2. Greed, Fear and Fair Value
• Markets keep gyrating between greed and fear
• Real value lies somewhere in between
• Markets keep passing through real-value line quite effortlessly
• Both Greed and Fear cause paralysis
• When Fair Value band arrives – There is little money left
• Behavioral science suggests, people normally act in herds
3. So, What Do We Do ?
• Grab the bargains
• Ascertain the right value-line with a higher degree of accuracy, with our
capabilities
• Deep-dive to grab opportunities that keep arising from time to time
• Be disciplined to nCASH the gains and move back to liquid funds for the
next opportunity
5. nCASH
• nCASH is a product that will make Contrary Allocations to Stocks
Hammered due to market cycles.
• The idea behind this allocation strategy is that investments in quality
businesses can be made at attractive valuations by capitalising on
opportunities to acquire mis-priced assets at distress valuations.
• Sooner than later, beaten down stocks normally tend to revert to their
fair values also referred to as „reversion to mean‟
6. Portfolio Strategy
Focus on companies with:
• Top 100 companies in terms of market capitalization
• Strong and Robust businesses run by quality and superior managements
• Adequate track record and available at reasonable valuations
• Sudden / Sharp fall in price due to occurrence of an event
7. Portfolio Strategy
The endeavor would be to identify and nCASH on Sudden / Sharp fall in
price due to occurrence of events like
• Disappointing results
• Policy changes by Government
• Sharp currency movements
• Spike in commodity prices
• Rise/Fall in interest rates
• Global developments
• Other events
8. Illustration
CASE 1 : Ranbaxy
500
Buy Sell
450
400
350
300
250
200
2-Oct-09
4-Oct-09
6-Oct-09
3-Aug-09
5-Aug-09
7-Aug-09
9-Aug-09
2-Sep-09
4-Sep-09
6-Sep-09
8-Sep-09
25-Aug-09
27-Aug-09
22-Sep-09
24-Sep-09
11-Aug-09
13-Aug-09
15-Aug-09
17-Aug-09
19-Aug-09
21-Aug-09
23-Aug-09
29-Aug-09
31-Aug-09
10-Sep-09
12-Sep-09
14-Sep-09
16-Sep-09
18-Sep-09
20-Sep-09
26-Sep-09
28-Sep-09
30-Sep-09
Investment Made Reason to Enter or Exit
First Purchase 2% of NAV at 325 Change in top head expected to drive growth story; worst in terms of
earnings already in price; announcements expected regarding ANDA's
Second Purchase 1% of NAV at 335 approval
Exited 0.50% of NAV at 377 Sold at a profit of 16%
Exited 1% of NAV at 407 Sold at a profit of 25%
Exited 1.50% of NAV at 413 Sold at a profit of 24%
There is no assurance or guarantee that past performance may be sustained in
future. Investments in capital markets are subject to risks. Please refer Slide No.
25 for disclaimer. The above graph represents the values for the year 2009
9. Illustration
CASE 2 : Sesa Goa
320
Buy Sell
270
220
170
120
70
20 19-Aug-09
31-Aug-09
12-Sep-09
24-Sep-09
11-Aug-09
13-Aug-09
15-Aug-09
17-Aug-09
21-Aug-09
23-Aug-09
25-Aug-09
27-Aug-09
29-Aug-09
10-Sep-09
14-Sep-09
16-Sep-09
18-Sep-09
20-Sep-09
22-Sep-09
26-Sep-09
28-Sep-09
30-Sep-09
7-Aug-09
3-Aug-09
5-Aug-09
9-Aug-09
2-Sep-09
4-Sep-09
6-Sep-09
8-Sep-09
6-Oct-09
2-Oct-09
4-Oct-09
Investment Made Reason to Enter or Exit
First Purchase 4% of NAV at 225 Concensus expected Iron ore prices expected to fall instead went up
given strong china story; Contrarian call against market consensus of sell
Second Purchase 1% of NAV at 219 call; expected some acquisition and strong numbers
Exited 2% of NAV at 267 Sold at a profit of 19%
Exited 2% of NAV at 263 Sold at a profit of 17%
Exited 1% of NAV at 267 Sold at a profit of 22%
There is no assurance or guarantee that past performance may be sustained in
future. Investments in capital markets are subject to risks. Please refer Slide No.
25 for disclaimer. The above graph represents the values for the year 2009
10. Superior Performance
80.00%
70.71%
70.00% 50.00% Since Inception
42.04% 42.95%
60.00%
40.00%
48.46%
50.00%
42.04%
30.00%
40.00% 24.66%
30.00% 20.00%
18.48%
20.00%
11.42% 10.00%
9.05% 5.42%
10.00% 5.21% 5.42%
0.00% 0.00%
1 month 3 month 6 month Since Inception CAGR Standard Deviation
Returns
nCASH Nifty
nCASH Performance as compared to benchmark performance i.e. Nifty (as on 30 Sep, 2009)
Past Performance may or may not be sustained in future. The returns are
absolute for the periods mentioned less than 1 year and in CAGR for period Inception Date: June 2, 2008
more than 1 year.
