Invest India Strategy Octoberr 2010

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Invest India Strategy Octoberr 2010

  1. 1. Invest India StrategyInvest India Strategy The Strategy aims to generate long term capital appreciation by creating a focused portfolio of high growth stocks having the potential to grow more than the nominal GDP for next 5-7 years across market capitalization and which are available at reasonable market prices. Strategy ObjectiveStrategy Objective
  2. 2. Strategy Style & ConstructStrategy Style & Construct Investment Style & Timing – Buy Growth Stocks across Market capitalization which have the potential to grow at 1.5 times the nominal GDP for next 5-7 years. – BUY & HOLD strategy, leading to low to medium churn thereby enhancing post-tax returns Allocations - Market capitalization – Large Caps :50 % - 100% – Mid & Small Caps: 0% - 50% No of Stock: Concentrated portfolio of 10 to 14 stocks. – Scrip Allocation: Not more than 10% –15% in a single stock – Sector Allocation Limit: 30% in a sector
  3. 3. Investment ManagerInvestment Manager Mr. Manish Sonthalia – 15 Years Experience in Equity Research, Fund Management & Equity Sales. – Qualifications – FCA, ICWAI, CS, MBA – Vice President – for Equity Strategy for Motilal Oswal Securities Ltd
  4. 4. StrategyStrategy FeaturesFeatures Investment Horizon: – Medium to Long Term (3 Years +) Benchmark: – BSE 200 For Whom: – Investors keen to generate wealth by participating in India’s growth story over a period of time Return Risk Low Low to Medium Medium Medium to High HighLow Lowto MediumMedium Medium toHighHigh Invest India Strategy
  5. 5. Key FeaturesKey Features Min Investment Amount: Rs.10 lakhs & in multiples of Rs.1 lakh Plans: Growth Plan Pay less for staying Long: – Reduced management fees - by 0.25% from year 4 onwards Mode of payment: Cheque or transfer of existing stocks or a combination of both Mode of Reporting: Monthly Performance statement, Transaction & Corporate Action statement & Annual CA certified statement for your investment
  6. 6. Formula for INVEST INDIAFormula for INVEST INDIA The formula to achieve the objective of the strategy is to find Winner Categories = Sectors that will participate in India’s growth + Scalability Category Winners = Winning Categories + Entry Barriers + Great Management Great Investments = Category Winners + Reasonable Valuation
  7. 7. Category WinnersCategory Winners Entry Barriers – Demand side • Customer Captivity, Differentiated Brands, Strong distribution network, High switching costs – Supply side • Patent protection for products and/or processes • Privileged access to critical inputs e.g. captive ore mines – Economies of scale Great Management – One who Successfully defends or even increases Entry Barriers and Manages growth at least in line with category Category Winners tend to enjoy all 3 kinds of Entry Barriers and are run by Great Management
  8. 8. Model HoldingModel Holding Top SectorTop Sector Top HoldingsTop Holdings Please Note: These stocks are a part of the existing Invest India Strategy PMS strategy as on 30th September 2010. These Stocks 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 present or future holdings in these stocks. The companies mentioned above are only for the purpose of explaining the concept and should not be construed as recommendations from MOSL. ^ Based as per the closing market prices on 30th September 2010 Sector Allocation % Allocation ^ Scrip Name % Holding ^ Banking & Finance 22.52 Bajaj Auto Finance Ltd. 9.22 Engineering & Electricals 13.22 State Bank Of India 8.27 Auto & Auto Ancillaries 12.01 Cummins India Ltd. 7.44 FMCG 10.75 Jindal Steel & Power Ltd 7.03 Oil and Gas 8.17 Bharti Airtel Ltd. 6.65 Steel 7.03 Bharat Heavy Electricals Ltd. 5.78 Telecom 6.65 ITC Ltd. 5.47 Real Estate 5.45 Godrej Properties Ltd 5.45 Nestle India Ltd. 5.28 M R F Ltd 5.21 Union Bank Of India 5.02
  9. 9. Performance Track RecordPerformance Track Record All Figure in % Data as on 30th September 2010 %ofreturns Period Strategy Inception Date: 11/02/2010. Please Note: The above strategy returns are of a Model Client who is a part of exiting Invest India Strategy . 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 investment. Returns below 1 year are absolute and above 1 year are annualized. 9.44 12.56 23.58 8.56 20.91 34.77 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 1 Month 3 Months Since Inception Invest India Strategy BSE 200
