investment strategy report - indiainfoline
TRANSCRIPT
Table of Contents Page No.
I Market Update & Outlook 4
A Market Update 5
B Equity Outlook 6
C Fixed Income Outlook 7
D Highlights of Economic Package – India 8-10
II Model Portfolio & Returns – Direct Equity 11-12
III Mutual Fund Recommendations 13
A Equity Mutual Funds 14-19
B Balanced Hybrid 20
C Debt Mutual Funds 21-26
D Specific Themes & Funds: Covid-19 27-31
E Model Portfolio & Returns – Mutual Funds 32-34
2
3
Table of Contents Page No.
IV Non-MF Product Recommendations 35
A PMS 36-41
B AIF 42-43
C Purnartha Equity Advisory 44
D Unlisted Shares 45
E Bonds 46
F MLD 47-50
Disclaimer 51
3
5
In May 2020, global equity markets saw a strong rally despite risingCovid cases and renewed tension between the US and China
Investor sentiments which were already buoyed by the huge globalliquidity and commitment for more fiscal stimulus for economicrecovery, strengthened further on optimism about the re-openingof economies severely affected by Coronavirus
Indian equities settled lower as market participants weredisappointed with the economic package amid rising Covid cases
Nifty 50 fell 2.8%, while BSE Sensex declined 3.8% on MoM basis inMay 2020. Broader markets outperformed frontline indices due tovalue buying in mid and small cap stocks
In May 2020, FIIs bought ₹11,796cr (vs. ₹2,449cr bought MoM) inIndian equities, while DIIs bought ₹2,702cr worth of equities (vs.₹7,154cr sold MoM) during the month
Markets which are riding on optimism of gradual re-opening ofeconomic activities worldwide must be extremely cautious, asyet there is no breakthrough on Covid-19 vaccine and its adverseeffect on global economic fundamentals are not clear
28,891
(7,154)
2,702
(62,434)
2,44911,796
Mar-20 Apr-20 May-20
Net Inflows in Equity (₹cr.)
DIIs FIIs
Index 29-May-20 1 M (%) 1 YR (%)
NIFTY 50 9,580 (2.8) (19.8)
S&P BSE SENSEX 32,424 (3.8) (18.6)
S&P BSE Mid-Cap 11,843 (1.4) (21.4)
S&P BSE Small-Cap 10,893 (1.9) (27.2)
Dow Jones 25,383 4.3 0.8
Nasdaq-100 9,556 6.2 31.9
S&P 500 3,044 4.5 9.2
Hang Seng 22,961 (6.8) (15.3)
Nikkei 225 21,878 8.3 4.5
Market Update
Note: Data as on May 29, 2020, Inflows as on May28, 2020Source: ACE MF, IIFL Research
Nifty 50 2Y-fwd PE was trading at a discount of ~4%(17.3x) to its 10yr rolling avg. PE (18.1x) in May month
Sharp reversion of the 2Y-forward PE towards its 10yaverage was mainly owing to earnings downgrade
Thus benchmark indices look expensive consideringmore earnings downgrades in the times to come
Indian equities are likely to see spells of volatility withdownward bias as various economic and industry dataare expected to be severely weak despite partialrelaxation of the lockdown
Equity investors with significant risk appetite can lookto invest in the stocks that are key beneficiaries of ruralgrowth. Moreover, select high quality stocks fromRetail, Chemical, Consumer Staple and Pharma spacemay remain resilient during periods of volatility.Investors with low risk appetite for direct equities cancontinue to invest in equities through mutual funds ina staggered manner. Such investors are also advised totop up their SIP amount to bring down their averagecost
Equity Outlook
6Note: NIFTY Forward PE data till May 29, 2020Source: ACE Equity, IIFL Research,
8.010.012.014.016.018.020.022.024.026.0
May
-10
No
v-1
0
May
-11
No
v-1
1
May
-12
No
v-1
2
May
-13
No
v-1
3
May
-14
No
v-1
4
May
-15
No
v-1
5
May
-16
No
v-1
6
May
-17
No
v-1
7
May
-18
No
v-1
8
May
-19
No
v-1
9
May
-20
Nifty 2Y-Forward P/E
2Y Fwd P/E Avg. -1 Stdv +1 Stdv -2 Stdv +2 Stdv
7
India’s 10-year bond yield softened 10bps to 6.0% amid furtherliquidity infusion and accommodative actions taken by the RBI
The RBI cut repo rate by 40bps to 4.0% (Reverse Repo 3.35%) tofurther reduce the cost of funding in the system
India’s GDP growth for Q4FY20 slumped to 3.1% (Q3FY20: 4.7%)due to continued weakness in manufacturing activities coupledwith partial effect of lockdown in the month of March. Thuscountry’s full year GDP growth for FY20 stood at 4.2% (FY19: 6.1%)
Credit rating agency Moody’s has downgraded India’s sovereignrating citing upcoming challenges in implementing policiesrequired to mitigate risk arising from low growth, deterioration infiscal position, and stress in the financial sector
In May 2020, Indian rupee traded in a narrow range despite surgein Brent crude oil prices (up ~34%). The Indian currency marginallydepreciated by 0.5% MoM to ~76 v/s the US dollar
Returns from debt instruments may moderate in future due tonotable reduction in yields of AAA-rated papers. Also, RBI’sdovish stance may keep the interest rates low. However,investments in debt should be primarily into high quality papersgiven the uncertain environment
Fixed Income Outlook
60
65
70
75
80
May
-15
Sep
-15
Jan
-16
May
-16
Sep
-16
Jan
-17
May
-17
Sep
-17
Jan
-18
May
-18
Sep
-18
Jan
-19
May
-19
Sep
-19
Jan
-20
May
-20
USD/INR
Note: NIFTY 2Y Forward PE & Yield Spread data till May 29, 2020Source: ACE Equity, IIFL Research
3.0
5.0
7.0
9.0
11.0
May
-10
No
v-10
May
-11
No
v-11
May
-12
No
v-12
May
-13
No
v-13
May
-14
No
v-14
May
-15
No
v-15
May
-16
No
v-16
May
-17
No
v-17
May
-18
No
v-18
May
-19
No
v-19
May
-20
Yield Spread
Earnings Yield (%) Bond Yields (%)
Aggressive Allocation (%) Moderate Allocation (%) Conservative Allocation (%)
Kotak Mahindra Bank 8 SBI Life 7 Power Grid 8
Gujarat Gas 7 Bajaj Finance 7 Bharti Airtel Ltd 7
Deepak Nitrite Ltd 8 TCS 9 TCS 9
ICICI Bank 8 Bajaj Finserv 7 Hindustan Unilever Ltd. 8
Exide Industries 9 Dr. Reddys Laboratories Ltd. 9 Hero Motocorp 8
UPL Ltd 8 ICICI Lombard General 9 HDFC Bank 9
Avenue Supermarts 9 Cadila Healthcare 9 ICICI Lombard General 9
Kansa Nerolac 8 HDFC Bank 9 ITC 7
SBI Life 9 Bharti Airtel Ltd 9 IPCA Labs 8
Bajaj Finance 9 Reliance Industries 9 Titan 9
HDFC 8 Hindustan Unilever Ltd. 7 Reliance Industries 9
Quess Corp Ltd 9 ACC 9 Cadila Healthcare 9
Total 100 Total 100 Total 100Risk Reward Statistics Risk Reward Statistics Risk Reward StatisticsPortfolio Beta 0.98 Portfolio Beta 0.88 Portfolio Beta 0.77Sharpe Ratio -0.16 Sharpe Ratio 0.16 Sharpe Ratio 0.16Portfolio Std. Deviation 46.35 Portfolio Std. Deviation 42.23 Portfolio Std. Deviation 40.48
Investment Objective & Portfolio Strategy - Aggressive portfolio targets above market returns using high beta and midcap ideas. Moderateportfolio uses Multi-cap approach to reduce volatility. Conservative portfolio is built with objectives of less volatility and capital protection.
