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Why Edelweiss BAF - June 2022 presentation

The Edelweiss Balanced Advantage Fund is a dynamic asset allocation fund that aims to generate low volatile equity-linked returns by adjusting its investment strategy according to market conditions. It utilizes a unique pro-cyclical EEHI model, which allocates more to equities during bull markets and less during bear markets, thus creating wealth while also protecting against downturns. The fund has demonstrated superior risk-adjusted returns and has historically outperformed many peers across various market cycles.

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WHY EDELWEISS BALANCED ADVANTAGE FUND? Creating wealth at every step up; Protecting at every step down 1 June 2022
0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 Jan-2006 Aug-2006 Mar-2007 Oct-2007 May-2008 Dec-2008 Jul-2009 Feb-2010 Sep-2010 Apr-2011 Nov-2011 Jun-2012 Jan-2013 Aug-2013 Mar-2014 Oct-2014 May-2015 Dec-2015 Jul-2016 Feb-2017 Sep-2017 Apr-2018 Nov-2018 Jun-2019 Jan-2020 Aug-2020 Mar-2021 Oct-2021 May-2022 NIFTY 50 But if you want All Three... Market always proves us wrong Source: ACE Mf | Data as on 10th Jun 2022 | Only for internal reference. Market bounce back sharply right when we think it is a bear market Market falls sharply right when we think it is a strong bull run 2
0 5000 10000 15000 20000 25000 30000 Jan-2012 Jun-2012 Nov-2012 Apr-2013 Sep-2013 Feb-2014 Jul-2014 Dec-2014 May-2015 Oct-2015 Mar-2016 Aug-2016 Jan-2017 Jun-2017 Nov-2017 Apr-2018 Sep-2018 Feb-2019 Jul-2019 Dec-2019 May-2020 Oct-2020 Mar-2021 Aug-2021 Jan-2022 Jun-2022 NIFTY 50 - TRI But if you want All Three... Ideal way is to obey market trends and go along with them, not against them Stay Invested and create wealth Stay away and protect wealth 3 Source: ACE Mf | Data as on 10th Jun 2022 | Only for internal reference.
But if you want All Three... Currently Uncertainly is even more prevailing Uncertainty around Earnings COVID Crisis and Lockdowns Valuations High or low Geopolitical Risk Economic Recovery time unknown Only for internal reference. 4
But if you want All Three... How to invest amidst this Volatility? Invest in a fund which adjusts itself according to market conditions Maintain Higher Equity Levels to create wealth if markets continue to rise Maintain lower Equity Levels to protect downside if markets fall Only for internal reference. You win whichever way market moves 5
But if you want All Three... …and Protect Downside Only for internal reference. If You Lose Gain required to breakeven 20% 25% 30% 43% 50% 100% 18% (43-25) % gain by protecting 10% downside Protecting downside is more important. Every % saved is % gain later 6
But if you want All Three... Presenting Edelweiss Balanced Advantage Fund Only for internal reference. Creating wealth at every step up Protecting wealth at every step down 7
But if you want All Three... Edelweiss Balanced Advantage Fund Only for internal reference. • Dynamic asset allocation fund which aims to generate low volatile equity linked returns • Invests in Equity & Fixed Income and varies allocation between these asset classes based on a predefined Asset Allocation Model. • Aims to capture the upside during the bull market and protect downside in bear markets based on PROCYCLICAL EEHI Model Equity Linked Returns High Liquidity Tax efficient returns Lower Volatility The Fund aims to fulfill following investor expectations 8
But if you want All Three... Investment Strategy Only for internal reference. EQUITY DEBT ARBITRAGE 30% to 80% Net Equity Multi-Cap Growth oriented Active Duration Management Focus on Accrual Hedging Capture Spreads Corporate Actions Dynamic Equity Allocation Net Equity exposure is equity exposure minus short derivative exposure. The scheme asset allocation allows to take derivative exposure up to 50% of the net assets. 9
But if you want All Three... Investment Strategy Only for internal reference. EQUITY FIXED INCOME Quality Quality Management High Free Cash Flow Consistency Growth Strong Earnings Growth Sector Growth Competitive Advantage Value Attractive Valuations Margin of Safety Objective Generate Accrual Income Provide Stability Exposure 0-35% Duration Active Duration Management 1 to 5 Year Range Credit Quality Relatively higher quality corporate bonds (AAA Only) 10
But if you want All Three... A Deep dive into EEHI Model Only for internal reference. Market Trend Trend Health Fundamentals 1 week, 2 weeks, 1 month & 3 month Daily Moving Average (DMA) of Nifty 50 Indicates bull or a bear market trend Market Volatility & Downside Deviation of Nifty 50 Indicates the strength and sustainability of current bull/bear market trend Market Valuations and Macro-economic factors Indicates the overall economy trend and its strength Equity Market Health Core Factors Overriding factors • EEHI (Edelweiss Equity Health Index) is a Pro-cyclical asset allocation model which is based on quantitative factors coupled with fundamentals. • It aims to have higher equity exposure during the bull market and lower in the bear market Following are the factors considered by EEHI 11
