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August 2018 | Issue 28
Investment Product Guide
MOFSL- Overview
Market Update
Product Update
A strengthened global economy is giving central banks’ opportunity to withdraw stimulus. Following the Fed, the ECB has
indicated its intent to end its bond-buying program. This indicates the end of easy money era and this clearly reflects as
consequences in the emerging market. Higher interest rates means liquidity flowing out of the emerging market to be
parked back at home and this is reflecting currently. As an effect of these global developments, most emerging market
currencies have taken a hit and the rupee hit the all-time low of 69 on 19th July 2018. Meanwhile, a trade war playing out
between US & China is keeping everyone on their toes.
In line with the global economy, India’s economy continues to remain robust. The same evident various high frequency
data points. The country’s latest GDP number & composite PMI no., infrastructure growth jumped 7 months high are
testament to this. We believe that pick up in corporate profitability is the next immediate progression of this increased
economic activity. All this while earnings have been mirage, this time it is finally started reflecting in the reality. There is
confidence to be gained in the widespread nature of the same. Instead of few sectors pulling the weight, we have
witnessed a recovery across the spectrum. The building blocks of a domestic economic recovery seem to be falling in
place. This appears to be led by both structural and cyclical factors.
Our newly launched strategy “Renaissance India Next AIF” aims to capture growth through companies and sector which
have been head winded in the past but will see good uptick in the coming years. We continue to advise a staggered
approach to investing in equities with a view to commit more during any sharp correction.
In the fixed income space, we continue to recommend low maturity high accrual portfolios as they are provide strong
visibility of returns.
Risk reward continues to favour multi cap strategies
MOFSL- Overview
o Group Profile & Structure
o Business Evolution
o Business Update
Group Profile and Structure
Affordable Housing Loan Families
Retail Broking and Distribution Clients
Institutions
AMC Distributors
Corporates
638+
100+
48,000+
870,000+
2,300+
● Well-diversified, financial services company offering a range of financial products and services
● Focused on wealth creation for all its customers, such as institutional clients, HNWIs and retail customers
● Network spread over 500+ cities comprising 2200+ business locations operated by our business partners
and us with 1 Million+ total registered customers
● Shares listed on the Bombay Stock Exchange and National Stock Exchange in Mumbai
Motilal Oswal
Securities Ltd.
Institutional
Equities
Broking &
Distribution
Motilal Oswal
Investment
Advisors Pvt. Ltd.
Investment
Banking
MOPE Investment
Advisors Pvt Ltd.
Private Equity
Real Estate
Motilal Oswal Financial Services Ltd.
Motilal Oswal
Wealth Management
Ltd.
Financial
Strategy
Wealth
Management
Motilal Oswal Asset
Management
Co. Ltd.
PMS
AIF
Mutual Funds
Offshore Funds
Aspire Home
Finance
Corporation Limited
Housing Finance
Motilal Oswal
Commodities
Broker Private Ltd.
Commodity
Broking
Evolution
Institutions
Corporates
638+
100+ Mutual Fund
Retail broking
Institutional Equities
PMS
DistributionMF, IPO, Insurance
Investment Banking
Retail broking
Institutional Equities
DistributionMF, IPO
Retail broking
Institutional Equities
Private Equity
Lending(LAS)
PMS
Wealth Management
Broking Integrated Financial Services
1987 - 95 1996 - 2005 2006 - 2007 2010
Retail broking
Institutional Equities
Investment Banking
Private Equity
Lending(LAS)
PMS
Wealth Management
DistributionMF, IPO, Insurance
Mutual Fund
Retail broking
Institutional Equities
Investment Banking
Private Equity
Lending(LAS)
PMS
Wealth Management
DistributionMF, IPO, Insurance
Housing Finance
2014
FY18 update- Achieving a high, sustainable RoE
Notes: • # Treasury gains in Agency business P&L have been classified under Fund based business• Does not include unrealised gain on our quoted equity investments (Rs 7 bn as of December 2017).• Post-tax XIRR of these investments (since inception): ~25%; other treasury investments are valued at cost
Group RoE Segment-wise RoE*, with % of net worth employed (NWE)
Capital
Markets#
156% in FY18
Asset
Management
200% in FY18
Housing
Finance
4% in FY18
Fund based
business
5% in FY17
Capital
Markets#
61% in FY17
Asset
Management
206% in FY17
Housing
Finance
17% in FY17
Fund based
business
12% in FY18
MOFSL
Consolidated
27% (Inc-Unrealised Gain is 31%) in FY18
MOFSL
Consolidated
22% in Q3FY17
(5% of NWE) (6% of NWE) (34% of NWE) (55% of NWE)
(7% of NWE) (4% of NWE) (34% of NWE) (55% of NWE)
Business Snapshot
Trusted by 1 Million+ customersCustomised advice for various Investing Styles & Risk Profiles
● One stop solution provider for all financial needs: We offer our customer a range of products to ensure that
all the needs are met under one roof.
● One of the largest broking companies in India with presence across 2,200+ locations and AUM of 8,000+
Cr* in investment products.
● Award-winning research covering 95% of market capitalization.
