BUY RIGHT : SIT TIGHT

Transcription

1 BUY RIGHT SIT TIGHT Buying quality companies and riding their growth cycle THINK EQUITY THINK MOTILAL OSWAL

2 MOTILAL OSWAL AMC Motilal Oswal Asset Management Company (MOAMC) is one of India's fastest growing asset management companies. With a focus on equity investing and equity investment expertise inherited from over 0 years of capital markets experience of our sponsors Motilal Oswal Financial Services Ltd., we have created a single investing philosophy be it Mutual Fund (MF) or Portfolio Management Services (PMS). Like our investing philosophy, our product basket is also focused with concentrated 'buy and hold' PMS Strategies and Mutual Fund schemes in the Large Cap, Midcap and Multicap space respectively. Our Value Strategy is one of the longest running products in PMS with a track record of years. And our MF offerings come with unique features such as Low Churn and Focused portfolios. With an investment management team of ; we aim to be seen as an investment management house focused on wholesaling through marquee distribution platforms and strong relationships, backed by performance track record. Note Pursuant to the scheme of amalgamation Motilal Oswal Securities Limited (MOSL) has been merged with Motilal Oswal Financial Services Limited (MOFSL) whereby all the assets and liabilities of MOSL including its business and investments have been transferred to MOFSL w.e.f. August, 08.

3 BUY RIGHT SIT TIGHT Our Investment Philosophy At Motilal Oswal Asset Management Company (MOAMC), our investment philosophy is centered on two critical pillars of equity investing 'Buy Right Sit Tight'. 'Buy Right' means buying quality companies at a reasonable price and 'Sit Tight' means staying invested in them for a long time to realise the full growth potential of the stocks. ProcessPerformance Value Strategy Inception Date Mar 00 Delivered an annualized return of.8% since incep on as against 6.09% by Ni y 0 Index Delivered an annualized return of 6.8% since incep on as against.% by Ni y 00 Index NTDOP Strategy Incep on Date Dec 007 IOP Strategy Inception Date Feb 00 Delivered an annualized return of.7% since incep on as against 6.6% by Ni y Smallcap 00 Index Delivered an annualized return of.8% since incep on as against.08% by Ni y 0 MOF Inception Date May 0 MOF0 Inception Date Feb 0 Delivered an annualized return of 9.8% since incep on as against 0.08% by Ni y Midcap 00 Delivered an annualized return of 0.6% since incep on as against.0% by Ni y 00 MOF Inception Date8 Apr 0 MOFLTE Inception Date Jan 0 Delivered an annualized return of.7% since incep on as against 7.00% by Ni y 00 Delivered an annualized return of 7.0% since incep on as against 8.08% by CRISIL Hybrid Aggressive MOFDYNAMIC Inception Date7 Sep 06 Data as on October, 08 Past performance may or may not be sustained in future. For detailed performance tables, please refer page no. to 6 for Mutual Fund s and 8 to 0 for Strategies of Portfolio Management Services

4 BUY RIGHT How do we 'Buy Right'? Over the last years, our chairman, Raamdeo Agrawal (one of India's foremost value investors) has been analyzing the Indian equity market to come up with investing insights in the form of the Annual Motilal Oswal Wealth Creation Study. The learnings from all these studies have helped us evolve a unique and focused investing process - 'QGLP'. Every stock we buy in our Mutual Fund s or PMS Strategies is based on our QGLP parameters. Qfor QUALITY Gfor GROWTH Lfor LONGEVITY Pfor PRICE Quality denotes quality of the business and management Growth denotes growth in earnings and sustained RoE Longevity denotes longevity of the competitive advantage or economic moat of the business Price denotes our approach of buying a good business for a fair price rather than buying a fair business for a good price Performance of QGLP stocks Here are a few more examples that show how QGLP stocks have fared in terms of compounded annual growth return (CAGR) over the last 0 years or since listing; whichever is later. Company Name Eicher Motors Ltd. Berger Paints Ltd. Pidilite Industries Ltd. Kotak Mahindra Bank Ltd. Asian Paints Ltd. CAGR % The given stocks are part of portfolio. The Stocks mentioned above are used to explain the concept and are for illustration purpose only and should not be used for development or implementation of an investment strategy. It shall not be constitute as an advice, an offer to sell/purchase or as an invitation or solicitation to do so for any securities. The statements made 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. Past performance may or may not be sustained in future. Source Bloomberg Consensus & Internal Research Data as on October, 08

5 SIT TIGHT How do we 'Sit Tight'? While Buying Right is all about following a process, Sitting Tight on a good buy requires Focus & Discipline. Buy and Hold We believe in focused stock portfolios and are strictly buy and hold investors and believe that while picking the right business needs skill; 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 0 to stocks being our ideal number. We believe in adequate diversification as overdiversification results in diluting returns for our investors and adding market risk. Buy & Hold If you had invested ` 00 in the Sensex in 979, your investment would have mul plied to `,0 with dividend and to `,677 without dividend. Purchasing Power,000,00,000,00,000 Sensex Sensex cum Dividend If you had invested Rs `,0 `, Mar-79 Jan-80 Nov-80 Sep-8 Jul-8 May-8 Mar-8 Jan-8 Nov-8 Sep-86 Jul-87 May-88 Mar-89 Jan-90 Nov-90 Sep-9 Jul-9 May-9 Mar-9 Jan-9 Nov-9 Sep-96 Jul-97 May-98 Mar-99 Jan-00 Nov-00 Sep-0 Jul-0 May-0 Mar-0 Jan-0 Nov-0 Sep-06 Jul-07 May-08 Mar-09 Jan-0 Nov-0 Sep- Jul- May- Mar- Jan- Nov- Sep-6 Jul-7 May-8 Jun-8 Jul-8 Aug-8 Source Bloomberg Data as on September 0, 08 The graph above is used to explain the concept and is for illustration purpose only and should not be used for development or implementation of an investment strategy. It should not be construed as investment advice to any party. The above figures are inflation adjusted. Focused Por olio Diversifica on beyond your control becomes unmanageable and adds no value to your por olio. Over diversifica on can impact the overall performance of your por olio. As in case of most por olios, the top good quality stocks contribute 80% of overall performance of your por olio while the rest 0% is contributed by bad quality stocks. Sensex Sensex cum Dividend Risk Risk reducing as the number of stocks raise. But after 0 stocks in portfolio, change of risk is minimal Stock 0 Stocks 00 Stocks Number of Stocks

