KEY INFORMATION MEMORANDUM AND APPLICATION FORM Motilal Oswal MOSt Focused 25 Fund (An open ended equity scheme) This product is suitable for investors who are seeking*: 1. Return by investing in upto 25 companies with long term sustainable competitive advantage and growth potential 2. Investment in Equity and equity related instruments subject to overall limit of 25 companies 3. High Risk (BROWN) Motilal Oswal MOSt 10 Year Gilt Fund (MOSt 10 Year Gilt Fund) (An open ended gilt scheme) This product is suitable for investors who are seeking*: 1. Long term capital appreciation 2. Investment in securities issued by the Central Government and State Government. 3. Low Risk (BLUE) Motilal Oswal MOSt Ultra Short Term Bond Fund (An open ended debt scheme) This product is suitable for investors who are seeking*: 1. Optimal returns consistent with moderate levels of risk 2. Investment in debt securities and money market securities with average maturity less than equal to 12 months 3. Medium Risk (YELLOW) *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Note: Risk is represented as: (BLUE) Please understand that the principal will be at low risk (YELLOW) Please understand that the principal will be at medium risk (BROWN) Please understand that the principal will be at high risk Continuous Offer of Units at Applicable NAV. This Key Information Memorandum (KIM) sets forth the information, which a prospective investor ought to know before investing. For further details of the scheme/mutual Fund, due diligence certificate by the AMC, Key Personnel, investors rights & services, risk factors, penalties & pending litigations etc. investors should, before investment, refer to the Scheme Information Document and Statement of Additional Information available free of cost at any of the Investor Service Centres or distributors or from the website www.motilaloswal.com/assetmanagement and www.mostshares.com. The Scheme particulars have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended till date, and filed with Securities and Exchange Board of India (SEBI). The units being offered for public subscription have not been approved or disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of this KIM.
Investment Objective Motilal Oswal MOSt Focused 25 Fund: The investment objective of the Scheme is to achieve long term capital appreciation by investing in upto 25 companies with long term sustainable competitive advantage and growth potential. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved. Motilal Oswal MOSt 10 Year Gilt Fund: The primary investment objective of the Scheme is to generate credit riskfree returns by investing in a portfolio of securities issued by the Central Government and State Government. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved. Motilal Oswal MOSt Ultra Short Term Bond Fund: The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved. Asset Allocation Pattern Motilal Oswal MOSt Focused 25 Fund: Instruments Indicative Risk Profile allocations (% of total assets) Min. Max. High / Medium / Low Equity and equity related 65 100 High instruments* selected from Top 200 listed companies by size of market capitalization Equity and equity related 0 25 High instruments* of companies beyond Top 200 listed companies by size of market capitalization but with minimum market capitalization of `1400 crores Money Market Instruments, 0 10 Low G-Secs, Bonds, Debentures and cash at call *subject to overall limit of 25 companies The scheme shall invest in equity and equity related instruments as per the investment objective of the scheme. While it is the intention of the Scheme to maintain the maximum exposure guidelines provided in the table above, there may be instances when these percentages may be exceeded. Typically, this may occur while the Scheme is new and the corpus is small thereby causing diversification issues. Exposure by the Scheme in derivative instruments shall not exceed 50% of the total Net Assets of Scheme. The Scheme will not participate in stock lending more than 20% of total Net Assets of the Scheme and would limit its exposure with regard to stock lending for a single intermediary to the extent of 5% of the total net assets at the time of lending. The scheme will not invest in Securitised debt and foreign securities. The cumulative gross exposure through equity, debt and derivative positions should not exceed 100% of the net assets of the scheme. Motilal Oswal MOSt 10 Year Gilt Fund: Instruments Indicative Risk Profile allocations (% of total assets) Min. Max. High / Medium / Low 10 year Benchmark Government Security 90 100 Low Other Government 0 10 Low Securities (7 to 12 years), T-Bills, Cash Management Bills, CBLO & Repo *Money Market Instruments include CDs, CBLOs & Repo and any other like instruments with a maturity of upto 1 year or less, as specified by the RBI from time to time. While it is the intention of the Scheme to maintain the maximum exposure guidelines provided in the table above, there may be instances when these percentages may be exceeded. Typically, this may occur while the Scheme is new and the corpus is small thereby causing diversification issues. Motilal Oswal MOSt Ultra Short Term Bond Fund: Instruments Indicative Risk Profile allocations (% of total assets) Min. Max. High / Medium / Low Debt Instruments including 0 100 Low Government Securities, Corporate Debt, Other debt instruments, Term Deposits and Money Market Instruments with average maturity less than equal to 12 months *Money Market Instruments include CMBs, T-Bills, and Government securities with an unexpired maturity upto one year, CBLOs & Repo/ Reverse Repo. The scheme will not invest in Securitised debt, foreign securities, corporate repo & reverse repo and derivatives. The total investments in the Fund including investment in debt, money market and other securities shall not exceed the net assets under management in the scheme. The Scheme will retain the flexibility to invest in the entire range of securities as per investment objectives of the Scheme and as per the SEBI Regulations with average maturity less than equal to 12 months. Investment Strategy Motilal Oswal MOSt Focused 25 Fund: The primary investment objective of the Scheme is to generate returns by investing in a portfolio of primarily in equity and equity related instruments, money market