11. NAV Movement
nCASH Performance to Benchmark
16
NAV Per Unit Rebased Nifty
14
12
10
8
6
4
02-Jul-08
02-Jul-09
02-Apr-09
02-Oct-08
02-Nov-08
02-Dec-08
02-Aug-08
02-Sep-08
02-Aug-09
02-Sep-09
02-Jun-08
02-Jan-09
02-Jun-09
02-May-09
02-Feb-09
02-Mar-09
There is no assurance or guarantee that past performance may be sustained
in future. The above graph represents the values for the year 2008 & 2009
12. Opportunities Exist
In a rising market, we saw 5 major corrections.
Source: www.nseindia.com
13. Need for Speed
• Market dynamics are rapid and changes are quick.
• Stock and Sector rotation is the order of the day, given the global scenario.
• Volatility could be opportunity.
• Greed and fear swings are more protracted.
• All markets scenarios give opportunities.
14. Product Features & Pricing Structure
Rs. 25,00,000/- per Individual account or as mutually agreed between
Minimum Account Size
the Portfolio Manager and the Client.
1% for clients subscribing after Nov 1, 2007 & withdrawing the same
Redemption Charge
within 1 year from date of investment on FIFO basis.
Investors are recommended to seek advice on taxation from their
Taxation independent financial advisors / tax consultant / accountant before
making any investments.
Option I - Upfront Fees : 2.25 %
Fixed Fee Annualised Fees : 2 %
Basic Fixed : 2%
Investment Portfolio Performance
Portfolio Manager's Share
Management & (Annualised Returns)
Option II - Upto 15% NIL
Advisory
Fixed Plus 20% of the excess
Fees Above 15% upto 30%
Variable Fees over 15%
25% of the excess
Beyond 30%
over 15%
For further details please refer Disclosure Document dated March 31, 2009 & subsequent addendum if any to the Disclosure Document
15. Privileged Account Service
A Discretionary Portfolio Management Service, created for very
elite, very discerning clients
LIKE YOU
16. Privileged Account Service (PAS)
• PAS is a highly customized portfolio management service from Birla Sun
Life Asset Management Company Ltd. that helps HNIs like you fulfill their
financial goals
• With an investment philosophy that seeks consistent, long-term results by
adopting a research-based, methodical approach to investing
• After fully understanding your particular needs, your portfolio manager will
put together the optimal portfolio for you, which takes into account your
financial goals, time horizon, risk appetite and investment outlook
• Investment excellence within the framework of transparent and rigorous risk
control
17. The power behind PAS :
Birla Sun Life Asset Management Company Ltd.
Birla Sun Life Asset
Management Company Ltd.
One of the Winner of
top 5 MF various
Houses in awards in
India „08
More than a
Investor base 100 branches
of more than Assets under across India
22 Lakh (as on Management and 700 plus
30 Sep 09)
in excess of people
Rs. 63,000 Cr
(as on 30 Sep 09)
Past Performance is no guarantee of future results. Mutual Fund investments are
subject to market risks. Please read the Statement of Additional Information /
Scheme Information Document carefully before investing.
18. Why PAS
• An institutional quality investment management
• Long-term track record
• No conflict of interest - neither into broking nor investment banking
• Emphasis on proprietary research
• Adherence to portfolio universe and disciplined investment process
• Emphasis on risk management
• Strict internal and external compliances
• Outstanding responsiveness and comprehensive communication with client
19. How it Works
• Investment Strategy
• Investment Philosophy
• Strong research process
20. Investment Strategy
Top-down Strategies
Duration Sector Yield Curve
Quantitative
Credit Analysis Trading
Research
Bottom – Up Strategies
21. Investment Philosophy
Robust
Industry
Dynamics Strong
Management
Reasonable
Valuations
Stock
Sustainable
Business
Model
Sustainable Strong
Competitive Earnings
Advantage Growth
The goal is to find an outstanding business at a sensible price, not an mediocre business at a
bargain price
22. Strong Research Process
Industry Analysis Business Analysis
Management Analysis
• Demand & supply scenarios • Strategies for growth
•Promoter‟s performance & track
• Raw material scenario • Productivity analysis
record
• Industry cycles & seasonal • Working capital management
•Performance of group companies
factors • Capital expenditure plans
•Internal control systems
• Impact of export / imports • Competitive positioning
•Capabilities under stress
• Competitive advantage
Financial Analysis
Other Issues
• Analysis of key financial docs & Regulatory Environment
• Repayment track record
accounting policies • Impact of govt. policies
• Feedback from other creditors &
• Cashflow analysis • Impact of changes in tax & duty
rating agencies
• Sensitivity analysis structures
• Contingent liabilities of the
• CAR, ALM profile, ageing • Import / export benefits
company
analysis
• Market share analysis
• Payback period analysis
23. Tailored solutions for unique needs
Products
Equity Debt Custom NLD
• Value We provide customized
Dynamic Fixed
• High Dividend Yield portfolio for investment Accelerator Series
Income Portfolio
• nCASH above 2.5 Cr.
