Asset Management FAQs

Motilal Oswal MOSt Shares M50 ETF (MOSt Shares M50) is an open ended fundamentally weighted ETF that seeks investment return that corresponds (before fees and expenses) to the performance of the MOSt 50 Basket, subject to tracking error. It’s first of its kind of ETF in India that combines the benefits of fundamentals based investing and rational execution. It also combines the benefit of mutual fund scheme with convenience of trading like a share.

MOSt Shares M50 is listed on the capital market segment of NSE and will trade like any other share. Investors can buy & sell the units of the Scheme at the prevailing price on NSE, which though a function of demand & supply, will be around the NAV of underlying MOSt Shares M50 portfolio. The indicative intra day real time NAV of MOSt Shares M50 will be displayed on AMC’s website.

1.  A mutual fund scheme with the convenience of trading like a share.

2.  Lower fees and expenses.

3.  Combines the benefit of fundaments based investing and rational execution.

4.  Owning a diversified portfolio of top 50 stocks at low investment amount.

5.  Better transparency with daily portfolio disclosure.

MOSt Shares M50 is listed on NSE and investors can buy or sell MOSt Shares M50 from NSE through their trading accounts with their brokers/sub-brokers at prices quoted on NSE.

The Large Investors can subscribe/redeem directly with the Fund only in creation unit size i.e. 50,000 units.

MOSt Shares Midcap 100 is an open ended index ETF that seeks investment return that corresponds (before fees and expenses) to the performance of CNX Midcap Index, subject to tracking error.

 The Scheme will invest in the securities which are constituents of CNX Midcap Index in the same proportion as in the Index.

CNX Midcap Index is formulated by India Index Services & Products Limited (IISL), a joint venture between NSE and CRISIL Ltd. It comprises 100 Midcap stocks with their weightage in index being determined based on their free float market capitalisation. 

 The primary objective of the CNX Midcap Index is to capture the movement and be a benchmark of the midcap segment of the market.

MOSt Shares Midcap 100 is listed on the capital market segment of NSE and will trade like any other share. Investors can buy & sell the units of the Scheme at the prevailing price on NSE. The price on NSE though a function of demand & supply is expected to be around the NAV of the scheme. The indicative intra-day real time NAV of MOSt Shares Midcap 100 will be displayed on AMC’s website (www.motilaloswal.com/assetmanagement and www.mostshares.com).

End of the day NAV of MOSt Shares Midcap 100 will also be published daily at the end of day before 9 p.m. on AMFI website i.e. www.amfiindia.com

1. A mutual fund scheme with the convenience of trading like a share.

2. Low fees and expenses.

3. Owning a diversified portfolio of 100 midcap stocks at low investment amount.

4. Better transparency with daily portfolio disclosure.

MOSt Shares Midcap 100 is listed on NSE and investors can buy or sell MOSt Shares Midcap 100 from NSE through their trading accounts with their brokers/sub-brokers at prices quoted on NSE.

The Large Investors can subscribe/redeem directly with the Fund only in creation unit size i.e. 2,50,000 units.

Motilal Oswal MOSt Shares NASDAQ-100 ETF, (MOSt Shares NASDAQ 100) is an open ended Index Exchange Traded Fund that seeks investment return that corresponds (before fees and expenses) generally to the performance of the NASDAQ-100 Index, subject to tracking error. The Scheme will invest in the securities which are constituents of NASDAQ–100 Index in the same proportion as in the Index.

The NASDAQ-100 is an index of 100 of the largest (by market capitalization) non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. The companies’ weights in the index are based on their market capitalizations, with certain rules capping the influence of the largest components. It does not contain financial companies, and also includes companies incorporated outside the United States.

The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. It is the largest electronic screen-based equity securities trading market in the United States and second largest by market capitalization in the world. The NASDAQ has more trading volume than any other electronic stock exchange in the world. When the NASDAQ stock exchange began trading on February 8, 1971, it was the world’s first electronic stock market (Source: NASDAQ Website).

MOSt Shares NASDAQ 100 is listed on the capital market segment of NSE and BSE and will trade like any share. Investors can buy & sell the units of the Scheme at the prevailing price on NSE and BSE, which though a function of demand & supply, will be around the NAV of underlying MOSt Shares NASDAQ 100 portfolio. The indicative intra-day real time NAV of MOSt Shares NASDAQ 100 will be displayed on AMC’s websites (www.motilaloswal.com/assetmanagement and www.mostshares.com). End of the day NAV of MOSt Shares NASDAQ 100 will also be published daily at the end of day before 9 p.m. on AMFI website i.e. www.amfiindia.com

1. A mutual fund scheme with the convenience of trading like a share.

2. Low fees and expenses.

3. Owning a diversified portfolio of 100 of the largest (by market capitalization) non financial companies listed on NASDAQ at low investment amount.

