iti - cover page - final low · 2019. 10. 11. · formalisation of indian economy: sectors where...

Your partner for long-term wealth creation

SEPTEMBER 2019FUND FACTSHEET

Our Equity Investment Philosophy

SMARGIN

OF SAFETY

QQUALITY OF

THE BUSINESS

LLOW

LEVERAGE

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

Formalisation of Indian Economy: Sectors where unorganised to organised shift can happen rapidly – Real Estate, FMCG, Retail, Flexi-staffing etc

Under penetrated sectors & Beneficiaries of Indian Demography - Consumer Durables, Healthcare, Infrastructure, Auto, FMCG

Exporters & Import substitution businesses – IT, Pharma & Manufactured Exports.

Anti-Pollution – Gas Utilities, Auto

All broad market valuation indicators such as Yield Gap, Market Capitalisation to GDP and Price to Book Value Multiples suggest that valuations are becoming reasonable for the market as a whole.

George Heber JosephCEO & CIO

“The big money is not in the buying or selling, but in the waiting.” Charlie Munger

Being patient allows investors to benefit from the magic of compounding. High-quality businesses do not often trade at significant discounts to their intrinsic values. When you get them cheap or are available at reasonable valuation, investors should invest into those companies’ stocks and keep waiting for the underlying businesses to grow. As the companies’ earnings keep growing the stocks would also start reflecting the earnings growth in it and thereby experiencing the compounded returns in stocks.

Our in-house Investment philosophy allows us to buy good quality, non-leveraged simple businesses at reasonably attractive valuations and hold on to it from a long term perspective and thereby generating good compounded returns experience for our investors.

Our strong belief is that we are at the bottom of the economic cycle and many sectors are going through severe cyclical down turn which is throwing up very good opportunities to invest into some of the good companies at attractive valuations.

Make-in India: A big step, though will take time to boost exports

Slashing income-tax rate to 17% for newly set up domestic manufacturing companies (before March 2019) is on the lines of those offered by Thailand and Vietnam recently and one of the lowest across Asian countries. This can attract significant FDIs into our country and India could be seen as a strong manufacturing destination. However, cut in tax rate is just one of the key aspects. India needs to work on other issues like inadequate infrastructure, delays in land acquisitions, complex and stringent labour laws to compete with other Asian peers. Going by the government's proactive approach and openness to listen to the industry, expect more initiatives towards addressing these issues. Nevertheless, the move makes a strong case for India in attracting companies and business shifting away from China in the face of US-China trade war, especially in sectors like engineering, electronics, apparel, agrochemicals, and chemicals. Export-oriented Indian Companies in these sectors will also look at raising investment in new plants to strengthen their global business.

Our government has taken various long term steps in the last three years and our economy is going through a series of changes. The biggest change to be kept in mind in our view is the “Formalisation of our Indian Economy”. All initiatives undertaken by the government - Demonetization, GST, RERA, IBC, Corporate Tax Cuts, possible changes in labour code, digitization push and activities to curb black-money- all are linked to the same super theme.

Some of the key structural themes that we believe in and part of our funds are as follows:

Market Share Gainers

Private corporate banks

Private insurers ( General & Life)

’

‘

SEPTEMBER 2019 1FUND FACTSHEET

“If we avoid the losers, the winners will take care of themselves.”

Our strong belief is that we are at the bottom of the economic cycle and many sectors are going through severe cyclical down turn which is throwing up very good opportunities to invest into some of the good companies at attractive valuations

•

•

•

Formalisation of Indian Economy: Sectors where unorganised to organised shift can happen rapidly – Real Estate, FMCG, Retail, Flexi-staffing etc

Under penetrated sectors & Beneficiaries of Indian Demography - Consumer Durables, Healthcare, Infrastructure, Auto, FMCG

Exporters & Import substitution businesses – IT, Pharma & Manufactured Exports.

Anti-Pollution – Gas Utilities, Auto

All broad market valuation indicators such as Yield Gap, Market Capitalisation to GDP and Price to Book Value Multiples suggest that valuations are becoming reasonable for the market as a whole.

Equity Market Outlook:

Post government announcement on corporate tax cuts our bullishness on equity markets have only increased. We strongly believe that all negative factors portrayed today are going to reverse soon and we have been mentioning that we have to poise for the mean reversion of corporate profitability to GDP (currently at 15 year lows), increase in jobs (July’19 CMIE data suggests job losses are at multi-year high), business cycles reversing (presently many sectors are seeing significant downturn) in many sectors and normalisation of valuations as earnings growth picks up in coming years.

Our call of preferring large caps over mid and small caps, even after the general elections in May 2019, has paid off. We do not feel to change that stance as of now as we see larger companies are taking market share from smaller ones and bringing disruption. Moreover large cap stocks valuation offer good risk reward as well. Selectively some mid and small cap stocks are looking attractive and we have taken some exposure to those as can be seen in from our ITI Multi Cap Fund.

