BRSTBRSTBRST
BRSTBRST
BRSTBRST
Your key toIndia’s Next Trillion Dollar
of GDP Growth
N XTEOpportunity Strategy
Trillion Dollar
rab te il ne g
C
Years11
July 2020
About the Strategy
1
NTDOP is a multi-cap strategy investing across market capitalization
Investing in businesses that benefit from the Next Trillion Dollar GDP growth of India
12+ years track record with consistent outperformance vis-à-vis benchmark across market cycles (10 out 12 calendar years)
Concentrated portfolio of 24 stocks with 14 companies held for over 5 years: a truly ‘Buy and Hold’ strategy
Investment Manager
Motilal Oswal AMC is the pioneer of PMS business in India with over 16 years of track record
One of the co-founders, Mr. Raamdeo Agrawal is one of the most honored and trusted names in the investing world
It has a unique positioning of being “Equity only AMC” with defined “Investment Philosophy”
Trusted by over 42,000 HNI investors and with around Rs. 12,000 Crs of assets as on 30th June 2020
Index agnostic: ~87% away from benchmark Nifty 500
2
186
193
201
218
212
233
249
279
297
296
321
270
288
279 327
360
393
416
421 459
468
485
515 60
8 709 82
0 940
1217
1199 13
42
1676 18
23
1828
1857 20
39 2104 22
90
2653 27
26
2972
3258
3577
3924
4306
4729
0
500
1000
1500
2000
2500
Ind
ia G
DP
(cu
rre
nt
$ b
n)
3000
3500
4000
4500
5000
FY 1
980
FY 1
981
FY 1
982
FY 1
983
FY 1
984
FY 1
985
FY 1
986
FY 1
987
FY 1
988
FY 1
989
FY 1
990
FY 1
991
FY 1
992
FY 1
993
FY 1
994
FY 1
995
FY 1
996
FY 1
997
FY 1
998
FY 1
999
FY 2
000
FY 2
001
FY 2
002
FY 2
003
FY 2
004
FY 2
005
FY 2
006
FY 2
007
FY 2
008
FY 20
09
FY 2
010
FY 2
011
FY 2
012
FY 2
013
FY 2
014
FY 2
015
FY 2
016
FY 2
017
FY 2
018
FY 2
019
FY 2
020E
FY 2
021E
FY 2
022E
FY 2
023E
FY 2
024E
1st US$ tn
2nd US$ tn
3rd US$ tn
4th US$ tn
Nearing 5th US$ tn
According to World Bank data, India has now become the world’s sixth-largest economy
India is one of the fastest growing among major economies
Source: statisticstimes.comPast performance may or may not sustain and does not guarantee future performanceNote - Above forward looking statements are based on external current views and assumptions and involve known and unknown risks and uncertainties that could affect actual results.Investments are subject to market risk. The above graph is used for illustration purpose only and should not used for development or implementation of an investment strategy.
India’s GDP Growth Opportunity
Rising Discretionary Spending
Discretionary spending is expected to increasedisproportionately going forward
Discretionary spending will rise from 52%in 2005 to 70% in 2025
56
4234
25
5
6
5
5
14
12
12
10
2
3
3
3
4
8
9
11
11
17
19
20
12
3
6
35
69
4 7 9 13
1995 2005 2015 2025 E
Food, beverages &Tobacco
Housing & Utilities
Personal Products &Services
Transportation
Communication
Education & Recreation
Health Care
DISCRETIONARY ITEMSShare of Avg. Household consumption% thousand, INR
Necessities
Discretionary Items
Source: data.gov.in & Motilal Oswal Financial Services Ltd
Pe
r C
apit
a In
com
e(I
n R
s. T
ho
usa
nd
)
10,000
30,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
CAGR of 11.6%
CAGR of 9.5%
CAGR of 10.5%
110,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
3
Above forward-looking graphs/statements are based on external current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results.
Consumption
• Banks
• Capital Markets
• Insurance
• NBFCs
Banking andFinancial Services
Government Spending
• Power
• Cement
• Capital Goods
• Construction
• Engineering
Some Themes that Benefit from GDP Growth
These are illustrative in nature and can change from time to time based on the outlook of the portfolio manager.
