MOSt Funds Call: 1800-200-6626 | SMS: FOCUS to 575753 The Power of FOCUS AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY Motilal Oswal MOSt Focused 25 Fund (An open ended Equity Scheme) NO LOAD FUND With the power of focus, you can see constellations where others only see stars
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MOStFundsCall: 1800-200-6626 | SMS: FOCUS to 575753
The Power of
FOCUS
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Motilal Oswal MOSt Focused 25 Fund(An open ended Equity Scheme)
NO LOAD FUND
With the power of focus, you can see constellations where others only see stars
Summary
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Key objective of investing is to increase purchasing power. In the long run equities enhance purchasing power in portfolios
In equity investing, a focused portfolio of companies with quality, growth and business longevity wins
MOSt Focused 25 Fund would endeavor to construct such a portfolio; a product best suited for medium to long term investors
Research, Integrity and Focus are pillars of the Motilal Oswal Group
The Group has a successful track record of managing public money based on a focused investment philosophy
1
Why Equities as an Asset Class?“Investing is foregoing current purchasing power now
for a greater purchasing power in future.” - Warren Buffett
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY 2
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Key Objective of Investing: Enhancing Purchasing Power
Over FY79-13 CPI inflation has been 8.4%, eroding purchasing power of ` by 94%
Source: Centre for Monitoring Indian Economy (CMIE), Motilal Oswal Financial Services Ltd (MOFSL), Bloomberg, Motilal Oswal Asset Management Company (MOAMC) Internal Analysis. Data as on 31st March, 2013.
Jan
-79
Jan
-81
Jan
-83
Jan
-85
Jan
-87
Jan
-89
Jan
-91
Jan
-93
Jan
-95
Jan
-97
Jan
-99
Jan
-01
Jan
-03
Jan
-05
Jan
-07
Jan
-09
Jan
-11
Jan
-13
120
100
80
60
40
20
100
6
`Inflation erodes purchasing power of money
CPI= Consumer Price Index
3
Equities significantly enhance purchasing power of portfolios
Source: CMIE, MOFSL, Bloomberg, MOAMC Internal Analysis. Data as on 31st March, 2013Note: The information / data herein is used for comparison purpose and is illustrative and is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party.
Jan-7
9
Jan-8
1
Jan-8
3
Jan-8
5
Jan-8
7
Jan-8
9
Jan-9
1
Jan-9
3
Jan-9
5
Jan-9
7
Jan-9
9
Jan-0
1
Jan-0
3
Jan-0
5
Jan-0
7
Jan-0
9
Jan-1
1
Jan-1
3
100
283
985
If you had invested `100...
Fixed Deposit
Sensex
Gold
100
200
400
600
800
1,000
1,200
1,400
Pu
rch
asin
g P
ow
er
Inflation-adjusted returns of different assets
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Key Objective of Investing: Enhancing Purchasing Power (Contd.)
4
Source: CMIE, MOFSL, Bloomberg, MOAMC Internal Analysis. Data as on 31st March, 2013.Note:The information / data herein is used for comparison purpose and is illustrative and is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party.
Jan
-79
Jan
-81
Jan
-83
Jan
-85
Jan
-87
Jan
-89
Jan
-91
Jan
-93
Jan
-95
Jan
-97
Jan
-99
Jan
-01
Jan
-03
Jan
-05
Jan
-07
Jan
-09
Jan
-11
Jan
-13
1,539
4,355
15,172If you had invested `100...Fixed Deposit
Sensex
Gold
100
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000N
om
inal
Valu
e
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Key Objective of Investing: Enhancing Purchasing Power (Contd.)
5
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Motilal Oswal MOSt Focused 25 Fund“It is impossible to produce superior performance
unless you do something different.”—John Templeton
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“Understandable first-class businesses, with enduring competitive advantages, accompanied by able and trustworthy managers, available at a bargain price.”
- The Four Filters Invention of Warren Buffett and Charlie Munger
Quality, Growth andLongevity (QGL)
‘Buy and Hold’ StrategyFocused, High Conviction
Portfolio Construct
• Will invest in companies with: • Enduring economic moats that ensure quality and longevity • High growth potential
• Maximum 25 stocks• Minimum stock positions of 2.5%• Bottom-up stock picking• Optimal Diversification
Long term growth over economic cycles Enables compounding of growth Low Churn: Cost Efficient Portfolio churn driven by fundamentals over valuations
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
MOSt Focused 25 Fund – Key Differentiators
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Why Quality?
“….Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions…"
Quality companies are those which have enduring economic moats (EMC’s)
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Why “Buy and Hold”?
