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**CRISIL Benchmark Disclaimer: CRISIL Indices are the sole property of CRISIL Limited (CRISIL). CRISIL Indices shall not be copied, transmitted or distributed in any
manner for any commercial use. CRISIL has taken due care and caution in computation of the Indices, based on the data obtained from sources, which it considers
reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Indices and is not responsible for any errors or for the results
obtained from the use of the Indices. CRISIL especially states that it has no financial liability whatsoever to the users of CRISIL Indices
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL
SCHEME RELATED DOCUMENTS CAREFULLY.
Statutory Details: Constitution: Union Mutual Fund (formerly Union KBC Mutual Fund) has been set up as a Trust under the Indian Trusts Act, 1882;
Sponsors: Union Bank of India and Dai-ichi Life Holdings, Inc.; Trustee: Union Trustee Company Private Limited (formerly Union KBC Trustee Company Private
Limited), [Corporate Identity Number (CIN): U65923MH2009PTC198198], a company incorporated under the Companies Act, 1956 with a limited liability;
Investment Manager: Union Asset Management Company Private Limited (formerly Union KBC Asset Management Company Private Limited), [Corporate Identity
Number (CIN): U65923MH2009PTC198201], a company incorporated under the Companies Act, 1956 with a limited liability. Registered Office: Unit 503, 5th Floor,
Leela Business Park, Andheri Kurla Road, Andheri (East), Mumbai - 400059. Toll Free No. 18002002268 • Non Toll Free. 022-67483333 • Fax No: 022-67483401 •
Website: www.unionmf.com • Email: investorcare@unionmf.com
Copy of all Scheme related documents along with the application form can be obtained from any of our AMC offices / Customer Service Centres/ distributors as well
as from our website www.unionmf.com.](https://image.slidesharecdn.com/unionbalancedadvantagefund-190112070823/85/Union-balanced-advantage-fund-22-320.jpg)
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Union balanced advantage fund
This document summarizes information about the Union Balanced Advantage Fund, an open-ended dynamic asset allocation fund. It discusses the fund's investment strategy, which uses a multi-parameter indicator called the Union Market Pulse Indicator (UMPI) to dynamically allocate between equity and debt based on factors like price-to-book value, dividend yield, and bond yields. Historical data is presented showing how UMPI aimed to increase equity allocation when markets fell and decrease it when markets rose, with the goal of providing better risk-adjusted returns than the Nifty 50 index over the long run.
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Union balanced advantage fund
- 1. UNION BALANCED ADVANTAGEFUND (Formerly Union Prudence Fund) (An Open-ended Dynamic Asset Allocation Fund)
- 2. …psychology affects our decisionsmore than financial theory… -John Nofsinger
- 4. Individuals who cannotmaster their emotions are ill-suited to profit from the investment process. -Benjamin Graham
- 5. Source: NSE 0 2,000 4,000 6,000 8,000 10,000 12,000 Aug-02 Mar-03 Oct-03 May-04 Dec-04 Jul-05 Feb-06 Sep-06 Apr-07 Nov-07 Jun-08 Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13 Sep-13 Apr-14 Nov-14 Jun-15 Jan-16 Aug-16 Mar-17 Oct-17 May-18 Nifty50 MOVEMENT OFNIFTY 50 INDEX WHEN WAS THE BEST TIME TO INCREASE ALLOCATION IN EQUITIES? Data Range 6th Aug 2002 - 31st May 2018
