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FEBRUARY 2018
CANARA ROBECO F.O.R.C.E. FUND
*Investors should consult their financial advisers if in doubt about whether the product is suitable
This product is suitable for investors who are seeking*
• Capital appreciation over long term• Investing in equity and equity related securities of companies in the Finance, Retail &Entertainment sectors
Canara Robeco F.O.R.C.E. FundFINANCIAL OPPORTUNITIES RETAIL CONSUMPTION ENTERTAINMENT
An Open Ended Equity Scheme
F.O.R.C.E.- A theme Risk-Return Matrix India Growth Story F.O.R.C.E.- Brief
Canara Robeco F.O.R.C.E. Fund Investment Strategy Portfolio Performance
Why Canara Robeco F.O.R.C.E. Fund
Product Positioning
Fund Facts
CONTENTS
RISK REWARD MATRIX
Thematic Funds have high risk as well reward opportunity in comparison to other categories
Balanced Fund
Thematic Funds
Mid & Small Cap Funds
Large Cap Fund
Index Funds
RETURN
VO
LATI
LITY
Broad gamut to operatewith and invest in stocksrelated to particular theme
higher risk and volatility ascompared to other category
LOW MEDIUM HIGH
Diversified Funds/ Multi Cap Funds/ ELSS
INDIA GROWTH STORY
Consumption
Infrastructure
Banking &
Financial Services
CREATES PLATFORM FOR SUPPLY
CREATES CONSUMPTION DEMAND
SAVINGS TO INVESTMENT
INVESTMENT FINANCE
Job Creation
INDIA CONSUMPTION STORY
FINANCIAL SERVICES RETAIL CONSUMPTION MEDIA & ENTERTAINMENT
Financial Opportunities, Retail Consumption & Entertainment F.O.R.C.E
CHANGING NEEDS OF CONSUMERS
FIRST WAS… THEN CAME… GOING FORWARD…
F.O.R.C.E
FOOD, GROCERIES,CLOTHING, HEALTHCARE
AUTOMOBILES, TELECOM,BANKING, HOUSING
FINANCIAL SERVICES, RETAIL, MEDIA & ENTERTAINMENT, LEISURE
FINANCIAL OPPORTUNITIES
FINANCIAL OPPORTUNITY
Banking Services
Brokerage & Distribution
Financing (NBFCs)
Insurance (Life & General)
Asset Management
(MFs)
Investment Banking /
Private Equity / Venture Capital
Investment Universe Expected To widen in the coming years
Likely Future Investment Avenues
India has one of the most developed and regulated financial markets in the developing world
Regulatory supervision, changing investor needs, Integration and reduction in the cost of administration are emerging trends in the financial services industry
RISING INCOME LEVELS – HUGE OPPORTUNITY
Total savings in last 3 years – ~INR 134 tn
Expected Savings in next 3 years –~INR 177 tn
Rapid Growth in Per Capita Income expected
by 203063,460
71,05079,412
86,87993,293
55,00065,00075,00085,00095,000
105,000
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Per capital net National Income at market prices (Rs.)