Model Portfolios – Direct Equity
11
Absolute % Returns CAGR % Return Valuation Multiples (1Yr Forward))
Portfolios/Index 6 M 1 Yr 2 Yr Since Inception P/E P/BV
Aggressive (29.3) (26.2) (12.0) 0.2 36.6 3.6
Moderate (11.2) (5.3) 1.0 6.7 28.4 4.3
Conservative (7.6) (9.2) (3.6) 1.4 27.8 5.1
NIFTY 50 (20.5) (19.6) (5.3) 2.3 16.4 2.0
Model Portfolio - Returns
12
Note: NASource: ACE Equity, IIFL Research, returns as on May 29, 2020
80
90
100
110
120
130
140
150
Feb
-17
May
-17
Aug
-17
No
v-17
Feb
-18
May
-18
Aug
-18
No
v-18
Feb
-19
May
-19
Aug
-19
No
v-19
Feb
-20
May
-20
Aggressive NIFTY
85
95
105
115
125
135
145
Feb
-17
May
-17
Aug
-17
No
v-17
Feb
-18
May
-18
Aug
-18
No
v-18
Feb
-19
May
-19
Aug
-19
No
v-19
Feb
-20
May
-20
Moderate NIFTY
80
90
100
110
120
130
140
150
Feb
-17
May
-17
Aug
-17
No
v-17
Feb
-18
May
-18
Aug
-18
No
v-18
Feb
-19
May
-19
Aug
-19
No
v-19
Feb
-20
May
-20
Conservative NIFTY
Scheme Name Fund Manager AUM (₹cr) 1M (%) 6 M (%) 1 Y (%) 3 Y (%) 5 Y (%)
Mirae Asset Large Cap Fund(G) Gaurav Misra 15,347 (1.0) (20.6) (17.6) 0.7 5.7
IIFL Focused Equity Fund(G) Mayur Patel 786 (1.3) (15.6) (9.3) 4.4 6.4
Kotak Standard Multicap Fund(G) Harsha Upadhyaya 26,049 0.8 (19.5) (18.2) (0.2) 5.5
Axis Midcap Fund(G) Shreyash Devalkar 5,098 (0.6) (10.7) (2.8) 8.2 6.6
Nippon India Small Cap Fund(G) Samir Rachh 6,995 (1.4) (20.4) (25.5) (5.4) 4.9
Recommended Equity Mutual Funds
14
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Fund Basic Details
Fund Benchmark Nifty 100 – TRI AUM (₹cr) 15,347
Inception Date April 2008 Exit Load 1% on or before 1Y(365D), Nil after 1Y(365D)
Fund Manager Gaurav Misra Expense Ratio 1.7%
Asset Allocation It is an equity fund that primarily invests (at least 80% of AUM) in top 100 Nifty companiesby market capitalization. Remaining 20% is invested in high conviction mid cap ideas
The key investment strategy involves investing in high quality businesses available at areasonable price and holding the same over a period of time
Thus the scheme focuses to identify companies which have sustainable competitiveadvantage in their space and therefore have strong pricing power
As of April 2020, the fund had invested 85% of AUM in large cap stocks while 12% wasinvested in mid cap stocks. The fund had highest allocation to Banks (25.7%) followed byRefineries (12.3%)
Its top stock holdings comprise of HDFC Bank (9.7%), Reliance (9.7%) and ICICI Bank (6.7%)
Investors who prefer to invest in a diversified portfolio of blue chip stocks can invest inthis fund to create wealth in the long term
This scheme is suitable for investors with moderately high risk appetite and at least 5years of investment horizon
Returns (%)
85%
12%
1%
2%Large Cap
Mid Cap
Small Cap
Others
-17.6
0.7
5.7
-17.3
0.94.2
1 Year 3 Years 5 YearsFund Benchmark
Mirae Asset Large Cap Fund
15
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Focused category mutual fund schemes aim to generate superior return through aconcentrated portfolio of equity & equity related instruments
IIFL Focused Equity Fund’s key objective is to generate long term capital appreciation froma portfolio of equity & equity related securities by investing in maximum 30 stocks ofvarious market capitalization
The scheme follows multi cap approach with orientation towards large cap companies. Itsstock selection criteria is based on three attributes viz. (1) companies which are primebeneficiaries of secular growth, (2) companies which are poised for strong uptick inperformance due to cyclical upturn, (3) defensives which are poised for higher growth
As of April 2020, the fund had invested 61% of AUM in large cap stocks while allocation tomid cap and small cap stocks was 19% and 10% respectively. The fund had highestallocation to Banks (20.3%) followed by Pharma (17.1%). The fund’s top stock holdingsconsist of ICICI Bank (9.6%) followed by Axis Bank (5.9%) and Dr. Reddy’s Labs (5.8%)
Investors with moderately high risk appetite and a investment horizon of at least 5 years,can look to invest in this open ended scheme to accumulate wealth in the long run
61%
19%
10%
10%Large Cap
Mid Cap
Small Cap
Other
-9.3
4.4 6.4
-17.4
0.54.1
1 Year 3 Years 5 YearsFund Benchmark
IIFL Focused Equity FundFund Basic Details
Fund Benchmark S&P BSE 200 – TRI AUM (₹cr) 786
Inception Date October 2014 Exit Load 1% on or before 12M
Fund Manager Mayur Patel Expense Ratio 2.3%
Asset Allocation
Returns (%)
16
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
68%21%
1% 10%Large Cap
Mid Cap
Small Cap
Other
-18.2
-0.2
5.5
-18.1
0.13.8
1 Year 3 Years 5 YearsFund Benchmark
Kotak Standard Multicap FundFund Basic Details
Fund Benchmark Nifty 200 – TRI AUM (₹cr) 26,049
Inception Date October 2014 Exit Load 1% on or before 1Y, Nil after 1Y
Fund Manager Harsha Upadhyaya Expense Ratio 1.7%
Asset Allocation
Returns (%)
17
The scheme aims to generate long term capital appreciation from a diversified portfolio ofequity and equity related instruments across market capitalization
The key investment strategy of this scheme is to identify and invest in select few sectorsthat are likely to perform well over the medium term
However, the scheme is open to all types of sectors and it positions itself to capture variousthemes which are in flavor
As of April 2020, the fund had invested 68% of AUM in large cap stocks while 21% wasinvested in mid cap stocks. The fund had highest allocation to Banks (21.1%) followed byRefineries (8.9%)
Its top stock holdings comprise of Reliance (7.6%), ICICI Bank (6.4%), and HDFC Bank (5.6%)
Investors who prefer to invest in a diversified portfolio of stocks can invest in this fund tocreate wealth in the long term
This scheme is suitable for investors with moderately high risk appetite and at least 5years of investment horizon
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
It is an equity based fund that aims to generate capital appreciation by actively managinga diversified portfolio of mid cap stocks (at least 65% of AUM in companies ranked from101st to 250th by market capitalization)
The fund looks to identify and invest in midcap companies that have the potential todeliver superior returns due to potential of faster earnings growth
As of April 2020, the fund had invested 66% of AUM in mid cap stocks, while 15% wasinvested in large cap stocks. The fund had highest allocation to Pharma (15.0%) followed byRetailing (9.3%)
The scheme’s top holdings comprise of Avenue Supermarts (5.3%), Ipca Labs (4.7%) andBata India (3.8%)