instruments, cash and cash equivalents. The Fund may also enter into Stock Lending or such other transactions, in accordance with the Regulations, as may be allowed to Mutual Funds from time to time. The scheme shall follow an active investment style and it will seek to invest in companies with strong competitive position, good industry prospects, good business prospects along with quality management that may help them to achieve good growth over medium to long term. While making investment decisions, besides other factors, the impact of the prevailing economic environment over the medium to long term prospects of the companies will also be taken into consideration. The AMC will endeavour to meet the investment objective of the Scheme while maintaining a balance between safety, liquidity and return on investments. Motilal Oswal MOSt 10 Year Gilt Fund: The Scheme will invest the funds in the entire range of Government securities, T-Bills, CMB & money market instruments as per investment objectives of the Scheme and as per the SEBI Regulations. Investment objective of the Scheme is to invest in highly liquid Government securities, T-Bills, CMB & money market instruments with highest level of credit quality. The objective is to enhance the returns and minimize the price risk and loss of capital even on a daily basis. The Scheme investments will be in accordance with investment objective of the Scheme and provisions of SEBI regulations. The AMC will endeavour to meet the investment objective of the Scheme while maintaining a balance between safety, liquidity and return on investments. As the primary objective of the Scheme is to provide high liquidity with low volatility, the AMC will invest a significant portion of assets in short term securities, which carry low market risk. The Fund will try to identify securities that yield relative value over others for similar risk and liquidity level. Various analytical tools like spread, horizon returns, forward implied interest rates will be deployed to evaluate various investment options. Investment in debt instruments carry various risks like Interest Rate Risk, Liquidity Risk, Credit Risk, etc. While they cannot be eliminated, they can be reduced by diversification and effective use of hedging techniques. Investment views/decisions will be taken on the basis of following parameters: 1. Liquidity of the security. 2. Maturity profile of the instruments. 3. Quality of the Security/instrument (including the financial health of the issuer). 4. Returns offered relative to alternative investment opportunities. 5. Prevailing interest rate scenario. 6. Any other factors considered relevant in the opinion of the AMC. Motilal Oswal MOSt Ultra Short Term Bond Fund: The fund management team will endeavor to maintain a consistent performance in the scheme by maintaining a balance between safety, liquidity and profitability aspects of various investments. The fund manager will try to achieve an optimal risk return balance for management of the fixed income portfolios. The investments in debt instruments carry various risks like interest rate risk, liquidity risk, default risk, purchasing power risk etc. While they cannot be done away with, they can be minimized by diversification and effective use of hedging techniques. The fund management team will take an active view of the interest rate movement by keeping a close watch on various parameters of the Indian economy, as well as developments in global markets. Investment in debt instruments carry various risks like Interest Rate Risk, Liquidity Risk, Credit Risk, etc. While they cannot be eliminated, they can be reduced by diversification and effective use of hedging techniques. Investment views/decisions will be taken on the basis of following parameters: 1. Liquidity of the security. 2. Maturity profile of the instruments. 3. Quality of the Security/instrument (including the financial health of the issuer). 4. Returns offered relative to alternative investment opportunities. 5. Prevailing interest rate scenario. 6. Any other factors considered relevant in the opinion of the AMC. Risk Profile of the Scheme & Risk Mitigation Motilal Oswal MOSt Focused 25 Fund: The Scheme is subject to the principal risks described below. Some or all of these risks may adversely affect Scheme s NAV, yield, return and/or its ability to meet its objectives. Market Risk The Scheme s NAV will react to stock market movements.the Investor may lose money over short or long period due to fluctuation in Scheme s NAV in response to factors such as performance of companies whose stock comprises the underlying portfolio, economic and political developments, changes in interest rates, inflation and other monetary factors and movement in prices of underlining investments. Regulatory Risk Any changes in trading regulations by NSE or SEBI may affect the ability of market maker to arbitrage resulting into wider premium/discount to NAV. Right to Limit Redemptions The Trustee, in the general interest of the unit holders of the Scheme offered under this SID and keeping in view of the unforeseen circumstances / unusual market conditions, may limit the total number of Units which can be redeemed on any Business Day. Asset Class Risk The returns from the types of securities in which the Scheme invests may under perform from the various general securities markets or different asset classes. Different types of securities tend to go through cycles of outperformance and under-performance in comparison with the general securities markets. Interest Rate Risk Changes in interest rates will affect the Scheme s Net Asset Value. The prices of securities usually increase as interest rates decline and usually decrease as interest rates rise. The extent of fall or rise in the prices is guided by duration, which is a function of the existing coupon, days to maturity and increase or decrease in the level of interest rate. The new level of interest rate is determined by the rate at which the government raises new money and/or the price levels at which the market is already dealing in existing securities. Prices of long-term securities generally fluctuate more in response to interest rate changes than short-term securities. The price risk is low in the case of the floating rate or inflationlinked bonds. The price risk does not exist if the investment is made under a repo agreement. Debt markets, especially in developing markets like
