Learn About Mutual Fund

1. 1
UNEMOTIONAL INVESTING
IN VOLATILE TIMES –
IDFC DYNAMIC EQUITY FUND

2. Contents
2
1. Investor behaviour & investment solution
2. Buy, Buy, Buy - If not now then when!
3. Disciplined approach of IDFC Dynamic Equity Fund
4. More about the fund

3. 3
Investor behaviour & investment solution

4. Typical investor behaviour
4
An average investor’s psychology
gets impacted by his recent
experience and thus ends up doing
the complete opposite –
“Buy high and sell low”

5. Flows supporting this hypothesis
5
Investor experience
≠
Market performance
Nifty in Jan’08: 6288
Flows: INR 21,247cr
Nifty in Mar’15: 8996
Flows: INR 17,286cr
Nifty in Oct’08: 2524
Flows: INR 2146cr
Nifty in Feb’16: 6970
Flows: INR 10,876cr
This is only for illustration purposes only. The flows mentioned here are gross sales into Equity/ELSS and NFOs
Source: AMFI

6. The remedy
6
Buy Low Sell High
But
Easier said than done!

7. Need for a fund with disciplined investing
7
Removes the need to
time the market /
removes human bias
of predicting trends
Reduced volatility versus
pure equity - cushioning
the drawdowns
Model based approach
Dynamic Allocation between
Equity ↔ Debt ↔ Arbitrage

8. a
Introducing dynamic asset allocation
8
Model based approach that allocates dynamically between
EQUITY DEBT Arbitrage /
Hedged Equity
Capital
Appreciation
Regular
Income
Downside risk
reduction

9. 9
Buy, Buy, Buy - If not now then when!

10. Nifty in Feb’16: 6970
Why you should buy more when markets are low
10
Past Return
≠
Future Return
The chart is only for illustration purposes only. Past performance may or may not be sustained in future.
Source: MFI
Nifty in Oct’08: 2524

11. Markets down significantly since January’20 peak
11
8000
9000
10000
11000
12000
13000
31-Dec-19
07-Jan-20
14-Jan-20
21-Jan-20
28-Jan-20
04-Feb-20
11-Feb-20
18-Feb-20
25-Feb-20
03-Mar-20
10-Mar-20
17-Mar-20
Nifty 50 Index
Fall in markets and
valuation call for increased
allocation towards equity
Data as on March 2020
15
20
25
30
31-Dec-19
7-Jan-20
14-Jan-20
21-Jan-20
28-Jan-20
4-Feb-20
11-Feb-20
18-Feb-20
25-Feb-20
3-Mar-20
10-Mar-20
17-Mar-20
Nifty 50 PE
Valuations
Markets

12. Allocation towards equity has increased
12
IDFC Dynamic Equity Fund
has increased its allocation
to 65% as per its model
Allocation as on 31st Dec’19
46%
65%
Allocation as on 18th Mar’20
The allocation presented here is based on net equity allocation

13. a
Journey of the fund – when markets were down
13
From Nifty 50
Nifty Midcap
100
Nifty Smallcap
100
Benchmark IDFC DEF
Avg. Equity
Allocation
Jan'18 to Mar'18 -9.8% -13.0% -15.3% -5.6% -4.3% 52%
Aug'18 to Oct'18 -14.4% -17.5% -24.2% -9.2% -8.1% 51%
Jun'19 to Aug'19 -9.7% -13.1% -17.5% -5.1% -4.1% 51%
Jan'20 to Feb'20 -33.0% -32.7% -39.2% -19.8% -18.7% 55%
Cushioning the downside with lower equity allocation
Past performance may or may not be sustained in future.

