market caps, volatility, allocation, valuations. my fund ... multicap fund_ppt.pdf · india –...

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

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

Vision And Mission Statement

Our vision is to be a trusted partner in progress for our investors, distributors and also be a respected leader in the Indian mutual fund industry

VisionVision

Our mission is to help our investors reach their long-term financial goals. We aim to achieve this through active fund management and investment strategies that adhere to ethical values and investment principles, and by offering our employees a challenging and rewarding place to build a career

MissionMission

Value Proposition to Investors

• Investor centric product innovation• Offer the right product to the investor at the right time• Provide a good quality portfolio in debt and equity• Superior risk adjusted returns• Transparent communication

India – The Investment Destination

3rdLargest

size in PPP

604Million

2nd largestin the world

between age group15 - 64

900Million

429Million

30 people moveevery minute to

urban areas

4thLargest

In the world

7.2%FY1819

Fastest growingLarge Economy

in the World

$406.6Billion(22.3.19)

2ndLargest

In the world5.6 mn KM

GDP Growth Rate Forex Reserves Road network

Railway networkInternet�Users Population Urban Population

Data Source: IBEF, RBI, CSO, UN Forecast and Internal Estimates

India – Demographic Advantage

Urban market expected to account for 2/3rd of consumption growth over the coming decade

Working population expected to increase by 33% to reach 1.14 billion by 2025

India as a “young nation”, with average median age shall be: 37.3 years by 2050

Source - Source: UNDP Asia Pacific Human Development Report 2016

1,311

1,528

1,705

860

1,0331,145

27

31

37

0

5

10

15

20

25

30

35

40

0

200

400

600

800

1000

1200

1400

1600

1800

2015 2030 2050

Age

(yea

rs)

Popu

latio

n (m

illio

n)

Total Population Working age population Median age of population

Promise of a strong consumer market combined with a large working population

Equities Have Delivered Over Long Term

Data Source: Bloomberg. Calculations Internal. Returns are CAGR as on 29th March 2019

10.0011.0012.0013.0014.0015.0016.0017.0018.0019.00

Nifty Index NSE Midcap100 Index

NSE Small Cap100 Index

NSE 500 Index



NSE 500 Index



NSE 500 Index



NSE 500 Index

10 Year Returns

10.0010.5011.0011.5012.0012.5013.0013.5014.0014.50

Returns Since Jan 2004

3,00,000

3,50,000

4,00,000

4,50,000

5,00,000

5,50,000

Value of Rs. 1 Lakh over 10 Years

5,00,000

5,50,000

6,00,000

6,50,000

7,00,000

7,50,000

8,00,000

Value of Rs. 1 Lakh Since Jan 2004

Index Returns Converge Over Long Term

-

100

200

300

400

500

600

700

800

900

1000

Jun-

04N

ov-0

4Ap

r-05

Sep-

05Fe

b-06

Jul-

06D

ec-0

6M

ay-0

7O

ct-0

7M

ar-0

8Au

g-08

Jan-

09Ju

n-09

Nov

-09

Apr-

10Se

p-10

Feb-

11Ju

l-11

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug-

13Ja

n-14

Jun-

14N

ov-1

4Ap

r-15

Sep-

15Fe

b-16

Jul-

16D

ec-1

6M

ay-1

7O

ct-1

7M

ar-1

8Au

g-18

Jan-

19

Nifty Index NSE Midcap 100 Index NSE Small cap 100 Index NSE 500 Index

Winners Keep Changing

Best to Worst

2019 (YTD Mar 31) Nifty 7.01%

NSE 500 5.38%

NSE Small Cap 100 3.46%

NSE Midcap 100 2.14%

2018 Nifty 3.2%

NSE 500 -3.4%

NSE Midcap 100 -15.4%

NSE Small Cap 100 -29.1%

2017 NSE Small Cap 100 57.3%


NSE 500 35.9%

Nifty 28.7%

2016 NSE Midcap 100 7.1%

NSE 500 3.8%

Nifty 3%


2015 NSE Small Cap 100 7.2%

NSE Midcap 100 6.5%

NSE 500 -0.7%

Nifty -4.1%

2014 NSE Midcap 100 55.9%

NSE Small Cap 100 55%

NSE 500 37.8%

Nifty 31.4%

2013 Nifty 6.8%

NSE 500 3.6%



2012 NSE Midcap 100 39.2%


NSE 500 31.8%

Nifty 27.7%

2011 Nifty -24.6%

NSE 500 -27.2%

NSE Midcap 100 -31%


2010 NSE Midcap 100 19.2%

Nifty 18%


NSE 500 14.1%

2009 NSE Small Cap 100 107%

NSE Midcap 100 99%

NSE 500 88.6%

Nifty 75.8%

2008 Nifty -51.8%

NSE 500 -57.1%


NSE Small Cap 100 -71%

2007 NSE Small Cap 100 87.3%


NSE 500 62.5%

Nifty 54.8%

2006 NSE Small Cap 100 41.6%

Nifty 39.8%

NSE 500 34%

NSE Midcap 100 29%

Data Source Bloomberg. Calculations Internal

Market cap indices


Sectoral indices (Year 2006 to 2012)


