an open ended dynamic asset allocation fund...1 previously known as edelweiss dynamic equity...

1Previously known as Edelweiss Dynamic Equity Advantage Fund

Edelweiss Balanced Advantage Fund

Market kam ho ya zyada, Advantage rakhne ka ek Balanced irada!

An Open Ended Dynamic Asset Allocation Fund

February -2019

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Asset Allocation

Types of Asset

Allocation

Static:

Invest in various asset classes such as stocks and bonds with precise amount

within each type.

Dynamic:

Rotate among stocks, bonds and cash with changing market situations


Asset Allocation is easy said than done

Difficulties in following Asset Allocation

Hence, most choose static50-50 Asset Allocation Strategy

Choosing right allocation in each asset class

Rebalance portfolio with frequently changing market dynamics

Market noise generally leads to bias opinions

Controlling Sentiments

Tax Efficiency while rebalancing the portfolio

4


Dynamic Asset Allocation – A superior approach

Dynamic Asset Allocation is best way of Asset Allocation as it• Reduces probability of negative return in short term• Provides better investment experience than pure equity or static asset allocation

Investment Period

Probability of negative returns (Days with negative returns/Total no. of days)

Pure EquityStatic Equity

Allocation(50% Eqt, 50% Debt)

Dynamic Equity Allocation (30-80%

Equity)

1 year 33% 21% 10%

3 year 20% 5% 0%

5 year 13% 0% 0%

10 years 1% 0% 0%




It’s a dynamic asset allocation fund which aims to generate absolute returns withlow volatility over a longer tenure of time

Fund Invests in arbitrage opportunities, debt, pure equity based on EEHI Model.

Equity Liked Returns High Liquidity

Lower VolatilityTAX Efficient Returns

The Fund aims to fulfill following investor expectations

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Dynamic Asset Allocation using EEHI

Edelweiss Equity Health Index (EEHI) is a proprietary model that incorporates market directions, volatility and fundamentals

How is Works?

• The main principle of the model is increasingexposure on winning side and reducing exposureon losing side.

• Thus harnessing the power of compounding in aneffective way.

How it is better than value only based approach?

• Avoids timing of market reversal• Captures bigger trends and limits drawdown• Superior risk adjusted returns

Increase Equity Allocation

during Bull cycle

Reduce Equity Exposure

during bear cycle

80%

30%

Net Equity exposure is equity exposure alone with corresponding equity derivative exposure. The scheme asset allocation allows to take derivative exposure up to 50% of the net asset.


EEHI – Factors considered in the Model

• 1 week, 2 week, 1 month & 3 month Daily Moving Average (DMA) of Nifty 50

• Indicates bull or a bear market trendMarket Trend

• Market Volatility & Downside Deviation of Nifty 50

• Indicates the strength and sustainability of current bull/bear market trend

Trend Health

• Market Valuations and Macro-economic factors

• Indicates the overall economy trend and its strength

Fundamentals

Equity Market Health

Avg Equity

71% Avg Equity

51%

Avg Equity

48%

Avg

Equity

61%Avg Equity

71%

Market Fall

EHI IndicatorNifty 50

8

EEHI Model – Net Equity Level vs Nifty 50

Average equity levels have been high during the bull markets and low during bear markets phase

Only for illustration purpose.

Market Fall

Avg

Equity

41%

Avg Equity

50%

Avg Equity

60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

6500

7500

8500

9500

10500

11500

No

v-1

5

De

c-1

5

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

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Procyclical Model of EEHI – Its Different!

• EEHI uses principle of pro-cyclical approach of dynamically managing equity levels. i.e.

increase exposure on winning side and reduce on losing side.

• It is built on two key pillars – Market Trend, Health of the Trend.

Counter Cyclical

• Based on Fundamentals i.e. PE, PB andDividend Yield

• Aims to gradually reduce equityexposure in a bull cycle and increaseequity exposure during the bear marketcycle

Edelweiss Procyclical Model

• Based on quantitative factors coupledwith fundamentals.

• Aims to have higher equity exposureduring the bull market and lower equityexposure during the bear market cycle.

Market Market

Equity Level Equity Level

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Historic perspective EEHI vs Countercyclical Approach

*For 2018, the returns are till 31-July-2018

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* Total

Nifty 50 36.3% 39.8% 54.8% -51.8% 75.8% 17.9% -24.6% 27.7% 6.8% 31.4% -4.1% 3.0% 28.6% 8.5% 13.4%

Procyclical 27.5% 34.9% 37.2% -21.3% 47.8% 12.4% -9.5% 17.3% 6.0% 20.1% -1.2% 2.7% 18.7% 6.1% 13.2%

CounterCyclical 20.4% 21.1% 20.5% -26.5% 48.6% 9.0% -13.8% 19.3% 5.6% 18.3% -1.5% 1.9% 14.6% 4.3% 9.0%

Fund Net Equity Level

68% 68% 69% 54% 65% 65% 54% 64% 60% 67% 57% 62% 71% 58% -

-10

0

10

20

30

40

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total

YoY (%) Return Differential (Procyclical - Counter Cyclical)

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Swift Equity allocation

These are actual net equity levels in the fund during these periods.

