dsp blackrock us flexible equity fund - nfo presentation

7/31/2019 DSP BlackRock US Flexible Equity Fund - NFO Presentation

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(*The term Flexible in the name of the Scheme signifies that the Investment Manager of the Underlying Fund can

invest either in growth or value investment characteristic securities placing an emphasis as the market outlook warrants.)

NFO Period: July 17, 2012 to July 31, 2012

An Open Ended Fund Of Funds Scheme Investing In a US Equity Fund

*

Call 94 8300 8300 Now!


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2

DSP BlackRock US Flexible* Equity Fund

Accessing one of the Flagship funds of BlackRock in the categorySource: Internal; *AUM as at May 31, 2012. *The term Flexible in the name of the Scheme signies that the Investment Manager of the Underlying Fund can invest ei

in growth or value investment characteristic securities placing an emphasis as the market outlook warrants.

(USD 1.3 billion*)

Indian Investors

BlackRock Global Funds (BGUS Flexible Equity Fund


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Contents

Why US equities?

- Access to the worlds largest equity market

- US Equities are a core component of global equity portfolios/indices

- Amongst the most well diversied markets- Represents numerous global investment themes

- Resilient economy

Why invest now?

- Attractive valuations

- Continued out-performance by US markets in recent times

- Global portfolios are overweight on US equities

- Strong corporate balance sheets

Why DSP BlackRock US Flexible* Equity Fund?

- BGF US Flexible Equity Fund: A portfolio well-positioned

- BlackRock: Worlds Largest Asset Management Company

*The term Flexible in the name of the Scheme signies that the Investment Manager of the Underlying Fund can invest either in growth orvalue investment characteristic securities placing an emphasis as the market outlook warrants.


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Why US equities?


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Access to the largest equity market in the world

Top 10 Equity Markets by Market Capitalization (US$ trillion)

Source: Bloomberg; as at May 31, 2012

US market capitalization is greater than those of the next 6 countries combined

15.7

3.3 3.0 2.9 2.91.8

1.4 1.2 1.1 1.1

0

2

4

6

8

10

12

14

16

18

US Japan UK China Hong Kong Canada France Germany Australia Brazil

USD

trillion


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US Equities are a core component of global equity portfolios/ indices

US Equities have the largest allocation in every major global equity and sector index

US as a % of Global Equity Indices US as a % of Global Sector Indices (S&P Global Indice

Source: Internal, as at May 31, 2012

100

75

50

25

Information

Technology

Healthcare

Consumer

Consumer

Utilities

Industrials

Energy

Financials

Global

Infrastructure

MaterialsSector

Staples

Discretionary

0

MSCIACWI

S&PGlobal1200

FTSEDeveloped

Index

S&PGlobal100

FTSEAllWorldIndex

MSCIWorld

100

75

50

25

0


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US is amongst the most well diversied markets

Source: CLSA Research; as at May 31, 2012

All MSCI industry sectors are well represented in the US market

The top 2 sectors Financials & Technology account for only ~34% of the US equity market

MSCI Wt(%) Energy Materials IndustrialCons.Disc

Cons.Staples

Financial Pharma Tech Telecom Utilities Top 2

US 10.7 3.6 10.1 11.9 11.2 14.0 11.7 20.0 3.2 3.7 34.0

Japan 1.6 6.9 20.8 20.0 6.7 17.4 6.7 12.1 4.4 3.5 40.8

UK 19.5 11.3 6.2 6.2 17.2 17.8 8.8 0.7 7.5 4.9 37.3

China 18.4 5.0 6.7 5.8 5.6 35.2 0.8 7.0 13.3 2.2 53.6

Hong Kong 0.0 0.0 10.9 13.7 0.0 59.8 0.0 1.3 0.5 13.8 73.6

Canada 26.4 19.3 6.0 3.8 3.2 33.7 1.8 1.2 3.3 1.2 60.1

France 12.6 7.3 15.8 13.3 12.3 13.3 12.2 3.1 5.7 4.5 29.0

Germany 0.0 15.9 13.9 18.4 4.3 16.0 12.0 8.7 3.8 7.1 34.4

Australia 6.8 23.9 4.8 1.7 8.9 46.1 3.9 0.4 2.0 1.6 69.9Brazil 18.8 19.9 4.4 3.6 13.1 24.2 0.9 3.5 3.5 8.0 44.1


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Represents numerous global investment themes

US companies have exhibited unparalleled innovation to lead many global trends

Technology

New Media

Global Trend InvestableThemes

CompanyExamples*

New HealthServices

Economic Shift

Lifestyle Shifts

Demographic Shifts

Productivity Enhancement

Niche Growth

Market Theme

Apple Inc.