• Consumer Discretionary
• Retailing
• Consumer Durables
• Passenger Vehicles
• Utility Services
4
Benefits of Multicap
Large Cap
Leaders in respective sectors
Stability and less volatile
Mid Cap
High growth
Potential of tomorrow’s large caps
Small Cap
Emerging businesses
Offer potential to scale
5
Investing in Multicaps Reduces Extremes
Large Cap [8.1%]
CY2014 CY2015 CY2016 CY2017 CY2018CY2013
Multicap[6.1%]
Mid Cap [-4.0%]
Small Cap [-9.7%]
Small Cap [71.1%]
Mid Cap [56.9%]
Multicap[37.4%]
Large Cap [33.3%]
Mid Cap [8.7%]
Small Cap [7.7%]
Multicap[-0.2%]
Large Cap [-2.7%]
Mid Cap [9.3%]
Multicap[5.4%]
Large Cap [4.7%]
Small Cap [2.7%]
Small Cap [60.8%]
Mid Cap [49.9%]
Multicap[35.0%]
Large Cap [31.6%]
Large Cap [3.7%]
Multicap[0.8%]
Mid Cap [-12.5%]
Small Cap [-22.8%]
Large Cap [12.2%]
Multicap[10.4%]
Mid Cap [-2.1%]
Small Cap [-5.9%]
Pe
rfo
rman
ce
Top
Bottom
Diversification offers flexibility to invest across sectors/ themes and may perform well in different market conditions with relatively low risk
Multicap Index – S&P BSE 200 TRI ; Large Cap – S&P BSE Large Cap TRI; Mid Cap - S&P BSE Mid Cap TRI; Small Cap - S&P BSE Small Cap TRI.Source: ICRA MFI Explorer. Performance shown above is CAGR (%) and is for the Calendar Year. The above graph is used to explain the concept and is for illustration purpose only and should not used for development or implementation of an investment strategy. Past performance may or may not be sustained in future.
6
CY 2019
Our Investment Philosophy
At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on 'Buy Right: Sit Tight‘ principle.
Buy Right
‘Q’uality denotes quality of the business and management
‘G’rowth denotes growth in earnings and sustained RoE
‘L’ongevity denotes longevity of the competitive advantage or economic moat of the business
‘P’rice denotes our approach of buying a good business for a fair price rather than buying a fair business for a good price
QGLP
Sit Tight
Buy and Hold: We are strictly buy and hold investors and believe that picking the right business needs skill and holding onto these businesses to enable our investors to benefit from the entire growth cycle needs even more skill.
Focus: Our portfolios are high conviction portfolios with 25 to 30 stocks being our ideal n u m b e r. We b e l i e v e i n a d e q u a t e diversification but over-diversification results in diluting returns for our investors and adding market risk
7
Please Note: The given stocks are part of portfolio of a model client of NTDOP Strategy as on 30th June 2020. The stocks forming part of the existing portfolio under NTDOP Strategy may or may not be bought for new client. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. The Company mentioned above is only for the purpose of explaining the concept and should not be construed as recommendations from MOAMC.
Wealth Creators - Buy and Hold Strategy
Sep-10
Nov-12
Aug-14
Mar-13
30,379
5,922
3,026
13,633
Market Cap Rs. Crores
30-June-20 Stock
Initial Purchase
Date
Market Cap Rs. Crores(Purchase
Date)
CAGR (%)
Source: MOAMC Internal Analysis
Kotak Mahindra Bank
Ipca Laboratories
City Union Bank
HPCL
2,69,078
21,112
8,951
33,029
25%
18%
16%
16%
8
Absolute Growth
8.9X
3.6X
3.3X
2.2X
The average holding period for stocks held under NTDOP Strategy is over 6 years 6 months
Holding Period
Since Inception (10+ Years)
>5 Years
> 2 Years but <5 Years
<2 Years
No. of Scrips
2
12
7
3
Buy and Hold strategy with > 60% stocks held for more than 5 years (Page Industries held since inception) and 10% of stocks held for 10+ years resulting in wealth creation for investors
Portfolio Allocation
Scrip Name % Holding
12.0
10.1
8.6
6.5
5.6
5.6
5.4
4.8
4.2
3.4
Kotak Mahindra Bank Ltd.
Voltas Ltd.
Page Industries Ltd.
Ipca Laboratories Ltd.
Max Financial Services Ltd.
ICICI Bank Ltd.
Hindustan Unilever Ltd.
Eicher Motors Ltd.
L&T Technology Services Ltd.
Godrej Industries Ltd.
Sectoral Allocation Top 10 Holdings
Market Capitalization
Please Note: Data as on 30th June 2020. The stocks mentioned are a part of existing NTDOP 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.
9
Large Cap
Mid Cap
Small Cap
42%
55%
3%
Weighted Average Market Cap Rs. 89.938 Crs
0.1
2.2
2.6
2.7
2.7
3.0
3.8
4.8
5.6
7.3
8.6
9.8
10.9
13.6
22.3
Cash
Oil & Gas
Petroleum Products
Transporta�on
Chemicals
Auto Ancillaries
Industrial Products
Auto
-Non-Lending Financials
So�ware
Tex�le Products
Pharmaceu�cals
Construc�on Project
Consumer Non Durables
Banks
Performance Snapshot
*Strategy Inception Date: 11th December 2007.Please Note: The Above strategy returns are of a Model Client as on 30th June 2020. Returns of individual clients may differ depending on time of entry in the Strategy. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Returns below 1 year are absolute and above 1 year are annualized. Strategy returns shown above are post fees & expenses.