India’s long-term growth outlook continues to remain strong. Market valuations are coming nearer to long term averages and many sectors/stocks are now available at or below long-term averages, increasing the opportunities for bottom up stock picking. Interest rates are low, monsoon has improved, oil prices are stable and valuations look interesting. Markets just need some catalyst to improve confidence. We feel investors should use the current volatility to systematically increase equity exposure with a three year plus time horizon.

Our view is that multi cap funds offer good long term wealth creation prospects. Thinking from investor perspective, we have launched two multi cap category products – ITI Multi Cap Fund and ITI Long Term Equity Fund (ELSS) in this market environment.

“The big money is not in the buying or selling, but in the waiting.” Charlie Munger

Being patient allows investors to benefit from the magic of compounding. High-quality businesses do not often trade at significant discounts to their intrinsic values. When you get them cheap or are available at reasonable valuation, investors should invest into those companies’ stocks and keep waiting for the underlying businesses to grow. As the companies’ earnings keep growing the stocks would also start reflecting the earnings growth in it and thereby experiencing the compounded returns in stocks.

Our in-house Investment philosophy allows us to buy good quality, non-leveraged simple businesses at reasonably attractive valuations and hold on to it from a long term perspective and thereby generating good compounded returns experience for our investors.

Our strong belief is that we are at the bottom of the economic cycle and many sectors are going through severe cyclical down turn which is throwing up very good opportunities to invest into some of the good companies at attractive valuations.

Make-in India: A big step, though will take time to boost exports

Slashing income-tax rate to 17% for newly set up domestic manufacturing companies (before March 2019) is on the lines of those offered by Thailand and Vietnam recently and one of the lowest across Asian countries. This can attract significant FDIs into our country and India could be seen as a strong manufacturing destination. However, cut in tax rate is just one of the key aspects. India needs to work on other issues like inadequate infrastructure, delays in land acquisitions, complex and stringent labour laws to compete with other Asian peers. Going by the government's proactive approach and openness to listen to the industry, expect more initiatives towards addressing these issues. Nevertheless, the move makes a strong case for India in attracting companies and business shifting away from China in the face of US-China trade war, especially in sectors like engineering, electronics, apparel, agrochemicals, and chemicals. Export-oriented Indian Companies in these sectors will also look at raising investment in new plants to strengthen their global business.

Our government has taken various long term steps in the last three years and our economy is going through a series of changes. The biggest change to be kept in mind in our view is the “Formalisation of our Indian Economy”. All initiatives undertaken by the government - Demonetization, GST, RERA, IBC, Corporate Tax Cuts, possible changes in labour code, digitization push and activities to curb black-money- all are linked to the same super theme.

Some of the key structural themes that we believe in and part of our funds are as follows:

Market Share Gainers

Private corporate banks

Private insurers ( General & Life)


SQL

Margin of SafetyQuality of the BusinessLow Leverage

SafetyQuality of the BusinessLiquidity

Investment Philosophy Equity Fixed Income

•

•

••

Investment Philosophy as an Edge!

Our investment philosophy is represented by SQL and this is applicable to both Equity and Fixed Income.

The “SQL” philosophy is aligned to our equity investment objective of ‘Long Term Wealth Creation’. We believe this investment philosophy would stand the test of times and follows our overriding belief that "If we avoid the losers, the winners will take care of themselves." Avoiding losers from the portfolio (low quality companies, companies with bad corporate governance, etc) is very important and core to our investment philosophy.

How do we manage Risk & Return? Our primary goal is superior investment performance with less-than-commensurate risk. So our goal is not superior investment performance but our focus will be superior risk adjusted returns vs. Benchmarks and Peer funds. We do not believe in the predictive ability required to correctly time markets so we will keep Equity and Debt portfolios more than 90% invested all the time whenever attractively priced assets can be bought.

Debt Market Outlook:

India’s 10 year G-Sec yield increased by 15 bps during September, on account of fears of possible rise in fiscal deficit, post the tax cut announcements. However, the rise in G Sec yield has been modest due to possibility of higher divestment revenue, higher receipts under the small savings scheme, and a possible overseas bond issue. Liquidity conditions remain favourable both in India and globally with Central Banks continuing with easy monetary policy and bond yields remain soft.

RBI and Governments are focussing their attention on better transmission of rate cuts to the final borrower. However, the concerns on credit quality, due to weak economic activity and weakness in real estate sector is keeping credit growth weak despite lower funding costs.

In the last six months, G-Ses yields have fallen substantially while the spread between corporate bonds and G-Secs has not contracted as much. With inflation already at low levels, any uptick in growth can limit the prospect of further decline in G-Sec yields.