● We offer 100% paperless trading and demat account in 15 minutes.
● Real-time portfolio monitoring and restructuring tools which help you to make investment decisions on
the move & Ability to get recommendations across asset classes at your fingertips.
● Feature rich execution options for customers through MOBILE | TAB | DESKTOP | WEB | Call & Trade
*AUM Mentioned here is combined AUM of MOSL in all investment Products ( PMS, MF,
fixed income, Alternate Investment Product)
Market Update
o Macro Update
o Equity Market Update
o Fixed Income Update
Current Account Deficit & wholesale Inflation widening
India’s current account deficit (CAD) widened sharply to $13 bn in
Q4FY18 from just $2.6 bn (0.4% of GDP) in the corresponding
quarter last year. This rise in CAD was largely led by a 110 bps Y0Y
surge in the non-oil non-gold merchandise trade deficit.
Overall, the merchandise trade widened by $11.9 bn Y0Y to $41.6
bn (5.9% of GDP) in Q4FY18. Import frowth (+15.7%) continued
outspacing exports growth (+6.3%). Invisible earnings rose 5.2% Y0Y
to $28.6 bn in Q4FY18, partially offsetting the higher merchandise
trade deficit.
Capital inflows stood at $24.6 bn (3.5% of GDP) in Q4FY18, much
higher than $10.4 bn (1.4% of GDP) in Q4FY17. While FDI inflows
dipped slightly to $7.4 bn from an average of $8bn for the first three
quarters of FY18, FPI inflows declined sharply to $2.4 bn from an
average of $6.6 bn.
Retail inflation inched upwards to 5 months high of 5.00% (which is
slightly lower than Dec 2017 CPI no.) in June 2018 as compared to
4.87% in May 2018. Inflation based on wholesale prices shot up to a
15 month high of 5.77% in June 2018 from 4.43% in May 2018.
Similar to retail inflation, unfavourable base, fuel and food inflation
were the main driver for the surge in wholesale inflation.
Source: Trading Economics, RBI & MOPWM | Data as on 31st July 2018
1.2
1.7
1.4
0.1 0.1
0.6
1.4
0.4
2.5
1.1
2.11.9
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY16 FY17 FY18
CAD (% of GDP)
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
Dec
-17
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
CPI WPI
Equity Market: Large Cap hold up, while mid & small caps continue to remain volatile
Equity markets (represented by NIFTY 50) ended month on higher note
after flat two consecutive month. Trade tension between US & China had
negative impact on the market sentiment. Moreover, rupee depreciation
against dollar, rising 10 year G-Sec yield and surge in oil prices further
dampened market sentiment. However, easing in rupee valuation, 10
year G-Sec yield and better corporate earnings have supported the
market sentiment in the month of June 2018. Our NIFTY EPS for FY19
have been cut by 3.6% to INR 559 and for the FY20 are largely stable at
INR 694. From valuation standpoint, NIFTY’s forward PE is 20.32x is
trading above the long term average. Currently valuation levels are on
the back of depressed earnings growth over the last few years. Earnings
recovery from here on shall provide the necessary support to the
market. We expect strong earnings recovery supported by demand
recovery in consumption sectors, low base of demonetization and
commodity price inflation. In the near term, markets are likely to remain
under pressure due to strong USD, boiling crude prices and weak global
developments, however, progression of better monsoon could provide
some respite to the markets.
Given the performance of last 5 years and from the valuation
perspective, large cap offers valuation comfort as compared to
midcaps given the high visibility on earnings provided by large caps.
Also, we believe there are various opportunities in certain mi & small
cap space which can benefit from broad based recovery in the
economy. Thereby, we continue to favour multicap and focused midcap
strategies.Source: MOSL & Bloomberg | Data as on 31st July 2018
5%
-5%-4%
6%
0% 0%
6%
9%
-2%
-5% -5%
8%
-7%
-4%
4%
-11%
-3%-5%
-7%
8%
-7%-8%
4%
-19%
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
CYT
D
NIFTY 50 CNX Mid Cap CNX Small Cap
5
9
7
12
7
11
13
17
22
3
9
0
65
10
14
1
3
Q1
FY1
7
Q2
FY1
7
Q3
FY1
7
Q4
FY1
7
Q1
FY1
8
Q2
FY1
8
Q3
FY1
8
Q4
FY1
8
Q1
FY1
9
NIFTY Sales growth NIFTY PAT growth
Debt Market: RBI Rate hiked, stay invested with “Accruals”
RBI monetary policy committee decided to raise the repo rate by
25 bps to 6.50% &
The MPC is targeting to maintain inflation in a band of 4 (+/-
2)%, however the inflation projection is raised of 4.6% CPI in H1
and 4.8% in H2. Meanwhile, MPC is in say that risk of forecast is
evenly balance. In lieu of the domestic & global uncertainties,
yields across the curve, especially on the front end, inched up
inflation at 5% in the month of June 2018.