- 6. Source: NSE &AMFI 0 2,000 4,000 6,000 8,000 10,000 12,000 Aug-02 Mar-03 Oct-03 May-04 Dec-04 Jul-05 Feb-06 Sep-06 Apr-07 Nov-07 Jun-08 Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13 Sep-13 Apr-14 Nov-14 Jun-15 Jan-16 Aug-16 Mar-17 Oct-17 May-18 NIFTY50 NIFTY 50 INDEX V/S NET FLOW IN EQUITY MUTUAL FUNDS Net Flow (+) ₹54,556 Crs Net Flow (-) ₹1,345 Crs Net Flow (-) ₹39,590 Crs Net Flow (+) ₹2,36,619 Crs EQUITY INVESTMENTS: REALITY VS. DESIRE Data Range 6th Aug 2002 - 31st May 2018
- 7. Risk and returnsshown above are for illustration purpose only INVESTMENT CHOICES - WITH POTENTIAL RISK AND RETURNS ExpectedReturns Risk Lower Higher Higher Lower Money Market Instruments Alternative Investment Funds Balanced Advantage Fund is placed in between Fixed Income and Equity Mutual Funds Fixed Income Mutual Funds Equity Mutual Fund
- 8. Stock Selection through fundamental analysis Capitalisingon pricing anomalies through arbitrage strategies Exposure to high quality fixed income instruments Dynamic Equity & Debt Allocation based on Multi Parameter Strategy (Union Market Pulse Indicator)* UNION BALANCED ADVANTAGE FUND - FEATURES Endeavour to increase equity allocation when markets go down *Union Market Pulse Indicator (UMPI) - This is the current investment strategy which is subject to change. Please refer the Scheme Information Document (SID) of the Scheme for the asset allocation pattern and investment strategy. Subject to the provisions of the SID, the asset allocation and investment strategy may change depending on the Fund Manager’s view and on the prevailing market conditions. Endeavour to decrease equity allocation when markets go up
- 9. Note: This isthe current investment strategy and is subject to change depending on market conditions and Fund Manager’s view. UMPI only indicates the proportion of equity and debt allocation. The underlying securities in the Scheme’s portfolio will be selected as per Fund Manager’s discretion. ** EV: Enterprise Value, EBIDTA: Earning before interest, depreciation, tax and ammortisation. *G-Sec : Government of India Security Price to Book Value Dividend Yield EV to EBIDTA** 10 Year G-Sec Yield* UNION MARKET PULSE INDICATOR (UMPI) MULTI PARAMETER STRATEGY (UNION MARKET PULSE INDICATOR) - FOUR FACTOR BASED STRATEGY
- 10. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0 2,000 4,000 6,000 8,000 10,000 12,000 Aug-02 Jan-03 Jun-03 Nov-03 Apr-04 Sep-04 Feb-05 Jul-05 Dec-05 May-06 Oct-06 Mar-07 Aug-07 Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18 Nifty 50 -LHS UMPI Equity Allocation-RHS UMPI EQUITY ALLOCATION VIS-À-VIS NIFTY 50 MOVEMENT PERIOD: 6th AUG 2002 – 8th JUN 2018 UMPI endeavours to increase equity allocation when markets go down and endeavours to decrease equity allocation when markets go up. The above illustration shows the back tested equity allocation using the current investment strategy which is subject to change, depending on the market conditions. The above illustration is for understanding the concept of dynamic asset allocation only and should not be taken as any indication of current or future returns of the Scheme. UMPI only indicates the proportion of equity and debt allocation. The underlying securities in the Scheme’s portfolio will be selected as per Fund Manager’s discretion. The AMC is not guaranteeing or promising or forecasting any returns. Also, UMPI is using fundamental style of investing and will not capture gyrations caused by momentum factors. Source : NSE, Internal Research.