• Growth
• India Reform Portfolio
24. Team of Professionals at your service
Jinesh Gopani – Fund Manager (Equity)
• An MBA in Finance , he was, for last two and half years, working in USA
based FII Voyager Investments as a Senior Research Analyst.
• Earlier, he worked with Emkay share and stockbrokers for four
years, where he was designated as Research Analyst
Apurvi Sharma – Fund Manager (Debt)
• A CFA & CA, prior to joining Birla Sun Life she was associated with
BenchMark Mutual Fund as AVP
• She has a total work experience of 9 years
25. Risk Factors & Disclaimer
Investments in securities are subject to market risks & there can be no assurance or guarantee that the objectives of the product will be achieved. The past
performance of the Portfolio Manager in any product is not indicative of the future performance in the same product or in any other product either existing or that may
be offered. There is no assurance that past performances in earlier product will be repeated. 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. Risk arising from the investment objective,
investment strategy and asset allocation: Market risk, political and geopolitical risk and risk arising from changing business dynamics, which may affect portfolio returns.
At times, portfolios of individual clients may be concentrated in certain companies/industries. The performance of the portfolios would depend on the performance of
such companies / industries / sectors of the economy.
While utmost care has been exercised, Birla Sun Life AMC Ltd. or any of its officers, employees, personnel, directors make no representation as to the accuracy,
completeness or reliability of the content and hereby disclaim any liability with regard to the same. Recipients of this material should exercise due care and read the
disclosure document (including if necessary, obtaining the advice of tax / legal / accounting / financial / other professionals) prior to taking of any decision, acting or
omitting to act. The document is solely for the information and understanding of intended recipients only. Further, the recipient shall not copy / circulate contents of this
presentation, in part or in whole, or in any other manner whatsoever without prior and explicit approval of BSLAMC.
Risks associated with investment in Equity and equity related instruments:
Equity and Equity related securities by nature are volatile and prone to price fluctuations on a daily basis due to both macro and micro factors. In respect of investments
in equity and equity-related instruments, there may be risks associated with trading volumes, settlement periods and transfer procedures that may restrict liquidity of
investments in equity and equity-related securities. In the event of inordinately large number of redemptions or of a restructuring of the Product's investment portfolio,
there may be delays in the redemption of units. The value of the Product's investments, may be affected generally by factors affecting securities markets, such as price
and volume volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government, taxation laws or policies of any appropriate
authority and other political and economic developments and closure of stock exchanges which may have an adverse bearing on individual securities, a specific sector
or all sectors including equity and debt markets. Consequently, the value of the portfolio may fluctuate and can go up or down. The Portfolio Manager may choose to
invest in unlisted securities that offer attractive yields. Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger
amount of liquidity risk, in comparison to securities that are listed on the exchanges or offer other exit options to the investor, including a put option. This may however
increase the risk of the portfolio. Investors may note that Portfolio Manager's investment decisions may not always be profitable, as actual market movements may be at
variance with anticipated trends.
Risk Associated with Investments in Fixed Income and Money Market Instruments:
Some of the common risks associated with investments in fixed income and money market securities are mentioned below. These risks include but are not restricted to:
Interest Rate Risk: As with all debt securities, changes in interest rates will affect the valuation of the Portfolios, as the prices of securities generally increase as interest
rates decline and generally decrease as interest rates rise. Prices of longer-term securities generally fluctuate more in response to interest rate changes than do
shorter-term securities. Interest rate movements in the Indian debt markets can be volatile leading to the possibility of large price movements up or down in debt and
money market securities and thereby to possibly large movements in the valuation of Portfolios
Liquidity or Marketability Risk: This refers to the ease at which a security can be sold at or near its true value. The primary measure of liquidity risk is the spread
between the bid price and the offer price quoted by a dealer. Liquidity risk is characteristic of the Indian fixed income market.
Credit Risk: Credit risk or default risk refers to the risk, which may arise due to default on the part of the issuer of the fixed income security (i.e. risk that the issuer will
be unable to make timely principal and interest payments on the security). Because of this risk debentures are sold at a yield spread above those offered on Treasury
securities, which are sovereign obligations and generally considered to be free of credit risk. Normally, the value of a fixed income security will fluctuate depending upon
the actual changes in the perceived level of credit risk as well as the actual event of default.
Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities under a particular Portfolio are reinvested. The additional
income from reinvestment is the “interest on interest” component. The risk refers to the fall in the rate for reinvestment of interim cashflows.