Reduce volatility by investing in combination of equity & bonds Investment duration & sectorial allocation basis Current Account Deficit level A Multi Cap strategy with current bias towards large cap stocks A balanced solution for better financial returns Investment in debt papers with credit quality of AA & above Product Suitability INDIABULLS EQUITY HYBRID FUND NFO period : November 22 nd Dec 6 th 2018 This product is suitable for investors who are seeking* : To generate periodic returns and long term capital appreciation from a judicious mix of equity and debt instruments. Moderately High Risk Riskometer *Investors should consult their financial advisors if in doubt whether the product is suitable for them Investors understand that their principal will be at moderately high risk Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Presentation Flow About Indiabulls Group About Sponsor : Indiabulls Housing Finance Ltd. Indiabulls Asset Management Company. Ltd. What is Indiabulls Equity Hybrid Fund Why Indiabulls Equity Hybrid Fund Fund Classification Portfolio Construct - Equity Sector Selection Stock Selection Multi Cap Strategy with large cap bias Portfolio Construct Fixed Income Fixed Income Strategy Who should Invest in Indiabulls Equity Hybrid Fund
About Indiabulls Group Leading player in Financial Services & Real Estate Indiabulls Housing Finance Indiabulls Real Estate Indiabulls Ventures One of the largest private housing finance company Part of Nifty 50 Index AAA rated by all of the four leading credit rating agencies Servicing over 1 million customers 13 th largest consumer finance company worldwide by Forbes Global 2000 One of the largest real estate company by net worth and assets Delivered a record 4.7 million sq ft developed space Credit rating of AA-, highest amongst Indian real estate developers Fee based wealth management platform Rated BQ1 by CRISIL - highest for any brokerage in India Servicing over 7 lakh clients Operates through separate listed companies (no Group Holding Company) No equity cross holdings Source : Indiabulls Group Website. Data as on Sep 30, 2018.
About Sponsor : Indiabulls Housing Finance Ltd. Key Highlights Rated AAA by CRISIL, ICRA, CARE & Brickworks Balance Sheet size of 1,39,803 crores PAT YoY Growth up by 21.2% Q2 FY19 1,044 crores Q2 FY18 861 crores Net worth of over 17,349 crores 2nd highest amongst Private HFCs/NBFCs Number of Retail Customers 10,95,710 Cumulative disbursements of over 2,36,000 crores Loans Outstanding 1,29,000 crores Overall GNPA of 0.77% & net NPA of 0.58% Liquidity Coverage Ratio [6 months] 135% Total Revenues YoY Growth up by 23.3% Q2 FY19 4,255 crores Q2 FY18 3,452 crores Loan Assets [7years] 27% CAGR PAT [7 years] 25% CAGR Source : Indiabulls Housing Finance Ltd. Quarterly Result September 2018 & Earning Updates. Data as on Sep 30, 2018. * Liquidity and ALM Update. October 07, 2018.
About Sponsor : Indiabulls Housing Finance Ltd. Robust Financials Smart City home Loan Branches September 2018 : Successfully set up 100 smart city home loans branches as of Q2FY19 Number of Employees 8,111 (FY 2018) Market Price per share 932 (Oct 12, 2018) FII Holding 55.80% (Sep 30, 2018) DII Holding 14.20% (Sep 30, 2018) Robust Financial Performance Note : Map not as per scale. The branch location shown are for representative purpose only and doesn t reflect all the branches of the company. in crores H1 FY 18-19 H1 FY 17-18 Y-o-Y Growth (%) Balance Sheet 1,39,803 1,16,131 20.40% Loan Assets 1,28,908 1,00,012 28.90% NII* 3,320 2,713 22.37% PAT 2,099 1,671 25.61% PBT 2,789 2,170 28.50% *NII does not include net gain on excess interest spread on assignment transactions for the quarter
Indiabulls Asset Management Co. Ltd. Currently houses three businesses - Mutual Funds, Alternate Investment Funds and Portfolio Management Services Indiabulls AMC Quarterly AAUM (inclusive of Mutual Fund, AIF & PMS) : 9,271.37 crores Indiabulls AMC Net worth : 150 Crores % Growth in Number of Folios on YoY basis : 300% Launched our first AIF (Cat II) fund in the month of May 2015. Successfully raised over 1,634 Crores and invested ~ 1,277 Crores by Sept 2018. Indiabulls Real Estate Fund has paid 13 quarterly interests & Indiabulls High Yield fund & Indiabulls India Opportunities Fund has paid 8 quarterly interests in a timely manner without any default Geared for next level of growth
Presenting INDIABULLS EQUITY HYBRID FUND NFO period: November 22 nd Dec 6 th 2018
What is Indiabulls Equity Hybrid Fund An open-ended hybrid scheme investing predominantly in equity & equity related instruments CAD O - METER CAD movement will be used as one of the Investment criteria to determine the sector allocation in equity & duration calls in debt Hybrid Fund with an equity allocation of 65% - 80% & debt allocation of 20% - 35% Dual benefit of Wealth generation through investment in equities and lower volatility through investment in debt Suitable for investors having moderately high risk profile CAD Current Account Deficit. Current account deficit is nothing but the difference in the balance of trade. That is difference between the import trade and export trade including income and expenditure. In short if the imports are more then the exports, including remittances, there is a deficit in the current account. The deficit is usually measured as a percentage of GDP.