4. Exposure to basket of securities which has Low correlation with Nifty (0.29) and Sensex   (0.29). Source: NASDAQ OMX and Factset Research Systems Inc.

5. Better transparency with daily portfolio disclosure.

MOSt Shares NASDAQ 100 is listed on NSE and BSE and investors can buy or sell MOSt Shares NASDAQ 100 from NSE or BSE through their trading accounts with their brokers/sub-brokers at prices quoted on NSE or BSE. The Large Investors can subscribe/redeem directly with the Fund only in creation unit size i.e. 100,000 units.

MOSt Gold Shares is India’s First Gold ETF to offer pure imported gold at a price lower than other options in the market by redeeming ETF units for physical gold bars as low as 10gms across 22 cities in India.

The performance of the fund will be benchmarked to the Indian Spot Gold Price. However, the performance of fund may differ from that of the underlying index due to tracking error.

1.     For the 1st time ever, directly buy from AMC in 10 gram lots    OR Buy Gold ETFs from stock  exchange terminal (1 gm i.e. 1 unit or higher)

2.    For the 1st time ever, redeem ETF Units for physical Gold bars as low as 10gms

3.    Get pure imported gold- fineness or purity of 99.5% or higher

4.    At a price lower than other options in the market

5.    Delivery centers across 22 cities in India

6.    Pass through price benefit to consumers!!!

7.    No entry & exit load

8.    No storage & security issues for investors

9.    Units of MOSt Gold Shares will not be liable for wealth tax unlike physical gold 

The units of the Scheme will be listed on both NSE & BSE. Investors can buy/sell the scheme units through their trading accounts with their broker/sub-brokers at the price quoted on stock exchanges. The minimum number of units that can be bought or sold is one unit.

The units of the scheme can also be directly bought/sold with Mutual Fund in creation unit lot of 10 units (10 grams) and multiples of 10 units (10 grams) thereof.

Short term funds primarily deliver returns due to current tightness in the liquidity. Short term instruments generally react due to liquidity considerations ie when the liquidity is tight, short term yields rise and vice versa.

They are meant for investors with shorter investment horizon.

On the contrary, Gsec funds with relatively longer duration provide investors an opportunity to play on the interest rate cycle with no default risk.

1. Inflation

2. Fiscal Deficit

3. GDP

4. Currency situation

5. Commodity prices

6. Investment outlook

7. Monetary policy

Interest rate & bond price have inverse relationship ie if the interest rate moves up, bond price depreciates & vice versa impacting the returns.

While there is no evident default risk, adverse interest movements can potentially lead to erosion of capital.

In case of long-term capital gains, the tax liability is computed using two methods i.e. with indexation (charged at 20% plus surcharge) and without indexation (charged at 10% plus surcharge); the tax liability will be the lower of the two.

Simply put, indexation means adjusting the cost of the capital asset (in this case a mutual fund), by incorporating the impact of inflation during the period of holding i.e. the period between the purchase date and the date of transfer/sale. An example will help us better understand the same.

Say an investor Mr. A purchases units of Gilt Fund on April 1, 2010; he buys 1,000 units at Rs 10.00 each. He decides to sell his entire holding on April 1, 2011; on the date of sale, the net asset value (NAV) of each unit is Rs 10.90.  While computing his tax-liability, Mr. A needs to compute the gains using both the methods i.e. with indexation and without indexation. In the latter, the capital gains amount to Rs 900 (Rs 10,900 less Rs 10,000).

Conversely, for computing the capital gains taking into account the indexation benefits, the Cost Inflation Index (CII) needs to be factored in. The CII for the year of purchase i.e. 2010 is 730, while that for the year of sale i.e. 2011 is 785.

The indexed cost of purchase is computed as follows:

(Cost of purchase X CII - year of sale) / (CII - year of purchase)

Howindexation works

Ascan be seen in the table above, t he capital gains, after factoringin indexation amounts to Rs 146 vis-vis Rs 900 without indexation.The tax liability would be the lower of Rs 29.3 (with indexation)than Rs 90 (Without indexation)

 The Total Expense Ratio (TER) of the fund is 0.99% p.a.

  Entry load - Nil

  Exit load - 0.50% applicable if redeemed within 6 months from the date of investment/allotment of units.

