Edelweiss ETF – Nifty Quality 30 An open Ended Exchange Traded Fund

Trick to constructing a successful Equity Portfolio

Find Bluechip stocks with :

i. Good Returns on Equity

ii. Low Debt to Equity Ratio

iii. Consistent profitability

Find a consistent performing active

Fund Manager

PRAY !

O

R Invest in QUALITY Index

Factors considered while investing in Large Cap Mutual Funds

CORPORATE GOVERNANCE

FUND MANAGER BIAS

LIQUIDITY

IS IT A RISK ?

Introducing Nifty Quality 30 Index

Nifty Quality 30 is an index with an objective to provide Quality investment strategy

Advantages of Nifty Quality 30 Index Diversification

30 stocks spread across 9 broad sectors

Liquidity Liquidity is inbuilt as stock selection criteria filters out non-liquid stocks

Index Governance Index maintained by IISL, an NSE group company

Making of Nifty Quality 30 Index

The criteria of constituent selection in this index keeps in mind the long term growth and sustainability of the companies

The index also complies the IRDA dividend criteria in stock selection

Higher Returns generated for every rupee invested

Weight : 40%

Ensuring higher revenue than the interest cost

Weight : 40%

Consistent growth in profits

Weight : 20%

P A

T

Best Quality Factors put to work together

Source : IISL as on 29-Apr-2016

Active Fund Management at Ease and Cost of Passive

0.4%

13.2%

17.7% 16.3%

13.4%

-3.0%

8.7%

11.1% 11.3%

7.7%

-1.7%

15.0% 15.7% 13.6%

10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

1 year 2 year 3 year 4year 5 year

Nifty Quality 30 Nifty50 Average of Large Cap

Data Source : Ace MF & IISL as on 29-Apr-2016

Nifty Quality 30 index has outperformed Nifty50 as well as most Large Cap Funds

Data taken from ACE MF based on a study of all active Mutual Fund schemes following benchmark indices either of:

Nifty50, Nifty100, Nifty200 &

S&P BSE Sensex, S&P BSE100, S&P BSE200

This gave a set of 106 schemes categorised as Large Cap for simplicity of the analysis

Constituents: Nifty Quality 30 Index

Data Source : IISL as on 29-Apr-2016

SNo Name Sector Weight SNo Name Sector Weight

1 Tata Cons. Services Ltd. IT 10.43% 16 Bharat Petro. Corp. Ltd. Energy 2.33%

2 Infosys Ltd. IT 10.22% 17 Ambuja Cements Ltd. Cement Products 1.57%

3 I T C Ltd. Consumer Goods 10.18% 18 Britannia Industries Ltd. Consumer Goods 1.54%

4 Sun Pharma. Ind. Ltd. Pharma 8.04% 19 Dabur India Ltd. Consumer Goods 1.42%

5 Tata Motors Ltd. Automobile 7.23% 20 Titan Company Ltd. Consumer Goods 1.36%

6 Hindustan Unilever Ltd. Consumer Goods 5.67% 21 Divi‘s Laboratories Ltd. Pharma 1.23%

7 Maruti Suzuki India Ltd. Automobile 4.61% 22 Cummins India Ltd. Ind.Manufacturing 1.10%

8 HCL Technologies Ltd. IT 3.87% 23 Motherson Sumi Sys. Ltd. Automobile 1.04%

9 Asian Paints Ltd. Consumer Goods 3.57% 24 Colgate Pal. (India) Ltd Consumer Goods 1.03%

10 Dr. Reddy‘s Lab. Ltd. Pharma 3.57% 25 MRF Ltd. Automobile 0.76%

11 Lupin Ltd. Pharma 3.51% 26 Havells India Ltd. Consumer Goods 0.72%

12 Coal India Ltd. Metals 3.33% 27 NMDC Ltd. Metals 0.69%

13 Wipro Ltd. IT 3.26% 28 Page Industries Ltd. Textiles 0.63%

14 Bajaj Auto Ltd. Automobile 3.17% 29 Exide Industries Ltd. Automobile 0.62%

15 Tech Mahindra Ltd. IT 2.75% 30 Emami Ltd. Consumer Goods 0.56%

ROE D/E PAT Growth Index Influence Factor

Sectors: Nifty Quality 30 vis-à-vis Nifty50

Quality Factors ensure the index has higher weights to sectors which have demonstrated consistent

growth Data Source : IISL as on 29-Apr-2016

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35

IT

Consumer Goods

Automobile

Pharma

Metals

Energy

Cement & Cement Products

Industrial Manufacturing

Textiles

Services

Media & Entertainment

Telecom

Construction

Financial Services

Nifty50 Nifty Quality 30

Index Factors: Nifty Quality 30 vis-à-vis Nifty50

Data Source : IISL as on 29-Apr-2016

22.81%

35.36%

13.96%

23.72%

1.03

0.2

0

0.2

0.4

0.6

0.8

1

1.2

0%

5%

10%

15%

20%

25%

30%

35%

40%

Nifty 50 Nifty Quality 30

Returns on Equity (%) PAT Growth (%) Debt to Equity (times) [secondary axis]