But if you want All Three... How Edelweiss BAF is different from Peers? Only for internal reference. • Unlike E-BAF most of the funds follow a Valuation based or Valuation + Trend based approach. • EBAF is the only Fund which follows a pure trend based asset allocation approach 12 Fund Name Asset Allocation Model Strategy Axis Dynamic Equity Fund PE Valuation + Trend + Volatility Aditya Birla SL Balanced Advantage Fund PE Valuation DSP Dynamic Asset Allocation Fund Valuation + trend HDFC Balanced Advantage Fund Static ICICI Pru Balanced Advantage Fund Price to Book Valuation Kotak Balanced Advantage Fund PE valuation + Trend L & T Balanced Advantage Fund PE/PB Valuation Nippon India Balanced Advantage Fund PE Valuation + Trend SBI Balanced Advantage Fund No model Tata Balanced Advantage Fund PE Valuation + Marco Indicators Edelweiss Balanced Advantage Fund Pure Trend Based
But if you want All Three... Edelweiss Procyclical Model Outperforms Only for internal reference. Data as on 31st Dec, 2021. Performance of the model and not the fund. In 14 out of 17 years, Procyclical Model has outperformed Countercyclical 13 Calendar year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Nifty 50 36.3% 39.8% 54.8% -51.8% 75.8% 17.9% -24.6% 27.7% 6.8% 31.4% -4.1% 3.0% 28.6% 3.2% 12.0% 14.9% 24.1% Procyclical 27.5% 34.9% 37.2% -21.3% 47.8% 12.4% -9.5% 17.3% 6.0% 20.1% -1.2% 2.7% 18.7% 4.0% 4.6% 17.0% 11.7% Counter Cyclical 20.4% 21.1% 20.5% -26.5% 48.6% 9.0% -13.8% 19.3% 5.6% 18.3% -1.5% 1.9% 14.6% 2.1% 6.7% 11.7% 10.5% Pro Cyclical Net Equity Level 68% 68% 69% 54% 65% 65% 54% 64% 60% 67% 57% 62% 71% 55% 61% 63% 59%
EEHI Model – Net Equity Level vs Nifty 50 Data as on 31st May 2022 | Source: www.nseindia.com; Internal. Up Market Avg. Net Equity Level 66% Up Market Avg. Net Equity Level 66% Down Market Avg. Net Equity Level 51% Down Market Avg. Net Equity Level 52% Down Market Avg. Net Equity Level 46% Avg. Net Equity % Nifty 50 Levels Up Market Avg. Net Equity Level 70% 7,000 9,000 11,000 13,000 15,000 17,000 19,000 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Nifty 50 15 per. Mov. Avg. (Exposure for the next day) Down Market Avg. Net Equity Level 50% Avg. Net Equity % Avg. Net Equity %
But if you want All Three... Swift Equity Allocation Source: Internal. Data as on 31st May 2022 15 Swift change in equity levels during bear market cycles Low equity levels during weak markets High equity levels during healthy markets Nifty 50 Return Average Net Equity Min Net Equity Max Net Equity July-20 7.48% 73% 68% 80% Aug-20 2.84% 70% 63% 80% Sep-20 -1.20% 60% 50% 65% Oct-20 3.51% 66% 53% 70% Nov-20 11.39% 72% 53% 80% Dec-20 7.80% 72% 63% 80% Jan-21 -2.48% 65% 51% 70% Feb-21 6.56% 66% 51% 70% Mar-21 1.11% 60% 51% 65% Apr-21 -0.41% 52% 42% 61% May-21 6.50% 60% 55% 63% Jun-21 0.89% 59% 55% 63% Jul-21 0.26% 58% 55% 60% Aug-21 7.46% 63% 60% 63% Sep-21 4.01% 63% 62% 70% Oct-21 0.30% 62% 56% 70% Nov-21 -3.90% 55% 46% 61% Dec-21 2.18% 51% 45% 55% Jan-22 -0.08% 60% 48% 69% Feb-22 -3.15% 49% 35% 55% Mar-22 3.99% 50% 35% 63% Apr-22 -2.07% 58% 50% 65% May-22 -3.03% 45% 38% 55%
But if you want All Three... What is stock selection process? Only for internal reference. Universe Selection Stock Selection Portfolio Construction Risk Management • Business Quality • Management Quality Consistency Growth Arbitrage Value Arbitrage Bucketing based on Market cap Building pre-risk adjusted portfolio Benchmark Sensitive approach Diversified portfolio 4 Pillar - Investment Process 16
But if you want All Three... Portfolio Snapshot Only for internal reference. Data as on 31st May 2022 17 Top Stocks* (in %) Reliance Industries Ltd. 6.2% HDFC Bank Ltd. 5.7% ICICI Bank Ltd. 5.7% Infosys Ltd. 3.5% Axis Bank Ltd. 3.5% State Bank of India 2.7% HDFC Ltd. 1.7% Larsen & Toubro Ltd. 1.8% Tata Consultancy Services Ltd. 1.7% ITC Ltd. 1.6% Fixed Income Quantitative Indicators YTM 5.35% Modified Duration 1.03 Years Average Maturity 1.21 Years Equity Quantitative Indicators Net Equity 55.00% Top 10 (%) 34.1% Active Bet 31.76% Market Cap Allocation Large cap 83% Midcap 13% Small cap 4% Sector % Over wt. Sector % Under wt. BFSI 10.94% Power -0.10% Auto & Auto Ancillaries 2.34% Media & Entertainment 0.00% Metals & Mining 2.20% *Equity Portfolio Ex Arbitrage
