Chapter 6

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  • 1. Chapter 6: Research Findings and Conclusion 1
  • 2. 3 Assets Management Company 1. HDFC Assets Management Company Limited 2. ICICI Assets Management Company Limited 3. Reliance Assets Management Company Limited 9 Equity Schemes of 3 Assets Management Company HDFC 1. HDFC Top 200 Fund 2. HDFC Equity Fund 3. HDFC Prudence Fund ICICI 4. ICICI Top 200 Fund 5. ICICI Discovery Fund 6. ICICI Dynamic Fund RELIANCE 7. RELIANCE Vision Fund 8. RELIANCE Equity Fund 9. RELIANCE Regular Saving Fund 2
  • 3. HDFC Top 200 Fund Active Management: Refers to the use of a human element, such as a single Manager, co-managers or a team of managers, to actively manage a fund’s Portfolio.They rely on analytical research, forecasts and their own judgement and experience in making investment decisions. They believe it is possible to profit from the stock market through any number of strategies that aim to identify mispriced securities. Passive Management: An investing strategy that mirrors a market index and does not attempt to beat the market attempt to beat the market Investment Strategy:  The investment portfolio for equity and equity linked instruments will be Primarily drawn from the companies in the BSE 200 Index  The fund may also invest in listed companies that would qualify to be in the top200 by market capitalisation on the BSE even though they may not be listed on the BSE 3
  • 4. Last 5 Year NAV (Net assets Value) and performance: 4
  • 5. HDFC Equity Fund Investing in strong companies… Stronger companies reduce risk in bad times, both of the markets and of the Industry. Preference for strong and well managed companies across capitalization Preference for No. 1, 2 or 3 companies in the respective sectors / segments Investment in mid caps is also targeted in strong companies in their respective sectors.  Quality of diversification is more important that quantity  Investments in 10 stocks with high correlation is riskier than investments in 3 stocks with low correlation  Despite maintaining a focused portfolio the fund is reasonably diversified across sectors  Care is taken to target low correlation across sectors (diversify across key Economic risks / variables) 5
  • 6. Last 5 Year NAV (Net assets Value) and performance: 6
  • 7. HDFC Prudence Fund A balanced fund is one that has a portfolio comprising debt instruments, convertible securities, preference and equity shares Assets are generally held in predefined proportion of debt / money market securities and equities Broadly, balanced funds target returns greater than debt schemes with lower volatility than equity schemes Balanced funds provide investors with the best of both worlds; the returns of equity with the safety of debt  In the long term, the mix between equity and debt instruments is targeted Between 40:75 and 60:25 respectively  In such times when the interest rates are high and equities are expensive, investments in debt would be generally more attractive versus equities and accordingly the fund would increase the debt component in the portfolio 7
  • 8. Last 5 Year NAV (Net assets Value) and performance: 8
  • 9. ICICI Prudential Dynamic Fund To generate capital appreciation by actively investing in equity and equity related securities and for defensive consideration in debt / money market instruments and derivative. The scheme is ranked 2 in Diversified Equity category by Crisil. If you are already invested in this scheme, you may continue to stay invested. But, do keep a check on its performance. Investment Philosophy This fund adopts a "Bottom-up" fundamental analysis strategy across market capitalizations on a diversified basis, to identify and pick its investments. The fund manager has the discretion to take aggressive or defensive asset calls, based on market conditions Key Benefits It could be an ideal product in a volatile environment as it has the agility, aimed at capturing upside opportunities in the market across market capitalizations. On the flip side, it has the ability to switch to cash; thus seeking to limit the downside, in case stock markets get into an overvalued position. 9
  • 10. Last 5 Year NAV (Net assets Value) and performance: 10
  • 11. ICICI Prudential Top 200 Fund A multitude of choice could make it difficult to settle on anything. What looks excellent today may not be that fruitful tomorrow, and what seems to be hopeless today could be terrific tomorrow. ICICI Prudential Top 200 Fund, an open-ended diversified equity fund allows you to capture growth opportunities by constantly being on the lookout for out the best sectors to invest in across multiple regions in the market. Investment Philosophy This fund seeks to optimize the risk-adjusted return by building a portfolio of large and mid-cap stocks across select sectors. It follows a blend of top-down macro research to identify growth sectors and bottom-up fundamental research to identify stocks. It is a multi-sector fund focused on investing in carefully selected stocks offering best possible risk-adjusted return across select sectors with potential growth opportunities. Key Benefits It gives you a core large-cap portfolio with limited exposure to mid-cap stocks. It gives you an edge by capturing the best sectoral opportunities in the market 11
  • 12. Last 5 Year NAV (Net assets Value) and performance: 12
  • 13. ICICI Prudential Discovery Fund Open-ended Diversified Equity Fund, which aims to invest stocks available at a discount to their intrinsic value, through a process of ‘Discovery’. The process involves identifying companies that are well managed, fundamentally strong, and are available at a price, which can be termed as a bargain. Investment Philosophy This fund adopts a "Bottom-up" strategy, to identify and pick its investments based on an evaluation of several parameters such as Price / Earning, Price / Book Value and Dividend Yield. The fund manager works towards building a portfolio that is well diversified across sectors and constructed based on indepth research. Key Benefits  It follows a value strategy of bargain hunting for intrinsically good stocks  As the potential value of the stocks in which the fund invests has not yet been unlocked, the probability of growth is much higher. 13
  • 14.  Last 5 Year NAV (Net assets Value) and performance: 14
  • 15. 15