Our view at this point of time is to be invested in the short end of the curve and focus more on good quality accrual debt instruments. One should play this rally only with high quality names having sound credit worthiness. We feel large part of the decline in yields has already happened, core inflation & food inflation started inching up and potentially overshoot RBI forecasts as well.


Market ReviewSeptember 2019

Equity Market Update

Indian markets significantly outperformed key developed and emerging markets in September 2019.

FIIs turned buyers in Indian equities with net buying of about USD 1.1 bn in September 2019, after being net sellers for the past two months.

Net inflows in equity and equity oriented hybrid funds (excluding arbitrage funds) were healthy at Rs 88 bn in August 2019, though slightly lower than July 2019. SIP flows remain healthy at over Rs 80 bn.

Market valuations remain closer to longer term averages and conducive to adding equity exposure with a medium term view.

Indian equity markets ended September 2019 in the positive territory after witnessing the highest single-day gain of 5.32% (Sep 20) in more than a decade on the back of Government’s announcement of sharp reduction in corporate tax rates and further concessions for new manufacturing companies.

Key benchmark indices S&P BSE Sensex and Nifty 50 rose 3.57% and 4.09% to close at 38,667.33 and 11,474.45, respectively. Broader market performance was mixed with NSE Midcap index underperforming the benchmarks while BSE Small cap index outperformed. Sectorally, autos, consumer and private sector banks outperformed while pharma, IT and media underperformed.

The corporate tax cut announcement is a significant measure to improve competitiveness of Indian businesses and boost the animal spirits of the markets and the entrepreneurs. The measures are not sector specific and are clearly aimed at encouraging investments.

3M 6M 1Y

Change in %

S&P BSE SensexNifty 50S&P BSE 200Nifty 500Nifty Mid CapS&P BSE Small Cap

-1.85-2.67-2.69-3.28-9.22-7.50

1MMonth End

ValueIndex

3.574.094.024.052.395.07

38667.3311474.45

4794.259340.90

16026.0013170.76

-0.01-1.29-2.31-3.34

-12.23-12.35

6.704.953.492.45

-6.54-8.69

3Y

11.5410.04

8.838.101.311.01

5Y

7.747.578.077.807.014.28

1M3M6M1Y3Y5Y

7,548-22,463

9,24636,38744,083

126,800

11,02943,52050,31684,457

323,481425,277

Net Flows

Domestic Indices Performance

Net Institutional Flows - Equity (in Rs. Crore)

Source: NSE & BSE

Source: SEBI

FII Flows MF Flows

3M 6M 1Y

Change in %

DJIAS&P 500FTSEDAXCACNikkeiHang SengKOSPIShanghaiMSCI EMMSCI India

1.191.19

-0.230.242.512.26

-8.58-3.17-2.47-5.11-5.52

1MMonth End

ValueIndex

1.951.722.794.093.605.081.434.840.661.693.53

26916.832976.747408.21

12428.085677.79

21755.8426092.27

2063.052905.191001.00

18.32

3.815.021.777.836.122.59

-10.19-3.63-6.00-5.40-5.14

1.732.15

-1.351.473.34

-9.75-6.07

-11.892.96

-4.483.61

3Y

13.7111.14

2.405.748.489.773.850.32

-1.123.485.14

5Y

9.578.582.275.575.156.112.610.424.21

-0.092.49

Global Indices Performance

Source: Thomson Reuters Eikon

3M 6M 1Y

Change in %

Nifty AutoNifty BankNifty EnergyNifty FMCGNifty India ConsumptionNifty InfrastructureNifty ITNifty MetalNifty CommoditiesNifty PharmaNifty PSENifty Realty

-5.49-6.44-3.405.384.22

-4.77-2.49

-18.13-8.89-6.42

-11.31-9.15

1MMonth End

ValueIndex

6.906.117.786.426.066.91

-2.946.557.28

-6.507.09

-3.16

7493.1529103.1515501.6031134.50

4956.153208.40

15540.152439.853312.207547.753243.70

258.75

-10.10-4.35-5.962.682.080.02

-0.56-19.85

-8.65-19.25

-9.51-3.88

-21.7615.76-1.244.603.388.08

-1.87-29.86-10.10-24.20

-8.8517.72

3Y

-9.2614.7016.6913.06

8.514.73

14.72-1.103.02

-13.00-2.488.48

5Y

-1.0513.5810.81

9.398.851.216.57

-3.163.36

-6.99-1.564.99

Sectoral Performance

Source: NSE

Nifty 50 - P/E

Nifty 50 - P/B

Source: NSE

Source: NSE


22

25

28

31

Sep-18 Jan-19 May-19 Sep-19

3.10

3.40

3.70

4.00

Sep-18 Jan-19 May-19 Sep-19

Yiel

d (%

)


Debt Market Update

Market ReviewSeptember 2019

Data from the Reserve Bank of India showed that India’s current account deficit (CAD) widened to $14.3 billion (2.0% of GDP) in Q1FY20 from $ 4.6 billion (0.7% of GDP) in the preceding quarter but narrowed from $15.8 billion (2.3% of GDP) in the same period of the previous year.