To give the perspective, in last one year, AAA yield curve has
shifted upwards and is currently trading at levels above the
levels of AA yield curve respectively prevailing at that time. A
case in point is that over the last one year the quantum of rise in
yield of lower rated assets, thus leading to spread compression
between AAA & high yielding assets. Such compression has been
largely owing to transmission of interest rate rise to AAA
segment due to its liquid and better price discovery attribute
and not owing to any credit prospects of lower rated bonds.
Keeping in mind that there are various factors affecting the
bond market, we believe that volatility would persist and the
yield would hover in a range bound manner. The investors are
expected to remain on sidelines due to the lack of any positive
fresh cues.
Source: Bloomberg | Data as on 31st July 2018
6.73 6.78
7.05
7.48
8.03
7.507.67
7.807.90
8.057.94
7.77
8.06
1M 2M 3M 6M 1Yr 2Yr 3Yr 4Yr 5Yr 7Yr 9Yr 10Yr 15Yr
Yield curve
Current 1 mth back 6 mth back 1 yr back
88.97
54.25
127.09
76.49
47.5
145.54
83.11
50.75
148.29
AAA to G Sec AA to AAA A to AA
Credit spreads
10 yr maturity 5 yrs maturity 3 yrs maturity
Product Update
o Portfolio Management Services
o Private Equity- IBEF-III
o Mutual Fund
o Fixed Income
A comprehensive basket of products to meet all financial needs
*Alternate Assets are not available for regular subscription.
MOSL Product Offerings
Mutual Fund
• Equity Mutual Fund
• ELSS Funds
• Balanced Funds
• Arbitrage Funds
• Short term Debt Funds
• Accrual & Credit Funds
• Duration Funds
• Fixed Deposits
• Preference Shares
• Perpetual Bonds
• High Credit Bonds &
NCDs
• Capital Gain Bonds
• Government of India
Bond
• MOAMC Value
Strategy
• MOAMC NTDOP
• MOAMC IOP
• MOAMC IOP V2
• MOAMC BOP
• ASK IEP
• Invesco DAWN
PMS Fixed IncomeAlternate Assets*
• IBEF (Private Equity)
• AIF Funds (Cat III)
• MOAMC AIF
• Renaissance AIF
• IREF (real estate)
• Structured Product
Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed
Income & Alternate Assets
New Product Offering
o Renaissance India Next Fund (category-III Alternate Investment Fund)
New Fund- Renaissance India Next Fund AIF (exclusive for Motilal Oswal)
• Focus on sustainable & durable business model
• Superior quality businesses as demonstrated by competitive edge, pricing power, ROE, FRC.
• Good quality & competent management teams.
• Identify ideas that can deliver superior growth over medium term to long term.
• Ability to invest at reasonable valuations.
• Focus on economic value of business.
Investment Philosophy
• Over two decades of experience in Equities fund management.
• Ability to leverage his Private Equity experience at RARE Enterprises.
• Known for identifying business leaders early and buy them at reasonable valuations.
• Emphasis on Risk management and Bottom up selection.
• Fund management skill honed through prior stints at UTI AMC, Axis AMC, DSP Merill Lynch, Motilal Oswal.
• Last stint was with Axis AMC as Head of Equities.
Managed by
Pankaj Murarka
• Dominant Market players & companies in Industries that have gone through consolidation.
• Focused on companies that will get benefited from India’s Economic Recovery.
• Companies with a healthy balance sheet to ensure margin of safety.
• Mutlicap fund with bottom up stock selection.
Theme of the Fund
New Fund- Renaissance India Next Fund AIF (exclusive for Motilal Oswal)
Category of Fund Key features of Fund
Portfolio Name Renaissance India Next Fund
Minimum Investment Rs. 1 Crore & multiple of Rs. 1 lac
Reference Index Nifty 50
Tenure 3 year + 1 year extendable
Share Class
F1 F2 A1 (Rs.1Crs – 5Crs) A2 (Rs.1Crs – 5Crs)
100% Upfront
30% with application
100% Upfront
30% with application
40% 1st Drawdown 40% 1st Drawdown
30% 2nd Drawdown 30% 2nd Drawdown
Set up Fees Upto 2% Upto 2%
Management Fees 2.5% p.a. 1.75 % p.a.
Hurdle Rate N/A 10%
Performance Linked Fee (to be charged at the end of the tenure or redemption)
N/A 15% (with out catch up)
Exit Load
F1 / A1 F2 /A2
24 to 36 months - 3% 18 to 36 months - 3%
36 months to Fund Closure - Nil 36 months to Fund Closure - Nil
Portfolio Management Services
o MOAMC Value
o MOAMC NTDOP
o MOAMC IOP
o MOAMC IOP V2
o MOAMC BOP
o ASK IEP
o Invesco DAWN
Value Strategy
• Buy Right & Sit Tight approach to stock investing
• Value PMS has delivered 23.70% annualized returns since
inception versus 17.05% of Nifty 50; INR 1 Cr. invested in Value
PMS in March 2003 is worth INR 26.24 Cr versus INR 11.23 Cr. in
Nifty 50.
• Focused portfolio approach, currently strategy has 20 stocks in its
portfolio.