6 QQuality "Great companies to invest are like wonderful castles, surrounded by deep, dangerous moats where the leader inside is an honest and decent person. Preferably, the castle gets its strength from the genius inside; the moat is permanent and acts as a powerful deterrent to those considering an attack; and inside, the leader makes gold but doesn't keep it all for himself. Q = Quality of business x Quality of management There are two aspects to Q () Quality of business and () Quality of management. The rela onship between the two is mul plica ve and not addi ve. Thus, if one of the aspects is zero, Q will be equal to zero, no ma er how high the other. Quality is a subjec ve concept, and yet there are several objec ve indicators of the same, as listed below Q INDICATORS Quality of Business Large profit pool Economic Moat i.e. sustained c o m p e t i t i v e a d v a n t a g e reflected in return ratios (RoE, RoCE) higher than cost of c a p i t a l a n d a l s o t h o s e of peers F a v o u r a b l e c o m p e t i t i v e structure like monopoly or oligopoly Secular and stable business, preferably consumer facing Po s i t i v e d e m a n d - s u p p l y situation Quality of Management Competence Sound business strategy Excellence in execution Rational dividend payout policy Integrity Honest and transparent Concern for all stakeholders Growth mindset Long-range profit outlook Efficient capital allocation, including growth by acquisitions

7 Growth "Growth creates value only when it takes place within the limits of a Gstrong and sustainable company franchise, and these are rare. G = Growth in earnings In inves ng, there are two dimensions of growth () Earnings growth and () Valua on growth. The G of QGLP addresses earnings growth, whereas the P(rice) takes care of the Valua on growth. Earnings growth by itself doesn't mean much. It adds value only when the company earns returns on capital higher than the cost of capital. Hence, growth is simply an amplifier good when returns exceed the cost of capital, bad when returns are below the cost of capital, and neutral when returns equal the cost of capital. In the final analysis, G (i.e. earnings growth in a company) is a quan ta ve reflec on of Q (i.e. quality of business and management). G has four dimensions. Volume growth - a func on of demand growth matched by company's capacity to supply. Price growth - a func on of company's pricing power, which in turn is a func on of the compe ve landscape. Opera ng leverage - a func on of the company's opera ng cost structure. Higher the fixed cost, lower the unit cost incidence and higher the opera ng leverage. Financial Leverage - a func on of capital structure. Higher the debt-equity, higher the financial leverage and vice versa Mul plica ve dimensions of earnings growth Sales Volume Growth Realisa on Growth EARNINGS GROWTH Opera ng Leverage Financial Leverage 6

8 L Longevity "We like great companies with dominant positions, whose franchise is hard to duplicate and has tremendous staying power or some permanence to it. L = Longevity of quality and growth Having established the present quality and earnings growth of the company, the next challenge to investors is assessing how long it can sustain both. In the context of longevity, competence of management is tested at two levels () Extending CAP (i.e. Compe ve Advantage Period), and () Delaying growth slowdown. Extending CAP Compe ve Advantage Period (CAP) is the me during which a company generates returns on investment that exceed its cost of capital. Compe on eventually drives down returns to cost of capital, and some mes even below it. However, a company with a great business and great management keeps extending its CAP, sustaining high return both for itself and its equity investors. Companies usually enjoy a certain CAP Rate of Return Compe ve forces work to bring down excess return but high-quality companies tend to extend it Rate of Return Incremental excess return WACC Return= WACC WACC Return= WACC CAP WACC is the Weighted Average Cost of Capital Time (in years) Delaying growth slowdown Competent managements can delay growth slowdown by () new streams of organic growth, and/or () inorganic growth via judicious acquisi ons. 0 Year CAP rolls over by year Time (in years) 7

9 P "In Price Case the Bible, Study it says Shriram that love Transport covers a mul tude of sins. Well, in the inves ng field, price covers a mul tude of mistakes. For human beings, there is no subs tute for love. For inves ng there is no subs tute for paying the right price absolutely none. P = Price (i.e. Favourable valua on) Growth in stock price is a mul plica ve func on of growth in earnings and growth in valua on. The simplest way to improve the odds of valua on growth is by ensuring favourable purchase price. The price of a stock has to be seen in conjunc on with the value it offers. Price is what we pay; value is what we get. Therefore, stock prices are a rac ve only when they are less than the value perceived in the stock. A simple rule of thumb of favourable purchase price is low P/E, preferably single-digit. However, in certain situa ons, low P/E may not be the sole determinant of favourable price e.g. during bo om-of-the-cycle, earnings of cyclical stocks are depressed leading to high P/Es; likewise, where companies are expected to turn from loss to profit, current P/E cannot be calculated. Few other measures of favourable purchase price Ÿ Discount to historical valuation bands P/E, Price/Book Ÿ PEG Ratio (i.e. P/E Earnings growth; the lower the better) Ÿ Discount to DCF value (Discounted Cash Flow) or Replacement cost Ÿ Low Payback ratio (i.e. Market cap / Expected profits of next years) Ÿ High dividend yield Ÿ Absolute market cap relative to the size of opportunity 8

