It’s time for Prudent Investingrrfinance.com/pdf_files/Prudence Fund - NFO ppt (retail).pdf ·...
Transcript of It’s time for Prudent Investingrrfinance.com/pdf_files/Prudence Fund - NFO ppt (retail).pdf ·...
It’s time for Prudent Investing !!!
For Illustration Purpose Only Creating wealth since 7 years!!!
For institutional Use Only
Existing Product Basket
RISK
RETURN
International Funds
MidCap Fund
Large Cap Fund
Fixed Income Funds
Existing Funds
For institutional Use Only
Volatility of Last 7 years
7,000
12,000
17,000
22,000
27,000
32,000
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-08
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S&P BSE Sensex
S&P BSE Sensex
Global Financial Crisis
Rebound Rally
Fed tapering &
Weak currency
New Government
formation
India’s Macroeconomic
concerns
Recovering
Macro economy
Previous Bull Market peak
Source: Bloomberg, 31st March, 2015
Market Dynamics Sailing Through Global & Domestic Headwinds
For institutional Use Only
Existing Product Basket – How did they fair
RISK
RETURN
International Funds
MidCap Fund
Large Cap Fund
Fixed Income Funds
Existing Funds
For institutional Use Only
Mirae Asset India Opportunities Fund - Journey
Source : AMFI, BSE India, 31 st March 2015 The above chart shows performance since inception for Mirae Asset India Opportunities Fund - Regular Plan - Growth Option. Past Performance may or may not be sustained in future. The above is NAV movement of graph as on 31st March, 2015. The Scheme NAV and Benchmark index have been rebased to Rs. 10/-
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9
14
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24
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34
Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14
MAIOF S&P BSE 200 S&P BSE SENSEX
32.427
18.222
18.633
Mar-15
Rs
.
For institutional Use Only
Mirae Asset Emerging Bluechip Fund – Journey so Far
Source : AMFI, BSE India, 31 st March 2015 The Scheme NAV and Benchmark index have been rebased to Rs.10/-. Past performance may or may not be sustained in future and is no guarantee of future results. The above chart shows performance since inception for Mirae Asset Emerging Bluechip Fund- Regular Plan - Growth Option.
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MAEBF CNX Midcap S&P BSE Sensex
29.244
15.677
15.662
Rs.
Consistent Seven Years Journey!
For institutional Use Only
-34.8%
117.2%
14.4%
-2.9%
7.6%
25.1%
46.9%
-39.9%
89.6%
7.3%
-9.5%
5.4%
16.7%
31.7%
-36.7%
77.0%
9.9%
-10.4%
7.8%
18.7% 24.6%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
FY 2008 - 2009 FY 2009 - 2010 FY 2010 - 2011 FY 2011 - 2012 FY 2012 - 2013 FY 2013 - 2014 FY 2014 - 2015
MAIOF
S&P BSE 200
S&P BSE Sensex
Mirae Asset India Opportunities Fund
- YoY Journey!
Source: Bloomberg, 31st March, 2015. Past performance may or may not be sustained in future. The CY period is considered from the first day of the year to the last day of the year
% returns
MAIOF has been consistently outperforming benchmark year on year.
For institutional Use Only
Mirae Asset Emerging Bluechip Fund -
YoY Performance……..
Source: Bloomberg, 31st March, 2015. The aforesaid graph depicts absolute performance of the scheme for the calendar year.
Past performances may or may not sustain in future and is no guarantee of future results.
13%
-16%
46%
8%
84%
4% 7%
-31%
40%
-6%
55%
3%
15%
-25%
25%
8%
30%
2%
-40%
-20%
0%
20%
40%
60%
80%
100%
CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 (YTD)
MAEBF
CNX Midcap
BSE S&P Sensex
% returns
For institutional Use Only
Consistent Dividend Record
• Past performances may or may not sustain in future.
