Flow of the Presentation Creation of Effective Portfolio Risk Management Synopsis Fund and Portfolio Details Biographies
Creation of Efficient Portfolio CAGR , since Jan 2005 Volatility, since Jan 2005 20.56% 35.06% 33.91% 32.79% % CAGR Return 25.00% 18.42% 16.76% 40.00% 20.00% 15.00% 30.00% 10.00% 20.00% 5.00% 10.00% 0.00% 0.00% Sensex Midcap Small Cap Sensex Midcap Small Cap BSE Sensex has outperformed BSE midcap and BSE Daily volatility over long term of BSE Sensex, BSE small cap index in last 5 years Midcap and BSE small cap is very Similar • BSE Sensex, BSE Midcap and BSE Small cap show very similar characteristics over a long period. • Risk, Returns imply that investments over a long periods are capitalization agnostic. • But long term trends results are derived on various short term trends.Source: Bloomberg. Data as on 31.12.2010
Creation of Efficient Portfolio Performance Growth of INR 100 80.00% 140 120 Value in INR 60.00% CAGR returns % 100 80 40.00% 60 40 20.00% 20 0 Oct 08 May 08 Aug 08 Nov 08 Jul 08 Apr 08 Jan 08 Feb 08 Mar 08 Jun 08 Jan 09 Feb 09 Dec 07 Sep 08 Dec 08 0.00% 1 Year 2 Year 3 Year 5 Year -20.00% Sensex Midcap Small Cap BSE MID CAP BSE SMALL CAP BSE Sensex The returns of BSE Sensex, BSE Midcap and BSE Small cap are In a downward trending market, large caps outperform divergent in shorter time horizons. midcaps and small caps 375 Sustained Bull run 350Growth of INR 100 325 300 275 250 225 200 175 150 125 100 75 50 Sensex Midcap Smallcap Source: Bloomberg. Data as on 31.12.2010 In an upward trending market, midcaps and small caps outperform large caps
Top Down Approach for Large Caps Economic Interest Qualitative Liquidity Regulation Growth Rates Factors Flows Macro Outlook Demand- Business Profitability Pricing Supply Cycle Sector Allocation Busines Valuation Mgmt s s Model Stock Selection
Focus Sectors: Domestic Consumption 150 Index price movement 140 130 120 110 100 90 80 70 60 50 BSE 100 BSE FMCG Consumption sector to reap benefits: Resilient domestic economy and negative real interest rates continue to boost consumer spending. Rural up liftment Rural Income not completely dependent on agriculture Dependence on Monsoon is reducing as the proportion of irrigated land increases and ‘NREGA’ “Inclusive growth” government policies Developmental policies by UPA government has led to Wealth effect play in rural India. example: Rural penetration of Car, Two wheelers Government has spent US$26bn on key rural programmes in last four years, which is ~11% of total government spending in the same periodSource: Bloomberg. Data as on 31.12.10
Healthcare 160 150Index Price Movement 140 130 120 110 100 90 80 70 60 50 BSE 100 BSE Healthcare With multiple growth drivers (US, emerging markets, domestic demand) playing out simultaneously, it is expected that earnings trajectory would be strong & return ratios robust. Cost advantage and quality acceptance is opening up a number of markets across the globe. Most Indian firms are better placed (in terms of size, visibility, readiness of plants & filings) to target this wave than in the past, due to increase investments Risk return trade off is favourable on the back of better visibility and the inherent defensive nature of the business Source: Bloomberg. Data as on 31.12.10
Bottom up Process for Mid Caps Sell-Side Quantitative Tools Primary Research Business Outlook Management Valuations Management Valuations Interaction Stress Earnings Testing Model
Stocks which have fared well… Zydus Wellness 250 Stock Price Movement (Base 100) 200 150 100 50 0 2/1/10 3/1/10 4/1/10 5/1/10 6/1/10 7/1/10 8/1/10 9/1/10 10/1/10 11/1/10 12/1/10 Zydus Wellness BSE 100 • A perfect play on H&W (health & wellness) theme. • Market leader in high growth niche categories.. • The company benefits from its first-mover advantage in key segments. Revenue mix is well balanced with all 3 brands contributing. (Sugar free, Everyouth and Nutralite)Stocks in the portfolio as on 30/04/2011. These stocks may/ may not be in portfolio in future Fund manager reserves the right to alter/modify the portfolio within theasset allocation pattern as mentioned in the SID. Views expressed about the stocks is for the purpose of general information only on the basis of various availablesources. It should not be construed as recommendations to buy/sell the stocks. Investors are requested to take the professional advice and read the schemeinformation document carefully before investing. Source: Bloomberg