India, can be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possible movements in the NAV. Credit Risk Credit Risk means that the issuer of a security may default on interest payments or even paying back the principal amount on maturity (i.e. the issuer may be unable to make timely principal and interest payments on the security). Even where no default occurs, the prices of security may go down because the credit rating of an issuer goes down. It must be, however, noted that where the Scheme has invested in Government securities, there is no risk to that extent. Liquidity or Marketability Risk This refers to the ease at which a security can be sold at or near its true value. The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Liquidity risk is characteristic of the Indian fixed income market. Trading Volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the Scheme. Different segments of the Indian financial markets have different settlement periods and such period may be extended significantly by unforeseen circumstances leading to delays in receipt of proceeds from sale of securities. As liquidity of the investments made by the Scheme could, at times, be restricted by trading volumes and settlement periods, the time taken by the Fund for redemption of units may be significant in the event of an inordinately large number of redemption requests or restructuring of the Scheme. Risks associated with Investing in Derivatives Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Execution of such strategies depends upon the ability of the fund manager to identify such opportunities. Identification and execution of the strategies to be pursued by the fund manager involve uncertainty and decision of the fund manager may not always be profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies. Derivative products are specialized instruments that require investment techniques and risk analysis different from those associated with stocks. The use of a derivative requires an understanding not only of the underlying instrument but of the derivative itself. Derivatives require the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price or interest rate movements correctly. There is a possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the counterparty ) to comply with the terms of the derivatives contract. Other risks in using derivatives include the risk of mis-pricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices, illiquidity risk whereby the Scheme may not be able to sell or purchase derivative quickly enough at a fair price. The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Risks associated with Stock Lending Stock Lending is a lending of securities through an SEBI approved intermediary to a borrower under an agreement for a specified period with the condition that the borrower will return equivalent securities of the same type or class at the end of the specified period along with the corporate benefits accruing on the securities borrowed. In case the Scheme undertakes stock lending as prescribed in the Regulations, it may, at times be exposed to counter party risk and other risks associated with the securities lending. Unitholders of the Scheme should note that there are risks inherent to securities lending, including the risk of failure of the other party, in this case the approved intermediary, to comply with the terms of the agreement entered into between the lender of securities i.e. the Scheme and the approved intermediary. Such failure can result in the possible loss of rights to the collateral put up by the borrower of the securities, the inability of the approved intermediary to return the securities deposited by the lender and the possible loss of any corporate benefits accruing to the lender from the securities lent. The Fund may not be able to sell such lent securities and this can lead to temporary illiquidity. Risks associated with investing in Equities Equity and Equity related instruments on account of its volatile nature are subject to price fluctuations on daily basis. The volatility in the value of the equity and equity related instruments is due to various micro and macro economic factors affecting the securities markets. This may have adverse impact on individual securities /sector and consequently on the NAV of Scheme. The inability of the Scheme to make intended securities purchases due to settlement problems could cause the Scheme to miss certain investment opportunities as in certain cases, settlement periods may be extended significantly by unforeseen circumstances. Similarly, the inability to sell securities held in the schemes portfolio may result, at times, in potential losses to the scheme, should there be a subsequently decline in the value of the securities held in the schemes portfolio. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments. This may impact the ability of the unit holders to redeem their units. In view of this, the Trustee has the right, in its sole discretion to limit redemptions (including suspending redemptions) under certain circumstances. The Scheme may find itself invested in unlisted securities due to external events or corporate actions. This may increase the risk of the portfolio as these unlisted securities are inherently illiquid in nature and carry larger liquidity risk as compared to the listed securities or those that offer other exit options to the investors. Investments in equity and equity related securities involve high degree of risks and investors should not invest in the Scheme unless they can afford to take the risk of losing their investment. Risk Mitigation Measures The Fund makes the Investment as per the investment objective of the Scheme and in accordance with SEBI Regulations. Motilal Oswal MOSt 10 Year Gilt Fund: Mutual Fund Units involve investment risks including the possible loss of principal. Please read the SID carefully for details on risk factors before investment. Scheme specific Risk Factors are summarized below: 1. The volatility in the securities market have adverse impact on individual securities/sector and consequently on the NAV of Scheme. 2. The Portfolio of the Scheme will comprise predominantly of securities issued by the Central or State Government and to a lessor extent Reverse Repo. As such, there would be Zero-Credit Risk. Since there is restriction on the weighted average maturity of the securities i.e. upto four years, there would be low price risk or interest rate risk. 3. 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 entire volume 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 existing one 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.