• Pursuant to payment of dividend the NAV of the dividend option of the scheme falls to the extent of payout and statutory levy (if applicable)
Mirae Asset India Opportunities Fund
Record Date Rate of Dividend
(in Rs)
Face Value
(in Rs)
CUM NAV
(in Rs)
13-Feb-15 1.60 per unit 10 19.709
27-Jan-14 1.20 per unit 10 13.196
14-Mar-13 1.40 per unit 10 13.559
22-Mar-12 1.50 per Unit 10 13.376
10-Dec-10 1.50 per Unit 10 13.978
9-Sep-09 0.90 per Unit 10 12.039
Record Date Rate of Dividend
(in Rs)
Face Value
(in Rs)
CUM NAV
(in Rs)
8-Dec-14 1.80 per Unit 10 22.991
18-Mar-14 1.20 per Unit 10 14.959
29-Oct-12 1.10 per Unit 10 12.912
Mirae Asset Emerging Bluechip Fund
Expansion of Product Basket
For institutional Use Only
Expanding Product Basket
RISK
RETURN
International Funds
MidCap Fund
Large Cap Fund
Fixed Income Funds
Existing Funds New Fund
New Fund
For institutional Use Only
Fund Structure
Balanced Approach
Underlying Portfolio
Asset Allocation
Fund New Fund
Equity
65% - 80%
Large Cap* Bias
Debt
20% - 35%
Corporate Bonds
CD, CP, G-Sec
Risk Adjusted Returns
* Top 100 companies by market capitalization are classified as Large cap Companies and below top 100 as Mid and Small Caps.
For institutional Use Only
Risk/Return Profile
Liquid
Funds
Bond Funds
Sector Fund/
Thematic Fund
Lower Risk/Lower Return High Risk/High Return
Potential Potential
Mid / Small
Cap Fund
Large Cap
Fund
New Fund
Gilt Funds
Income Funds
For institutional Use Only
Investor Profile
Investment Goal
Capital Preservation Generate Income Wealth Creation
through Protective Compounding
Low Risk Funds Moderately Low or
Low Risk Funds
Moderately High
Risk Funds
Liquid Funds
Overnight Funds
Ultra Short Term Bond Funds,
Short Term Bond Funds
Income Funds
Equity Funds with Large Cap
Bias
For institutional Use Only
Comfort of Rebalancing
For institutional Use Only
The Scenario
An investor invests Rs. 1 lakh on January 01, 2005. He
puts half of his investment in equity and the other half
in debt. So he starts off with an Equity : Debt allocation
of 50:50. For the sake of simplicity, we did not look at
any annual additions to the portfolio. We consider just
the initial amount. For equity returns, we looked at the
Sensex. For debt, we looked at the one-year fixed
deposit rates. We then looked at the portfolio on
January 01, 2015.
Where does he win?
If he maintained his Equity : Debt allocation of 50:50 by
opting for annual rebalancing, he would end up with
Rs.3.25 lakh.
If he choose to ignore rebalancing and just left his
portfolio untouched, his investment would be worth Rs.
2.78 lakh.
Rs. 1 Lakh
Initial Investment
Rs. 2.78 Lakhs
Without Annual
Balancing
Rs. 3.25 Lakhs
With Annual
Balancing
Disciplined Investing
Portfolio Rebalancing - Powered by
For institutional Use Only
Investors spend too much time/focus on trying to “Timing the Market” which yields less than
2%, while ignoring Asset Allocation which constituents more than 90% of the investors returns
Why Asset Allocation?
Asset Allocation strategies driver returns
Asset Allocation, 91.5%
Security Selection, 4.6%
Market Timing, 1.8%
Other Factors, 2.1%
Drivers of investment results
Source: Financial Analyst Journal, 1986
For institutional Use Only
Why Asset Allocation?
No One Asset Class Performs at all times
Balance Portfolio mirrors the Equity performance in Bull Markets but in Bear Markets of
Equities they have been able to restrict the downside.
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15
% R
etu
rns
No Asset Class Always Outperforms
Equity Fixed Income 65%-35% Portfolio
Debt Outperformance
Equity Outperformance
Past Performance may or may not sustain in future. The above graph depicts 3 year CAGR rolling returns starting from 1st April 2005 to 31st May 2015. Source: Bloomberg
For institutional Use Only
Why Asset Allocation?
Asset Allocation Returns - Powered by
80
130
180
230
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330
380
430
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
Pure Equity 80% Equity 70% Equity 60% Equity 40% Equity 20% Equity Pure Fixed Income
Absolute Returns CAGR Returns
Pure Equity 276.37% 14.18%
80% Equity 273.41% 14.09%
70% Equity 262.18% 13.75%
60% Equity 246.01% 13.23%
40% Equity 203.12% 11.74%
20% Equity 152.40% 9.71%
Pure Fixed Income 101.86% 7.28%
Past Performance may or may not sustain in future. Equity part of the investment is equivalent to the BSE Sensex. Fixed income part is a representative liquid fund. Rebalancing was done at the beginning of every year by restoring both the asset classes to their desired proportion. The ten-year comparison is done with annual rebalancing.
