hdfc capital builder value fund-presentation

July 2021

ReferDisc laimeron Slide 17

Table of Contents

2

• What is definition of Value for HDFC Capital Builder Value Fund?

• Why invest in HDFC Capital Builder Value Fund

• Investment Approach

• Stock Selection

• Sector Allocation

• Large/Mid/Small-Cap break-up

• Portfolio Characteristics

• Portfolio Statistics

• Top 10 Holdings

• Fund Suitability

• Scheme Facts

• Scheme Performance


Investment strategy of this fund would be to focus on :

• Companies trading below intrinsic value, as measured by potential earnings or asset

values, and/or future cash flow growth

• Companies in turnaround phase – Good businesses that have gone through a temporary

difficult period and de-rated but are poised for turnaround in profitability

• Companies trading below their historical average multiples

Provided, the fund shall adhere to the following criterion

What is definition of Value for this Fund ?

3

The fund will endeavor to maintain a minimum of 60 % of the portfolio in companies which are trading

at multiples lower than Median P/E (Price/Earnings) or Median P/B (Price/Book Value) of NIFTY 500 Index

or below 5 year historical average of own trailing P/E or P/B


• Diversified multi-cap strategy with a value bias

• Fund will be managed true-to-mandate and will invest at least 60% of the portfolio in

companies which are trading at multiples lower than Median P/E (Price/Earnings) or

Median P/B (Price/Book Value) of NIFTY 500 Index or below 5 year historical average of

own trailing P/E or P/B with effect from 26th

February 2021*

• Emphasis on investing in undervalued stocks with a reasonable margin of safety

• Investors with long term horizon can benefit not only from earnings growth but also re-

rating of multiples

• Actively managed diversified equity portfolio which invests across sectors without a

market cap bias

Why Invest in HDFC Capital Builder Value Fund ?

4

* Revised investment strategy with effect from February 26, 2021

HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in this scheme. The current investment strategy is

subject to change depending on the market conditions.


Investment Approach

5

HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in this scheme. The current investment strategy is

subject to change depending on the market conditions.

•Emphasis on undervalued stocks

•Preference for companies

•(a) trading below intrinsic value

•(b) In turnaround phase

•(c) trading below historical average multiples

Stock Selection

•Active Overweight/Underweight vs benchmark

based on top down investment callsSector Allocation

•Investments across Market Capitalization rangeCapitalization Bias


Stock selection

6

• At the time of stock selection there is a preference for companies trading below intrinsic

value, companies trading blow historical average multiples and companies in turnaround

phase.

• As of Jun’21, ~82% of the portfolio is in preferred category as follows :

Part iculars

% of

Net

Assets

(Jun’21)

Average

TTM

P/E

Average

TTM

P/B

Average EPS

Growth

(Est imated)

FY21-23E

CAGR %

Average

ROE

(FY21)

%

Descript ion of some companies in

our portfolio

Companies trading below intrinsic

value (Absolute Value)

15.64% 12.78 4.24 14% 15.67% Large Utility Co. in India,

Large Tobacco Co. in India,

Large Corporate Focused Public

Sector Bank

Companies below historical average

multiples (Relat ive Value)

25.23% 32.97 4.11 24% 14.74% Large Private Sector Bank,

Large Tech Company in India

Large Pharma Company in India

Companies in Turnaround phase

- Profit Making Companies in FY 21

- Loss Making Companies in FY 21

(Loss to Profit)

32.41%

8.62%

67.62

_

5.24

5.34

48%

-

12.01%

-26.71%

Large Corporate focused Private Bank

Large Telecom Co. in India,

Large Healthcare player in India

Source – Bloomberg, Ratios /Growth estimates as of June 2021, TTM – Trailing 12 months, P/E-Price/Earnings,

P/B –Price/Book Value, EPS – Earnings per share

ROE – Return on Equity computed for Fiscal Year ended June 30, 2021.

The above is purely as per our internal analysis.

