PPFAS Long Term Value Fund is an equity fund that uses a value investing approach to buy and hold Indian and foreign stocks for the long term. The fund also has the ability to hold cash when opportunities are limited and to engage in arbitrage strategies like cash/futures arbitrage, delisting/buyback arbitrage, and structured products during opportunistic periods. Stocks are selected based on having durable competitive advantages, understandable businesses, and attractive valuations. The fund typically holds 20-25 stocks and has low portfolio churn. Foreign stocks provide opportunities for innovative sectors and valuation gaps not available in India. Asset allocation ranges from 65-100% Indian equity to 0-35% foreign equity and 0-85% debt/

1. PPFAS Long Term Value Fund

2. Core value investing

Buy and hold from a Value Investing
perspective

Ability to stay in cash for a while

3. PPFAS Long Term Value Fund

Equity
− Buy and hold equity from a Value Investing
approach
− Both Indian and Foreign

Opportunistic deployments in
− Cash to futures arbitrage
− Delisting / buy back arbitrage
− Debt securities
− Structures (Capital Protection Oriented)

4. “Value Investing”

Stock ownership as Business Partnership

Partners (Honest & Competent)

Great businesses
− Entry barriers, high return on equity, less debt,
understandable and predictable
− Available at attractive valuations

5 Star meal at Udipi rates, not vada pav

Typically 20 to 25 businesses owned

Low churn & long term holding

5. Why overseas stocks?

Home country bias

De-risking

Sectoral opportunities not available here
− Innovative IT, Pharma opportunities
− Upstream energy

Valuation gaps
− FMCG

Get paid additional 6%!

Amazing recent results

6. Cash to Futures Arbitrage

We saw this in 2007 ; investors who wanted
liquid investments and predictable returns

Returns then were around 18% p.a.

Buy a stock (say SBI) at Rs. 1,000 and sell the
same stock in futures at say Rs. 1,010

No risk whether SBI goes up or down in price

7. Delisting / Buyback / Open offers

Promoter group want to buy shares (forced by
regulators or otherwise)

Market price of share is known

Purchase price is know

Time frame is known

Acceptance ratio can be estimated

Low risk, opportunistic short term funds
deployment

8. Structures

Opportunities come occasionally

Conditions
− High interest rates
− Low volatility in equity prices

Advantage
− Heads we win
− Tails the market loses

If market goes down, our capital gets protected,
if market rises, we get equity participation

9. Asset Allocation

Indian Equity 65% to 100%

Derivatives (hedge) 0% to 50 %

Net Indian Equity 15% to 100%

Foreign Equity 0% to 35%

Debt Securities & cash 0% to 85%
(including hedge)
All tax benefits of Equity Scheme apply

10. What are valuations like right now?

Of late, smaller companies have been unjustly
punished leading to valuations in some of them
becoming very attractive.

Select US stocks (especially in energy, FMCG
& IT space) are very attractive.

Crude oil, gold and other commodities coming
off highs a positive.

Excesses of the past will still haunt the
indisciplined companies.

13. We will be happy to answer any questions you
may have......