RST BRST BRST BRST BRST BRSTBRST B The Zen of Investing August 2020
™ Motilal Oswal AMC is the pioneer of PMS business in India with over 16 years of track record ™ 31st July 2020 Trusted by over 42,000 HNI investors and with around Rs. 12,000 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 ~65% allocation Investment Manager Concentrated portfolio of 22 stocks ™ 4.3% over Nifty 50 TRI) Oldest PMS track record of 16+ years with annualized return of 20.7% since inception (an alpha of ™ Investing in good businesses, run by great management ™ 1 About the Strategy Index agnostic: ~68% away from benchmark Nifty 50
Why Large Caps? Benefit of capital Sheets Big Balance Businesses Matured Efficiency Capital visibility 2 Stability and costs compe��ve 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 7.7 recommendations from MOAMC. Weighted Average Market Cap Rs. 1,56,571 Crs 65% 30% 0% 2.0 2.0 3.0 3.8 5.1 5.2 6.3 6.3 14.4 sustained in future and should not be used as a basis for comparison with other investments. The 21.4 22.8 Construc�on Project Industrial Capital Goods Auto Ancillaries Auto Telecom - Services Cash Consumer Non Durables Oil & Gas NBFC Pharmaceu�cals Non-Lending Financials strategy may or may not have any future holdings in these stocks and should not be construed as clients and may or may not be bought for new clients. Past performance may or may not be 6 HDFC Life Insurance Company Ltd. Scrip Name % Holding 11.6 9.8 8.3 8.0 6.1 5.9 5.1 4.0 3.8 3.8 Max Financial Services Ltd. ICICI Bank Ltd. Please Note: Data as on 31st July 2020. The stocks mentioned are a part of existing Value Strategy HDFC Bank Ltd. Ipca Laboratories Ltd. Dr. Reddy's Laboratories Ltd. Bharti Airtel Ltd. Hindustan Unilever Ltd. Bharat Petroleum Corporation Ltd. Maruti Suzuki India Ltd. Sectoral Allocation Top 10 Holdings Large Cap Mid Cap Small Cap Market Capitalization Banking
Portfolio Updates 5,67,960 May-18 25% 69,159 Nov-17 Company HDFC Life Insurance 24% 40,986 53% Date Purchase Ini�al Value Strategy is over 3 years and 3 months The average holding period for stocks held under < 2 Years 9,208 Company > 2 Years but < 5 Years Absolute 1.8X 13.9X 23,798 1,26,653 (%) CAGR Growth (31�� June 20) Market Cap Rs. Crores Market Cap Jul-08 Ipca Laboratories HDFC Bank (Purchase Date) Rs. Crores 9 10 7 ICICI Lombard General Thermax ITC Quess Corp Eicher motors Bharat Forge Tech Mahindra Insurance Interglobe Aviation Dr Reddy’s Laboratories Hero Motocorp Bosch Sun Pharma in any manner indicate its future prospects and returns. 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 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 Please Note: The given stocks are part of portfolio of a model client of Value Strategy as on 31st July 2020. The stocks forming part of the existing portfolio under Value Strategy Axis Bank Max Financial Services > 5 Years but < 10 Years October 2018 1 > 10 Years 2 Holding Period Number of Scrips How Buy Right : Sit Tight works onwards EXITS Tube Investments of India ADDITIONS Significant changes made to align portfolio to the changing business environment Muthoot finance Hindustan unilever Bharti Airtel Lic Housing Finance GlaxoSmithKline Pharmaceuticals 2.6X
Performance Snapshot Value Strategy 0.9 -0.4 1.9 Jul-20 Dec-19 14X 26.1X Ni�y 50 TRI Nov-19 3.9 Mar-19 Jul-18 Nov-17 Mar-17 Jul-16 Nov-15 Mar-15 Jul-14 Nov-13 4.2 12.8 Jul-12 16.4 15 Years 10 Years 7 Years 5 Years 4 Years 3 Years 2 Years 1 Year 12.4 9.9 8.8 11.2 6.7 7.7 4.5 -0.1 0.7 20.7 13.4 Mar-13 Nov-11 8 (CAGR) since inception (25th Rs. 26.1 cr as on 31st July Strategy at inception is worth Rs. 1 crore invested in Value Ni�y 50 TRI Value Strategy of 4.3% (CAGR) Since inception, Value Strategy has delivered a CAGR of 20.7% vs. Nifty 50 TRI returns of 16.4%, an outperformance March 2003) outperformance of 4.3% 1 cr invested in Nifty 50 TRI returns of 16.4%, an CAGR of 20.7% vs. Nifty 50 TRI Value Strategy has delivered a 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. 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 31st July 2020. The stocks forming part of the existing portfolio under Value *Strategy Inception Date: 25�� March 2003. 2020. For the same period Rs. Index is now worth Rs. 14 cr. Mar-11 Jul-04 Jul-10 Nov-09 Mar-09 Jul-08 Nov-07 Mar-07 Jul-06 Nov-05 Mar-05 Nov-03 Mar-03 350 300 250 200 150 100 50 0 Since Incep�on
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