Motilal Oswal Vision 2030 Fund

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About Motilal Oswal

India’s only 100% equities fund manager with a clear investing philosophy. An asset management organisation with a strong point of differentiation, They aim to provide targeted mutual funds, PMS, and AIF strategies based on their primary equities research and investing competencies. Their sponsor, Motilal Oswal Financial Services Limited, which has over 30 years of experience under the direction of their founder and thought leader, Raamdeo Agrawal, provides them with equity expertise. Their unique investing methodology has grown and is continually being enhanced by the application, insights, and practical lessons of their seasoned equities investment and research team through his 25 Annual Wealth Creation Studies series.

Their equity offerings have been based on their investment tenet, Buy Right: Sit Tight, where Buy Right refers to purchasing high quality, growth-oriented businesses at a fair price and Sit Tight refers to maintaining investment in them for a considerable amount of time in order to realise the full growth potential of the underlying business. They aim to manage portfolios with about 20–25 high-conviction holdings and little portfolio churn, along with a “Buy and Hold” approach.

Fund Snapshot

Name of the scheme: Motilal Oswal Vision 2030 Fund
Inception: April 2022
Type: Category III AIF, close-ended scheme
Tenure: 6 years from final closing with a 2-year extension subject to approval
No. of stocks: Upto 30 stocks
Market cap: 3 Years
Flexi shall invest across market cap Nifty 500 TRI
Initial Drawdown: 30% of the Capital Commitment and balance at the discretion of the Investment Manager.
Lock In: 24 Months from the final closing

Fund Overview

Motilal Oswal Mutual Fund is a Multi Cap Equity product from Motilal Oswal Flexi Cap Fund Direct-Growth. This fund was established on July 4, 2014, making it 8 and 6 months old. As of September 30, 2022, Motilal Oswal Flexi Cap Fund Direct-Growth has assets under management (AUM) totalling $9,491 Crores, making it a medium-sized fund in its sector. The fund’s cost ratio, which is 0.93%, is greater than what most comparable Multi Cap funds charge.

The 1-year returns for Motilal Oswal Flexi Cap Fund Direct-Growth are -3.91%. It has generated returns of 16.74% on average every year since the start. Every seven years, the fund has quadrupled the amount invested in it.

  • Mr Oswal Motilal The Flexi Cap Fund Direct-Growth plan has a lower return consistency than the majority of funds in its category. In a declining market, it has little power to limit losses.
  • The financial, automotive, energy, consumer discretionary, and healthcare sectors are where the fund has the majority of its investments. Compared to other funds in the category, it has acquired less exposure in the financial and automotive industries.
  • The top 5 holdings of the fund are Reliance Industries Ltd., Maruti Suzuki India Ltd., ICICI Bank Ltd., HDFC Bank Ltd., and TI Financial Holdings Ltd.

The right stock selection can help you create a well-diversified equity portfolio that will help you reach your financial objectives. This is due to the fact that multicap funds invest in equities with a wide range of market caps, allowing them to benefit from opportunities across contexts. Investing in our Motilal Oswal Multicap Fund may benefit from your stock portfolio’s growth potential. This is due to our firm belief in our distinctive investment strategy, “Buy Right: Sit Tight,” which calls for the purchase of high-quality equities with long lifespans and growth potential (QGLP).

Buy Right Stock Characteristics

  • ‘Q’uality denotes the quality of the business and management.
  • ‘G’rowth denotes growth in earnings and sustained RoE.
  • ‘L’ongevity denotes the longevity of the business’s competitive advantage or economic moat.
  • ‘P’rice denotes our approach of buying a good business for a fair price rather than buying a fair business for a good price.

Sit Tight Approach

Buy and Hold: As buy-and-hold investors, we firmly believe that selecting the correct company requires talent. Maintaining these companies so our investors can profit from the development cycle requires even greater skill.

