BRICS PMS Performance Update - 31 August 2010
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BRICS PMS Performance Update - 31 August 2010

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Performance Update of the Portfolio Management Services, (PMS), I manage at BRICS Securities.

Performance Update of the Portfolio Management Services, (PMS), I manage at BRICS Securities.

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    BRICS PMS Performance Update - 31 August 2010 BRICS PMS Performance Update - 31 August 2010 Presentation Transcript

    • MULTIPLE -STRATEGY TREND RATED AUTOMATIC TRADING SYSTEM Portfolio Management Services (PMS) Performance Update 31 August 2010 Vivek Mavani – Vice President and Senior Portfolio Manager
    • BRICS Growth Synopsis  BRICS Growth is a Long only Diversified Equity Product aimed at generating Absolute Returns  The Objective is:  Generate Steady & Consistent returns over medium to long term  Low Volatility  Cautious on Margin of Safety  The Focus is therefore on Stock Picking with a Buy and Hold philosophy  Invest in high quality and high growth companies at reasonable valuations and hold them over a period of time. (Not trade in & out frequently)  Our conservative approach to managing investments, (especially during periods of volatility) is reflected in our superior performance.
    • Absolute Performance – 31 August 2010 YTD Since Weekly Monthly Quarterly Half Yearly (Calendar) Inception BRICS Growth -0.49% 7.25% 17.84% 32.34% 30.88% 42.00% NIFTY -1.87% 0.65% 6.21% 9.75% 3.87% 6.28% SENSEX -1.86% 0.58% 6.06% 9.38% 2.90% 4.88% S&P CNX 500 -1.89% 1.39% 7.35% 9.93% 4.81% 10.15% S&P CNX MIDCAP -2.93% 3.14% 11.91% 21.10% 16.78% 29.59% Inception Date: 1 October, 2009 Portfolio returns are audited and net of fees & expenses
    • Performance Snapshot 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Monthly Quarterly Half Yearly YTD (Calender) Since Inception BRICS Growth NAV Nifty Sensex S&P CNX 500 CNX Mid Cap Inception Date: 1 October, 2009 Portfolio returns are audited and net of fees & expenses
    • Consistency in our Month-on-Month Performance Performance ahead of benchmark indices month after month Month BRICS Growth Nifty Sensex S&P CNX 500 CNX Mid Cap Oct-09 -0.67% -7.31% -7.23% -6.46% -1.77% Nov-09 2.79% 6.81% 6.48% 7.59% 8.65% Dec-09 6.27% 3.35% 3.18% 4.43% 3.97% Jan-10 -1.84% -6.13% -6.34% -4.00% -3.11% Feb-10 0.75% 0.82% 0.44% -0.69% -0.48% Mar-10 6.24% 6.64% 6.68% 4.50% 7.50% Apr-10 3.77% 0.55% 0.18% 1.27% 4.62% May-10 1.86% -3.63% -3.50% -3.24% -3.79% Jun-10 5.81% 4.45% 3.83% 4.59% 4.83% Jul-10 3.84% 1.04% 1.56% 1.23% 3.50% Aug-10 7.25% 0.65% 0.58% 1.39% 3.14%
    • Month on month comparison 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 BRICS Growth Nifty Sensex S&P CNX 500 CNX Mid Cap
    • Compared to Top 20 Mutual Funds Ranked on 1 month returns Rank Scheme Name Performance 1 Month % 3 Months % 6 Months % 1 Brics Growth 7.25 17.84 32.34 2 HDFC Long Term Equity Fund - Growth 5.09 13.15 22.05 3 DSP BlackRock Equity Fund - Growth 4.77 12.37 20.13 4 HDFC Growth Fund - Growth 4.06 11.97 22.40 5 IDFC Premier Equity Fund - Plan A - Growth 4.03 19.19 26.99 6 SBI Magnum Global Fund 94 - Growth 3.98 13.91 20.55 7 HDFC Equity Fund - Growth 3.95 13.45 22.31 8 Quantum Long-Term Equity Fund - Growth 3.73 12.45 20.52 9 Canara Robeco Emerging Equities - Growth 3.69 14.73 28.77 10 Reliance Equity Opportunities Fund - Growth 3.63 14.85 25.76 11 Fortis Future Leaders Fund - Growth 3.53 13.17 26.82 12 Franklin India High Growth Companies Fund - Growth 3.51 12.09 15.02 13 DSP BlackRock Opportunities Fund - Growth 3.17 11.48 20.78 14 Tata Select Equity Fund - Appr 3.15 9.35 14.32 15 DSP BlackRock India Tiger Fund - Growth 3.08 9.81 16.30 16 Franklin India Prima Fund - Growth 3.00 12.61 20.49 17 Kotak Emerging Equity Scheme - Growth 3.00 14.41 23.90 18 Morgan Stanley A.C.E Fund - Growth 2.60 11.61 17.64 19 Templeton India Growth Fund - Growth 2.56 7.40 13.25 20 Morgan Stanley Growth Fund - Growth 2.44 9.37 14.45 The comparison includes 250 Diversified Equity Funds across all Fund Houses