India’s consumer price index-based inflation rate touched 10-month high to 3.21% YoY in Aug 2019 from 3.15% in Jul 2019. However, inflation eased from 3.69% YoY, recorded a year ago. Sequential rise in inflation was due to acceleration in consumer food inflation price index that rose to 2.99% YoY from 2.36% in the similar period.

India’s Index of Industrial production (IIP) grew 4.3% YoY in Jul 2019, slower than 6.5% in Jul 2018. Manufacturing grew 4.2% in Jul 2019, much slower than 7.0%, a year ago. From Apr to Jul 2019, IIP grew eased to 3.3% YoY from 5.4% recorded in the corresponding period last year.

Liquidity conditions remained favourable as the overnight call rate traded in a range from 5.10% to 5.40% during the month under review compared with that of

the previous month when call rates traded in the range of 5.27% to 5.64%.

Yields on the 10-year U.S. Treasury bond rose 16 bps to close at 1.67% compared with the previous month’s close of 1.51%. U.S Treasury prices fell as trade tensions between U.S. and China eased to some extent. Prices fell further as the safe haven appeal of U.S. Treasuries came down on hopes that central banks across the globe will launch stimulus measures to support their slumping economies.

Yield on gilt securities increased across the maturities in the range of 6 bps to 32 bps barring 1 and 2-year paper which fell 1 bps and 4 bps respectively. Yield on corporate bonds increased across 6 to 10-year maturities in the range of 4 bps to 20 bps barring 1 to 5-year maturities and 15-year paper which fell in the range of 6 bps to 56 bps. Difference in spread between corporate bond and gilt securities contracted across the maturities in the range of 5 bps to 72 bps barring 7-year paper which expanded 6 bps.

India Yield Curve Shift (Year- on- Year)

1M

3M

6M

1Y

3Y

5Y

-990

20,115

24,522

29,566

84,109

173,221

31,354

134,469

260,200

549,243

1,181,038

2,011,769

Net Flows

Net Institutional Flows - Debt (in Rs. Crore)

Source: SEBI, NSDL

FII Flows MF Flows

3M 6M 1Y

Change in BPS

10Y GSEC CMT10Y AAA CMT10Y SPREAD*

1Y CD3M CD1Y CP3M CP

-18-23

-4-74-52-95

-115

1MMonth End

ValueIndex

144

-11-840

5-5

6.708.16136

6.425.897.055.85

-65-3830

-92-132-105-170

-133-8651

-198-154-225-230

3Y

-265582

-62-73-51-93

5Y

-182-101

92-261-275-236-306

Key Domestic Yield Indicators

Source: Thomson Reuters Eikon; *Absolute Change

3M 6M 1Y

Change in %

CPIFOOD & BEVERAGESFUEL & LIGHTHOUSINGCORE CPI

0.160.93

-4.180.02

-0.03

1MAug -19Index

0.060.63

-1.41-0.03-0.05

3.212.96

-1.704.844.20

0.643.03

-2.94-0.26-1.09

-0.482.18

-10.25-2.75-1.75

3Y

-1.84-2.87-4.19-0.45-0.39

5Y

-3.82-5.62-5.62-1.22-1.72

Inflation Indicators

Source: Thomson Reuters Eikon, Bloomberg

3M 6M 1Y

Change in %

US 2Y CMT YIELD (Change in BPS)US 10Y CMT YIELD (Change in BPS)BrentUSD/INRIIPManufacturing PMIService PMI

Trade DeficitNet Oil ImportsNet Non-Oil Trade DeficitNet Gold ImportsTrade Deficit ex Oil & GoldNET of Principal CommoditiesElectronic Goods

-12-33

-10.272.561.10

-0.702.20

1MIndex

1217

1.23-1.503.100.00

-1.40

1.621.67

61.8870.69

4.3051.4052.40

-65-74

-9.692.192.70

-1.20-0.10

-120-138

-25.63-2.57-2.20-0.800.90

3Y

867

27.256.04

-0.20N.A.N.A.

5Y

104-84

-34.4614.72-1.10

N.A.N.A.

