With the power of focus, you can see constellations where others only see stars. Motilal Oswal MOSt Focused 25 Fund. (An open ended Equity Scheme)

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1 The Power of FOCUS With the power of focus, you can see constellations where others only see stars Motilal Oswal MOSt Focused 25 Fund (An open ended Equity Scheme) NO LOAD FUND Call: SMS: FOCUS to MOSt Funds

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3 Summary Key objective of investing is to increase purchasing power. In the long run equities enhance purchasing power in portfolios In equity investing, a focused portfolio of companies with quality, growth and business longevity wins MOSt Focused 25 Fund would endeavor to construct such a portfolio; a product best suited for medium to long term investors Research, Integrity and Focus are pillars of the Motilal Oswal Group The Group has a successful track record of managing public money based on a focused investment philosophy 1

4 Why Equities as an Asset Class? Investing is foregoing current purchasing power now for a greater purchasing power in future. - Warren Buffett 2

5 Key Objective of Investing: Enhancing Purchasing Power Over FY79-13 CPI inflation has been 8.4%, eroding purchasing power of ` by 94% 120 Inflation erodes purchasing power of money ` CPI= Consumer Price Index 6 Jan-79 Jan-81 Jan-83 Jan-85 Jan-87 Jan-89 Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Source: Centre for Monitoring Indian Economy (CMIE), Motilal Oswal Financial Services Ltd (MOFSL), Bloomberg, Motilal Oswal Asset Management Company (MOAMC) Internal Analysis. Data as on 31st March,

6 Key Objective of Investing: Enhancing Purchasing Power (Contd.) Equities significantly enhance purchasing power of portfolios Inflation-adjusted returns of different assets Purchasing Power 1,400 1,200 1, Sensex Gold Fixed Deposit If you had invested ` Jan-79 Jan-81 Jan-83 Jan-85 Jan-87 Jan-89 Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Source: CMIE, MOFSL, Bloomberg, MOAMC Internal Analysis. Data as on 31st March, 2013 Note: The information / data herein is used for comparison purpose and is illustrative and 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. 4

7 Key Objective of Investing: Enhancing Purchasing Power (Contd.) 18,000 16,000 14,000 Fixed Deposit Sensex Gold If you had invested ` ,172 12,000 Nominal Value 10,000 8,000 6,000 4,355 4,000 2, ,539 Jan-79 Jan-81 Jan-83 Jan-85 Jan-87 Jan-89 Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Source: CMIE, MOFSL, Bloomberg, MOAMC Internal Analysis. Data as on 31st March, Note:The information / data herein is used for comparison purpose and is illustrative and 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. 5

8 Motilal Oswal MOSt Focused 25 Fund It is impossible to produce superior performance unless you do something different. John Templeton 6

9 MOSt Focused 25 Fund Key Differentiators Understandable first-class businesses, with enduring competitive advantages, accompanied by able and trustworthy managers, available at a bargain price. - The Four Filters Invention of Warren Buffett and Charlie Munger Quality, Growth and Longevity (QGL) Will invest in companies with: Enduring economic moats that ensure quality and longevity High growth potential Buy and Hold Strategy Long term growth over economic cycles Enables compounding of growth Low Churn: Cost Efficient Portfolio churn driven by fundamentals over valuations Focused, High Conviction Portfolio Construct Maximum 25 stocks Minimum stock positions of 2.5% Bottom-up stock picking Optimal Diversification 7

10 Why Quality? Quality companies are those which have enduring economic moats (EMC s) Payoff profile of EMCs, Non-EMCs and Sensex EMCs Non-EMCs Sensex (All rebased to 100 in March 2002) 33%CAGR,5.5x 25%,9.3x 18%,5.0x %CAGR,3x 12%,3.1x 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12.Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions " - Benjamin Graham: The Intelligent Investor 8

11 Why Buy and Hold? Superior quality companies held for longer durations deliver superior returns 24.0% 22.0% 20.0% Time is the friend of the wonderful business, the enemy of the mediocre -Warren Buffett 19.4% 22.5% C A G R 18.0% 16.0% 15.4% 14.0% 12.0% 13.8% 11.9% 12.6% 10.0% Index <3 yrs <5 yrs <7 yrs yrs Index always Nifty Source: MOAMC Internal Analysis. Data as on 31st March,

