Motilal Oswal AMC Logo

MOTILAL OSWAL Next Trillion Dollar Opportunity (NTDOP)


Motilal Oswal AMC Logo

MOTILAL OSWAL Next Trillion Dollar Opportunity (NTDOP)

KEY PORTFOLIO ATTRIBUTES #

Year of Inception 03-Aug-2007
Number of Stocks 30
Alpha (1Y) -21.85%
Beta (1Y) 0.75

About MOTILAL OSWAL Asset Management

Motilal Oswal Asset Management Company Ltd. is promoted by Motilal Oswal Financial Services Limited (MOFSL). Lead by one of the most well-known investors in India Mr. Raamdeo Agrawal, Motilal Oswal AMC is almost synonymous with philosophy based investing – its flagship philosophy “Quality Growth Longevity and Price” ( QGLP ) and “Buy Right and Sit Tight” which have popularized well researched investing.

Key People

Raamdeo Agrawal
Raamdeo Agrawal Chairman
Prateek Agrawal
Prateek Agrawal Executive Director
Manish Sonthalia
Manish Sonthalia Executive Director & CIO

Investment Objective

Motilal Oswal’s Next Trillion Dollar Opportunity (NTDOP) PMS aims to deliver superior returns by investing in different multi-cap stocks of companies from sectors that can benefit from the Next Trillion-Dollar GDP growth.

It aims to invest in stocks across market capitalisation with a focus on identifying potential winners that would participate in successive phases of GDP growth.

Investment Strategy

NTDOP Portfolio Management Service of Motilal Oswal invests in companies which are likely to earn 20-25 % on its net worth going forward. Motilal Oswal PMS invests with margin of safety and purchases a piece of great business at a fraction of its true value. NTDOP stands for Next Trillion Dollar GDP growth.

The strategy has the mandate to invest in Equity and Equity-related instruments across the entire market capitalization spectrum of Large cap, Midcap and Small cap companies.

But the focus is on buying companies that will benefit out of the Next Trillion Dollar GDP growth. Motilal Oswal identifies potential long-term wealth creators by focusing on individual companies and their management.

It strongly believes that “Money is made by investing for the long term”. It follows a Focused portfolio strategy and the portfolio consists of up to 25 stocks.

In his words of Mr. Manish Sonthalia, Head of PMS, at Motilal Oswal Asset Management during a Webinar organised by PMS AIF WORLD on 13th Sep, 2019, Motilal Next Trillion Dollar Opportunities Portfolio (NTDOP) is a stable portfolio of unleveraged businesses. Mr. Manish Sonthalia, mentioned, “Our philosophy is to play on operating leverage”. Portfolio comprises of good businesses.

Businesses do not travel in a straight line; one has to take a long-term view. Buying decent businesses and holding on to them for long term is what we believe in.

It is more about longevity of growth; the terminal value of business and not 1 or 2 years of growth. Expected earnings growth of companies in NTDOP PMS can be seen in the vicinity of 18-20%. For Q1, 2019, earnings growth of NTDOP portfolio was at 12% but Nifty’s earnings were at 2%. Outlook for next 6-9 months looks hazy. NTDOP Portfolio earnings growth would be better than market’s earnings growth.

• Focus on return on net worth – Companies which are likely to earn 20-25 % on its net worth going forward.

• Margin of safety – To purchase a piece of great business at a fraction of its true value.

• Focus on Next Trillion Dollar GDP growth

• The focus is on buying companies that will benefit out of the Next Trillion Dollar GDP growth.

• Buying stable earnings / cash flows in reasonably priced assets

• Long-term investment view – Strongly believe that “Money is made by investing for the long term”

• Bottom up approach – To identify potential long-term wealth creators by focusing on individual companies and their management bandwidth.

• Focused strategy construct – The portfolio consists of 25 stocks

Investment Philosophy

Investment philosophy is centered on ‘Buy Right: Sit Tight‘ principle.

Q-G-L-P Demystified

Motilal Oswal’s Next Trillion Dollar Opportunity (NTDOP) PMS follows the ‘Buy Right & Sit Tight’ policy, predominantly to invest in small & Mid Cap with focus on potential winners. Focus on sectors & Companies which promise a higher-than-average Growth by focusing on QGLP (Quality, Growth, Longevity, and Price).