Performance(%ge) Value of 1 cr. Invested
PeriodValue
StrategyNifty 50
ValueStrategy
Nifty 50
1 Month 2.70 5.99 1.03 1.06
3 Months -0.99 5.75 0.99 1.06
6 Months -0.67 2.98 0.99 1.03
1 Year 3.41 12.70 1.03 1.13
2 Years 8.89 14.66 1.19 1.31
3 Years 6.84 10.00 1.22 1.33
4 Years 13.23 10.13 1.64 1.47
5 Years 18.57 14.61 2.34 1.98
Since Inception 23.70 17.05 26.24 11.23
Inception Date Benchmark Fund Manager
25-Mar-03 Nifty 50 Index Mr. Shrey Loonker
Source: MOAMC | Data as on 31st July 2018
Portfolio (Top 5 Stocks)
Scrip Name (%) of Market value
HDFC Bank Ltd. 11.67
Kotak Mahindra Bank Ltd. 9.65
Bajaj Finserv Ltd. 7.30
Bharat Petroleum Corporation Ltd.
6.56
AU Small Finance Bank Ltd. 6.38
Market Cap
Sector Allocation %of Assets
Large Cap 89
Mid Cap 9
Small Cap 1
Top 3 sectors
Sector Name (%) of Market value
Banking & Finance 50.32
Auto & Auto Ancillaries 22.64
Oil and Gas 9.62
Next Trillion Dollar Opportunity Strategy (NTDOP)
• The strategy aims to deliver superior returns by investing in
focused themes which are part of the next trillion dollar GDP
growth opportunity. It aims to predominantly invest in Multi Cap
stocks with a focus on identifying emerging stocks/ sectors.
• Have successfully completed 10 years.
• The portfolio consist of 24 stocks.
• In last 5 years, NTDOP PMS has delivered positive return of 31.35%
versus 17.12% of Nifty 500.
Performance(%ge) Value of 1 cr. Invested
Period NTDOP NIFTY 500 NTDOP NIFTY 500
1 Month 5.99 5.33 1.06 1.05
3 Months 2.80 1.62 1.03 1.02
6 Months 5.53 -0.49 1.06 1.00
1 Year 9.73 9.75 1.10 1.10
2 Years 15.06 14.74 1.32 1.32
3 Years 14.34 10.74 1.49 1.36
4 Years 26.90 11.72 2.59 1.56
5 Years 31.35 17.12 3.91 2.20
Since Inception 18.45 6.20 6.08 1.90
Inception Date Benchmark Fund Manager
5-Dec-07 NIFTY 500 Index Mr. Manish Sonthalia
Source: MOAMC | Data as on 31st July 2018
Portfolio (Top 5 Stocks)
Scrip Name (%) of Market value
Kotak Mahindra Bank Ltd. 12.17
Bajaj Finance Ltd. 11.94
Page Industries Ltd. 10.05
Voltas td. 8.39
Eicher Motors Ltd. 5.77
Market Cap
Sector Allocation %of Assets
Large Cap 45
Mid Cap 50
Small Cap 5
Top 3 sectors
Sector Name (%) of Market value
Banking & Finance 35.74
FMCG 17.70
Auto & Auto Ancillaries 12.96
India Opportunity Portfolio (IOP)
• The Strategy aims to generate long term capital appreciation by
creating a focused portfolio of high growth stocks having the
potential to grow more than the nominal GDP for next 5-7 years
• The Strategy at present has a concentration in 24 stocks.
• Focus Theme for Next Five year: REVIVAL IN CAPEX CYCLE | MAKE
IN INDIA | THIRD TRILLION DOLLAR OPPORTUNITIES
• In last 4 years, IOP PMS has delivered positive return of 18.01%
versus 10.21% of Nifty Midcap100.
Performance(%ge) Value of 1 cr. Invested
Period IOPNIFTY Small
Cap100IOP
NIFTY SmallCap100
1 Month 1.94 4.01 1.02 1.04
3 Months -9.67 -11.01 0.90 0.89
6 Months -15.09 -15.32 0.85 0.85
1 Year -11.50 -4.29 0.89 0.96
2 Years 14.06 10.76 1.30 1.23
3 Years 11.32 9.27 1.38 1.30
4 Years 18.01 10.21 1.94 1.48
5 Years 20.38 22.99 2.53 2.81
Since Inception 14.53 9.48 3.15 2.15
Inception Date Benchmark Fund Manager
15-Feb-10Nifty Smallcap 100
IndexMr. Manish Sonthalia
Source: MOAMC | Data as on 31st July 2018
Portfolio (Top 5 Stocks)
Scrip Name (%) of Market value
Development Credit Bank Ltd. 8.98
Birla Corporation Ltd. 8.24
AU Small Finance Bank Ltd 7.78
Aegis Logistics 7.27
Gabriel India Ltd. 6.06
Market Cap
Sector Allocation %of Assets
Large Cap --
Mid Cap 25
Small Cap 75
Top 3 sectors
Sector Name (%) of Market value
Banking & Finance 28.09
Pharmaceuticals 13.36
Oil and Gas 12.64
India Opportunity Portfolio V2 (IOP V2)
Inception Date Benchmark Fund Manager
5-Feb-18Nifty Smallcap 100
IndexMr. Manish Sonthalia
• The Strategy aims to deliver superior returns by investing in stocks
from sectors that can benefit from India's emerging businesses.