10 MUTUAL FUNDS For whom Our equity expertise can be accessed by individual investors with an approach to long term savings through our Mutual Fund products for as low as Rs. 00 through a systematic investment plan (SIP). Benefits Our Mutual Fund s pass through a rigorous investment process with an aim to deliver consistent performance. Investments in the s can also be conveniently done online. As an investment house, since we have only one investment philosophy, we aim to keep life simple for us and our investors by having a focused menu of equity funds one large cap, one midcap, one multicap, one tax saver fund and one dynamic fund. Our Funds Mo lal Oswal Focused Fund (MOF) Invests in enduring wealth creators Mo lal Oswal Midcap 0 Fund (MOF0) Invests in emerging wealth creators Mo lal Oswal Mul cap Fund (MOF) Invests in emerging and enduring wealth creators Mo lal Oswal Long Term Equity Fund (MOFLTE) Lock in fund that invests in wealth creators plus saves tax Mo lal Oswal Dynamic Fund (MOFDYNAMIC) Invest in equity, deriva ves, debt, money market instruments and units issued by REITs and InvITs. Mo lal Oswal Equity Hybrid Fund (MOFEH) Invests in equity and equity related instruments to generate returns by inves ng in a combined por olio of equity debt resul ng in less vola lity. Benefits of our Funds Low Churn Reap the full growth poten al of stocks Focused Portfolio We do not buy more than -0 stocks, reducing the risk of diversifica on 9

11 PORTFOLIO MANAGEMENT SERVICES For whom Our PMS products are meant for financially savvy high net worth individuals (HNIs) who wish to u lise our exper se in building a por olio of high quality companies or who have a large por olio of stocks but lack the bandwidth to monitor them. Benefits With our Por olio Management Services one can build an equity por olio in the large cap and midcap segment with highly personalized service. Also, the 'Buy Right Sit Tight' approach results in low churn in our por olios and makes the cos ng of our Por olio Management Services very a rac ve. Our Strategies Value Strategy Concentrated large cap por olio with around 0 stocks Next Trillion Dollar Opportunity Strategy Concentrated Diversified por olio with around stocks India Opportunity Por olio Strategy Concentrated Small & Mid cap por olio with around 0 stocks India Opportunity Por olio V Strategy Concentrated Small & Mid cap por olio with around 0 stocks Benefits of our Strategies Low Churn Reap the full growth poten al of stocks Focused Portfolio We do not buy more than -0 stocks, reducing the risk of diversifica on High Brand Recall Widely accepted and distributed product Segregated Portfolio Behavior of an investor won't impact the por olio of other investors Track Record One of the longest running strategies in the industry with a + years track record Transparency Transparency in por olio holdings, transac ons and expenses 0

12 LARGE CAP FUND Investment Objective Motilal Oswal Focused Fund (MOF) Type of Category Benchmark Entry Exit Load The investment objective of the is to achieve long term capital appreciation by investing in upto companies with long term sustainable competitive advantage and growth potential. However, there can be no assurance or guarantee that the investment objective of the would be achieved. An open ended equity scheme investing in maximum stocks intending to focus on Large Cap stocks Focused Fund intending to invest in large cap stocks Nifty 0 Nil % - If redeemed on or before year from the date of allotment; Nil - If redeemed after year from the date of allotment No Exit Load applies for switch between MOF, MOF0, MOF, MOFDYNAMIC & MOFEH. No Load for switch between Options within the. Investors have option to withdraw up to % p.a. of original investment cost (OIC) within year (from date of investment) with no exit load. If the withdrawal amount is beyond % p.a. of OIC, the normal exit load applies on the amount greater than % p.a. Performance* Year Years Years Since Inception Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 MOF -7. 9,77 6.9,8.9 9,9.8 9, Ni y 0 (Benchmark).9 0,9 0., ,6.08 8,66 BSE Sensex (Addi onal benchmark).9 0,9 0.,6.7 7,9. 8,96 NAV (Rs.) Per Unit (9. as on -Oct-08) Date of inception -May-0. Incase, the start/end date of the concerned period is non business date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth Option. Different plans have different expense structure. This scheme is currently managed by Mr. Siddharth Bothra. He is the Fund Manager for equity component since -Nov-06; Mr. Gautam Sinha Roy is the Co-Fund Manager for equity component since 6-Dec-06 and Mr. Abhiroop Mukherjee is the Fund Manager for debt component since inception. The performance of the s managed by them are on page no.,,, and 6. Fund Manager Name Mr. Siddharth Bothra Fund Manager Mr. Gautam Sinha Roy Co-Fund Manager Top 0 Holdings* Sr. No. Name of Instrument % to Net Assets HDFC Bank Ltd *Data as on October, 08 Kotak Mahindra Bank Ltd. Tata Consultancy Services Ltd. Maruti Suzuki India Ltd. ICICI Lombard General Insurance Company Ltd. HDFC Standard Life Insurance Company Ltd. Housing Development Finance Corporation Ltd. ABB India Ltd. Eicher Motors Ltd. MphasiS Ltd. Experience He has a rich experience of more than 7 years in the field of research and investments. He has been managing this fund since -Nov- 06 He has close to years of experience in fund management and investment research. He has been co-managing this fund since 6-Dec-06 SIP Performance* Invested Amount Market Value Returns (CAGR)% 08, ^Also represents additional benchmark Inception date -May-0. For SIP returns, monthly investment of ` 0,000/- invested on the st day of every month has been considered. Performance is for Regular Plan Growth Option. Past performance may or may not be sustained in the future Year Nifty 0,0,000 7, -.97 BSE Sensex ^ 8, ,98.7 Year Nifty 0,60,000 6, Sector Allocation* Finance Banks Software Auto Pharmaceuticals Transportation Industrial Capital Goods Consumer Non-Durables Construction Projects Consumer Durables Cement Commercial Services Petroleum Products BSE Sensex ^, %.6%.%.9%.8% Cash & Equivalent.76% 70,89.7% %.% 7.0% Year Nifty 0 6,00,000 76, % BSE Sensex ^ 77,80.80% % 8, Since Inception Nifty 0 6,0,000 86, BSE Sensex ^ 867,60.7% 0.6