• Buy Right is represented by – (QLGP)
“Q” denotes the quality of the business and management
“G” denotes growth in earnings and sustained RoE
“L” denotes longevity of the competitive advantage or economic moat of the business
“P” denotes our approach of buying a good business for a fair price rather than buying a fair business for a good price

• Sit Tight
Buy and Hold: Strictly buy and hold and believe that picking the right business needs skill and holding onto these businesses to enable investors to benefit from the entire growth cycle needs even more skill.
Focus: High conviction portfolios with 25 to 30 stocks being our ideal number. We believe in adequate diversification but over-diversification results in diluting returns and add market risk.

Why ‘Buy Right, Sit Tight’ is significant?

• Real wealth is created by riding out bulk of the growth curve of quality companies and not by trading in and out in response to buy, sell and hold recommendations.

• This philosophy enables investor and manager alike to keep focus on the businesses they are holding rather than get distracted by movements in share prices

• An approach of buying high quality stocks and holding them for a long term wealth creation motive, results in drastic reduction of costs for the end investor.

• While BUY RIGHT is largely the role of the portfolio manager, SIT TIGHT calls for involvement from the portfolio manager as well as investor. This brings in greater accountability from the manager and at the same time calls for better involvement and understanding from investor resulting in better education for the latter.

• Long term multiplication of wealth is obtained only by holding on to the winners and deserting the losers.

Wealth Creators – Buy and Hold strategy

• BUY & HOLD strategy, leading low churn, lower costs and enhanced returns

• A business is prudently picked for investment after a thorough study of its underlying hidden long-term potential.

• “We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.” -Warren Buffett

Awards & Achievements - Across Motilal Oswal PMSs & AIFs

• In 2021, Motilal Oswal Next Trillion Dollar Opportunity Portfolio (NTDOP) was awarded Rank #1 as the Best PMS across all categories, on a 10Y Risk-Adjusted Returns. These Awards were hosted by PMS AIF WORLD, in association with IIM-Ahmedabad.

• In 2021, Motilal India Rising India Fund, a Long Only Cat III AIF, was awarded the winner in the Best Long Only Cat III AIF, on 2Y Absolute Returns. These Awards were hosted by PMS AIF WORLD, in association with IIM-Ahmedabad.

• In 2020, Motilal Oswal Next Trillion Dollar Opportunity Portfolio (NTDOP) was awarded Rank #3 as the Best PMS across all categories, on a 10Y Risk-Adjusted Returns. These Awards were hosted by PMS AIF WORLD, in association with IIM-Ahmedabad.

• In 2020, Motilal Oswal Next Trillion Dollar Opportunity Portfolio (NTDOP) was awarded Rank #3 as the Best PMS across all categories, on a 5Y Risk-Adjusted Returns. These Awards were hosted by PMS AIF WORLD, in association with IIM-Ahmedabad.

Performance Table #


Trailing Returns (%) 1m return 3m return 6m return 1y return 2y return 3y return 5y return 10y return Since inception return
Motilal Oswal AMC Next Trillion Dollar Opportunities (NTDOP)-0.24%6.86%13.09%8.07%0.49%16.13%10.01%17.53%14.42%
BSE 500 TRI-2.86%-1.42%10.89%9.63%6.74%22.01%15.34%14.72%11.13%

QRC Report Card *




VIEW DETAILED QUALITY, RISK, CONSISTENCY ANALYSIS

Portfolio Holdings


Holding %
Piramal Enterprises Limited 5.60
ZOMATO LTD 5.50
BSE Limited 4.90
IndusInd Bank Ltd. 4.50
ITC Ltd. 4.30
IDFC FIRST BANK LIMITED 4.30
ONE 97 COMMUNICATIONS LTD 4.20
ANGEL ONE LTD 4.20
DEEPAK NITRITE LTD 3.80
Larsen & Toubro Ltd. 3.60
Top 10 Equity Holdings 44.70

Sector Allocation


Holding %
Banks 25.70
IT - Software 7.60
Pharmaceuticals & Biotechnology 7.10
IT - Services 6.50
Textiles & Apparels 6.40
Industrial Products 5.70
Automobiles 5.30
Consumer Durables 4.60
Insurance 4.50
Diversified FMCG 4.50

Market Cap Allocation


Allocations %
Large Cap 36
Mid Cap 43
Small Cap 20
Cash 1

Do Not Simply Invest, Make Informed Decisions

WISH TO MAKE INFORMED INVESTMENTS FOR LONG TERM WEALTH CREATION

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Disclaimer

#Returns as of 31 Oct 2023. Returns up to 1 Year are absolute, above 1 Year are CAGR.

*QRC Report Card data is updated quarterly. Current data is as of Sep 23.


Do Not Simply Invest, Make Informed Decisions

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