• It aims to predominantly invest in Small and Midcap stocks with a
focus on identifying potential winners.
• Focus on Sectors and Companies which promise a higher than
average growth by focusing on four basic themes.
• The Strategy at present has a concentration in 20 stocks.
• Concentration on emerging Themes.
• Investments with Long term perspective.
• Four basic themes- affordable housing, market share gain by
NBFCs & Private Sector banks from PSU banks, growth in rural
economy, shift from unorganized to organized sector
• Investment Approach: “Buy & Hold” strategy
• IOP V2 has delivered 4.28% vs NIFTY Midcap 100 has delivered
4.01% in the last 1 month.
Source: MOAMC | Data as on 31st July 2018
Portfolio (Top 5 Stocks)
Scrip Name (%) of Market value
Heg Ltd 10.64
Gruh Finance Ltd. 7.68
Cholamandalam Investment And Finance Company Ltd.
7.53
Godrej Agrovet Ltd 7.23
Bajaj Electricals Ltd 6.69
Market Cap
Sector Allocation %of Assets
Large Cap --
Mid Cap 47
Small Cap 52
Top 3 sectors
Sector Name (%) of Market value
Banking & Finance 23.49
Electricals & Electronics 20.69
Agriculture 11.39
Business Opportunities Portfolio (BOP)
Inception Date Benchmark Fund Manager
16-Jan-18 Nifty 500 Index Mr. Manish Sonthalia
• The Portfolio will be constructed based on in-depth research leading
to bottom-up stock picking with a view of equities from 3-4 years
perspective.
• It aims to predominantly invest in Small and Midcap stocks with a
focus on identifying potential winners.
• The Strategy at present has a concentration in 22 stocks.
• Concentration on emerging Themes.
• Investments with Long term perspective.
• Five basic themes- Affordable Housing, market share gain by NBFCs &
Private Sector banks from PSU banks, Rise in Consumer
Discretionary, Agriculture & GST beneficiaries.
• Investment Approach: “Buy & Hold” strategy
• BOP has delivered 5.23% vs NIFTY 500 has delivered -0.49% in the
last 6 months.
Source: MOAMC | Data as on 31st July 2018
Portfolio (Top 5 Stocks)
Scrip Name (%) of Market value
Hindustan Unilever Ltd. 8.68
HDFC Bank Ltd. 7.77
Bajaj Finance Ltd. 6.15
Godrej Agrovet Ltd. 6.11
Exide Industries Ltd. 6.07
Market Cap
Sector Allocation %of Assets
Large Cap 50
Mid Cap 26
Small Cap 24
Top 3 sectors
Sector Name (%) of Market value
Banking & Finance 35.55
FMCG 17.96
Retail 11.08
India Entrepreneur Portfolio (IEP)
• The strategy is market cap agnostic and builds portfolio which has
companies with more than 25% promoter holdings, high ROCE &
high non-dilutive compounded EPS. Identify business with
competitive advantage that is significant sized (min. 100 Cr. PBT).
The Strategy is built primarily on entrepreneur concept.
• The portfolio consist of 20 stocks.
• Investments with Long term perspective.
• In last 5 years, IEP PMS has delivered positive return of 27.80%
versus 17.00% of BSE 500.
Performance(%ge) Value of 1 cr. Invested
Period IEP BSE 500 IEP BSE 500
1 Month 7.70 5.40 1.08 1.05
3 Months 6.40 1.80 1.06 1.02
6 Months 15.50 -0.20 1.16 1.00
1 Year 19.80 10.20 1.20 1.10
2 Years 17.30 14.90 1.38 1.32
3 Years 15.90 10.90 1.56 1.36
4 Years 21.30 11.70 2.16 1.56
5 Years 27.80 17.00 3.41 2.19
Since Inception 21.40 10.20 5.22 2.29
Inception Date Benchmark Fund Manager
25-Jan-10BSE 500 IndexNifty 50 Index
Mr. Prateek Agrawal Mr. Sumit Jain
Source: ASK IM| Data as on 31st July 2018 (market cap data is as per SEBIclassification
Portfolio (Top 5 Stocks)
Scrip Name (%) of Market value
Bajaj Finserv Ltd. 7.87
Bajaj Finance Ltd. 7.31
Britannia Industries Ltd. 7.01
IndusInd Bank Ltd 6.80
Page Industries Ltd. 6.45
Market Cap
Sector Allocation %of Assets
Large Cap 75
Mid Cap 23
Small Cap 1
Top 3 sectors
Sector Name (%) of Market value
Banking & Finance 32.75
FMCG 22.77
Auto & Auto Ancillaries 18.21
INVESCO Dawn Strategy
There’s always a light at the end of the tunnel
• Focus on mean reversion & value style
• High impetus on quality business models & management
• Bottom up stock picking approach without bias towards market
cap or sector
• Catalyst for investing – Cyclical recovery, earning recovery and
Under owned to Value style
• Focused portfolio approach, currently strategy has 23 stocks in
its portfolio.
