CANARA ROBECO EMERGING EQUITIES August 2018
Canara Robeco Emerging Equities Large & Mid Cap Fund - An open ended equity scheme investing in both large cap and mid cap stocks This product is suitable for investors who are seeking* Capital appreciation over long term Investing predominantly in equities and equity related instruments of both large cap and mid cap companies *Investors should consult their financial advisers if in doubt about whether the product is suitable
MID CAP OUTPERFORMANCE S&P BSE Sensex TRI S&P BSE 200 TRI 1600 1500 1400 1300 1200 1100 1000 900 800 Jan-15 May-15 Sep-15 Jan-16 May-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jul-18 Source: ICRA MFI Explorer From Date To Date 01-Jan-15 31-Jul-18 CAGR S&P BSE Sensex TRI 37611.32 54057.63 10.66% S&P BSE 200 TRI 3853.33 5738.03 11.76%
Index Values GDP % MID CAP PERFORMANCE 3500 3000 2500 2000 1500 1000 500 0 Economic Uptrend 14 12 10 8 6 4 2 0 Nifty 50 TRI Nifty Free Float Midcap 100 TRI GDP Nifty Free Float GDP Nifty 50 TRI Midcap 100 TRI From To CAGR 50.43% 80.46% 0.24% 9.68% Mid Caps outperform Large Caps when economy is picking up Source: Bloomberg, MFIE, ICRAOnline. Past performance may or may not be sustained in future
Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Index Values GDP % Index Values GDP % MID CAP PERFORMANCE 3000 2500 2000 1500 1000 500 Range Bound Growth 11.00 10.00 9.00 8.00 3500 3000 2500 2000 1500 1000 500 Economic Downtrend 12.00 10.00 8.00 6.00 4.00 2.00 0 7.00 0 0.00 Nifty 50 TRI Nifty Free Float Midcap 100 TRI GDP Nifty 50 TRI Nifty Free Float Midcap 100 TRI GDP Nifty Free GDP Nifty 50 TRI Float Midcap From To 100 TRI CAGR 75.45% 95.62% 7.41% 10.55% Every trough is followed by an expansion phase. Staying invested in Midcaps even during economic slowdown is advantageous, to reap the benefits of economic revival. Source: Bloomberg, MFIE, ICRAOnline. Past performance may or may not be sustained in future Nifty Free GDP Nifty 50 TRI Float Midcap From To 100 TRI CAGR 8.21% 6.98% 10.24% 4.99%
MID CAP PERFORMANCE CY 2008-52 -56 CY 2009 83 91 CY 2010 19 18 CY 2011-24 -26 CY 2012 28 33 CY 2013 11 6 CY 2014 32 37 CY 2015-4 0 CY 2016 3 5 CY 2017 30 35 CY 2018* 11 5-80.00-60.00-40.00-20.00 0.00 20.00 40.00 60.00 80.00 100.00 8 out of 11 times S&P BSE 200 TRI outperformed S&P BSE Sensex TRI S&P BSE Sensex TRI S&P BSE 200 TRI Source: ICRA MFI Explorer; CY = Calendar Year Data As On 31 st Jul 18
LONG TERM PERFORMANCE 35 Daily 3 year Rolling Return (%) 30 25 S&P BSE Sensex TRI 20 15 10 5 0-5 -10 S&P BSE 200 TRI Probability of Outperformance of S&P BSE 200 TRI over S&P BSE Sensex TRI 34% 66% Outperformance Underperformance Source: ICRA MFI Explorer, Rolling Return (CAGR) for the above periods. Data as on 31 st Jul 18
LONG TERM PERFORMANCE 25 Daily 5 year Rolling Return (%) 20 15 10 5 0-5 S&P BSE Sensex TRI S&P BSE 200 TRI Probability of Outperformance of S&P BSE 200 TRI over S&P BSE Sensex TRI 39% 61% Outperformance Underperformance Source: ICRA MFI Explorer, Rolling Return (CAGR) for the above periods. Data as on 31 st Jul 18