147.5964.8982.7029.2253.4845.54

182.6992.3490.3524.1066.25

49.6

108.0659.3348.7315.1133.6230.33

97.4647.3750.09

4.6445.4534.69

125.7657.6368.1320.1947.9434.52

140.4095.8444.5717.6626.9129.13

150.59100.08

50.5119.8030.7124.14

Key Indicators

Source: Thomson Reuters Eikon, Bloomberg

2017 2016 20152018Jan toAug 2019 2014 2013

10-Yr Benchmark Gsec Bond

Source: Thomson Reuters Eikon

Source: CCIL

US $ Billion

Change in bps Sep-19 Sep-18

Month EndValue

-210

-140

-70

0

5.40

6.40

7.40

8.40

1 Yr 5 Yr 10 Yr 20 Yr 30 Yr

Yiel

d (%

)

6.0

6.8

7.6

8.4

Sep-16 Sep-17 Sep-18 Sep-19

47-19

This product is suitable for investors who are seeking*• Long-term capital growth• Investment in equity and equity-related securities of companies across various market capitalizations

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Investing in equities is simple – choose one fund that can dynamically invest across large, mid and small cap stocks to help you make the most of different opportunities to build wealth for the long term. Our fund managers follow the SQL philosophy – Margin of Safety, Quality of the Business and Low Leverage with the aim of providing better risk-adjusted returns in the long term. Invest now and get the benefits of all, in one!

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

ITI Multi Cap Fund(An open ended equity scheme investing acrossLarge Cap, Mid Cap and Small Cap stocks)

“Market caps, volatility, allocation, valuations. My fund takes care of all.”

Investors understand that their principalwill be at moderately high risk

RISKOMETER

Call: 1800 266 9603 | Email: [email protected] | www.itimf.com

THIS PRODUCT IS SUITABLEFOR INVESTORS WHO ARE SEEKING^

Face Value per Unit: Rs. 10 unless otherwise specified; Data is as of September 30, 2019 unless otherwise specified.

* Includes TREPs,Marginal Fixed Deposits and Net Current Assets

FUND FACTSHEET SEPTEMBER 2019 6

PORTFOLIO

ITI Multi Cap Fund(An open-ended equity scheme investing acrosslarge cap, mid cap, small cap stocks)

CATEGORY OF SCHEME: Multicap Fund

INVESTMENT OBJECTIVEThe investment objective of the Scheme is to generate long-term capital appreciation from a diversified portfolio that predominantly invests in equity and equity-related securities of companies across various market capitalisation. However, there can be no assurance that the investment objective of the Scheme will be realised.

SCHEME DETAILS

FUND MANAGER

Inception Date(Date of Allotment):Benchmark:

15-May-19Nifty 500 TRI

Minimum ApplicationAmount:

Load Structure:Entry Load:

Mr. George Heber Joseph (Since 15-May-19)Total Experience: 16 years

AUM (in Rs. Cr): 40.1535.9225.38%39.25%64

NAV as on September 30, 2019

Regular Plan(in Rs.)

10.671410.6714

Growth:Dividend:

Direct Plan(in Rs.)

10.754410.7544

AAUM (in Rs. Cr):

NA

% of top 5 holdings:% of top 10 holdings:No. of scrips:

Mr. Pradeep Gokhale (Since 15-May-19)Total Experience: 23 years

Rs. 1,000/- and in multiples of Re. 1/- thereafter

Nil

Exit Load: If units are redeemed/switched out within 12 months - 1%. Nil thereafter

Name of the Instrument % toNAV

% to NAVDerivatives

5.56

1.391.241.50

Equity & Equity Related TotalAutoMaruti Suzuki India Ltd.TVS Motor Company Ltd.Mahindra & Mahindra Ltd.Hero MotoCorp Ltd.Auto AncillariesJtekt India Ltd.Exide Industries Ltd.MRF Ltd.BanksHDFC Bank Ltd.Axis Bank Ltd.ICICI Bank Ltd.State Bank of IndiaKotak Mahindra Bank Ltd.City Union Bank Ltd.Bank of BarodaCementUltratech Cement Ltd.ConstructionMahindra Lifespace Developers Ltd.KNR Constructions Ltd.NBCC (India) Ltd.Construction ProjectLarsen & Toubro Ltd.Consumer DurablesJohnson CtrlsHitachi Air Cond India Ltd.Crompton Greaves Consumer Electrical LtdTitan Company Ltd.Consumer Non DurablesITC Ltd.Nestle India Ltd.United Spirits Ltd.Hindustan Unilever Ltd.Jubilant Foodworks Ltd.Asian Paints Ltd.Ferrous MetalsTata Steel Ltd.FinanceHousing Development Finance Corp Ltd.Cholamandalam Investment & Fin Co Ltd.HDFC Life Insurance Co. LtdCan Fin Homes Ltd.Equitas Holdings Ltd.ICICI Securities Ltd.