Quality 30 represent Quality Factor moving up the chart

CAGR Returns: Nifty Quality 30 vs Nifty 50

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

An

nu

aliz

ed

Ret

urn

s

1 year 2 year 3 year 4year 5 year

Nifty Quality 30 0.4% 13.2% 17.7% 16.3% 13.4%

Nifty50 -3.0% 8.7% 11.1% 11.3% 7.7%

Nifty Quality 30 has delivered ~ 2x returns of Nifty 50 in last 5 years with ¾ risk

Data Source : IISL as on 29-Apr-2016

BETA w.r.t. Nifty 50 0. 83 0.77 0.73 0.73 0.75

Financial Year Returns : Nifty Quality 30 vs Nifty 50

Quality 30 Index performed better than the broad based Nifty50 index each Financial Year

since inception

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

An

nu

aliz

ed

Ret

urn

s

upto 31-Mar-10

FY10-11 FY11-12 FY12-13 FY13-14 FY14-15 FY 15-16

Nifty Quality 30 2.5% 16.9% 2.2% 11.6% 27.9% 36.4% -6.0%

Nifty50 3.5% 12.4% -8.2% 8.8% 19.3% 28.2% -7.8%

Data Source : IISL as on 29-Apr-2016

Volatility : Nifty Quality 30 vs Nifty 50

Less volatile than that the Nifty50 Index, still delivering better returns over time

12%

14%

16%

18%

An

nu

ali

ze

d V

ola

tili

ty

1 Year 2 Year 3 Year 4 Year 5 Year

Nifty Quality 30 15.41% 13.89% 13.98% 13.35% 14.20%

Nifty 50 17.29% 15.71% 16.46% 15.72% 16.76%

Data Source : IISL as on 29-Apr-2016

Vis-à-vis Active Large Cap schemes : Nifty Quality 30 Index

A comparison of all diversified Equity MF schemes following Benchmark Indices within the universe of

Nifty50, Nifty100, Nifty200 &

S&P BSE Sensex, S&P BSE100, S&P BSE200

FY15-16 FY14-15 FY13-14 FY12-13 FY11-

12

CAGR Performance 1 Year 3

Year 5

Year 1

Year 3

Year 5

Year 1

Year 3

Year 1 Year

3 Year

1 Year

NSE Quality 30 -6% 18% 13% 36% 25% 18% 28% 13% 12% 10% 2%

Nifty 50 -8% 12% 7% 28% 19% 11% 19% 6% 9% 4% -8%

Average of all diversified MF schemes following Benchmark indices within the universe of Nifty200 & S&P BSE200*

-7% 16% 10% 42% 21% 13% 19% 6% 6% 3% -6%

Total No. of Schemes in the category

106 98 91 97 96 87 96 89 96 87 91

No. of Schemes underperforming Nifty Quality 30

67 72 82 35 75 84 92 87 85 86 87

% of Schemes underperforming 60% 73% 90% 36% 78% 97% 96% 98% 89% 99% 96%

Data Source : Ace MF & IISL as on 29-Apr-2016

Edelweiss ETF – Nifty Quality 30

Edelweiss ETF – Nifty Quality 30 is suitable for investors who are seeking*: Riskometer

Long term capital appreciation

Investment in securities covered by Nifty Quality 30 Index

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

Investors understand that their principal will be at Moderately High risk

Scheme Details

Key Details

Investment Objective

The investment objective of the scheme is to provide returns before expenses that closely correspond to the total returns of the Nifty Quality 30 Index subject to tracking errors. However, there is no assurance that the investment objective of the Scheme will be realized and the Scheme does not assure or guarantee any returns

Liquidity To be Listed on National Stock Exchange

Nature of Scheme An Open Ended Exchange Traded Fund

Benchmark Nifty Quality 30 Index

Proposed Asset Allocation

- Securities constituting Nifty Quality 30 Index 95%-100% - Debt & money market instruments (with unexpired maturity not exceeding 91 days) and Liquid Schemes 0%-5%

Load Structure Entry Load : Not Applicable | Exit Load : Nil

Fund Manager Bhavesh Jain

Co Fund Manager Hiten Shah

Creation Unit details

Creation Unit Size is the minimum denomination of units that can be directly purchased / redeemed

from the AMC by APs and Large Investors

*Since product not listed yet, the price of the index as on 29-Apr-2016 has been taken as reference

value for illustration

Importance of Creation Unit Size

In case of non availability of sizeable quotes Investors can transact directly with Edelweiss Asset

Management Limited in creation unit lots

Domestic Investors can transact both in form of cash or stock basket (stock restrictions to

Foreign Portfolio Investors applicable)

Units are created at live NAV price

Composition Approx.