Investors looking for inflation-beating superior returns in the long run can invest in thisscheme
Mid cap funds are suitable for those investors who have high appetite for marketvolatility and investment horizon of at least 5 years
15%
66%
1% 18% Large Cap
Mid Cap
Small Cap
Others
-2.8
8.2 6.6
-20.0
-5.2
3.2
1 Year 3 Years 5 YearsFund Benchmark
Axis Midcap FundFund Basic Details
Fund Benchmark S&P BSE Midcap – TRI AUM (₹cr) 5,098
Inception Date February 2011 Exit Load Nil up to 10% of units within 1Y and 1% for more than 10%
of units within 1Y, Nil after 1Y
Fund Manager Shreyash Devalkar Expense Ratio 1.9%
Asset Allocation
Returns (%)
18
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
The scheme predominantly invests in equity and equity related instruments of small capcompanies (at least 65% of AUM in companies ranked 251st and beyond by market cap)
The scheme identifies small cap companies which are mid caps of tomorrow and offer dualadvantage of high growth prospects and relatively low valuation
Thus the fund focuses on good growth businesses with reasonable size, qualitymanagement and rational valuation
As of April 2020, 75% of its AUM was invested in small cap stocks while 14% was invested inmid cap stocks. It has highest allocation to Chemicals (9.3%) followed by Pharma (6.0%)
The fund’s top stock holdings comprise of Deepak Nitrite (5.3%), Navin Flourine (3.9%) andOrient Electric (2.9%)
Investors who are seeking to invest in a diversified portfolio of small cap stocks anddesire for risk adjusted returns in the long run can invest in this scheme
This open ended scheme is relevant for investors who have high risk appetite withinvestment horizon of at least 7 years
7%
14%
75%
4% Large Cap
Mid Cap
Small Cap
Others
-25.5
-5.4
4.9
-26.0
-8.9
0.2
1 Year 3 Years 5 YearsFund Benchmark
Nippon India Small Cap FundFund Basic Details
Fund Benchmark S&P BSE Small Cap – TRI AUM (₹cr) 6,995
Inception Date September 2010 Exit Load Nil upto 10% of units and 1% for remaining units on or before 12M, Nil after 12M
Fund Manager Samir Rachh Expense Ratio 2.2%
Asset Allocation
Returns (%)
19
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
ICICI Pru Asset Allocator Fund is an open ended fund-of-funds (FoF) scheme which investsin equity oriented schemes, debt oriented schemes and gold ETFs schemes
It is an actively managed fund that aims to generate better risk-adjusted returns throughoptimum allocation of debt and equity based on their relative attractiveness andopportunities available in respective markets
As of April 2020, the scheme’s portfolio consist of ICICI Pru Blue chip Fund (32.7%), ICICI PruDiscovery Fund (17.9%), ICICI Pru Multicap Fund (11.2%), ICICI Pru All Seasons Bond Fund(10.5%), ICICI Pru India Opportunities Fund (6.1%), ICICI Pru Large & Mid Cap Fund (6.0%),ICICI Pru Floating Interest Fund (3.9%), ICICI Pru Banking & Financial Services Fund (3.8%),ICICI Pru Gilt Fund (2.2%), ICICI Pru Money Market Fund (1.1%) and rest in others
The scheme is ideal for those investors who struggle around the most critical aspects ofinvesting that is asset allocation, instrument selection and timing the market
Conservative investors with moderately high risk appetite can invest in this scheme togenerate wealth in the long term -4.7
4.36.8
-1.5
5.2 7.2
1 Year 3 Years 5 YearsFund Benchmark
Fund Basic Details
Fund Benchmark CRISIL Hybrid 50 + 50 - Moderate Index AUM (₹cr) 6,892
Inception Date December 2003 Exit Load Nil up to 10% of units within 1Y and 1% for more than 10%of units within 1Y, Nil after 1Y
Fund Manager Sankaran Naren Expense Ratio 1.2%
ICICI Pru Asset Allocator Fund (FoF) – Balanced Hybrid
Asset Allocation (All the schemes are of ICICI Pru.)
Returns (%)
20
34%
19%
12%11%7%
6%
4%
4%
2% 1%
Bluechip Fund
Value Discovery Fund
Multicap Fund
All Seasons Bond Fund
India Opportunities Fund
Large & Mid Cap Fund
Floating Interest Fund
Banking & Fin. Srv. Fund
Gilt Fund
Money Market
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Scheme Name AUM (₹cr)
YTM (%)
1M(%)
6 M(%)
1 Y (%)
3 Y (%)
5 Y (%)
Rating ProfileAAA & Equiv.
HDFC Overnight Fund(G) 18,087 3.7 0.2 1.9 4.6 5.6 5.9 100*
Nippon India Liquid Fund(G) 26,033 4.8 0.4 2.7 5.9 6.8 7.1 86.0
ICICI Pru Corporate Bond Fund(G) 11,860 7.1 2.1 5.0 10.4 8.2 8.4 78.0
IDFC Bond Fund - Medium Term Plan(G) 2,808 6.7 1.8 5.5 11.0 7.9 8.1 44.4
Axis Banking & PSU Debt Fund(G) 13,709 6.4 2.0 4.5 10.5 8.9 8.6 92.6
Recommended Debt Mutual Funds
21
Note: *Cash & Cash Equivalent, Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
HDFC Overnight Fund aims to generate income through a portfolio of debt and money marketinstruments with overnight maturity
Thus the scheme predominantly invests in Collateralized Borrowing & Lending Obligations(CBLO), overnight reverse repos and fixed income securities / instruments with overnightmaturity
The average yield to maturity (YTM) of the fund is 3.7%
As of April 2020, the fund had invested 100% of the total AUM in cash and cash equivalent
The fund is suitable for investors who are looking to park their corpus for smaller time periodand looking for lower risk compared to liquid funds
Fund also provides liquidity without any exit load
Investors with low risk appetite and investment period of up to 1 month can invest in this fund
100%
Cash & Eq.
0.2
0.8
1.9
0.3
0.8
2.0
1 Month 3 Month 6 Month
Fund Benchmark
Fund Basic Details
Fund Benchmark CRISIL Overnight Index AUM (₹cr) 18,087
Inception Date February 2002 Exit Load Nil
Fund Manager Anil Bamboli Expense Ratio 0.2%
HDFC Overnight Fund
Rating Profile
Returns (%)
22
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Nippon India Liquid Fund focuses to maximize returns while ensuring adequate liquidity throughinvestments in various debt and money market instruments with maturity up to 91 days
The average maturity of the portfolio will typically be in a range of 30-60 days
The investments in fixed income securities are done in such a manner that the modifiedduration of the constructed portfolio is 0.12 years
The average yield to maturity (YTM) of the fund is 4.8%
As of April 2020, the fund had invested 83% of the total AUM in AAA rated debt instrumentsand 17% in Sovereign securities
The fund is suitable for the investors who are looking for:
Regular income over short period of time
Income through a portfolio comprising of debt and money market instruments
Investors with low risk appetite and investment period of up to 3 months can invest in this fund
83%0%
17%AAA & Eq.
