Motilal Oswal Mutual Fund (MOMF) on Thursday announced the launch of the ‘Motilal Oswal Contra Fund’, an open-ended equity scheme that will follow a contrarian investment strategy to identify companies trading below their intrinsic value despite having strong long-term fundamentals.

The New Fund Offer (NFO) will open for subscription on May 8 and close on May 22, 2026. The scheme will benchmark itself against the Nifty 500 Total Return Index and aims to generate long-term capital appreciation by investing predominantly in equity and equity-related instruments.

The launch comes at a time when sectoral leadership in the market continues to shift across industries such as banking, metals, auto and real estate, prompting fund houses to pitch differentiated investment strategies to investors seeking diversification and long-term alpha generation.

Focus on mispriced opportunities

According to the fund house, the contra strategy will look to capitalise on temporary market dislocations and behavioural biases that often lead to mispricing of fundamentally sound businesses.

Prateek Agrawal, MD & CEO of Motilal Oswal Asset Management Company (MOAMC), said market volatility often creates opportunities for patient investors willing to stay invested through complete market cycles.

“Market mispricings often persist due to behavioural biases and structural factors. The Motilal Oswal Contra Fund is designed to identify these early signals and opportunities and invest in companies with relatively reasonable valuations,” Agrawal said.

The fund will maintain a high-conviction portfolio diversified across market capitalisations and sectors, with an investment horizon of three to five years.

Portfolio to hold 30-35 stocks

Bhalchandra Shinde, Fund Manager at MOAMC, said the scheme would focus on companies with strong operating cash flows, attractive valuations and visible turnaround potential.

“The strategy aims to build a concentrated portfolio of 30-35 stocks while following a disciplined risk management and exit framework,” he said.

The scheme will be jointly managed by Varun Sharma, Bhalchandra Shinde, Ankit Agarwal, Rakesh Shetty and Swapnil Mayekar, overseeing equity, debt and overseas allocations.

Investment details

The minimum lump sum investment during the NFO period has been fixed at ₹500, with additional investments starting from ₹500 thereafter. An exit load of 1 per cent will apply if units are redeemed within 365 days from allotment, while no exit load will be charged after one year.

Motilal Oswal Asset Management Company, incorporated in 2008, manages mutual funds, portfolio management services and alternative investment funds under the Motilal Oswal Group, which has over three decades of presence in India’s equity markets.