Currency, 12.49%
Bank deposits, 43.64%
Non-bank deposits,
2.32%
Trade Debt(Net),
0.27%
Life insurance fund, 16.94%
Provident & pension fund,
17.84%
Claims on Govt., 4.17%
Shares & debentures,
2.34%
INDIA'S FINANCIAL SAVINGS
##Source: Motilal Oswal Securities
FINANCIAL SERVICES PENETRATION
RET
AIL
• Retail lending could be a USD 1.2Tn opportunity by 2020E
• NBFCs dominating the retail finance space
• NBFCs finance more than 80% of equipment leasing and hire purchase activities in India H
OU
SIN
G F
INA
NCE
• USD 409Bn opportunity by 2020E; up from ~USD 200Bn in 2015
• Consumer debt levels in India - significantly below those seen in other emerging / developed economies, suggesting secular growth trends banking sector
• Markets still remain underpenetrated (70%+ of households have no liabilities of any sort)
OTH
ER E
MER
GEN
T
• Microfinances and Fin-tech companies may emerge as the Major Players in the financial services industry
Source: Nandan Nilenkani Report; Economic Times
FINANCIAL SERVICES –OPPORTUNITY TO BANK UPON
Source: Nandan Nilenkani Report; Economic Times
INDIA RETAIL STORY
Demographic Dividend Rapid Urbanisation & Rural Expansion
Expanding E-Commerce
Constantly Improving Lifestyle
Younger India – Avg. age 29 years by 2020;
Working age population to rise to 64% by 2020 up from 49% in 2016
E-commerce industry to earn ~70Bn USD by 2020; up from 6Bn USD in 2015
Consumer expenditure to be USD3.6 Tn by 2020 vs USD1.25 Tn in 2015
Policy reforms in place to enhance growth & rural demand
Household consumption (56%) as a % GDP, better than China (36%)
Rising income & demand for quality products to boost consumer exp.
Increasing population & larger work force to help boost consumption.
India expected to be
5th Largest Consumer Market
by 2025
Source: Jubilant Foodworks Annual Report, Nandan Nilenkani Report; Industry reports
INDIAN RETAIL – CURRENT PIE
5th Largest Retail Destination Globally
Emerging as one of the largest sectors in the Indian Economy (Market Value: USD672 Bn)
Around 8,500 supermarkets by 2016 from 500 in 2006
Fuelled primarily by – Changing demographic scenario, increase in number of Working women, prevalence of Nuclear family structure, Easy Availability of Credit & High Exposure to Media & Brands
Market Share: Organized Retail – 8%. Unorganized Retail – 92%. (Huge Opportunity!) This is expected to reduce post implementation of GST
In FDI Confidence Index, Indian Retail market ranks ninth (after United States, China, Canada, Germany, UK, Japan, Australia and France)
India’s net retail sales are quite significant among emerging and developed nations; the country is ranked third (after Chinaand Brazil)
Source: www.ibef.org
ECOMMERCE SET TO GROW
Market size over the past few years (USD Bn)
Retail industry -expected to grow to
USD1.3 Tnby 2020, registering
a CAGR of 7.46%
Source: www.ibef.org
INDIAN CONSUMPTION STORY – OTHER SECTOR
With household televisions increasing from 175mn in 2015 to 181mn in 2016
India is estimated to be the second largest television market, globally in 2016
One of the largest broadcasting market in the world with 847 private satellite television channels, 243 FM radio channels and 190 operational community radio networks
Indian Animation & VFX industry expected to grow from USD797 mn in 2015 to USD909 mn in 2016; Expected to reach USD1.68 bn by the end of 2020
Exponential growth to be witness in the Indian Film Industry; expected to grow to USD3.54 bn by 2020
Overall size of the Media & Entertainment industry to increase from USD 20.5 Bn to USD 62.2 Bn.
Higher penetration and a rapidly growing young population coupled with increased usage of 3G, 4G and portable devices would augment demand
Source: Nasscom; www.ibef.org
INDIA MEDIA & ENTERTAINMENT SECTOR
Television accounts for 46.92% of revenue in 2016;expected to grow further to 48.56% by 2020
Television, print and films together are likely to account for 82.2% of market share in 2016, in value terms
With the advancement of Technology & Digitization, going ahead, Digital Advertisement is expected to be the ‘NEXT BIG THING’ in the Media sector
Source: www.ibef.org
KEY TRENDS IN MEDIA & ENTERTAINMENT
Themes Our View
Financial Services
Biggest beneficiaries of Investment cycle turning around
Stress in banking sector is expected to bottom out
Traction still remaining in NBFC space & Private Banks
Media & Entertainment
Digitization remains a strong theme as there has been a steady growth in subscribers
Increasing digitization will help increase Mobile phone and Internet penetration and thereby help
media companies grow
Economic revival would led to Advertisement revenue growth for media companies
Retail Consumption
Favourable demographics for consumption growth – High proportion of young & working
population
Over the last few years’ consumer spend has been largely driven by rural demand with rising
income levels and increasing penetration
With expected economic revival, discretionary spending would further increase
CANARA ROBECO FORCE - HIGHLIGHT
India Growth Story to benefit Designed to benefit from demographic advantage of “Young India” for the next decade and
participating in the changing consumption pattern emerging out of rising middle class and urbanization.
