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MOSt Focused Long Term: Short but sweet performance history
Thu, Jan 26, 2017
Source : Yash Jashnani, Citrus Interactive

MOSt Focused Long Term Fund is an open ended equity linked savings scheme (ELSS). Funds in this category have a 3 year lock in period. The investment objective of the scheme is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related instruments. The fund has an AUM of Rs. 222 Crore as on 31st December 2016 which has increased by Rs. 124 Crore compared to last year as on 31st December 2015.

 

Performance

 

The fund’s performance across various time horizons is extremely good as seen in the table given below. It has beaten its benchmark in all the time periods. It has also beaten the ELSS category in all the time periods.

 

Scheme Name

YTD

6 Months

1 Year

Since Inception

MOSt Focused Long Term Fund

12.47

8.09

12.47

12.75

 NIFTY 500

3.84

0.03

3.84

-0.51

Category Average

4.5

0.89

4.5

NA

Rank

4/37

1/37

4/37

NA

Figures are in % as on 31st December 2016; Returns above 1 year in Compounded Annual Growth Rate (CAGR)

*The fund was launched on 21st January 2015, hence the 3 year & 5 year period data are not available

 

In terms of the calendar year returns the fund has beaten its benchmark in the year 2016. It has generated higher returns than the ELSS category in the year 2016 compared to its category average as shown in the table below.

 

Scheme Name

2016

MOSt Focused Long Term Fund

12.47

 NIFTY 500

3.84

Category Average

3.53

Rank

4/37

All figures in %

 

Risk: In terms of measures of risk such as Standard Deviation & Beta (measured over the last 3 years), the fund has taken lower risk compared to the category median.

 

 

Standard Deviation

Beta

MOSt Focused Long Term Fund

0.67

0.87

Category Median

0.92

0.92

 

 

 

Risk-Adjusted Return: In terms of Treynor & Sharpe ratio (measured over the last 3 years), the fund has proved lower risk-adjusted returns than the category median.

 

 

Treynor

Sharpe

MOSt Focused Long Term Fund

0.04

0.04

Category Median

0.05

0.06

 

Portfolio

Sector concentration: The fund’s concentration in the Top 3, Top 5 and Top 10 sectors is higher than the category median.

 

 

Top 3

Top 5

Top 10

MOSt Focused Long Term Fund

38.91

54.95

80.36

Category Median

32.33

44.46

63.8

 

 

Company concentration: The Fund’s Concentration in the Top 3, Top 5 and Top 10 Companies is higher than the category median.

 

 

Top 3

Top 5

Top 10

MOSt Focused Long Term Fund

24.56

36.63

62.48

Category Median

16.55

23.78

38.73

 

 

Number of Equity Holdings: The Fund currently holds 21 stocks in its portfolio (31st December 2016), which is lower than the median stock count of the ELSS category, which currently stands at 49. Since inception the equity holding averages to 20.

 

Cash Equivalent:

           

Its cash equivalent for December 2016 was 4.85 per cent. The average cash allocation for the last two years is 3.37 per cent. Its maximum allocation to cash over the last one year is 10.60 percent in October 2015 and lowest was -0.02 percent in February 2015. In 2016 it had an average cash allocation of 2.48 per cent.

 

Portfolio Characteristics

           

The Top 5 sectors include Bank-Private, Pharmaceuticals & Drugs, Refineries, Finance-Housing & Automobile Two & Three Wheelers.

 

In the last 6 months the fund has bought Advanced Enzyme Technologies Ltd., Bayer CropScience Ltd., Can Fin Homes Ltd., Indian Oil Corporation Ltd., Jubilant Life Sciences Ltd., Mahanagar Gas Ltd. & Tata Elxsi Ltd.

 

Stocks of Ajanta Pharma Ltd., Britannia Industries Ltd., Essel Propack Ltd., Hindustan Petroleum Corporation Ltd., Housing Development Finance Corporation Ltd., Infosys Ltd., Max Ventures And Industries Ltd. & Supreme Industries Ltd. were sold in the last 6 months.

 

Stocks of Bajaj Finance Ltd. and RBL Bank Ltd. were bought and sold.

 

Process

 

The scheme invests 80-100% in Equity & Equity Related Securities. It would also invest 0-20% in Debt Instruments Money Market Instruments, G-Sec, and Cash &Cash at call etc.

The scheme may invest in derivative instruments if permitted under the ELSS rules and under such event the fund exposure to derivatives instruments shall not exceed 50 % of the total net asset of the scheme.

 

The Scheme will invest in securities across asset classes (debt and equity) and across sectors and capitalization levels. Emphasis will be placed on identifying high quality/high & sustainable growth companies for investment. The fund shall follow an active investment style using bottom-up stock picking. The fund managers shall identify and invest in shares of high quality businesses having sustainable and scalable business models thus using QGLP (Quality, Growth, Longevity & Price) as the key evaluation parameters. The businesses should have strong earnings growth prospects and be available at reasonable valuations. The fund shall be benchmark agnostic with a portfolio of high conviction stock ideas from across market-capitalization levels/ sectors.

 

Fund Manager

 

Gautam Sinha Roy

 

Mr. Roy has 13 years of rich experience in fund management and research. He had worked with Motilal Oswal Securities Limited as a part of the Investment, Market Strategy & Product Development team. He is associated with Motilal Oswal Group since 4 years. His last assignment was with Motilal Oswal Securities Ltd. where he was handling corporate investments books. Prior to joining the Motilal Oswal Group he has worked with organizations like IIFL Capital Pvt. Ltd.(Singapore), Mirae Asset Global Investment Pvt. Ltd., Edelweiss Capital Ltd. and Genpact Ltd.

He is also a Fund Manager for the scheme Motilal Oswal MOSt Focused Multicap 35 Fund.

Mr. Gautam Roy is an alumnus of IIM Calcutta (2003) and also holds an honours degree in Chemical Engineering.

 

Abhiroop Mukherjee

 

Mr. Abhiroop Mukherjee has over 7 years of experience in the Fixed Income Securities Trading and fund management. He is associated with the Motilal Oswal Group since May 2011. Currently he is designated as Assistant Vice President & Fund Manager – Fixed Income.  Prior to joining Motilal Oswal Asset Management Company Limited, he was a WDM trader with PNB Gilts Ltd. 

He is the fund manager of Motilal Oswal Most 10 year Gilt Fund and MOSt Ultra Short Term Bond Fund.

Mr. Mukherjee is a PGPBF (Finance) from National Institute of Bank Management, and holds Degree in B.Com (Honours) from Calcutta University.

 

Our View

 

MOSt Focused Long Term Fund has shown great performance record in the short period of its existence which reflects well on the fund manager’s stock picking skills. It holds a concentrated portfolio, which increases the risk. Investors can consider this for their ELSS investment.

 

 

 
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