10                                             10Get the       Power of 10 in your portfolio       ’s  India t    Firs    ...
Factors impacting interest rate Economic Growth           Inflation              Liquidity GDP ?                   Commodi...
Current Scenario                                                                                                          ...
Interest Rate Outlook                                      10.00                                                          ...
Case for Investment 10 Year G-Sec Interest rates nearing its 9 year peak? an opportunity to play the interest rate cycle.P...
Interest Rates (Yields) Nearing Peak                                                                                      ...
Why MOSt 10 Year Gilt Fund Access to 10 Year Benchmark G-Sec Invest predominantly in the10 Year Benchmark G-Sec Purest pla...
Markets and Volumes: Ample Liquidity                                    10 Year G - Sec Liquidity    54%                  ...
Asset AllocationThe Motilal Oswal MOSt 10 Year Gilt Fund would primarily invest inGovernment bonds:  Security             ...
Product FeaturesType of the scheme             : An Open Ended Gilt SchemeTwo Plans                      : Dividend & Grow...
DISCLAIMER: This presentation has been prepared and issued on the basis of internal data, publicly available information a...
Funds  Call: 1800-200-6626 I SMS: GILT to 575753      E-mail: mfservice@motilaloswal.comWebsite: www.motilaloswal.com/asse...
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Mo st 10 year gilt fund presentation

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Mo st 10 year gilt fund presentation

