BUY RIGHT, SIT TIGHT AND SAVE TAX

AN ELSS FUND FROM MOTILAL OSWAL AMC

Did you know that locking your money could be a benefit to your investments. That’s because during volatile market conditions you are often tempted to redeem or book profits. An ELSS fund with its lock in period protects you against the temptation. What’s more it helps you gain from the benefits of long term investing and save tax as well.

As an equity fund house, we at Motilal Oswal AMC have an investing philosophy – ‘Buy Right : Sit Tight’. While we ‘Buy Right’ using our QGLP (Quality, Growth, Longevity and Price) philosophy to buy the right stocks, the lock-in period helps you ‘Sit Tight’ on them without compromising on their growth potential. As an ELSS fund you get the benefits of tax exemption under section 80C as well.

Motilal Oswal MOSt Focused Long Term fund comes with a 3 year lock-in to prevent you from giving in to your whims of redeeming while you have the added advantage of saving tax.

This chart depicts, the longer you stay invested in equities, the probability of negative returns diminishes and it becomes 0 after 8 years in Nifty 500.

Minimum to maximum returns for a respective time period (in %)

graph

The above chart depicts the daily rolling returns on compounded annualized basis of Nifty 500 from 1 year to 15 year periods since January 1, 1995. It provides the maximum, minimum and average returns derived for all these time periods. Total number of time periods: 1year: 7,662; 2years: 7,297; 3years: 6,933; 4years: 6,567; 5years: 6,201; 6years: 5,836, 7years: 5,471; 8years: 5107; 9years: 4,741; 10years: 4376; 11years: 4,014; 12years: 3,652; 13years: 3,286; 14years: 2,921; 15years: 2,557. Data as on December 31, 2016. The above chart is provided for illustration purpose only. Motilal Oswal AMC does not provide any guarantee/ assurance any minimum or maximum returns. Past performance may or may not be sustained in future.

Source: Analysis by MOAMC Internal Research.
Tax Saving Instruments / Features PPF NSC Five-year bank fixed deposit EPF NPS* Sukanya Samriddhi ELSS
Returns (%) 8-9 8-9 7-8 8-9 Market-linked 8-9 Market-linked
Min investment/year (Rs.) 500 100 1000 Up to 12% of basic salary by employee and employer 6000 1000 500
One-time investment No Yes Yes No No No Yes
Compounding Yearly Yearly Quarterly Yearly NA Yearly NA
Lock-in (years) 15 5 5 Emplyment-linked Until 60 years of age** See Note 1 below 3 Years
Holding of Investment after Lock-in In blocks of 5 years No In blocks of 5 years Employment-linked Until 7a0 years of age Account will keep earning interest if not closed Yes
Guaranteed returns Yes Yes Yes Yes No Yes No
Taxation on Maturity Amount Tax-free Taxable Interest is taxable Partially taxable Withdrawal/ annuity taxed Tax-free Tax-free

*Over and above the exemption of Rs.1.5 lakh allowed under Section 80C, one can avail exemption of an additional Rs.50,000 under Section 80CCD(1B) **If withdrawn before 60 years of age, 80% of the amount must be used to buy an annuity. After 60 years of age, 40% of the amount must be used to buy an annuity. Note 1: The account matures after 21 years of its opening or at the time of the girls marriage on attaining 18 years of age, whichever is earlier

Source: MOAMC Analysis

When you invest in certain schemes like ELSS, Public Provident Fund, certain Bank Fixed Deposits etc. you can claim up to Rs.1,50,000 as a deduction from your gross total income in a financial year under Section 80C of Income Tax Act, 1961. The Table below will help further explain the how this works


Particulars Without Tax Saving Investments u/s 80C With Tax Saving Investments u/s 80C
Gross Total Income Rs.7,50,000 Rs.7,50,000
Exemption u/s 80C Nil Rs.1,50,000
Total Income Rs.7,50,000 Rs.6,00,000
Tax on Total Income Rs.75,000 Rs.45,000
Tax saved Nil Rs.30,000

Illustration of Tax exemption for an individual less than 60 years in receipt of salary income for the assessment year 2015-16. Along with the tax deductions, an ELSS offers you the opportunity to grow your money by investing in the equity market. Long-term capital gains from these funds are tax free in your hands and the lock-in period is only 3 years. Furthermore, you can also opt for a Dividend Payout option, thereby realizing some potential gain during the lock-in period, and also choose to invest through a Systematic Investment Plan and bring discipline to your tax planning.

Since inception MOSt Focused Long Term has delivered over 12% annualised returns

Rs. 10,000 invested in MOSt Focused Long Term on 21st Jan ‘15 has grown to Rs. 12,625 as on 31st Dec '16

Period Scheme Benchmark Current Value of Standard Investment of Rs 10000
MOSt Focused Long Term
Returns (%) 		Nifty 500
Returns (%) 		Nifty 50 Returns (%) MOSt Focused Long Term
Returns (INR) 		Nifty 500
Returns (INR) 		Nifty 50 Returns (INR)
Since Inception till Dec 31, 2016 12.73% -0.85% -3.25% 12,625 9,835 9,377
Dec 31, 2015 to Dec 31, 2016 12.47% 3.84% 3.01% N.A.

NAV per unit : Rs 10.0000 (Jan 21, 2015); 11.2256 (Dec 31, 2015); 12.6253 (Dec 31, 2016). Data as on Dec 31, 2016. Inception Date: Jan 21, 2015
Returns for one year are absolute. Returns for more than one year are compounded annualized; 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. Date of inception is deemed to be date of allotment. Past performance may or may not be sustained in the future. All the Returns shown above are of Regular Plan Growth Option.

Fund Manager: Mr. Gautam Roy Sinha (For Equity Component), Mr. Abhiroop Mukherjee (For Debt Component)

Co- Fund Manager: Mr. Siddharth Bothra (For Equity Component)

Click here to view the performances of the schemes managed by the same Fund Manager

No Load Funds

Get full value from your investments

Low Churn

Reap the full growth potential of stocks

Focused Portfolio

We do not buy more than 20-25 stocks reducing the riskof diversification

QGLP

We buy Quality companies with Growth potential and Longevity advantage at reasonable Price
Top 10 holdings % to Net Assets
HDFC Bank Limited 9.18%
IndusInd Bank Limited 8.24%
Eicher Motors Limited 7.14%
Bajaj Finance Limited 6.12%
Can Fin Homes Limited 5.94%
Bharat Petroleum Corporation Limited 5.69%
Max Financial Services Limited 5.58%
Maruti Suzuki India Limited 5.00%
Lupin Limited 4.85%
Tata Elxsi Limited 4.71%
graph
Industry classification as recommended by AMFI
*Data as on Dec 31, 2016;
Click here to view the performances of the schemes managed by the same Fund Manager
Name of the Scheme This product is suitable for investors who are seeking
Motilal Oswal MOSt Focused Long Term Fund(MOSt Focused Long Term) • Long-term capital growth
• Investment predominantly in equity and equity related instruments
Mutual Fund investments are subject to market risks, read all scheme related documents carefully