13 MIDCAP FUND Motilal Oswal Midcap 0 Fund (MOF0) Investment Objective Type of Category Benchmark Entry Exit Load The investment objective of the is to achieve long term capital appreciation by investing in a maximum of 0 quality mid-cap companies having long-term competitive advantages and potential for growth. However, there can be no assurance or guarantee that the investment objective of the would be achieved. Mid Cap Fund - An open ended equity scheme predominantly investing in mid cap stocks Mid Cap Fund Nifty Midcap 00 Nil % - If redeemed on or before year from the date of allotment; Nil - If redeemed after year from the date of allotment No Exit Load applies for switch between MOF, MOF0, MOF, MOFDYNAMIC & MOFEH. No Load for switch between Options within the. Investors have option to withdraw up to % p.a. of original investment cost (OIC) within year (from date of investment) with no exit load. If the withdrawal amount is beyond % p.a. of OIC, the normal exit load applies on the amount greater than % p.a. Performance* MOF0 Ni y Midcap 00 (Benchmark) Ni y 0 (Addi onal Benchmark) NAV (Rs.) Per Unit (. as on -Oct-08) Year Years Since Inception.96 Current Value of Investment of ` 0,000 9, 8,869 0, Current Value of Investment of ` 0,000,6,6, Current Value of Investment of ` 0,000,,67 7,89 Date of inception -Feb-. = Incase, the start/end date of the concerned period is non business date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth option. Different plans have different expense structure. = Mr. Akash Singhania is the Fund Manager for equity component since 8-Jul-07; Mr. Niket Shah is the Associate Fund Manager since March, 08 and Mr. Abhiroop Mukherjee is the Fund Manager for debt component since -Feb-0. The performance of the s is the Associate Fund Manager managed by them are on page no.,,, and = The scheme has been in existence for less than years. Fund Manager Name Mr. Akash Singhania Fund Manager Experience H e h a s o v e r a l l y e a r s o f experience and more than years of experience in Fund management across the tenure. He has been appointed as the Fund Manager since 8-Jul-07 Mr. Niket Shah He has been appointed as Associate Fund Manager since March, 08 Associate Fund Manager He has overall 9 years of experience SIP Performance* Invested Amount Market Value Returns (CAGR)% 08,0-7.9 Year Nifty Midcap 00,0,000 07, Nifty 0 ^ 7, , Since Inception Inception date -Feb-0. ^Also represents additional benchmark For SIP returns, monthly investment of Rs. 0000/- invested on the st day of every month has been considered. Performance is for Regular Plan Growth Option. Past performance may or may not be sustained in the future. Year Nifty Midcap 00,60,000 88,9.0 Nifty 0 ^ 6, , Nifty Midcap 00 60,000 70, Nifty 0 ^ 69,0 9. Top 0 Holdings* Sr. No. Name of Instrument % to Net Assets Bajaj Finance Ltd. RBL Bank Ltd. Exide Industries Ltd. City Union Bank Ltd. AU Small Finance Bank Ltd. Voltas Ltd. Balkrishna Industries Ltd. Astral Poly Technik Ltd. Eris Life sciences Ltd. *Data as on October, 08 Cholamandalam Investment and Finance Company Ltd Sector Allocation* Auto Ancillaries Banks Finance Industrial Products.9% Construction Projects.0% Software.8% Pharmaceuticals.7% Consumer Durables.0% Commercial Services.0% Consumer Non-Durables.0% Cement.89% Auto.8% Cash & Equivalent.9% 7.99% 8.%.98%

14 MULTICAP FUND Motilal Oswal Multicap Fund (MOF) Investment Objective Type of Category Benchmark Entry Exit Load The investment objective of the is to achieve long term capital appreciation by primarily investing in a maximum of equity & equity related instruments across sectors and market-capitalization levels. However, there can be no assurance or guarantee that the investment objective of the would be achieved. MultiCap - An open ended equity scheme investing across large cap, mid cap, small cap stocks MultiCap Nifty 00 Nil % - If redeemed on or before year from the date of allotment; Nil - If redeemed after year from the date of allotment No Exit Load applies for switch between MOF, MOF0, MOF, MOFDYNAMIC & MOFEH. No Load for switch between Options within the. Investors have option to withdraw up to % p.a. of original investment cost (OIC) within year (from date of investment) with no exit load. If the withdrawal amount is beyond % p.a. of OIC, the normal exit load applies on the amount greater than % p.a. Performance* Year Current Value of Investment of ` 0,000 Years Current Value of Investment of ` 0,000 Since Inception Current Value of Investment of ` 0,000 MOF , , 0.6,0 Ni y 00 (Benchmark) -.7 9,68 0.,9.0 7,77 Ni y 0 (Addi onal Benchmark).9 0,9 0.,96. 6, NAV (Rs.) Per Unit (.0 as on -Oct-08) Date of inception 8-Apr-. = Incase, the start/end date of the concerned period is non business date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth option. Different plans have different expense structure. =Mr. Gautam Sinha Roy is the Fund Manager for equity component since -May-0; = Ms. Snigdha Sharma has been appointed Associate Fund Manager of the s Motilal Oswal Multicap Fund (MOF) vide addendum dated August, 08 w.e.f. July, 08, Mr. Abhiroop Mukherjee is the Fund Manager for debt component since 8-Apr-0 and Mr. Swapnil Mayekar for Foreign Securities since 0-Aug-0. The performance of the s managed by them are on page no.,,, and 6 = The scheme has been in existence for less than years. Fund manager Name Mr. Gautam Sinha Roy Fund Manager Ms. Snigdha Sharma Associate Fund Manager Experience He has close to years of experience in fund management and investment research. He has been managing this fund since - May-0 Ms. Snigdha Sharma has overall 0 y e a r s o f r i c h a n d d i v e r s e experience on both buy and sell side equity research across India and US markets SIP Performance* Invested Amount Market Value Returns (CAGR)% 0,68 -. Year Nifty 00 0,000,9-0.9 Nifty 0 ^ 7, , Since Inception Inception date 8-Apr-0. ^Also represents additional benchmark For SIP returns, monthly investment of Rs. 0000/- invested on the st day of every month has been considered. Performance is for Regular Plan Growth Option. Past performance may or may not be sustained in the future. Year Nifty 00 60,000 07, Nifty 0 ^ 6, ,6 9.8 Nifty 00 0,000 68, Nifty 0 ^ 60,7 8. Top 0 Holdings* Sector Allocation* Sr. No. Name of Instrument % to Net Assets HDFC Bank Ltd. HDFC Ltd. Infosys Ltd. Tata Consultancy Services Ltd. Maruti Suzuki India Ltd. IndusInd Bank Ltd. Bajaj Finance Ltd. Eicher Motors Ltd. RBL Bank Ltd. United Spirits Ltd Finance Banks Software Auto Consumer Non-Durables Pharmaceuticals Petroleum Products Construction Projects Gas Consumer Durables Transportation 7.06% 6.7%.%.7%.9%.6% 0.%.7%.89% 9.6%.% *Data as on October, 08 Cash & Equivalent.0%