But if you want All Three... Edelweiss Balanced Advantage Fund Aims to capture the upside during the bull market and protect downside in a bear market based on Unique Asset Allocation Model Captures bigger trends and limits drawdown Aims to maximize the benefits of trending markets, both upside and downside. Superior risk adjusted returns This approach smoothens the ride in a volatile equity market, Systematic process driven approach Discretionary decisions based on ‘gut feeling’ or news generally fail over a longer time period. Avoids timing of market reversal Timing the reversals looking at historical valuation ratios have typical drawback of having hindsight syndrome. What is unique about the Fund? Only for internal reference. 18
But if you want All Three... How the Fund has performed in different Cycles? High Equity Levels when market is rising = Upside Participation Low Equity Levels when market is falling = Downside participation Source: Ace MF | Data as on 31st May 2022 | Only for internal reference. 19 Jan 17 to Jan 18 Feb 18 to Mar 18 Apr 18 to Sep 18 Oct 18 to Oct 18 Nov 18 to Jun 19 Jul 19 to Sep 19 Oct 19 to Jan 20 Feb 20 to Mar 20 Apr 20 to Oct 21 Nov 21 to May 22 Nifty 50 Returns 35% -8% 8% -5% 14% -2.7% 5% -28% 57.49% -6.15% E-BAF Avg. Net Equity Level 70% 50% 59% 38% 62% 53% 65% 46% 64% 52% E-BAF Performance 26% -4% 3% -2% 7% 0.3% 5% -12% 35.55% -3.98%
But if you want All Three... Protected during every crisis Source: Ace MF | Only for internal reference | Data as on 31st May 2022 Not only in the last one year, Edelweiss BAF model has protected during all steep falls in market by swiftly reducing equity levels 20 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Nifty 50 Average for the Month IL&FS Crisis Post Union Budget Fall Covid 19 Changes in LTCG
But if you want All Three... Fund Performance in recent Market Cycles Only for internal reference. All funds in the category have been considered for this analysis. Performances are in absolute terms. Correction Phase 14th Jan 20 – 23rd Mar 20 Nifty 50 - TR -38% Edelweiss Balanced Advantage -15% Recovery Phase 24th March 20 – 18th Oct 21 Nifty 50 - TR 147% Edelweiss Balanced Advantage 74% Through the Cycle 14th Jan, 20 –10th Jun, 22 Nifty 50 - TR 13.26% Edelweiss Balanced Advantage 13.90% Year on Year Performance CY 2017 CY 2018 CY 2019 CY 2020 CY21 Edelweiss BAF Returns 23.9% 1.9% 7.8% 22.6% 18.76 Peer group Average returns 17.0% 1.6% 9.1% 15.1% 13.74 Ranking 3/9 6/12 12/13 2/13 3/21 Excess returns over peer group 6.9% 0.3% -1.3% 7.6% 5.02 21 Correction Phase 19th Oct 21 – 20th Dec 21 Nifty 50 - TR -10% Edelweiss Balanced Advantage -5%
But if you want All Three... Wins in all market conditions Only for internal reference. Funds above 1,500 cr. AUM have been considered for this analysis. All performances are in absolute terms. Performance against peers during different market cycles Significant downside protection Good upside participation Intermediate downside protection Best performance in complete cycle Scheme Name 14-Jan-20 to 23-Mar-20 24-Mar-20 to 18-Oct-21 19-Oct-21 to 20-Dec-21 14-Jan-20 to 10-Jun-22 Overall Rank Edelweiss Balanced Advantage Fund -14.81 73.80 -5.10 13.90 1 Aditya Birla SL Balanced Advantage -26.10 79.14 -4.66 9.48 6 Axis Dynamic Equity Fund -15.52 50.88 -3.35 7.01 9 Baroda Dynamic Equity Fund -19.25 83.63 -4.37 13.12 2 DSP Dynamic Asset Allocation Fund -17.70 50.30 -2.55 6.28 13 ICICI Pru Balanced Advantage Fund -26.79 76.10 -2.77 10.71 4 IDFC Balanced Advantage Fund -23.84 69.71 -2.88 7.00 11 Kotak Balanced Advantage Fund -25.75 73.71 -2.85 9.02 8 L&T Balanced Advantage Fund -18.79 52.59 -3.55 7.00 10 Nippon India Balanced Advantage -21.17 65.79 -4.68 9.32 7 Sundaram Balanced Advantage -12.58 40.36 -2.90 6.58 12 Tata Balanced Adv Fund -19.68 68.53 -3.69 11.58 3 Union Balanced Advantage Fund -23.63 75.52 -2.70 10.54 5 NIFTY 50 - TRI -38.27 147.12 -9.93 13.26
But if you want All Three... Resulting in Better performance vs Peers Only for internal reference. Performance as on 10th Jun 2022. Funds above 1,500 cr. AUM have been considered for this analysis . Returns <1Y are in absolute terms and >1Y are in CAGR terms . Scheme Name 1Y Rank 2Y Rank 3Y Rank 5Y Rank Edelweiss Balanced Advantage Fund 2.62 3 17.76 2 12.41 2 10.02 1 Aditya Birla SL Balanced Advantage Fund 0.91 10 16.63 5 9.31 7 7.42 4 Axis Balanced Advantage Fund 2.51 4 12.22 9 6.83 12 Baroda Dynamic Equity Fund 1.74 7 17.40 3 12.41 1 DSP Dynamic Asset Allocation Fund -1.57 13 9.54 12 7.33 10 6.29 7 ICICI Pru Balanced Advantage Fund 6.01 1 18.80 1 10.77 3 9.50 2 IDFC Balanced Advantage Fund -1.12 12 11.28 10 7.51 9 7.29 5 Kotak Balanced Advantage Fund 2.00 6 14.92 7 9.45 6 L&T Balanced Advantage Fund 1.18 8 9.76 11 7.01 11 6.63 6 Nippon India Balanced Advantage Fund 2.14 5 17.12 4 8.57 8 7.79 3 Sundaram Balanced Advantage Fund 0.99 9 9.47 13 5.90 13 4.87 8 Tata Balanced Adv Fund 4.02 2 16.30 6 10.48 4 Union Balanced Advantage Fund 0.63 11 14.85 8 10.23 5 23