  1. 1. 10 10Get the Power of 10 in your portfolio ’s India t Firs Presenting Motilal Oswal MOSt 10 Year Gilt Fund (An open ended Gilt Scheme) Opens: 21st Nov 2011 NFO Closes: 5th Dec 2011 Funds
  2. 2. Factors impacting interest rate Economic Growth Inflation Liquidity GDP ? Commodity ? price Fiscal deficit ? ? of Balance Payment movement Investment ? outlook Currency ? movement 1
  3. 3. Current Scenario Slowing Growth 10 9.6 9.3 9 8.5 GPD Growth 8 7.6 8 7 6.8 6 5 11 09 10 08 07 E 12 FY FY FY FY FY FYSource : CGA, Ministry of Finance, CIRA Source: MOSL Research Tight Systemic Liquidity Inflation close to double digit 2,000 12 Liquidity Adjustment Facility (Rs Bn) 1,500 10 1,000 WPI (in Percentage) 8 500 6 0 4 7/10/2000 7/10/2001 7/10/2002 7/10/2003 7/10/2004 7/10/2005 7/10/2006 7/10/2007 7/10/2008 7/10/2009 7/10/2010 7/10/2011 -500 2 -1,000 0 9/1/2009 1/1/2010 3/1/2010 5/1/2010 7/1/2010 9/1/2010 1/1/2011 3/1/2011 5/1/2011 7/1/2011 9/1/2011 11/1/2009 11/1/2010 -1,500 -2,000Source : Bloomberg Source : Bloomberg As a result, interest rates have increased significantly in recent months 2
  4. 4. Interest Rate Outlook 10.00 5.00 MSCI EM Commodity Index 9.67 4.80 9,288 9.50 4.60 Indian GDP Growth (in Percentage) World GDP Growth (in Percentage) 4.54 4.51 4.46 4.40 4.40 9.00 4.34 8.78 4.22 3.96 4.20 6,944 in USD 8.50 4.00 8.43 8.37 8.24 4.00 3.80 8.00 7.84 3.60 7.82 3.40 7.50 7.53 3.20 7.00 3.00 1-Oct-10 1-Jul-10 1-Jul-11 1-Jun-10 1-Jun-11 1-Aug-10 1-Nov-10 1-Aug-11 1-Jan-11 1-Sep-10 1-Sep-11 1-May-10 1-Dec-10 1-May-11 1-Apr-10 1-Apr-11 1-Feb-11 1-Mar-11 12/12/2008 10/12/2010 12/12/2010 10/12/2011 10/12/2009 12/12/2009 2/12/2009 8/12/2010 8/12/2011 4/12/2009 6/12/2009 2/12/2011 8/12/2009 4/12/2011 6/12/2011 2/12/2010 4/12/2010 6/12/2010 India 2011 India 2012 World 2011 World2012Source : IMF Data Source : Bloomberg? liquidity expected to improve as capital investments are decelerating and high interest rates areSystemic leading to strong deposit growthInflation momentum turning negative & expected to ease? Interest rates expected to declineSource: MOAMC Internal Analysis.The statements contained herein may include statements of future expectations and other forward-looking statements that are based onexternal current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performanceor events to differ materially from those expressed or implied in such statements. Please refer to the scheme information document forfurther information. 3
  5. 5. Case for Investment 10 Year G-Sec Interest rates nearing its 9 year peak? an opportunity to play the interest rate cycle.ProvidesLong duration bonds are a good way to play it.? Government securities (G-Sec)? access to liquid and Credit-Risk free investmentProvides? premium - sovereign guaranteeLow riskLow illiquidity premium – G-Secs are most liquid part of bond market?Source: MOAMC Internal Analysis.The statements contained herein may include statements of future expectations and other forward-looking statements that are based on externalcurrent views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events todiffer materially from those expressed or implied in such statements. Please refer to the scheme information document for further information. 4
  6. 6. Interest Rates (Yields) Nearing Peak Yields Near Peak 140 10.00 9.51% 135.11 135 9.50 130 9.00 Investment Value (in Rs) 125 8.50 Yield (in Percentage) 120 8.00 115 7.50 110 7.00 105 6.50 100 6.00 95 97.31 5.50 90 5% 5.00 21-Oct-08 21-Oct-09 21-Oct-10 21-Aug-07 21-Aug-08 21-Aug-09 21-Aug-10 21-Aug-11 21-Dec-07 21-Dec-08 21-Dec-09 21-Dec-10 21-Jun-08 21-Jun-09 21-Jun-10 21-Jun-11 21-Feb-08 21-Apr-08 21-Apr-09 21-Feb-10 21-Apr-10 21-Feb-11 21-Apr-11 21-Oct-07 21-Feb-09 Investment Value YieldSource: RBI NDS OM data as on 31.10.2011 Investment value calculated using clean price & paid couponThe statements contained herein may include statements of future expectations and other forward-looking statements that are based on externalcurrent views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events todiffer materially from those expressed or implied in such statements. Please refer to the scheme information document for further information. 5
  7. 7. Why MOSt 10 Year Gilt Fund Access to 10 Year Benchmark G-Sec Invest predominantly in the10 Year Benchmark G-Sec Purest play on the interest rate cycle No active duration management 10 year benchmark G-Sec is the most liquid segment of the market Credit risk free returns Indexation benefit 6
  8. 8. Markets and Volumes: Ample Liquidity 10 Year G - Sec Liquidity 54% 180,590 200,000 52% 180,000 52% 52% 138,315 160,000 136,960 126,610 140,000 50% 120,000 48% 100,000 47% 80,000 46% 60,000 46% 40,000 44% 20,000 42% 0 Jun-11 Jul-11 Aug-11 Sep-11 Monthly G - sec Volume (Rs. Cr) % of 10 Yr Benchmark G-sec in Total volume (Rs. Cr)Source RBI on 31.10.2011 Total Outstanding Government of India Securities Rs.2,387,333.47 Cr 7
  9. 9. Asset AllocationThe Motilal Oswal MOSt 10 Year Gilt Fund would primarily invest inGovernment bonds: Security Investment Risk 10 Year Benchmark G-Sec 90 – 100 % Low Other Government Securities (7 to 12 years), T-Bills, 0 – 10 % Medium- Low Cash Management Bills, CBLO & RepoFor further details, please refer to the Scheme Information Document (SID) 8
  10. 10. Product FeaturesType of the scheme : An Open Ended Gilt SchemeTwo Plans : Dividend & GrowthTotal Expenses : 0.99%Exit Load : 0.5% if redeemed within 3 monthsMin Subscription : Rs.10000 & in multiples of Re. 1 thereafterNFO Opens : 21st November 2011NFO Closes : 5th December 2011Fund Manager : Abhiroop Mukherjee B.com (H), MBA 4yrs Experience in Trading Fixed Income Securities viz. G-Sec, T-bills, Corporate Bonds CP CD etc. , Earlier worked with PNB GILTS LTD. as WDM dealer for 2007-2011For further details, please refer to the Scheme Information Document (SID) 9
  11. 11. 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 informationcontained 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 10 Year Gilt Fund(MOSt 10 Year Gilt Fund). 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 beconstrued 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 informationand 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 todiffer 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 documentmay 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.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. InvestmentManager: Motilal Oswal Asset Management Company Ltd. Sponsor: Motilal Oswal Securities Ltd.Scheme Classification : Motilal Oswal MOSt 10 Year Gilt Fund (MOSt 10 Year Gilt Fund), an open ended gilt scheme Investment Objective: The primary investment objective of theScheme is to generate credit risk-free returns by investing in a portfolio of securities issued by the Central Government and State Government. Asset Allocation: 10 yr BenchmarkGovernment Security: 90%-100%; Other Government Securities (7 to 12 years), T-Bills, Cash Management Bills, CBLO & Repo: 0-10%. Load: Entry Load: Nil Exit Load: 0.50% for exitwithin 3 months Terms of Issue: Minimum Application Amount: During NFO& ongoing basis: Rs. 10,000/- and in multiples of Re. 1/-thereafter. Face Value & Issue Price: Offer of unitsof Rs. 10/- per unit 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 unitsthrough 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 thefirst 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) Allthe 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 factorsand 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 andmay not provide a basis of comparison with other investments (4) Motilal Oswal MOSt 10 Year Gilt Fund (MOSt 10 Year Gilt Fund )is the name of the Scheme and does not in anymanner 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 InvestmentAdvisor 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 initialcontribution made by it of an amount of Rs. 1 Lac towards setting up of the Mutual Fund (6) The present Scheme is not a guaranteed or assured return Scheme. Scheme SpecificRisk Factors: The 10 yr Benchmark Government Bond is the most liquid security in the entire Government Bond market, presently it alone constitutes about 80%-90% of the entirevolume of the Government Bond market. The 10 yr Benchmark however changes every year as there is a new 10 yr Benchmark Government Bond issued by the RBI as the existingone becomes a 9 yr residual maturity paper, hence the market exits from the existing paper and the focus shifts to the new 10 yr Benchmark Government Bond. For further SchemeSpecific Risk Factors & other details, Please read the Scheme Information Document (SID) & Statement of Additional Information (SAI) carefully before investing. A copy of SID, SAIand 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 andwww.mostshares.com Investors can also contact us on our toll free number 1800-200-6626 or send email at mfservice@motilaloswal.com 10
  12. 12. Funds Call: 1800-200-6626 I SMS: GILT to 575753 E-mail: mfservice@motilaloswal.comWebsite: www.motilaloswal.com/assetmanagement Website: www.mostshares.com

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