Motilal Oswal MOSt Ultra Short Term Bond Fund: Mutual Fund Units involve investment risks including the possible loss of principal. Please read the SID carefully for details on risk factors before investment. Scheme specific Risk Factors are summarized below: Market Risk The Scheme s NAV will react to the interest rate movements. The Investor may lose money over short or long period due to fluctuation in Scheme s NAV in response to factors such as economic and political developments, changes in interest rates, inflation and other monetary factors and also movement in prices of underlining investments. Regulatory Risk Any changes in trading regulations by NSE or SEBI may affect the ability of market maker to arbitrage resulting into wider premium/discount to NAV. Right to Limit Redemptions The Trustee, in the general interest of the unit holders of the Scheme offered under this SID and keeping in view of the unforeseen circumstances/unusual market conditions, may limit the total number of Units which can be redeemed on any Business Day. Asset Class Risk The returns from the types of securities in which the Scheme invests may under perform from the various general securities markets or different asset classes. Different types of securities tend to go through cycles of outperformance and under-performance in comparison with the general securities markets. Interest Rate Risk Changes in interest rates will affect the Scheme s Net Asset Value. The prices of securities usually increase as interest rates decline and usually decrease as interest rates rise. The extent of fall or rise in the prices is guided by modified duration, which is a function of the existing coupon, days to maturity and increase or decrease in the level of interest rate. The new level of interest rate is determined by the rate at which the government raises new money and/or the price levels at which the market is already dealing in existing securities. Prices of long-term securities generally fluctuate more in response to interest rate changes than short-term securities. The price risk is low in the case of the floating rate or inflationlinked bonds. The price risk does not exist if the investment is made under a repo agreement. Debt markets, especially in developing markets like India, can be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possible movements in the NAV. Modified Duration is a measure of price sensitivity, the change in the value of investment to a 1% change in the yield of the investment. Credit Risk Credit Risk means that the issuer of a security may default on interest payments or even paying back the principal amount on maturity. (i.e. the issuer may be unable to make timely principal and interest payments on the security). Even where no default occurs, the prices of security may go down because the credit rating of an issuer goes down. It must be, however, noted that where the Scheme has invested in Government securities, there is no risk to that extent. Liquidity or Marketability Risk This refers to the ease at which a security can be sold at or near its true value. The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Liquidity risk is characteristic of the Indian fixed income market. Trading Volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the Scheme. Different segments of the Indian financial markets have different settlement periods and such period may be extended significantly by unforeseen circumstances leading to delays in receipt of proceeds from sale of securities. As liquidity of the investments made by the Scheme could, at times, be restricted by trading volumes and settlement periods, the time taken by the Fund for redemption of units may be significant in the event of an inordinately large number of redemption requests or restructuring of the Scheme. Risks associated with short selling Scheme may enter into short selling transactions, subject to SEBI and RBI regulations in the matter. This will be done if the fund management team is of the view that there exists an opportunity to make trading gains. Calls for short selling will be taken after considering the liquidity, price movement & volatility of the security by the fund management team. There can be a loss in such a transaction if the price of the security goes up instead of falling down. Regular Plan and Direct Plan. Plans Direct Plan is only for investors who purchase/subscribe Units in a Scheme directly with the Fund and is not routed through an AMFI Registration Number (ARN) Holder. Options (Under Each Plan) Motilal Oswal MOSt Focused 25 Fund & Motilal Oswal MOSt 10 Year Gilt Fund: Dividend (Payout and Reinvestment) and Growth. Dividend Option - Under this Option, the Trustee reserves the right to declare dividend under the Scheme depending on the net distributable surplus available under the Option. It should, however, be noted that actual declaration of dividends and the frequency of distribution will depend, interalia, on the availability of distributable surplus and will be entirely at the discretion of the Trustees or any Committee authorised by them. Growth Option - All Income earned and realized profit in respect of a unit issued under that will continue to remain invested until repurchase and shall be deemed to have remained invested in the option itself which will be reflected in the NAV. The AMC reserves the right to introduce further Plans / Options as and when deemed fit. Motilal Oswal MOSt Ultra Short Term Bond Fund: Growth and Dividend (Payout and re-investment) Growth: The respective option will not declare any dividends. Income / profits received / earned on the Scheme s corpus would be accumulated by the Fund as capital accretion & will remain invested in the Scheme and will be reflected in the Net Asset Value (NAV). Unit holders who opt for this Option will not receive any dividend in normal circumstances. Dividend: a) Dividend Reinvestment option: Unit holders opting for dividend option may choose to reinvest the dividends to be received by them. Under this facility the dividend due and payable to the Unit holders will be compulsorily and without any further act by the Unit holders, reinvested in the dividend option at a price based on
the prevailing Net Asset Value per Unit on the record date. The Units for the purpose of re-investment will be created and credited to the Unit holder s account at the applicable NAV announced immediately following the record date. There shall, however, be no load on the dividends so reinvested. b) Dividend Payout option Under this option, it is proposed to declare dividends subject to the availability of distributable surplus as computed in accordance with SEBI Regulations. Dividends, if declared, will be paid (subject to deduction of dividend distribution tax and statutory levy, if any) to those Unit holders, whose names appear in the register of Unit holders on the notified record date. AMC reserves the right to decide the record date from time to time. However, it must be distinctly understood that actual declaration of dividends is at the discretion of the Board of Trustees. There is no assurance or guarantee to Unit holders as to the rate of dividend distribution nor that the dividends will be declared regularly, though it is the intention of the Mutual Fund to make regular dividend distribution under the Dividend Plan. On