Motilal Oswal Asset Management Company Ltd. (MOAMC) is a public limited company incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered Office at 10th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025.
Motilal Oswal Asset Management Company Ltd. has been appointed as the Investment Manager to Motilal Oswal Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 21, 2009, executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset Management Company Ltd.
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Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive (G) - 10.6741Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive-Dir (G) - 10.6893Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative (G) - 10.5364Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative-Dir(G) - 10.5532Motilal Oswal Dynamic Fund (Div-A) - 13.5064Motilal Oswal Dynamic Fund (Div-Q) - 12.0966Motilal Oswal Dynamic Fund (G) - 14.9036Motilal Oswal Dynamic Fund-Dir (Div-A) - 13.6715Motilal Oswal Dynamic Fund-Dir (Div-Q) - 12.2594Motilal Oswal Dynamic Fund-Dir (G) - 15.7315Motilal Oswal Equity Hybrid Fund - Direct (G) - 14.9593Motilal Oswal Equity Hybrid Fund - Regular (G) - 14.3119Motilal Oswal Flexi Cap Fund(D) - 24.9521Motilal Oswal Flexi Cap Fund(G) - 33.1944Motilal Oswal Flexi Cap Fund-Dir(D) - 24.9694Motilal Oswal Flexi Cap Fund-Dir(G) - 35.5144Motilal Oswal Focused 25 Fund - Direct (D) - 20.4246Motilal Oswal Focused 25 Fund - Direct (G) - 34.8895Motilal Oswal Focused 25 Fund (D) - 18.3723Motilal Oswal Focused 25 Fund (G) - 31.3034Motilal Oswal Large and Midcap Fund - Dir (D) - 15.0008Motilal Oswal Large and Midcap Fund - Dir (G) - 15.0008Motilal Oswal Large and Midcap Fund (D) - 14.57Motilal Oswal Large and Midcap Fund (G) - 14.57Motilal Oswal Liquid Fund - Direct (Div-D) RI - 10.0077Motilal Oswal Liquid Fund - Direct (Div-F) RI - 10.0068Motilal Oswal Liquid Fund - Direct (Div-M) - 10.0442Motilal Oswal Liquid Fund - Direct (Div-Q) - 10.0694Motilal Oswal Liquid Fund - Direct (Div-W) RI - 10.0083Motilal Oswal Liquid Fund - Direct (G) - 11.1042Motilal Oswal Liquid Fund - Regular (Div-D) RI - 10.0055Motilal Oswal Liquid Fund - Regular (Div-F) RI - 10.0066Motilal Oswal Liquid Fund - Regular (Div-M) - 10.0434Motilal Oswal Liquid Fund - Regular (Div-Q) - 10.0663Motilal Oswal Liquid Fund - Regular (Div-W) RI - 10.0154Motilal Oswal Liquid Fund - Regular (G) - 11.0628Motilal Oswal Long Term Equity Fund (D) - 18.9673Motilal Oswal Long Term Equity Fund (G) - 24.1448Motilal Oswal Long Term Equity Fund -Dir (D) - 22.5586Motilal Oswal Long Term Equity Fund -Dir (G) - 26.3202Motilal Oswal Midcap 30 Fund (D) - 21.9396Motilal Oswal Midcap 30 Fund (G) - 35.9137Motilal Oswal Midcap 30 Fund-Dir (D) - 22.6487Motilal Oswal Midcap 30 Fund-Dir (G) - 39.3237Motilal Oswal Multi Asset Fund - Direct (G) - 10.7049Motilal Oswal Multi Asset Fund (G) - 10.5652Motilal Oswal Nasdaq 100 FOF - Direct (G) - 21.7182Motilal Oswal Nasdaq 100 FOF - Regular (G) - 21.4982Motilal Oswal Nifty 50 Index Fund - Direct (G) - 13.1123Motilal Oswal Nifty 50 Index Fund (G) - 13.0304Motilal Oswal Nifty 500 Fund - Direct (G) - 15.2785Motilal Oswal Nifty 500 Fund (G) - 15.1033Motilal Oswal Nifty Bank Index Fund - Direct (G) - 12.6493Motilal Oswal Nifty Bank Index Fund (G) - 12.505Motilal Oswal Nifty Midcap 150 Index Fund (G) - 17.9037Motilal Oswal Nifty Midcap 150 Index Fund-Dir (G) - 18.1149Motilal Oswal Nifty Next 50 Index Fund - Dir (G) - 13.6955Motilal Oswal Nifty Next 50 Index Fund (G) - 13.5607Motilal Oswal Nifty Smallcap 250 Index Fund (G) - 18.3538Motilal Oswal Nifty Smallcap 250 Index Fund-Dir(G) - 18.5688Motilal Oswal S&P 500 Index Fund - Direct (G) - 14.0875Motilal Oswal S&P 500 Index Fund (G) - 13.9767Motilal Oswal Ultra Short Term Fund - Dir (Div-D) - 9.91Motilal Oswal Ultra Short Term Fund - Dir (Div-F) - 9.9314Motilal Oswal Ultra Short Term Fund - Dir (Div-M) - 9.9171Motilal Oswal Ultra Short Term Fund - Dir (Div-Q) - 10.0598Motilal Oswal Ultra Short Term Fund - Dir (Div-W) - 9.921Motilal Oswal Ultra Short Term Fund - Dir (G) - 14.0415Motilal Oswal Ultra Short Term Fund (Div-D) - 9.8772Motilal Oswal Ultra Short Term Fund (Div-F) - 9.8877Motilal Oswal Ultra Short Term Fund (Div-M) - 9.8777Motilal Oswal Ultra Short Term Fund (Div-Q) - 10.0212Motilal Oswal Ultra Short Term Fund (Div-W) - 9.8807Motilal Oswal Ultra Short Term Fund (G) - 13.6038