    • Compared to Top 20 Mutual Funds Ranked on 3 month returns Rank Scheme Name Performance 1 Month % 3 Months % 6 Months % 1 IDFC Premier Equity Fund - Plan A - Growth 4.03 19.19 26.99 2 Brics Growth 7.25 17.84 32.34 3 Reliance Equity Opportunities Fund - Growth 3.63 14.85 25.76 4 Canara Robeco Emerging Equities - Growth 3.69 14.73 28.77 5 Kotak Emerging Equity Scheme - Growth 3.00 14.41 23.90 6 SBI Magnum Global Fund 94 - Growth 3.98 13.91 20.55 7 HDFC Equity Fund - Growth 3.95 13.45 22.31 8 Fortis Future Leaders Fund - Growth 3.53 13.17 26.82 9 HDFC Long Term Equity Fund - Growth 5.09 13.15 22.05 10 Franklin India Prima Fund - Growth 3.00 12.61 20.49 11 Quantum Long-Term Equity Fund - Growth 3.73 12.45 20.52 12 DSP BlackRock Equity Fund - Growth 4.77 12.37 20.13 13 Franklin India High Growth Companies Fund - Growth 3.51 12.09 15.02 14 HDFC Growth Fund - Growth 4.06 11.97 22.40 15 Morgan Stanley A.C.E Fund - Growth 2.60 11.61 17.64 16 DSP BlackRock Opportunities Fund - Growth 3.17 11.48 20.78 17 JPMorgan India Equity Fund - Growth 1.80 10.20 18.30 18 Fidelity Equity Fund - Growth 1.36 9.84 19.54 19 DSP BlackRock India Tiger Fund - Growth 3.08 9.81 16.30 20 Franklin India Opportunity Fund - Growth 2.33 9.81 13.35 The comparison includes 250 Diversified Equity Funds across all Fund Houses
    • Compared to Top 20 Mutual Funds Ranked on 6 month returns Rank Scheme Name Performance 1 Month % 3 Months % 6 Months % 1 Brics Growth 7.25 17.84 32.34 2 Canara Robeco Emerging Equities - Growth 3.69 14.73 28.77 3 IDFC Premier Equity Fund - Plan A - Growth 4.03 19.19 26.99 4 Fortis Future Leaders Fund - Growth 3.53 13.17 26.82 5 Reliance Equity Opportunities Fund - Growth 3.63 14.85 25.76 6 Kotak Emerging Equity Scheme - Growth 3.00 14.41 23.90 7 Escorts Growth Plan - Growth 1.66 9.09 23.00 8 HDFC Growth Fund - Growth 4.06 11.97 22.40 9 HDFC Equity Fund - Growth 3.95 13.45 22.31 10 HDFC Long Term Equity Fund - Growth 5.09 13.15 22.05 11 DSP BlackRock Opportunities Fund - Growth 3.17 11.48 20.78 12 SBI Magnum Global Fund 94 - Growth 3.98 13.91 20.55 13 Quantum Long-Term Equity Fund - Growth 3.73 12.45 20.52 14 Franklin India Prima Fund - Growth 3.00 12.61 20.49 15 DSP BlackRock Equity Fund - Growth 4.77 12.37 20.13 16 ICICI Prudential Fusion Fund - IP - Growth 1.36 9.22 19.85 17 Fidelity Equity Fund - Growth 1.36 9.84 19.54 18 JPMorgan India Equity Fund - Growth 1.80 10.20 18.30 19 Morgan Stanley A.C.E Fund - Growth 2.60 11.61 17.64 20 Fidelity India Growth Fund - Growth 0.69 9.41 17.62 The comparison includes 250 Diversified Equity Funds across all Fund Houses
    • BRICS Growth NAV Trend  BRICS Growth has delivered steady & BRICS Growth NAV v/s Indices (normalised) consistent returns during both periods: 150  of range bound market with sharp 145 volatility between October 2009-May 140 2010 135 130  and when markets witnessed sharp rally between May-August 2010 125 120  Performance has been a result of our : 115  Stock Picking 110 105  Low churn in the portfolio and, 100  Conservative attitude (not taking 95 excessive risks) 90  Leading to consistently increasing out- 85 1-Dec-09 1-Aug-10 1-Jul-10 1-Apr-10 1-Feb-10 1-Mar-10 1-Jan-10 1-May-10 1-Jun-10 1-Nov-09 performance of returns as compared to the 1-Oct-09 benchmark indices BRICS Growth Nifty Sensex S&P 500 CNX Midcap
    • BRICS Growth Outperformance  Our out-performance has been increasing BRICS Growth NAV Outperformance vis-a-vis Indices over a period of time 45%  Our Strategy has been to : 40% 35%  Buy only during panics 30%  Use sharp rallies to partially book 25% profits 20%  Remain liquid in the interim 15%  Large liquidity helps : 10% 5%  Protect against volatility 0%  Provides enough courage and -5% conviction to buy into panics -10% 1-Nov-2009 1-Dec-2009 1-Feb-2010 1-Mar-2010 1-Oct-2009 1-Apr-2010 1-Jan-2010 1-Jun-2010 1-Aug-2010 1-Jul-2010 1-May-2010  Current cash/liquid balances ~ at 25% of the Portfolio Nifty Sensex S&P 500 CNX MidCap
