Canara Robeco F.O.R.C.E Fund. December FINANCIAL OPPORTUNITIES RETAIL CONSUMPTION ENTERTAINMENT An Open Ended Equity Scheme

Transcription

1 Canara Robeco F.O.R.C.E Fund FINANCIAL OPPORTUNITIES RETAIL CONSUMPTION ENTERTAINMENT An Open Ended Equity Scheme December 2016 This product is suitable for investors who are seeking* Capital appreciation over long term Investing in equity and equity related securities of companies in the Finance, Retail & Entertainment sectors *Investors should consult their financial advisers if in doubt about whether the product is suitable 1

2 Introduction F.O.R.C.E.- A theme Risk-Return Matrix India Growth Story F.O.R.C.E.- Brief Canara Robeco F.O.R.C.E. Fund Investment Strategy Portfolio Performance Why Canara Robeco F.O.R.C.E. Fund Product Positioning Fund Facts 2

3 Risk-Reward Matrix Broad gamut to operate with and invest in stocks related to particular theme Higher risk and volatility as compared to diversified fund Thematic Funds Mid & Small Cap Funds VOLATILITY Large Cap Fund Diversified Funds/ Multi Cap Funds/ ELSS Index Funds Balanced Fund RETURN LOW MEDIUM HIGH Thematic Funds have high risk as well reward opportunity in comparison to other categories 3

4 India Structural Drivers for Growth Job Creation SAVINGS TO INVESTMENT INVESTMENT FINANCE Banking & Financial Services Infrastructure Consumption CREATES PLATFORM FOR SUPPLY CREATES CONSUMPTION DEMAND 4

5 India vis-à-vis other emerging markets GDP growth Q FY15 GDP (%) -1 India Indonesia Malaysia China Thailand Brazil South Afrcia South Korea India is better positioned among peers Source: Bloomberg 5

6 Indian Consumption Story - Direct Beneficiaries FINANCIAL SERVICES RETAIL CONSUMPTION MEDIA & ENTERTAINMENT Financial Opportunities, Retail Consumption & Entertainment F.O.R.C.E 6

7 Changing Needs of Indian Consumer Necessities to Discretionary F.O.R.C.E FIRST WAS THEN CAME GOING FORWARD FOOD, GROCERIES, CLOTHING, HEALTHCARE AUTOMOBILES, TELECOM, BANKING, HOUSING FINANCIAL SERVICES, RETAIL, MEDIA & ENTERTAINMENT, LEISURE 7

8 F.O.R.C.E Financial Opportunities 8

9 Financial Services A Wide Canvas India has one of the most developed and regulated financial markets in the developing world Regulatory supervision, changing investor needs, Integration and reduction in the cost of administration are emerging trends in the financial services industry FINANCIAL OPPORTUNITY Banking Services Brokerage & Distribution Financing (NBFCs) Insurance (Life & General) Asset Management (MFs) Investment Banking / Private Equity / Venture Capital Likely Future Investment Avenues Investment Universe Expected To widen in the coming years 9

10 India's Rising Income & Domestic Savings Opportunities Galore Per capital net National Income at market prices (Rs.)# * 5x Growth in Per Capita Income expected by 2030 India's domestic savings## India's Financial Savings 2014## INR Bln 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 FY12 FY13 FY14 FY15E FY16E FY17E FY18E FY19E FY20E Gross domestic saving GDS/GDP % % Net claims on government 1% Life insurance funds 26% Provident & pension funds 13% Currency 13% Net Bank deposits 42% Trade Debt (Net) 1% Total savings in last 5 years ~INR 138 tn Expected Savings in next 5 years ~INR 256 tn One Beneficiary Banking & Financial Services Shares and debentures 3% Net Non Banking Deposits 1% #Source: Economic survey, *Advanced Estimates, The above data is as per series; AC Neilson. ##Source: Motilal Oswal Securities 10

11 F.O.R.C.E Retail Consumption 11

12 The Indian Economy Noteworthy facts supporting the Consumption Story 2 nd Fastest growing economy 65% India s population under the age of 35 3 rd Largest country already in terms of PPP next only to China & US 60% Household consumption as a % GDP, better than China 70% Population still lives in rural India Source: CIA World Factbook, Final Census Report April 2013,: UN World Urbanization Prospects 2014, Deloitte: 'India matters: Winning in growth markets, India s Urban Awakening, 2010: Mckinsey 12