How international funds have given good returns

Blog Blog Details
  • April 13, 2020
  • Pratik Oswal|
  • Head, Passive Funds
A decade ago - friends and family in the US wanted to take advantage of the India growth story from abroad. Their investments in India over ten years ago have delivered good returns (10-12% yearly), but they are still upset about it? Why? The dollar has eroded all the gains they have made India. If they account for rupee depreciation - their returns are under 0.8%. The India growth story is well and alive - but rupee depreciation has led to investors to lose out on all the profits generated. 

For Indian investors investing abroad - it s been a different experience. Global companies are doing better than ever - and the rupee depreciation has added a minimum of 3-5% every year to their returns. The S&P 500, for example, has delivered a performance of close to 18% yearly over the last decade in rupee terms. 

It s becoming a common belief that returns alone should not dictate how one should invest. Investors realise that returns are uncertain and hard to predict. Merely choosing the fund with the highest returns - leads to average results over long-time periods. And what is also well documented is that top funds change every year. 

So, if returns are not the best gauge then what else should investors look for? 

1. Portfolio diversification - It s a common saying -"don t put your eggs in one basket." What this means is that investors should ideally diversify their investments across different securities. It s the reason why mutual funds have become so successful. But this is still not entirely correct. The new theory should be to "buy multiple baskets." Why? We have seen over the last two months that however, diversified one s investment is - equities fall together. Whether someone has invested in 5 or even 50 mutual funds, they have seen a decline in portfolios of over 25-40%. Diversification across asset classes (or buying multiple baskets) has proven to be effective in these times. If someone had diversified his/her investments in gold, international equities, debt and equities - their short-term portfolio loss would have been much lower. 

How does international diversification fit into this? 
International investments have fallen less and over long-time periods have very low correlation with Indian equity markets. By taking out country risk - investors are making their portfolios less volatile. For example - correlation of international indices such as the NASDAQ and S&P 500 with Indian indices is less than 15%. What this means is that investors choosing to diversify with international funds can expect their portfolios to move differently to Indian indices (just like gold).
 
1) Why is dollar hedge important? 
Almost every working professional is spending in dollar terms today. We earn in rupee but pay in the dollar. We are buying Nike shoes, Apple/Android phones, Hyundai cars, and sending our kids to school outside India. For instance - The cost of education abroad has increased 2-3x over the last decade, and this is because of the rupee decline. Keeping spending in mind - it s crucial to hold some proportion of investments in dollar-based investments. 

Even going forward - the dollar will continue to appreciate over the rupee. As long as inflation in India is higher than it is in the US - the rupee will depreciate. Therefore - investors need to hedge their spending by adding international funds in their portfolio. 

2) Global factors - Need for international diversification comes at the point where the world is becoming more global. In addition to our spending patterns - business models are getting a lot more global. We all use Flipkart, Amazon, Instagram, WhatsApp daily. Today a Maruti is competing with a Kia or a Hyundai. With these forces - it’s important for the investment portfolio to evolve with competitive trends. Having brands such as Amazon, Google, Facebook, Coca Cola in the portfolio enables investors to have the very best companies with them at all times. The Indian market is small in comparison to global standards and having global exposure allows investors to who grow with some of the biggest companies out there. 


Chart 1: ‘As seen above, international diversification reduces portfolio volatility dramatically’

So how does one diversify? 
There are a lot of international funds in India currently being offered. By choosing index funds (most popular and proven to be effective), investors can ensure low fees while getting exposure to the best companies globally. 

A sound asset allocation strategy based on the individual s risk profile is a great starting point. If a customer is purely looking at returns (which have been phenomenal), then there is a likelihood of him/her of being disappointed in the future. Advice would not to go all-in but build it in a way where an investor can have portfolio exposure of 5-10% in the next 1-2 years. 

In conclusion, - investors should look beyond returns to allocate their investments in global funds. Diversification and dollar hedge should be on top of their minds. 



Chart 2: “Returns in the last decade have been great.” However – returns alone should not be a deciding factor.” 












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