UNION EQUITY SAVINGS FUND

Transcription

1 NFO: 19th July 2018 till 30th July 2018 UNION EQUITY SAVINGS FUND (An Open Ended Scheme investing in Equity, Arbitrage and Debt)

2 KEY HIGHLIGHTS UNION EQUITY SAVINGS FUND SEEKS TO ACHIEVE THE OPTIMUM COMBINATION OF EQUITY, ARBITRAGE AND DEBT Growth potential better than fixed income investments~ Lower volatility as compared to pure equity funds Benefits of equity taxation # Low drawdownsacross market cycles # In view of individual nature of the tax consequences, each investor is advised to consult his/her own professional tax advisor. ~ The period considered is medium to long term. Union Mutual Fund/ AMC is not guaranteeing return on investments made in Scheme. 2

3 UNION EQUITY SAVINGS FUND-ITS ASSET ALLOCATION Under normal circumstances, the asset allocation of the portfolio will be as follows: Unhedged Equity Equities including Arbitrage Fixed Income Exposure: 10%-40% Exposure: 65%-90%^ Exposure: 10% - 35% Capital Appreciation through investment in diverse universe of stocks Regular Income by buying securities in cash and selling futures of same securities thus exploiting inefficiencies in securities pricing Stability through investment in high security fixed income instruments ^ Arbitrage exposure would range between 25%-80%. Note: For complete details of the asset allocation pattern, refer the Scheme Information Document (SID) of the Scheme. 3

4 Risk-Reward Spectrum Union Small Cap Fund Union Tax Saver Scheme Union Equity Fund Equity Schemes Union Largecap Fund Union Equity Savings Fund^ Union Balanced Advantage Fund Union Asset Allocation Fund Hybrid Schemes Union Corporate Bond Fund Union Dynamic Bond Fund Union Short Term Fund Debt Schemes Union Liquid Fund Lower Higher Note: The risk and return spectrum shown above is for broadly explaining the risk-return spectrum of debt, hybrid and equity schemes. The actual risk and returns for the schemes mentioned in each of the categories above may or may not be in line with the risk-return curve shown above. ^New Fund Offer Period commences on July 19,

5 UNION EQUITY SAVINGS FUND - FEATURES Dynamic Equity & Debt Allocation based on Multi Parameter Strategy (Union Market Pulse Indicator) (10/40)* Endeavour to increase equity allocation when markets go down Endeavour to decrease equity allocation when markets go up Stock Selection through fundamental analysis Capitalising on pricing anomalies through arbitrage strategies Exposure to high quality fixed income instruments *Union Market Pulse Indicator 10/40 (UMPI 10/40) - This is the current investment strategy which is subject to change. 10/40 indicates minimum maximum unhedged equity allocation. Please refer the Scheme Information Document (SID) of the Scheme for the asset allocation pattern and investment strategy. Subject to the provisions of the SID, the asset allocation and investment strategy may change depending on the Fund Manager s view and on the prevailing market conditions. 5

6 MULTI PARAMETER STRATEGY (UNION MARKET PULSE INDICATOR) 10/40 - FOUR FACTOR BASED STRATEGY Price to Book Value Dividend Yield EV to EBIDTA** 10 Year G-Sec UNION MARKET PULSE INDICATOR 10/40 (UMPI 10/40) Note: Union Market Pulse Indicator 10/40 (UMPI 10/40): This is the current investment strategy and is subject to change depending on market conditions and Fund Manager s view. 10/40 indicates minimum maximum unhedged equity allocation. The four factor based strategy only indicates the proportion of equity and debt allocation. The underlying securities in the Scheme s portfolio will be selected as per Fund Manager s discretion. ** EV: Enterprise Value, EBIDTA: Earning before interest, depreciation, tax and G-Sec : Government of India Security 6

7 BENEFITS OF INVESTING IN UNION EQUITY SAVINGS FUND Benefit from asset allocation and diversification Strict guidelines for investment in Equities, Hedge/Arbitrage and Fixed Income Dual benefit of capital appreciation and stability While investment in equities could derive capital appreciation, the fixed income part aims to lend stability to the portfolio Investment qualifies for equity taxation Gross exposure to equities would be maintained at 65%. Thus gains arising out of this investment would be eligible for equity scheme taxation Lower volatility as compared to pure equity funds Combined investment in arbitrage/hedge and Fixed income would lead to lower volatility than a fund purely investing in equities only Growth potential better than fixed income investments. Disciplined investment in equity and equity related instruments where floor and cap is clearly defined. Since the fund would remain invested in equities, the growth potential is better than fixed income investments. Investments would be always guided by the mandate. The ceiling and floor for allocation to equities are clearly defined. 7

8 UNHEDGED EQUITY INVESTMENT PROCESS 8

9 INVESTMENT STRATEGY Scheme would invest across Large Cap, Mid Cap and Small Cap Stocks. Portfolio of stocks would be selected with a combination of top down and bottom up basis. We intend to have overweight positions in investee stocks vis-à-vis the benchmark. Scheme aims to remain invested in a diversified portfolio. This is the current investment strategy which is subject to change. Please refer the Scheme Information Document (SID) of the Scheme for the asset allocation pattern and investment strategy. Subject to the provisions of the SID, the asset allocation and investment strategy may change depending on the Fund Manager s view and on the prevailing market conditions. 9

10 INVESTMENT PROCESS Investment Process Stock Selection Investment Universe (Stocks with a market capitalization of more than a defined threshold) BMV* Filters Portfolio Construction Fund Mandate Portfolio Construction Factors Fund House Universe Stock Segmentation Stock Selection Sector Allocation Capitalization Growth Bargain Asset Allocation Concentration *BMV=Business, Management & Valuation 10