Inception Date Benchmark Fund Manager
28- Aug-17 S&P BSE 500Mr. Taher BadshahMr. Amit Ganatra
Source: INVESCO AMC | Data as on 31st July 2018
Portfolio (Top 5 Stocks)
Scrip Name (%) of Market value
Reliance Industries Ltd. 8.53
ICICI Bank Ltd. 8.22
ITC Ltd. 6.08
Infosys Ltd. 5.61
Exide Industries Ltd. 5.32
Market Cap
Sector Allocation %of Assets
Large Cap 63.09
Mid Cap 11.93
Small Cap 17.93
Top 3 sectors
Sector Name (%) of Market value
Financials 23.45
Energy 11.42
Industries 11.28
Private Equity Fund
o India Reality Excellence Fund-IV
o India Business Excellence Fund-III
India Reality Excellence Fund – IREF IV
IREF IV key features
Target Fund Size INR 1,500 Cr. With tenor of 5+1+1 years
Regular Income & Equity Update
Mix of Debt & Equity with 50% of the portfolio to be under mezzanine structure which will give periodic pay-outs and equity upside along with capital protection.
Structured Equity Investments
Upto 50% of the portfolio to be invested under pure equity/structured equity to take the benefit of recovery cycle.
High Sponsor commitment
Sponsor will commit 15% of aggregate capital commitment received by the Fund, subject to a minimum capital commitment of INR 50 Cr. And maximum capital commitment of INR 100 Cr.
Alignment of InterestCarry structure for team members to ensure alignment of interest and minimise churn within the team.
Majority external members of IC
Experts from various fields of Real Estate, banking, Corp Finance are part of Investment Committee.
Project StrategyInvest in top 6 cities across residentialproject primarily which are self liquidating in nature.
Fund I – INR 165 Cr. Fund
• 2008 vintage fund; Final close in Dec 2009.
• 7 Investments across Mumbai, Pune & Bangalore.
• All 7 investments have been exited
Source: MORE| Data as on 31st July 2018
Fund II – INR 500 Cr. Fund
• 2013 vintage fund; Final close in Apr. 2015.
• 14 investments; 7 exited.
• Award the “Real Estate Fund of the Year-Domestic” at the CNBC- Awaz Real Awards 2016-17
• 81% money returned to the investors within commitment period
Fund III – INR 1,000 Cr. Fund
• 2016 vintage fund; Final close in August 2017.
• 15 Investments across Mumbai, Pune, Delhi NCR, Chennai, Hyderabad & Bangalore.
• All 13 investments are Structured Debt transactions.
• 2 out of 15 investments exited.
India Business Excellence Fund – IBEF III
• Fund Launched in July 2017
• Amount raised till date: INR 1,826 Cr
• Investment Strategy – Investment in mid-market
enterprises that are typically market leaders which are
generally managed by first-generation entrepreneurs
• Preferred sectors: Consumer, Financial Services, Life
sciences
IBEF key terms
Target Fund Size INR 2,000 Cr
Investment ManagerMOPE Investment Advisors Private Limited
Hurdle Rate 10% IRR for domestic unit holders
Target Returns Investment IRR 25% – 30%
Minimum Commitment Domestic unit holders INR 2.5 Cr
Sponsor Commitment INR 170 Cr
Team Commitment INR 38 Cr
Tenure10 years from the date of the final closing subject to two additional 1 year extensions
Commitment Period 5 years from final closing
Advisory Fees2% of commitment amount p.a. during commitment period2% of invested amount p.a. thereafter
Additional return 20% with catch-up
One time Distribution & Servicing cost
2% of the capital commitment
One time Equalization amount
1% per month on the drawn down amount, if admitted at the initial closing
Fund III – Investment
MAS FINANCIAL SERVICE
• Amount Invested – Rs. 143 crore @ Rs. 358/Share
• Status – Listed on 18th Oct , 2017 @ 660/Share
• MOIC – 1.7X (Unrealized)
N. R. Ranga Rao & Sons (Cycle Agarbathi)
• Amount Invested – Rs. 250 crore
• Status – Invested on 9th April 2018
• MOIC – 1.0X (recent investment)
Source: MOPE| Data as on 3rd July 2018
Mutual Fund
o Equity Funds
o Equity Linked Saving Schemes
o Balanced Funds
o Arbitrage Funds
o Debt Funds
