FOCUS - Motilal Oswal · Research, Integrity and Focus are pillars of the Motilal Oswal Group ... Asset Management Company (MOAMC) Internal Analysis. Data as on 31st March, 2013

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


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


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


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


Key Objective of Investing: Enhancing Purchasing Power (Contd.)

5


Motilal Oswal MOSt Focused 25 Fund“It is impossible to produce superior performance

unless you do something different.”—John Templeton

6

“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


MOSt Focused 25 Fund – Key Differentiators

7


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…"

- Benjamin Graham: The Intelligent Investor

Payoff profile of EMCs, Non-EMCs and Sensex

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

0

250

500

750

1000

(All rebased to 100 in March 2002)

EMCs Non-EMCs Sensex

25%,9.3x

12%,3.1x

18%,5.0x33%CAGR,5.5x

20%CAGR,3x

Quality companies are those which have enduring economic moats (EMC’s)

8


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

9


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

10


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

11


Investment Process

A businesswe

understand

Favourablelong termeconomics

Able andtrustworthy

management

Margin ofSafety

12


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

13


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

14


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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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.

16


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

-

-

17


Our Credentials

18


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


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


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

Documents

FOCUS - Motilal Oswal · Research, Integrity and Focus are pillars of the Motilal Oswal Group ... Asset Management Company (MOAMC) Internal Analysis. Data as on 31st March, 2013