Superior quality companies held for longer durations deliver superior returns
Source: MOAMC Internal Analysis. Data as on 31st March, 2013
CAGR
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
13.8%11.9%
12.6%
15.4%
19.4%
22.5%
Index <3 yrs <5 yrs <7 yrs 10 -17 yrs Index always
“Time is the friend of the wonderfulbusiness, the enemy of the mediocre”
-Warren Buffett
Nifty
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Focus: Seeking Optimal Diversification
“The idea of excessive diversification is madness. Widediversification, which necessarily includes investment in mediocre
businesses, only guarantees ordinary results.”-Charlie Munger
Source: An Introduction to Risk and Return Concepts and Evidence by Franco Modigliani and Gerald A. Pogue
Portfolio Standard Deviation v/s Number of Securities
Po
rtfo
lio
Sta
nd
ard
Devia
tio
n
Number of Securities in Portfolio
10%
0%
20%
30%
40%40%
50%
60%
0 5 10 15 2020 25 3530 40
Diversifiable Risk
Non-DiversifiableSystemic Risk
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Focus – The Road Less Travelled
“We don’t believe that widespread diversification will yield agood result. We believe almost all good investments will involve
relatively low diversification.” - Charlie Munger
Funds with > 50 stocks (35%)
Funds with 25 - 50 stocks (58%)
Funds with < 25 stocks (7%)
st Source: ICRA. Data as on 31 March, 2013 Note: The above excludes sector-specific and index funds (65 funds)
AUM - `1.63 tnNo of Funds - 269
1%
38%
61%
`21 bn
`621 bn
`985 bn
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Investment Process
A businesswe
understand
Favourablelong termeconomics
Able andtrustworthy
management
Margin ofSafety
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Investment Process – Stock Screening
Top down analysis market views, thematic drivers, winner categories and category winners
Investment Universe
Quantitative Screening Research Fund Portfolio
Greater than `1,400 cr of Market Capitalization
Earnings growth, FCF, ROA and ROE etc.
‘360 degree view’ of companyIdentify competitive advantages, barriers to entryNature and sustainability of catalysts
High Conviction Ideas Superior risk-adjusted return characteristics
100-150 Stocks500 Stocks 75-100 Stocks Max 25 Stocks
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Portfolio Construct
For Whom
Investors who like to invest with a Long-term wealth creation view
Investment Horizon
Medium to Long Term (3+ Years)
Allocations
Minimum 65%: Top 200 companies of BSE/ NSEMaximum 25%: Beyond Top 200 but > `1,400cr market capitalizationMaximum 10% discretionary cash and equivalents
Number of Stocks
Maximum 25 stocks
Scrip Allocation
Maximum 10% of NAV in a single stockMinimum 2.5% of NAV in a single stock
Sector Allocation Limit
Higher of 25% or 1.5x of benchmark weight (under normal circumstances)Minimum Zero
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Fund Details
Type of Scheme: An open ended equity scheme
Investment Objective: The investment objective of the Scheme is to achieve long term capital appreciation by investing in up to 25 companies with long term sustainable competitive advantage and growth potential.
However, there can be no guarantee that the investment objective of the scheme would be achieved.
Benchmark: CNX Nifty
Entry/Exit Load: Nil
Plans: Regular Plan and Direct Plan
Options (Under each plan): Dividend (Payout and Reinvestment) and Growth
Minimum Application Amount: ̀ 10,000/- and in multiples of ̀ 1/- thereafter.
Additional Application Amount:`1,000/- and in multiples of ̀ 1/- thereafter.
Systematic Investment Plan (SIP): Minimum installment amount `1,000/- and `2,000/- respectively for Monthly and Quarterly frequency respectively and in multiples of ̀ 1/- thereafter.
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Fund Details (Contd.)
Taher Badshah brings with him 18 years of rich experience in fund management and investment research.
He started his career as an automobiles analyst with Motilal Oswal and has been well-regarded in the industry for his work in this sector. Besides, Taher has also worked in different capacities with organizations like Kotak Mahindra and Prudential ICICI. He has spent the first 10 years of his career doing sell-side equity research and the past 8 years in active fund management. Taher has worked as a Senior Fund Manager for ICICI Prudential PMS for 3 years post which his last assignment has been with Kotak Mahindra Investment Advisors as a Fund Manager managing a part of their long-only offshore equity assets between 2007 and 2010.
At Motilal Oswal AMC, in his capacity as Sr. Fund Manager and Co-Head Equities, he has led the active equity investment team since 2010 and has also served as an interim CEO of Motilal Oswal AMC over the past 6 months.
Taher is a B.E. in Electronics from the University of Mumbai and has followed it up with a Masters in Management Studies (Finance) from the SP Jain Institute of Management, Mumbai.
Taher BadshahSenior Vice President & Co-Head of Equities
Abhiroop Mukherjee Sr. Manager – Fixed Income
Mr. Abhiroop Mukherjee, aged 30 years, is a PGPBF (Finance) from National Institute of Bank Management, a B.Com (Honors) from Calcutta University. He has over 6 years experience in Fixed Income Securities trading. Prior to joining Motilal Oswal Asset Management Company Limited, he was a WDM trader with PNB Gilts Ltd. In Mumbai. Earlier he had worked as Assistant Vice President-Fixed Income, between April 2007 to May 2011 where he was responsible for trading in Government Securities, T-Bills & Corporate Bonds. At Motilal Oswal Asset Management Company Limited, he is the Fund Manager of Motilal Oswal Most 10 year Gilt Fund.
