Motilal Oswal Nifty Alpha 50 ETF · NSE:MOALPHA50
Motilal Oswal Nifty Alpha 50 ETF — Motilal Oswal Asset Management Company — Investor Presentation (August 2017)
27 slides from Motilal Oswal Nifty Alpha 50 ETF's investor presentation, August 2017
Slide 1: Next Trillion Dollar Opportunity (NTDOP) Strategy
July 2015 August 2017 January 2017 1
Slide 2: Contents
Contents India’s Next Trillion Dollar Opportunity (NTDOP) Small and Mid Cap (SMID) Market Opportunity Why Motilal Oswal PMS? NTDOP Strategy details 2
Slide 3: Trillion Dollar GDP
Trillion Dollar GDP 4th US$ tn India has joined the club of countries with a 3,977 3 years 3,611 3rd US$ tn Trillion Dollar GDP in FY08 3,278 2,976 5 years 2,702 It took our GDP almost 60 years to reach 1st US 2,453 2nd US$ tn 2,249 7 years 2,074 $ trillion; but only 7 years to reach the 2nd US $ 2,
Slide 4: Rising discretionary spending
Rising discretionary spending Discretionary spending is expected to increase Discretionary spending will rise from 52% disproportionately going forward in 2005 to 70% in 2025 Past performance may or may not be sustained in future and should not be used as a Above forward-looking graphs/statements ar
Slide 5: Some themes that benefit from GDP growth
Some themes that benefit from GDP growth Banking and Infrastructure and Consumption Financial Services Related Services • Increasing consumer • Beneficiary from high • Benefit from Government spending GDP growth and Spending savings rate • Power • Retailing • Banks • Cement • Consumer durables • Cap
Slide 6: The Small And Mid Cap opportunity
The Small And Mid Cap opportunity 500 468 Companies with net sales over 5000 Cr. 450 400 Companies with net sales between 1000 Cr. To 5000 Cr. • Companies with net sales over Rs. 5000 Crs. 350 have increased by ~4 times from 2008 to 297 2016 300 250 222 • Companies with net sales of Rs. 1000 Crs. to
Slide 7: Markets return as much as growth in earnings
Markets return as much as growth in earnings 21-years CAGR of Sensex at 10% is exactly the same as 21-years Sensex EPS CAGR! Sensex Sensex Sensex YoY EPS YoY Sensex YoY EPS YoY Mar-95 3261 181 Mar-07 13072 16% 720 33% Mar-96 3367 3% 250 38% Mar-08 15644 20% 833 16% Mar-97 3361 0% 266 6% Mar-09 9709
Slide 8: Food for thought
Food for thought Over long periods of time equities do deliver in line with corporate earnings; but it’s a known fact that the volatility in share prices is way higher than volatility of earnings themselves. This volatility in share prices results in emotional response of greed in rising markets and
Slide 9: Characteristics of Mid cap market
Characteristics of Mid cap market Larger stock universe Relatively under owned and under-researched companies Fewer business lines and focused businesses Attractive valuation as compared to large caps 9
Slide 10: Why Motilal Oswal PMS?
Why Motilal Oswal PMS? Amongst India’s leading PMS providers, with Assets under Management of approx Rs. 12,755 Crores. NTDOP Strategy has consistently outperformed the benchmark across market cycles over last 9 years. Overall PMS track record of over 14 years since its inception in 2003. Motilal Os
Slide 11: Our investment philosophy – 'Buy Right : Sit Tight'
Our investment philosophy – ‘Buy Right : Sit Tight’ At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on 'Buy Right: Sit Tight‘ principle. Buy Right Sit Tight QGLP Buy and Hold: We are strictly buy and hold ‘Q’uality denotes quality of the business investor
Slide 12: Why 'Buy Right : Sit Tight' is significant?