14. 14
Disciplined approach of IDFC Dynamic Equity
Fund

15. The fund strategy
15
Dynamic
Allocation
between Debt
& Equity
Predefined
Model –
using PE
values
Active
Management
Diversified
Portfolio
* Fund will maintain 65% Equity allocation at all times for Equity taxation & hedging will be used to reduce effective equity exposure up to 30%

16. The ‘Buy Low – Sell High’ model
16
Equity Allocation is based on the model below
PE Bands Equity Allocation
<12 90-100
12-16 75-90
16-19 65-75
19-22 55-65
22-26 40-55
>26 30-40
Equity Allocation would be basis month-end weighted average Trailing PE ratio of Nifty 50
PE and changes will happen once a month
Cheaper Markets – Higher Equity
Allocation
Expensive Markets – Lower Equity
Allocation

17. Dynamic allocation between equity and debt
17
100%
90% 85%
75% 70%
60% 55% 50%
40%
30%
5% 10% 15%
25%
35%
10% 15%
25% 30% 35% 35% 35% 35% 35%
65%
Equity Exposure Arbitrage Debt Equity
Low PE High PE
As the Nifty PE moves from Low to High the allocation towards Net Equity reduces
The minimum Equity
holding requirement
of 65% to meet Equity
taxation eligibility is
met with investment
in Equity Derivatives
This is only for illustration purposes only.

18. Changes in equity allocation with market valuation
18
19
20
21
22
23
24
25
26
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
P/E
Ratio
Net
Equity
Allocation
Net Equity Allocation P/E (RHS)
Source: IDFC MF, Bloomberg
Data as on Feb’20

19. a
Journey in different markets
19
When the market goes up
IDFC DEF has been able to participate in the market upside despite
having lower active equity exposure at all times
From Nifty 50
Nifty Midcap
100
Nifty Smallcap
100
Benchmark DEF
Avg Equity
Allocation
Feb'19 to Feb'20 5.0% 1.5% -3.3% 7.1% 11.1% 49%
Feb'18 to Feb'20 4.7% -6.7% -16.7% 5.1% 5.5% 51%
Feb'17 to Feb'20 9.5% 1.7% -4.5% 8.1% 7.9% 51%*
*Since repositioning i.e. Sep 2017
When the market remains sideways
From Nifty 50
Nifty Midcap
100
Nifty Smallcap
100
Benchmark DEF
Avg Equity
Allocation
Jul'17 to Mar'18 0.5% 0.9% -1.4% 1.9% 2.3% 50%*
Jan'18 to Jul'18 0.3% -14.6% -21.0% -0.8% 0.5% 53%
Jun'19 to Nov'19 0.2% -6.7% -11.5% 2.0% 2.3% 50%
Past performance may or may not be sustained in future.

20. 20
More About the Fund

21. Equity allocation strategy
21
Management Quality Past Financial History Earning Growth Trajectory
3Cs –Corporate governance, Capital
allocation & shareholder wealth
Creation
• Superior Cash Generation
• Sector leading return on capital
• Low financial leverage
Strong earnings visibility
Equity Stock Selection Framework
Investment strategy and asset allocation will be as per provisions of SID

22. Fixed Income allocation strategy
22
Quality Duration Allocation mix
Preference for High Quality • Preference towards short to
moderate duration portfolio
Optimize the mix between ‘carry’
and ‘mark-to-market’ (MTM) income
Actively managed Debt portion
Investment strategy and asset allocation will be as per provisions of SID

23. Who should invest?
23
WHO
SHOULD
INVEST?
Investors who wish to
participate in Equity
Markets with a relatively
conservative approach
Investors looking to
invest dynamically
between Debt and Equity
while benefitting from
equity taxation
Investors seeking alpha in a volatile /
uncertain market environment
Suitable for conservative investor or for 1st time investors

24. Fund detail
24
An open ended
dynamic asset allocation fund
Min. application amount is
Rs.5,000 and any amount
thereafter
50% S&P BSE 200TRI +
50% Nifty AAA Short
Duration Bond Index
• For 10% of investment: Nil
• For remaining: 1% if
redeemed/switched out
within 1 year from the date of
allotment
Nature
Minimum
Application Amount
Benchmark Exit Load
Equity: Mr. Arpit Kapoor &
Mr. Sumit Agarwal
Debt: Mr. Arvind Subramanian
Fund Manager*
*Overseas investment will be managed by Mr. Viraj Kulkarni

25. Scheme performance
25
B-Benchmark, AB- Alternate Benchmark
Performance based on NAV as on 28/02/2020. Past performance may or may not be sustained in future.
Refer following slide for performance on other funds managed by the fund manager
The performances given are of regular plan growth option.
Regular and Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
The fund has been repositioned from a Nifty linked fund to an open banded fund w.e.f. June 19, 2017.