Cash & Eq.
Sov
0.4
1.4
2.7
0.4
1.42.8
1 Month 3 Month 6 Month
Fund Benchmark
Fund Basic Details
Fund Benchmark CRISIL Liquid Fund Index AUM (₹cr) 26,033
Inception Date December 2003 Exit Load Nil after 7D
Fund Manager Anju Chhajer Expense Ratio 0.3%
Nippon India Liquid Fund
Rating Profile
Returns (%)
23
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
The scheme aims to generate income through investing predominantly in AA+ and above ratedcorporate bonds while maintaining optimum balance of yield, safety and liquidity
The investments in fixed income securities are done in such a manner that the modifiedduration of the constructed portfolio is 2.4 years
The average yield to maturity (YTM) of the fund is 7.1%
As of April 2020, the fund had invested 79% of the total AUM in AAA rated debt instrumentswhile 18% was parked in Sovereign securities
The scheme is ideal for those investors who are looking for:
Alternatives to traditional fixed savings instruments
Short to medium term savings
Investors with moderately low risk appetite and investment horizon of at least 3 years caninvest in this fund
79%
18%
3%
AAA & Eq.
Sov
Cash & Eq.
10.48.2 8.49.7
8.0 8.2
1 Year 3 Years 5 Years
Fund Benchmark
Fund Basic Details
Fund Benchmark CRISIL AAA Short Term Bond Index AUM (₹cr) 11,860
Inception Date August 2009 Exit Load Nil
Fund Manager Anuj Tagra Expense Ratio 0.6%
ICICI Pru Corporate Bond Fund
Rating Profile
Returns (%)
24
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
The fund’s objective is to generate regular income with high degree of liquidity throughinvestments in a portfolio comprising predominantly of debt and money market instruments
The scheme invests in debt instruments such that the Macaulay Duration of the portfolio isbetween 3 years and 4 years
The investments in fixed income securities are done in such a manner that the modifiedduration of the constructed portfolio is 3.7 years
The average yield to maturity (YTM) of the fund is 6.7%
As of April 2020, the fund had invested 45% of the total AUM in AAA rated debt instruments,48% in Sovereign securities and 7% in cash and cash equivalent
The fund is suitable for the investors who are looking for:
Regular income over short period of time
Attractive risk-adjusted returns through active management of credit risk and interestrate risk in the portfolio
Suitable for investors with moderate risk appetite and investment horizon of at least 4 years
45%
48%
7%AAA & Eq.
Sov
Cash & Eq.
11.0
7.9 8.110.0
7.8 8.2
1 Year 3 Years 5 Years
Fund Benchmark
Fund Basic Details
Fund Benchmark Crisil Short Term Bond Fund Index AUM (₹cr) 2,808
Inception Date July 2003 Exit Load Nil
Fund Manager Suyash Choudhary Expense Ratio 1.4%
IDFC Bond Fund - Medium Term Plan
Rating Profile
Returns (%)
25
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Axis Banking & PSU Debt Fund aims to generate income through investing in debt instrumentsof Banks, Public Sector Undertakings (PSUs) & Public Financial Institutions (PFIs)
The investments in fixed income securities are done in such a manner that the modifiedduration of the constructed portfolio is 1.9 years
The average yield to maturity (YTM) of the fund is 6.4%
As of April 2020, the fund had invested 92% of the total AUM in AAA rated debt instrumentswhile 6% was parked in cash and cash equivalent
The scheme is ideal for those investors who are looking for:
Alternatives to traditional fixed savings instruments
Medium term savings
Investors with moderately low risk appetite and investment horizon of at least 3 years caninvest in this fund
92%
2%
6%
AAA & Eq.
Sov
Cash & Eq.
10.58.9 8.6
10.27.4 7.8
1 Year 3 Years 5 Years
Fund Benchmark
Fund Basic Details
Fund Benchmark Nifty Banking & PSU Debt Index AUM (₹cr) 13,709
Inception Date June 2012 Exit Load Nil
Fund Manager Aditya Pagaria Expense Ratio 0.6%
Axis Banking & PSU Debt Fund
Rating Profile
Returns (%)
26
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Make In India – Theme Of The Decade
28
There are some dramatic changes in both external and internal factors that can offer India an opportunity to become global manufacturing hub in the
medium term. Indian companies are witnessing a sharp rise in the enquiries for its products after tariff hikes by the US on Chinese imports. Since the
developments will evolve over a notable period of time and several sectors (such as Pharma, Chemicals, Electronics, Defense, Energy and PSUs) will
be the key beneficiary of this theme, we recommend to invest in ICICI Prudential Manufacture In India Fund to capture this theme in the portfolio.
Chinese manufacturers may significantly lose their global competitiveness as further imposition of higher tariffs due to acceleration in global trade
war will make Chinese products more expensive. Thus MNCs will look to (fully / partially) shift production out of China to avoid high tariffs
Several companies are looking to diversify their manufacturing supply Chain away from excessive reliance on Chinese production
Countries which are angry on Chinese handling of Covid situation, have announced incentives for their companies to move out of China
External Factors
Internal Factors
Tax reforms, hike in FDI limits across sector and substantial jump in India’s ease of doing business ranking are likely to attract global firms who are
looking for alternatives (or back up) to their Chinese manufacturing
Stubbornly rising unemployment will force Indian government to push through critical reforms (land & labor) to boost manufacturing activities
High probability of anti-dumping duty on Chinese imports to save and revive domestic manufacturing which are bleeding due to Covid lockdown
More incentives likely for local manufacturers and exporters in coming days as Indian government has shown strong intent towards being self reliant
and reduce dependence on imported products
69%18%
8%
5%
Large Cap
Mid Cap
Small Cap
Other
5.0
-17.1 -18.2
3.2
-14.9 -13.4
1Month 6 Month 1YearFund Benchmark
ICICI Pru Manufacture In India FundFund Basic Details
Fund Benchmark S&P BSE India Manufacturing – TRI AUM (₹cr) 687
Inception Date October 2018 Exit Load 1% on or before 1Y, Nil after 1Y
Fund Manager Anish Tawakley Expense Ratio 2.5%
Asset Allocation
Returns (%)
29
The scheme aims to generate long term capital appreciation by creating a portfolio that isinvested predominantly in equity and equity related securities of companies engaged inmanufacturing theme
The Scheme endeavors to invest in companies that are likely to benefit from theGovernment’s Make in India initiative
Adopts bottom-up approach to identify companies with long term sustainablecompetitive advantage