Theme to Bank upon Macro-economic fundamentals are nearly stable; Banks & Financial Sector are poised perfectly for a multi fold jump &
any improvement in economic fundamentals is likely to benefit this sector.
The Government is believed to be committed towards boosting growth. This will help to increase Financial Savings ofindividuals & thereby help to increase Consumer Spending, thereby, benefitting both Financials & Consumption sector
Fund predominantly invests in 3 sectors benefitting from the demographic dividend
Fund also looks for opportunity to invest in few other companies which benefit from this theme
Sector Allocation Range (%)
Financial Services 40 – 65
Retail Consumption 10 – 25
Media & Entertainment 15 – 35
PORTFOLIO SNAPSHOT
Asset Allocation
Top 5 Sector break up (% to NAV)Top 10 Holdings Industry Classification % of Net Assets
HDFC Bank Ltd Banks 7.99%
ICICI Bank Ltd Banks 7.16%
Zee Entertainment Enterprises Ltd
Media & Entertainment 6.67%
Housing Development Finance Corporation Ltd
Finance 5.56%
Kotak Mahindra Bank Ltd Banks 4.43%
Avenue Supermarts Ltd Retailing 4.32%
Jubilant Foodworks Ltd Consumer Non Durables 3.97%
Bajaj Finserv Ltd Finance 3.97%
Hindustan Unilever Ltd Consumer Non Durables 3.95%
ITC Ltd Consumer Non Durables 3.74%
A concentrated portfolio with 30 stocks Top 3 sectors: 62.82% Top 5 Sectors: 83.71% Top 10 Stocks: 51.76%
Data as on 28th Feb’18
0% 10% 20% 30%
Retailing | 5.77%
Media & Entertainment | 15.12%
Finance | 16.38%
Consumer Non Durables | 23.13%
Banks | 23.31%
Equities I 94.8%
Money MarketInstruments I6.12%
Others I -0.92%
PORTFOLIO SNAPSHOT
Market Capitalisation (%)
Data as on 28th Feb’18
Investment Style
Quantitative Information
Criteria Values
Standard Deviation 16.18
Portfolio Beta 1.05
Portfolio Turnover Ratio 0.39 times
R-Squared 0.79
Sharpe Ratio 0.32
Key Highlights
Emphasis on tactical ideas to benefit from market developments
Fund invests in companies which have potential for growth
73.18%
19.48%
2.20%5.14% Large Cap
Mid Cap
Small Cap
Debt, Cash &Others
Growth Blend Value
Large Cap Mid Cap Small Cap
Diversified Thematic Sector
PERFORMANCE AT A GLANCE
Canara Robeco FORCE Fund: Rs.35,920 on an investment of Rs.10,000 since inception
The past performance may or may not be sustained in the future. Returns are based on growth NAV and are calculated on compounded annualized basis for a period of more than (orequal to) a year and absolute basis for a period less than a year. Inception Date: September 14, 2009. Different plans have a different expense structure. The performance detailsprovided herein are of Regular Plan. The current fund manager Mr. Ravi Gopalakrishnan is managing the scheme since 01-Oct-17. Performance as on 28th Feb'18.