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Portfolio Holdings
Data as on 28th June, 2013 .*As classified by AMFI.
Security NameHDFC Bank Ltd
Tata Consultancy Services Ltd
ITC Ltd
HDFC Ltd
Idea Cellular Ltd
Kotak Mahindra Bank Ltd
Maruti Suzuki Ltd
Container Corporation of India Ltd
Pidilite Industries Ltd
ONGC Ltd
Bata India Ltd
Divis Laboratories Ltd
Page Industries Ltd
Cummins India Ltd
Sundaram Finance Ltd
Larsen & Toubro Ltd
MCX Ltd
Tata Motors Ltd
Term Deposit
Cash & Others
Total
Portfolio (%)8.20
8.10
6.80
6.50
6.20
6.00
5.90
5.80
5.60
4.00
4.00
3.90
3.90
3.80
3.70
3.60
3.40
3.00
4.10
3.40
100.00
Industry* Banks
Software
Consumer Non-Durables
Finance
Telecom
Banks
Auto
Transportation
Chemicals
Oil
Consumer Durables
Pharmaceuticals
Textile
Industrial Products
Finance
Construction
Financial Institution
Auto
-
-
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AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Our Credentials
18
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Motilal Oswal Financial Services Ltd. (MOFSL)
*AMC = 20.1 bn, PE = `12.4 bn and WM = `18.4 bn. Data as of 31st Dec, 2012.
A 25-year old well-diversified, financial services company offering a range of products and services
Research, Integrity and Focus are pillars of the Motilal Oswal Group
Market capitalization of ̀ 1,200crs, Gross Revenue and Earnings of ̀ 318 crs and ̀ 73 crs respectively
Equity research has been the firm’s DNA
Driven by passion to create wealth for our customers
Over a decade of experience in successfully managing public money leveraging :
- Two decades of Investment Research expertise
- Investment philosophy distilled from 17 years of Wealth Creation Studies
- Presently, the Group has close to US$ 1 bn* in assets under management
19
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
Motilal Oswal Asset Management Company (MOAMC)
Data as on 31st Mar ’13 Data as on 31st Mar ’13
Combined team investment experience of over 80 man years
`1,724 crs of total assets under management
Active strategies - Equity Long-Only (PMS)
A stellar 10-year track record in Value / Growth At A Reasonable Price (GARP) strategies across market caps
Strong track record in identification of investment themes (Next Trillion Dollar Opportunity, Target Return etc.)
Innovative Access Products in Mutual Funds
Innovative first of its kind access products
MOSt Shares M50 (India’s first fundamentally weighted ETF based on the CNX Nifty Index)
MOSt Shares Midcap 100 (India’s first Midcap ETF based on the CNX Midcap Index)
MOSt Shares NASDAQ 100 (India’s first US equities based ETF, denominated in INR)
MOSt Gold Shares (India’s first Gold ETF which enables investment as well as consumption of pure gold)
MOSt 10 Year Gilt Fund (India’s first 10 Year benchmark Government Bond access product)
PMS AUM (`Crs)
477
982
1,2581,357
1,260
FY09 FY10 FY11 FY12 FY13
Mutual Funds AUM (`Crs)
464Nasdaq 100
ETF, 13%
M-50ETF, 15%
GoldETF, 14%
Midcap 100ETF, 20%
10 Year GiltFund, 38%
Investment Expertise
20
AN ASSET MANAGER WITH A FOCUSED INVESTMENT PHILOSOPHY
DisclaimerThis presentation has been prepared and issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact and terms and conditions and features of MOSt Focused 25 Fund. The information / data herein alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions, figures, charts/graphs, estimates and data included in this presentation are as on date and are subject to change without notice. While utmost care has been exercised while preparing this document, Motilal Oswal Asset Management Company Limited does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Readers shall be fully responsible/liable for any decision taken on the basis of this presentation. No part of this document may be duplicated in whole or in part in any form and/or redistributed without prior written consent of the Motilal Oswal Mutual Fund/Motilal Oswal Asset Management Company Limited. Readers should before investing in the Scheme make their own investigation and seek appropriate professional advice.
Statutory Details: Constitution: Motilal Oswal Mutual Fund has been set up as a trust under the Indian Trust Act, 1882. Trustee: Motilal Oswal Trustee Company Limited. Investment Manager: Motilal Oswal Asset Management Company Ltd. Sponsor: Motilal Oswal Securities Ltd.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Past performance of the Sponsor/ AMC/ Mutual Fund and its affiliates does not indicate the future performance of the scheme and may not provide a basis of comparison with other investments.
This product is suitable for investors who are seeking*
Return by investing in upto 25 companies with long term sustainable competitive advantage and growth potential
Investment in Equity and equity related instruments subject to overall limit of 25 companies
High risk (BROWN)
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Note: Risk is represented as:
(BLUE) investors understand that their principal will be at low risk
(YELLOW) investors understand that their principal will be at medium risk
(BROWN) investors understand that their principal will be at high risk