But if you want All Three... Lower Risk compared to Peers Only for internal reference. The above table indicates ranks based on risk ratios calculated on monthly rolling returns for trailing 3 years ending on 10th Jun 2022. Funds above 1,500 cr. AUM existing for 3 years have been considered for this analysis . Data Source – ACE MF Scheme Name Annualized SD (Volatility) Treynor* Sharpe** Jensen`s Alpha*** Sortino^ Down-Side Risk^^ Up Capture Ratio^^^ Down Capture Ratio# Ranks Edelweiss Balanced Advantage 5 1 1 1 1 3 2 5 Aditya Birla SL Balanced Advantage 12 7 7 7 6 10 4 11 Axis Balanced Advantage 1 12 12 11 11 2 10 4 Baroda Dynamic Equity 7 6 2 2 2 6 1 12 DSP Dynamic Asset Allocation 3 9 9 9 10 5 11 2 ICICI Pru Balanced Advantage 11 4 5 4 5 12 3 9 IDFC Balanced Advantage 10 11 11 12 12 11 9 10 Kotak Balanced Advantage 9 5 6 6 7 9 5 7 L&T Balanced Advantage 2 10 10 10 9 1 12 1 Nippon India Balanced Advantage 6 8 8 8 8 8 7 8 Tata Balanced Adv 4 2 3 3 3 4 8 3 Union Balanced Advantage 8 3 4 5 4 7 6 6 *Excess return per unit of risk taken; **Average returns earned above risk free rate; ***Excess returns over benchmark using CAPM ^Returns compared to downside deviation; ^^Risk of generating negative return; ^^^Participation during market rise – higher the better #Participation during market fall – lower the better
But if you want All Three... Performance and Volatility against other MF categories Only for internal reference. Performance as on 10th Jun 2022. Standard deviation calculated for each period based on monthly rolling returns. Source – ACE MF Returns 1 Year 2 Years 3 Years 5 Years 7 Years 10 Years Edelweiss BAF 2.62 17.76 12.41 10.02 8.96 11.17 Nifty 50 TR 4.27 28.12 12.15 12.28 11.75 13.72 Average Large cap Funds 1.20 24.41 10.56 9.28 9.88 13.16 Average Large & Midcap 3.01 29.69 13.74 10.07 11.52 15.26 Average Flexi cap Funds 1.38 26.95 12.51 10.11 10.99 14.30 Volatility (Annualised SD) 1 Year 2 Years 3 Years 5 Years 7 Years 10 Years Edelweiss BAF 9.08 9.66 11.57 10.26 9.85 9.56 Nifty 50 - TR 15.82 16.21 22.51 19.00 17.70 16.86 Average Large cap Funds 15.96 15.99 20.95 18.19 17.31 16.79 Average Large & Midcap 17.48 16.94 22.81 20.37 19.36 18.80 Average Flexi cap Funds 17.05 16.71 21.15 18.85 18.16 17.94 Comparable returns with much lower volatility. Apt for conservative investors 25
But if you want All Three... No negative returns on 3 years plus horizon Only for internal reference. Rolling performance since inception of the fund to 31st May 2022. Returns in CAGR. Rolling Return Minimum Maximum Average Returns 3 Year Rolling Return 2.21 18.51 10.33 5 Year Rolling Return 2.65 15.02 10.60 CAGR Return Range % of times - 3 Year Rolling Returns % of times - 5 year Rolling Return Less than 0 % 0% 0% 0% to 7% 22% 11% 7% to 15% 65% 89% Above 15% 14% 0% Total Observations 2,406 1,915 • The Fund has never given negative returns on 3 and 5 years horizon 26 79% of times – 3 years returns has been above 7% 89% of times 5 years returns has been above 7%
But if you want All Three... Performance vs Benchmark Only for internal reference. Performance as on 31st May 2022. Scheme Name Edelweiss Balanced Advantage Fund NIFTY 50 Hybrid Composite Debt 50:50 Index NIFTY 50 TRI Last 1 Year 4.99% 4.65% 7.90% Last 3 Years 12.73% 10.80% 13.03% Last 5 Years 10.66% 10.40% 12.97% Since Inception 10.17% 10.34% 12.17% 27
But if you want All Three... Rolling SIP Performance Analysis Only for internal reference. 3 Years SIP Returns Data as on Edelweiss Balanced Advantage Fund (XIRR %) NIFTY 50 – TR (XIRR %) May-22 13.48 18.06 Apr-22 15.89 20.77 Mar-22 17.11 15.11 Dec-21 20.32 25.13 Sep-21 22.70 29.00 Jun-21 19.76 22.62 Mar-21 17.51 19.53 Dec-20 12.31 14.83 Sep-20 8.78 6.02 Jun-20 4.36 -1.46 Mar-20 -2.85 -15.12 Dec-19 7.02 11.89 Sep-19 6.20 9.38 Jun-19 7.16 12.73 Mar-19 7.94 14.15 Dec-18 7.21 11.68 Sep-18 8.05 13.92 Jun-18 9.03 14.13 Consistently generated SIP returns 28
But if you want All Three... Portfolio Quality - Debt Only for internal reference. Portfolio as on 31st May 2022 Edelweiss BAF invests only in AAA rated bonds 29 Rating ABSL Balanced Advantage Fund Axis Dynamic Equity Fund Baroda BNP Paribas BAF DSP Dynamic Asset Allocation Fund Edelweiss Balanced Advantage Fund ICICI Pru Balanced Advantage Fund IDFC Balanced Advantage Fund Kotak Balanced Advantage Fund Nippon India Balanced Advantage Fund Tata Balanced Advantage Fund Union Balanced Advantage Fund A / A+ / A- 0.86 1.03 A1 / A1+ / A1- 3.16 1.65 5.26 1.50 0.73 3.38 1.51 0.96 AA / AA+ / AA- 5.48 1.42 4.02 4.88 5.13 2.08 AAA 10.36 3.19 13.05 12.35 4.26 1.49 5.46 0.39 7.66 15.05 6.81 Cash & Equivalent 6.56 28.43 11.01 2.75 12.34 3.61 6.23 8.29 6.14 1.40 14.42 D 0.13 0.00 Others 74.31 50.37 61.06 66.67 74.76 66.67 67.91 69.82 66.85 71.62 71.81 SOV 16.58 9.21 12.98 7.13 21.77 17.03 20.47 12.71 8.89 6.97
But if you want All Three... True-to-Label approach Only for internal reference. Portfolio as on 31st May 2022 Conservative Approach Multi cap Portfolio with Largecap bias Well Diversified 90 Stocks Low Sector biases with a conservative approach. Un-Biased Dynamic Asset Allocation Asset Allocation Strategy is based on model and intervention of Fund manager is mainly for stock selection High Quality Investment No allocation to bonds below ‘AAA’ Credit rating 30