Nifty ReturnAverage Net

EquityMin Net Equity Max Net Equity

Jan-18 4.72% 73% 65% 75%

Feb-18 -4.85% 51% 40% 70%

Mar-18 -4% 50% 40% 65%

Apr-18 6.19% 59% 52% 68%

May-18 0.0% 57% 45% 68%

Jun-18 -0.2% 59.6% 50% 68%

Jul-18 5.99% 64.7% 50% 80%

Aug-18 2.85% 70% 60% 80%

Sep-18 -6.42% 44% 30% 55%

Oct-18 -4.98% 38% 30% 50%

Nov-18 4.72% 61% 50% 68%

Dec-18 -0.1% 61% 50% 78%

Jan-19 -0.3% 57.0% 50.0% 70.0%

High equity levels during healthy

markets

Swift change in equity levels during bear market cycles

Low equity levels during weak

markets


Investment Strategy

Equity

• 30% to 80% Net Equity

• MultiCap• GARP

Debt

• Active Duration Management

• Focus on Accrual

Arbitrage

• Hedging• Capture

Spreads• Corporate

Actions

Dynamic Equity Allocation

Net Equity exposure is equity exposure minus short derivative exposure. The scheme asset allocation allows to take derivative exposure up to 50% of the net asset.



Navigating Smoothly between market ups and downs


Investment Strategy

Equity Fixed Income

QualityQuality ManagementHigh Free Cash Flow

Consistency

GrowthStrong Earnings Growth

Sector GrowthCompetitive Advantage

ValueAttractive Valuations

Margin of Safety

ObjectiveGeneral Accrual Income

Provide Stability to portfolioExposure 0-33%

DurationActive Duration Management

1 to 5 Year Range

Credit QualityRelatively Higher yielding

corporate bondsAA and Above credit rating

profile

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Key benefits of the Fund

Low risk equity linked return

No Need to time the market

Create wealth during bull market & protect during bear market

Tax Free capital gains after 1 year upto 1 lakh

Regular Cash flows from monthly & Quarterly dividends

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Portfolio Details

Equity Quantitative Indicators

Net Equity 63.60%

Debt & Others 16.79%

Top 10 Holdings 31.74%

Data as on 31st January 2019.

Fixed Income Quantitative Indicators

YTM 7.31%

Modified Duration 0.56 Yrs

Average Maturity 0.67 Yrs

Holdings as on 31st Jan 2019 (in %)

% NAV

Axis Bank Ltd. 8.75%

Housing Development Finance Corp Ltd. 7.98%

HDFC Bank Ltd. 7.08%

Reliance Industries Ltd. 4.91%

Clearing Corporation of India Ltd. 4.11%

State Bank of India 4.00%

Infosys Ltd. 3.27%

Kotak Mahindra Bank Ltd. 2.90%

GlaxoSmithKline Consumer Healthcare Ltd. 2.43%

Tata Consultancy Services Ltd. 2.40%

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Performance

Scheme

Benchmark (60% Nifty 50 Index + 40% Crisil Composite

Bond Fund Index)

Additional BenchmarkNifty 50 TR Index

Period Returns*Value of Rs.

10000 InvestedReturns*

Value of Rs. 10000 Invested

Returns*Value of Rs.

10000 Invested

1 Year -1.35% 9,865 2.50% 10,250 -0.35% 9,965

3 Year 8.04% 12,619 11.75% 13,967 14.20% 14,910

5 Year 11.16% 16,980 11.96% 17,594 13.61% 18,930

Since Inception 9.01% 22,600 8.57% 21,752 11.17% 27,221

Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments.* CAGR Return.- Different plans shall have different expense structure. The performance details provided herein are of Regular Plan of Edelweiss Balanced AdvantageFund. Returns are for Growth Option only. Since Inception returns are calculated on Rs. 10/- invested at inception of the scheme. In case the start/enddate is non business day, the NAV of previous day is used for computation.- The scheme is currently managed by Mr. Bhavesh Jain (Managing this fund from August 7, 2013), Mr. Bharat Lahoti (Managing this fund from September 18, 2017) and Gautam Kaul (managing this fund from December 11, 2017).Data Source: Ace MF, Data as on 31st January 2019 In case the start/end date is non business day, the NAV of previous day is used for computation.Please click on http://edelweissmf.com/Download/factsheet.aspx for performance of other funds managed by fund manager.

http://edelweissmf.com/Download/factsheet.aspx

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True-to-Label – Bill board

Conservative Approach

Major investment in Largecap, only small exposure to midcaps/small

caps.

High Quality Investment

No allocation to papers below ‘AA’ Credit rating

Well Diversified

• 69 Stocks• Low Sector biases with a

conservative approach.