12 Focus: Seeking Optimal Diversification 60% The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results. -Charlie Munger 50% Portfolio Standard Deviation v/s Number of Securities 40% 30% Portfolio Standard Deviation 20% Diversifiable Risk 10% 0% Number of Securities in Portfolio Non-Diversifiable Systemic Risk Source: An Introduction to Risk and Return Concepts and Evidence by Franco Modigliani and Gerald A. Pogue 10

13 Focus The Road Less Travelled We don t believe that widespread diversification will yield a good result. We believe almost all good investments will involve relatively low diversification. - Charlie Munger No of Funds AUM - `1.63 tn Funds with < 25 stocks (7%) `21 bn 1% Funds with stocks (58%) `621 bn 38% Funds with > 50 stocks (35%) `985 bn 61% Source: ICRA. Data as on 31 st March, 2013 Note: The above excludes sector-specific and index funds (65 funds) 11

14 Investment Process A business we understand Favourable long term economics Able and trustworthy management Margin of Safety 12

15 Investment Process Stock Screening Top down analysis market views, thematic drivers, winner categories and category winners Investment Universe Quantitative Screening Research Fund Portfolio Greater than `1,400 cr of Market Capitalization Earnings growth, FCF, ROA and ROE etc. 360 degree view of company Identify competitive advantages, barriers to entry Nature and sustainability of catalysts High Conviction Ideas Superior riskadjusted return characteristics 500 Stocks Stocks Stocks Max 25 Stocks 13

16 Portfolio Construct For Whom Investors who like to invest with a Long-term wealth creation view Investment Horizon Medium to Long Term (3+ Years) Allocations Minimum 65%: Top 200 companies of BSE/ NSE Maximum 25%: Beyond Top 200 but > `1,400cr market capitalization Maximum 10% discretionary cash and equivalents Number of Stocks Maximum 25 stocks Scrip Allocation Maximum 10% of NAV in a single stock Minimum 2.5% of NAV in a single stock Sector Allocation Limit Higher of 25% or 1.5x of benchmark weight (under normal circumstances) Minimum Zero 14

17 Fund Details Type of Scheme: An open ended equity scheme Options (Under each plan): Dividend (Payout and Reinvestment) and Growth Investment Objective: The investment objective of the Scheme is to achieve long term capital appreciation by investing in up to 25 companies with long term sustainable competitive advantage and growth potential. However, there can be no guarantee that the investment objective of the scheme would be achieved. Benchmark: CNX Nifty Entry/Exit Load: Nil Plans: Regular Plan and Direct Plan Minimum Application Amount: `10,000/- and in multiples of `1/- thereafter. Additional Application Amount:`1,000/- and in multiples of ` 1/- thereafter. Systematic Investment Plan (SIP): Minimum installment amount `1,000/- and `2,000/- respectively for Monthly and Quarterly frequency respectively and in multiples of `1/- thereafter. 15

18 Fund Details (Contd.) Taher Badshah Senior Vice President & Co-Head of Equities Taher Badshah brings with him 18 years of rich experience in fund management and investment research. He started his career as an automobiles analyst with Motilal Oswal and has been well-regarded in the industry for his work in this sector. Besides, Taher has also worked in different capacities with organizations like Kotak Mahindra and Prudential ICICI. He has spent the first 10 years of his career doing sell-side equity research and the past 8 years in active fund management. Taher has worked as a Senior Fund Manager for ICICI Prudential PMS for 3 years post which his last assignment has been with Kotak Mahindra Investment Advisors as a Fund Manager managing a part of their long-only offshore equity assets between 2007 and At Motilal Oswal AMC, in his capacity as Sr. Fund Manager and Co-Head Equities, he has led the active equity investment team since 2010 and has also served as an interim CEO of Motilal Oswal AMC over the past 6 months. Taher is a B.E. in Electronics from the University of Mumbai and has followed it up with a Masters in Management Studies (Finance) from the SP Jain Institute of Management, Mumbai. Abhiroop Mukherjee Sr. Manager Fixed Income Mr. Abhiroop Mukherjee, aged 30 years, is a PGPBF (Finance) from National Institute of Bank Management, a B.Com (Honors) from Calcutta University. He has over 6 years experience in Fixed Income Securities trading. Prior to joining Motilal Oswal Asset Management Company Limited, he was a WDM trader with PNB Gilts Ltd. In Mumbai. Earlier he had worked as Assistant Vice President-Fixed Income, between April 2007 to May 2011 where he was responsible for trading in Government Securities, T-Bills & Corporate Bonds. At Motilal Oswal Asset Management Company Limited, he is the Fund Manager of Motilal Oswal Most 10 year Gilt Fund. 16