94.21

4.311.250.570.45

1.370.570.49

5.033.593.521.701.551.311.21

3.15

1.331.291.20

3.79

1.431.110.77

2.351.891.211.111.020.90

0.77

1.651.491.331.331.291.19

Name of the Instrument

Reliance Nippon Life Asset Mgmt Ltd.Geojit Financial Services Ltd.ICICI Prudential Life Insrnce Co. Ltd.ICICI Lombard General Insurance Co. Ltd.Max Financial Services Ltd.GasGAIL (India) Ltd.Healthcare ServicesDr. Lal Path labs Ltd.Industrial Capital GoodsSiemens Ltd.ABB India Ltd.Industrial ProductsSchaeffler India Ltd.Supreme Industries Ltd.Minerals/MiningCoal India Ltd.Non - Ferrous MetalsHindustan Zinc Ltd.PesticidesPI Industries Ltd.Petroleum ProductsReliance Industries Ltd.Bharat Petroleum Corporation Ltd.PharmaceuticalsTorrent Pharmaceuticals Ltd.Natco Pharma Ltd.Lupin Ltd.Alembic Pharmaceuticals Ltd.PowerNTPC Ltd.RetailingTrent Ltd.ServicesThomas Cook (India) Ltd.SoftwareInfosys Ltd.Tata Consultancy Services Ltd.HCL Technologies Ltd.Larsen & Toubro Infotech Ltd.Oracle Financial Services Software Ltd.Telecom - ServicesBharti Airtel Ltd.Short Term Debt & Net Current Assets

Market Capitalisation Wise Exposure

FUND FEATURES

Top Ten HoldingsDerivatives are considered at Exposure Level and included in Portfolio Aggregates

Long-term capital growthInvestment in equity and equity-related securities of companies across various market capitalization

^Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Computed for the 3-yr period ended September 30, 2019. Based on month-end NAV. * Risk free rate: NA (Source: FIMMDA MIBOR)

QUANTITATIVE DATA

PORTFOLIO DETAILS

Total Expense Ratio (TER):

Direct Plan: 0.45%Regular Plan: 2.45%

Including Additional Expenses and Goods and Service Tax on Management Fees

Portfolio Allocation (%)

September 2019

Fresh, no legacy/no baggage portfolio

Smooth investing experience for the investor

Long term wealth creation focus

Portfolio TurnoverRatio (Last 1 year):

NANANA

RISK RATIO

Standard Deviation:Beta:Sharpe Ratio :*

% toNAV1.150.960.950.42

1.53

1.15

1.170.66

0.980.65

0.85

1.60

0.65

4.151.74

1.841.831.160.53

1.84

0.35

1.31

2.691.271.241.191.13

0.710.23

% to NAVDerivatives

0.77

0.67

0.23%0.35%0.65%0.71%0.77%0.85%1.15%1.31%1.53%1.60%1.63%1.83%1.84%

2.44%3.15%3.31%

3.79%3.82%

5.36%6.55%6.58%

7.51%8.48%

12.54%22.02%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

BanksFinance

Consumer Non DurablesSoftware

AutoPetroleum Products

PharmaceuticalsConstruction

Construction ProjectConsumer Durables

CementAuto Ancillaries

PowerIndustrial Capital Goods

Industrial ProductsNon - Ferrous Metals

GasServices

Healthcare ServicesMinerals/Mining

Ferrous MetalsTelecom - Services

PesticidesRetailing

Cash and Cash Equivalent*

Large Cap71.93%

Mid Cap14.41%

Small Cap13.66%

Strong expertise in equity research

Differently positioned as a flexi cap within the multicap segment

SQL investment philosophy

When markets are expensive, the fund generally reduces risk and when markets are undervalued fund increases the risk in the portfolio so that risk adjusted return and investor experience becomes smooth and rewarding

THIS PRODUCT IS SUITABLEFOR INVESTORS WHO ARE SEEKING^

Face Value per Unit: Rs. 10 unless otherwise specified; Data is as of September 30, 2019 unless otherwise specified.

FUND FACTSHEET SEPTEMBER 2019 7

PORTFOLIO

ITI Arbitrage Fund(An open ended scheme investing in arbitrage opportunities)

CATEGORY OF SCHEME: Arbitrage Fund

INVESTMENT OBJECTIVEThe investment objective of the Scheme is to generate income by predominantly investing in arbitrage opportunities in the cash and the derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments. However, there is no assurance that the investment objective of the scheme will be realized.

SCHEME DETAILS

FUND MANAGER

Inception Date(Date of Allotment):Benchmark:

09-Sep-19Nifty 50 Arbitrage Index


Load Structure:Entry Load:

Mr. George Heber Joseph (Since 09-Sep-19)Total Experience: 16 years

AUM (in Rs. Cr): 48.7943.70

NAV as on September 30, 2019


10.029910.0299

Growth:Dividend:

Direct Plan(in Rs.)

10.034410.0344

AAUM (in Rs. Cr):

NA

Mr. Milan Mody (Since 09-Sep-19)Total Experience: 16 years


NilExit Load: Nil

Name of the Instrument % toNAV

% to NAVDerivatives

-73.06

-7.31-6.34-5.67

-4.34

-7.30

-8.38

Equity & Equity Related TotalBanksIndusInd Bank Ltd.HDFC Bank Ltd.ICICI Bank Ltd.Consumer DurablesTitan Company Ltd.Consumer Non DurablesITC Ltd.FinanceHousing Development Finance Corp Ltd.