Focus: Our recommended number of equities for our high-conviction portfolios is 20 to 25. Although we think proper diversity is important, excessive diversification reduces investment returns and increases market risk.

The virtue of Long-Term Investing

To make money in stocks, you must have –

  • The Vision to see them
  • The Courage to buy them
  • The Patience to hold them

Patience is the rarest of the three.

Investment Strategy

  • Spend in businesses with solid QGLP and be willing to invest up to 20% of your capital in further bottom-up stock possibilities.
  • When submitting the DRHP, invest in early-stage firms before they become public. Close to their IPO, use anchor allocation.
  • Utilize your bargain sourcing skills MOPE

Tax Update

  • The NAV is continuously adjusted for taxes on realised and unrealized profits. It is a post-tax, post-management fee NAV as a result.
  • The trust, acting as the investor’s representative assessee, pays tax.
  • Investors do not have to pay additional tax individually since the fund will pay the tax on their behalf.
  • This is accurate for local individual investors. Investors with various legal entities want to speak with their tax advisors.
  • The investor does not obtain a TDS certificate for the Cat III fund.
  • Following the conclusion of the audit for the pertinent financial year, the fund distributes a tax letter.

About Fund Manager

Mr. Manish Sonthalia

manish sonthalia

Since its establishment, Manish has been overseeing the Strategy and acting as the Director of the Motilal Oswal India Fund, Mauritius. He has worked at Motilal Oswal PMS for more than 14 years and has over 25 years of expertise in equities research and fund management. He has overseen the management of different PMS strategies and AIFs at MOAMC and served as the foundational pillar of the PMS investing process. Manish has many postgraduate degrees, such as an MBA in Finance, an FCA, a CS (Company Secretary), and a cost and works accounting (CWA).

Investment Frameworks

Value Migration

  • Transfer financial and shareholder value from ineffective company models to more effective ones that better meet consumer needs.
  • Jewellery, Wedding Garment: Migration from Unorganized to Organized 
  • FMCG: Shift towards traditional/herbal players (customer preference)
  • Telecom: Disruption by new players (voice to data)

Trillion Dollar

  • Linear growth in the GDP = Exponential growth in opportunities
  • Key drivers – Middle and High Segment Expansion, Rising per capita income fuelling consumption growth exponentially, Govt. capex (e.g. PLIs) can have a multiplier effect on other sectors

Disruption

  • Modern technological startups are competing with established companies

Examples – Renewable energy changing the dynamics of the power industry, EV journey in the Auto sector, rise in On the back of food delivery services, Cloud Kitchen is set up.

Value Migration Drivers

New Business Models Emerge on Back of Shift in Economic Landscape.

  • Technology
  • Lower switching cost
  • Cost
  • Easier Access to Funding
  • Innovation
  • Convenience

Value migration occurs when there is a disconnect between customer priorities & existing business designs

Intercountry migration

  • Interindustry migration in the same country
  • Inter-company migration in the same industry
  • One segment to another in the same company

Top 10 Holdings:

  • HDFC Bank Ltd.
  • Infosys Ltd. 
  • Axis Bank Ltd. 
  • Housing Development Finance Corporation Ltd.
  • Larsen & Toubro Ltd. 
  • RBL Bank Ltd. 
  • Maruti Suzuki India Ltd.
  • IndusInd Bank Ltd.
  • Bajaj Finance Ltd.
  • Tata Consultancy Services Ltd. 

The Trillion Dollar Plan

Today’s India: More Aspirational in its Consumption Pattern

Income Growth

  • Middle and High Segment Expansion
  • Reduction of Poverty
  • Consumption Growth and Composition

Urbanization

  • Steady and Dispersed Urbanization
  • Breakdown of UrbanRural divide

Favourable Demographics

  • Working age Majority
  • Millennials and Gen Z

Technology and Innovation

  • Existing Technology Backbone
  • New Technology and Business Model Innovations

Evolving Consumer attitudes: Income, Demographics, Technology adoption led preferences

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.