There are many benefits of availing Portfolio Management Services. Some of them are:

1)  India’s leading PMS Service Providers, with Assets under Management of over Rs.1300 crores as on 31st May 2012.

2)  Value is the single biggest discretionary PMS strategy in the country with AUM of over Rs.  1000 crores   as on 31^st May 2012 clearly showing client’s trust in our product’s performance & services.

3)  Our Flagship “Value Strategy” has consistently outperformed the benchmark across market cycles over a 9 year period.

4)  Motilal Oswal PMS   has one of the largest  active customer base of 5000+ on PMS Platform as on 31^st May 2012 clearing showing strong trust developed with customers.

5)  *1 crore invested in Value PMS in March 2003  is worth Rs. 10.03 crores as on 31^st  March 2012 v/s. just 5.24 crores if it would have been invested in NIFTY.

6)  MO PMS has active clients in 138 different cities right from Agra to Vijayawada; a testimony of strong acceptance of our PMS across the length & breadth of the country.

Value Strategy’s performance is rated by international ly reputed agency Morningstar every quarter

You can open a PMS account with us, if you are:

• An Individual

• A Hindu Undivided Families

• An Association of Persons 

• A Limited Companies 

•       An NRI, overseas company, firm, society or an overseas trust (subject to RBI approval) 

Yes, you can open a PMS account with a combination of cash and stocks. The initial portfolio of securities/ shares will be re-aligned as per the model portfolio.

The Portfolio Management Scheme is open for all Indian nationals, resident or otherwise. NRIs will have to open a PIS Account as required under RBI guidelines in order to invest in the PMS scheme.

You can use your current securities / shares to make investment in PMS Account, but these will have to be liquidated and the sale amount should be minimum Rs 25, 00, 000.

Your PMS account will activate only after you deposit a minimum of Rs 25 lacs in the account (combination of cash and stocks). To put in money, you can use one of the following ways:  

1.   Cheque Cheques will in the name of Motilal Oswal Asset Management Company Ltd. – PMS for all strategies. The strategy names will not be required to be mentioned on the cheques

2.    Bank Transfer   If you have banking facilities you can transfer funds in Indian Rupees to your PMS account by online transfer (RTGS/NEFT) or wire transfer. 

You can give minimum Rs. 50,000 as a Top Up (additional investment) in any of your strategy accounts in multiples of Rs. 5,000.

For instance, upon opening of your account, you had initially invested Rs 50 lacs in Motilal Oswal AMC PMS and now you wish to increase your investment size in it, the additional amount:   

(1) Should be minimum of Rs 50,000;

(2) Should be in multiples of Rs. 5,000.

In our PMS, we understand that you have given us your hard earned money and therefore we ensure that we answer your every query. You can anytime request for an appointment/call and we will arrange a meeting /call with the fund management/Investment advisory team for discussion about portfolio spread and returns or any other query you may have regarding your portfolio.

Since we offer only discretionary portfolio management service, the discretion to invest primarily lies with the portfolio manager.  However at the time of giving us the portfolio you can give us list of securities, sectors which you do not/cannot invest in your portfolio due to reasons like conflict of interests, religious beliefs etc and we will take care of your need.

Motilal Oswal Asset Management Company Ltd PMS is a discretionary service wherein the portfolio manager manages your portfolio without having to bother you with the day to day decisions. The portfolio manager takes all the investment decisions on your behalf.

However, we do a comprehensive reporting to maintain complete transparency in managing your portfolio. You will receive regular updates and a detailed report on your portfolio, allowing you to track its activity and performance.

As a part of our service offering and in an endeavor to provide complete transparency of the dealings in the clients PMS account, the following reports are emailed to the clients to their registered email id/ mailed to the correspondence address, which will enable the clients to track their portfolios. The reports are emailed on every month-end and quarter-end basis before the 10th of the next month.

• Account Performance Statement
• Holding Statement
• Transaction Statement
• Capital Movement Statement
• Corporate Action Statement
• Debit Note
• Client Information
• Taxable Gain/Loss statement   

Clients are provided with a login id and password which will enable 24*7 access to the details of the investments on click of a button. 

Hard copy of the Account statement will be sent to the end-clients every six months.

Audited reports certified by a CA will be sent to all clients annually after March-yearend audit is completed.

We provide each client an audited tax statement of his portfolio annually. This can be used for calculating your tax liability and henceforth filing returns. However, we advice all our clients to consult their tax consultant before filing of their tax returns.