Best

to W

orst

2006 2007 2008 2009 2010 2011 2012

Nifty 39.8%

NSE Commodities

108.8%

NSE Pharma -25.6%

NSE IT 166%

NSE Pharma 35.3%

NSE Pharma -10%

NSE Finance 52%

NSE Finance 39.6%

NSE Finance 82.9%

NSE Consumption

-43.3%

NSE Commodities

108.3%

NSE Finance 29.9%

NSE Consumption

-10.8%

NSE Pharma 31.9%

NSE IT 39%

NSE 500 62.5%

Nifty -51.8%

NSE Finance 88.7%

NSE IT 28.8%

NSE IT -18.1%

NSE Consumption

37.5%

NSE 500 34%

Nifty 54.8%

NSE IT -54.6%

NSE 500 88.6%

NSE Consumption

21.3%

Nifty -24.6%

NSE 500 31.8%

NSE Commodities

30.7%

NSE Consumption

37.6%

NSE Finance -55.1%

Nifty 75.8%

Nifty 18%

NSE 500 -27.2%

Nifty 27.7%

NSE Pharma 25%

NSE Pharma 14.6%

NSE 500 -57.1%

NSE Pharma 59.1%

NSE 500 14.1%

NSE Finance -29%

NSE Commodities

19.3%NSE

Consumption NA

NSE IT -11.4%

NSE Commodities

-57.4%

NSE Consumption

51.3%

NSE Commodities

2%

NSE Commodities

-34.1%

NSE IT -1.9%


Sectoral indices (Year 2013 to 2019 YTD)


Best

to W

orst

2013 2014 2015 2016 2017 2018 2019 (YTD Mar 31)

NSE IT 58%

NSE Finance 57.3%

NSE Pharma 9.3%

NSE Commodities

24.7%

NSE Consumption

45.1%

NSE IT 23.8%

NSE Finance 8.27%

NSE Pharma 26.5%

NSE Pharma 43.4%

NSE Consumption

8%

NSE Finance 4.9%

NSE Finance 41.4%

NSE Finance 10.6%

NSE IT 8.23%

NSE Consumption

9.6%

NSE 500 37.8%

NSE IT 0%

NSE 500 3.8%

NSE 500 35.9%

Nifty 3.2%

Nifty 7.01%

Nifty 6.8%

Nifty 31.4%

NSE 500 -0.7%

Nifty 3.01%

NSE Commodities

34.8%

NSE Consumption

-2.3%

NSE Commodities

5.67%

NSE 500 3.6%

NSE Consumption

29.7%

Nifty -4.1%

NSE Consumption

-2.5%

Nifty 28.7%

NSE 500 -3.4%

NSE Pharma 5.39%

NSE Finance -7.3%

NSE IT 17.8%

NSE Finance -5.4%

NSE IT -7.3%

NSE IT 12.2%

NSE Pharma -7.8%

NSE 5005.38%

NSE Commodities

-8.6%

NSE Commodities

16.7%

NSE Commodities

-9.5%

NSE Pharma -14.2%

NSE Pharma -6.3%

NSE Commodities

-16.1%

NSE Consumption

-2.67%

Investor Considerations

Equity fund investment

What do retail investors expect from a equity fund?

Are investors expected to separately invest in Large, Mid, Small Cap Funds, Growth/Value Style Funds, Different sector focused funds?

Are investors themselves expected to manage their equity risk?

Solution - A Multi Cap fund which manages all these on behalf of the investors

In a specific long term SIP, changing the allocation and redirecting subsequent flows is even more difficult

Retail Investors may not have the expertise to manage these allocations for optimum investment performance

Whether your money is going to a fund house with a unique investment philosophy?