Google

Microsoft

IBM

Pfizer

Abbot Labs

Johnson & Johnson

Proctor & Gamble

Expedia

NASDAQ

McGraw Hill Companies

General Electric

*Company examples are for illustration purposes only, there is no guarantee that they will form a part of the portfolio of BGF US Flexible Equity Fund


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Resilient economy

US unemployment rate

Signicant decrease in unemployment numbers after each economic slowdown therebyexhibiting economic resilience

Source: ISI. Data through December 2011.

2

4

6

8

10

12

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

(%)


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Reasons to invest in US

equities now


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Attractive valuations

S&P 500 Forward P/E Ratio

S&P500 forward P/E ratio is trading below its the long term averageSource: BofA Merrill Lynch. Data through March 2012. Past Performance may or may not be sustained in future.

ForwardPE

30.0

Average = 16.9x

28.0

26.0

24.0

22.0

20.0

18.0

16.0

14.0

12.0

10.0

Sep/90

Sep/89

Oct/91

Nov/92

Dec/93

Jan/95

Feb/96

Feb/97

Mar/98

Apr/99

May/00

Jun/01

Jun/02

Aug/03

Aug/04

Sep/05

Oct/06

Nov/07

Dec/08

Jan/10

Jan/11

Feb/12


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Most US stocks are currently available at near 30 year low prices*Source: UBS. Data through March 2012. *Forward P/E/ basis. Past Performance may or may not be sustained in future.

Spread between S&P 500 Earnings Yield and 10-Year Yields

2.5

1.5

0.5

-0.5

-1.5

-2.5

-3.5

-4.5

-5.5

-6.5

-7.5

64 67 70 73 76 79 82 85 88 91 94 97 00 03 06 09

Stocks Expensive

Stocks Cheap


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Company*P/E

(Mar 31, 2000)P/E

(May 31, 2012)

Microsoft 57.0 9.7

Hewlett Packard 35.0 8.3

Disney 55.0 16.6

JPMorgan Chase 20.0 9.3

Amgen 60.0 10.0

Exxon Mobil 24.0 10.0

Halliburton 71.0 17.0

Lockheed Martin 18.0 11.5

Medtronic 50.0 11.5

Kimberly-Clark 17.0 18.9

IBM 31.5 14.4

General Electric 30.0 15.8

S&P 500 Index 23.5 13.5

Leading companies with good business fundamentals available at attractive valuations*Company examples are for illustration purposes only, there is no guarantee that they will form a part of the portfolio of BGF US Flexible Equity Fund


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US Markets: Continued out-performance in recent times

Percentage of companies reporting positive EPS surprises by region (4Q11)

Source: FactSet, Bloomberg. Past Performance may or may not be sustained in future.

80%

70%

60%

50%

40%

30%

20%

10%

0%S&P 500 Russell 1000 Russell 2000 Europe ACWI BRIC EM Japan

69% 67%

60%

55% 53% 53%

43%

24%


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Global portfolios are overweight on the US region

Geographic equity preferences of portfolio managers*

Current Next 12-M

US Overweight Overweight

Europe Underweight Underweight

Japan Underweight Underweight

Emerging markets Overweight Overweight

*Source- Bank of America Merrill Lynch Portfolio Managers Survey June 2012


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Strong corporate balance sheets

Free cash ow yields: 1998 vs. Today

9%

7.2%

2.8%

1998 Today

2.3%

7.9%8%

7%

6%

5%

4%

3%

2%

1%

0%

Emerging Markets US

Source: Bloomberg. Today data as at Feb 29, 2012. Indices used are MSCI Emerging Markets Index and MSCI US Index. Past Performance may or may not be sustainedin future. Free Cash Flow Yield is calculated by dividing Free Cash Flow per Share by Current Market Price of each share.


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Strong Corporate balance sheets: Dividends & buybacks hit a record high

Buybacks plus dividends ($bn)

Excess cash in balance sheets has resulted in record buybacks and dividendsSource: Bloomberg. Past Performance may or may not be sustained in future.

145132

144 156 170222

254298

363 372 353324 329 350

491

706

858

1050

761

587652

880

0

200

400

600

800

1,000

1,200

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Calendar Year

USD

bn


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Why DSP BlackRock US

Flexible* Equity Fund?