As of April 2020, the fund had invested 69% of AUM in large cap stocks while 18% wasinvested in mid cap stocks. The fund had highest allocation to Refineries (19.6%) followedby Pharma (9.8%) and Aluminum (7.4%)
Its top stock holdings comprise of BPCL (9.5%), Reliance (5.8%), and Hindalco (5.2%)
This thematic yet diversified fund brings India’s manufacturing story in the portfolio
Since thematic funds carry high risk, the scheme is suitable only for those investors whohave high risk appetite and long term investment horizon say 8-10 years
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Gold – A Must Have Asset Class
30
Gold is a special asset class and therefore provides additional diversification in the investment portfolio
It is considered as a hedge against the inflation and rupee depreciation
The presence of gold in the portfolio reduces volatility in one’s net worth
It offer portfolio a defense during times of uncertainty such as war, geopolitical issues or unprecedented scenario such as Covid-19
Key Features & Benefits
Thus gold is a must have asset class in the portfolio. However, it is not seen as an instrument for generating returns and meet long term financial goals.Instead, it is seen as an instrument for hedge against inflation, currency depreciation and global economic / political uncertainty. Therefore it is advisedto allocate up to 15% of the total portfolio in gold for hedging and to add an additional asset class in the portfolio. Investors can invest in gold throughETFs, Mutual Funds, Sovereign Gold Bonds, Digital / Physical Gold. Below are some recommended gold ETFs and gold based mutual fund schemes:
Scheme Name AUM (₹cr) CAGR Returns (%)
Risk 1 Y 3 Y 5 Y 7Y
ICICI Pru Gold ETF(G) 1,238 45.8 15.8 10.4 6.9 Moderately High
SBI-ETF Gold(G) 1,175 46.4 16.2 10.6 7.1 Moderately High
Nippon India Gold Savings Fund(G) 921 44.1 15.6 9.9 6.4 Moderately High
Kotak Gold Fund(G) 387 46.2 16.9 10.5 6.6 Moderately High
Axis Gold Fund(G) 104 44.6 16.1 9.3 5.6 Moderately High
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Scheme Name AUM (₹cr) CAGR Returns (%) Asset Allocation (%)
Risk1 Y 3 Y 5 Y Large Cap Mid Cap Small Cap
Equity Linked Savings Scheme (Tax Saver Fund)
Mirae Asset Tax Saver Fund(G) 2,671 (10.8) 4.1 -- 71.2 21.1 5.2 Moderately high
Axis Long Term Equity Fund(G) 17,495 (3.9) 6.3 7.3 76.8 13.5 4.2 Moderately high
Pharma / Healthcare Fund
Nippon India Pharma Fund(G) 2,190 16.8 11.1 6.5 58.8 28.6 11.3 High
ICICI Pru Pharma Health and Diagnostics Fund(G) 1,557 18.0 -- -- 45.3 32.2 22.5 High
FMCG / Consumption Fund
Sundaram Rural and Consumption Fund(G) 1,303 (14.2) (2.8) 7.5 46.0 39.3 12.1 High
ICICI Pru FMCG Fund(G) 461 (8.9) 4.8 7.4 74.2 14.4 6.4 High
Equity ETFs
SBI-ETF Sensex 23,289 (17.0) 2.0 3.7 100.0 -- -- Moderately high
ICICI Pru Nifty ETF 1,793 (18.3) 1.1 3.3 100.0 -- -- Moderately high
International Equity
ICICI Pru US Bluechip Equity Fund(G) 507 12.2 15.4 11.8 100.0 -- -- High
Motilal Oswal S&P 500 Index Fund(G) 122 -- -- -- 100.0 -- -- High
Motilal Oswal NASDAQ 100 Fund(G) 402 38.7 -- -- 100.0 -- -- High
Other Themes and Funds
31
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
The objective of the strategy is to generate substantial wealth in the long run for investors from a portfolio of aggressive equity orientedmutual funds.
The strategy takes a concentrated position in mutual funds across different market-cap and sectors and endeavors to strategicallychange allocation between different market-cap and sectors depending on change in the business cycles.
Aggressive Model Portfolios – Mutual Funds
32
Sr. No Scheme NameAllocation
(%)
Absolute % Returns CAGR % Return Quant's
6 M 1 Yr 3 Yr 5 Yr Beta NAV
1 Mirae Asset Large Cap Fund(G) 20.0 (20.6) (17.6) 0.7 5.7 0.9 42.9
2 IIFL Focused Equity Fund(G) 20.0 (15.6) (9.3) 4.4 6.4 0.8 15.0
3 Kotak Standard Multicap Fund(G) 20.0 (19.5) (18.2) (0.2) 5.5 0.9 30.0
4 Axis Mid Cap Fund(G) 15.0 (10.7) (2.8) 8.2 6.6 0.7 35.4
5 Nippon India Small Cap Fund(G) 25.0 (20.4) (25.5) (5.4) 4.9 0.7 30.6
Total 100.0
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
The objective of the strategy is to generate long term capital appreciation for investors from a portfolio of equity oriented mutual fundswith a moderate risk appetite. Primarily to beat inflation without having too much volatility.
The strategy takes a concentrated position in mutual funds across different market-cap and sectors and endeavors to strategicallychange allocation between different market-cap and sectors depending on change in the business cycles.
Moderate Model Portfolios – Mutual Funds
33
Sr. No Scheme NameAllocation
(%)
Absolute % Returns CAGR % Return Quant's
6 M 1 Yr 3 Yr 5 Yr Beta NAV
1 Mirae Asset Large Cap Fund(G) 20.0 (20.6) (17.6) 0.7 5.7 0.9 42.9
2 Kotak Standard Multicap Fund(G) 25.0 (19.5) (18.2) (0.2) 5.5 0.9 30.0
3 ICICI Pru Asset Allocator (FoF)(G) 20.0 (9.0) (4.7) 4.3 6.8 (0.02) 53.2
4 IDFC Bond Fund - Medium Term Plan(G) 20.0 5.5 11.0 7.9 8.1 0.6 35.2
5 Axis Mid Cap Fund(G) 15.0 (10.7) (2.8) 8.2 6.6 0.7 35.4
Total 100.0
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
The objective of the strategy is to generate long term capital appreciation for investors from a portfolio of equity and debt orientedmutual funds. Primarily to avoid any potential loss and preserve capital.
The strategy takes a concentrated position in mutual funds across different market-cap and sectors and endeavors to strategicallychange allocation between different market-cap and sectors depending on change in the business cycles.
Conservative Model Portfolios – Mutual Funds
34
Sr. No Scheme NameAllocation
(%)
Absolute % Returns CAGR % Return Quant's
6 M 1 Yr 3 Yr 5 Yr Beta NAV
1 Axis Bluechip Fund(G) 25.0 (14.3) (8.1) 7.0 7.0 0.8 27.1
2 SBI Magnum Multicap Fund(G) 10.0 (20.1) (19.6) (1.0) 4.5 0.8 40.6
3 Axis Banking & PSU Debt Fund(G) 20.0 4.5 10.5 8.9 8.6 0.4 1,955.8
4 IDFC Bond Fund - Short Term Plan(G) 20.0 4.7 10.2 8.0 8.0 0.3 42.5
5 ICICI Pru Asset Allocator (FoF)(G) 25.0 (9.0) (4.7) 4.3 6.8 (0.02) 53.2
Total 100.0
Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM as on April 2020; Returns as on May 29, 2020Source: ACE MF
Investment Philosophy – SCDV Framework
Cyclical (PAT>15%, ROE <15%) – Companies/ Sectors that show high growth
but are affected by market cycles, hence need to be timed for entry and exit
Secular (PAT>15%, ROE >15%) – High growth companies / sectors which show
consistent growth across market cycles
Defensive (PAT<15%, ROE >15%) – Companies / sectors that show consistent
stable growth across market cycles
Value Trap (PAT<15%, ROE <15%) – Companies/ sectors that are at attractive
valuation but do not show commensurate growth.
