RST BRST BRST BRST BRST BRSTBRST B The Zen of Investing December 2019
™ Motilal Oswal AMC is the pioneer of PMS business in India with over 16 years of track record ™ 30th November 2019 Trusted by over 42,000 HNI investors and with around Rs. 16,000 Crs of assets as on ™ It has a unique positioning of being “Equity only AMC” with defined “Investment Philosophy” ™ the investing world One of the co-founders, Mr. Raamdeo Agrawal is one of the most honored and trusted names in ™ ™ Large cap oriented portfolio with ~75% allocation Investment Manager Concentrated portfolio of 20 stocks ™ 6.5% over Nifty 50) Oldest PMS track record of 16+ years with annualized return of 22.5% since inception (an alpha of ™ Investing in good businesses, run by great management ™ 1 About the Strategy Index agnostic: ~66% away from benchmark Nifty 50
Why Large Caps? Benefit of capital Sheets Big Balance Businesses Matured Efficiency Capital visibility 2 Stability and costs competitive Leverage at cost Low marginal of Operations Large Scale investments
Large Caps Have Lesser Drawdowns -24.6% Absolute returns Falling market periods Small Cap Mid Cap Large Cap 28 September 2018 29 January 2018 to 30 December 2011 03 January 2011 to 27 February 2009 01 January 2008 to 30 June 2004 01 January 2004 to -43.6% 3 -77.3% -28.5% -16.6% -34.8% -72.2% -21.2% -0.2% -24.8% -56.2% -18.9% a specific period, which may or may not be greater than 1 year, the returns are shown in absolute terms. The above illustration is to explain the performance of various categories during the periods where markets have shown downward bend. Further since the above returns are calculated for Source: MFI Explorer. Large Caps are represented by S&P BSE Sensex. Mid Caps by S&P BSE Midcap. Small Caps by S&P BSE Smallcap. Past performance may or may not be sustained in future. Ability to withstand downturns
Investment Philosophy growth to benefit from the entire cycle needs even more skill. Focus: investors our Our right hold investors and believe that picking the business needs skill holding onto these businesses enable diversification but over-diversification results in diluting returns for our adequate investors and adding market risk QGLP ™ ™ ™ ™ ™ ™ portfolios are high conviction portfolios with 25 to 30 in stocks being our ideal number. We believe strictly buy are growth in earnings and sustained RoE ‘L’ongevity denotes denotes longevity of the competitive advantage or denotes At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on 'Buy Right: Sit Tight‘ principle. Buy Right Sit Tight ‘Q’uality ‘G’rowth quality of the business and management buying for a fair price rather than business a fair business for a good price and Hold: We economic good moat of the business ‘P’rice denotes our approach of buying a 4 Buy and and to
Current Investment Themes Asset Moats from Unorganized to Business migration RERA, IBC REFORMS - GST, and compliance costs in India. Rising labour a few asset monopolies Very tough to re-create to Generics 5 to Bangalore, Patent Private Sector, Boston Public Sector to of per capita GDP Beneficiary of doubling Discretionary Consumer Value Migration #GST (Goods & Services Tax), RERA (Real Estate Regulatory Authority), IBC (Insolvency & Bankruptcy Code) Organized
Portfolio Allocation 8.0 Please Note: Data as on 30th November 2019. The stocks mentioned are a part of existing Value Strategy clients and may or may not be bought for new clients. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. The strategy may or may not have any future holdings in these stocks and should not be construed as recommendations from MOAMC. 74.7% 20.5% 2.4% 1.2 2.2 7.4 8.5 Small Cap 14.1 22.2 34.0 Services FMCG Engineering & Electricals Oil and Gas Pharmaceu�cals Auto & Auto Ancillaries Insurance Banks Market Capitalization Mid Cap 6 4.4 Scrip Name % Holding 12.3 10.2 8.8 6.7 6.6 5.5 5.0 4.8 4.7 HDFC Bank Large Cap HDFC Life Insurance Company ICICI Bank Kotak Mahindra Bank Bajaj Finserv Max Financial Services Larsen & Toubro Maruti Suzuki India Bharat Petroleum Corporation Ipca Laboratories Sectoral Allocation Top 10 Holdings Weighted Average Market Cap Rs. 2,03,464 Crs