(*The term Flexible in the name of the Scheme signies that the Investment Manager of the Underlying Fund can invest either in growth or value investment characteristic

securities placing an emphasis as the market outlook warrants)


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BlackRock: Worlds largest Asset Management Company

One of the worlds pre-eminent asset management companies

USD 3.68 trillion assets under management with USD 1.74 trillion in equity assets

Broad product range available through mutual funds, ETFs, commingled funds, and separate accounts

Fiduciary model/culture- no proprietary trading BlackRock Solutions oversees USD 12 trillion in assets

Financial Markets Advisory Group advises public and private financial institutions on key assignments

Dedicated transitions team helps clients change investment exposure, minimizing risk and cost

Global footprint enables a deep understanding of local markets, industries, and regulatory dynamics

24 investment centers worldwide facilitate access to major capital markets

Global trading capabilities enable us to source assets and negotiate favorable terms for investors

Superior insights through access to management and perspective as an investor across the capital structure in thousands

of companies worldwide

Recognized as go to leader in recent credit and liquidity crises

Investment insights gained at a local level & shared globally maximize investment opportunities for clients

Investment platform promotes knowledge sharing across the firm; daily calls connect investment teams, linking the insights

from up to seven trading desks and 79 portfolio teams across asset classes and geographies

Nearly 10,000 employees, including more than 1,600 investment professionals, leverage the firms global resources

Presence in 67 cities across 27 countries provides local experience and global expertise to a diverse client base

Source: Internal, Bloomberg; as at Mar 31, 2012

BGF US Fl ibl E i F d A f li ll i i d


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BGF US Flexible Equity Fund: A portfolio well-positioned

As at March 2012. The sectors discussed should not be considered a solicitation or recommendation by BlackRock and may not be protable. Company examples are for

illustration purposes only, there is no guarantee that they will form a part of the portfolio of BGF US Flexible Equity Fund.

Technology

AccentureDell Computer

Microsoft

Energy

Apache ConocoPhillips

Marathon Petroleum

Cyclical

JPMorgan

Parker Hannifin

Tyco International

Consumer

DISH Network

Macys

Time Warner

Free cash flow

Domestically-sourced earnings

Health care & energy

Adding to consumer discretionary

Dividend yield

Europe-sourced earnings

Financials & utilities

Reducing consumer staples

Health care

Eli LillyMcKesson

UnitedHealth

Defensive

Kroger

Lockheed Martin

Philip Morris International

Overweight Underweight

Areas of focus/interest

BGF US Fl ibl E it F d A ll iti d tf li


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BGF US Flexible Equity Fund: A well-positioned portfolio

Healthcare and energy to outperform utilities and nancials

Healthcare

Predictable earnings

Performs well when profits decelerate Big pharma cheap and unloved

Risk: Patent cliffs, government austerity

Financials

Contagion risks from Europe

Net interest margin pressure Regulatory risks

Risk: Cheap and unloved

Energy

Sector cheap relative to market

Sector cheap relative to oil prices

Spending upcycle

Risk: Global slowdown

Utilities

Record high valuations

Earnings weakness

Growth prospects poor

Risk: Risk aversion causes continued interest

BGF US Fl ibl E it F d P tf li Ch t i ti ( t M 31 2012)


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BGF US Flexible Equity Fund: Portfolio Characteristics (as at May 31, 2012)

Source: BlackRock, FactSet. Portfolio characteristics are of BGF US Flexible Equity Funds portfolio and are subject to change. Holdings are for informational purposes

only and should not be deemed as a recommendation to buy or sell the securities mentioned or securities in the industries shown above.

Sector allocation

Top 10 holdings

(%)

Apple Inc. 3.71Exxon Mobil Corp. 2.59

Chevron Corp. 2.52

Pfizer Inc. 2.27

Verizon Communications Inc. 1.91

Abbott Laboratories 1.70

ConocoPhillips 1.53

Microsoft Corp. 1.53

UnitedHealth Group Inc. 1.48

Goldman Sachs Group Inc. 1.40

Characteristics

Portfolio Russell 1000

Est. 3-5 Year EPS Growth 9.94% 11.64%

Number of Holdings 107 977

Dividend Yield 2.0 2.1

Wtd. Avg. Market Cap. $63.7bn $94.4bn

Price/Book Value 1.6 2.0

P/E (FY1) 10.7 16.7

3.76

2.96

3.87

19.20

10.86

11.70

14.86

10.21

10.42

12.15

3.02

3.19

4.28

20.47

7.84

16.49

5.26

16.42

3.76

19.25

0 8 16 24 32

Utilities

Telecommunication services

Materials

Information technology

Industrials

Health care

Financials

Energy

Consumer staples

Consumer discretionary

Percent

BGF US Flexible Equity

Russell 1000 Index

BGF US Flexible Equity Fund: Portfolio Management Team


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BGF US Flexible Equity Fund: Portfolio Management Team