Equity Mutual Funds
Source: Ace MF| Data as on 31st July 2018
Scheme AUM
(Rs. In Cr.)Inception Date
Returns (%ge) Std dev Beta Alpha
1 yr 3 yrs 5 yrs YTD (CY18)Since
Inception
Large Cap Fund
ICICI Pru Bluechip Fund 17,496.16 23-May-08 10.15 11.30 18.52 3.00 15.03 11.93 0.97 1.10
Motilal Oswal Focused 25 Fund 1,111.85 13-May-13 7.94 9.59 18.87 4.00 16.67 12.79 0.91 2.96
SBI BlueChip Fund 19,064.05 20-Jan-06 7.10 10.12 19.93 2.00 11.53 8.57 0.61 3.90
Category Avg -- -- 7.04 9.49 17.11 1.89 -- 11.91 0.85 -0.10
NIFTY 50 -- -- 12.70 9.99 14.61 9.00 -- 11.85 1.00 --
Multi Cap Fund
Kotak Standard Multicap Fund 19,826.83 11-Sep-09 9.19 13.09 22.75 4.00 15.06 12.36 0.92 3.90
ICICI Pru Value Discovery Fund 16,129.59 16-Aug-04 7.32 7.66 24.55 0.39 21.27 9.05 0.61 0.15
Motilal Oswal MC 35 Fund 13,015.79 28-Apr-14 6.80 13.60 -- -0.13 26.33 14.25 0.89 8.58
Category Avg -- -- 7.05 10.81 20.47 -1.05 -- 13.20 0.96 0.84
NIFTY 500 -- -- 9.75 10.73 17.11 2.00 -- 12.62 1.00 --
Small & Mid Cap Fund
Sundaram Midcap Fund 6,039.25 19-Jul-02 1.66 10.80 27.36 -10.00 27.49 13.25 0.95 0.20
HDFC Small Cap Fund 4,143.36 03-Apr-08 17.25 18.22 24.58 -3.84 15.58 16.39 0.77 6.83
HDFC Mid Cap Opp Fund 25-Jun-07 5.98 13.64 28.28 -4.78 17.03 13.27 0.92 1.10
Category Avg -- -- 4.49 10.95 27.38 -8.98 -- 13.52 0.81 0.70
NIFTY free float Midcap 100 -- -- 1.96 11.19 22.38 -11.00 -- 13.88 1.00 --
ELSS | Balanced Funds | Arbitrage Funds | DAAFs
Source: Ace MF| Data as on 31st July 2018
Scheme AUM
(Rs. In Cr.)Inception
Date
Returns (%ge) Std dev Beta Alpha
Asset Category (%ge)
1 yr 3 yrs 5 yrsSince
Inception Equity Debt
Others /Cash
Equity Linked Savings Scheme
Franklin India Tax shield Fund 3,623.09 10-Apr-99 6.22 8.42 19.82 23.20 9.21 0.64 1.52 91.80 8.20 --
Invesco India Tax Plan 556.63 29-Dec-06 15.62 12.02 23.18 15.30 11.10 0.85 2.39 98.21 1.79 --
IDFC Tax Advt(ELSS) Fund 1,527.65 26-Dec-08 9.96 11.25 22.05 19.95 16.39 1.24 2.67 90.69 9.31 --
Balanced Fund
Aditya Birla SL Equity Hybrid '95 Fund 14,484.19 10-Feb-95 4.18 9.87 18.22 20.27 8.59 1.05 0.90 72.17 22.24 3.22
Franklin India Equity Hybrid Fund 2,036.19 10-Dec-99 4.83 7.82 17.03 14.09 6.70 0.73 1.08 65.65 33.03 1.32
ICICI Pru Equity & Debt Fund 28,266.47 03-Nov-99 4.99 10.62 18.81 14.57 10.13 1.24 0.49 65.07 27.77 2.83
Arbitrage Fund
IDFC Arbitrage Fund 2,513.35 21-Dec-06 5.97 6.05 7.14 7.17 0.63 -- -- -- -- --
BNP Paribas Arbitrage Fund 621.39 28-Dec-16 5.94 -- -- 6.32 0.20 0.02 0.81 -- -- --
Kotak Equity Arbitrage Scheme 11,763.88 29-Sep-05 6.20 6.26 7.38 7.51 0.61 -- -- -- -- --
Dynamic Asset Allocation Fund
Motilal Oswal Dynamic Fund 1,780.03 27-Sep-16 6.22 -- -- 11.60 5.65 1.02 -0.34 67.26 24.61 31.46
ICICI Pru Balanced Advantage Fund 27,877.11 30-Dec-06 6.82 8.69 15.22 11.13 5.73 -- -- 65.28 25.04 28.28
Debt Funds
Source: Ace MF| Data as on 31st July 2018
Scheme Inception
Date
Simple Annualized CAGR Avg
MaturityMod Dur YTM (%)
Sov & AAA
Below AAA
Call & Cash
Unrated 3 Month 6 Month 1 yrs 3 yrs 5 yrs
Since Inception
Liquid Fund- (Investment duration 1 day to 3 months)
ICICI Pru Liquid Fund 17-Nov-05 7.18 7.29 6.96 7.27 8.06 7.89 0.14 0.13 7.27 109.17 0.10 -9.49 --
Aditya Birla SL Liquid Fund 30-Mar-04 7.17 7.29 7.00 7.29 8.11 7.57 0.14 0.14 7.30 91.75 -- -2.76 8.25
Ultra Short Term Fund - (Investment duration 3 months to 9 months)
ICICI Pru Savings Fund 27-Sep-02 7.16 6.97 6.36 7.85 8.64 8.02 0.92 0.78 7.78 79.34 -- 2.26 --
Franklin India Ultra Short Bond Fund 18-Dec-07 8.19 8.10 7.63 8.85 9.44 8.87 0.53 0.45 8.25 32.39 22.68 13.38 0.99
Short Term income Fund - (Investment duration 1 year to 2 years)
Aditya Birla SL ST Opp Fund 09-May-03 5.86 5.10 4.29 7.58 8.84 7.29 1.80 1.56 7.71 56.55 3.73 4.96 --
IDFC Bond Fund – Short Term Plan 14-Dec-00 6.05 5.15 4.49 6.93 8.12 7.50 1.93 1.63 7.63 96.42 -- 3.58 --
Credit Opportunities Fund – (Investment duration 18 months to 3 years)