The current investment strategy is subject to change depending on the market conditions. Refer disclaimers on Slide 17. Stocks/Sectors

referred here in are illustrative and not recommended by HDFC Mutual Fund / AMC. The Fund may or may not have any present or future

positions in these stocks/ sectors. The data/statistics are given on the basis of information which is already available in publicly accessible

media. The same should not be construed as any research report/research recommendation to buy or sell any security covered under the

respective sector/s. HDFC Mutual Fund/AMC is not guaranteeing returns on any investments. For complete portfolio please visit our website

www.hdfcfund.com


Sector Allocation

7

• The Scheme also uses sector allocation and takes top down investment calls.

• The Scheme is positioned to benefit from domestic cyclical recovery and is overweight on sectors such

as Financials, Industrials and Consumer Discretionary. The scheme is also overweight on Healthcare and

Utilities due to attractive valuations.

• The Scheme is underweight on consumer staples due to expensive valuations and materials due to

strong near term re-rating of the sector.

• Key overweight/(underweights) –OW /(UW) are as under

Source: Bloomberg, Stocks/sectors referred above are illustrative and are not recommended by HDFC Mutual Fund/AMC. The Fund may or may not have

any present or future positions in these stocks/sectors. The above statements / analysis should not be construed as an investment advice or a research

report or a recommendation to buy or sell any security covered under the respective sector/s .The same has been prepared on the basis of information

which is already available in publicly accessible media.

Sectors

Data as on June 30, 2021 Data as on December 31, 2020

Scheme Weight % OW/ (UW) % P/B Scheme Weight % OW/(UW) % P/B

Financials 34.0 2.9 2.6 30.9 -2.1 2.6

Industrials 9.2 2.2 4.1 10.8 4.6 3.6

Communication Services 4.0 1.4 6.2 6.0 3.1 4.5

Consumer Discretionary 9.2 1.2 4.2 7.4 -0.8 3.7

Real Estate 1.5 0.9 2.5 1.0 0.4 2.4

Utilities 4.2 0.8 2.1 2.4 -0.6 1.6

Health Care 6.8 0.7 5.2 8.6 2.5 5.1

Information Technology 13.3 -0.2 7.8 14.7 2.0 6.7

Consumer Staples 6.2 -1.9 8.2 5.6 -3.5 8.9

Energy 3.5 -5.1 1.7 5.1 -4.3 2.1

Materials 5.7 -5.2 2.9 6.7 -2.2 2.4


Large/Mid/Small Cap break-up

8

As of June 30, 2021, Source :MFI Explorer

• The Scheme invests across market capitalization

• At present, the scheme has a large cap bias (~72% of Net Assets)

• Market Cap Bias is an outcome of bottom up stock selection

77%

11% 12%

72%

11%14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Large Cap Mid Cap Small Cap

Market Cap Break-up

Dec-20 Jun-21


Portfolio Characteristics

9

Source :Bloomberg ,MFI Explorer, As of June 30, 2021

Characteristics Scheme NIFTY 500

Return on Equity (ROE) FY21 12.80 16.52

Trailing 12 Month - Price to Earnings Ratio (P/E) 35.15 39.44

Trailing 12 Month - Price to Book Value Ratio (P/B) 4.90 5.28

9

9


Portfolio Statistics (As of June 30, 2021)

10

** Risk Free Rate 3.36% (Source FIMMDA, MIBOR)

For complete portfolio details please visit www.hdfcfund.com

Particulars % To Net Assets

Top 10 Equity And Equity Related Holdings 47.46%

Total Equity & Equity Related Holdings 97.69%

Cash, Cash Equivalents And Net Current Assets 1.87%

Assets Under Management (Rs. In Crore) 4,870

Standard Deviation** 6.91%

Beta** 1.037

10

10

http://www.hdfcfund.com/


Top 10 Holdings (As of June 30, 2021)

11

Particulars Sector% To Net

Assets

Benchmark Weight (%)

NIFTY 500

Overweight/

(Underweight) (%)

Infosys Limited Software 8.82 5.74 3.08

ICICI Bank Ltd. Banks 8.56 4.28 4.28

HDFC Bank Ltd. Banks 8.55 6.40 2.15

Axis Bank Ltd. Banks 5.73 1.89 3.84

Bharti Airtel Ltd. Telecom - Services 3.57 1.22 2.35

State Bank of India Banks 3.54 1.58 1.96

NTPC Limited Power 2.43 0.54 1.89

Larsen and Toubro Ltd. Construction Project 2.23 1.78 0.45

Sun Pharmaceutical

Industries Ltd.