IIFL Multicap PMS IIFL Multicap Advantage PMS
The objective is to generate long term capital appreciation for investorsfrom a portfolio of equity & equity related securities.The portfolio manager aims to achieve the investment objective by:-Investing in a concentrated basket of 20-25 stocks with a bias towardslarge cap stocksActively use sector rotation to align with changes in business cycles togenerate AlphaPortfolio Manager shall follow the SCDV framework for portfolioconstruction
The portfolio manager aims to take a concentrated position in portfolio of 20-25 stocks with a bias towards Large cap stocks with an objective of generatingwealth over long period; at the same time hedge the portfolio using At theMoney Nifty 50 Put option to safeguard against downside risk
Investment Allocation :-
Equity Investment – up to 100% of corpusPut Options (for Hedging) – up to 8% of corpus*Liquid scheme of Mutual funds and other securities as per FM discretion
36
IIFL Multicap and Multicap Advantage PMS
Key TermsManagement fee 2.50% per annum. Management fee will be computed on Daily NAV (charged monthly)
Brokerage 0.12% of the transaction value (plus applicable statutory levies)
Other charges Statutory/Other charges as applicable(STT/Demat/Custodial Charges/Service Tax, etc.)
Exit fees If withdrawn: Within 9 months: 4%; 9-18 months: 3% ;18-24 months: 2% ; 24-36 months: 1%
Recommended Investment horizon 36 months and above
Taxation As per equity taxation
Performance
Strategy/Benchmark 1 Month (%) 3 Month (%) 6 Month (%) 1 Year (%) 2 Year (%) 3 Year (%) Since Inception
IIFL Multicap PMS 14.9 -21.0 -15.1 -6.9 2.2 5.8 13.4
IIFL Multicap Advantage 9.3 -8.1 -3.1 5.3 7.3 9.3 7.1
S&P BSE 200 TRI 14.7 -17.5 -16.5 -14.6 -5.1 - -
Fund ManagerMitul Patel, Strategy Manager for IIFL Multicap PMS, has an overall experience of 14 years across areas of Equity Research, Fund Management, PrivateEquity Advisory and Investment banking. Apart from managing the strategies of Portfolio Management Services offered by IIFL Asset Management Limited(IIFL AMC), he also heads research for listed equities and is responsible for generating investment ideas across sectors and market capitalizations. He hasbeen instrumental in setting up the research desk at IIFL AMC and also directly tracks companies in the Chemicals, Auto and Pharma sectors. Prior tojoining IIFL AMC, Mitul spent 7 years with Laburnum capital, a boutique investment management firm.
37
Returns as on April 30, 2020
Returns less than 1 year are absolute; Returns greater than 1 year are CAGR
IIFL Multicap and Multicap Advantage PMS
The objective of the strategy is to seek long term capital appreciation with investments in mid-cap companies.
The portfolio manager aims to achieve the investment objective by:-
Taking a bet on Sundaram’s mid & small cap strength but differentiated with a concentrated portfolio and attractive cap curve positioning
Creating a concentrated 20-30 stocks multi sector portfolio
Picking Stocks with less than Rs. 500bn market cap
Identifying stocks in the Mid & Small Cap space that are in early stages of their business cycle and could emerge as tomorrow’s large caps.
3Qs - Quality approach to stock selection
Quality of Business
Pricing power, profitability, growth, brand strength, capital intensity, complexity of
business
Quality of Management
Track record, management bandwidth, corporate governance
Quality of Financials
Capital allocation, leverage, cash flow generation, return on capital
Portfolio to capture India story
38
Sundaram Emerging Leadership Fund (S.E.L.F.) PMS
KEY TERMS
Minimum Investment 50 Lakh
Management fee 2.50% per annum
Exit fees If withdrawn: Within 1 year: 4%; 12-24 months: 2%; 24-36 months: 1%
Recommended Investment horizon 36 months and above
Taxation As per equity taxation
Performance
Strategy/Benchmark 1 Month (%) 3 Month (%) 6 Month (%) 1 Year (%) 3 Year (%) 5 Year (%) Since Inception
S.E.L.F. Strategy 11.1 -23.7 -13.2 -11.4 -1.4 5.0 13.3
NSE Midcap 100 15.4 -25.0 -19.7 -23.1 -9.3 1.2 5.3
Fund Manager
Madanagopal Ramu joined Sundaram Asset Management Company Limited (SAMC) in October 2010 as a research analyst, covering industrials,infrastructure, cement and logistics. At SAMC, prior to becoming the Fund Manager of PMS & AIF, he was the Head of Research for the Mutual Funddivision. He has over 12 years of experience in research and over 5 years of experience in Fund Management. Prior to SAMC, he worked with CentrumBroking (P) Ltd. as a Research Analyst tracking power and capital goods. He is an MBA from BIM Trichy and a Cost Accountant.
Sundaram Emerging Leadership Fund (S.E.L.F.) PMS
39
Returns as on April 30, 2020Inception date – June 2010
Returns less than 1 year are absolute; Returns greater than 1 year are CAGR
The portfolio manager aims to achieve the investment objective of generating capital appreciation across market cycles by investing:-
Across market Cap – “Multi Cap” approach (skewed towards Large Cap) - in a concentrated high conviction 15-stock portfolio
With Compounding Stories that:
3Qs - Quality approach to stock selection
Quality of Business
Pricing power, profitability, growth, brand strength, capital intensity, complexity of
business
Quality of Management
Track record, management bandwidth, corporate governance
Quality of Financials
Capital allocation, leverage, cash flow generation, return on capital
Portfolio to capture India story
40
Sundaram India Secular Opportunities Portfolio (SISOP) PMS
i. Grow > 1.5x of nominal GDP growth; ii. Potential to generate 20% growth in Cash Flow / Earnings across
market cycles; iii. ROE >20%;
iv. Have a self-funded model i.e. with growth through internal accruals and v. Companies that exhibit high corporate governance standards and have visionary leadership
KEY TERMS
Minimum Investment 50 Lakh
Management fee 2.50% per annum
Exit fees If withdrawn: Within 1 year: 4%; 12-24 months: 2%; 24-36 months: 1%
Recommended Investment horizon 36 months and above
Taxation As per equity taxation
Performance
Strategy/Benchmark 1 Month (%) 3 Month (%) 6 Month (%) 1 Year (%) 3 Year (%) 5 Year (%) Since Inception
SISOP Strategy 6.0 -21.4 -17 -6.4 2.0 4.8 19.7
Nifty 500 14.5 -18.7 -17.3 -17.1 -0.8 3.5 6.8
Fund Manager
Madanagopal Ramu joined Sundaram Asset Management Company Limited (SAMC) in October 2010 as a research analyst, covering industrials,infrastructure, cement and logistics. At SAMC, prior to becoming the Fund Manager of PMS & AIF, he was the Head of Research for the Mutual Funddivision. He has over 12 years of experience in research and over 5 years of experience in Fund Management. Prior to SAMC, he worked with CentrumBroking (P) Ltd. as a Research Analyst tracking power and capital goods. He is an MBA from BIM Trichy and a Cost Accountant.
