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  • FEBRUARY 2018

    CANARA ROBECO MEDIUM TERM OPPORTUNITIES FUND

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

    Income/Capital appreciation over medium to long-term Investment in Debt and Money Market securities with a portfolio weighted average maturity

    between 3 to 7 years

    This product is suitable for investors who are seeking*

  • STRONG INDIAN MACROS

    CAD 4.8% 1.7% 1.3% 0.8% 0.7%

    Fiscal Deficit 4.9% 4.5% 4.1% 3.9% 3.5%

    GDP 5.1% 6.6% 7.2% 7.6% 7.1%

    2015 2017FI

    NA

    NCI

    AL

    YEA

    R E

    ND 20162014

    Inflation 7.88% 5.37% 5.26% 3.65% 5.21%

    INR 61.80 63.04 66.15 67.92 63.87

    2016 2018

    Year

    -on-

    Year

    * 201720152014

    2013

    Slow and Steady Improvement since 2013.

    Source: Bloomberg, Motilal Oswal * Data as of February month end of respective years

  • KEY MACRO VARIABLES

    Source: Bloomberg, IIP & WPI base year considered is 2011-12

    4.4

    2.48

    -8

    -6

    -4

    -2

    0

    2

    4

    6

    8

    10

    12

    14

    May

    -13

    Jul-1

    3

    Sep-

    13

    No

    v-13

    Dec

    -13

    Feb-

    14

    Apr

    -14

    May

    -14

    Jul-1

    4

    Sep-

    14

    No

    v-14

    Dec

    -14

    Feb-

    15

    Apr

    -15

    May

    -15

    Jul-1

    5

    Sep-

    15

    No

    v-15

    Dec

    -15

    Feb-

    16

    Apr

    -16

    May

    -16

    Jul-1

    6

    Sep-

    16

    Oct

    -16

    Dec

    -16

    Feb-

    17

    Apr

    -17

    May

    -17

    Jul-1

    7

    Sep-

    17

    Oct

    -17

    Dec

    -17

    Feb-

    18

    Inflation

    CPI WPI

    RBIs comfort zone (2-6%)

    CPI inflation grew at 4.44% year-on-year in Feb18, below the print of 5.07% in Jan18. marking it to be the lowest inflation rate in four months and in the comfort zone for inflation & medium-term target of the central bank.

    Wholesale prices in India rose by 2.48% year-on-year in Feb18, after a 2.84% increase in the prior month. It was the lowest wholesale inflation sinceJul17, as cost of food and fuel rose at softer paces.

  • CRUDE OIL PRICE MOVEMENT

    OPCRTOTL Index (Bloomberg Total OPEC Crude Oil Production Output Data)DOETCRUD Index (United States DOE Crude Oil Total Production Data)CO1 Comdty (Generic 1st 'CO' Future)

    Brent Crude was seen trading in a wide range of 62-70 USD/bbl mark and remained volatile during the last month

    Geo-political issues in middle east and supply side problems are expected to keep the prices of crude range bound in the comingmonths

    Source: Bloomberg. Data as on 20th Mar18

  • FPI INVESTMENTS

    Source: NSDL, SEBI, ICRA MFI Explorer/ Bloomberg. Data from 1st Jan17 to 28th Feb18

    344

    -5000

    0

    5000

    10000

    15000

    20000

    25000

    30000

    Jan-

    17

    Feb-

    17

    Mar

    -17

    Apr

    -17

    May

    -17

    Jun-

    17

    Jul-1

    7

    Aug

    -17

    Sep-

    17

    Oct

    -17

    No

    v-17

    Dec

    '17

    Jan'

    18

    Feb-

    18

    INR

    Cr

    FPI's Net Flow in Debt (INR Crs)

    RBI to increase FPI limit (in phases) to 5%(G-sec) & 2%(SDL) of outstanding stock by March 2018

    During the month of Feb18, FPIs significantly decreased allocation to Indian debt markets to the tune of Rs. 344 crs in

    Feb18 from Rs.8523 crs in Jan18

  • IMPROVED CREDIT QUALITY

    Fig. 1: Semi-annual trends in credit ratio and debt-weighted credit ratio

    Fig. 2: Semi-annual trends in debt upgrades and downgrades

    Credit quality has improved; aided by recent spurt in the government spending & steady growth in private consumption

    Sustained recovery (indicated by IIP) is still not certain; Investment linked sectors under pressure

    Source: CRISIL Rating Roundup

  • INVESTMENT GRID

    With the current credit environment surrounded by uncertainty, a fund is likely to benefit which endeavors to: Benefit from Interest Rate volatility with Moderate Risk and Aims to capture High Quality Corporate Bond Yields