( ) years of Investment experience; as at May 31, 2012

Team members average nearly 15 years of investment experience

Portfolio manager defines investment process and strategy and makes buy and sell decisions

Utilize quantitative research to evaluate opportunities in the investment universe

Analysts conduct fundamental research on the opportunities identified by the model and provide

input into the buy and sell process

Large Cap Series Equity Team draws on BlackRocks broad resources

Diverse equity investment teams

Scientific Active Equity group

Risk & Quantitative Analysis group

Fundamental Analyst

Vice PresidentFundamental Analyst Fundamental Analyst

Tim Doherty, CFA (10)Todd Burnside (13) David Gardner, CFA (7)

Managing DirectorFundamental Analyst

Gregory Brunk (20)Brett Shaver, CFA (10)Dan Hanson, CFA (19)

BlackRock Large Cap Series Resources

Portfolio Management Team

Product Specialist

Portfolio Manager

Peter Stournaras, CFA (17)

CIO, Fundamental Equity (Americas)

Portfolio Manager

Chris Leavy, CFA (20)

Lead Quantitative Analyst

Joe Wolfe, CFA (11)

Analysts

BGF US Flexible Equity Fund: Bridging Quantitative and


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BGF US Flexible Equity Fund: Bridging Quantitative andFundamental Investing

Combining the Best of BlackRocks Quantitative and Fundamental Innovation

Quantitative

analysis

Fundamental

research

Portfolioconstruction

Actual

portfolio

Best of Both Worlds

FundamentalResearch

Quantitative AnalysisIntegratedFundamental &

Quantitative

Subjective Objective Pragmatic

Idiosyncratic Scalable Guided focus

Judgmental SystematicDisciplined, informed

decisionsForward-looking Historically-based Evidential forecasts


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BGF US Flexible Equity Fund: Idea Generation- Internal Quantitative Model


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BGF US Flexible Equity Fund: Idea Generation- Internal Quantitative Model

Current process for selecting investments in BGF US Flexible Equity Funds portfolio in accordance with its stated investment objectives and policies. Process subjec

change based on market conditions, portfolio managers opinion and other factors.

Model ranks the investment universe from most to least attractive

Companies above 25th percentile eligible for investment on a quantitative basis

No more than 20% active weight in stocks scoring below 33rd percentile

Enhancements

Model leverages BlackRock's significant investment expertise and quantitative investment platforms

worldwide

Synchronize the model with expected holding period- reduce turnover

Weights adjusted based on existing market regime and opportunities

Priced Attractively

- How much we pay for

earnings, assets and cash

flow

- Price implied expectations

Accounting we can rely on

- Accruals

- Pensions

- Economic vs. GAAP

- Capital Deployment

Fundamental Momentum

- Growth

- Stability of Growth

Investment Sentiment

- Price Momentum

- Analyst Revisions

- Short Interest

BGF US Flexible Equity Fund: Research Process


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BGF US Flexible Equity Fund: Research Process

Systematic Approach, Enabling Focus on Value-Added Analysis

Individual company template

Analysis tool and discussion framework

Identify key drivers/pivotal issuers Top risks and opportunities

Review independent/external bull-bear case

Review company filings and conference call

transcripts

Internal BlackRock insights

Develop downside, core and stretch targets

Risks


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Risks

US macroeconomic data continues to demonstrate recovery, although it is a slow recovery

Sustained job creation is a major challenge

Fiscal tightening likely in 2013 as spending cuts take effect

De-leveraging by US households likely to continue impacting consumer spending

Worsening of the Euro zone crisis will likely have a negative impact on the US financial system

Weakening US Dollar

Summary: Why invest in DSP BlackRock US Flexible* Equity Fund


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Summary: Why invest in DSP BlackRock US Flexible Equity Fund

Valuations of US equities at multi year lows

Relative strength of economy compared to other developed countries

Corporate balance sheets of most large and mid cap US companies are in good shape

US equities are likely to continue out-performance over other global equity markets

*The term Flexible in the name of the Scheme signies that the Investment Manager of the Underlying Fund can invest either in growth or value investment characteri

securities placing an emphasis as the market outlook warrants.

DSP BlackRock US Flexible* Equity Fund: Scheme Features


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DSP BlackRock US Flexible Equity Fund: Scheme Features

Name of Fund DSP BlackRock US Flexible* Equity Fund (DSPBRUSFEF)

Type of Fund Open ended Fund of Funds Scheme investing in a US Equity Fund

Benchmark Russell 1000 Index

Minimum investment Rs. 5,000/- and multiples of Re. 1/- thereafter

amount

Options Available Growth; Payout Dividend; Reinvest Dividend

Exit Load For holding period < 12months: 1%, holding period >= 12 months: Nil

Fund Managers Mr. Mehul Jani & Mr. Laukik Bagwe

Risk Factors 1. Risks associated with underlying schemes

2. Risks associated with overseas investments

3. Risks associated with investments in debt and money market instruments

4. Risks associated with transaction in Units through stock exchange mechanism5. Risks associated with trading in derivatives

Please read the Scheme Information Document carefully for details

on risk factors before investment.