Sundaram India Secular Opportunities Portfolio (SISOP) PMS
41
Returns as on April 30, 2020Inception date – February 2010
Returns less than 1 year are absolute; Returns greater than 1 year are CAGR
IIFL High Conviction Fund intends to create a concentrated portfolio of 15-20 high conviction stocks, which are:
Key beneficiaries of the secular growth drivers
Poised for a strong uptick in earnings and cash flows
Offer an attractive risk-reward
The fund would be following a mix of top-down (macro analysis to identify sectors) and bottom-up approach (micro analysis to pick stocks within these
sectors) for portfolio construction using the SCDV framework
SCDV Framework Investment Philosophy
Industry or sector potential – Look for growing sectors, at the same time
avoid sectors which are vulnerable to regulation changes, high competitive
intensity, technological changes and short growth cycles
Business – Look for companies with competitive advantages that have
delivered consistently higher ROE than peers while avoiding companies with
poor free cash flows and declining market share
Governance – Prudent capital allocation, in line with minority shareholder
interest would be an important criteria while selecting investments
Valuations – Companies which offer a favorable risk reward ratio
Core Portfolio – Secular stocks will form a core portfolio of the fund. They provide consistency and stability to the overall portfolio with lower risk
Tactical Allocation – Cyclical and Defensive stocks will be used to take benefit of cyclical trends of the market and generate extra alpha
42
IIFL High Conviction Fund – Cat III AIF
Performance
Strategy/Benchmark 1 Month 3 Month 6 Month 1 Year 2 Year 3 Year Since Inception#
IIFL High Conviction Fund Series 1 12.2 -19.9 - - - - -20.0
S&P BSE 200 TRI 14.7 -18.1 - - - - -17.2
Fund Manager
Mehul Jani has over 15 years of experience in covering and managing financial services and consumer stocks. Prior to working with IIFL, he has workedwith DSP Blackrock for 10 years. Prior to DSP Blackrock, he worked with Morgan Stanley Plc, London, for 4 years, as an associate, dealing withstructured product valuation and fund derivatives. Mehul is an alumnus of Cass Business School, London and holds Masters in Banking and InternationalFinance. He also holds a CFA charter
Key TermsA1 A2 A3
Capital commitment 1 Cr to < 5 Cr 5 Cr to < 15 Cr 15 Cr and above
Fixed Management Fee 2.50% 2.10% 1.75%
Set up Fees (up to) 2.00% 2.00% 2.00%
Profit Share (without catch up) Nil Nil Nil
Exit load (applicable post lock in period*)0-12 months after lock in period* - 3%
12-24 months after lock in period* - 2%
Initial Drawdown 25% of the commitment amount
*Lock in period: 12 month from final drawdown date#Inception date is November 26, 2019Returns less than 1 year are absolute; Returns greater than 1 year are CAGR
43
Returns as on April 30, 2020
IIFL High Conviction Fund – Cat III AIF
Performance
1 Month (%) 3 Months (%) 6 Months (%) 1 Year (%) 2 Years (%) 3 Years (%) 5 Years (%) Since Inception (%)
Purnartha Portfolio 11.45 -25.91 -16.77 -3.26 -1.44 8.64 15.75 38.41
NIFTY 50 14.68 -17.57 -16.99 -16.07 -4.28 1.99 3.88 11.48
Midcap 50 17.03 -24.28 -19.77 -23.45 -17.83 -7.34 2.70 11.26
Minimum Tenure 1 Year
Minimum Amount 25 Lakh
Plan A (%) Plan B (%) Plan C(%) Plan D (%) Plan E (%) Plan F (%)
Initial Advisory Fee 2.50 2.00 1.75 1.50 1.00 0.60
Profit Sharing Above Hurdle Rate
20.00 20.00 20.00 20.00 20.00 20.00
Hurdle Rate 25.00 15.00 12.00 10.00 6.33 0.00
Min Tenure 3 Year
Min Amount 10 Lakh
IIFL Exclusive Plan (%)
Initial Advisory Fee 7.50
Profit Sharing Above Hurdle Rate
20
Hurdle Rate 75
Investment Advisory Plans
• Purnartha started out as a unique equity investment advisory firm. Their philosophy is based on choosing non-cyclical companies, ensuring that the
investments are poised to reap long-term gains.
• Over the years, Purnartha has consistently outperformed benchmarks such as NIFTY and helped several families grow and prosper together with their
research-backed, clear & unbiased advice.
44
Returns as on April 30, 2020Inception date is April 01, 2009
Purnartha Equity Advisory
Unlisted Shares
Many young companies grow much faster than mature companies due to their lower base, and hence tend to significantly
outperform the benchmark returns. However, a lot of this growth happens before the company goes public with an IPO. Hence,
participating in such companies in the Growth / Pre-IPO stage can provide superior returns to the investor.
45
Returns as on May 27th, 2020
Absolute % Return
Stock 3M 6M 9M Current Offer Price#
HDB Financials -44.09 -44.80 -42.19 640.50
HDFC Securities -21.84 -2.16 -6.59 7,140.00
Hero Fincorp -25.58 -13.04 -8.10 840.00
Nazara Technologies -11.82 -19.17 -29.27 509.25
One97 Communication (Paytm) -22.22 -38.24 -35.19 11,025.00
TATA Technologies -14.29 -20.45 -31.14 1,102.50
Utkarsh Micro Finance -2.27 -2.27 -10.06 225.75
Taxable Bonds
Security Coupon Maturity Interest Payment Yield# (%) Rating
India Infradebt 2024 (Secured) 8.60% 30-Dec-24 30-Dec 7.78% AAA by CRISIL & ICRA
HDFC LTD. 2025 7.50% 08-Jan-25 08-Jan Ann 7.10% AAA by CRISIL , AAA by ICRA
ONGC Petro 2025 8.00% 11-Apr-25 11-Feb 7.20% AAA(CE)/Stable by ICRA & CARE
REC 2029 8.97% 28-Mar-29 28-Mar Ann 7.62% AAA by CRISIL , AAA by ICRA
IRFC 2029 8.23% 29-Mar-29 15-Oct Ann 6.56% AAA by CRISIL , AAA by CARE
NABARD 2030 7.65% 03-Jan-30 03-Jan Ann 6.68% AAA by CRISIL , AAA by ICRA
46
#Yields as on June 2nd, 2020
*Bond yields are subject to availability and market movement. Please confirm yields as well as availability before finalizing any deal.
Bonds
Perpetual Bonds
Security Coupon (%) Call / Put Option Interest Payment Yield# (%) Rating
ICICI Bank Perpetual 9.20% 17-Mar-22 17-Mar 8.55% AA+ ICRA / CARE
BOB Perpetual 8.70% 28-Nov-24 28-Nov 8.46% AA+ CRISIL / IND
State Bank of India 8.50% 22-Nov-24 22-Nov 7.85% AA+ by CRISIL/ICRA
A Principal Protected, listed & Rated Market Linked Debenture (Rated AA+r(CE) by CRISIL) Issued by India Infoline Finance Ltd. (Rated AA by CRISIL)backed by Gold loan receivables originated by IIFL and assigned to the SPVwith the below features
Credit Enhancement:• MLD issued is bankruptcy remote i.e. Investor is not subject to the credit risk of
the issuer• Guaranteed by SPV, which will service cash flow if not paid by the issuer• SPV holds Gold Loans worth 1.25x of Nominal Value of the Debentures issued
throughout the tenor of MLD• Extra collateral in the form of Bank Guarantee (@7% of the issue size) will be
provided to the SPV by the issue
Lock-in attractive yields:• MLD offers 9.00% p.a. pre-tax yield which is attractive in medium term• Other AAA rated instruments are currently yielding about 8% p.a. Pre-tax
Tax -Efficient wrapper:• The structured product will be issued as listed secured NCD. Capital Gain arising
from the sale of these NCDs will be taxed at 10% + applicable surcharge andcess
Pay-outs post 12 months of the issue:• Aims to generate regular cash flows from the pay-outs after 12 months of the
issue
47
Pay-off:
Illustrative Cash-flows:
Please Note: the above illustration tables is for representation purpose only. The actual interest payout will be determined based on the actual payout schedule and yield fixed at
9% p.a. (pre-tax, after factoring-in principal payment)
IIFL Credit Enhanced Market Linked Debenture
48
IIFL Credit Enhanced Market Linked Debenture
Terms Description
Issuer IIFL Finance
Credit Rating of the Issuer
AA by CRISIL
Instrument Credit Enhanced Market Linked Debenture
Credit Rating of the Instrument
AA+ r (CE) by CRISIL
Tenure 18M/24M
Return (XIRR) 9% p.a. (based on pay-off)*
Benchmark / Underlying
7.26% GS 2029
Collateral Gold Loan Pool and Bank Guarantee
Liquidity Listed on NSE
*The actual interest pay-out will be determined based on the actual pay-out schedule and yield fixed at 9% p.a. (pre-tax, after factoring-in principal payment)
Terms Description
Initial Level Clean Price of underlying security on Trade
Date
Final Level Clean Price of underlying Security on date falling 5 BD prior to the date on which the entire Principal is repaid
Pay-off
If Final Value >50%*Initial Value then Principal + Coupon (TBD); Else only Principal
Initial Value = Clean Price of underlying security on Trade Date
Final Value = Clean Price of underlying Security on Trade Date+18M
Underlying Index / Security : 7.26% GS 2029 (10yr G-Sec)
Face Value per Debenture
10 Lacs
Min Investment Amount
10 Lacs & further in multiple of 10 Lacs
Issue Size Rs. 400 Crores
Introducing, Secure Trust April 2020 Pass Through Certificates Series A, which is asecuritized instrument originated by India Infoline Finance Ltd. backed by a pool of goldloan receivables. It has a very strong degree of safety regarding timely payment offinancial obligations.