But if you want All Three... Outlook 31 The ongoing crude and commodities shock in the wake of the Russia-Ukraine conflict has led to negative implications on global growth post covid. This has accentuated already highly volatile market led by hawkish commentary and inflation concerns. India is better placed to absorb the impact of oil price shock given sufficient buffers built through FX reserves and tax collection and strong DII flows have been able to withstand FII outflows. With economic activity is gaining momentum which is evident from pick up in pace of high frequency indicators we believe the recovery in capital market will be swift as geopolitical situation normalize. Therefore, a dynamic asset allocation fund will deliver better risk adjusted returns in such market scenario. Our core equity portfolio in EBAF continues to focus on companies which has shown high visibility of earnings and strong balance sheet. Consequently, we have OW stance on BFSI and Auto & auto ancillaries while being UW in Oil & Gas and power sector . We continue to remain conservative on debt portfolio and will actively seek ideas on open offer/buybacks/delisting/IPO listings to enhance our non-equity linked returns. As on 31st May 2022
But if you want All Three... What are the risks associated with the Fund? Only for internal reference. Performance Risk Liquidity Risk* Fund Manager Risk • Fund may have mixed performance during range bound markets. However, in the long history of markets there have been very few years where markets have not displayed any trends. • The Fund is suitable for long term investor with horizon of 5 years or a complete market cycle • The not is not suitable for Aggressive investors looking for pure Equity returns • The Fund predominantly invest in large market cap stocks which are mostly in liquid stocks and redemption requests does not face difficulty • While sizing individual bets in our portfolio, we pay close attention to this aspect. We believe it is important to balance performance with liquidity in the long-term interests of all our investors • The Fund follow a consistent 4 pillar investment process driven approach which includes Universe Selection, Stock Selection, Portfolio Construction & Risk Management • These processes are true to label and are religiously followed by our fund management team even if the members or the fund managers change over time *Liquidity is the ability of an investment manager to meet redemptions in an orderly manner without compromising interests of investors who are not redeeming 32

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Why Edelweiss BAF - June 2022 presentation

  • 1.
    WHY EDELWEISS BALANCED ADVANTAGEFUND? Creating wealth at every step up; Protecting at every step down 1 June 2022
  • 2.
    0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 Jan-2006 Aug-2006 Mar-2007 Oct-2007 May-2008 Dec-2008 Jul-2009 Feb-2010 Sep-2010 Apr-2011 Nov-2011 Jun-2012 Jan-2013 Aug-2013 Mar-2014 Oct-2014 May-2015 Dec-2015 Jul-2016 Feb-2017 Sep-2017 Apr-2018 Nov-2018 Jun-2019 Jan-2020 Aug-2020 Mar-2021 Oct-2021 May-2022 NIFTY 50 But ifyou want All Three... Market always proves us wrong Source: ACE Mf | Data as on 10th Jun 2022 | Only for internal reference. Market bounce back sharply right when we think it is a bear market Market falls sharply right when we think it is a strong bull run 2
  • 3.
    0 5000 10000 15000 20000 25000 30000 Jan-2012 Jun-2012 Nov-2012 Apr-2013 Sep-2013 Feb-2014 Jul-2014 Dec-2014 May-2015 Oct-2015 Mar-2016 Aug-2016 Jan-2017 Jun-2017 Nov-2017 Apr-2018 Sep-2018 Feb-2019 Jul-2019 Dec-2019 May-2020 Oct-2020 Mar-2021 Aug-2021 Jan-2022 Jun-2022 NIFTY 50 -TRI But if you want All Three... Ideal way is to obey market trends and go along with them, not against them Stay Invested and create wealth Stay away and protect wealth 3 Source: ACE Mf | Data as on 10th Jun 2022 | Only for internal reference.
  • 4.
    But if youwant All Three... Currently Uncertainly is even more prevailing Uncertainty around Earnings COVID Crisis and Lockdowns Valuations High or low Geopolitical Risk Economic Recovery time unknown Only for internal reference. 4
  • 5.
    But if youwant All Three... How to invest amidst this Volatility? Invest in a fund which adjusts itself according to market conditions Maintain Higher Equity Levels to create wealth if markets continue to rise Maintain lower Equity Levels to protect downside if markets fall Only for internal reference. You win whichever way market moves 5
  • 6.
    But if youwant All Three... …and Protect Downside Only for internal reference. If You Lose Gain required to breakeven 20% 25% 30% 43% 50% 100% 18% (43-25) % gain by protecting 10% downside Protecting downside is more important. Every % saved is % gain later 6
  • 7.