Portfolio Updates > 5 Years but < 10 Years Market Cap Company < 2 Years 9 > 2 Years but < 5 Years 8 1 (Purchase Date) > 10 Years 2 Holding Period Number of Scrips 22% 1,28,554 Rs. Crores HDFC Bank 37% CAGR (%) 11.0X 17.0X 3,08,574 62,477 Value Strategy is over 3 years and 2 months The average holding period for stocks held under Growth Kotak Mahindra Absolute (30�� Nov 19) Rs. Crores Market Cap Jul-08 Bank Jul-15 5,682 7 Interglobe Aviation Tech Mahindra Thermax ITC Tech Mahindra Insurance ICICI Lombard General Hero Motocorp Dr Reddy’s Laboratories Bosch Sun Pharma of the PMS Strategy does not in any manner indicate its future prospects and returns. recommendations from MOAMC. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Name Strategy may or may not be bought for new client. The stocks mentioned above are only for the purpose of explaining the concept and should not be construed as Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 30th November 2019. The stocks forming part of the existing portfolio under Value Axis Bank Max Financial Services Apr-12 Purchase Eicher Motors 28% 6,98,110 40,986 Date Ini�al Tube Investments of India How Buy Right : Sit Tight works onwards October 2018 EXITS ADDITIONS Significant changes made to align portfolio to the changing business environment 2.4X
Performance Snapshot 12.9 16.9 22.5 10.8 8.6 13.6 11.0 7.0 10.8 9.1 16.0 13.6 1 year 2 Year 3 Years 4 years 5 years 7 years 10 Years 15 Years Since 12.5 8.4 8 returns of 16.0%, an Returns (%) *Strategy Inception Date: 25�� March 2003. Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 30th November 2019. The stocks forming part of the existing portfolio under Value Strategy may or may not be bought for new client. The stocks mentioned above are only for the purpose of explaining the concept and should not be construed as recommendations from MOAMC. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Name of the PMS Strategy does not in any manner indicate its future prospects and returns. Value Strategy has delivered a CAGR of 22.5% vs. Nifty 50 outperformance of 6.5% 11.1 (CAGR) since inception (25th March 2003) Since inception, Value Strategy has delivered a CAGR of 22.5% vs. Nifty 50 returns of 16.0%, an outperformance of 6.5% (CAGR) Value Strategy Ni�y 50 21.3 7.5 12.7 Incep�on
Performance Snapshot in Nifty 50 Index is now worth 350 300 250 200 150 100 50 0 Rs. 11.9 cr. same period Rs. 1 cr invested Jan-04 November 2019. For the Rs. 29.6 cr as on 30th Strategy at inception is worth Rs. 1 crore invested in Value 15.1 14.6 Nov-19 Sep-19 Jul-19 Mar-03 Nov-04 Mar-19 Nov-14 11.9X Ni�y 50 Value Strategy Nov-19 Jan-19 Mar-18 May-17 Jul-16 Sep-15 Jan-14 Sep-05 Mar-13 May-12 Jul-11 Sep-10 Nov-09 Jan-09 Mar-08 May-07 Jul-06 May-19 Jan-19 9 invested in Nifty 50 Index is 13 12 11 10 9 8 Ni�y 50 Value Strategy now worth Rs. 1.46 cr. the same period Rs. 1 cr 15 30th November 2019. For is worth Rs. 1.51 cr as on Strategy on 1st January 2015 Rs. 1 crore invested in Value Name of the PMS Strategy does not in any manner indicate its future prospects and returns. recommendations from MOAMC. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Value Strategy may or may not be bought for new client. The stocks mentioned above are only for the purpose of explaining the concept and should not be construed as Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 30th November 2019. The stocks forming part of the existing portfolio under *Strategy Inception Date: 25�� March 2003. 14 Jan-15 Nov-18 Mar-17 Sep-18 Jul-18 May-18 Mar-18 Jan-18 Nov-17 Sep-17 Jul-17 May-17 Jan-17 Mar-15 Nov-16 Sep-16 Jul-16 May-16 Mar-16 Jan-16 Nov-15 Sep-15 Jul-15 May-15 29.6X
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