Non Biased Dynamic Asset Allocation

Strategy is depended on the model and intervention of Fund manager is mainly

on stocks level

Data as on January 31st 2019.

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Consistent Quarterly Dividend

YearRecord

Date

Dividend /

Unit (Re.)

Record

Date NAV

Dividend

Amount

(Rs)

Dividend

Yield*

2011

28-Jan 0.165 11.20 143,603 6%

29-Apr 0.18 11.10 156,658 6%

29-Jul 0.18 11.05 156,658 6%

28-Oct 0.18 10.88 156,658 6%

2012

27-Jan 0.18 10.92 156,658 6%

27-Apr 0.18 10.84 156,658 6%

27-Jul 0.18 10.88 156,658 6%

29-Oct 0.18 11.06 156,658 6%

2013

24-Jan 0.18 11.08 156,658 6%

26-Apr 0.18 10.98 156,658 6%

26-Jul 0.22 11.06 191,471 8%

25-Oct 0.22 11.20 191,471 8%

2014

31-Jan 0.22 10.87 191,471 8%

25-Apr 0.22 11.16 191,471 8%

25-Jul 0.22 12.64 191,471 8%

31-Oct 0.22 13.24 191,471 8%

YearRecord

Date

Dividend

/Unit Re.

Record

Date NAV

Dividend

Amt (Rs)

Dividend

Yield*

2015

27-Jan 0.30 14.08 261,097 10%

22-Apr 0.22 13.81 191,471 8%

27-Jul 0.22 13.93 191,471 8%

27-Oct 0.22 13.37 191,471 8%

2016

25-Jan 0.30 12.54 261,097 10%

26-Apr 0.22 12.70 191,471 8%

25-Jul 0.22 12.85 191,471 8%

26-Oct 0.22 12.74 191,471 8%

2017

18-Jan 0.22 12.21 191,471 8%

04-May 0.22 13.24 191,471 8%

10-Jul 0.22 13.44 191,471 8%

21-Sep 0.22 13.55 191,471 8%

2018

22-Jan 0.22 14.02 191,471 8%

22-Mar 0.22 13.28 191,471 8%

25-Jun 0.22 13.49 191,471 8%

24-Sep 0.24 13.31 208,877 8%

24-Dec 0.25 12.90 208,877 9%

Total Dividend Paid 6,131,419

2018 24-Dec Investment Value 11,227,154

Rs. 1 crore initial investment in the fund has yielded a dividend of Rs. 61.31 lakh since Jan 2011

*Annualised dividend yield for each 3 month period is calculated on initial investment value. Dividend is declared on the face value of Rs. 10 each /-. After payment of dividend, the NAV will fall to the extent

of dividend payout and statutory levy (if applicable). Past performance may or may not be sustained in future.

Dividend is Declared on Face value of Rs. 10

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Fund Features

Scheme Type An open ended dynamic asset allocation fund

Exit Load

10% of the units allotted shall be redeemed without any Exit Load on or before completion of 365 days from the date of allotment of units. Any redemption in excess of such limit within 365 days from the date of allotment shall be subject to the following Exit Load:• If redeemed or switched out on or before completion of 365 days from the date of allotment of units – 1.00%• If redeemed or switched out after completion of 365 days from the date of allotment of units – NILRedemption of units would be done on First in First out Basis (FIFO).

Plans & OptionsPlan: Regular & DirectOptions: Quarterly Dividend (Payout and Reinvestment) & GrowthMonthly Dividend (Payout, Reinvestment & Sweep)

Minimum Investment Amount

Rs. 5000/- per application & in multiples of Re. 1/- thereafter

Additional investment amount

Rs. 500/- per application & in multiples of Re. 1/- thereafter

Fund Manager Mr. Bhavesh Jain, Mr. Bharat Lahoti, Mr. Gautam Kaul

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Disclaimer

This product is suitable for investors who are seeking*: Riskometer

•To create wealth over long term and prevent capital erosion in mediumterm•Investment predominantly in equity and equity related securitiesincluding through arbitrage opportunities with balance exposure to debtand money market securities

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

Investors understand that their principal will be at moderately high risk

This presentation is for information purposes only for distributors and does not constitute an offer orrecommendation to buy or sell any scheme of Edelweiss Mutual Fund. This presentation also does not constitutean offer or recommendation to buy or sell any financial products offered by Edelweiss. Any action taken by youon the basis of the information contained herein is your responsibility alone and Edelweiss Asset ManagementLimited (the AMC)/Edelweiss Trusteeship Company Limited/ Edelweiss Mutual Fund or its directors or employeeswill not be liable in any manner for the consequences of such action taken by you. The AMC takes noresponsibility of updating any data/information in this material from time to time. The information shall not bealtered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the mediaor reproduced in any form, without prior written consent of the AMC.

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

an open ended dynamic asset allocation fund...1 previously known as edelweiss dynamic equity...

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