    But if youwant All Three... Presenting Edelweiss Balanced Advantage Fund Only for internal reference. Creating wealth at every step up Protecting wealth at every step down 7
  • 8.
    But if youwant All Three... Edelweiss Balanced Advantage Fund Only for internal reference. • Dynamic asset allocation fund which aims to generate low volatile equity linked returns • Invests in Equity & Fixed Income and varies allocation between these asset classes based on a predefined Asset Allocation Model. • Aims to capture the upside during the bull market and protect downside in bear markets based on PROCYCLICAL EEHI Model Equity Linked Returns High Liquidity Tax efficient returns Lower Volatility The Fund aims to fulfill following investor expectations 8
  • 9.
    But if youwant All Three... Investment Strategy Only for internal reference. EQUITY DEBT ARBITRAGE 30% to 80% Net Equity Multi-Cap Growth oriented Active Duration Management Focus on Accrual Hedging Capture Spreads Corporate Actions Dynamic Equity Allocation Net Equity exposure is equity exposure minus short derivative exposure. The scheme asset allocation allows to take derivative exposure up to 50% of the net assets. 9
  • 10.
    But if youwant All Three... Investment Strategy Only for internal reference. EQUITY FIXED INCOME Quality Quality Management High Free Cash Flow Consistency Growth Strong Earnings Growth Sector Growth Competitive Advantage Value Attractive Valuations Margin of Safety Objective Generate Accrual Income Provide Stability Exposure 0-35% Duration Active Duration Management 1 to 5 Year Range Credit Quality Relatively higher quality corporate bonds (AAA Only) 10
  • 11.
    But if youwant All Three... A Deep dive into EEHI Model Only for internal reference. Market Trend Trend Health Fundamentals 1 week, 2 weeks, 1 month & 3 month Daily Moving Average (DMA) of Nifty 50 Indicates bull or a bear market trend Market Volatility & Downside Deviation of Nifty 50 Indicates the strength and sustainability of current bull/bear market trend Market Valuations and Macro-economic factors Indicates the overall economy trend and its strength Equity Market Health Core Factors Overriding factors • EEHI (Edelweiss Equity Health Index) is a Pro-cyclical asset allocation model which is based on quantitative factors coupled with fundamentals. • It aims to have higher equity exposure during the bull market and lower in the bear market Following are the factors considered by EEHI 11
  • 12.
    But if youwant All Three... How Edelweiss BAF is different from Peers? Only for internal reference. • Unlike E-BAF most of the funds follow a Valuation based or Valuation + Trend based approach. • EBAF is the only Fund which follows a pure trend based asset allocation approach 12 Fund Name Asset Allocation Model Strategy Axis Dynamic Equity Fund PE Valuation + Trend + Volatility Aditya Birla SL Balanced Advantage Fund PE Valuation DSP Dynamic Asset Allocation Fund Valuation + trend HDFC Balanced Advantage Fund Static ICICI Pru Balanced Advantage Fund Price to Book Valuation Kotak Balanced Advantage Fund PE valuation + Trend L & T Balanced Advantage Fund PE/PB Valuation Nippon India Balanced Advantage Fund PE Valuation + Trend SBI Balanced Advantage Fund No model Tata Balanced Advantage Fund PE Valuation + Marco Indicators Edelweiss Balanced Advantage Fund Pure Trend Based
  • 13.
    But if youwant All Three... Edelweiss Procyclical Model Outperforms Only for internal reference. Data as on 31st Dec, 2021. Performance of the model and not the fund. In 14 out of 17 years, Procyclical Model has outperformed Countercyclical 13 Calendar year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Nifty 50 36.3% 39.8% 54.8% -51.8% 75.8% 17.9% -24.6% 27.7% 6.8% 31.4% -4.1% 3.0% 28.6% 3.2% 12.0% 14.9% 24.1% Procyclical 27.5% 34.9% 37.2% -21.3% 47.8% 12.4% -9.5% 17.3% 6.0% 20.1% -1.2% 2.7% 18.7% 4.0% 4.6% 17.0% 11.7% Counter Cyclical 20.4% 21.1% 20.5% -26.5% 48.6% 9.0% -13.8% 19.3% 5.6% 18.3% -1.5% 1.9% 14.6% 2.1% 6.7% 11.7% 10.5% Pro Cyclical Net Equity Level 68% 68% 69% 54% 65% 65% 54% 64% 60% 67% 57% 62% 71% 55% 61% 63% 59%
  • 14.
    EEHI Model –Net Equity Level vs Nifty 50 Data as on 31st May 2022 | Source: www.nseindia.com; Internal. Up Market Avg. Net Equity Level 66% Up Market Avg. Net Equity Level 66% Down Market Avg. Net Equity Level 51% Down Market Avg. Net Equity Level 52% Down Market Avg. Net Equity Level 46% Avg. Net Equity % Nifty 50 Levels Up Market Avg. Net Equity Level 70% 7,000 9,000 11,000 13,000 15,000 17,000 19,000 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Nifty 50 15 per. Mov. Avg. (Exposure for the next day) Down Market Avg. Net Equity Level 50% Avg. Net Equity % Avg. Net Equity %
  • 15.
