Professional Documents
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Amcbooklet
Amcbooklet
presents
m50
REMIXED
s India t Firs
NFO Closes:
An Open Ended Exchange Traded Fund Indias first fundamentally weighted ETF based on Nifty
MOSt
Mutual Fund
Shares
For further details on scheme features, please refer to the Scheme Information Document ( SID ) of the scheme.
For further details on scheme features, please refer to the Scheme Information Document ( SID ) of the scheme.
Equal Weighted 76.59% 9.42% 20.71% returns S&P CNX 77.59% 10.71% 21.70% Nifty
Asset Weighted 77.86% 10.33% 21.36% returns S&P CNX 77.59% 10.71% 21.70% Nifty
Source: S&P Crisil SPIVA Report, Indices v/s Active Funds Scorecard, India, December 2009
Fundamental Weighing
Fundamentally Weighing combines the positive features of both active fundamentals based investing and passive execution
Active Investing features Higher capital allocation to companies which have Strong consistent financial performance Cheap valuation or reasonable valuation
Passive / Index Investing features Quantitative rule based investing based on pre-defined investment rules No discretion to fund managers in selecting or rejecting individual stocks Low costs
Weightage to stocks
Based on stock's Market Capitalization. Higher allocation to stocks with bigger market capitalization irrespective of their underlying fundamentals.
Based on stock's fundamentals (ROE, Net Worth, Retained Earnings & Price). Higher allocation to stocks with better financial performance and reasonable valuations. Periodic rebalancing of Most 50 basket linked to change in Nifty constituents ensures higher capital remains allocated to stocks with good financial performance and reasonable valuations.
Implication
Weight of stock is not reduced even if it becomes expensive or have poor financial performance.
Investment Allocation in a Market Cap based index gives primary credence to size of company. Expansion in valuations lead to increasing weightage of a stock in an Index thereby increasing investors exposure to an already expensive stock, when in fact it should be the reverse. Conversely, companies with depressed valuations tend to be underweight, especially at times of extreme pessimism, when in fact it should be the reverse. MOSt Shares M50 aims at combining the best of active investing principles with passive execution, thereby eliminating the bias of size & expensiveness in an investment portfolio.
Source: Internal Analysis
High
Under Weight
Moderate Weight
Valuations
Low
Moderate Weight
Over Weight
Low
High
Under weight Real Estate FMCG Moderate weight Cement Low Telecom Oil
Moderate weight
Capital Equipment
High
Technology
Valuations
Metal Low
Once MOSt Shares M50 is listed, the constituent holdings will be declared on a daily basis
24.40% 6.60% 1.20% 8.00% 15.00% 5.10% 2.10% 3.30% 11.50% 4.80%
MOSt Shares M50 is a new scheme and does not have a performance track record. Past Performance may or may not be achieved in future. The above illustration is meant to help the investors have an understanding of the MOSt 50 Basket. Investors may note that comparison shown above is not meant to indicate performance of MOSt 50 Basket in any manner whatsoever. In particular the Scheme does not offer capital protection or assured returns. MOSt 50 Basket methodology is as mentioned in the Scheme Information Document. The results presented here are based on indicative MOSt 50 Basket values and the final values since inception will be provided by IISL before the Scheme is listed and will be available on the AMCs website.
MOSl 50 Basket
Nifty
9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 10/3/2009 10/3/2008 10/3/2007 12/3/2007 12/3/2008 12/3/2009 2/3/2009 4/3/2009 6/3/2009 8/3/2009 2/3/2008 2/3/2010 4/3/2008 6/3/2008 4/3/2007 6/3/2007 8/3/2007 8/3/2008 4/3/2010
MOSt 50
MOSt 50 Basket* Value on 3rd April 2007 Value on 31st May 2010 Annualized Returns Annualized Standard Deviation Beta with Market Sharpe Ratio Jensen Alfa * Indicative Value 3691 7218 23.7% 33.28% 0.94 0.53 13.2%
MOSt Shares M50 is a new scheme and does not have a performance track record. Past Performance, as indicated above, may or may not be achieved in future. The above illustration is meant to help the investors have an understanding of the MOSt 50 Basket. Investors may note that comparison shown above is not meant to indicate performance of MOSt 50 Basket in any manner whatsoever. In particular the Scheme does not offer capital protection or assured returns. MOSt 50 Basket methodology is as mentioned in the Scheme Information Document. The results presented here are based on indicative MOSt 50 Basket values and the final values since inception will be provided by IISL before the Scheme is listed and will be available on the AMCs website.