13 How SMALL is the Indian Consumption market? Top 20 Countries by Population (Billion) Larger than the 3 rd largest Country More than the size of 5 th Largest Country India s active Facebook users are greater than the population of Egypt & Iran combined 0 China India India's Wireless Subscribers India TV Viewers European Union India's Internet Subscribers United States Indonesia India Smartphone Users Brazil Pakistan Nigeria Bangladesh Russia Japan India's monthly active users of Facebook Mexico Philippines Ethiopia Egypt Germany Iran Turkey India's active DTH Subscribers Source: TRAI, CIA World Factbook 13

14 The Indian Consumer Young Urban Middle Class Young Urban Middle Class >~25% of India's population is in the age group of Yrs >The median age of the poulation is 27 Yrs > Urban population is expected to more than double by 2050 from current 377 million > By 2030, India is likely to become the world s largest middle class market with a total consumer spend of nearly US $ 13 trillion Benefit A Young Workforce is More Productive + Higher Disposable Income Benefit Culture of Consumerism + Brand Awareness Benefit Change in Spending Pattern from Necessities to Discretionary Demographic dividend Key Factor for economic growth Source: CIA World Factbook, Final Census Report April 2013,: UN World Urbanization Prospects 2014, Deloitte: 'India matters: Winning in growth markets' 14

15 The Indian Retail Pie Current Scenario 5 th Largest Retail Destination Globally Contributes to 10% of GDP Employs 8% of India s Working Population Fuelled primarily by Changing demographic scenario, increase in number of Working women, prevalence of Nuclear family structure, Easy Availability of Credit & High Exposure to Media & Brands Market Share: Organized Retail 8%. Unorganized Retail 92%. (Huge Opportunity!) Unorganized Retail - 15mn mom & pop stores exists in India Source: 15

16 Huge Growth Potential in Retail & Ecommerce space Source: BCG Retail 2020: retrospect, reinvest rewrite 16

17 F.O.R.C.E Entertainment & Media 17

18 Indian Consumption Story It does not end there Highest Number of Movies & Largest Number of Tickets sold Low Screen Density per million people ratio The Times of India Among the Top Selling Newspaper Low English Newspaper Penetration Source: Wikipedia 18

19 Indian Media & Entertainment Industry A Humongous Opportunity 2400 Media & Entertainment Sector 2000 USD Bn CY 2008 CY 2009 CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 E CY 2016 E CY 2017 E CY 2018 E CY 2019 E Sector Size (USD Billion) Source: Edelweiss 19

20 Key Trends in Media & Entertainment Sector Cable and satellite (C&S) households expected to increase from ~168mn in CY14 to ~196mn households in CY19 Radio witnessed a robust YoY growth of 17.6% in CY14 Phase III auctions, key driver for the industry 20

21 Themes Financial Services Media & Entertainment Our View Macro economic indicators turning favourable Stress in corporate lending is bottoming out while retail lending continues to grow Biggest beneficiaries of Investment cycle turning around Digitization remains a strong theme as there has been a steady growth in subscribers Increasing digitization may help increase TV penetration and thereby help media companies grow Economic revival would led to Advertisement revenue growth for media companies Retail Consumption Consumer - Discretionary With expected economic revival, discretionary spending would revive Favourable demographics for consumption growth High proportion of young & working population Consumer - Staples Over the last few years consumer spend has been largely driven by rural demand with rising income levels and increasing penetration Demand for staples would be steady but would be lagging the demand for discretionary consumption Stronger growth prospects for the retail consumption space if FDI in retail goes through & GST is implemented 21

22 Goods & Services Tax (GST) Major Catalyst for Organized Players 22

23 Goods & Services Tax (GST) & its Benefits Destination Based Tax Benefiting Unified Tax for goods & services GST Input Credit across Value Chain the economy and major sectors Avoids Double Taxation Minimizes Cascading Effect 23