72.65

7.266.295.62

4.30

7.29

8.31

Name of the Instrument

GasPetronet LNG Ltd.Petroleum ProductsReliance Industries Ltd.PharmaceuticalsLupin Ltd.PowerNTPC Ltd.SoftwareTata Consultancy Services Ltd.Short Term Debt & Net Current Assets

To generate income by predominantly investing in arbitrage opportunitiesInvestments predominantly in arbitrage opportunities in the cash and derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments


Computed for the 3-yr period ended September 30, 2019. Based on month-end NAV. * Risk free rate: NA (Source: FIMMDA MIBOR)

QUANTITATIVE DATA

PORTFOLIO DETAILS




September 2019

Portfolio TurnoverRatio (Last 1 year):

NANANA

RISK RATIO

Standard Deviation:Beta:Sharpe Ratio :*

% toNAV

8.31

9.69

0.72

8.09

6.7827.34

% to NAVDerivatives

-8.35

-9.73

-0.72

-8.13

-6.79

September 2019

Comparatively higher risk adjusted returns vis a vis savings accounts

Disciplined risk management

Low Risk

Hedge in rising interest rate scenario

Daily accrual

High liquidity

High credit qualitydebt papers

SEPTEMBER 2019 8

FUND FEATURES

Top Ten Holdings

PORTFOLIO

ITI Liquid Fund(An open-ended liquid Scheme)

INVESTMENT OBJECTIVE

The investment objective of the Scheme is to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities. However, there can be no assurance that the investment objective of the scheme will be realised.

SCHEME DETAILS

FUND MANAGER

PORTFOLIO DETAILS

Benchmark:

24-Apr-19

CRISIL Liquid Fund Index


Load Structure:


Entry Load: NilExit Load: Nil


Mr. George Heber Joseph (Since 24-Apr-19)Total Experience: 16 years

Mr. Milan Mody (Since 24-Apr-19)Total Experience: 16 years

AUM (in Rs. Cr): 26.0615.91

NAV as on August 31, 2019

THIS PRODUCT IS SUITABLEFOR INVESTORS WHO ARE SEEKING

AAUM (in Rs. Cr):

Average Maturity:Macaulay Duration:Yield to Maturity:

4.21 Days4.22 Days5.31%


Name of the Instrument Ratings % toNAV

4.60

93.96

1.44

100.00

Debt Instruments

Fixed Deposits

Axis Bank Ltd.

Reverse Repo/TREPS

The Clearing Corporation of India Ltd.

Net Current Assets

Total Net Assets

NA

NA

NA

Market Value(Rs. Lakhs)

120.00

2449.00

37.50

Portfolio Composition by Asset Class (%) Portfolio Classification by Rating Class (%)

CATEGORY OF SCHEME: Liquid Fund

QUANTITATIVE DATA


1024.90361001.0000----1001.79841024.9282

Growth:Daily Dividend:Weekly Dividend:Fortnightly Dividend:Monthly Dividend:Annual Dividend:

Direct Plan(in Rs.)

1025.39771001.2750--1001.83111001.81021025.4069

Income over short term.Investment in money market and debt instruments.


FUND FACTSHEET


Face Value per Unit: Rs. 1000 unless otherwise specified; CD - Certificate of Deposit; CP - Commercial Papers;Data is as of September 30, 2019 unless otherwise specified.

^

Inception Date(Date of Allotment):

Triparty Repo93.96%

Fixed Deposits4.60%

Net Current Assets1.44%

Fixed Deposit4.60%

Cash & cashequivalent, 95.40%

Glossary

How to read factsheet

Average MaturityWeighted average maturity of the securities in scheme.

Macaulay Duration (Duration)Macaulay Duration (Duration) measures the price volatility of fixed income securities. It is often used in the comparison of interest rate risk between securities with different coupons and different maturities. It is defined as the weighted average time to cash flows of a bond where the weights are nothing but the present value of the cash flows themselves. It is expressed in years. The duration of a fixed income security is always shorter than its term to maturity, except in the case of zero-coupon securities where they are the same.

Portfolio Yield (Yield To Maturity)Weighted average yield of the securities in a scheme portfolio.

Total Expense Ratio (TER)Total expenses charged to scheme for the month expressed as a percentage to average monthly net assets.


Portfolio Turnover RatioPortfolio Turnover Ratio is the percentage of a fund’s holdings that have changed in a given period. This ratio measures the fund’s trading activity, which is computed by taking the lesser of purchases or sales and dividing it by average monthly net assets.

Tracking ErrorTracking error indicates how closely the portfolio return is tracking the benchmark index return. It measures the deviation between portfolio return and benchmark index return. A lower tracking error indicates portfolio is closely tracking benchmark index and higher tracking error indicates higher deviation of portfolio returns from benchmark index returns.