    RBI not aggressive in changing interest rates

    Government closely monitoring Fiscal Deficit

    India feeling the impact of global headwinds

    Corporate balance sheets loaded with excess debt

    Curr

    ent

    Scen

    ario

  • INVESTMENT STRATEGY

    Accrual Income

    Capital Appreciati

    on & Liquidity

    Investment

    Strategy

    Average Maturity

    Predominant allocation to high credit quality corporate bonds

    Tactical allocation to G-Sec and money market instruments

    Average maturity of the fund would be in the range of 3 to 7 years

    Canara Robeco Medium Term Opportunities Fund offers attractive yields generating Regular Accrual by investing in only High Quality Debt Instruments with Low to Medium Term Duration thereby seeming to be a Perfect Fit in the current Scenario

  • WHY INVEST

    Ideal investment horizon of the scheme is 3-5 years, which helps investors mitigate short term volatility

    Fund will actively manage duration within average maturity range of 3 to 7 years based on fund manager's view on interest rates

    Substantial exposure to AAA papers and AA+ papers

    Exposure to lower risk, yield generating SDLs

    Accrual Income: Through Corporate Bond Exposure

    Capital Appreciation: Through G-sec Exposure

    Benefit from both Accrual and Duration

    Quality Debt Papers

    Uncertain Macro-

    Economic Factors

    Active Management

  • PORTFOLIO HIGHLIGHT

    As per the latest portfolio, a substantial portion of the portfolio was allocated to securitiesrated AA+ & above, Sovereign and Cash & Cash Equivalents with a view to maximize incomewhile maintaining an optimum balance of safety & liquidity.

    The fund has optimized returns by keeping its average maturity consistent between 3 to 5years with a stable underlying Corporate Bond holding.

    The fund is positioned to benefit from expected downward movements in interest rates owingto the accommodative stance of RBI and expected transmission of rate cuts by the banks.

  • PORTFOLIO SNAPSHOT

    Data as on 28th Feb18

    19.00%

    14.67%

    66.33%

    Asset Allocation

    Cblo/Repo/Reverse Repo &Net Current Assets

    Treasury Bills/ Sovereign

    NCDs/Bonds

    19.00%

    14.67%

    19.54%

    46.78%

    Rating Allocation

    Cblo/Repo/Reverse Repo &Net Current Assets

    Treasury Bills/Sovereign

    AA+ & Equivaent

    AAA & Equivalent

  • PORTFOLIO SNAPSHOT

    Data as on 28th Feb18

    4.21%

    14.80%

    13.51%

    13.62%

    53.86%

    0% 10% 20% 30% 40% 50% 60%

    Net Current Assets

    0 to 3 Months

    3 to 6 Months

    1 -2 years

    Greater than 2 Years

    Maturity Profile

    Average Maturity Yrs 3.21

    Modified Duration 2.28

    Yield To Maturity 7.76%

  • PORTFOLIO SNAPSHOT

    Data as on 28th Feb18

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18

    Asset Allocation

    Cblo/Repo/Reverse Repo & Net Current Assets Commercial Paper NCDs/Bonds Treasury Bills/ Sovereign

  • PORTFOLIO SNAPSHOT

    Data as on 28th Feb18

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18

    Rating Allocation

    Cblo/Repo/Reverse Repo & Net Current Assets AAA & Equivalent AA+ & Equivaent A1+ & Equivalent Treasury Bills/Sovereign

  • FUND FACTS

    Data as on 28th Feb18

    Fund Category Open ended debt scheme

    Investment ObjectiveThe investment objective of the scheme is to generate income and capital appreciation through a portfolioconstituted of medium term debt instruments and money market instruments. However, there can be noassurance that the investment objective of the Scheme will be realized

    Inception Date 7-Feb-14

    Asset Allocation GoI & Debt Securities: 60%-100%Money Market Instruments : 0% - 40%.

    Plans/Options Regular & Direct Plan:

    Options: Growth / Daily, Weekly, Monthly and Quarterly Dividend with payout & Reinvestment

    Facilities SIP/ STP/ SWP/ Dividend Transfer Facility

    Fund Size Rs. 259.29 Crs (Month End AuM)

    Load Structure Exit Load: 1% - If redeemed/switched out within 1 year from the date of allotmentNil - If redeemed/switched out after 1 year from the date of allotment

    Benchmark CRISIL Composite Bond Fund Index

    Fund Manager Mr. Avnish Jain

  • The information used towards formulating the outlook have been obtained from sources published by third parties. While suchpublications are believed to be reliable, however, neither the AMC, its officers, the trustees, the Fund nor any of their affiliates orrepresentatives assume any responsibility for the accuracy of such information. CRMF, its sponsors, its trustees, CRAMC, itsemployees, officer, directors, etc assume no financial liability whatsoever to the user of this document. Mutual FundInvestments are subject to market risk. Investors are requested to read the Scheme related documents carefully beforeinvesting.

    Mutual Fund investments are subject to market risks, read all Scheme rela

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