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For further details on scheme features, please refer to the Scheme Information Document ( SID ) of the scheme.
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Fund Manager
Mr. Rajnish Rastogi 14 Years Experience in Fund Management and Equity Research Qualifications CFA, M. Tech (Mgmt & Systems) and B.Tech from Indian Institute of Technology (I.I.T.) Prior Experience Investment Manager at Alliance Bernstein LLP , New York, USA Director Investment at HSBC Private Equity Advisors (India) Pvt. Ltd. Associate Director at IL&FS Investment Managers Ltd. Head Equity Research, CRISIL Ltd.
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Post NFO Period Post NFO, MOSt Shares M50 will be listed on NSE and will be available for buy and sell like any other share through equity brokers. Minimum investment would be in round lot of one unit on NSE. AP/Large investor can buy/sell in creation unit size directly with the fund.
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ETF An Introduction
Exchange Traded Funds (ETFs) are open ended mutual fund schemes, which are traded on stock exchanges like a share and seek investment returns that correspond to the performance of a particular index like Nifty or Basket of Securities like MOSt50. Post NFO, ETF is listed on stock exchanges and can be bought and sold like any other company share. ETF and Open ended Mutual Fund ( An Illustrative chart )
Feature NAV / Price Portfolio Transparency Fund Management Charges Operating expenses Intraday Trading Margin Funding Purchase / Redemption
ETFs Real Time High - Daily Low Low Possible Possible Exchange / Fund House
Mutual Fund End of the day Low - Monthly / Quarterly Comparatively High Relatively high Not possible Not possible Fund House
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56% CAGR
Global ETF assets are at an all time high of US$ 1.03 Trillion as on March 2010, clocking a CAGR of approx 56% since it was first launched in 1993. During 2006-09, worldwide MF assets have grown by 2.5%, where as ETF assets have grown by 82.46% On US Exchanges, 11 out of top 25 Volume leaders / stocks are ETFs These 11 ETFs account for 78% of total volume out of top 25 traded stocks on US exchanges. 10 years back it was less than 25% In US, ETF corpus increased by 180 billion$ last year while normal Mutual Fund lost similar amount of money. In India ETFs are amongst top 150 traded stocks on NSE. In India ETF AUM has grown from just 7 crores in 2001 to 2410 crores as on Dec 09 i.e. astounding 344 times growth in assets.
Source : Bloomberg
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DISCLAIMER:
This 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 Motilal Oswal MOSt Shares M50 ETF (MOSt Shares M50). The information / data herein alone is not sufficient and shouldnt 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.
