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Motilal Oswal Mutual Fund presents
m 50REMIXED
Acts like a fund, Trades like a share
MOSt
SharesMutual Fund
Motilal Oswal MOSt Shares M50 Exchange Traded Fund An Open Ended Exchange Traded Fund
India’s first fundamentally weighted ETF based on Nifty
Opens: 30 June 2010Closes: 19 July 2010NFO
I n d i a ’ s
F i r s t
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MOSl Shares M 50
India’s 1st Fundamentally Weighted ETF based on the S&P CNX Nifty Index(Nifty).
Seeks investment return that generally corresponds to the performance
of the MOSt50basket*.
MOSt 50 basket is essentially Nifty Remixed and consists of all 50
stocksofNifty but not in same proportionasNifty.
Weights of stocks in MOSt 50 basket determined by using Motilal
Oswal AMC’s proprietary pre-defined methodology that assigns
weights based on stock’s fundamentals (ROE, net worth, retainedearnings& price) against marketcap based weights used inNifty.
Weightage allocation methodology based on a set of fundamental/
financialparametersandvaluations.
Companieswith good financialperformance andreasonable valuation
get higherweightage.
* Beforefees & expenses;Subject to trackingerror
For further details on scheme features, please refer to the Scheme InformationDocument( SID ) ofthe scheme.
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Pre-definedset of rules todetermine the allocations.
Day to day management of the basket components / weights being done
by India Index Services & Products Ltd. (IISL – A Joint Venture between
Crisil Ltd. & National Stock Exchange of India Ltd.) based on pre-defined
set of rules.
Periodic rebalancing of the basket ensures an element of active capital
allocation.
Rebalancing linked to change in Nifty constituents or 12 months from
last rebalance, whichever is earlier.
No discretion on weightages with Fund Manager / AMC, ensuring passive
replication of the MOSt50Basket.
MOSt Shares ETF platform to provide for an fficient, ransparent &lexible platform.
For further details on scheme features, please refer to the Scheme Information
Document( SID ) ofthe scheme.
E TF
MOSl Shares M 50
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Active Funds Scorecard
70% of Large Cap funds have underperformed S&P CNX Nifty Indexovera 5-yearperiod.
Source: S&P Crisil SPIVA Report, Indices v/s Active Funds Scorecard, India,
December 2009
Equal Weighted
Returns v/s Benchmark
Large Cap
Equity 1 Year 3 Year 5 Year
Equal Weighted
returns
76.59% 9.42% 20.71%
S&P CNX
Nifty 77.59% 10.71% 21.70%
Asset Weighted
Returns v/s Benchmark
Large Cap
Equity 1 Year 3 Year 5 Year
Asset Weighted
returns
77.86% 10.33% 21.36%
S&P CNX
Nifty 77.59% 10.71% 21.70%
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Fundamental Weighing
Fundamentally Weighing combines the positive features of bothactive fundamentals based investingandpassive execution
Active Investing features
Passive / Index Investing features
Highercapital allocation to companieswhichhave
Strong consistent financialperformance
Cheap valuationor reasonable valuation
Quantitativerule based investingbased onpre-defined investment rules
Nodiscretion to fundmanagers in selecting or rejecting individual stocks
Lowcosts
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Market Cap Index MOSt 50 Basket
Weightage to
stocksBased on stock's Market Capitalization. Based on stock's fundamentals (ROE,
Net Worth, Retained Earnings & Price).
Higher allocation to stocks with better financial
performance and reasonable valuations.
Periodic rebalancing of Most 50 basket linked to change in Nifty constituents ensures higher capital remains allocated to stocks with goodfinancial performance and reasonable valuations.
Implication Weight of stock is not reduced even
if it becomes expensive or have poor
financial performance.
Higher allocation to stocks with bigger
market capitalization irrespective of
their underlying fundamentals.
Investment Features - Market Cap Based
Index & MOSl 50
Investment Allocation in a Market Cap based index gives primary credence
to sizeof company.Expansion in valuations lead to increasing weightage of a stock in an Index
thereby increasing investors exposure toanalready expensive stock, when in
fact it shouldbethe reverse.