LONG TERM PERFORMANCE 14 12 10 8 6 4 2 Daily 10 year Rolling Return (%) S&P BSE Sensex TRI S&P BSE 200 TRI 0 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Probability of Outperformance of S&P BSE 200 TRI over S&P BSE Sensex TRI 0% Outperformance Underperformance 100% Source: ICRA MFI Explorer, Rolling Return (CAGR) for the above periods. Data as on 31 st Jul 18
VOLATILITY RIISK REWARD MATRIX Since the risk associated with large & mid cap funds is high, the potential to generate better returns is also high Hybrid Funds Large Cap Fund Multi Cap Funds/ ELSS Large & Mid Cap Funds Thematic Funds LOW MEDIUM HIGH
INVESTMENT PHILOSOPHY Investment Philosophy We believe it is companies and not stocks that create wealth Investment Objective Invest in robust growth-oriented businesses with competent management at reasonable valuations
INVESTMENT PROCESS Macro Research Macro Research & Intelligence Identification of themes Tracking business cycles Stock - Specific Ideas In-house fundamental research Management meetings Sell-side research and sector specialists Behavioral screener Robust Business Fundamentals Competent Management Reasonable Valuations Investment Checklist Regulatory Limits Individual Stock Limits Internal Risk Management Limits Tracking Error Ratio Var Beta Monitoring Investment Mandate Market Cap of the stock Investment Recording Captain s Log Investment Universe Investible Ideas Final Portfolio IDEATE SCREEN DESIGN
MID CAP ATTRIBUTES High Growth Potential Market leadership Business Valuation Intrinsic Value Healthy Financial Management Management Track Record Corporate Governance
BROAD THEMES Technological Edge Distribution & Logistics High Barriers to Entry Stocks likely beneficiary of Government Capex Brand Play Goods & Services Tax
PORTFOLIO CONSTRUCT Investments Consumption Exports 41% 35% 20% Industrials Auto CV Corporate lenders Infrastructure Rating Agencies Logistics Power Consumer Auto Paints Branded Apparel Branded Building Material Retail Financiers Media Pharma Specialty Chemical Auto Ancillaries Textile Manufacturing exporters Agro Chemical
RECENT TRENDS Improving competitive Edge Private banks and NBFCs at the cost of PSBs Unorganized to organized Building material, logistics, Healthcare & diagnostic, Dairy products Auto OEMs Product and geography gap fill up Value Migration Auto ancillaries Low end to high end and High cost to Low cost Aspiration & Premium isation - Multiplex, Consumer durables and non-durables Physical assets to financial assets Financial saving mobilisers such as MFs, Wealth desks, Private Equities Generic molecules to complex R&D based molecules Niche R&D driven pharma & specialty chemical companies Balance Sheet and P&L Improvement Faster Govt. project approvals and reforms Selective Infra & OMCs Improving operating & financial metrics Cement, Garments, Industrials
VOLATILITY & RISK CONTROL Concentration risk management can be seen from the following: Jul 18 No of Stocks in the Portfolio 66 Highest Stock Exposure in the Portfolio 4.11% Top 3 sector exposure 37.83% Top 10 holdings 28.48% The fund follows stringent risk control measures: Liquidity of the portfolio to be maintained such that at least 60% of the portfolio can be liquidated within 7 working days with due consideration to average daily volume of the stocks.