24 Triple benefit to Companies in the Consumption Basket Increase in Revenue Gaining Market Share Reduction in Cost GST implementation is likely to reduce effective tax rate Input Tax set off available for Organised Players GST would be an unified destination tax across India Demand revival due to a possible decrease in price of branded goods Price differential between organised & unorganised sector likely to reduce Reduction in additional distribution cost Increase in Sales Organised sector likely to gain market share Increase in Savings therefore Increased Profitability 24

25 Impact of GST on the F.O.R.C.E Sectors Sector Impact of Tax Rate Cascading Impact Supply Chain Management Double Taxation Overall Impact FMCG Media BFSI Positive Impact Negative Impact Neutral Two major Sectors of Canara Robeco F.O.R.C.E may benefit from implementation of GST 25

26 Presenting: Canara Robeco F.O.R.C.E Fund 26

27 Canara Robeco F.O.R.C.E Fund - Key Highlights Benefit from the India Growth Story Designed to benefit from demographic advantage of young India for the next decade and participating in the changing consumption pattern emerging out of rising middle class and urbanization. Theme to Team with Macro-economic fundamentals are slowly stabilizing; Banks & Financial Sector is a beta-play & any improvement in economic fundamentals is likely to benefit this sector. The Government is believed to be committed towards boosting growth as well as taming inflation. This will help to increase Financial Savings of individuals & thereby help to increase Consumer Spending, thereby, benefitting both Financials & Consumption sector Sector Allocation Range (%) Financial Services Retail, Consumption Media & Entertainment Fund predominantly invests in 3 sectors benefitting from the demographic dividend Fund also looks for opportunity to invest in few other companies which benefit from this theme 27

28 Portfolio Snapshot- Glimpse of the Portfolio Name of the Company Industry Classification % of Net Assets HDFC Bank Ltd Banks 9.50% Zee Entertainment Enterprises Ltd Media & Entertainment 7.59% I T C Ltd Consumer Non Durables 7.48% State Bank of India Banks 5.43% ICICI Bank Ltd Banks 5.06% Kotak Mahindra Bank Ltd Banks 4.79% Yes Bank Ltd Banks 4.69% Bajaj Finserv Ltd Finance 2.97% IndusInd Bank Ltd Banks 2.84% Hindustan Unilever Ltd Consumer Non Durables 2.53% 120% 100% 80% Top 5 Sector break up (% to NAV) Banks 34.76% Consumer Non Durables 20.51% Media & Entertainment 16.39% Finance 11.47% Textile Products 4.33% 0% 10% 20% 30% 40% Asset Allocation Concentrated portfolio with 36 stocks Top 10 Stocks: 52.88% Top 3 Sectors: 71.66% Top 5 Sectors: 87.46% 60% 40% 20% 0% -20% Equities I 96.36% Money Market Instruments I 4.58% Others I -0.94% Portfolio include Top 10 holdings under equity instruments. All data as on 30 th December,

29 Portfolio Snapshot- Glimpse of the Portfolio Market Capitalization (%) 23% 2% 4% Large Cap Mid Cap Small Cap Investment Style Growth Blend Value Large Cap Mid Cap Small Cap Diversified Thematic Sector 71% Debt, Cash & Others Key Highlights Quantitative Information Criteria Values Standard Deviation Portfolio Beta 1.13 Portfolio Turnover Ratio 0.63 times R-Squared 0.80 Sharpe Ratio 0.66 Emphasis on tactical ideas to benefit from market developments Fund invests in companies which have potential for growth All data as on December 30,

30 Performance at a Glance- Fund v/s Benchmark Canara Robeco F.O.R.C.E. Fund has generated Rs.26,180 on an investment of Rs.10,000 since inception Period NAV Per Unit (Rs.) Scheme Returns (%) Nifty 50* S&P BSE Sensex ** Current Value of Standard Investment of Rs in the Scheme Nifty 50* S&P BSE Sensex** Since Inception (CAGR) ,180 17,023 16, Dec 2015 to 30 Dec Dec 2014 to 30 Dec Not Applicable 30 Dec 2013 to 30 Dec The past performance may or may not be sustained in the future. Returns are based on growth NAV of Regular plan and are calculated on compounded annualized basis for a period of more than (or equal to) a year and absolute basis for a period less than a year. Inception Date: September 14, 2009 #Scheme Benchmark ##Additional Benchmark $NAV per unit for since inception is as of Dec 30, 2016 and for others is as of beginning of the period. Load is not taken into consideration for computation of returns. Returns of dividend option under the scheme for the investor would be net of distribution tax as applicable. The performance of other funds managed by fund manager of Canara Robeco F.O.R.C.E. Fund is on the slide number 36 30