- 11. Comparison Risk andReturn of UMPI & Nifty 50
- 12. Data Range 6thAug 2002 - 8th June 2018; Values rebased to 100. Source: NSE & Internal Research 50 200 350 500 650 800 950 1,100 Aug-02 Jan-03 Jun-03 Nov-03 Apr-04 Sep-04 Feb-05 Jul-05 Dec-05 May-06 Oct-06 Mar-07 Aug-07 Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18 Nifty 50 UMPI Performance Parameters (Period: 06/08/2002 - 08/06/2018) Nifty 50 UMPI Returns (CAGR) 16.4% 16.7% Risk* 24.3% 13.8% Max Drawdown^ 59.9% 20.5% PERFORMANCE OF NIFTY 50 AND UMPI **Returns are based on the back tested values. Past performance may or may not be sustained in the future. No expense/alpha is considered in the above illustration. UMPI performance is calculated using Nifty 50 Index for equity allocation and Liquid Fund for debt allocation. UMPI only indicates the proportion of equity and debt allocation. The underlying securities in the Scheme’s portfolio will be selected as per Fund Manager’s discretion. The above illustration is for understanding the concept of dynamic asset allocation using UMPI and should not be taken as any indication of current or future returns of the Scheme. The AMC is not guaranteeing or promising or forecasting any returns. *Risk above is measured as annualized standard deviation. ^ Maximum Drawdown is the peak to trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage between the peak to the trough.
- 13. FINANCIAL YEAR NIFTY 50 RETURNS UMPI RETURNS RELATIVERETURNS FY 05-06 51.5% 39.2% -12.3% FY 06-07 29.2% 21.6% -7.6% FY 07-08 32.5% 20.6% -11.8% FY 08-09 -3.9% 6.4% 10.3% FY 09-10 10.5% 19.0% 8.5% FY 10-11 7.2% 17.2% 10.0% FY 11-12 20.6% 20.3% -0.3% FY 12-13 2.7% 7.5% 4.8% FY 13-14 4.7% 10.1% 5.3% FY 14-15 17.0% 14.8% -2.2% FY 15-16 10.8% 12.4% 1.6% FY 16-17 11.0% 11.7% 0.7% FY 17-18 6.0% 8.6% 2.6% Since 6th Aug 02 till 8th Jun 18 16.4% 16.7% 0.2% UMPI AND NIFTY 50 RETURNS FOR PAST THREE YEARS IN EACH OF THE FOLLOWING FINANCIAL YEARS Returns are based on the back tested values. UMPI performance is calculated using Nifty 50 Index for equity allocation and Liquid Fund for debt allocation. Past performance may or may not be sustained in the future. No expense/alpha is considered in the above illustration. UMPI only indicates the proportion of equity and debt allocation. The underlying securities in the Scheme’s portfolio will be selected as per Fund Manager’s discretion. The above illustration should not be taken as any indication of current or future returns of the Scheme. The AMC is not guaranteeing or promising or forecasting any returns. The above 3 year returns are annualized returns and are based on data from 6th Aug 2002 to 8th Jun 2018. Source: NSE, Internal Research.
- 14. For past thirteenthree year periods and since 6th Aug 2002 to 8th Jun 2018, UMPI has on an average taken relatively lower risk as compared to Nifty 50. ^Risk above is measured as annualized standard deviation. Past performance may or may not be sustained in the future. The above illustration should not be taken as any indication of current or future returns or standard deviation of the Scheme. Source: NSE & Internal Research FINANCIAL YEAR NIFTY 50 RISK^ UMPI RISK^ % RELATIVE RISK TO NIFTY FY 05-06 23.7% 17.3% 72.9% FY 06-07 24.4% 14.2% 58.3% FY 07-08 26.9% 11.8% 43.9% FY 08-09 34.6% 12.7% 36.7% FY 09-10 38.0% 19.9% 52.3% FY 10-11 34.8% 19.5% 55.9% FY 11-12 27.9% 18.1% 65.0% FY 12-13 18.0% 8.4% 46.8% FY 13-14 18.2% 10.5% 57.7% FY 14-15 15.3% 9.6% 62.5% FY 15-16 16.5% 8.9% 54.0% FY 16-17 14.6% 6.6% 45.1% FY 17-18 13.1% 5.5% 41.9% Since 6th Aug 2002 to 8th Jun 2018 24.3% 13.8% 56.7% UMPI AND NIFTY 50 RISK IN PAST THREE YEARS IN EACH OF THE FOLLOWING FINANCIAL YEARS