  10. 10. Fixed Fee StructureFixed Fee Structure *please refer to the detailed terms and conditions in the fee schedule The Portfolio Manager will have the discretion to appoint any broker/s to execute the transaction for the Portfolio Management Scheme. Brokerage rate would be as applicable. Brokerage As ApplicableService Tax, Security Transaction Tax & Other Statutory levies NILRegistrar & Transfer Fees NILExit after 24 Months & Above 1.00%Exit between 12 months to < 24 Months 2.00%Exit between 0 months to < 12 Months Exit Fee * As ApplicableDepository Charges 0.25% p.a.Custodian Fees 2.00% p.a.2.25% p.a.2.25% p.a.2.25% p.a.Rs. 100 Lakhs & Above 2.25% p.a.2.50% p.a.2.50% p.a.2.50% p.a.Rs. 25 Lakhs to < Rs. 100 Lakhs 2.50% p.a.2.75% p.a.2.75% p.a.2.75% p.a.Rs. 10 Lakhs to < Rs. 25 Lakhs Assets Under Management 4th Year onwards3rd Year2nd Year1st Year*Fixed Management Fees 1.00%Upfront Fee Fees %Nature of Fees Fixed Fee Option Invest India Strategy The Portfolio Manager will have the discretion to appoint any broker/s to execute the transaction for the Portfolio Management Scheme. Brokerage rate would be as applicable. Brokerage As ApplicableService Tax, Security Transaction Tax & Other Statutory levies NILRegistrar & Transfer Fees NILExit after 24 Months & Above 1.00%Exit between 12 months to < 24 Months 2.00%Exit between 0 months to < 12 Months Exit Fee * As ApplicableDepository Charges 0.25% p.a.Custodian Fees 2.00% p.a.2.25% p.a.2.25% p.a.2.25% p.a.Rs. 100 Lakhs & Above 2.25% p.a.2.50% p.a.2.50% p.a.2.50% p.a.Rs. 25 Lakhs to < Rs. 100 Lakhs 2.50% p.a.2.75% p.a.2.75% p.a.2.75% p.a.Rs. 10 Lakhs to < Rs. 25 Lakhs Assets Under Management 4th Year onwards3rd Year2nd Year1st Year*Fixed Management Fees 1.00%Upfront Fee Fees %Nature of Fees Fixed Fee Option Invest India Strategy
  11. 11. Variable Fee StructureVariable Fee Structure *please refer to the detailed terms and conditions in the fee schedule The Portfolio Manager will have the discretion to appoint any broker/s to execute the transaction for the Portfolio Management Scheme. Brokerage rate would be as applicable.Brokerage As ApplicableService Tax, Security Transaction Tax & Other Statutory levies NILRegistrar & Transfer Fees As ApplicableDepository Charges 0.25% p.a.Custodian Fees NILExit after 24 Months & Above 1.00%Exit between 12 months to < 24 Months 2.00%Exit between 0 months to < 12 Months Exit Fee * 10 % Profit Sharing on Higher Water Marking Basis (For Details please refer to Example overleaf) Performance based Management Fees 0.50% p.a.0.75% p.a.0.75% p.a.0.75% p.a.Rs. 100 Lakhs & Above 0.75% p.a.1.00% p.a.1.00% p.a.1.00% p.a.Rs. 25 Lakhs to < Rs. 100 Lakhs 1.25% p.a.1.50% p.a.1.50% p.a.1.50% p.a.Rs. 10 Lakhs to < Rs. 25 Lakhs Assets Under Management 4th Year onwards3rd Year2nd Year1st Year* Frequency of ChargingFixed Management Fees 1.00%Upfront Fee Fees %Nature of Fees Variable Fee Structure Invest India Strategy The Portfolio Manager will have the discretion to appoint any broker/s to execute the transaction for the Portfolio Management Scheme. Brokerage rate would be as applicable.Brokerage As ApplicableService Tax, Security Transaction Tax & Other Statutory levies NILRegistrar & Transfer Fees As ApplicableDepository Charges 0.25% p.a.Custodian Fees NILExit after 24 Months & Above 1.00%Exit between 12 months to < 24 Months 2.00%Exit between 0 months to < 12 Months Exit Fee * 10 % Profit Sharing on Higher Water Marking Basis (For Details please refer to Example overleaf) Performance based Management Fees 0.50% p.a.0.75% p.a.0.75% p.a.0.75% p.a.Rs. 100 Lakhs & Above 0.75% p.a.1.00% p.a.1.00% p.a.1.00% p.a.Rs. 25 Lakhs to < Rs. 100 Lakhs 1.25% p.a.1.50% p.a.1.50% p.a.1.50% p.a.Rs. 10 Lakhs to < Rs. 25 Lakhs Assets Under Management 4th Year onwards3rd Year2nd Year1st Year* Frequency of ChargingFixed Management Fees 1.00%Upfront Fee Fees %Nature of Fees Variable Fee Structure Invest India Strategy
  12. 12. Risk Disclosure And DisclaimerRisk Disclosure And DisclaimerRisk Disclosure And Disclaimer 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 investments 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 Securities Ltd. (MOSL), 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 MOSL’s 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 MOSL for any liability it may incur in this respect. Registered Office: Motilal Oswal Securities Ltd. Palm Spring Centre, 2nd Floor, New Link Road, Malad (West), Mumbai - 400 064 SEBI Certificate of Registration as Portfolio Manager INP 000000670

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