Pharmaceuticals 2.18 0.71 1.47

HCL Technologies Ltd. Software 1.85 1.05 0.80

11

11

Source: Bloomberg. The fund may or may not have any present or future positions in the stocks /sectors referred above. The above should not be

construed as an investment advice or a research report or a recommended by HDFC Mutual Fund / AMC. For complete portfolio details please visit our

website www.hdfcfund.com.


Fund Suitability

12

The scheme is suitable for investors who

• Intend to invest in undervalued companies.

• Would like to invest in a diversified portfolio with a long term horizon.

• Want twin benefit of earnings growth as well as re-rating of valuation multiples

• Are looking for a sound and disciplined approach to investing in volatile times.


Scheme Facts

1313

Type of Scheme An open ended equity scheme following a value investment strategy

Inception Date

(Date of allotment)

February 01, 1994

Investment Objective To achieve capital appreciation/ income in the long term by primarily investing in undervalued stocks

Fund Manager $ Mr Amit Ganatra

PlansDirect Plan

Regular Plan

Sub-OptionsUnder Each Plan: Growth & Payout of Income Distribution Cum Capital Withdrawal (IDCW) option and Re-investment

of Income Distribution Cum Capital Withdrawal (IDCW) Option

Minimum Application

Amount

(Under Each Plan/Option)

Purchase: Rs. 5,000 and any amount thereafter

Additional Purchase: Rs. 1,000 and any amount thereafter

Load Structure

Entry Load:

• Not Applicable. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI

registered Distributor) based on the investors’ assessment of various factors including the service

rendered by the ARN Holder.

Exit Load:

• In respect of each purchase / switch-in of Units, an Exit Load of 1.00% is payable if Units are

redeemed / switched-out within 1 year from the date of allotment.

• No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of

allotment.

In respect of Systematic Transactions such as SIP, Flex SIP, GSIP, STP, Flex STP, Swing STP, Flex index, etc

- Exit Load, if any, prevailing on the date of registration / enrolment shall be levied. For further details on

load structure, please refer to the Scheme Information Document/Key information memorandum of the

Scheme.

Benchmark Index NIFTY 500

For further details, refer Scheme Information Document and Key Information Memorandum and addenda thereto available on www.hdfcfund.com and at Investor

Service Centres of HDFC Mutual Fund. $ Dedicated fund manager foroverseas investments Mr.Sankalp Baid

13



Asset Allocation Pattern

1414

For further details, refer Scheme Information Document and Key Information Memorandum and addenda thereto

available on www.hdfcfund.com and at Investor Service Centres of HDFC Mutual Fund. $ Dedicated fund manager

for overseas investments Mr. Sankalp Baid .

Under normal circumstances, the asset allocation (% of net assets) of the Scheme’s portfolio

will be as follows.

Types of Instruments Normal Allocation (%) Risk Profile

Equity and Equity related

instruments

65-100 High

Debt Securities (including

securitised debt) and

money market

instruments

0-35 Low to Medium

Units issued by REITs and

InvITs

0-10 Medium to High

Non-convertible

preference shares

0-10 Low to Medium

The Scheme may invest in the schemes of Mutual Funds in accordance with the applicable

extant SEBI (Mutual Funds) Regulations as amended from time to time. The Scheme may invest

up to 35% of its net assets in foreign securities. The Scheme may invest up to 100% of its net

assets in Derivatives.

14



Scheme Performance Summary – HDFC Capital Builder Value Fund

Value of Rs 10,000 invested

Scheme

Returns (%)

Benchmark

Returns (%) #

Addit ional

Benchmark

Returns (%) ##

Scheme Benchmark

(Rs)

Addit ional

Benchmark

(Rs)

Last 1 Year 61.91 60.77 54.58 16,191 16,077 15,458

Last 3 Years 10.09 15.00 15.00 13,349 15,220 15,220

Last 5 Years 12.98 15.40 15.08 18,416 20,473 20,191

Since Inception 14.22 NA 10.94 383,876 NA 172,596

The above scheme has been managed by Amit Ganatra, the fund manager since May 21, 2020. # NIFTY 500 TRI

## NIFTY 50 TRI

The performance of the Scheme is benchmarked to the Total Return Index (TRI) Variant of the Indices.