15 TAX SAVER FUND Motilal Oswal Long Term Equity Fund (MOFLTE) Investment Objective The investment objective of the is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related instruments. However, there can be no assurance or guarantee that the investment objective of the would be achieved. Type of Category Benchmark Entry Exit An open ended equity linked saving scheme with a statutory lock in of years and tax benefit ELSS Nifty 00 NIL NIL Performance* MOFLTE Ni y 00 (Benchmark) Ni y 0 (Addi onal Benchmark) NAV (Rs.) Per Unit (.779 as on -Oct-08) Year Current Value of Investment of ` 0,000 9, 9,68 0,9 Date of inception -Jan-0. Incase, the start/end date of the concerned period is non business date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth Option. Different plans have different expense structure. This scheme is currently managed by Mr. Gautam Sinha Roy is the Fund Manager for equity component since inception; Ms. Snigdha Sharma has been appointed Associate Fund Manager of the s Motilal Oswal Long Term Equity Fund (MOFLTE) vide addendum dated August, 08 w.e.f. July, 08 and Mr. Abhiroop Mukherjee is the Fund Manager for debt component since inception. The performance of the s managed by them are on page no.,,, and 6. The scheme has been in existence for less than years." Fund manager Name Mr. Gautam Sinha Roy Fund Manager Ms. Snigdha Sharma Associate Fund Manager Experience He has close to years of experience in fund management and investment research. He has been managing this fund since inception Ms. Snigdha Sharma has overall 0 years of rich and diverse experience on both buy and sell side equity research across India and US markets SIP Performance* Invested Amount Market Value Returns (CAGR)% 06,9-0.6 Year Nifty 00,0,000, Years.0 Nifty 0 ^ 7, -.06 Current Value of Investment of ` 0,000 98,8 6.77,,9, Since Inception Current Value of Investment of ` 0, Since Inception,78,9,0 Inception date -Jan-0. ^Also represents additional benchmark For SIP returns, monthly investment of Rs. 0000/- invested on the st day of every month has been considered. Performance is for Regular Plan Growth Option. Past performance may or may not be sustained in the future. Year Nifty 00,60,000 07, Nifty 0 ^ 6, , Nifty 00 0,000 6,6 8. Nifty 0 ^,0 9.0 Top 0 Holdings* Sector Allocation* Sr. No. Name of Instrument % to Net Assets Finance.0% Infosys Ltd. HDFC Bank Ltd. Housing Development Finance Corporation Ltd. IndusInd Bank Ltd. Petronet LNG Ltd. 6 Larsen & Toubro Ltd. 7 Bajaj Finance Ltd. 8 Eris Lifesciences Ltd. 9 Tata Elxsi Ltd. 0 ICICI Lombard General Insurance Company Ltd. *Data as on October, Software Banks Auto Construction Projects Pharmaceuticals Gas Petroleum Products Commercial Services Consumer Non-Durables Consumer Durables Industrial Products Auto Ancillaries Transportation Cash & Equivalent 6.7%.96%.8%.96%.70%.8%.89%.87%.% 0.7%.6% 9.6% 6.6%.%