11 STOCK SELECTION Two Step Process BMV* Filter Stock Segmentation Investment Universe (Stocks with a market capitalization of more than a defined threshold) Above universe filtered Using BMV* approach to arrive at Fund House Universe. This is then divided into either Growth or Bargain category Objective is to have a high portfolio return potential. Current fund house universe consists of 128 stocks. *BMV=Business, Management & Valuation 11

12 STOCK SEGMENTATION Stock Selection Stock Segmentation Growth Stocks Sales growth greater than nominal GDP# growth Fast growing Intrinsic Value Current price may be closer or higher than Intrinsic Value Stock returns mostly come from earnings growth BMV* Needs strong B and M. It may have fair V Bargain Stocks Sales growth lower than nominal GDP# growth Slow growing Intrinsic Value Current price has to be significantly lower than Intrinsic Value Stock returns mostly come from multiple re-rating BMV* Needs strong M and cheap V. It may have a fair B *BMV=Business, Management & Valuation, #GDP=Gross Domestic Product 12

13 PORTFOLIO CONSTRUCTION STRATEGY Stock Selection Growth Bargain Blend Sector Allocation Tight with benchmark Free from benchmark Capitalization Large Mid Small Concentration Focused Diversified Asset Allocation Cash Calls No Cash Calls 13

14 PORTFOLIO CONSTRUCTION FACTORS Portfolio Construction Factors Stock Selection Sector Allocation Capitalisation Union Equity Savings Fund Primarily Growth Segment Stocks Meaningful Over/ Under weight relative to benchmark Large, Mid and Small Cap Stocks Asset Allocation Based on UMPI (10/40) Model # Concentration Diversified #Note: This is the current investment strategy which is subject to change. Please refer the Scheme Information Document (SID) of the Scheme for the asset allocation pattern and investment strategy. Subject to the provisions of the SID, the asset allocation and investment strategy may change depending on the Fund Manager s view and on the prevailing market conditions. 14

15 FIXED INCOME INVESTMENT PROCESS 15

16 INVESTMENT PROCESS Investment Process Security Selection Issuer Universe Portfolio Construction Fund Mandate Credit Research Domestic Macro Factors Global Macro Qualitative Analysis Quantitative Analysis Fund House Fixed Income Universe Duration Risk 16

17 PORTFOLIO CONSTRUCTION FACTORS Duration Range (short to medium term) Strict Internal Limits at Issuers Level Diversification and review of sectors Focus on high quality Issuers. Investment Universe based on Credit Research Note: This is the current investment strategy which is subject to change. Please refer the Scheme Information Document (SID) of the Scheme for the asset allocation pattern and investment strategy. Subject to the provisions of the SID, the asset allocation and investment strategy may change depending on the Fund Manager s view and on the prevailing market conditions. 17

18 FUND FACTS Type of Scheme An open ended scheme investing in equity, arbitrage and debt NFO Period 19 th July th July 2018 Investment Objective Fund Manager To seek capital appreciation and/or to generate consistent returns by actively investing in a combination of diversified equity and equity related instruments, arbitrage and derivative strategies and exposure in debt and money market instruments. However, there is no assurance that the Investment Objective of the scheme will be achieved. Vinay Paharia Plans Options Application Amount Load Structure Benchmark Index Direct Plan for investors who purchase units directly with Union Mutual Fund. Regular Plan for investors who purchase units through a Distributor. Growth Dividend with Reinvestment, Payout and Sweep Facility Minimum Application Amount: 5,000 and in multiples of 1 thereafter Minimum Additional Investment: 1,000 and in multiples of 1 thereafter Minimum Redemption Amount: 1,000 and in multiples of 1 thereafter Entry Load: Nil Exit Load: 1 % if units are redeemed / switched out within 1 year from the date of allotment. Nil thereafter. CRISIL Short Term Debt Hybrid Fund Index 18

19 Product Labelling *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. 19

20 Product Labelling *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. 20

21 Product Labelling *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. 21

22 DISCLAIMERS MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUEMENTS CAREFULLY. Disclaimer: The views, facts and figures in this document are as of 25 th June 2018, unless stated otherwise, and could change without any notice. The information in this document alone is not sufficient and should not be used for the development or implementation of an investment strategy. Neither the Sponsors/the AMC/ the Trustee Company/ their associates/ any person connected with it, accepts any liability arising from the use of this information. While utmost care has been exercised while preparing this document, the Sponsors/ the AMC/ the Trustee Company/ their associates/ any person connected with it, do not warrant the completeness or accuracy of the information and disclaim all liabilities, losses and damages arising out of the use of this information. The recipients of this material should rely on their investigations and take their own professional advice. Statutory Details: Constitution: Union Mutual Fund (formerly Union KBC Mutual Fund) has been set up as a Trust under the Indian Trusts Act, 1882; Sponsors: Union Bank of India and Dai-ichi Life Holdings, Inc.; Trustee: Union Trustee Company Private Limited (formerly Union KBC Trustee Company Private Limited), [Corporate Identity Number (CIN): U65923MH2009PTC198198], a company incorporated under the Companies Act, 1956 with a limited liability; Investment Manager: Union Asset Management Company Private Limited (formerly Union KBC Asset Management Company Private Limited), [Corporate Identity Number (CIN): U65923MH2009PTC198201], a company incorporated under the Companies Act, 1956 with a limited liability. Registered Office: Unit 503, 5th Floor, Leela Business Park, Andheri Kurla Road, Andheri (East), Mumbai Toll Free No Non Toll Free Fax No: Website: investorcare@unionmf.com Copy of all Scheme related documents along with the application form can be obtained from any of our AMC offices / Customer Service Centres/ distributors as well as from our website 22

23 THANK YOU