Franklin India ST Income Plan 31-Jan-02 7.60 7.09 6.56 8.15 9.47 8.34 2.23 1.78 9.27 39.26 43.04 4.93 8.73
Reliance Credit Risk Fund 10-Jun-05 6.94 5.75 5.32 7.87 8.86 7.05 2.34 1.77 8.53 5.43 31.79 3.20 6.03
Accrual Fund – (Investment duration 18 months to 3 years)
ICICI Pru Bond Fund 18-Aug-08 4.62 2.32 1.82 7.08 8.70 9.32 4.59 3.39 7.59 96.08 -- 3.92 --
IDFC Corp Bond Fund 12-Jan-16 6.11 5.48 4.62 -- -- 7.55 1.80 1.56 8.01 95.25 -- 4.75 --
Dynamic Bond Fund – (Investment duration more than 3 years)
IDFC Dynamic Bond Fund 01-Dec-08 5.86 3.63 0.07 6.91 7.81 7.85 4.00 3.35 6.54 98.35 -- 1.65 --
UTI Dynamic Bond Fund 23-Jun-10 4.22 5.02 1.42 8.14 9.33 9.05 2.57 1.92 6.96 59.27 1.85 27.57 0.54
Fixed Income
o Fixed Deposits
o Capital Gain Bonds (54EC Bonds)
o 7.75% Government of India Savings Bond
Corporate Fixed Deposits | Capital Gain Bonds
Company name Ratingcumulative interest rate in (%ge) Senior citizen
Additional ROI (%ge)
Interest mode12 m 24 m 36 m 48 m 60m
Mahindra & Mahindra Finance Services Ltd
CRISIL : FAAA 7.70 8.25 8.50 8.50 8.50 0.25 H/Q
DHFL - Aashray Deposit CARE : AAA 7.70 8.00 8.45 8.50 8.50 0.40 M/Q/H/Y
DHFL - Aashray Deposit Single CARE: AAA 7.90 (14M) 0.40 M/Q/H/Y
DHFL - Aashray Deposit Trust CARE : AAA 7.75 (13M) -- M/Q/H/Y
DHFL - Aashray Deposit CARE : AAA 8.50 (40M) 0.40 M/Q/H/Y
Shriram Unnati Deposit CRISIL : FAAA+ 7.75 8.00 8.60 8.60 8.60 0.25 Q/H/Y
Capital gain bonds (54 EC Bonds)
Company name Rate Of Interest (60 months)
Rural Electrification Corporation Ltd. - (REC) 5.75%
National Highway Authority of India - (NHAI) 5.75%
Indian Railway Finance Corporation Ltd. - (IRFC) 5.75%
Power Finance Corporation Ltd. – (PFC) 5.75%
Data as on 31st July 2018
7.75% Government of India Savings Bond
Particulars Specifications
Issue 7.75% Savings (Taxable) Bonds, 2003
Tenure 7 Years
Rate of Return 7.75% (payable half- yearly on 1st February & 1st August)
Min. Investment Rs. 1000/- multiple by Rs. 1000
Max. Investment No Limit
Date on Issue of bond Date of realization of cheque / draft
Bond Issue Physical mode only
Who can apply Individual & HUF
Cheque in favour HDFC Bank 7.75% SAVINGS (TAXABLE) BONDS, 2018
Government of India issued 7.75% saving bond. This is one of the debt instrument which giving 7.75% p.a. return with no credit risk.
Data as on 31st July 2018
36
Thank You !
Motilal Oswal Securities Ltd. (MOSL) Member of NSE, BSE, MCX, NCDEX,CIN no.: U65990MH1994PLC079418
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi,Mumbai-400025; Tel No.: 022-3980 4263; Website www.motilaloswal.com.Correspondence Adds: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West),Mumbai- 400 064. Tel No: 022 3080 1000.Registration Nos.: Motilal Oswal Securities Ltd. (MOSL): INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397; Investment Adviser:INA000007100; IRDA Corporate Agent: CA0541.Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS andMutual Funds are offered through MOAMC which is group company of MOSL.Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered throughMOWML, which is a group company of MOSL. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS,Fixed Deposit, Bond, NCDs, Insurance Products and IPOs. *Real Estate is offered through Motilal Oswal Real EstateInvestment Advisors II Pvt. Ltd. which is a group company of MOFSL. *Private Equity is offered through MotilalOswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. *Research & Advisoryservices is backed by proper research.Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There isno assurance or guarantee of the returns. Investment in securities market are subject to market risks, read all therelated documents carefully before investing.Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: [email protected], Contact No.:022-38281085.
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