*The term Flexible in the name of the Scheme signies that the Investment Manager of the Underlying Fund can invest either in growth or value investment characteri

securities placing an emphasis as the market outlook warrants.

Disclaimer


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Disclaimer

Investment objective: The primary investment objective of DSP BlackRock US Flexible Equity Fund (Scheme) is to seek capital appreciation by investing predominantlunits of BlackRock Global Funds US Flexible Equity Fund (BGF - USFEF). The Scheme may, at the discretion of the Investment Manager, also invest in the units of other sim

overseas mutual fund schemes, which may constitute a signicant part of its corpus. The Scheme may also invest a certain portion of its corpus in money market securi

and/ or money market/liquid schemes of DSP BlackRock Mutual Fund, in order to meet liquidity requirements from time to time. However, there is no assurance that

investment objective of the Scheme will be realized. It shall be noted similar overseas mutual fund schemes shall have investment objective, investment strategy and

prole/consideration similar to those of BGF USFEF. The term Flexible in the name of the Scheme signies that the Investment Manager of the Underlying Fund can in

either in growth or value investment characteristic securities placing an emphasis as the market outlook warrants. Asset Allocation: Units of BGF USFEF# or other simoverseas mutual fund scheme(s): 95%-100%, Money market securities and/or units of money market/liquid schemes of DSP BlackRock Mutual Fund: 0-5%, # in the share

BGF USFEF, an Undertaking for Collective Investment in Transferable Securities (UCITS) III fund. Terms of Issue: Rs. 10/- per Unit. Min Investment Rs. 5,000/- and multof Re. 1/- thereafter. Load Structure & Expenses: Entry Load NIL Exit Load- For holding period < 12 months: 1%; for holding period >= 12 months: Nil. Investor Bene& General Services: During Continuous Offer, sale (at Purchase Price) and redemption (at Redemption Price) on all Business Days (Redemption normally within 5 BusinDays). SIP, SWP, STP & Nomination facilities available. If the SEBI limits for overseas investments allowed to the Fund are expected to be exceeded, the NFO may be clo

/ subscriptions and switches into the Scheme (During Continuous Offer) may be temporarily suspended / SIP/STP into the Scheme may be terminated. Declaration of

for each Business Day by 10 a.m. of the next Business Day.

Statutory Details: DSP BlackRock Mutual Fund was set up as a Trust and the settlors/ sponsors are DSP ADIKO Holdings Pvt. Ltd. & DSP HMK Holdings Pvt. Ltd. (collectivand BlackRock Inc. (Combined liability restricted to Rs. 1 lakh). Trustee: DSP BlackRock Trustee Company Pvt. Ltd. Investment Manager: DSP BlackRock InvestmManagers Pvt. Ltd. Risk Factors: Mutual funds, like securities investments, are subject to market and other risks and there can be no assurance that the Schemobjectives will be achieved. As with any investment in securities, the NAV of Units issued under the Schemes can go up or down depending on the factors and for

affecting capital markets. Past performance of the sponsor/AMC/mutual fund does not indicate the future performance of the Schemes. Investors in the Schemes are being offered a guaranteed or assured rate of return. The Schemes are required to have (i) minimum 20 investors and (ii) no single investor holding>25% of the corpus

the Schemes. In case of non-fulllment of the condition of minimum 20 investors, the investors money would be refunded, in full, immediately after the close of the N

Fund Offer Period. In case of non-fulllment with the condition of 25% holding by a single investor on the date of allotment, the application to the extent of exposure

excess of the 25% limit would be rejected, and the allotment would be effective only to the extent of 25% of the corpus collected. The name of the Scheme does noany manner indicate the quality of the Scheme, its future prospects or returns. For detailed Schemes specic risk factors, please refer the relevant Scheme InformaDocument (SID). For more details, please refer the Key Information Memorandum cum Application Forms, which are available on the website, www.dspblackrock.com,

at the ISCs/Distributors.

DSP BlackRock Mutual Fund has used information that is publicly available including information developed in-house. Information gathered and used in this mateis believed to be from reliable sources. The Fund/AMC however does not warrant the accuracy, reasonableness and/or completeness of any information.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

dsp blackrock us flexible equity fund - nfo presentation

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