Value (INR) Approx.

Value (USD)*

1 Unit of the scheme ~ 1/10 Value of Nifty Quality30 Index* 205.145

Creation Unit Size 24000 units of the scheme 49,23,480/- 74,122/-

Subscription and Redemption details

Expenses with respect to purchase or sale of the constituents would apply in case of direct unit

creation / redemption

Subscription Process Features

Through Stock Exchange

online terminal / stock broker

• Can trade as less as 1 Unit • Funding to be done on T+1 • Unit credit on T+2 • Transaction on Exchange traded price • No paperwork • Transaction on order matching and availability of quotes

Through AMC (Authorized Participants & Large Investors)

Transaction form with requisite documents

• Can transact in creation unit size only • Funding as per last day NAV+2% before order execution • Unit credit possible at T+1 • Transaction on Live NAV • No restriction of quotes being available on the exchange

Redemption Process Features

Through Stock Exchange

online terminal / stock broker

• Can trade as less as 1 Unit • Units taken on T+1 • Amount credited T+2

Through AMC (Authorized Participants & Large Investors)

Redemption Request

• Can trade in creation unit size only • Transaction on Live NAV

Disclaimers

The views expressed herein are based on internal data, publicly available information and other sources believed to be reliable. This information is meant for

general reading purposes only and is not meant to serve as a professional guide for the readers. Certain factual and statistical (both historical and projected)

industry and market data and other information was obtained by Edelweiss Asset Management Limited from independent, third-party sources that it deems to be

reliable, some of which have been cited above. However, Edelweiss Asset Management Limited has not independently verified any of such data or other

information, or the reasonableness of the assumptions upon which such data and other information was based, and there can be no assurance as to the accuracy of

such data and other information. Further, many of the statements and assertions contained in these materials reflect the belief of Edelweiss Asset Management

Limited, which belief may be based in whole or in part on such data and other information.

The Sponsor, the Investment Manager, the Trustee or any of their respective directors, employees, affiliates or representatives do not assume any responsibility for,

or warrant the accuracy, completeness, adequacy and reliability of such information. Whilst no action has been solicited based upon the information provided

herein, due care has been taken to ensure that the facts are accurate and opinions given are fair and reasonable. Recipients of this information should rely on

information/data arising out of their own investigations. Readers are advised to seek independent professional advice, verify the contents and arrive at an informed

investment decision before making any investments.

None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable for any direct, indirect,

special, incidental, consequential, punitive or exemplary damages, including loss of profits arising in any way from the information contained in this material. The

Sponsor, the Investment Manager, the Trustee, any of their respective directors, employees including the fund managers, affiliates, representatives including

persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities thereof, of

company(ies) / specific economic sectors mentioned herein.

Scheme Specific Risk Factors :

IISL Disclaimer: The “Product” offered by “the issuer” is not sponsored endorsed sold or promoted by India Index Services & Products Limited (IISL). IISL does not

make any representation or warranty express or implied (including warranties of merchantability or fitness for particular purpose or use) and disclaims all liability to

the owners of “the Product” or any member of the public regarding the advisability of investing in securities generally or in “the Product” linked to Nifty Quality 30

Index or particularly in the ability of the Nifty Quality 30 Index to track general stock market performance in India. Please read the full Disclaimers in relation to the

Nifty Quality 30 Index in the in the Scheme Information Document.

NSE Disclaimer : It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Scheme Information

Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Draft Scheme Information

Document. The investors are advised to refer to the Scheme Information Document for the full text of the 'Disclaimer Clause of NSE’

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

Annexure

19

Performance: Nifty Quality 30 Index

1 Year 2 Year 3 Year 4 Year 5 Year Since inception

BETA w.r.t. Nifty 50 0. 83 0.77 0.73 0.73 0.75 0.77

Value of Rs 10,00,000 invested on 01-Oct-2009 16,62,200 22,61,800

Nifty 50 Nifty Quality30

Data Source : IISL as on 29-Apr-2016

0

500

1000

1500

2000

2500

3000

Nifty Quality 30 Nifty 50

Nifty Quality 30 vs Nifty 50

Data Source : IISL as on 29-Apr-2016

Nifty Quality 30 Nifty 50

Return on Equity ( %) 35.36 22.81

Debt to Equity (times) 0.20 1.0

PAT Growth % 23.72 13.96