Why Indiabulls Equity Hybrid Fund CAD O - METER Strong Economic Indicator to determine Sector Selection in equity and duration calls Large Cap bias with a multi cap strategy thus ensuring quality portfolio Portfolio above AA+ thus ensuring quality debt portfolio & adequate liquidity with an active duration management Asset allocation based on macro economic factors and fund manager outlook thus capturing opportunity actively
Equity Hybrid Debt Fund Classification Balancing for risk adjusted returns with better stability Overnight Fund Liquid Fund Ultra Short Duration Fund Low Duration Fund Money Market Fund Short Duration Fund Medium Duration Fund Medium to Long Duration Fund Long Duration Fund Dynamic Fund Corporate Bond Fund Credit Risk Fund Banking & PSU Fund Gilt Fund Gilt Fund with 10 year constant duration Floater Fund Arbitrage Fund Conservative Hybrid Fund Balanced Hybrid Fund INDIABULLS EQUITY HYBRID FUND (Aggressive Hybrid Fund) Equity Savings Fund Dynamic Asset Allocation/ Balanced Advantage Fund Multi Asset Allocation Fund Multi Cap Fund Large Cap Fund Large & Mid Cap Fund Mid Cap Fund Small Cap Fund Dividend Yield Fund Value Fund Contra Fund Focused Fund Sectoral Fund Thematic Fund ELSS Retirement Fund Children s Fund Index Funds/ ETFs FoFs (overseas /Domestic) Solution Oriented Others
Stable Global Economic Outlook? USA : Strong & Stable. Would it Sustain? Q3CY18 GDP growth at 3.5% High frequency data now indicating normalization US Fed QE withdrawal & hawkish rate hike guidance of one more rate hike in 2018, three in 2019 European Union: Strong & stable. Would it Sustain? Growth broad based: all 27 countries participating Q3CY18 GDP growth at 1.7%;ECB- revised GDP growth estimates from 1.8% to 2.3% for CY18 Greece out of bail out program; Italy an emerging concern QE cut down & Dovish rate guidance. China : Key monitorable in 2018-19 High frequency data suggesting weakness growing at 6.5% - Sustain? Shadow Banking & Leverage- a concern Factory shutdown due to environmental concerns to weigh on economy US-China trade war; Stimulus to increase domestic consumption Rest of World: Japan: Gradual recovery - can it sustain? Latin America: Trumped? Other emerging markets Global economic growth is strong; FII outflows to continue; Geo-politics fragile
India Economic Outlook Strong Micros Macros : GST impact transient to get better gradually Twin deficits Oil a major over hang Fiscal deficit Government committed to 3.3% Inflation to remain benign GDP Growth : 7-7.5% over next 3 years Currency Depreciation a concern?; Commodities : Oil is a risk? Exports : US- China trade dispute can have positive spill over? Earnings : 12-15% CAGR over next 3 years Over short term - Volatility to remain elevated Weak Macros, Strong micros Trade wars QE withdrawal & Rate hikes State & Union Elections - Prefer large caps over mid caps in short term - Prefer hybrids over pure equity funds
Sector Selection Understanding Current Account Deficit (CAD) Formula to calculate Current Account CURRENT A/C = ( X M ) + NY + NCT Export of Goods & Services Import of Goods & Services Net Income from Abroad Net Current Transfers Positive figure CURRENT ACCOUNT SURPLUS Negative figure CURRENT ACCOUNT DEFICIT Factors which cause Current Account Deficit (CAD) Higher Inflation making export less competitive Decline in Export Sector High Consumer Spending Rising Import Bill (Currently Oil imports) Overvalued Exchange rates Global Recession Current Account Deficit (CAD) is usually measured as a percentage of GDP
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sector Selection 6% 2.30% is presently the reference point* to determine sector allocation Average %CAD to GDP 4% 2% Last 10 years Average % CAD to GDP : 2.38% 2.39% 0% CAD O-METER INDICATIVE SECTORS Cyclical Bias Defensive Bias 1.70% 1.90% 2.10% 2.30% 2.50% 2.70% 2.90% Cyclical Sectors 1. Automobile 2. Banking 3. Financial Services 4. Metals 5. Energy Defensive Sectors 1. FMCG 2. IT 3. Pharma 2.30% is the reference point to determine allocation bias to Cyclical or Defensive sectors Please Note : Allocation bias will also be determined basis macro economic and Fund manager outlook Source: Bloomberg. *Reference point is subject to change as per investment team outlook and evaluation.