19 Security Name HDFC Bank Ltd Tata Consultancy Services Ltd ITC Ltd HDFC Ltd Idea Cellular Ltd Kotak Mahindra Bank Ltd Maruti Suzuki Ltd Container Corporation of India Ltd Pidilite Industries Ltd ONGC Ltd Bata India Ltd Divis Laboratories Ltd Page Industries Ltd Cummins India Ltd Sundaram Finance Ltd Larsen & Toubro Ltd MCX Ltd Tata Motors Ltd Term Deposit Cash & Others Total Data as on 28th June, 2013.*As classified by AMFI. Portfolio Holdings Portfolio (%) Industry* Banks Software Consumer Non-Durables Finance Telecom Banks Auto Transportation Chemicals Oil Consumer Durables Pharmaceuticals Textile Industrial Products Finance Construction Financial Institution Auto

20 Our Credentials 18

21 Motilal Oswal Financial Services Ltd. (MOFSL) A 25-year old well-diversified, financial services company offering a range of products and services Research, Integrity and Focus are pillars of the Motilal Oswal Group Market capitalization of `1,200crs, Gross Revenue and Earnings of `318 crs and `73 crs respectively Equity research has been the firm s DNA Driven by passion to create wealth for our customers Over a decade of experience in successfully managing public money leveraging : - Two decades of Investment Research expertise - Investment philosophy distilled from 17 years of Wealth Creation Studies - Presently, the Group has close to US$ 1 bn* in assets under management *AMC = 20.1 bn, PE = `12.4 bn and WM = `18.4 bn. Data as of 31st Dec,

22 Motilal Oswal Asset Management Company (MOAMC) Investment Expertise Innovative Access Products in Mutual Funds Combined team investment experience of over 80 man years `1,724 crs of total assets under management Active strategies - Equity Long-Only (PMS) A stellar 10-year track record in Value / Growth At A Reasonable Price (GARP) strategies across market caps Strong track record in identification of investment themes (Next Trillion Dollar Opportunity, Target Return etc.) PMS AUM (`Crs) Innovative first of its kind access products MOSt Shares M50 (India s first fundamentally weighted ETF based on the CNX Nifty Index) MOSt Shares Midcap 100 (India s first Midcap ETF based on the CNX Midcap Index) MOSt Shares NASDAQ 100 (India s first US equities based ETF, denominated in INR) MOSt Gold Shares (India s first Gold ETF which enables investment as well as consumption of pure gold) MOSt 10 Year Gilt Fund (India s first 10 Year benchmark Government Bond access product) Mutual Funds AUM (`Crs) ,258 1,357 1,260 Nasdaq 100 ETF, 13% Midcap 100 ETF, 20% 464 Gold ETF, 14% M-50 ETF, 15% FY09 FY10 FY11 FY12 FY13 Data as on 31st Mar Year Gilt Data as on 31st Mar 13 Fund, 38% 20

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24 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 and features of MOSt Focused 25 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 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 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, Trustee: Motilal Oswal Trustee Company Limited. Investment Manager: Motilal Oswal Asset Management Company Ltd. Sponsor: Motilal Oswal Securities Ltd. Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past performance of the Sponsor/ AMC/ Mutual Fund and its affiliates does not indicate the future performance of the scheme and may not provide a basis of comparison with other investments. This product is suitable for investors who are seeking* Return by investing in upto 25 companies with long term sustainable competitive advantage and growth potential Investment in Equity and equity related instruments subject to overall limit of 25 companies High risk (BROWN) *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Note: Risk is represented as: (BLUE) investors understand that their principal will be at low risk (YELLOW) investors understand that their principal will be at medium risk (BROWN) investors understand that their principal will be at high risk