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.
Close
NAV
Motilal Oswal Dynamic Fund (Div-A) - 13.6888Motilal Oswal Dynamic Fund (Div-Q) - 12.016Motilal Oswal Dynamic Fund (G) - 14.5525Motilal Oswal Dynamic Fund-Dir (Div-A) - 14.0334Motilal Oswal Dynamic Fund-Dir (Div-Q) - 12.1168Motilal Oswal Dynamic Fund-Dir (G) - 15.2862Motilal Oswal Equity Hybrid Fund - Direct (G) - 14.2063Motilal Oswal Equity Hybrid Fund - Regular (G) - 13.6771Motilal Oswal Focused 25 Fund - Direct (D) - 22.3572Motilal Oswal Focused 25 Fund - Direct (G) - 32.5681Motilal Oswal Focused 25 Fund (D) - 20.2276Motilal Oswal Focused 25 Fund (G) - 29.3557Motilal Oswal Large and Midcap Fund - Dir (D) - 12.734Motilal Oswal Large and Midcap Fund - Dir (G) - 12.734Motilal Oswal Large and Midcap Fund (D) - 12.4542Motilal Oswal Large and Midcap Fund (G) - 12.4541Motilal Oswal Liquid Fund - Direct (Div-D) RI - 10.0077Motilal Oswal Liquid Fund - Direct (Div-F) RI - 10.0132Motilal Oswal Liquid Fund - Direct (Div-M) - 10.0477Motilal Oswal Liquid Fund - Direct (Div-Q) - 10.021Motilal Oswal Liquid Fund - Direct (Div-W) RI - 10.0112Motilal Oswal Liquid Fund - Direct (G) - 10.973Motilal Oswal Liquid Fund - Regular (Div-D) RI - 10.0055Motilal Oswal Liquid Fund - Regular (Div-F) RI - 10.0124Motilal Oswal Liquid Fund - Regular (Div-M) - 10.0466Motilal Oswal Liquid Fund - Regular (Div-Q) - 10.0201Motilal Oswal Liquid Fund - Regular (Div-W) RI - 10.0181Motilal Oswal Liquid Fund - Regular (G) - 10.9387Motilal Oswal Long Term Equity Fund (D) - 18.7188Motilal Oswal Long Term Equity Fund (G) - 21.1255Motilal Oswal Long Term Equity Fund -Dir (D) - 20.4073Motilal Oswal Long Term Equity Fund -Dir (G) - 22.9114Motilal Oswal Midcap 30 Fund (D) - 21.6026Motilal Oswal Midcap 30 Fund (G) - 30.2394Motilal Oswal Midcap 30 Fund-Dir (D) - 22.2855Motilal Oswal Midcap 30 Fund-Dir (G) - 32.9437Motilal Oswal Multi Asset Fund - Direct (G) - 10.51Motilal Oswal Multi Asset Fund (G) - 10.4361Motilal Oswal Multicap 35 Fund (D) - 27.3459Motilal Oswal Multicap 35 Fund (G) - 31.0393Motilal Oswal Multicap 35 Fund-Dir(D) - 27.5237Motilal Oswal Multicap 35 Fund-Dir(G) - 33.0923Motilal Oswal Nasdaq 100 FOF - Direct (G) - 20.6522Motilal Oswal Nasdaq 100 FOF - Regular (G) - 20.4755Motilal Oswal Nifty 50 Index Fund - Direct (G) - 12.0528Motilal Oswal Nifty 50 Index Fund (G) - 12.0006Motilal Oswal Nifty 500 Fund - Direct (G) - 13.5305Motilal Oswal Nifty 500 Fund (G) - 13.4099Motilal Oswal Nifty Bank Index Fund - Direct (G) - 11.7039Motilal Oswal Nifty Bank Index Fund (G) - 11.6Motilal Oswal Nifty Midcap 150 Index Fund (G) - 14.4828Motilal Oswal Nifty Midcap 150 Index Fund-Dir (G) - 14.6131Motilal Oswal Nifty Next 50 Index Fund - Dir (G) - 11.7853Motilal Oswal Nifty Next 50 Index Fund (G) - 11.703Motilal Oswal Nifty Smallcap 250 Index Fund (G) - 13.9354Motilal Oswal Nifty Smallcap 250 Index Fund-Dir(G) - 14.0612Motilal Oswal S&P 500 Index Fund - Direct (G) - 12.7297Motilal Oswal S&P 500 Index Fund (G) - 12.6642Motilal Oswal Ultra Short Term Fund - Dir (Div-D) - 9.7847Motilal Oswal Ultra Short Term Fund - Dir (Div-F) - 9.8038Motilal Oswal Ultra Short Term Fund - Dir (Div-M) - 9.7917Motilal Oswal Ultra Short Term Fund - Dir (Div-Q) - 9.9324Motilal Oswal Ultra Short Term Fund - Dir (Div-W) - 9.7956Motilal Oswal Ultra Short Term Fund - Dir (G) - 13.8641Motilal Oswal Ultra Short Term Fund (Div-D) - 9.7831Motilal Oswal Ultra Short Term Fund (Div-F) - 9.7936Motilal Oswal Ultra Short Term Fund (Div-M) - 9.7836Motilal Oswal Ultra Short Term Fund (Div-Q) - 9.9259Motilal Oswal Ultra Short Term Fund (Div-W) - 9.7866Motilal Oswal Ultra Short Term Fund (G) - 13.4745