Conversely, companies with depressed valuations tend to be underweight,
especially at times of extreme pessimism, when in fact it should be the
reverse.
MOSt Shares M50 aims at combining the best of active investing principles
with passive execution, thereby eliminating the bias of size & expensiveness
in an investment portfolio.
Source: Internal Analysis
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Illustrative Capital Allocation
MOSl 50
Under Weight Moderate Weight
Over WeightModerate Weight
Fundamental / Financial Performance
Low High
Low
High
V
a l u
a t
i o n s
n
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Illustrative Capital Allocation
MOSl 50
Note : Representative basket as on last two Nifty change datesSource: Internal Analysis
Metal
Oil
Telecom
Technology
Cement
Real
Estate
Banking &
FinancialPower
Auto
Pharma
Low
High
Fundamental / Financial Performance
Low High
FMCG
Capital
Equipment
Moderate weightUnder weight
Moderate weight Over weight V
a l u
a t
i o n s
Illustrative Capital Allocation
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Sectoral allocation of Nifty and MOSt 50 on Oct 22,
2009 and April 8, 2010
when change in Nifty took
place
Once MOSt Shares M50 islisted, the constituent
holdings will be declared
onadailybasis
MOSt 50 Basket Inception
date : 3rdApril2007
MOSt Shares M50 is a new scheme and does not have a performance track record. Past
Performance may or may not be achieved in future. The above illustration is meant to help the
investors have an understanding of the MOSt 50 Basket. Investors may note that comparison shown
above is not meant to indicate performance of MOSt 50 Basket in any manner whatsoever. In
particular the Scheme does not offer capital protection or assured returns. MOSt 50 Basket
methodology is as mentionedin the Scheme InformationDocument. The results presentedhereare
based on indicative MOSt 50 Basket values and the final values since inception will be provided by
IISL before the Scheme is listed and will beavailable on the AMC’swebsite.
MOSt 50 Basket Value 3691
Nifty Value 3691
3rd Apr 2007
Nifty MOSt 50 Nifty MOSt 50
Automotives 4.60% 11.60% 5.20% 12.80%
Capital Equipment 11.10% 3.00% 10.60% 9.40%
Cement 2.20% 4.90% 1.30% 1.20%
Financial Services 24.40% 31.00% 24.00% 28.30%FMCG 6.60% 1.20% 6.00% 4.30%
Infrastructure 1.20% 0.60% 1.20% 0.60%
Metals 8.00% 10.30% 9.10% 12.40%
Oils 15.00% 5.50% 15.80% 2.40%
Power 5.10% 12.40% 4.40% 10.30%
Pharma 2.10% 6.10% 2.40% 6.10%
Real Estate 3.30% 1.80% 2.60% 1.80%
Technology 11.50% 9.70% 12.80% 8.50%
Telecom 4.80% 1.80% 4.00% 1.85%
8-Apr-1022-Oct-09Sectors
Illustrative Capital Allocation:
Nifty & MOSl 50
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MOSt Shares M50 is a new scheme and does not have a performance track record. Past Performance, as
indicated above, may or may not beachieved in future. The above illustration is meant to help the investors have
an understanding of the MOSt 50 Basket. Investors may note that comparison shown above is not meant to
indicate performance of MOSt 50 Basket in any manner whatsoever. In particular the Scheme does not offer
capital protection or assured returns. MOSt 50 Basket methodology is as mentioned in the Scheme InformationDocument. The results presented here are based on indicative MOSt 50 Basket values and the final values since
inception willbeprovidedby IISLbeforethe Schemeis listedand will beavailable onthe AMC’swebsite.
