Q3. Is this NFO (New Fund Offer)  suitable for conservative investors?

A: Ideal for moderate-to-high-risk investors. Nivesh’s advisors can suggest safer alternatives like balanced advantage funds or FD-linked portfolios.

Q4. How can Nivesh assist in tracking this fund?

A: Our platform provides real-time NAV updates, monthly performance reports, and comparative analytics against benchmarks like Nifty Services TRI.

Q5. What is the benchmark for this fund?

A: The fund benchmarks against the Nifty Services Sector TRI, which tracks the performance of India’s top service-sector companies. Nivesh’s dashboard lets you compare fund returns against this benchmark seamlessly.

Q6. Are there exit loads for early redemption?

A: Yes, a 1% exit load applies if units are redeemed within 365 days. However, Nivesh’s advisory team can guide you on optimal holding periods to minimize costs.

Q7. Can I switch existing investments to this fund?

A: Absolutely! Nivesh’s portfolio restructuring service helps you reallocate investments from underperforming funds to this NFO(New Fund Offer), ensuring alignment with your goals.

Q8. How tax-efficient is this fund?

A: Long-term capital gains (held >1 year) are taxed at 10% beyond ₹1 lakh. Short-term gains are taxed at 15%. Nivesh’s tax advisory tools can optimize your post-tax returns.