Risk Free ReturnThe theoretical rate of return of an investment with safest (zero risk) investment in a country.

Growth and Cumulative optionGrowth and Cumulative words are used alternatively.

Fund ManagerAn employee of the asset management company such as a mutual fund or life insurer, who manages investments of the scheme. He is usually part of a larger team of fund managers and research analysts.

Application Amount for Fresh SubscriptionThis is the minimum investment amount for a new investor in a mutual fund scheme.

Minimum Additional AmountThis is the minimum investment amount for an existing investor in a mutual fund scheme.

SIPSIP or systematic investment plan works on the principle of making periodic investments of a fixed sum. It works similar to a recurring bank deposit. For instance, an investor may opt for a SIP that invests Rs. 500 on every 15th of a month in an equity fund for a period of three years.

NAVThe NAV or the net asset value is the total asset value per unit of the mutual fund after deducting all related and permissible expenses. The NAV is calculated at the end of every business day. It is the value at which an investor enters or exits the mutual fund.

BenchmarkA group of securities, usually a market index, whose performance is used as a standard or benchmark to measure investment performance of mutual funds. Some typical benchmarks include the NIFTY, Sensex, BSE200, NSE500, Crisil Liquid Fund Index and 10-Year Gsec.

Entry LoadA mutual fund may have a sales charge or load at the time of entry and/or exit to compensate the distributor/agent. Entry load is charged when an investor purchases the units of a mutual fund. The entry load is added to the prevailing NAV at the time of investment. For instance, if the NAV is Rs. 100 and the entry load is 1%, the investor will enter the fund at Rs. 101.(Note: SEBI, vide circular dated June 30, 2009 has abolished entry load and mandated that the upfront commission to distributors will be paid by the investor directly to the distributor, based on his assessment of various factors including the service rendered by the distributor).

Exit LoadExit load is charged when an investor redeems the units of a mutual fund. The exit load is reduced from the prevailing NAV at the time of redemption. The investor will receive redemption proceeds at net value of NAV less Exit Load. For instance, if the NAV is Rs. 100 and the exit load is 1%, the investor will receive Rs. 99.

Yield to Maturity (YTM)The Yield to Maturity or the YTM is the rate of return when a bond is held until maturity. YTM is expressed as an annual rate. The YTM factors in the bond’s current market price, par value, coupon interest rate and time to maturity.

Modified DurationModified duration is the price sensitivity and the percentage change in price for a unit change in yield.

Standard DeviationStandard deviation is a statistical measure of the range of an investment’s performance. When a mutual fund has a high standard deviation, it means its range of performance is wide, implying greater volatility.

Sharpe RatioThe Sharpe Ratio, named after its founder, the Nobel Laureate William Sharpe, is a measure of risk-adjusted returns. It is calculated using standard deviation and excess return to determine reward per unit of risk.

Beta Ratio (Portfolio Beta)Beta is a measure of an investment’s volatility vis-a-vis the market. Beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 implies that the security’s price will be more volatile than the market.

AUMAUM or assets under management refers to the recent / updated cumulative market value of investments managed by a mutual fund or any investment firm.

HoldingsThe holdings or the portfolio is a mutual fund’s latest or updated reported statement of investments/securities. These are usually displayed in terms of percentage to net assets or the rupee value or both. The objective is to give investors an idea of where their money is being invested by the fund manager.

Nature of SchemeThe investment objective and underlying investments determine the nature of the mutual fund scheme. For instance, a mutual fund that aims at generating capital appreciation by investing in stock markets is termed an equity fund or growth fund. Likewise, a mutual fund that aims at capital preservation by investing in debt markets is a debt fund or income fund. Each of these categories may have sub-categories.

Rating ProfileMutual funds invest in securities after evaluating their creditworthiness as disclosed by the ratings. A depiction of the mutual fund in various investments based on their ratings becomes the rating profile of the fund. Typically, this is a feature of debt funds.

“My fund gives me both! Tax saving. Wealth creation.”

Benefits of investing• Save tax up to Rs. 46,800* under section 80C of the Income Tax Act, 1961

• Opportunity for long-term wealth creation

• Shortest lock-in period among all eligible 80C investments

NFO Closes October 14, 2019ITI Long Term Equity Fund(An open ended equity linked saving scheme with a statutorylock in of 3 years and tax benefit)

Call: 1800 266 9603 | Email: [email protected] | www.itimf.com

Investors understand that their principalwill be at moderately high risk

RISKOMETER

This product is suitable for investors who are seeking*• Capital appreciation over long term• Investment in equity and equity related securities*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

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

* To save tax up to Rs. 46,800: Individual and HUF having taxable income of less than Rs. 50 lakhs can invest upto Rs. 1.5 lakhs under the ELSS scheme during the FY 2019-20 as per provision of Section 80C of the Income Tax Act 1961 (Includes applicable cess).

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