70- 80% Equity portfolios delivers similar returns as 100% Equity portfolio with lower volatility
For institutional Use Only
Balance - Risk v/s Reward
Past Performance may or may not sustain in future. Volatility is annualized Standard deviation and Returns are in CAGR terms. The period of
the same is 1st April 2002 to 31st May, 2015. Portfolio of Equity is CNX Nifty, Gold is Gold in INR terms, Fixed Income is I-Sec Composite
Index and Commodity is RICI Commodity Index. Source: Bloomberg, 31st May 2015.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
10% 12% 14% 16% 18% 20% 22% 24% 26%
Retu
rns (
in %
)
Volatility
Volatility and Returns of Different Asset classes
Fixed Income
Commodity
65% Equity; 35% Debt
Gold
Equity
Favorable Risk-Return Portfolio
For institutional Use Only
The investment objective of the Scheme is to generate capital appreciation along with current income from a
combined portfolio of equity & equity related instruments and debt and money market instruments.
MAPF - Investment Objective
For institutional Use Only
Allocation between Equity and Debt- Function of Valuation, Earnings Growth and Interest Rate
Outlook
Bottom up Stock selection Process
No Bias towards any sector/Themes
MAPF – Equity Investment Strategy
Mid and Small Caps* (Up to 15%) Allocation based on better growth outlook
and valuation gap with Large caps
Stock Selection Parameters 1. Business Selection
2. Management
3. Valuation
Large Caps* (65-80%) (Growth opportunities through
large caps)
* Top 100 companies by market capitalization are classified as Large cap Companies and below top 100 as Mid and Small Caps.
For institutional Use Only
-2.4%
-7.5%
-10.1%
16.8%
19.3%
23.8%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
S&P BSE Sensex S&P BSE MidCap S&P BSE SmallCap
3 Year CAGR Rolling Returns
Large Cap vs Mid vs Small cap
In falling markets large caps generally provide stability to the portfolio and
they participate in the bull rallies.
Source: Bloomberg, 31st May, 2015. The above chart depicts average Highs and Lows, over the period of June-2005 to May-2015.
Past performance of the indices may or may not be sustained in future and may vary according to the changing economic environment.
% returns
For institutional Use Only
Why Large Cap Companies?
First to react to an economic revival.
Generally performs across various market cycles.
Highly traded on stock exchanges ensuring good
liquidity.
Advantages of size and scale.
These companies have proven track records and
have been through several market cycles.
MAPF - Large Caps generally provide stability
Source: Bloomberg, 31st May, 2015. The Top 100 companies by
market capitalization have been classified as large caps.
24.2
3.3
0 5 10 15 20 25 30
Large Cap
Mid & Small Cap
Average Volume (in lakhs) 6 months
For institutional Use Only
MAPF – Equity Stock Selection Process
• Business with Scalability & Sustainable Competitive Advantages
• High ROI (Return on Investment), and thus free cash generation
• Strong Earnings Growth & Visibility
BUSINESS SELECTION
• Intellect and thought leadership
• Good Corporate governance track record
MANAGEMENT
• Bias for reasonable “Margin of Safety”, which mitigates underlying risks (related to business, liquidity and volatility)
VALUATION
PORTFOLIO
For institutional Use Only
MAPF - Debt Investment Process
Final Debt Portfolio
Precautions
• Adequate precautions are taken to reduce credit risk, liquidity risk and risk spreads.
Method
• Mix of Top down and Bottom up method is followed
Approach
• The approach is primarily guided by the interest rate movement in the market.
Aim
• The strategy aims to maximize risk-adjusted returns by allocating assets dynamically to the most attractive fixed income securities.
For institutional Use Only
Its better to ride with airbags then without
For institutional Use Only
Mirae Asset Prudence Fund (An Open Ended Equity Oriented Asset Allocation Scheme)
NFO Opens: 8th July, 2015 NFO Closes: 22nd July, 2015*
*Scheme re-opens for continuous sale and re-purchase on or before five business days from the date of allotment.
For institutional Use Only
For institutional Use Only
Product Labelling
Certain information contained in this document is compiled
from third party sources. Whilst Mirae Asset Global
Investments (India) Private Limited has to the best of its
endeavor ensured that such information is accurate,
complete and up-to-date, and has taken care in accurately
reproducing the information, it shall have no responsibility or
liability whatsoever for the accuracy of such information or
any use or reliance thereof. This document shall not be
deemed to constitute any offer to sell the schemes of Mirae
Asset Mutual Fund. Mirae Asset Global Investments (India)
Pvt. Ltd/ Mirae Asset Trustee Co. Pvt. Ltd./ Mirae Asset
Mutual Fund/ its Directors or employees accepts no liability
for any loss or damage of any kind resulting out of the
unauthorized use of this document. References to particular
sectors, securities or companies are for general information
only and are not recommendations to buy or sell a security,
or an indication of the author’s holdings/ portfolios of the
schemes of Mirae Asset Mutual Fund at any one time.