Period
Returns (%) Current Value of Standard Investment of
Rs.10,000 in the
SchemeNifty 50 TRI
# S&P BSE Sensex
TRI ## Scheme Nifty 50 TRI #
S&P BSE Sensex TRI ##
Last 1 Year 21.15% 19.75% 20.46% 12,115 11,975 12,046
Last 3 Years 11.54% 7.21% 6.85% 13,885 12,327 12,204
Last 5 Years 19.12% 14.41% 14.28% 23,995 19,609 19,496
Since Inception (CAGR) 16.31% 10.15% 13.90% 35,920 29,860 30,080
#Scheme Benchmark , ##Additional Benchmark . Load is not taken into consideration for computation of returns. Returns of dividend option under the scheme for the investor would be net of distributiontax as applicable. The performance of other funds managed by fund manager of Canara Robeco FORCE Fund is on the slide number 26
PERFORMANCE AT A GLANCE - SIP
Investment date is taken to be 1st of the month or subsequent day if 1st is a holiday and investment of Rs.10,000 is taken. Returns are as on 28th Feb’18 and are CAGR. The calculations are based on theregular growth plan NAVs. Past performance may or may not be sustained in the future. Scheme Benchmark# , Additional benchmark##. Inception Date: September 14, 2009
Canara Robeco FORCE Fund has outperformed the benchmark & S&P BSE SENSEX TRI over long term
Canara Robeco FORCE Fund 1 year 3 years 5 years Since Inception
Total Amt invested (INR) 1,20,000 3,60,000 6,00,000 10,20,000
Market Value (INR) 1,26,902 4,60,101 9,58,133 21,43,738
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1 Year 3 Years 5 Years Since InceptionCanara Robeco F.O.R.C.E. Fund Nifty 50 TRI # S&P BSE Sensex TRI ##
PRODUCT POSITIONING
CR Emerging Equities
CR Infrastructure
CR Equity TaxSaver
Large Cap
Diversified
Mid & Small Cap
Thematic Fund
ELSS
SATE
LITE
PO
RTF
OLI
OCO
RE
PO
RTF
OLI
O
CR Equity Diversified
CR Large Cap +
CR FORCE
NEE
D B
ASE
D
Above positioning is for illustration purpose only
WHY INVEST
Fund being a thematic fund, invests in the niche space and follows a Growth style of investing
Expected turnaround in the economic cycle leading to increase in employment which may boost thediscretionary consumption and benefit the sectors that fund invests in
Banks & Financial Sector are poised perfectly for a multi fold growth and as the fund has maximumallocation to Banking and Financial Services, it could benefit from the opportunity lying ahead in the sector
FUND FACTS
Data as on 28th Feb’18
Fund Category Open Ended Equity Scheme
Investment ObjectiveTo provide long-term capital appreciation by primarily investing in equity and equity related securities of companies in the Finance, Retail & Entertainment sectors.
Inception Date 14-Sep-09
Asset Allocation
Equity related companies in Finance, Retail & Entertainment: 65-100% (Risk Profile - High) Other Equity & related instruments: 0-35% (Risk Profile - High) Domestic Debt & MMI (Including securitised debt up to 10% of net assets): 0-35% (Risk Profile - Low)
Plans/OptionsRegular & Direct Plan:
Options: Growth / Dividend with payout & Reinvestment
Facilities SIP/ SWP/ STP/ Dividend Transfer Facility
Fund Size Rs. 177.94 Crs (Month End AuM)
Load Structure1% - if redeemed/switched out within 1 year from the date of allotment.Nil – if redeemed / switched out after 1 year from the date of allotment.
Benchmark Nifty 50 TRI
Fund Manager Mr. Ravi Gopalakrishnan
Performance of Fund Manager
Data as on 28th Feb’18
The information used towards formulating the outlook have been obtained from sources published by third parties. While suchpublications are believed to be reliable, however, neither the AMC, its officers, the trustees, the Fund nor any of their affiliates orrepresentatives assume any responsibility for the accuracy of such information. CRMF, its sponsors, its trustees, CRAMC, itsemployees, officer, directors, etc assume no financial liability whatsoever to the user of this document. Mutual FundInvestments are subject to market risk. Investors are requested to read the Scheme related documents carefully beforeinvesting.
Mutual Fund investments are subject to market risks, read all Scheme related documents carefully.
DISCLAIMER
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