PORTFOLIO SNAPSHOT Top 10 Holdings Industry Classification % of Net Assets Bajaj Finserv Ltd Finance 4.11% ITC Ltd Consumer Non Durables 4.04% Reliance Industries Ltd Petroleum Products 3.13% Bajaj Finance Ltd Finance 2.70% Britannia Industries Ltd Consumer Non Durables 2.63% Atul Ltd Chemicals 2.58% Piramal Enterprises Ltd Finance 2.50% Top 5 Sector break up (% to NAV) Finance 18.56% Consumer Non Durables 11.20% Auto Ancillaries 8.07% Pharmaceuticals 8.01% Chemicals 4.93% 0% 5% 10% 15% 20% Asset Allocation Mahindra & Mahindra Financial Services Ltd Finance 2.44% Whirlpool Of India Ltd Consumer Durables 2.19% MRF Ltd Auto Ancillaries 2.16% Equities I 97.83% Money Market Instruments I 2.41% Others I -0.24% Data as on 31 st Jul 18
PORTFOLIO SNAPSHOT Market Capitalisation (%) Investment Style 2.17 18.43 41.19 Large Cap Mid Cap Growth Value Blend Large Cap Mid Cap Small Cap 38.21 Small Cap Debt, Cash & Others Diversified Thematic Sector Quantitative Information Criteria Values Standard Deviation 18.37 Portfolio Beta 1.14 Portfolio Turnover Ratio 0.52 times R-Squared 0.80 Sharpe Ratio 0.55 Data as on 31 st Jul 18
PERFORMANCE AT A GLANCE Canara Robeco Emerging Equities has generated Rs. 96,260 on an investment of Rs.10,000 since inception Period Scheme Returns (%) S&P BSE 200 TRI # S&P BSE Sensex TRI ## Current Value of Standard Investment of Rs.10,000 in the Scheme S&P BSE 200 TRI # S&P BSE Sensex TRI ## Last 1 Year 9.84% 12.51% 16.97% 10,984 11,251 11,697 Last 3 Years 14.51% 12.15% 11.61% 15,022 14,112 13,909 Last 5 Years 33.48% 18.05% 15.80% 42,405 22,939 20,828 Since Inception (CAGR) 18.41% 19.08% 16.67% 96,260 62,233 78,873 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: March 11, 2005. Different plans have a different expense structure.returns are based on NAV of Regular Plan - Growth Option. The current fund manager Mr. Miyush Gandhi is managing the scheme since 5-April-2018. and Mr. Ravi Gopalakrishnan managed the scheme from 16-Sept. 12 till 29-June-2018. Mr. Kartik Mehta managed the scheme from 11-Aug-2016 till 5-April-2018. #Scheme Benchmark, ##Additional Benchmark. 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 Emerging Equities is on the slide number 24.
PERFORMANCE AT A GLANCE - SIP 30% 25% 20% 15% 10% 5% Canara Robeco Emerging Equities has outperformed the benchmark & S&P BSE SENSEX TRI over long term 0% 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception Canara Robeco Emerging Equities S&P BSE200 TRI # S&P BSE Sensex TRI ## Canara Robeco Emerging Equities 1 year 3 years 5 years 5 years 10 years Since Inception Total Amt invested (INR) 120000 360000 600000 840000 1200000 1610000 Market Value (INR) 125201 475008 1105202 2097068 4413135 7139552 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 31 st Jul 18 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: March 11, 2005
PRODUCT POSITIONING Multi Cap CR Equity Diversified Fund Large Cap CR Blue Chip Equity Fund CORE PORTFOLIO Large & Mid Cap CR Emerging Equities Thematic CR Infrastructure CR Consumer Trends Fund SATELITE PORTFOLIO ELSS CR Equity Tax Saver Fund NEED BASED Above positioning is for illustration purpose only
WHY INVEST Bottom-up stock picking employed on Large & Mid Cap Companies endeavors to select the best among the emerging companies form a part of portfolio Endeavour to identify companies which have the potential to become leaders of tomorrow in their respective sectors Taking a Long Term View: The fund invests with a long term view. The aim is to stay away from herd behaviour, chasing short term profits, running after certain market spurs. Such short term approach tends to be very risk and may not pay off in the long term
FUND FACTS Fund Category Investment Objective Inception Date Asset Allocation Plans/Options Facilities Fund Size Load Structure Benchmark Fund Manager Large & Mid Cap Fund - An open ended equity scheme investing in both large cap and mid cap stocks To generate capital appreciation by investing in a diversified portfolio of large and mid-cap stocks. However, there can be no assurance that the investment objective of the scheme will be realized. 11-Mar-05 Large Cap equity and equity related instruments - 35% to 65%. (Risk- High) Mid Cap equity and equity related instruments - 35% to 65% (Risk- High) Other equity and equity related instruments, debt and money market instruments - 0% to 30% (Risk- Low to Medium) Reits/Invits- 0% to 10%.(Risk- Medium to High) Regular & Direct Plan: Options: Growth / Dividend with payout & Reinvestment SIP/ SWP/ STP/ Dividend Transfer Facility Rs 3,792.99 Crs (Month End AuM) Exit Load:1% - if redeemed/switched out within 12 months; Nil- if redeemed/switched out after 12 months S&P BSE 200 TRI Mr. Miyush Gandhi Data as on 31 st Jul 18
Performance of Fund Manager Data as on 31 st Jul 18
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.