The data mentioned are as on 23rd June, 2015.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO
MARKET RISKS, READ ALL SCHEME RELATED
DOCUMENTS CAREFULLY
For institutional Use Only
Mirae Asset India Opportunities Fund – Regular Plan – Growth Option is managed by Mr. Neelesh Surana and Mr. Sumit Agrawal
Period NAV at the end of the period (Rs. per unit)
Returns
MAIOF S&P BSE 200 S&P BSE Sensex**
31st March 2014 - 31st March 2015 32.427 46.99% 31.93% 24.89%
31st March 2013 - 31st March 2014 22.060 25.09% 17.19% 18.85%
31st March 2012 - 31st March 2013 17.522 8.32% 6.03% 8.23%
Since Inception(CAGR)- 31st March 15 32.427 18.32% 9.31% 8.96%
Since Inception - 31st March 15 (Value INR)* 32.427 32,427 18,633 18,222
Index Value ( 31st March, 2015) Index Value of S&P BSE 200 is 3537.55 and Index value of S&P BSE Sensex is 27,957.49
Date of allotment 04-Apr-08
Scheme Benchmark S&P BSE 200
Source: Ace MF : 31st March, 2015 **Alternate Benchmark; * Value of Investment of Rs. 10,000/- Invested in the Scheme. Past performances may or may not sustain in future.
Performance of other Funds
Period NAV at the end of the period (Rs. per unit)
Returns
MAEBF CNX Midcap S&P BSE Sensex**
31st March 2014 - 31st March 2015 29.244 70.38% 50.96% 24.89%
31st March 2013 - 31st March 2014 17.164 35.34% 16.36% 18.85%
31st March 2012 - 31st March 2013 12.682 9.62% -4.02% 8.23%
Since Inception(CAGR)- 31st March 15 29.244 25.47% 9.95% 9.97%
Since Inception - 31st March 15 (Value INR)* 29.244 29,244 15,662 15,677
Index Value ( 31st March, 2015) Index Value of CNX Midcap is 13,001.25 and Index value of S&P BSE Sensex is 27,957.49
Date of allotment 09-Jul-10
Scheme Benchmark CNX Midcap
Mirae Asset Emerging Bluechip Fund – Regular Plan – Growth Option is managed by Mr. Neelesh Surana
For institutional Use Only
Note: * For computation of since inception returns (%) the allotment NAV has been taken as Rs 10.00. In case, the start/end date of the concerned period is a non-
business date (NBD), the NAV of the previous date is considered for computation of returns. Returns (%) for less than 1 year calculated on simple annualized
basis. Load is not considered for computation of returns. The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. Returns
provided are of Regular Plan-Growth Option & Absolute returns. CAGR -Compounded Annualized Growth returns. *As per SEBI standard on performance disclosure,
returns in INR terms based on a standard investment of ` 10,000/- have been shown only for Schemes that have been in existence for more than three years. NAV (per
unit) is at the end of the period. Past performance may or may not be sustained in future. **Alternate Scheme -Benchmark.
Refer SID and SAI for details of the Load structure, risk factors, investment strategy, asset allocation and other details before investing.
Statutory Details: Trustee: Mirae Asset Trustee Company Private Limited; Investment Manager: Mirae Asset Global Investments (India) Private Limited (AMC);
Sponsor: Mirae Asset Global Investments Company Limited.
Certain information contained in this document is compiled from third party sources. Whilst Mirae Asset Global Investments (India) Private Limited has to
the best of its endeavour ensured that such information is accurate, complete and up-to-date, and has taken care in accurately reproducing the information,
it shall have no responsibility or liability whatsoever for the accuracy of such information or any use or reliance thereof. The views expressed herein
represents general market outlook and are not based on any assumptions/projections and purely represent the views of the author. This document shall
not be deemed to constitute any offer to sell the schemes of Mirae Asset Mutual Fund. Mirae Asset Global Investments (India) Pvt. Ltd/ Mirae Asset Trustee
Co. Pvt. Ltd./ Mirae Asset Mutual Fund/ its Directors or employees accepts no liability for any loss or damage of any kind resulting out of the unauthorized
use of this document. References to particular sectors, securities or companies are for general information only and are not recommendations to buy or
sell a security, or may be a part of author’s holdings/ portfolios (subject to change without any intimation) of the schemes of Mirae Asset Mutual Fund at
any one time.
The presentation is dated June 25, 2015
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED
DOCUMENTS CAREFULLY.
Disclaimer