• Short term investment tenure of 8-12 months
• Highest short term investment rating of A1+ (SO) by CRISIL Ltd.
Why you should invest in this product
• Earn 10% p.a. pre-tax interest compared to other short term options with averageexpected pre-tax returns of 4% to 5.5% p.a.
• Highly secured as it is collateralized against physical gold jewellery of value close to 1.6x(including overcollateralization) i.e. for Rs.1 Cr loan in the pool, collateral of gold taken of~Rs.1.60 Cr
• Possibility of regular income with expected interim payment of interest & part payment ofprincipal
• Low credit risk - Risk gets diversified across multiple borrowers:
o Highly diversified pool of borrowers (25,410 borrowers) across India
o Borrowers with average 4.4 months of payment history with no default
• High credit support to enhance credit quality of securitized pool:
o In case of unlikely event of default and/or fall in gold prices by more than 30% in valueat pool level, servicer to take first 10% loss
o Servicer also provides 5% additional corporate guarantee enhancing the security cover
49
Gold PTC – Secure Trust April 2020
Securitization of Loans
Gold Loan 3
Gold Loan 2
Gold Loan 1
Issue of Gold PTCs
Receivables• Monthly Interest
• Loan maturity in the pool
• Prepayments of loans
50
Gold PTC – Secure Trust April 2020
Parameter Description
InstrumentPass through Certificate (PTC) Series A
PTC Rating (for Series A) CRISIL A1 + (SO)
Face Value of PTC INR 10,000
Minimum Investment INR 5,00,000 (50 units)
Coupon 10% per annum
First coupon date 18th May 2020
Issue Open / Close date 30th April 2020
Legal final maturity 18th April 2021
Parameter Description
Trust Name Secure Trust April 2020
Servicer IIFL Finance Ltd.
Trustee Catalyst Trusteeship Ltd
Underlying Receivables
Principal, interest and all other amounts receivable on 25,410 loan contracts
Pool cut-off date 31st March 2020
Transaction Commencement
30th April 2020
Pricing Structure Par
PTC Payout Date18th of every month till maturity and if such day is not a business day, the immediately succeeding business day
Terms of Investment Key Transaction Details
DisclaimerMutual Fund investments are subject to market risks, read all scheme related documents carefully.
Nothing in this document constitutes investment, legal, accounting or tax advice or a representation that any investment or strategy is suitable or appropriate to the investor's specific
circumstances. The details included are based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is itsaccuracy or completeness guaranteed.
Investors should consult their financial advisers if in doubt about whether the product is suitable for them. The fund may or may not be suitable for all investors, who must make their
own investment decisions, based on their own investment objectives, financial positions and needs. This document may not be taken in substitution for the exercise of independentjudgment by any investor. The investor should independently evaluate the investment risks.
India Infoline Ltd. or any of its director/s or principal officer/employees and associate companies (IIFL) does not assure/give guarantee for accuracy of any of the facts/interpretations in
this document, and shall not be liable to any person including the beneficiary for any claim or demand for damages or otherwise in relation to this opinion or its contents.
The aimed returns mentioned anywhere in this document are purely indicative and are not promised or guaranteed in any manner. Returns are dependent on prevalent market factors,liquidity and credit conditions. Instrument returns depicted are in the current context and may be significantly different in the future.
The group company of India Infoline Limited, IIFL Wealth Management Limited is the Sponsor of IIFL Mutual Fund and holding company of the Investment Manager & Trustee Company
of IIFL Mutual Fund.
IIFL or its subsidiaries & affiliates may be holding all or any of the units of the scheme(s), referred in the document. The information contained herein is strictly confidential and meantsolely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any
form, without prior written consent of IIFL. While due care has been taken in preparing this document, IIFL and its affiliates accept no liabilities for any loss or damage of any kindarising out of any inaccurate, delayed or incomplete information nor for any actions taken in reliance thereon.
This document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction,
where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IIFL or its affiliates to any registration or licensing requirementwithin such jurisdiction. IIFL and/or its associates receive compensation/ commission for distribution of Mutual Funds from various Asset Management Companies (AMCs).
IIFL hosts the details of the commission rates earned by IIFL from Mutual Fund houses on our website https://ttweb.indiainfoline.com/trade/downloads/brokerage%20file.pdf. Hence,
IIFL or its associates may have received compensation from AMCs whose funds are mentioned in the report during the period preceding twelve months from the date of this report fordistribution of Mutual Funds or for providing marketing advertising support to these AMCs. IIFL group, associate and subsidiary companies are engaged in providing various financial
services and for the said services (including the service for acquiring and sourcing the units of the fund) may earn fees or remuneration in form of arranger fees, referral fees, advisoryfees, management fees, trustee fees, Commission, brokerage, transaction charges, underwriting charges, issue management fees and other fees.
Please refer to http://www.indiainfoline.com/research/disclaimer and http://www.indiainfoline.com/mf/disclaimer for additional recommendation parameter, analyst disclaimer and
other disclosures.
Please refer to http://www.indiainfoline.com/research/disclaimer for recommendation parameter, analyst disclaimer and other disclosures.
IIFL Group | IIFL Securities Ltd (CIN No.:L99999MH1996PLC132983) IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-23, MIDC, Thane Industrial Area, Wagle Estate, Thane -400604. Tel.: (91-22) 2580 6650 *Customer Service: 40071000 *Stock Broker SEBI Regn: INZ000164132 *NSE: 10975 *BSE: 0179 *MCX:55995 *NCDEX:378 *Depository: INDP185
2016 *MF Distributor ARN: 47791, *PMS SEBI Regn.: INP000002213, *Investment Adviser SEBI Regn. : INA000000623, *Research Analyst SEBI Regn:- INH000000248 | Kindly referto www.indiainfoline.com for detailed disclaimer and risk factors.
For Research related queries, write at [email protected]
For Sales and Account related information, write to customer care: [email protected] or call on 91-22 4007 1000
51