26. Performance of other scheme managed
26
Performance based on NAV as on 28/02/2020. Past Performance may or may not be sustained in future. The performance details provided herein are of regular plan growth option. Regular and
Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
IDFC Large Cap Fund’s Current Index performance adjusted for the period from since inception to June 28, 2007 with the performance of S&P BSE 100 price return index (Benchmark). The fund
has been repositioned from IPO fund to a large cap fund w.e.f. April 18, 2017. IDFC Dynamic Equity fund has been repositioned from a Nifty linked fund to an open banded fund w.e.f. June 19,
2017. Current Index performance adjusted for the period from since inception to May 28, 2018 with the performance of CRISIL Hybrid 85+15 Conservative Index (Benchmark for IDFC Asset
Allocation Fund- Conservative Plan and IDFC Asset Allocation Fund- Moderate Plan) and CRISIL Hybrid 35+65 - Aggressive Index (Benchmark for IDFC Asset Allocation Fund – Aggressive Plan). The
fund has been repositioned w.e.f. May 28, 2018 and since will invest only in the schemes of IDFC Mutual Funds.

27. Performance of other scheme managed
27
Performance based on NAV as on 28/02/2020. Past Performance may or may not be sustained in future
The performance details provided herein are of regular plan growth option. Regular and Direct Plans have different expense structure.
Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
IDFC Large Cap Fund’s Current Index performance adjusted for the period from since inception to June 28, 2007 with the performance of S&P BSE 100 price return index (Benchmark).
The fund has been repositioned from IPO fund to a large cap fund w.e.f. April 18, 2017. IDFC Dynamic Equity fund has been repositioned from a Nifty linked fund to an open banded fund
w.e.f. June 19, 2017.
 Performance of other scheme managed by Mr. Sumit Agarwal

28. Performance of other scheme managed
28
 Performance of other scheme managed by Mr. Arvind Subramanian
Performance based on NAV as on 28/02/2020. Past Performance may or may not be sustained in future
The performance details provided herein are of regular plan growth option. Regular and Direct Plans have different expense structure.
Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
IDFC Dynamic Equity fund has been repositioned from a Nifty linked fund to an open banded fund w.e.f. June 19, 2017.

29. Product label
29
Disclaimer:
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED
DOCUMENTS CAREFULLY.
The Disclosures of opinions/in house views/strategy incorporated herein is provided solely to enhance the
transparency about the investment strategy / theme of the Scheme and should not be treated as endorsement
of the views / opinions or as an investment advice. This document should not be construed as a research
report or a recommendation to buy or sell any security. This document has been prepared on the basis of
information, which is already available in publicly accessible media or developed through analysis of IDFC
Mutual Fund. The information/ views / opinions provided is for informative purpose only and may have
ceased to be current by the time it may reach the recipient, which should be taken into account before
interpreting this document. The recipient should note and understand that the information provided above
may not contain all the material aspects relevant for making an investment decision and the stocks may or
may not continue to form part of the scheme’s portfolio in future. The decision of the Investment Manager
may not always be profitable; as such decisions are based on the prevailing market conditions and the
understanding of the Investment Manager. Actual market movements may vary from the anticipated trends.
This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alterations to this statement as may be required from time to time. Neither IDFC Mutual
Fund / IDFC AMC Trustee Co. Ltd./ IDFC Asset Management Co. Ltd nor IDFC, its Directors or representatives
shall be liable for any damages whether direct or indirect, incidental, punitive special or consequential
including lost revenue or lost profits that may arise from or in connection with the use of the information.