31 Performance at a Glance Fund v/s Benchmark 20% Canara Robeco F.O.R.C.E. Fund 15% Nifty 50 Canara Robeco F.O.R.C.E. Fund has outperformed Nifty 50 across all time periods shown 10% 5% 0% -5% 1 year 2 years 3 years 5 years Since Inception Criteria 1 Year (%) 2 Years (%) 3 Years (%) 5 Years (%) Source: MFI Explorer, Performance as on December 30, Inception Date: September 14, Returns are on CAGR basis. Past performance may or may not be sustained in the future. Since Inception (%) Canara Robeco F.O.R.C.E. Fund 3.71% 3.07% 18.26% 18.83% 14.10% Nifty % -0.38% 9.16% 12.09% 13.59% Outperformance/ Underperformance 0.05% 3.45% 9.10% 6.74% 0.51% 31

32 Performance at a Glance SIP 15% Canara Robeco F.O.R.C.E. Fund has outperformed the benchmark & S&P BSE SENSEX 10% 5% 0% 1 year 3 years 5 years Since Inception Canara Robeco FORCE Nifty 50 S&P BSE SENSEX 1 year 3 years 5 years Since Inception Total Amt invested (INR) 1,20,000 3,60,000 6,00,000 8,80,000 Market Value (INR) 1,21,207 4,14,270 8,55,405 14,50,854 Investment date is taken to be 1st of the month or subsequent day if 1st is a holiday and investment of Rs.10,000 is taken. Returns are as on Dec 30, 2016 and are CAGR. The calculations are based on the regular growth plan NAVs.. Past performance may or may not be sustained in the future. Scheme Benchmark#, Additional benchmark##. Inception Date: September 14,

33 Product Positioning Large Cap Diversified Mid & Small Cap Thematic Fund CR Large Cap + CR Equity Diversified CR Emerging Equities CR Infrastructure CR F.O.R.C.E. SATELITE PORTFOLIO CORE PORTFOLIO ELSS CR Equity TaxSaver NEED BASED Above positioning is for illustration purpose only 33

34 Why Canara Robeco F.O.R.C.E. Fund Fund being a thematic fund, invests in the niche space and follows a Growth style of investing Expected turnaround in the economic cycle leading to increase in employment which may boost the discretionary consumption and benefit the sectors that fund invests in Since the banking sector is undergoing correction, it is expected to see an upturn. As the fund has maximum allocation to Banking and Financial Services, it could benefit from the opportunity lying ahead in the sector 34

35 Fund Facts Fund Category Investment Objective Inception Date Open Ended Equity Scheme To provide long-term capital appreciation by primarily investing in equity and equity related securities of companies in the Finance, Retail & Entertainment sectors. 14-Sep-09 Asset Allocation Equity related companies in Finance, Retail & Entertainment: % (Risk Profile - High) Other Equity & related instruments: 0-35% (Risk Profile - High) Domestic Debt & MMI (Including securitised debt up to 10% of net assets): 0-35% (Risk Profile - Low) Plans/Options Facilities Fund Size Load Structure Regular & Direct Plan: Options: Growth / Dividend with payout & Reinvestment SIP/ SWP/ STP/ Dividend Transfer Facility Rs Crs (Month End AuM) 1% - if redeemed/switched out within 1 year from the date of allotment. Nil if redeemed / switched out after 1 year from the date of allotment. Benchmark Nifty 50 Fund Manager Mr. Hemang Kapasi All data as on December 30,

36 Disclaimer The information used towards formulating the outlook have been obtained from sources published by third parties. While such publications are believed to be reliable, however, neither the AMC, its officers, the trustees, the Fund nor any of their affiliates or representatives assume any responsibility for the accuracy of such information. CRMF, its sponsors, its trustees, CRAMC, its employees, officer, directors, etc assume no financial liability whatsoever to the user of this document. Mutual Fund Investments are subject to market risk. Investors are requested to read the Scheme related documents carefully before investing. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. 36