payments of dividends, the NAV will stand reduced by the amount of dividend paid and the dividend distribution tax, if applicable. Default Plan / Option Investors subscribing Units under Direct Plan of a Scheme should indicate Direct Plan against the Scheme name in the application form. Investors should also mention Direct in the ARN column of the application form. However, in case Distributor code is mentioned in the application form but Direct Plan is mentioned against the Scheme name, then the Distributor code will be ignored and the application will be processed under Direct Plan. Further, where application is received without mentioning Distributor code or where Direct is mentioned in the ARN Column, then the application will be processed under Direct Plan. If the investor does not clearly specify the choice of option at the time of investing, it will be deemed that the investor has opted for Growth option and in case he does not specify payout/re-investment under dividend option, it will be deemed to be dividend re-investment. If dividend payout is less than ` 500 then it would be compulsorily re-invested In case the investor has not specified any of the following in the application form, the default attributes to be applicable are as under: 1. Default Option: Growth Option 2. In case of Dividend Option, default between Re-investment and Payout: Re-investment. 3. In case of Dividend Re-investment facility, default Frequency: Daily 4. In case of Dividend Payout facility, default between Monthly and Quarterly. Payout: Quarterly Payout If dividend payout is less than ` 500 then it would be compulsorily re-invested. Sub-Options (Under each Dividend Plan) Plan Options Facility Frequency Record date Sub- Options/ Regular Dividend Dividend Re- Daily Every business and investment day Direct Dividend Dividend Re- Weekly Every Friday* investment Dividend Dividend Re- Fortnightly Every 2nd & 4th investment Friday* of the Month Sub-Options (Under each Dividend Plan) Plan Options Facility Frequency Record date Sub- Options/ Dividend Dividend Re- Monthly Every last Friday* of investment / the month Payout Dividend Dividend Re- Quarterly Every last Friday* of investment / the quarter Payout * If Friday is a holiday, then the record date shall be the previous Business day. Minimum amount for purchase / switches into the Scheme on an ongoing basis Motilal Oswal MOSt Focused 25 Fund: Minimum Application Amount: ` 5,000/- and in multiples of ` 1/- thereafter. Additional Application Amount: ` 1,000/- and in multiples of ` 1/- thereafter. Systematic Investment Plan (SIP): Minimum instalment amount - `1,000/- for Weekly, Fortnightly Monthly and `2,000/- for Quarterly frequency and in multiples of ` 1/- thereafter. The dates for the Auto Debit st th th st th Facility shall be on the 1, 7, 14, 21 or 28 of every month. In case, the date fixed happens to be a holiday/non-business day, the same shall be affected on the next business day. No Post Dated cheques would be accepted for SIP. Motilal Oswal MOSt 10 Year Gilt Fund: 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 instalment amount - ` 1,000 and ` 2,000 respectively for Monthly and Quarterly frequency and in multiples of ` 1/- thereafter. The dates for Auto Debit Facility shall st th th st th be on the 1, 7, 14, 21 or 28 of every month/ quarter. In case, the date fixed happens to be a holiday / non-business day, the same shall be affected on the next business day. No Post Dated cheques would be accepted for SIP. Motilal Oswal MOSt Ultra Short Term Bond Fund: Minimum Application Amount ` 5,000/- and in multiples of ` 1/- thereafter. Additional Application Amount: ` 1,000/- and in multiples of ` 1/- thereafter. Systematic Investment Plan (SIP): Minimum instalment amount - ` 1,000/- and ` 2,000/- respectively for Monthly and Quarterly frequency and in multiples of ` 1/- thereafter. The dates for Auto Debit Facility shall st th th st th be on the 1, 7, 14, 21 or 28 of every month/ quarter. In case, the date fixed happens to be a holiday / non-business day, the same shall be affected on the next business day. No Post Dated cheques would be accepted for SIP.
Minimum Redemption Amount Minimum of `1,000/- and in multiples of `1/- thereafter or total investment amount, whichever is lower. Applicable NAV Motilal Oswal MOSt Focused 25 Fund: Cut-off time is the time before which the Investor s Application Form(s) (complete in all respects) should reach the Official Points of Acceptance to be entitled to the Applicable NAV of that Business Day. An application will be considered accepted on a Business Day, subject to it being complete in all respects and received and time stamped upto the relevant cut-off time mentioned below, at any of the Official Points of Acceptance of transactions. Where an application is received and the time stamping is done after the relevant cut-off time the request will be deemed to have been received on the next Business Day. Applications for an amount less than ` 2,00,000/- (` Two lakh only) For Purchases including switch-ins: In respect of valid applications received upto 3.00 p.m. on a Business Day by the Fund alongwith a local cheque or a demand draft payable at par at the Official Point(s) of Acceptance where the application is received, the closing NAV of the day on which application is received shall be applicable. In respect of valid applications received after 3.00 p.m. on a Business Day by the Fund alongwith a local cheque or a demand draft payable at par at the Official Point(s) of Acceptance where the application is received, the closing NAV of the next Business Day shall beapplicable However, in respect of valid applications, with outstation cheques / demand drafts not payable at par at the Official Point(s) of Acceptance where the application is received, closing NAV of the day on which the cheque / demand draft is credited shall be applicable. Applications for amount equal to or greater than ` 2,00,000/- (` Two lakh only) For Purchases including switch-ins In respect of valid applications received for an amount equal to or more than ` 2 lakh upto 3.00 p.m. at the Official Point(s) of Acceptance and where the funds for the entire amount of subscription/ purchase as per the application are credited to the bank account of the Scheme before the cut-off time i.e. available for utilization before the cut-off time -the closing NAV of the day shall be applicable. In respect of valid applications received for an amount equal to or more than ` 2 lakh after 3.00 p.m. at the Official Point(s) of Acceptance and where the funds for the entire amount of subscription/purchase as per the application are credited to the bank account of the Scheme before the cut-off time of the next Business Day i.e. available for utilization before the cut-off time of the next Business Day - the closing NAV of the next Business Day shall be applicable. Irrespective of the time of receipt of applications for an amount equal to or more than ` 2 lakh at the Official Point(s) of Acceptance, where the funds for the entire amount of subscription/purchase as per the application are credited to the bank account of the Scheme before the cut-off time on any subsequent Business Day i.e. available for utilization before the cut-off time on any subsequent Business For Redemption/Switch out In respect of valid applications received