16 DYNAMIC FUND Investment Objective Fund manager Name Mr. Gautam Sinha Roy Fund Manager Ms. Snigdha Sharma Associate Fund Manager Mr. Abhiroop Mukherjee - Fund Manager for Debt Component Performance* MOFDYNAMIC CRISIL Hybrid Aggressive Index (Benchmark) Nifty 0 (Additional Benchmark) Experience NAV (Rs.) Per Unit (. as on -Oct-08) Motilal Oswal Dynamic Fund (MOFDYNAMIC) Type of Category Benchmark Entry Exit Load Year.77 The investment objective is to generate long term capital appreciation by investing in equity and equity related instruments including equity derivatives, debt, money market instruments and units issued by REITs and InvITs. However, there can be no assurance or guarantee that the investment objective of the would be achieved. An open ended dynamic asset allocation fund Dynamic Asset Allocation CRISIL Hybrid Aggressive Nil % - If redeemed on or before year from the date of allotment; Nil - If redeemed after year from the date of allotment No Exit Load applies for switch between MOF, MOF0, MOF, MOFDYNAMIC & MOFEH. No Load for switch between Options within the. Investors have option to withdraw up to % p.a. of original investment cost (OIC) within year (from date of investment) with no exit load. If the withdrawal amount is beyond % p.a. of OIC, the normal exit load applies on the amount greater than % p.a. He has close to years of experience in fund management and investment research. He has been managing this fund since -Nov-06 Ms. Snigdha Sharma has overall 0 years of rich and diverse experience on both buy and sell side equity research across India and US markets He has 0 years of experience in Trading Fixed Income Securities viz. G-sec, T-bills, Corporate Bonds CP, CD etc. He has been managing this fund since inception Current Value of Investment of ` 0,000 9,87 0,0 0,9 Date of inception 7-Sep-06 Incase, the start/end date of the concerned period is non business date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth Option. Different plans have different expense structure. This scheme is currently managed by Mr. Gautam Sinha Roy. He has been managing equity component since -Nov-06; Ms. Snigdha Sharma has been appointed Associate Fund Manager of the s Motilal Oswal Dynamic Fund (MOFDYANAMIC) vide addendum dated August, 08 w.e.f. July, 08 and Mr. Abhiroop Mukherjee is the Fund Manager for debt component since inception. The performanceof the s managed by them are on page no.,,, and 6. The scheme has been in existence for less than years 7 Ashok Leyland Ltd.. 8 Larsen & Toubro Ltd.. 9 Max Financial Services Ltd.. 0 Petronet LNG Ltd.. Allocation* 6 Total Equity Bonds and NCDs Fixed Deposits Derivatives CBLO / Reverse Repo Investments Cash & Cash Equivalents Total *Data as on October, SIP Performance* Sector Allocation* Since Inception Current Value of Investment of ` 0,000 Year Since Inception Sr. No. Name of Instrument % to Net Assets CRISIL Hybrid CRISIL Hybrid Bajaj Finance Ltd Nifty Nifty 0 - Aggressive ^ - Aggressive ^ HDFC Ltd. 6.8 Maruti Suzuki India Ltd. 6. Invested Amount 0,000 0,000 United Spirits Ltd..9 Market Value,09 7,80 7,,8 6,87 68,88 Infosys Ltd HDFC Bank Ltd..6 Returns (CAGR)% %,,767,6 ^ Also represents additional benchmark Date of inception 7-Sep-06 For SIP returns, monthly investment of ` 0,000/- invested on the st day of every month has been considered. Performance is for Regular Plan Growth Option. Past performance may or may not be sustained in the future. Finance Auto Banks Software Consumer Non-Durables Construction Projects Pharmaceuticals Gas Consumer Durables Petroleum Products Commercial Services Industrial Products.6% 0.7%.6%.%.%.%.06%.06% 8.0% 8.07%.% 9.8%

17 HYBRID FUND Investment Objective Fund Manager Name Mr. Siddharth Bothra Fund Manager Mr. Akash Singhania Associate Fund Manager Mr. Abhiroop Mukherjee - Fund Manager for Debt Component Experience Motilal Oswal Equity Hybrid Fund (MOFEH) Type of Category Benchmark Entry Exit Load The investment objective is to generate equity linked returns by investing in a combined portfolio of equity and equity related instruments, debt, money market instruments and units issued by Real Estate Investment Trust (REITs) and Infrastructure Investment Trust (InvITs). An open ended hybrid scheme investing predominantly in equity and equity related instruments Aggressive Hybrid Fund CRISIL Hybrid +6 Aggressive Nil %- If redeemed on or before year from the date of allotment. Nil- If redeemed after year from the date of allotment. No Exit Load applies for switch between MOF, MOF0, MOF, MOFDYNAMIC & MOFEH. No Load for switch between Options within the. Investors have option to withdraw up to % p.a. of original investment cost (OIC) within year (from date of investment) with no exit load. If the withdrawal amount is beyond % p.a. of OIC, the normal exit load applies on the amount greater than % p.a. He is managing this fund since inception. He has close to 7 years of experience He is managing this fund since inception. He has close to years of experience He has 0 years of experience in Trading Fixed Income Securities viz. G-sec, T-bills, Corporate Bonds CP, CD etc. He has been managing this fund since inception Sector Allocation* Sr. No. Name of Instrument % to Net Assets HDFC Bank Ltd..8 Kotak Mahindra Bank Ltd..9 HDFC Standard Life Insurance Company Ltd..8 Tata Consultancy Services Ltd..6 ICICI Lombard General Insurance Company Ltd..0 6 Maruti Suzuki India Ltd HDFC Ltd Abbott India Ltd.. 9 Larsen & Toubro Ltd Infosys Ltd..86 Sovereign Debt Finance Banks Software Auto Pharmaceuticals Consumer Non-Durables Construction Projects Transportation Auto Ancillaries Industrial Capital Goods 6.7%.0%.9%.99%.0%.9%.8% 9.7%.78%.0%.% Allocation* Petroleum Products Consumer Durables.78%.7% Cement.% Total Equity Sovereign Debt (Treasury Bills) CBLO / Reverse Repo Investments Cash & Cash Equivalents Total Commercial Services 0.8% *Data as on October, 08 6

18 OTHER FUNDS Motilal Oswal Ultra Short Term Fund (MOFUSTF) Performance* Year Years Years Since Inception Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 Ultra Short Term (MOFUSTF) ,96.76,78.,88.7,09 CRISIL Short Term Bond Fund (Benchmark) 7.9 0,79 7.8, 8.,776 8.,087 CRISIL LIQUIFEX (Addi onal Benchmark) 7.0 0,70 7., 7.86, ,86 NAV (Rs.) Per Unit (.09 as on -Oct-08) Date of inception 6-Sep-. Incase, the start/end date of the concerned period is non business date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth Option. Different plans have different expense structure. This scheme is currently managed by Mr. Abhiroop Mukherjee. He has been managing this fund since inception; The performance of the s managed by him are on page no. to. The scheme has been in existence for less than years." Motilal Oswal NASDAQ 00 ETF (MOFN00) Performance* Year Years Years Since Inception Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 Current Value of Investment of ` 0,000 MOFN00.08, ,6 8.79,66.7 7,86 NASDAQ 00 (Benchmark)., 9. 7,0 0.79,70.6,76 Ni y 0 (Addi onal Benchmark).9 0,9 0., ,6 9. 9,9 NAV (Rs.) Per Unit ( as on -Oct-08) Date of inception 9-Mar-. Incase, the start/end date of the concerned period is non business date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth Option. Different plans have different expense structure.this scheme is currently managed by Mr. Swapnil Mayekar. He has been managing this fund since 0-Aug-0". Other managed by him are on page. Mr. Swapnil Mayekar is the fund manager of the scheme Motilal Oswal NASDAQ 00 ETF (MOFN00) & for foreign securities of the scheme, Motilal Oswal Multicap Fund (MOF). *Data as on October, 08 7

