Focusing on few quality stocks can greatly enhance the performance of a portfolio

Weights 3 Year Returns
Stock A 10% 25% 20% Returns
from top 3 stocks
13% higher returns
from Focused Portfolio
Stock B 10% 20%
Stock C 10% 15%
Stock D 10% 8%
Stock E 10% 7%
Stock F 10% 5%
Stock G 10% 5%
Stock H 10% 2%
Stock I 10% -6%
Stock J 10% -11%
Portfolio Returns 7.0% Returns from holding
entire portfolio of 10 stocks

Adding additional stocks does not reduce risk furthe

Based on Modern Portfolio Theory, Unsystematic risk reduces only till 20-30 stocks in a portfolio

Quality with stability and resilience

Relative stability

  • Relatively stable due to large size and longer history compared to the broader markets
  • Broad based ownership also ensures lesser volatility

Resilience

  • Larger Balance sheet
  • Survival through different market cycles make large caps resilient

Quality of Management

  • Experienced management teams
  • Quality of board
  • Better standards of governance/disclosures

High Conviction Concentrated Portfolio

  • Concentrated Portfolio of not more than 25 stocks

Large Cap Oriented

  • Large cap oriented focused portfolio

Benchmark Agnostic

  • Least overlap with the benchmark

Strong Stock Picking Process

  • QGLP framework for bottom up stock picking

#1 Concentrated portfolio of 25 stocks

- True to mandate Focused Fund

No. of stocks in the last 6 months

Concentration

#2 Large cap oriented focused fund

– Greater flexibility in portfolio structure

  • Minimum allocation to Large cap should be 65%

  • Higher flexibility in portfolio construction; thus the fund may tap right opportunities as they arise

#3 Benchmark agnostic

F25 benchmark agnostic portfolio is testament to bottoms up stock picking of high conviction companies

Top 5 Stocks with least overlap with Benchmark
Script Weightage (%) in portfolio Weightage (%) in Index
Portfolio Stock 1 5.7% 0.9%
Portfolio Stock 2 4.8% 0.0%
Portfolio Stock 3 4.7% 0.0%
Portfolio Stock 4 9.6% 5.0%
Portfolio Stock 5 3.9% 0.0%
  • Active weights means having portion of the portfolio which does not have an overlay with the benchmark.

#4 QGLP Framework

Quality

Quality of business x Quality of management

  • Stable business, preferably consumer facing
  • Huge business opportunity
  • Sustainable competitive advantage
  • Competent management team
  • Healthy financials & ratios

Growth

Growth in
earnings

  • Volume Growth
  • Price Growth
  • Mix change
  • Operating & Financial leverage

Longetvity

Longevity – of both Q & G

  • Long-term relevance of business
  • Extending competitive advantage period
  • Initiatives to sustain growth for 10-15 years

Price

Price

  • Reasonable valuation, relative to quality and growth prospects
  • High margin of safety
Performance
Net Asset Value Movement

Date of inception: 13-May-13

The performance of schemes of Motilal Oswal Mutual Fund is Benchmarked to the Total Return variant of respective Index chosen as Benchmark as against Price Return variant of respective Benchmark Index. In case, 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. The NAV per unit shown in the table is as on the start date of the said period. Past performance may or may not be sustained in the future. Performance is for Regular Plan Growth Option. Different plans have different expense structure. This scheme is currently managed by Mr. Siddharth Bothra. He has been managing this fund since 23-Nov-2016; Mr. Abhiroop Mukherjee is the fund manager for debt component.

Industry Classification as recommended by AMFI

Name of the Scheme

Riskometer

Investors understand that their principal will be at
very high risk

Motilal Oswal Focused 25 Fund (MOF25) An open ended equity scheme investing in maximum 25 stocks intending to focus on large cap stocks.
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.

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Fund Managers
For Equity Component: Mr. Siddharth Bothra

  • Rich Experience: Mr Siddharth Bothra has an experience of more than 13 years in the field of research and investments
  • Experience across sectors: Prior to joining Motilal Oswal AMC he had an extensive stint with Motilal Oswal Securities Ltd. as a senior analyst in the institutional equities division covering various sectors
  • Awards won: During his stint with Motilal Oswal Securities Ltd. Mr. Bothra won various recognitions such as the ZEE Business TV - India’s Best Analyst Awards 2009 Infrastructure, ET Reuters Starmine Awards No.1 Earnings Estimator 2009 Real Estate & No. 2 Stock Picker 2010 Real Estate
  • Excellent academic background: Honors degree of MBA (Post Graduate Program) from ISB (Indian School of Business, Hyderabad), MBA International Student Exchange NYU Stern School of Business (New York) and B.Com (Honors)
  • Funds managed: Motilal Oswal Focused 25 Fund, Motilal Oswal Equity Hybrid Fund and Motilal Oswal Multi Asset Fund

Fund Facts

Type of the Scheme An open ended equity scheme investing in maximum 25 stocks intending to focus on Large Cap stocks
Category of the Scheme Focused Fund intending to invest in large cap stocks
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 Nifty 50 TRI
Entry / Exit Load Entry : Nil Exit : 1% - If redeemed on or before 15 days from the date of allotment. Nil - If redeemed after 15 days from the date of allotment. A switch-out or a withdrawal shall also be subjected to the Exit Load like any Redemption. No Exit Load applies for switch between MOF25, MOF30, MOF35, MOFEH & MOFDYNAMIC. No Load for switch between Options within the Scheme.
Plans Regular Plan and Direct Plan
Options (Under each plan) Dividend (Payout and Reinvestment) and Growth
Minimum Application Amount Rs. 500/- and in multiples of Re. 1/- thereafter
Additional Application Amount Rs. 500/- and in multiples of Re. 1/- thereafter
Weekly SIP Rs. 500 and in multiples of Re.1/- thereafter (Minimum Installment – 12)
Fortnightly SIP
Monthly SIP
Quarterly SIP Rs. 1,500 and in multiples of Re.1/- thereafter (Minimum Installment – 4)
Annual SIP Rs. 6,000 and in multiples of Re. 1/- thereafter (Minimum Installment – 1)
The Dates of Auto Debit Facility shall be on the 1st, 7th, 14th ,21st or 28th of every month.
Minimum Redemption Amount Rs. 500/- and in multiples of Re. 1/- thereafter or account balance, whichever is lower.