This document summarizes a capital protection fund that aims to protect investors' principal through a mix of debt and equity investments. The fund manager invests 70-80% of funds in AAA-rated bonds to provide capital protection. The remaining 20-30% is invested in equities to generate returns. This strategy aims to offer downside protection of principal through debt investments while providing upside potential from equity investments. The fund has a fixed duration of 3 years, after which investors' original capital is guaranteed to be returned. The document compares the capital protection fund to fixed deposits and direct equity investments, arguing it provides better risk-adjusted returns than both over a 3-year time horizon.

1.  Focused Fund 1
CAPITALPROTECTED FUND

2. CapitalProtectionFund
2
• This is a fund wherein a fund manager’s major focus is to protect the capital of an
investor. Hence, it is known as Capital Protection Fund.
• It is a closed ended Fund, which comes with duration - post completion of closed end
duration, it automatically expires and investor gets the money as per the current value
of the investment.

3. 3
How itFunctions?
• Here, the fund manager invests major portion of investment in Debt market (approx.
70% - 80%) and remaining is invested in Equity.
• This 70% - 80% is invested in AAA rated bonds and can be kept on hold for the desired
period, so that it converts to 100% and remaining portion is invested in equity, which
in return generates income for the fund.

4. 4
Example
• If a fund manager has Rs.1000 in the NFO of 3 years capital protection fund, he will
invest Rs.800 in AAA bonds for 3 years, so that it converts to Rs.1000 after 3 years. The
remaining Rs.200 can be invested in equity and whatever returns are generated will be
the returns of the fund. Even if the equity market doesn’t perform, the investor will not
lose his capital, as it is gets covered through Debt market exposure.
Please have a look at CAP-PRO calculator

5. 5
How a CAP-PROis betterthan Equity?
• Equity is always a best investment asset for long run, but for a period of 3 years, it is too
volatile.
• Here’s when CAP-PRO comes into the picture, which clarifies Debt & Equity. It is not as
volatile as equity and loosening of capital is NIL in this fund, however if equity market
performs well, it gets the benefit of it, as it has approx. 30% equity exposure.

6. 6
How a CAP-PROis better than Fixed Deposit?
• Even though FD has a fixed interest rate, CAP-PRO has the potential to earn higher
return with least risk of capital loss. Hence, CAP-PRO is anytime better than FD.
• The taxation part supports CAP-PRO vis-a-vis FD.
• In FD, the taxation is as per the tax slab of investor, however in CAP-PRO, maximum tax
an investor should pay is 10%, if the tenure of 5 years in CAP-PRO, the returns is tax free
because of indexation benefit.

7. 7
Above example proves how a CAPPRO is more beneficial than FD.
Calculation &Comparison of returnsgenerated by 3years CAP-PRO
CAP-PRO Fixed Deposit
A Purchase Price 100,000.00 100,000.00
B % returns 9.30% 9.00%
C Maturity Amount 129,502.90 129,502.90
H Tax 2,357 9,574
I Post Tax Gains = D-H 27,145.97 19,929.21
J
Post Tax Annualized
Returns = (I/A) * no.
of years
9.05% 6.64%

8. CombinedComparisonof CAP-PRO,Equity & FD
8
Market Cap
range in Cr.
% of
Investment
Investment
Amount
Expected
Returns
Market Value
after 3 years
Post Tax
returns
Returns
CAPPRO
3 years CAP-PRO At least 65%
100,000 9% 131,420 129,063 9%
Debt Rest 25%
Equity 10%
Equity
3 year returns of
Equity Market
-
100,000 9% 129,503 129,503 9%
Equity 100%
FD
3 years FD -
100,000 9% 129,503 119,829 6.64%
Interest Rate
9%
-

9. Commonsalespitch of CAP-PRO
9
 A product which offers investor to invest in Debt & Equity.
 Most safe fund in Mutual Fund, as it gives capital protection assured.
 Invest 80% in AAA bonds (which are safest product), it will appreciate and convert to Rs.100 -
capital is protected. Another 20% investment in large cap stocks in equity like ITC, Infosys, Tata etc,
its value at the time of maturity will give you the profit.
 In current scenario, Debt market is trading at all time high and equity is at low, which is an ideal
situation to invest in CAP-PRO.
 This is a least volatile fund, so if investors are investing in equity, he/she should invest small
amount of investment to make few part of his/hers portfolio secured.
 If an investor invests in Fixed Deposits and/or bonds, he/she should invest in CAP-PRO, as CAP-PRO
has equity exposure, hence will have better return than FD & Bonds.
 From taxation point of view, CAP-PRO gets the benefit of indexation. However in FD, investor has
to pay as per his/hers tax slab.

10. InvestmentOptions
10
 As it is a closed end fund, SIP is not possible.
 Dividend is taxable as DDT @ 24%. (No advisable to take dividend options in this fund).
 The scheme will be redeemed by default in investors’ account.
CAP-PRO Lumpsum
Growth
Dividend

11. 11
DISCLOSURE
Motilal Oswal Securities Ltd. (MOSL) Member of NSE, BSE & MSEI - CIN no.:
U65990MH1994PLC079418
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot,
Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence
Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West),
Mumbai- 400 064. Tel No: 022 3080 1000. Registration Nos.: NSE (Cash): INB231041238; NSE (F&O):
INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE (F&O): INF011041257; BSE
(CD); MSEI (Cash): INB261041231; MSEI (F&O): INF261041231; MSEI (CD): INE261041231; CDSL: IN-
DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397.
Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670);
PMS & Mutual Funds are offered through MOAMC which is group company of MOSL. Motilal Oswal
Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through
MOWML which is a group company of MOSL. Motilal Oswal Securities Ltd is a distributor of Mutual
Fund & IPOs. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully
before investing. Investment in Securities is subject to market risk and there is no assurance or
guarantee of the returns.
Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com , Contact
No.:022-30801085