- 15. **The above illustrationis only to demonstrate that the probability of UMPI to outperform the market goes up with increase in the investment horizon. Returns are based on the back tested values. UMPI performance is calculated using Nifty 50 Index for equity allocation and Liquid Fund for debt allocation. UMPI only indicates the proportion of equity and debt allocation. The underlying securities in the Scheme’s portfolio will be selected as per Fund Manager’s discretion. Past performance may or may not be sustained in the future. No expense/alpha is considered in the above illustration. The above illustration is for understanding the concept of dynamic asset allocation using UMPI and should not be taken as any indication of current or future returns of the Scheme. The AMC is not guaranteeing or promising or forecasting any returns. The daily rolling returns are based on data from 2002-2018. The average (p.a.) figure is the average of the CAGR values for the 1 year/3 year/5 year/10 year rolling periods. NIFTY 50 UMPI NO. OF OBSERVATIONS PROBABILITY OF UMPI TO OUTPERFORM** ROLLING RETURNS MIN MAX AVG MIN MAX AVG 1 YEAR -56.8% 103.3% 20.0% -16.9% 77.3% 18.2% 3693 41% 3 YEARS -5.3% 59.0% 15.8% 4.1% 43.5% 16.3% 3184 63% 5 YEARS -1.1% 44.1% 13.9% 9.3% 29.1% 15.6% 2687 76% 10 YEARS 5.2% 20.6% 12.8% 11.8% 21.0% 15.3% 1445 100% Probability of outperforming increases with longer investment horizon COMPARATIVE RETURN ANALYSIS OF UMPI OVER NIFTY 50 INDEX (DATA AS ON 8TH JUNE, 2018) Source: MFI Explorer, NSE, Internal
- 16. Source: Crisil, NSE,Internal Research RELATIVE PERFORMANCE OF UMPI WITH NIFTY 50 ACROSS MARKET CYCLES 500 1,500 2,500 3,500 4,500 5,500 6,500 7,500 8,500 9,500 10,500 11,500 Aug-02 Oct-02 Dec-02 Feb-03 Apr-03 Jun-03 Aug-03 Oct-03 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 UMPI NIFTY 50 6.7%, (1.4)% UMPI might not outperform in a rising market, but it has beaten the market in all other market scenarios. Returns are based on the back tested values. UMPI performance is calculated using Nifty 50 Index for equity allocation and Liquid Fund for debt allocation. Past performance may or may not be sustained in the future. No expense/alpha is considered in the above illustration. The above illustration is for understanding the concept of dynamic asset allocation using UMPI and should not be taken as any indication of current or future returns of the Scheme. UMPI only indicates the proportion of equity and debt allocation. The underlying securities in the Scheme’s portfolio will be selected as per Fund Manager’s discretion. The AMC is not guaranteeing or promising or forecasting any returns. The arrows used in the graph above depict the start and end point used for calculation of returns. Figures in parenthesis denotes negative returns. For period greater than one year CAGR returns are calculated, for period less than one year, returns are simple returns. Period: 6th Aug 02-8th Jun 18.