    • Portfolio Breakup Sectoral Allocation Market Cap Breakup Banking & Oil & Gas Finance Cash 23% 13% 25% Large Cap Branded 32% Garments & Retail 15% Media 6% Infrastructure 4% Small Cap 18% FMCG Cash 14% Mid Cap 25% 25% Large Cap. More than Rs 5,000 crores Mid-Cap Rs 1,000 - 5,000 crores Small Cap. Less than Rs 1,000 crores
    • Low Portfolio Turnover (Buy & Hold at work) Portfolio Turnover 1.00 0.80 0.60 0.40 0.20 0.00 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Portfolio Turnover Average turnover
    • 10 Biggest falls since October 2009  How much a portfolio falls during a Points Points % Fall - correction / sharp downturn is as % Fall - % Fall - Date Fall - Fall - BRICS important as how much it gains in a bull Nifty Sensex market Nifty Sensex Growth  Protecting capital is often more important 27-Jan-10 -159.65 -3.19% -490.64 -2.92% -2.29% during periods of volatility 03-Nov-09 -147.80 -3.14% -491.34 -3.09% -0.36%  Downside protection equally contributes to superior returns over a period of time 19-May-10 -146.55 -2.89% -467.27 -2.77% -0.84%  We have managed to fall less than the 25-May-10 -137.20 -2.78% -447.07 -2.71% -1.62% indices during each of the sharp falls / panics since our inception 05-Feb-10 -126.70 -2.61% -434.02 -2.68% -0.47% 27-Oct-09 -124.20 -2.50% -387.10 -2.31% -0.65% 21-Jan-10 -127.55 -2.44% -423.35 -2.42% -1.32% 01-Jun-10 -116.10 -2.28% -372.60 -2.20% -1.24% Against -- Nifty Sensex 26-Nov-09 -102.60 -2.01% -344.02 -2.00% -0.95% Beta * 0.4075 0.4068 07-Jun-10 -101.50 -1.98% -336.62 -1.97% -0.99% *Beta measures the volatility of the portfolio relative to the index 04-Feb-10 -86.50 -1.75% -271.10 -1.64% -0.28%
    • Market Outlook  Global macro economic risks will continue to weigh on the markets. Will definitely have repercussions on India over a period of time, if not on a daily basis  Rest of 2010, markets are likely to remain range bound within 10-15% with sharp interim volatility. Short term we maintain a view of negative bias and perhaps a sharp correction  Overall Valuations are reasonable, but definitely not cheap  In some sectors/stocks valuations already factor in fairly aggressive growth rates for FY11 and FY12. Corporate performances could disappoint in those cases given high expectations  Q1 FY2011 results have just about met the expectations. In fact most sectors under- performed the expectations on profit margin front.  Corporates that have delivered/exceeded expectations have witnessed significant re-rating in the last one year and have had a sharp bounce back after each panic/fall  However, markets have also been very discriminative against corporates under-performing expectations. As a result markets have de-rated them over a period of time. This will continue as these stocks may not bounce back for a while even if the overall markets do, post a correction  Pockets of opportunities still available in those stocks where growth v/s valuations are still favourable. However continue to remain cautious of the market levels and valuations and buy only on dips / correction
    • Our Strategy  “Time” in the markets is more important than “Timing” the markets  Superior long-term sustainable returns are not made by timing the markets in terms of selling at the peaks. They are a result of purchase prices that are attractive in terms of valuations with adequate margin of safety  Even in range bound markets there are enough stocks providing consistent and absolute returns. Stock picking therefore is the key  Our strategy going ahead would continue to be:  Buy on declines/panics  Use the sharp rallies for part profit booking  Hold large cash/liquidity during interim periods  The sectors that we are bullish are and continue to be over weight:  Banking & Financial Services,  Gas Transportation & Distribution  Domestic Consumption oriented sectors including Paints, Branded Garments, Media etc.
    • Happy Investing Thank You Vivek Mavani – Senior Portfolio Manager vivek.mavani@bricssecurities.com BRICS SECURITIES LIMITED 1st Floor, Sadhana House, 570, P. B. Marg, Behind Mahindra Towers, Worli, Mumbai – 400 018. Tel: 91-22-6636 0000.