19 PRODUCT LABEL Name of the This product is suitable for investors who are seeking* Motilal Oswal Focused Fund (MOF) Return by investing in upto companies with long term sustainable competitive advantage and growth potential Investment in Equity and equity related instruments subject to overall limit of companies Motilal Oswal Midcap 0 Fund (MOF0) Motilal Oswal Multicap Fund (MOF) Long-term capital growth Investment in equity and equity related instruments in a maximum of 0 quality mid-cap companies having long-term competitive advantages and potential for growth Long-term capital growth Investment in a maximum of equity and equity related instruments across sectors and market capitalization levels. Low Moderately Low Riskometer Moderate Moderately High High Motilal Oswal Long Term Equity Fund (MOFLTE) Long-term capital growth Investment predominantly in equity and equity related instruments Low High Investors understand that their principal will be at Moderately High risk Motilal Oswal Dynamic Fund (MOFDYNAMIC) Motilal Oswal Equity Hybrid Fund (MOFEH) Motilal Oswal Ultra Short Term Fund (MOFUSTF) Long term capital appreciation Investment in equity, derivatives and debt instruments Long-term capital appreciation by generating equity linked returns Investment predominantly in equity and equity related instruments; Optimal returns consistent with moderate levels of risk Investment in debt securities and money market securities with Macaulay duration of the portfolio between months and 6 months. Motilal Oswal NASDAQ 00 ETF (MOFN00) Return that corresponds generally to the performance of the NASDAQ 00 Index, subject to tracking error Investment in equity securities of NASDAQ 00 Index Moderately Low Riskometer Moderate Moderately High Low High Low High Investors understand that their principal will be at High risk *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 8

20 LARGE CAP STRATEGY Value Strategy Investment objective The Strategy aims to benefit from the long term compounding effect on investments done in good businesses, run by great business managers for superior wealth creation. Ÿ Ÿ Concentrated large cap portfolio with around 0 stocks One of the longest running products in the industry with a years track record Ÿ The corpus under this Strategy is over Rs., cr as on October, 08 The selection of the stocks will be based on the criteria of strategy at the time of initial ideation and investment made as per the model portfolio of the strategy Strategy Details Fund Manager Strategy Type Date of Incep on Benchmark Investment Horizon Subscrip on Redemp on Valua on Point Shrey Loonker Open ended th March 00 Nifty 0 Index Years + Daily Daily Daily Top 0 Holdings Sr. No. Name of Instrument % to Net Assets HDFC Bank Ltd. Kotak Mahindra Bank Ltd. Sun Pharmaceuticals Ltd. Bajaj Finserv Ltd. AU Small Finance Bank Ltd. Larsen & Toubro Ltd. ICICI Lombard General Insurance Company Ltd. Bharat Forge Ltd. Eicher Motors Ltd. Bharat Petroleum Corporation Ltd Key Portfolio Analysis Performance Data (Since Inception) Value Strategy Nifty 0 Index Standard Deviation (%) 0.%.60% Beta Performance Sector Allocation Sr. No. Sector Allocation % Allocation Banking & Finance Auto & Auto Ancillaries Oil & Gas Pharmaceuticals Engineering & Electricals Investment Value Value Strategy Ni y 0 Index.X 0.7X Both, Value Strategy and Nifty 0 Index are rebased to 0 as on Mar, 00 The Above strategy returns are of a Model Client as on Oct, 08. Returns of individual clients may differ depending on factors such as time of entry/exit/ additional inflows in the strategies. The stocks forming part of the existing portfolio may or may not be bought for new client. Returns below year are absolute and above year are annualized. Strategy returns shown above are post fees & expenses. Past performance should not be used as a basis for comparison with other investments. Past performance may or may not be sustained in future. Mar-0 Aug-0 Jan-0 Jun-0 Nov-0 Apr-0 Sep-0 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Nov-09 Apr-0 Sep-0 Feb- Jul- Dec- May- Oct- Mar- Aug- Jan- Jun- Nov- Apr- Sep- Feb-6 Jul-6 Dec-6 May-7 Oct-7 Mar-8 Oct-8 Data as on October, 08 9

21 Diversified STRATEGY Next Trillion Dollar Opportunity Strategy (NTDOP) Investment 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 pre-dominantly invest in diversified stocks with a focus on identifying potential winners that would participate in successive phases of GDP growth. Ÿ Ÿ Concentrated Diversified portfolio with around stocks Focused on the 'Next Trillion Dollar Growth Opportunity Ÿ The corpus under this Strategy is over Rs. 7,8 cr as on October, 08 The selection of the stocks will be based on the criteria of strategy at the time of initial ideation and investment made as per the model portfolio of the strategy Strategy Details Fund Manager Strategy Type Date of Incep on Benchmark Investment Horizon Subscrip on Redemp on Valua on Point Manish Sonthalia Open ended th Dec 007 Nifty 00 Index Years + Daily Daily Daily Top 0 Holdings Sr. No. Name of Instrument % to Net Assets Page Industries Ltd. Kotak Mahindra Bank Ltd. Voltas Ltd. Bajaj Finance Ltd. Eicher Motors Ltd. City Union Bank Ltd. L&T Technology Services Ltd. Bosch Ltd. Tech Mahindra Ltd. Bharat Forge Ltd Key Portfolio Analysis Performance Data (Since Inception) NTDOP Strategy Standard Deviation (%) 7.89% Beta 0.69 Performance Nifty 00 Index.8%.00 Sector Allocation Sr. No. Sector Allocation % Allocation Banking & Finance FMCG Auto & Auto Ancillaries Diversified Infotech Investment Value NTDOP Strategy Ni y 00 Index Dec-07 mar-08 jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 mar-0 jun-0 Sep-0 Dec-0 mar- jun- Sep- Dec- mar- jun- Sep- Dec- mar- jun- Sep- Dec- mar- jun- Sep- Dec- mar- jun- Sep- Dec- mar-6 jun-6 Sep-6 Dec-6 mar-7 jun-7 Sep-7 Dec-7 Mar-8 Jun-8 Aug-8.7X.7X Both, NTDOP Strategy and Nifty 00 Index are rebased to 0 as on Dec, 007 The Above strategy returns are of a Model Client as on October, 08. Returns of individual clients may differ depending on factors such as time of entry/exit/ additional inflows in the strategies. The stocks forming part of the existing portfolio may or may not be bought for new client. Returns below year are absolute and above year are annualized. Strategy returns shown above are post fees & expenses. Past performance should not be used as a basis for comparison with other investments. Past performance may or may not be sustained in future. Data as on October, 08 0