- 17. UNDER NORMAL CIRCUMSTANCES,THE ASSET ALLOCATION PATTERN WILL BE AS FOLLOWS: The gross equity exposure will be maintained between 65% to 100% while the net equity exposure is to be maintained between 30% to 100%. The difference between these exposures will be carried out using derivatives. The derivatives may be used to hedge the gross exposure where the net exposure is required to be brought down. ASSET ALLOCATION PATTERN Instruments Indicative allocations (% of net assets) Equity and Equity related instruments 65%-100% Equity Derivatives 0%-45% Debt and Money Market Instruments 0%-35%
- 18. Risk Reduction Through Dynamic AssetAllocation Regular Monitoring Of Asset Allocation Limits Downside Risk Through Investment In Fixed Income BENEFITS OF INVESTING THROUGH UMPI Removes Emotional Element While Investing Avail Benefits Of Equity Taxation
- 19. EQUITY INVESTMENT PROCESS *BMV=Business,Management & Valuation Investment Universe (Stocks with a market capitalization of more than a defined threshold) Fund House Universe BargainGrowth Investment Process Stock Selection Portfolio Construction Stock Selection Sector Allocation Capitalization Asset Allocation Fund Mandate Concentration BMV Filters* Stock Segmentation Portfolio Construction Factors
- 20. FIXED INCOME INVESTMENTPROCESS Investment Process Security Selection Portfolio Construction Qualitative Analysis Quantitative Analysis Domestic Macro Global Macro Fund House Fixed Income Universe Duration Risk Issuer Universe Fund Mandate Credit Research Factors
- 21. 6.9% 3.4% 3.4% 3.3% 2.9% FinanceGas Software Auto Banks Top 5 Industry Holdings 29% 37% 33% 1% Portfolio Composition Unhedged Equity Hedged Equity Fixed Income Cash & Cash Equivalents Average AUM for May 2018 584.66 crore Minimum application amount Rs 5,000 and in multiples of Rs 1 thereafter Benchmark: 65% S&P BSE 50 Index (+) 35% CRISIL Composite Bond Fund Index (for disclaimers refer last page) Plans/Options: Direct and Regular Plan with Growth Option & Dividend Option (Reinvestment, Payout and Sweep facilities) Date of inception: 29th December, 2017 Co Fund Managers: Anshul Mishra & Parijat Agrawal Load Structure: Entry Load: Nil Exit Load: 20% of the units allotted may be redeemed without any exit load, on or before completion of 18 months from the date of allotment of units. Any redemption in excess of such limit in the first 18 months from the date of allotment shall be subject to the following exit load. Redemption of units would be done on First in First out Basis (FIFO): • 1% if redeemed or switched out on or before completion of 18 months from the date of allotment of units. • Nil, if redeemed or switched out after completion of 18 months from the date of allotment of units. PORTFOLIO UPDATE : 31ST MAY 2018 77% 19% 4% Market Capitalisation Large Cap Mid Cap Small Cap
- 22. Disclaimer: The views,facts and figures in this document are as of June 08, 2018, unless stated otherwise, and could change without any notice. **CRISIL Benchmark Disclaimer: CRISIL Indices are the sole property of CRISIL Limited (CRISIL). CRISIL Indices shall not be copied, transmitted or distributed in any manner for any commercial use. CRISIL has taken due care and caution in computation of the Indices, based on the data obtained from sources, which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Indices and is not responsible for any errors or for the results obtained from the use of the Indices. CRISIL especially states that it has no financial liability whatsoever to the users of CRISIL Indices MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Statutory Details: Constitution: Union Mutual Fund (formerly Union KBC Mutual Fund) has been set up as a Trust under the Indian Trusts Act, 1882; Sponsors: Union Bank of India and Dai-ichi Life Holdings, Inc.; Trustee: Union Trustee Company Private Limited (formerly Union KBC Trustee Company Private Limited), [Corporate Identity Number (CIN): U65923MH2009PTC198198], a company incorporated under the Companies Act, 1956 with a limited liability; Investment Manager: Union Asset Management Company Private Limited (formerly Union KBC Asset Management Company Private Limited), [Corporate Identity Number (CIN): U65923MH2009PTC198201], a company incorporated under the Companies Act, 1956 with a limited liability. Registered Office: Unit 503, 5th Floor, Leela Business Park, Andheri Kurla Road, Andheri (East), Mumbai - 400059. Toll Free No. 18002002268 • Non Toll Free. 022-67483333 • Fax No: 022-67483401 • Website: www.unionmf.com • Email: investorcare@unionmf.com Copy of all Scheme related documents along with the application form can be obtained from any of our AMC offices / Customer Service Centres/ distributors as well as from our website www.unionmf.com.
- 23.