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

Presenting

Equity Fund Positioned As One Stop Solution

• Differentiated positioning – Benchmark agnostic portfolio construction• Sector allocation based on analysis of business and market cycles using

valuation based tools

• Unbiased and dynamic management of allocation to different market cap segments based on research and valuation based tools

• A one stop equity investment solution, where SIP’s can continue irrespective of market conditions being suitable to any particular market cap segment

Active AllocationBetween MarketCap Segments

Active AllocationBetween MarketCap Segments

• Active and dynamic management of portfolio• Smooth investing experience for investor over long term

Active SectorAllocationActive SectorAllocation

Active RiskManagementActive RiskManagement

• Stock Selection based on SQL Investment Philosophy • SQL Philosophy is unique in India but proved globally

UniqueInvestmentPhilosophy

UniqueInvestmentPhilosophy

ITI MF Equity Investment Philosophy

SQL Investment Philosophy

• Margin of safety is the fair value of business minus the current share price• Buying stocks with good safety margin is critical for a good investment

experience and long term wealth creation

SMargin of Safety

SMargin of Safety

• Quality of business is of great significance. Quality companies with strong competitive advantages have been long term wealth creators

• We would like to invest in stocks that we understand and have comfort on Industry structure, business, management, growth ambitions, balance sheets

QQuality of Business

QQuality of Business

• High leverage significantly reduces a business’s ability to withstand business downturn’

• Low leverage companies are generally cash rich. Therefore, these companies are able to invest and grow their business and create wealth

LLow Leverage

LLow Leverage

The above philosophy seeks to generate long term wealth for our investors

Investment Approach

• The stock selection will predominantly be on bottom up approach

• Our stock universe is divided into core stocks and tactical stocks. Core stocks are companies that have a strong and sustainable competitive advantage in their business.

• Our research effort will be primarily focussed on understandingthe core set of good quality companies rather than focussingon a large number of mediocre companies

• GARP style of investing - Growth at Reasonable Price is ourstyle and not growth at any price

• Additionally, we would tactically invest in good companies going through temporary problems, with a possible upside catalyst.

Portfolio Strategy

• The fund will generally be minimum 90% invested. Number of stocks envisagedis 40 - 70 stocks

• The fund will be benchmark and sector agnostic

• The fund will follow a differentiated strategy to manage risk during bullish and bearish market scenarios and suitably align the portfolio

• Portfolio construction is dependant on business cycle, valuations and earnings growth prospects of the companies selected

• We focus on investing in good and sound businesses which we understand well

• For the purpose of allocation between Large, Mid and Small Cap segments we follow unique internal research driven process which is based on valuation, expected earnings growth, business cycles.

• The fund would typically maintain minimum 40% allocation towards Large Caps and can go up to 100% based on market conditions

• Allocation to large caps would provide stability to the portfolio with reasonable returns. Allocation to Mid and Small Caps would be alpha accretive

Internal Risk Limits

Active SectorExposure LimitsActive SectorExposure Limits

DecisionMakingDecisionMaking

Sector inBenchmarkSector inBenchmark

Sector notin BenchmarkSector notin Benchmark

At FM Level + 2.5% of AUMBenchmark Weight+/- 2.5%

In Consultation with CIO & Analyst

Maximum Upto 10% of AUM.

Any further deviation in multiples of 2.5%. Maximum allowed deviation is Benchmark +/- 10%

Active StockExposure LimitsActive StockExposure Limits

DecisionMakingDecisionMaking

BenchmarkStockBenchmarkStock

Non BenchmarkStockNon BenchmarkStock

At FM LevelMaximum Weight of 3% of AUM

Benchmark Weight+/- 3%

In Consultation with CIO & Analyst

Any further deviationbeyond 3%

All In One Equity Fund

ActiveMarket CapAllocation

ActiveMarket CapAllocation

ActiveRiskManagement

ActiveRiskManagement

GARPInvesting(Growth atReasonable Price)

GARPInvesting(Growth atReasonable Price)

ActiveSectorAllocation

ActiveSectorAllocation

Active Bottom upStock SelectionActive Bottom upStock Selection

SQLInvestmentPhilosophy

SQLInvestmentPhilosophy

Suitability & Reasons To Invest

Fresh, no legacy/no baggage portfolio

Differently positioned as a flexi cap within the multicap segment

Smooth investing experiencefor the investor

Long TermWealth Creation Focus

Strong expertise inequity research

SQL InvestmentPhilosophy

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

Fund Facts

Nifty 500 Total Return Index

The 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 capitalization. However, there can be no assurance that the investment objective of the scheme will be realized.