MOSl Basket50
MOSt 50
Basket*
Nifty
Value on 3rd April 2007
Value on 31st May 2010
Annualized Returns
Annualized Standard Deviation
Beta with Market
Sharpe Ratio
3691
5086
10.7%
34.24%
1.00
0.14 Jensen Alfa
3691
7218
23.7%
33.28%
0.94
0.5313.2%
* Indicative Value
-
1,0002,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
4 / 3 / 2 0 0 7
6 / 3 / 2 0 0 7
8 / 3 / 2 0 0 7
1 0 / 3 / 2 0 0 7
1 2 / 3 / 2 0 0 7
2 / 3 / 2 0 0 8
4 / 3 / 2 0 0 8
6 / 3 / 2 0 0 8
8 / 3 / 2 0 0 8
1 0 / 3 / 2 0 0 8
1 2 / 3 / 2 0 0 8
2 / 3 / 2 0 0 9
4 / 3 / 2 0 0 9
6 / 3 / 2 0 0 9
8 / 3 / 2 0 0 9
1 0 / 3 / 2 0 0 9
1 2 / 3 / 2 0 0 9
2 / 3 / 2 0 1
0
4 / 3 / 2 0 1
0
Nifty MOSt 50
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Benefits of MOSl Shares M 50
A mutual fund scheme with the convenience of share trading at real time liquidityandprices.
Owninga diversified portfolioof bluechipTop 50 Nifty stocks.
Higher allocation to stocks with superior fundamentals and
reasonablevaluations.
Lower allocation to stockswith inferior fundamentals& valuations.
Combines thebenefit of activeallocation & passive execution.
Lower cost structure (approx 1% against >2%) as compared to a traditional investment product.
NoEntry orExit loads.
Taxefficientexposure to the“market”.
Complete transparencywith daily portfoliodisclosure.
Availableat low denominations of less thanRs.100/-
For further details on scheme features, please refer to the SchemeInformation Document ( SID ) of the scheme.
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All types of investors i.e. Retail or Institutional, long termor short term can use MOSt Shares M50 for following
strategies.
Investing
Trading
Hedging
Arbitrage
Uses of MOSl Shares M 50
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Fund Manager
Mr. Rajnish Rastogi
14 YearsExperience inFund Management and Equity Research
Qualifications – CFA, M. Tech (Mgmt & Systems) and B.Tech from
Indian Institute of Technology (I.I.T.)
Prior Experience
Investment Manager at Alliance BernsteinLLP, New York, USA
Director InvestmentatHSBCPrivateEquityAdvisors (India) Pvt.Ltd.
Associate Director at IL&FS Investment ManagersLtd.
Head EquityResearch, CRISIL Ltd.
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Important Product Details
PostNFOPeriod
Post NFO, MOSt Shares M50 will be
listed on NSE and will be available for
buy and sell like any other share
through equity brokers.
Minimum investment would be in
roundlotofoneunitonNSE.
AP/Large investor can buy/sell in
creationunit sizedirectlywith the fund.
NFOPeriod
During NFO, Investors can apply
onlineonBSE StarPlatformoron MFSS
platform of NSE through their share
broker/sub-brokers or through any
Mutual Fund distributor. They can alsoapply directly to Motilal Oswal AMC
through physical applications.
Minimum investment amount during
NFO: Rs. 10,000 & in multiple of Rs. 1
thereafter.
During NFO period MOSt Shares M50
(units) will be allotted at 1/100th of
M50 basket Value e.g. if M50 basket on
allotment date is 7500 than issue price
for MOSt shares M50 will beapproximately Rs. 75 The units will be
alloted inwholenumbers.
Any remaining fractional amount after
allotment will be refunded to the
investor.
For further details on scheme features,
please refer to the Scheme Information
Document ( SID ) of the scheme.
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Exchange Traded Funds (ETFs) are open ended mutual fund schemes, which are traded on stock exchanges like a share and seek investment
returns that correspond to the performance of a particular index like
Nifty orBasketofSecurities likeMOSt50.
Post NFO, ETF is listed on stock exchanges and can be bought and sold
like any other company share.
ETF and Openended MutualFund ( AnIllustrativechart )
Feature
NAV / Price
Portfolio Transparency
Fund Management Charges
Operating expensesIntraday Trading
Margin Funding
Purchase / Redemption
ETFs
Real Time
High - Daily
Low
LowPossible
Possible
Exchange /
Fund House
Mutual FundEnd of the day
Low - Monthly / Quarterly
Comparatively High
Relatively highNot possible
Not possible
Fund House
ETF – An Introduction
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Global ETF assets are at an all time high of US$ 1.03 Trillion as on March 2010,clockingaCAGRofapprox56%sinceitwasfirstlaunchedin1993.