Past performance may or may not be sustained in the future. The above returns are of Regular Plan – Growth

Option. Returns greater than 1 year period are compounded annualized (CAGR). Load is not taken into

consideration for computation of performance. Different Plans viz. Regular Plan and Direct Plan have a different

expense structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution

expenses / commission charged in the Regular Plan. Returns as on June 30, 2021.

15


Performance Summary of other Scheme(s) managed by the Fund Manager

Past performance may or may not be sustained in the future. The performance of the Scheme is benchmarked to the Total

Return Index (TR I) Variant of the Indices. The above returns are of Regular Plan - Growth Option. Load is not taken into

consideration for computation of performance. ^ The scheme is co managed by Amit Ganatra (Equities) from May 21, 2020 and

Anil Bamboli (Debt) from June 28, 2014. @ The Scheme is co managed by Amit Ganatra (Equities) since June 12, 2020, Anil

Bamboli (Debt) since August 17, 2005, Krishan Daga (Gold related assets) since May 23, 2018. And Arun Agarwal (Arbitrage)

since August 24, 2020. Different Plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the

Direct Plan under the Scheme will be lower to the extent of the distribution expenses/ commission charged in the Regular Plan.

On account of difference in the type of the Scheme, asset allocation, investment strategy, inception dates, the performance of

these schemes is strictly not comparable. The above returns are of Regular Plan - Growth Option as on June 30, 2021.

16

Scheme

Managing scheme since

Returns (%)

1 year3 year 5 year

CAGR (in %) CAGR (in %)Amit Ganatra manages total 6 schemes

HDFC DYNAMIC PE RATIO FUND OF FUNDS ̂

21-May-20 37.81 12.99 11.93

NIFTY 50 Hybrid Composite Debt 65:35 Index

35.83 14.07 13.25

HDFC Multi Asset Fund @ 12-Jun-20 37.00 12.77 10.4990% NIFTY 50 Hybrid Composite Debt 65:35 Index + 10% Domestic price of Gold

31.41 14.41 12.88

HDFC Tax Saver 24-Aug-20 51.98 9.19 10.88NIFTY 500 TRI 60.77 15.00 15.40HDFC EOF - II - 1126D May 2017 (1) 21-May-20 47.52 8.45 NA

NIFTY 50 TRI 54.58 15.00 NA

HDFC EOF - II - 1100D June 2017 (1) 21-May-20 42.29 8.02 NANIFTY 50 TRI 54.58 15.00 NA


Disclaimer

17

This presentation dated July 30, 2021 has been prepared by HDFC Asset Management Company Limited (HDFC AMC)

based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are

approximations, meant as guidelines only, which you must confirm before relying on them. The information contained in this

document is for general purposes only and not an investment advice. The document is given in summary form and does not

purport to be complete. The document does not have regard to specific investment objectives, financial situation and the

particular needs of any specific person who may receive this document. The information/ data herein alone are not sufficient

and should not be used for the development or implementation of an investment strategy. The statements contained herein

are based on our current views and involve known and unknown risks and uncertainties that could cause actual results,

performance or events to differ materially from those expressed or implied in such statements. The information herein is

based on the assumption that Covid-19 would be behind us by March 2022 and the economy would bounce back by FY23.

However, if impact of Covid-19 continues after March 2022, various scenarios presented in this document may not hold

good. Past performance may or may not be sustained in future. Stocks/Sectors referred in the presentation are illustrative

and should not be construed as an investment advice or a research report or a recommended by HDFC Mutual Fund /

AMC. The Fund may or may not have any present or future positions in these sectors. HDFC Mutual Fund/AMC is not

guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The data/statistics are

given to explain general market trends in the securities market, it should not be construed as any research report/research

recommendation. Neither HDFC AMC and HDFC Mutual Fund nor any person connected with them, accepts any liability

arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their

own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision

taken on the basis of information contained herein.

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


Thank You

18

hdfc capital builder value fund-presentation

Documents