upto 3 p.m. on a Business Day by the Fund, same day's closing NAV shall be applicable. In respect of valid applications received after 3 p.m. on a Business Day by the Fund, the closing NAV of the next Business Day shall be applicable. Motilal Oswal MOSt 10 year Guilt Fund and Motilal Oswal MOSt Ultra Short Term Bond Fund: Applications for amount less than ` 200,000 ( ` Two Lakhs Only) For Purchase including switch-ins: In respect of valid applications received upto 3.00 p.m. on a Business Day by the Fund along with a local cheque or a demand draft payable at par at the official Point(s) of acceptance where the application is received, the closing NAV of the day onwhich application is received shall be applicable. In respect of valid applications received after 3.00 p.m. on a Business Day by the Fund along with a local cheque or a demand draft payable at par at the officialpoint(s) of acceptance where the application is received, the closing NAV of the next Business Day shall be applicable. However, in respect of valid applications, with outstation cheques / demand drafts not payable at par at the official Point(s) of acceptance where the application is received, closing NAV of the day on which the cheque / demand draft is credited shall be applicable. Applications for amount equal to or greater than Rs. 2 lakh For Purchases including switch-ins: In respect of applications for purchase / switch-in of units of an amount equal to or more thanrs.2 lakh, the closing Net Asset Value (NAV) of the Business Day on which the funds are availablefor utilization shall be applicable provided that: (i) (ii) Application for purchase / switch-in is received before the applicable cut-off time i.e. 3.00 p.m. Funds for the entire amount of subscription / purchase / switch-in as per the application are credited to the bank account of the respective schemes before the cut-off time. (iii) The funds are available for utilization before the cut-off time without availing any credit facilitywhether intra-day or otherwise. Where application is received after the cut-off time on a Business Day but the funds are cleared on the same day, the closing NAV of the next Business Day shall be applicable. For investments of an amount equal to or more than Rs.2 lakh through systematic investment routes such as Systematic Investment Plans (SIP), Systematic Transfer Plans (STP), the units will be allotted as per the closing NAV of the day on which the funds are available for utilization by the Target Scheme. All multiple applications for investment at the Unit holders PAN and holding pattern level in a Scheme (irrespective of amount or the plan/option/suboption) received on the same Business Day, will be aggregated to ascertain whether the total amount equals to Rs. 2 lakh or more and to determine the applicable Net Asset Value. Transactions in the name of
minor received through guardian will not be aggregated with the transaction in the name of same guardian. The AMC may have additional criteria for aggregation of multiple transactions. The criteria for aggregation of multiple transactions shall be as decided by the AMC at its sole discretion from time to time. For Redemptions including switch-outs: In respect of valid applications received upto 3.00 p.m. on a Business Day by the Fund, same day s closing NAV shall be applicable. In respect of valid applications received after 3.00 p.m. on a Business Day by the Fund, the closing NAV of the next Business Day shall be applicable. Despatch of Repurchase (Redemption) Request The redemption or repurchase proceeds shall be dispatched to the Unitholders within 10 working days from the date of redemption or repurchase. Benchmark Index Motilal Oswal MOSt Focused 25 Fund: CNX Nifty Index Motilal Oswal MOSt 10 Year Gilt Fund: CRISIL 10 Year Gilt Index Motilal Oswal MOSt Ultra Short Term Bond Fund: CRISIL Short Term Bond Fund Index Dividend Policy The Trustees may declare dividend subject to the availability of distributable surplus calculated in accordance with SEBI (MF) Regulations. The actual declaration of dividend and the frequency of distribution will be entirely at the discretion of the Trustees. The dividend would be paid to the Unitholders whose names appear in the Register of Unitholders as on the record date. There is no assurance or guarantee to the Unitholders as to the rate of dividend nor that would the dividend be paid regularly. If the Fund declares dividend, the NAV will stand reduced by the amount of dividend and dividend distribution tax (if applicable) paid. All the dividend payments shall be in accordance and compliance with SEBI Regulations, as applicable from time to time. Name of the Fund Manager Motilal Oswal MOSt Focused 25 Fund: Mr. Taher Badshah Motilal Oswal MOSt 10 Year Gilt Fund: Mr. Abhiroop Mukherjee Motilal Oswal MOSt Ultra Short Term Bond Fund: Mr. Abhiroop Mukherjee Name of the Trustee Company Motilal Oswal Trustee Company Limited Performance of the scheme Motilal Oswal MOSt Focused 25 Fund: The Scheme is a new Scheme and has not completed 1 year. Motilal Oswal MOSt 10 Year Gilt Fund: (As on March 31, 2013) Particulars Scheme Returns % Benchmark Returns % Most 10 Year Gilt Fund CRISIL 10 Year Gilt Index Returns for the last 1 year 9.79% 11.25% Returns since inception 11.48% 13.16% Absolute Returns for the last Financial Year 13.25 12.75 12.25 11.75 11.25 10.75 10.25 9.75 9.25 1 Year Since Inception Scheme Return CRISIL 10 Yr Gilt Index Return Past performance may or may not be sustained in future. Returns are Absolute & inception date is deemed to be date of allotment i.e. December 12, 2011. *Returns shown above one year are annualized returns Motilal Oswal MOSt Ultra Short Term Bond Fund: The Scheme is a new Scheme and does not have any performance track record. Expenses of the Scheme Motilal Oswal MOSt Focused 25 Fund: (i) Load Structure Type of Load Entry Exit (ii) Recurring expenses Load chargeable (as %age of NAV) NIL NIL The SEBI has prescribed the maximum annual recurring expenses that can be charged to the Scheme. Annual Scheme Recurring Expenses shall be within the limits stated in Regulations 52(6) and subject to a percentage limit of Daily Net Assets as stated below: First `100 crore - 2.50% Next `300 crores- 2.25% Next `300 crores- 2.00% On the balance of the assets - 1.75% Note: 0.70% of TER is charged towards distribution/commission under Regular Plan. The TER of Direct plan will be lowered to the extent of above mentioned distribution/commission which is charged in Regular Plan. In addition to the recurring expenses specified for the Scheme, the following expenses/ Service Tax may also be charged under the Scheme: a) Expenses in respect of inflows from beyond top 15 cities - a maximum charge of 0.30% on the daily net assets computed as per the guidelines issued by SEBI for meeting distribution expenses incurred for bringing inflows from such cities. b) Expenses not exceeding 0.20% p.a. of daily net assets towards Investment Management and Advisory Fees and the various sub-heads of recurring expenses mentioned under Regulation 52 (2) & (4) of SEBI (MF) Regulations respectively; c) Brokerage and transaction costs not exceeding 0.12% of the value of trades in case of cash market transactions; and d) Service Tax on Investment Management and Advisory Fees. For further details, please refer to the SID.