Under normal circumstances, the asset allocation shall be as follows:

Mr. George Heber Joseph and Mr. Pradeep Gokhale

Within 12 Months from the date of allotment in respect of Purchase made other than through SIP; and within 12 (twelve) months from the date of allotment in respect of each Purchase made through SIP – 1%. Beyond 12 (twelve) months from the date of allotment – NIL. A switch-out under Systematic Transfer Plan (“STP”) or a withdrawal under Systematic Withdrawal Plan (“SWP”) shall also attract an Exit Load like any Redemption.

Benchmark

InvestmentObjective

AssetAllocation

FundManagers

Exit Load

Equity & Equity Related Securities 100% 65% Medium to Highacross market capitalization.

Debt & Money Market Instruments 35% 0% Low to Medium

Type of Instruments Indicative Allocation Risk profile (% of Net Assets) (Low/Medium/High) Max Min

Fund Managers

Mr. George Heber Joseph Chief Executive Officer & Chief Investment Officer• Mr. George Heber Joseph joined ITI Asset Management Ltd. in November, 2018 and is

responsible for the entire business of ITI Asset Management Ltd.• George has around two decades of experience and has held positions in Equity Research,

Fund Management, Treasury Management and Management Consulting. Prior to joining ITI Asset Management Ltd., he has worked in companies like ICICI Prudential Asset Management Ltd., Tanfac Industries Ltd. (Aditya Birla Group), Cholamandalam Investments & Finance Co. Ltd., Met Life India, Wipro and DSP Merrill Lynch Ltd. based in India and abroad.

• His last stint was at ICICI Prudential Asset Management Co. Ltd. Mumbai, where he spent more than a decade managing some of the large flagship fund strategies in the equity and hybrid categories with assets under management exceeding Rs. 10,000 crores. All funds (Multicap, ELSS – Long Term Equity Fund, Child Care) and discretionary portfolios (Wellness, Exports, Flexicap, Largecap, PIPE/Smallcap) managed by him during this entire period were excellent performers in their respective categories. There, he was designated as Senior Fund Manager (Vice President Grade) based in Mumbai, India and was one of the Key Management Personnel in the company and was part of the investment management team.

• He is known for his focus on extensive bottom-up research and stock picking capabilities, has overseen fund managers activities, managed various research analysts during his tenure.

• George holds dual Bachelor’s Degrees in English Language & Literature and Commerce. He is a qualified Chartered Accountant from Institute of Chartered Accountants of India, New Delhi and a Cost and Management Accountant from Institute of Cost Accountants of India, Kolkata.

Fund Managers

Mr. Pradeep GokhaleSenior Fund Manager & Head of Research• Mr. Pradeep Gokhale joined ITI Asset Management Ltd in November 2018. He has over 23

years of extensive experience in Fund Management, Equity Research, Credit Evaluation and Ratings.

• He has been associated as a Key Management Personnel at Tata Asset Management Ltd for 15 years and his last role was in the capacity of Senior Fund Manager – Equities.

• During his stint, he managed a broad spectrum of schemes across large cap (Tata Large Cap Fund), multi cap (Tata Large and Midcap Fund, Tata India Tax Savings Fund and the equity portion of Tata Hybrid Equity Fund), offshore fund (Tata India Offshore Opportunities Fund) and thematic funds (Tata Ethical Fund) with assets under management exceeding Rs.5,000 crores. He was responsible for heading the equity research function and also for tracking various sectors and a wide variety of stocks.

• Prior to joining Tata Asset Management Ltd, he was Head of Financial Sector and Securitization Ratings at CARE Ratings Ltd since April 1995. At CARE, he handled multiple ratings and advisory assignments of companies across manufacturing, financial services and other services sectors. He has also worked in the corporate finance departments of companies like Bombay Dyeing, Tata International and Lubrizol India Ltd.

• Mr. Pradeep is a qualified Chartered Accountant from Institute of Chartered Accountants of India, New Delhi and a Chartered Financial Analyst from CFA Institute – USA.

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. 24-19

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 capitalization

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

Investors understand that their principalwill be at moderately high risk

RISKOMETER

www.itimf.com

Toll Free Number 1800 266 9603 | Email [email protected]

Riskometer & Disclaimers

Disclaimer: All figures and data given in the document are dated unless stated otherwise. In the preparation of the material contained in this document, the AMC has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such expressions that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. The AMC (including its affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on this material. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ITI Mutual Fund may or may not have any future position in these sector(s)/stock(s). Past performance may or may not be sustained in the future. The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors. Investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of ITI Mutual Fund. The information contained herein should not be construed as a forecast or promise nor should it be considered as an investment advice.

market caps, volatility, allocation, valuations. my fund ... multicap fund_ppt.pdf · india –...

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