    But if youwant All Three... Swift Equity Allocation Source: Internal. Data as on 31st May 2022 15 Swift change in equity levels during bear market cycles Low equity levels during weak markets High equity levels during healthy markets Nifty 50 Return Average Net Equity Min Net Equity Max Net Equity July-20 7.48% 73% 68% 80% Aug-20 2.84% 70% 63% 80% Sep-20 -1.20% 60% 50% 65% Oct-20 3.51% 66% 53% 70% Nov-20 11.39% 72% 53% 80% Dec-20 7.80% 72% 63% 80% Jan-21 -2.48% 65% 51% 70% Feb-21 6.56% 66% 51% 70% Mar-21 1.11% 60% 51% 65% Apr-21 -0.41% 52% 42% 61% May-21 6.50% 60% 55% 63% Jun-21 0.89% 59% 55% 63% Jul-21 0.26% 58% 55% 60% Aug-21 7.46% 63% 60% 63% Sep-21 4.01% 63% 62% 70% Oct-21 0.30% 62% 56% 70% Nov-21 -3.90% 55% 46% 61% Dec-21 2.18% 51% 45% 55% Jan-22 -0.08% 60% 48% 69% Feb-22 -3.15% 49% 35% 55% Mar-22 3.99% 50% 35% 63% Apr-22 -2.07% 58% 50% 65% May-22 -3.03% 45% 38% 55%
  • 16.
    But if youwant All Three... What is stock selection process? Only for internal reference. Universe Selection Stock Selection Portfolio Construction Risk Management • Business Quality • Management Quality Consistency Growth Arbitrage Value Arbitrage Bucketing based on Market cap Building pre-risk adjusted portfolio Benchmark Sensitive approach Diversified portfolio 4 Pillar - Investment Process 16
  • 17.
    But if youwant All Three... Portfolio Snapshot Only for internal reference. Data as on 31st May 2022 17 Top Stocks* (in %) Reliance Industries Ltd. 6.2% HDFC Bank Ltd. 5.7% ICICI Bank Ltd. 5.7% Infosys Ltd. 3.5% Axis Bank Ltd. 3.5% State Bank of India 2.7% HDFC Ltd. 1.7% Larsen & Toubro Ltd. 1.8% Tata Consultancy Services Ltd. 1.7% ITC Ltd. 1.6% Fixed Income Quantitative Indicators YTM 5.35% Modified Duration 1.03 Years Average Maturity 1.21 Years Equity Quantitative Indicators Net Equity 55.00% Top 10 (%) 34.1% Active Bet 31.76% Market Cap Allocation Large cap 83% Midcap 13% Small cap 4% Sector % Over wt. Sector % Under wt. BFSI 10.94% Power -0.10% Auto & Auto Ancillaries 2.34% Media & Entertainment 0.00% Metals & Mining 2.20% *Equity Portfolio Ex Arbitrage
  • 18.
    But if youwant All Three... Edelweiss Balanced Advantage Fund Aims to capture the upside during the bull market and protect downside in a bear market based on Unique Asset Allocation Model Captures bigger trends and limits drawdown Aims to maximize the benefits of trending markets, both upside and downside. Superior risk adjusted returns This approach smoothens the ride in a volatile equity market, Systematic process driven approach Discretionary decisions based on ‘gut feeling’ or news generally fail over a longer time period. Avoids timing of market reversal Timing the reversals looking at historical valuation ratios have typical drawback of having hindsight syndrome. What is unique about the Fund? Only for internal reference. 18
  • 19.
    But if youwant All Three... How the Fund has performed in different Cycles? High Equity Levels when market is rising = Upside Participation Low Equity Levels when market is falling = Downside participation Source: Ace MF | Data as on 31st May 2022 | Only for internal reference. 19 Jan 17 to Jan 18 Feb 18 to Mar 18 Apr 18 to Sep 18 Oct 18 to Oct 18 Nov 18 to Jun 19 Jul 19 to Sep 19 Oct 19 to Jan 20 Feb 20 to Mar 20 Apr 20 to Oct 21 Nov 21 to May 22 Nifty 50 Returns 35% -8% 8% -5% 14% -2.7% 5% -28% 57.49% -6.15% E-BAF Avg. Net Equity Level 70% 50% 59% 38% 62% 53% 65% 46% 64% 52% E-BAF Performance 26% -4% 3% -2% 7% 0.3% 5% -12% 35.55% -3.98%
  • 20.
    But if youwant All Three... Protected during every crisis Source: Ace MF | Only for internal reference | Data as on 31st May 2022 Not only in the last one year, Edelweiss BAF model has protected during all steep falls in market by swiftly reducing equity levels 20 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Nifty 50 Average for the Month IL&FS Crisis Post Union Budget Fall Covid 19 Changes in LTCG
  • 21.
    But if youwant All Three... Fund Performance in recent Market Cycles Only for internal reference. All funds in the category have been considered for this analysis. Performances are in absolute terms. Correction Phase 14th Jan 20 – 23rd Mar 20 Nifty 50 - TR -38% Edelweiss Balanced Advantage -15% Recovery Phase 24th March 20 – 18th Oct 21 Nifty 50 - TR 147% Edelweiss Balanced Advantage 74% Through the Cycle 14th Jan, 20 –10th Jun, 22 Nifty 50 - TR 13.26% Edelweiss Balanced Advantage 13.90% Year on Year Performance CY 2017 CY 2018 CY 2019 CY 2020 CY21 Edelweiss BAF Returns 23.9% 1.9% 7.8% 22.6% 18.76 Peer group Average returns 17.0% 1.6% 9.1% 15.1% 13.74 Ranking 3/9 6/12 12/13 2/13 3/21 Excess returns over peer group 6.9% 0.3% -1.3% 7.6% 5.02 21 Correction Phase 19th Oct 21 – 20th Dec 21 Nifty 50 - TR -10% Edelweiss Balanced Advantage -5%
  • 22.