Federal Bank 200.00Stock Price Movement (Base 100) 175.00 150.00 125.00 100.00 75.00 50.00 2/1/10 3/1/10 4/1/10 5/1/10 6/1/10 7/1/10 8/1/10 9/1/10 10/1/10 11/1/10 12/1/10 Federal Bank BSE 100• Strong focus on profitable segments like retail & working capital SME lending.• Key strengths are high margins, high return on assets and stable retail & NRI deposit base.• Management’s focus on strengthening risk management & performance planning should be keypositives that play out over the medium term. Valuations compare favorably with the bank’s old privatesector peers.Stocks in the portfolio as on 30/04/2011. These stocks may/ may not be in portfolio in future Fund manager reserves the right to alter/modify the portfolio within theasset allocation pattern as mentioned in the SID. Views expressed about the stocks is for the purpose of general information only on the basis of various availablesources. It should not be construed as recommendations to buy/sell the stocks. Investors are requested to take the professional advice and read the schemeinformation document carefully before investing. Source: Bloomberg
Lupin 180 Stock Price Movement (Base 100) 160 140 120 100 80 60 40 20 0 2/1/10 3/1/10 4/1/10 5/1/10 6/1/10 7/1/10 8/1/10 9/1/10 10/1/10 11/1/10 12/1/10 Lupin BSE 100 •Strong player in the Domestic market •Investments in the right direction •Well diversified businessStocks in the portfolio as on 30/04/2011. These stocks may/ may not be in portfolio in future Fund manager reserves the right to alter/modify the portfolio within theasset allocation pattern as mentioned in the SID. Views expressed about the stocks is for the purpose of general information only on the basis of various availablesources. It should not be construed as recommendations to buy/sell the stocks. Investors are requested to take the professional advice and read the schemeinformation document carefully before investing. Data as on 31.12.2010
In a Nut Shell: MMPS Portfolio Large – Cap Portfolio Midcap Portfolio • Alpha Strategy • Beta Strategy • Volatile • Less Volatile • Bottom up Philosophy • Highly Liquid Stocks • Top Down Strategy
Risk Analysis Quantitative Data Ratio Standard Deviation 30.46% Beta 0.83 R-Squared 0.95 Sharpe Ratio 0.14 Portfolio Turnover 0.54 Total Expense Ratio 2.00Source: Crisil Fund AnalyserData as on Apr 30, 2011
Performance Analysis CAGR Return 30.00% 24.97% 25.00% 19.26% 20.00% 14.75% 15.00% 11.86% 10.00% 7.45% 6.62% 5.20% 5.00% 3.09% 0.00% 1 year 3 years 5 years Since Inception Fund Benchmark Past performance may or may not be sustained in future. Returns are CAGR and for dividend option. It is assumed that dividend declared under the scheme has been reinvested at the prevailing NAV. Growth option was introduced on 25th May 2005. NAV (Growth ) as on 30/04/2011 is Rs. 81.59. Date of inception is 28th February 1993. Source: MFI Explorer. Data as on 30/04/2011
Synopsis • The key to investment in equity markets is to invest in all the capitalization and allocate assets to balance volatility and returns. • Active asset allocation within Largecap and Midcap to generate alpha • Within each market capitalization, alpha generation is factor of identifying quality stock which can deliver value. Robust investment process helps identifying quality stocks . • Portfolio Focused Themes o Domestic Consumption o Healthcare • Portfolio is currently Large cap biased with significant exposure to midcaps • Portfolio is overweight in Industrial Manufacturing, Consumer Goods and Pharma vis- a vis benchmark • Portfolio has outperformed benchmark on 3 year, 5 year & since inception basis
Investment Management Process Stock Universe Quant Screening Fundamental analysis Investment Universe Fund Risk Controls Mandate Portfolio
Fund FeaturesInvestment Universe: 2937 listed stocks on BSE (traded regularly)Investment Style: GrowthInvestment Approach: Mix of Top-down & Bottom-up ApproachBenchmark: BSE 200Inception Date: Feb 28, 1993Normal Asset Allocation Style Box Type of Instrument (% of Net Assets) Risk ProfileEquity and related instruments Not less than 70% Medium to HighDebt instruments (including Securitized Not more than 30% Low to mediumdebt & Govt. Securities)Securitized debt Not more than 10% Medium to HighMoney Market Instruments Balance Low
Fund Details Market Cap Allocation Sector Exposure Overweight in Industrial Manufacturing, Consumer Goods and The fund is currently skewed towards large cap PharmaData as on 30.04.2011