During 2006-09, worldwide MF assets have grown by 2.5%, where as ETFassetshavegrownby82.46%
OnUSExchanges,11outoftop25Volumeleaders/stocksareETFs
These 11 ETFs account for 78% of total volume out of top 25 traded stocks onUSexchanges.10yearsbackitwaslessthan25%
In US, ETF corpus increased by 180 billion$ last year while normal Mutual Fundlost similaramount of money.
InIndiaETFsareamongsttop150tradedstocksonNSE.
In India ETF AUM has grown from just 7 crores in 2001 to 2410 crores as on Dec09 i.e. astounding 344 times growth in assets.
Global ETF Growth
Global ETF Asset Growth
56% CAGR
Source: ETF Landscape Global Handbook Blackrock; Q1 2010
Source : Bloomberg
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DISCLAIMER:
This presentation has been prepared and issued on the basis of internal data, publicly available information andother sources believed to be reliable. The information contained in this document is forgeneral purposes only andnot a complete disclosure of every material fact and terms and conditions and features of Motilal Oswal MOStShares M50 ETF (MOSt Shares M50). The information / data herein alone is not sufficient and shouldn’ t beused for the development or implementation of an investment strategy. It should not be construed as investment advice toanyparty. Allopinions, figures, charts/graphs,estimatesanddata included in this presentation areas on date andaresubject to change without notice. While utmost care has been exercised while preparing this document, MotilalOswal Asset Management Company Limited 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 containedherein may include statements of future expectations andother forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actualresults, performance or events to differ materially from those expressed or implied in such statements. Readersshall be fully responsible / liable for any decision taken on the basis of this presentation. No part of this documentmay be duplicated in whole or in part in any form and/or redistributed without prior written consent of the MotilalOswal Mutual Fund/ Motilal Oswal Asset Management Company Limited. Readers should before investing in theSchememake theirowninvestigation andseek appropriateprofessionaladvice.
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Statutory Details: Trustee:
Investment Manager: Sponsor:Scheme Classification & Investment Objective: Motilal Oswal MOSt Shares M50 ETF
(MOSt Shares M50), an open ended Exchange Traded Fund
Asset Allocation:
Load: Terms of
Issue: Minimum Application Amount: During NFO, Ongoing Basis,
Directly with
theFund:
Face Value & Issue Price:
RiskFactors: (1)AlltheMutual Fundsandsecurities investmentsaresubject to marketrisks andthere canbe no assurance
that the Scheme's objectives will be achieved (2) As the price / value / interest rates of the securities in which the
Schemeinvests fluctuates, theNetAssetValue (NAV)ofunits issuedundertheSchememay go upor down depending
upon the factors and forces affecting the securities market (3) Past performance of the Sponsor/AMC/Mutual Fund
and its affiliates does not indicate the future performance of the Scheme and may not provide a basis of comparison
with other investments (4) Motilal Oswal MOSt Shares M50 ETF (MOSt Shares M50) is the name of the Scheme and
does not in any manner indicate either the quality of the Scheme, its future prospects and returns. Investors are
therefore urged to study the terms of offer carefully and consult their Investment Advisor before they invest in the
Scheme (5) The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Mutual
Fund beyond the initial contribution made by it of an amount of Rs. 1 Lac towards setting up of the Mutual Fund (6)
Motilal Oswal Asset Management Company Limited (MOAMC) has no previous experience in managing a Mutual
Fund. The presentScheme is the first Scheme being launched under its management (7) The presentScheme is not a
guaranteed or assured return Scheme. Scheme Specific Risk Factors: Investment in the scheme shall be subject to
various other risk factors including but not limited to risk associated with investment in Equities such as trading
volumes, settlement risk, liquidity risk, default risk, tracking error risk, calculating agent risk, Underlying Basketrisk,risk associated with investment in derivatives, risk of fundamentally weighted Basket, risk of total return, etc. IISL
Constitution: Motilal Oswal Mutual Fund has been set up as a trust under the Indian Trust Act, 1882.