Motilal Oswal MOSt 10 Year Gilt Fund: (I) Load Structure Type of Load Entry Exit* (ii) Recurring expenses Load chargeable (as %age of NAV) Nil 0.25% for exit within 30 days from the date of investment. SEBI has prescribed the maximum annual recurring expenses that can be charged to the Scheme. Annual Scheme Recurring Expenses shall be within the limits stated in Regulations 52(6) and subject to a percentage limit of Daily Net Assets as stated below: First Rs.100 crore - 2.25% Next 300 crores - 2.00% Next 300 crores - 1.75% On the balance of Assets - 1.50% In addition to the recurring expenses specified for the Scheme, the following expenses/ Service Tax may also be charged under the Scheme: a) Expenses in respect of inflows from beyond top 15 cities - a maximum charge of 0.30% on the daily net assets computed as per the guidelines issued by SEBI for meeting distribution expenses incurred for bringing inflows from such cities. b) Expenses not exceeding 0.20% p.a. of daily net assets towards Investment Management and Advisory Fees and the various sub-heads of recurring expenses mentioned under Regulation 52 (2) & (4) of SEBI (Mutual Funds) Regulations, 1996 respectively; c) Brokerage and transaction costs not exceeding 0.12% of the value of trades in case of cash market transactions; and d) Service Tax on Investment Management and Advisory Fees. For further details, please refer to the SID. Actual Expenses for the previous financial year (2012-2013): 0.99% The current expenses charged to the Scheme has been disclosed on the website of the Mutual Fund and in case of change, the Mutual Fund would update the current expense ratios on its website within two working days mentioning the effective date of the change. Motilal Oswal MOSt Ultra Short Term Bond Fund: (i) Load Structure Type of Load Entry Exit Load chargeable (as %age of NAV) NIL NIL (ii) Recurring expenses SEBI has prescribed the maximum annual recurring expenses that can be charged to the Scheme. Annual Scheme Recurring Expenses shall be within the limits stated in Regulations 52(6) and subject to a percentage limit of Daily Net Assets as in the table below: First `100 crore - 2.25% Next `300 crores- 2.00% Next `300 crores- 1.75% On the balance of the assets 1.50% The total expenses of the scheme as per Regulation 52(6) schemes shall not exceed 2.25 per cent of the daily net assets of the scheme as stated below and are subject to inter-se change and may increase/decrease as per actuals, and/or any change in the Regulations: Expense Head Investment Management and Advisory Fees Trustee fee Audit fees Custodian fees RTA Fees Marketing & Selling expense incl. agent commission Cost related to investor communications Cost of fund transfer from location to location % of daily Net Assets Cost of providing account statements and dividend redemption cheques and warrants Upto 2.25% Costs of statutory Advertisements Cost towards investor education & awareness (at least 2 bps) Brokerage & transaction cost over and above 12 bps for cash trades. Service tax on expenses other than investment and advisory fees Service tax on brokerage and transaction cost Other Expenses Maximum total expense ratio (TER) permissible Upto 2.25% under Regulation 52(6) (a) and (6) (c) (ii) Additional expenses under regulation 52 (6A) (c) Upto 0.20% Additional expenses for gross new inflows Upto 0.30% from specified cities Any expenditure in excess of the limits specified in the SEBI Regulations shall be borne by the AMC. Service Tax: 1. The scheme may charge service tax on investment and advisory fees to the scheme in addition to the maximum limit of TER as prescribed in regulation 52 of the Regulations. 2. Service tax on other than investment and advisory fees, if any, shall be borne by the scheme within the maximum limit of TER as per regulation 52 of the Regulations. 3. Service tax on exit load, if any, shall be paid out of the exit load proceeds and exit load net of service tax, if any, shall be credited to the scheme. 4. Service tax on brokerage and transaction cost paid for asset purchases, if any, shall be within the limit prescribed under regulation 52 of the Regulations.