Sector Selection 20% 15% DEFENSIVE SECTORS : Positive co-relation DEFENSIVE SECTORS : Positive co-relation with CAD with CAD 13.43% 16.67% Minimum 5 instances with direct co-relation 10% 8.21% 5% 4.89% 4.07% 3.78% 0% -5% -4.50% -3.10% -1.79% -2.62% -10% CAD (% to GDP) Defensive Sector returns Past Behavior of CAD to Defensive Sectors Instance 1 Instance 2 Instance 3 Instance 4 Instance 5 Dec 10 Sep 11 Mar 12 Dec 12 Jun 13 Mar 14 Jun 14 Mar 15 Dec 15 Sep 16 % CAD to GDP 2.47 4.26 4.53 6.75 4.75 0.27 1.54 0.12 1.35 0.62 Defensive Sector (Quarter returns in%) -4.50 4.89 4.07 8.21 13.43 3.78 16.67-3.10-1.79-2.62 Source : Bloomberg & NSE index values of the respective sectors. Please note : As there is lag of nearly one month in the publication of CAD data, quarterly returns are adjusted against respective CAD levels.
Sector Selection 25% 20% 15% 10% CYCLICAL SECTORS : Negative co-relation with CAD 19.70% Minimum 5 instances with Negative co-relation 5% 0% -5% -10% -15% -2.71% -10.62% 0.41% -3.79% -11.90% -0.34% 2.72% -3.93% -0.35% CAD (% to GDP) Cycilcal Sector returns Past Behavior of CAD to Cyclical Sectors Instance 1 Instance 2 Instance 3 Instance 4 Instance 5 Dec 10 Sep 11 Mar 12 Dec 12 Jun 13 Mar 14 Jun 14 Mar 15 Dec 15 Sep 16 % CAD to GDP 2.47 4.26 4.53 6.75 4.75 0.27 1.54 0.12 1.35 0.62 Cyclical Sector (Quarter returns in %) -2.71-10.62 0.41-3.79-11.90 19.70-0.34 2.72-3.93-0.35 Source : Bloomberg & NSE index values of the respective sectors. Please note : As there is lag of nearly one month in the publication of CAD data, quarterly returns are adjusted against respective CAD levels.
Portfolio Construction Fundamental Research Idea Generation Stock Selection Idea Generation Strong & sustainable competitive advantage (moat) against peers Ideally well recognized brands Management quality and capability High corporate governance standards Low debt to equity ratio Generating strong cash surpluses Reasonable valuations Emphasis on operating efficiency like high ROE and ROCE Predictable and sustainable earnings in future Few Instances based on existing portfolio of our open-ended schemes.. and so on... Exited NBFC space due to concerns about interest rate scenarios & stretched valuations Cut down exposure to Mid cap space due to rich valuations Avoided PSU Banking space
Portfolio Construction Fundamental Research Idea Generation Stock Selection Fundamental Research Company Reporting Research Financial Statement Analysis Examine Ratios & multiples Balance Sheet Strength Model Cash Flows & Earnings Scenario & Sensitivity Analysis etc... Research Process Field Research Meet with management, customers, suppliers & competitors Identify business drivers & industry trends prior to consensus etc Industry Research Demand Supply & pricing trends SWOT analysis Regulations & local market feasibility
Portfolio Construction Fundamental Research Idea Generation TOP DOWN APPROACH Stock Selection Portfolio Construction Qualitative Analysis Identify Investment themes and trends through studying: Macro-econmic analysis Economic outlook Sector/Industry Outlook Geopolitical landscape Glocal opportunities Identify companies with good growth prospects by screening for: Fundamental Analysis Peer Analysis Cheaper valuations Management Quality Sector Outlook Quantitative Analysis BOTTOM UP APPROACH
Returns in % Multi Cap Strategy with large cap bias 200 OUTSHINERS KEEP ROTATING 150 100 50 0-50 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19* Large Caps Mid Cap Small Cap Multi Cap Growth Strategy takes a concentrated, high-conviction approach to growth investing, emphasizing stocks across market capitalizations. Benefit of relatively low volatility of large caps and higher growth potential of mid- and small caps in moderation. Multicap strategy is typically followed to find higher growth opportunities in the rising markets with flexible bias to Large, Mid & Small market Caps. Source - MFIE Explorer Please Note: The above returns are absolute returns. FY Financial year. Large Caps : S&P BSE 100 TRI, Mid Caps : S& P BSE Mid Cap TRI & Small Cap : S&P BSE Small Cap TRI *till October 31, 2018
Portfolio Construct - Equity To summarize Sector Selection Defensive v/s Cyclical Sector selection & weightage based on CAD movement & other macro factors. Stock Selection Fundamental Analysis Growth prospects, earnings analysis, Balance Sheet analysis, Valuations, peer comparison Qualitative Analysis Management, Corporate Governance Business Strategy, Competitive Positioning Market Capitalisation Multi Cap Strategy with concentrated portfolio with a large cap bias.