Why ‘Buy Right : Sit Tight’ is significant? Real wealth is created by riding out bulk of the growth curve of quality companies and not by trading in and out in response to buy, sell and hold recommendations. This philosophy enables investor and manager alike to keep focus on the businesses they are
Slide 13: Wealth Creators - Buy and Hold strategy
Wealth Creators - Buy and Hold strategy Adjusted Market Rate • BUY & HOLD strategy, leading low Purchase as on Stock Purchase % Growth churn, lower costs and enhanced Date Price 31-July-17 returns Page Industries Ltd. Dec-07 456.37 16,378.45 3489% • A business is prudently picked for Bajaj Finance L
Slide 14: Earnings growth drives stock prices
Earnings growth drives stock prices 900 500 800 450 Eicher Motors - Reported PAT (RHS) 700 400 600 Eicher Motors - Share Price Rebased (LHS) 350 PAT Growth: 35%; 300 500 Nifty 50 Rebased (LHS) 250 Stock Price: 54%; 400 300 200 Nifty 50: 9% 150 200 100 100 50 0 0 Dec-08 Dec-07 Dec-09 Dec-10 Dec-11 De
Slide 15: NTDOP Strategy characteristics
NTDOP Strategy characteristics Focus on return on net worth Companies which are likely to earn 20-25 % on its net worth going forward. Margin of safety To purchase a piece of great business at a fraction of its true value. Focus on Next Trillion Dollar GDP growth The focus is on buying companies tha
Slide 16: Rigorous investment process
Rigorous investment process Top Down analysis: market views, thematic drivers, winner categories, category winners QUANTITATIVE INVESTMENT FUNDAMENTAL FUND SCREEN UNIVERSE (focus on earnings, FCF, ROA ANALYSIS PORTFOLIO & ROE) Secular growth ‘360 degree view’ High conviction Existing/ ideas thesis o
Slide 17: Next Trillion Dollar Opportunity Strategy
Next Trillion Dollar Opportunity Strategy Strategy objective Risk- Return matrix Strategy construct Model Holding Performance Risk analysis Fund management Strategy structure 17
Slide 18: Strategy objective
Strategy objective The Strategy aims to deliver superior returns by investing in stocks from sectors that can benefit from the Next Trillion Dollar GDP growth. It aims to predominantly invest in Small and Mid Cap stocks with a focus on identifying potential winners that would participate in successi
Slide 19: Risk-Return matrix & strategy construct
Risk-Return matrix & strategy construct Investment horizon: - Medium to long term (3 Years +) For Whom: - Investors who like to invest with a long-term wealth creation view. Strategy Construct Market capitalization - Maximum market cap at the time of buying new idea is 30000 Cr. No. of stocks - 20 t
Slide 20: Model holding
Model holding Sector Allocations Top 10 Holdings Scrip Names % Holdings 1.88 Banking & Finance 2.23 Kotak Mahindra Bank Ltd. 11.27 Auto & Auto Ancillaries 2.60 0.06 3.89 FMCG Bajaj Finance Ltd. 8.76 4.32 Diversified 6.23 34.79 Voltas Ltd. 8.30 Oil and Gas Eicher Motors Ltd. 7.20 Engineering & Electr
Slide 21: Performance snapshot
Performance snapshot Since Inception NTDOP has delivered 19.39% returns vs Nifty Free Float Midcap 100 Index returns of 8.41% delivering an alpha of 10.98% NTDOP Strategy Nifty Free Float Midcap 100 40 37.39 35 34.09 33.20 29.51 30 28.03 25.82 % Returns 25.02 25 20.65 20.84 19.44 19.39 20 16.71 15.9
Slide 22: Performance since inception
Performance since inception The chart below illustrates Rs. 1 crore invested in NTDOP Strategy in December 2007 is worth Rs. 5.54 cr as on 31th July 2017. For the same period Rs. 1 crore invested in Nifty Free Float Midcap 100 Index is now worth Rs. 2.18 cr. 5.54X Investment Value 2.18X Strategy Inc
Slide 23: Rolling Returns Performance
Rolling Returns Performance The data shows rolling returns of the NTDOP Strategy over various time frames. It is worth noting that on 1 year rolling basis, the returns are in a very wide range. The best return made by the Strategy is 141% and the worst return is -56%. As we increase the time horizon
Slide 24: Chairman
Chairman Mr. Raamdeo Agrawal is the Co-founder, Joint Managing Director of Motilal Oswal Financial Services Limited and Chairman of Motilal Oswal Asset Management Company Ltd. He is the brain behind the “QGLP” (Quality Growth Longevity & favorable Price) investment Process and its ‘Buy Right, Sit Ti
Slide 25: Fund Manager
Fund Manager Mr. Manish Sonthalia heads the Equity Portfolio Management Services at Motilal Oswal Asset Management Company Ltd. He also, serves as the Chief Investment Officer and the Director of the Motilal Oswal India Fund He has over 22 years of experience across equity fund management and resear
Slide 26: Strategy structure
Strategy structure Mode of payment By fund transfer/cheque and/or stock transfer Investment Horizon Medium to long term (3 Years +) Benchmark Nifty Free Float Midcap 100 Index Account Activation Next business day of clearance of funds Portfolio Valuation Closing NSE market prices of the previous day
Slide 27: Disclaimer
Disclaimer 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
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