Motilal Oswal Trustee Company Limited. Motilal Oswal Asset Management Company Ltd.Motilal Oswal Securities Ltd.
that seeks investment return that corresponds (before fees and
expenses) generally to the performance of the MOSt 50 Basket (Underlying Basket), subject to tracking error.
Securities constituting MOSt 50 Basket: 95%-100%; Debt and Money market instruments and cash at call: 0-5%. The total
exposure toDerivativeswouldbe restrictedto 10% ofthe net assetsof the Scheme. Entry Load: Nil ExitLoad:Nil
Rs. 10,000/- and in multiples of Re. 1/- each. On the
Exchange: The units of the Scheme are proposed to be listed on the Capital Market Segment on National Stock Exchange of India
Ltd. (NSE). On NSE, the units of the Scheme can bepurchased/sold in round lot of 1 unit and in multiples thereafter.
Theminimum numberofunits of theSchemethat investorscan create/redeem inexchange ofportfoliodeposit andcash
component is 50,000 units and in multiples thereof. Offer of units of Rs. 10/- per unit for cash at a
premium approximately equal to difference between the face value of Rs. 10/- and 1/100th of the value of MOSt 50 Basket during
the New Fund Offerand at NAV based prices on ongoing basis. Investor Benefits and General Services: During NFO, Investors can
also subscribe to the units through the mutual fund trading platforms viz. BSE StAR MF of Bombay Stock Exchange Limited (BSE)
and Mutual Fund Service System (MFSS) of NSE. The AMC will calculate and publish the first NAV of the Scheme not later than 30
days from the closure of the NFO. Subsequently, the NAVs will be calculated and disclosed at the close of every Business Day.
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Disclaimer:
S&PDisclaimer:
NSE Disclaimer:
Please read the Scheme Information
Document (SID) & Statement of Additional Information (SAI) carefully before investing.
The MOSt 50 Basket is not sponsored, endorsed, sold or promoted by India Index Services & Products Limited (IISL).
MOSt 50 Baskethasbeen developedbyMOAMCandIISL hascalculated andmaintained as perthespecifications andrequirementsof MOAMC. IISL does not make any representation or warranty, express or implied regarding the advisability of investing in the
products linked to MOSt 50 Basket and availing the services generally or particularly or the ability of MOSt 50 Basket to track
general stock market performance in India. Please read the full Disclaimers in relation to the MOSt 50 Basket in the Scheme
InformationDocument. “S&P®” and “Standard and Poor's®” aretrademarks of S&P, andhave been licensed for
use by India Index Services & Products Limited in connection with the S&P CNX Nifty Index. MOSt Shares M50 is not sponsored,
endorsed, sold or promoted by India Index Services & Products Limited ("IISL") or Standard & Poor's ("S&P"), a Delaware limited
liability company. Neither IISL nor S&P makes any representation or warranty, express or implied, to the owners of MOSt Shares
M50 or any member of the public regarding the advisability of investing in securities generally or in MOSt Shares M50. Please read
the full Disclaimers in relation to the S&P CNX Nifty Index in the Scheme Information Document. It is to be
distinctly understood that thepermission given byNSEshouldnot inanywaybe deemedor construedthat theSchemeInformation
Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the
Scheme Information Document. The investors are advised to refer to the Scheme Information Document for the full text of the
'Disclaimer Clause of NSE'. For further Scheme Specific Risk Factors & other details,
A copy of SID, SAI and KIM
alongwith the application form are available at the office of the AMC, R&T, Distributors, or can be downloaded from www.motilaloswal.com/assetmanagement and www.mostshares.com Investors canalso contact us on our toll free number 1800-
200-6626or sendemailat [email protected]
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Call: 1800-200-6626 l SMS: M50 to 575753E-mail: [email protected]
Website: www.mostshares.comwww.motilaloswal.com/assetmanagement
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