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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. Scheme Classification & Investment Objective: Motilal Oswal MOSt Shares M50 ETF (MOSt Shares M50), an open ended Exchange Traded Fund that seeks investment return that corresponds (before fees and expenses) generally to the performance of the MOSt 50 Basket (Underlying Basket), subject to tracking error. Asset Allocation: Securities constituting MOSt 50 Basket: 95%-100%; Debt and Money market instruments and cash at call: 0-5%. The total exposure to Derivatives would be restricted to 10% of the net assets of the Scheme. Load: Entry Load: Nil Exit Load: Nil Terms of Issue: Minimum Application Amount: During NFO, Rs. 10,000/- and in multiples of Re. 1/- each. Ongoing Basis, On the Exchange: The units of the Scheme are proposed to be listed on the Capital Market Segment on National Stock Exchange of India Ltd. (NSE). On NSE, the units of the Scheme can be purchased/sold in round lot of 1 unit and in multiples thereafter. Directly with the Fund: The minimum number of units of the Scheme that investors can create/redeem in exchange of portfolio deposit and cash component is 50,000 units and in multiples thereof. Face Value & Issue Price: Offer of units of Rs. 10/- per unit for cash at a premium approximately equal to difference between the face value of Rs. 10/- and 1/100th of the value of MOSt 50 Basket during the New Fund Offer and at NAV based prices on ongoing basis. Investor Benefits and General Services: During NFO, Investors can also subscribe to the units through the mutual fund trading platforms viz. BSE StAR MF of Bombay Stock Exchange Limited (BSE) and Mutual Fund Service System (MFSS) of NSE. The AMC will calculate and publish the first NAV of the Scheme not later than 30 days from the closure of the NFO. Subsequently, the NAVs will be calculated and disclosed at the close of every Business Day. Risk Factors: (1) All the Mutual Funds and securities investments are subject to market risks and there can be no assurance that the Scheme's objectives will be achieved (2) As the price / value / interest rates of the securities in which the Scheme invests fluctuates, the Net Asset Value (NAV) of units issued under the Scheme may go up or down depending upon the factors and forces affecting the securities market (3) 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 (4) Motilal Oswal MOSt Shares M50 ETF (MOSt Shares M50) is the name of the Scheme and does not in any manner indicate either the quality of the Scheme, its future prospects and returns. Investors are therefore urged to study the terms of offer carefully and consult their Investment Advisor before they invest in the Scheme (5) The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Mutual Fund beyond the initial contribution made by it of an amount of Rs. 1 Lac towards setting up of the Mutual Fund (6) Motilal Oswal Asset Management Company Limited (MOAMC) has no previous experience in managing a Mutual Fund. The present Scheme is the first Scheme being launched under its management (7) The present Scheme is not a guaranteed or assured return Scheme. Scheme Specific Risk Factors: Investment in the scheme shall be subject to various other risk factors including but not limited to risk associated with investment in Equities such as trading volumes, settlement risk, liquidity risk, default risk, tracking error risk, calculating agent risk, Underlying Basket risk, risk associated with investment in derivatives, risk of fundamentally weighted Basket, risk of total return, etc. IISL
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Disclaimer: The MOSt 50 Basket is not sponsored, endorsed, sold or promoted by India Index Services & Products Limited (IISL). MOSt 50 Basket has been developed by MOAMC and IISL has calculated and maintained as per the specifications and requirements of MOAMC. IISL does not make any representation or warranty, express or implied regarding the advisability of investing in the products linked to MOSt 50 Basket and availing the services generally or particularly or the ability of MOSt 50 Basket to track general stock market performance in India. Please read the full Disclaimers in relation to the MOSt 50 Basket in the Scheme Information Document. S&P Disclaimer: S&P and Standard and Poor's are trademarks of S&P , and have been licensed for use by India Index Services & Products Limited in connection with the S&P CNX Nifty Index. MOSt Shares M50 is not sponsored, endorsed, sold or promoted by India Index Services & Products Limited ("IISL") or Standard & Poor's ("S&P"), a Delaware limited liability company. Neither IISL nor S&P makes any representation or warranty, express or implied, to the owners of MOSt Shares M50 or any member of the public regarding the advisability of investing in securities generally or in MOSt Shares M50. Please read the full Disclaimers in relation to the S&P CNX Nifty Index in the Scheme Information Document. NSE Disclaimer: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Scheme Information Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Scheme Information Document. The investors are advised to refer to the Scheme Information Document for the full text of the 'Disclaimer Clause of NSE'. For further Scheme Specific Risk Factors & other details, Please read the Scheme Information Document (SID) & Statement of Additional Information (SAI) carefully before investing. A copy of SID, SAI and KIM alongwith the application form are available at the office of the AMC, R&T, Distributors, or can be downloaded from www.motilaloswal.com/assetmanagement and www.mostshares.com Investors can also contact us on our toll free number 1800200-6626 or send email at mfservice@motilaloswal.com
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Call: 1800-200-6626 l SMS: M50 to 575753 E-mail: mfservice@motilaloswal.com Website: www.mostshares.com www.motilaloswal.com/assetmanagement