10
NTDOP Strategy has delivered a CAGR of 13.5% vs. Ni�y 500
returns of 4.2%, an outperformance of 9.3%
(CAGR) since incep�on (5th December 2007)
NTDOP Strategy Nifty 500
Rs. 1 crore invested in NTDOP Strategy at inception is worth Rs. 4.9 cr as on 30th June 2020. For
the same period Rs. 1 cr invested in Nifty 500 Index is now worth
Rs. 1.7 cr.
NTDOP Strategy Ni�y 500
0
20
40
60
De
c-0
7
Jul-
08
Feb
-09
Sep
-09
Ap
r-1
0
No
v-1
0
Jun
-11
Jan
-12
Au
g-1
2
Mar
-13
Oct
-13
May
-14
De
c-1
4
Jul-
15
Feb
-16
Sep
-16
Ap
r-1
7
No
v-1
7
Jun
-18
Jan
-19
Au
g-1
9
Jun
-20
4.9X
1.7X
-13.2
-7.3
-2.1
5.1 4.7
17.3 16.713.5
-12.3
-3.8
0.65.0 4.2
9.46.7
4.2
1 Year 2 Years 3 Years 4 Years 5 Years 7 Years 10 Years Since Incep�on
Performance - Rolling Returns
Please Note: The Above strategy returns are of a Model Client as on 30th June 2020. Returns of individual clients may differ depending on time of entry in the strategy. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. Strategy returns shown above are post fees & expenses. Returns above 1 year are annualized.
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, the outcomes narrow significantly from the average.
For instance, if we consider the 5 year time frame, historically the best return (CAGR) is 36%, least return is 2% and average return is 25%.
It may also be noteworthy that the negative returns above 4 years rolling periods are zero.
12
Total number of time periods: 1year: 4,226; 2years: 3,861; 3years: 3,496; 4years: 3,131; 5years: 2,765; 6years: 2,400; 7years: 2,035; 8years: 1670; 9years: 1,304; 10years: 939;
1 2 3 4 5 6 7 8 9
Investment tenor (in years)
10
200%
150%
100%
50%
0%
-50%
-100%
% of times returns were negative
Average returnsNTDOP Strategy
142%
73%
50%41% 36%
43% 37% 35% 34% 30%
-56%
-16%-7% -1% 2% 10% 14% 15% 15% 14%
Fund Manager
Manish has been managing the Strategy since inception and also serves as the Director of the Motilal Oswal India Fund, Mauritius.
He has over 25 years of experience in equity research and fund management, with over 14 years with Motilal Oswal PMS.
He has been the guiding pillar in the PMS investment process and has been managing various PMS strategies and AIFs at MOAMC.
Manish holds various post graduate degrees including an MBA in Finance, FCA, Company Secretaryship (CS) and Cost & Works Accountancy (CWA).
Manish Sonthalia
13
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. The information / data herein alone is not sufficient and shouldn’t 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 Asset Management Company Limited. Readers should before investing in the Strategy make their own investigation and seek appropriate professional advice. • Investments in Securities are subject to market and other risks and there is no assurance or guarantee that the objectives of any of the strategies of the Portfolio Management Services will be achieved. • Clients under Portfolio Management Services are not being offered any guaranteed/assured returns. • Past performance of the Portfolio Manager does not indicate the future performance of any of the strategies. • The name of the Strategies do not in any manner indicate their prospects or return. • The strategy may not be suited to all categories of investors. • The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. • Neither Motilal Oswal Asset Management Company Ltd. (MOAMC), nor any person connected with it, accepts any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice. • Opinions, if any, expressed are our opinions as of the date of appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. • The Portfolio Manager is not responsible for any loss or shortfall resulting from the operation of the strategy. • Recipient shall understand that the aforementioned statements cannot disclose all the risks and characteristics. The recipient is requested to take into consideration all the risk factors including their financial condition, suitability to risk return, etc. and take professional advice before investing. As with any investment in securities, the Value of the portfolio under management may go up or down depending on the various factors and forces affecting the capital market. Disclosure Document shall be obtained and read carefully before executing the PMS agreement. • Prospective investors and others are cautioned that any forward - looking statements are not predictions and may be subject to change without notice. • For tax consequences, each investor is advised to consult his / her own professional tax advisor. • This document is not for public distribution and has been furnished solely for information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. No part of this material may be duplicated in any form and/or redistributed without ’MOAMCs prior written consent. • Distribution Restrictions – This material should not be circulated in countries where restrictions exist on soliciting business from potential clients residing in such countries. Recipients of this material should inform themselves about and observe any such restrictions. Recipients shall be solely liable for any liability incurred by them in this regard and will indemnify MOAMC for any liability it may incur in this respect.
Disclaimer
Custodian: Deutsche Bank A.G. | Auditor: Aneel Lasod & Associates | Depository: Central Depositary Services Ltd
Portfolio Manager: Motilal Oswal Asset Management Company Ltd. (MOAMC) | SEBI Registration No. : INP 000000670
THINK EQUITYTHINK MOTILAL OSWAL
For any PMS queries please call us on +91 81086 22222 / 022-4054 8002 (press 2 for PMS) or write to [email protected] or visit www.motilaloswalmf.com