Fixed Income Strategy 2.30% is presently the reference point* to determine investment duration GSEC Yield : Positive co-relation with CAD Instance 1 Instance 2 Instance 3 Instance 4 Instance 5 Sep 08 Sep 09 Jun 09 Jun 10 Dec 10 Dec 11 Jun 14 Jun 15 Mar 17 Mar 18 % CAD to GDP 3.93 2.97 1.41 3.50 2.47 4.53 1.54 1.20 0.57 1.85 G-Sec Yield (%) 8.62 7.22 7.01 7.56 7.91 8.56 8.74 7.86 6.66 7.40 There is a direct co-relation of CAD with G Sec yields When CAD moves above 2.30%, the scheme shall aim to have an average duration of upto 18 months. When CAD moves below 2.30%, the scheme shall aim to have an average duration of upto 60 months. 18 mths to 60 mths CAD O-METER Upto 18 mths 1.70% 1.90% 2.10% 2.30% 2.50% 2.70% 2.90% 2.30% is the reference point to determine the average duration of the portfolio Source : Bloomberg & Reuters Please note : As there is lag of nearly one month in the publication of CAD data. G Sec yields are adjusted against respective CAD levels.
Portfolio Construct Fixed Income To summarize Credit Quality Credit Risk is managed through Investment in debt papers having credit quality AA+ & above Duration Actively managed duration strategy through duration calls based on CAD movement and other macro factors Portfolio Management Intended portfolio allocation 20% to 35% of the AUM
Who should Invest in Indiabulls Equity Hybrid Fund Combo plan of debt and equity asset classes - Convenient - Efficient - Financially relevant Investors looking for equity long term tax advantage* with a combination of growth due to equity and lower volatility due to debt Well suited to investors looking to invest on a regular basis through Systematic Investment Plan (SIP) route Investors looking for regular cash flows through Systematic Withdrawal Plan (SWP) route *Indiabulls Equity Hybrid Fund is subject to equity taxation and tax incidence is subject to current income tax laws
Scheme Features Investment Objective The Scheme seeks to generate periodic return and long term capital appreciation from a judicious mix of equity and debt instruments. However, there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns. Rs. 500 and in multiples of Re. 1/- thereafter Fund Manager Minimum Investment Mr. Sumit Bhatnagar (Equity Segment) Mr. Veekesh Gandhi Co Fund Manager (Equity Segment) Mr. Malay Shah (Debt Segment) Asset Allocation Instruments Equity and Equity related securities* Debt, Money market instruments, Cash & Cash equivalents Indicative allocation (% of Net Assets) (Min- Max) Risk Profile 65% to 80% High 20% to 35% Medium *The Scheme may invest upto a maximum of 50% of its net assets in Derivatives Load Structure Entry Load : Not Applicable Exit Load : For exit < 12 months from the date of allotment: a) For 10% of investment Nil b) For remaining investments - 1.00% For exit > 12 months from the date of allotment Nil CRISIL Hybrid 35+65 - Aggressive Index Benchmark Refer Scheme Information Document & Key Information Document for more details
Let s speed up the long term wealth creation by accelerating the benefits of CAD o-meter CAD O-METER
Disclaimer This presentation has been prepared and issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact and terms and conditions and features of Indiabulls Equity Hybrid Fund. The information / data herein alone is not sufficient and shouldn't be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions, figures, charts/graphs, estimates and data included in this presentation are as on date and are subject to change without notice. While utmost care has been exercised while preparing this document, Indiabulls Asset Management Company Limited. does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Indiabulls Asset Management Company Limited does not provide any guarantee/ assurance any minimum or maximum returns. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Readers shall be fully responsible/liable for any decision taken on the basis of this presentation. No part of this document may be duplicated in whole or in part in any form and/or redistributed without prior written consent of the Indiabulls Mutual Fund/Indiabulls Asset Management Company Limited. Readers should before investing in the Scheme make their own investigation and seek appropriate professional advice. Please read Scheme Information Document (SID) and Statement of Additional Information (SAI) carefully before investing. Past performance of the Sponsor/ AMC/ Mutual Fund and its affiliates does not indicate the future performance of the scheme and may not provide a basis of comparison with other investments. 27
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