Fund Details Top 10 Holdings Dividend History Stocks % of Assets LAST DIVIDENDS STATE BANK OF INDIA 5.66% Record Date Dividend (in Rs./Unit) NESTLE (I) LIMITED 5.44% MAHINDRA & MAHINDRA LIMITED 5.09% 01- Oct-10 7.00 BLUE DART EXPRESS LIMITED 4.91% BANK OF INDIA 4.85% 22-Oct-09 7.00 ICICI BANK LTD 4.66% 24-Aug-07 6.00 LUPIN LIMITED 4.42% INFOSYS TECHNOLOGIES LIMITED 3.90% 31-May-05 2.10 TATA CONSULTANCY SERVICES LIMITED 3.73% THERMAX LTD 3.49% Top 10 stocks comprise 46.15% of the portfolioData as on 30.04.2011
Expertise Managing the Fund • Mr. Navneet Munot Mr. Navneet Munot joined SBI Funds Management Pvt. Ltd. as Chief Investment Officer in Dec. 2008. Most recently he was the Head of Multi Strategies fund at Morgan Stanley Investment Management. Prior to joining Morgan Stanley Investment Management, he worked as the Chief Investment Officer (Fixed Income and Hybrid Funds) of Birla Sun Life Asset Management Company Ltd. Several funds managed by Navneet got recognition for their consistent superior risk-adjusted performance and won several awards from independent agencies such as CRISIL, CNBC TV 18, ICRA, Reuters Lipper and got top ranking in Value Research. Navneet has been associated with the financial services business of the Birla group for over 13 years and worked in various areas such as fixed income, equities and foreign exchange. His articles on matters related to financial markets have widely been published. Navneet holds a Masters in Commerce and is also a rank holder Chartered Accountant. He is a charter holder of Chartered Financial Analyst Institute, US and Chartered Alternative Analyst Institute, US. He has also done Financial Risk Management, FRM from Global Association of Risk Professionals (GARP). • Mr. Jayesh Shroff Mr. Jayesh Shroff is the fund manager of the scheme. Mr. Jayesh has done his B.Com and PGD (MBFS) – ICFAI. He has experience of over 7 years as Fund Manager. He also has wide experience in investment banking activities including M&A activities, venture capital funding, preparation of business plans, project reports etc. His last assignment was with BOB Mutual Fund and has been with SBI Funds Management Pvt. Ltd. since March 2006.
Disclaimer Disclaimer: Past performance is no guarantee of future results. Risk Factors: Mutual Funds and Securities Investments are subject to market risks and there is no assurance or guarantee that the objective of scheme(s)/plan(s) will be achieved. As with any other investment in securities, the NAV of the Magnums/Units issued under the scheme(s)/plan(s) can go up or down depending on the factors and forces affecting the securities market. Past performance of the Sponsor/AMC/Mutual Fund/Scheme(s)/Plan(s) and their affiliates do not indicate the future performance of the scheme(s) of the Mutual Fund. Investment Objective: Magnum Multiplier Plus Scheme 93 (An Open-Ended Equity Scheme): To provide investors long term capital appreciation along with the liquidity of an open-ended scheme. The scheme will invest in a diversified portfolio of equities of high growth companies. Magnum Multiplier Plus Scheme 1993 is only the name of the scheme and does not in any manner indicate either the quality of the scheme, its future prospects and returns. Statutory Details: SBI Mutual Fund has been set up as a Trust under The Indian Trusts Act, 1882. State Bank of India (‘SBI’), the sponsor is not responsible or liable for any loss resulting from the operation of the schemes beyond the initial contribution made by it of an amount of Rs. 5 lacs towards setting up of the Mutual Fund. Asset Management Company- SBI Funds Management Private Limited (A joint venture with SBI and Société Générale Asset Management). Trustee Company: SBI Mutual Fund Trustee Company Private Limited. Please read the Scheme Information Document carefully before investing. This presentation is for information purposes only and is not an offer to sell or a solicitation to buy any mutual fund units/securities. These views alone are not sufficient and should not be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions and estimates included here constitute our view as of this date and are subject to change without notice. Neither SBI Funds Management Private Limited, nor any person connected with it, accepts any liability arising from the use of this information. The recipient of this material should rely on their investigations and take their own professional advice
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