Note: At least 0.75% of the TER is charged towards distribution expenses/ commission in the Regular Plan. The TER of the Direct Plan will be lower to the extent of the abovementioned distribution expenses/ commission (at least.075%) which is charged in the Regular Plan. In addition to the limits as specified in Regulation 52(6) of SEBI (Mutual Funds) Regulations 1996 or the Total Recurring Expenses (Total Expense Limit) as specified above, the following costs or expenses may be charged to the scheme: Additional TER can be charged up to 30 basis points on daily net assets of the scheme as per regulation 52 of SEBI (Mutual Funds) Regulations, 1996 (hereinafter referred to as Regulations), if the new inflows from beyond top 15 cities are at least (a) 30% of gross new inflows in the scheme or (b) 15% of the average assets under management (year to date) of the scheme, whichever is higher. Provided that expenses charged under this clause shall be utilised for distribution expenses incurred for bringing inflows from such cities In case inflows from beyond top 15 cities is less than the higher of (a) or (b) above, additional TER on daily net assets of the scheme shall be charged as follows: Daily net assets X 30 basis points X New inflows from beyond top 15 cities * 366, wherever applicable. 365* X Higher of (a) or (b) above The top 15 cities shall mean top 15 cities based on Association of Mutual Funds in India (AMFI) data on AUM by Geography - Consolidated Data for Mutual Fund Industry as at the end of the previous financial year. The additional TER on account of inflows from beyond top 15 cities so charged shall be clawed back in case the same is redeemed within a period of 1 year from the date of investment. Mutual funds/amcs shall make complete disclosures in the half yearly report of Trustees to SEBI regarding the efforts undertaken by them to increase geographical penetration of mutual funds and the details of opening of new branches, especially at locations beyond top 15 cities. The current expense ratios will be updated on the Fund s website, www.mostshares.com within two working days mentioning the effective date of the change. Investors applying for subscription of Units offered under the respective Series directly with the Fund (i.e. not routed through any distributor/agent) hereinafter referred to as 'Direct Plan' will be subject to a lower expense ratio excluding distribution expenses, commission, etc and no commission for distribution of Units will be paid / charged under Direct Plan and therefore, shall not in any manner be construed as an investment advice offered by the Mutual Fund/AMC. The subscription of Units through Direct Plan is a facility offered to the investor only to execute his/her/ their transactions at a lower expense ratio. Before making an investment decision, Investors are advised to consult their own investment and other professional advisors. Tax treatment for the Investors (Unitholders) Investors are advised to refer to the details in the Statement of Additional Information and also independently refer to their tax advisors. Daily Net Asset Value (NAV) Publication The NAV of the Scheme will be declared on all business days and will be published at least in two daily newspapers. The NAV can also be viewed on its websites www.motilaloswal.com/assetmanagement and www.mostshares.com and AMFI website www.amfiindia.com. For Investor Grievances please contact Karvy Computershare Pvt. Ltd. Karvy Plaza, H. No. 8-2-596, Avenue 4, Street No. 1, Banjara Hills, Hyderabad-500034. Tel No.: 040-23320751 / 752 / 753 E-mail Id: motilal.karvy@karvy.com Mr. Sudhindra Desai Motilal Oswal Asset Management Company Limited Motilal Oswal Tower, Jn. of Gokhale Road & Sayani Road, Prabhadevi, Mumbai - 400 025. Toll Free No.: 1800-200-6626 Email.: mfservice@motilaloswal.com Unitholders Information Motilal Oswal MOSt Focused 25 Fund: For Regular Transactions during continuous offer: An Account Statement will be despatched to each Unitholder stating the number of Units held, etc. within a maximum of five business days from the date of Allotment or as prescribed under SEBI regulations. Also, an Account Statement reflecting the net balance and value of units shall be despatched to the unit holders who have not transacted during the last six months prior to the date of generation of account statement, along with the Annual Report. After every subscription transaction a fresh Account statement Transaction Confirmation Slip will be dispatched, reflecting the updated holding of the unit holder, subject to realisation of the payment. Mutual Fund will despatch Account Statement within five working days from the date of receipt of the application form / transaction slip at the Designated Investor Service Centre or within maximum time period prescribed by SEBI. For the purpose of sending CAS, common investors across mutual funds shall be identified by their Permanent Account Number (PAN). The CAS shall not be sent to the Unit holders for the folio(s) not updated with PAN details. For folios without a valid PAN, the AMC may send account statements on a monthly basis. The Unit holders are therefore requested to ensure that the folio(s) are updated with their PAN. However, the Fund reserves right to provide the account statement / transaction confirmation slip to investor through an alternative mechanism as may be decided by the Fund from time to time. The alternative mechanism may include electronic means of communication such as e-mail etc. The alternative mechanism to provide the account statement / transaction confirmation slip will be provided only to those investors who have specifically opted for the alternative mechanism. For SIP transactions: Account Statement for SIP will be despatched once every quarter ending March, June, September and December within 10 working days of the end of the respective quarter. A soft copy of the Account Statement shall be mailed to the investors under SIP to their e-mail address on a monthly basis, if so mandated. However, the first Account Statement under SIP shall be issued within 10 working days of the initial investment/transfer. In case of specific request received from investors, Mutual Funds shall provide the account statement (SIP) to the investors within 5 working days from the receipt of such request without any charges.