22 SMALL-MIDCAP STRATEGY India Opportunity Portfolio Strategy (IOP) Investment objective 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 -7 years across mid and smallcap stocks; and which are available at reasonable market prices. Ÿ Concentrated Small & Mid cap portfolio with around 0 stocks Ÿ Flexibility to own best performing stocks irrespective of market capitalization Ÿ The corpus under this Strategy is over Rs.,9 cr as on October, 08 The selection of the stocks will be based on the criteria of strategy at the time of initial ideation and investment made as per the model portfolio of the strategy Strategy Details Fund Manager Associate Fund Manager Strategy Type Date of Inception Benchmark Investment Horizon Subscription Redemption Valuation Point Manish Sonthalia Atul Mehra Open ended th Feb. 00 Nifty Smallcap 00 Index Years + Daily Daily Daily Top 0 Holdings Sr. No. Name of Instrument % to Net Assets Development Credit Bank Ltd. Aegis Logistics Ltd. Birla Corporation Ltd. AU Small Finance Bank Ltd. TTK Prestige Ltd. Gabriel India Ltd. Mahanagar Gas Ltd. Alkem Laboratories Ltd. Quess Corp Ltd. Dishman Carbogen Amcis Ltd Key Portfolio Analysis Performance Data (Since Inception) IOP Strategy Standard Deviation (%).7% Beta 0.7 Performance Nifty Smallcap 00 Index 9.8%.00 Sector Allocation Sr. No. Sector Allocation % Allocation Banking & Finance Pharmaceuticals Oil & Gas Consumer Durable Cement & Infrastructure Feb-0 May-0 Aug-0 Nov-0 Feb- May- Aug- India Opportunity Por olio Strategy Nov- Feb- May- Aug- Nov- Feb- May- Aug- Nov- Feb- May- Aug- Nov- Feb- Ni y Smallcap 00 Index.X.7X May- Aug- Nov- Feb-6 May-6 Aug-6 Nov-6 Feb-7 May-7 Aug-7 Nov-7.7X.7X Feb-8 May-8 Aug-8 Both, IOP Strategy and Nifty Smallcap 00 Index are rebased to 0 as on Feb, 00. The Above strategy returns are of a Model Client as on October, 08. Returns of individual clients may differ depending on factors such as time of entry/exit/ additional inflows in the strategies. The stocks forming part of the existing portfolio may or may not be bought for new client. Returns below year are absolute and above year are annualized. Strategy returns shown above are post fees & expenses. Past performance should not be used as a basis for comparison with other investments. Past performance may or may not be sustained in future. Data as on October, 08

23 SMALL-MIDCAP STRATEGY India Opportunity Portfolio Strategy (IOP) V Investment objective The Strategy aims to deliver superior returns by investing in stocks from sectors that can benefit from India's emerging businesses. It aims to predominantly invest in Small and Midcap stocks with a focus on identifying potential winners. Focus on Sectors and Companies which promise a higher than average growth. Ÿ Concentrated Small & Mid cap portfolio with around 0 stocks Ÿ Companies which have potential to grow from mini to mid & mid to mega over a period of time Ÿ The corpus under this Strategy is over Rs. 00 cr as on October, 08 The selection of the stocks will be based on the criteria of strategy at the time of initial ideation and investment made as per the model portfolio of the strategy Strategy Details Fund Manager Associate Fund Manager Strategy Type Date of Incep on Benchmark Investment Horizon Subscrip on Redemp on Valua on Point Top Sectors Manish Sonthalia Atul Mehra Open ended th Feb. 08 Nifty Smallcap 00 Index Years + Daily Daily Daily Top 0 Holdings Sr. No. Name of Instrument % to Net Assets Heg Ltd. Gruh Finance Ltd. Cholamandalam Investment And Finance Company Ltd. Godrej Agrovet Ltd. Ipca Lab Ltd. Coffee Day Enterprises Ltd. Bajaj Electricals Ltd. Sobha Ltd. Sundaram Fasteners Ltd. Bata India Ltd Sr. No. Sector Allocation % Allocation* Banking & Finance Electricals & Electronics Agriculture Pharmaceuticals Restaurants Performance Period IOP V Ni y Smallcap 00 Months Since Incep on Data as on October, 08 Key Por olio Analysis Performance Data (Since Incep on) IOP V Ni y Smallcap 00 Standard Devia on (%) 7.% 0.% Beta Data as on October, 08

24 MANAGEMENT TEAM Raamdeo Agrawal Chairman Aashish P Somaiyaa MD & CEO MF Fund Manager Gautam Sinha Roy Sr. Vice President & Fund Manager Equity Mutual Funds Siddharth Bothra Sr. Vice President & Fund Manager Equity Mutual Funds Akash Singhania Sr. Vice President & Fund Manager Equity Mutual Funds Niket Shah Vice President & Associate Fund Manager Equity Mutual Funds Snigdha Sharma Vice President & Associate Fund Manager Equity Mutual Funds PMS Fund Manager Manish Sonthalia Sr. Vice President & Head Equity PMS Shrey Loonker Vice President & Fund Manager Equity PMS Atul Mehra Associate Fund Manager, PMS