Buy Right Sit Tight Insights - May 2017

Blog Blog Details
  • May 10, 2017
  • Raamdeo Agrawal|
  • Chairman, Motilal Oswal AMC

Dear investor friends,

The financial year 2016-17 has ended with Nifty-50 index closing around 9,200 levels. Interestingly, exactly two years ago in March 2015, the Nifty-50 touched 9,000, and closed a tad lower at 8,491. Does this mean there was no return in the market for full two years?

In this edition, I briefly discuss this and related insights.

Don’t be misled by indices

“Most people look on averages as basic reality, giving little thought to the possible variances.”
— Robert Hagstrom, in his book “Investing: The Last Liberal Art

Stock market performance is almost invariably measured by the change in popular benchmark indices – Sensex-30, Nifty-50, Nifty-500, Nifty Free Float Midcap 100, etc. The most important thing to know about these indices is that they merely indicate the average performance of their respective constituent stocks. Averages tend to conceal the variances within the data set under consideration.

The statistical perspective
Says Robert Hagstrom, in his book Investing: The Last Liberal Art, “Most of us have a tendency to see the world along the bell shape curve with two equal sides, where mean, median and mode are all the same value. But as we have learned, nature does not always fit so neatly along a normal symmetrical distribution, and sometimes skews asymmetrically to one side or the other. These distributions are called either right or left skewed, depending on the direction of the elongation.”

Hagstrom gives the following example of right skew. At age 40, Stephen Jay Gould, the famous American evolutionary biologist, was diagnosed with a rare form of abdominal cancer. Post-operation, he read about the cancer and found that it was incurable, with median life expectancy of only eight months. Though stunned initially, Gould soon smiled.

Median life expectancy of eight months simply meant that half the people diagnosed with that cancer lived for eight months or less, and half lived for more than eight months. Gould soon discovered that the life expectancy of patients was strongly right-skewed i.e. those on the plus side of the eight-month mark lived significantly longer than eight months. Gould himself went on to live for another 20 years!

Coming back to Nifty-50, between March 2015 and March 2017, the index clocked a CAGR of only 4%. However, within the Nifty-50 constituents, 19 stocks delivered return CAGR of 10% or higher. Likewise, Nifty Free Float Midcap 100 delivered two-year CAGR of 15%. Of the 100 constituent stocks, as many as 31 delivered return CAGR of 20% or higher. The frequency distribution of returns of Nifty-50 and Nifty Free Float Midcap 100 constituents confirm the concept of skew as shown below.

The return frequency distributions of Nifty 50 and Nifty Free Float Midcap 100 indices are right-skewed

Key takeaways
There are 2 key takeaways from the above –
1. Don’t be misled by indices:  Stock indices are merely the average of its constituents and can be misleading as regards investing opportunities in the market. As high as 30-40% of index constituents could significantly outperform the index itself.
2. Flat market is a stock-picker’s paradise:  If the benchmark indices remain flat (as was the case FY15-17), one may erroneously conclude that there are no money-making opportunities in the market. Quite to the contrary, flat market is a paradise for the diligent stock-picker with the right philosophy and process.


I welcome your feedback and suggestions for improvement. Please email the same to insights@motilaloswal.com.

Thanking you,

Raamdeo Agrawal
Chairman

Note: The source of all data used in this bulletin is MOAMC internal analysis, unless otherwise mentioned.

Disclaimer
This bulletin has been issued to explain our investment philosophy. The information contained in this document is for general purposes only and should not be construed as investment advice to any party. Readers shall be fully responsible / liable for any decision taken on the basis of this bulletin. Past performance may or may not be sustained in the future. This bulletin is not for circulation in general and is meant for intended recipient only. The bulletin 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.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.



Share this articles
  • FB Comments
Facebook comments not available
Newsletter
Connect with us
+91-22 40548002 | 8108622222
CIN-U67120MH2008PLC188186

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc), you need not undergo the same process again when you approach another intermediary

Site best viewed in IE 9.0+, Mozila Firefox 4.0+ and Google Chrome at 1024 x 768 pixels resolution