    But if youwant All Three... Wins in all market conditions Only for internal reference. Funds above 1,500 cr. AUM have been considered for this analysis. All performances are in absolute terms. Performance against peers during different market cycles Significant downside protection Good upside participation Intermediate downside protection Best performance in complete cycle Scheme Name 14-Jan-20 to 23-Mar-20 24-Mar-20 to 18-Oct-21 19-Oct-21 to 20-Dec-21 14-Jan-20 to 10-Jun-22 Overall Rank Edelweiss Balanced Advantage Fund -14.81 73.80 -5.10 13.90 1 Aditya Birla SL Balanced Advantage -26.10 79.14 -4.66 9.48 6 Axis Dynamic Equity Fund -15.52 50.88 -3.35 7.01 9 Baroda Dynamic Equity Fund -19.25 83.63 -4.37 13.12 2 DSP Dynamic Asset Allocation Fund -17.70 50.30 -2.55 6.28 13 ICICI Pru Balanced Advantage Fund -26.79 76.10 -2.77 10.71 4 IDFC Balanced Advantage Fund -23.84 69.71 -2.88 7.00 11 Kotak Balanced Advantage Fund -25.75 73.71 -2.85 9.02 8 L&T Balanced Advantage Fund -18.79 52.59 -3.55 7.00 10 Nippon India Balanced Advantage -21.17 65.79 -4.68 9.32 7 Sundaram Balanced Advantage -12.58 40.36 -2.90 6.58 12 Tata Balanced Adv Fund -19.68 68.53 -3.69 11.58 3 Union Balanced Advantage Fund -23.63 75.52 -2.70 10.54 5 NIFTY 50 - TRI -38.27 147.12 -9.93 13.26
  • 23.
    But if youwant All Three... Resulting in Better performance vs Peers Only for internal reference. Performance as on 10th Jun 2022. Funds above 1,500 cr. AUM have been considered for this analysis . Returns <1Y are in absolute terms and >1Y are in CAGR terms . Scheme Name 1Y Rank 2Y Rank 3Y Rank 5Y Rank Edelweiss Balanced Advantage Fund 2.62 3 17.76 2 12.41 2 10.02 1 Aditya Birla SL Balanced Advantage Fund 0.91 10 16.63 5 9.31 7 7.42 4 Axis Balanced Advantage Fund 2.51 4 12.22 9 6.83 12 Baroda Dynamic Equity Fund 1.74 7 17.40 3 12.41 1 DSP Dynamic Asset Allocation Fund -1.57 13 9.54 12 7.33 10 6.29 7 ICICI Pru Balanced Advantage Fund 6.01 1 18.80 1 10.77 3 9.50 2 IDFC Balanced Advantage Fund -1.12 12 11.28 10 7.51 9 7.29 5 Kotak Balanced Advantage Fund 2.00 6 14.92 7 9.45 6 L&T Balanced Advantage Fund 1.18 8 9.76 11 7.01 11 6.63 6 Nippon India Balanced Advantage Fund 2.14 5 17.12 4 8.57 8 7.79 3 Sundaram Balanced Advantage Fund 0.99 9 9.47 13 5.90 13 4.87 8 Tata Balanced Adv Fund 4.02 2 16.30 6 10.48 4 Union Balanced Advantage Fund 0.63 11 14.85 8 10.23 5 23
  • 24.
    But if youwant All Three... Lower Risk compared to Peers Only for internal reference. The above table indicates ranks based on risk ratios calculated on monthly rolling returns for trailing 3 years ending on 10th Jun 2022. Funds above 1,500 cr. AUM existing for 3 years have been considered for this analysis . Data Source – ACE MF Scheme Name Annualized SD (Volatility) Treynor* Sharpe** Jensen`s Alpha*** Sortino^ Down-Side Risk^^ Up Capture Ratio^^^ Down Capture Ratio# Ranks Edelweiss Balanced Advantage 5 1 1 1 1 3 2 5 Aditya Birla SL Balanced Advantage 12 7 7 7 6 10 4 11 Axis Balanced Advantage 1 12 12 11 11 2 10 4 Baroda Dynamic Equity 7 6 2 2 2 6 1 12 DSP Dynamic Asset Allocation 3 9 9 9 10 5 11 2 ICICI Pru Balanced Advantage 11 4 5 4 5 12 3 9 IDFC Balanced Advantage 10 11 11 12 12 11 9 10 Kotak Balanced Advantage 9 5 6 6 7 9 5 7 L&T Balanced Advantage 2 10 10 10 9 1 12 1 Nippon India Balanced Advantage 6 8 8 8 8 8 7 8 Tata Balanced Adv 4 2 3 3 3 4 8 3 Union Balanced Advantage 8 3 4 5 4 7 6 6 *Excess return per unit of risk taken; **Average returns earned above risk free rate; ***Excess returns over benchmark using CAPM ^Returns compared to downside deviation; ^^Risk of generating negative return; ^^^Participation during market rise – higher the better #Participation during market fall – lower the better
  • 25.
    But if youwant All Three... Performance and Volatility against other MF categories Only for internal reference. Performance as on 10th Jun 2022. Standard deviation calculated for each period based on monthly rolling returns. Source – ACE MF Returns 1 Year 2 Years 3 Years 5 Years 7 Years 10 Years Edelweiss BAF 2.62 17.76 12.41 10.02 8.96 11.17 Nifty 50 TR 4.27 28.12 12.15 12.28 11.75 13.72 Average Large cap Funds 1.20 24.41 10.56 9.28 9.88 13.16 Average Large & Midcap 3.01 29.69 13.74 10.07 11.52 15.26 Average Flexi cap Funds 1.38 26.95 12.51 10.11 10.99 14.30 Volatility (Annualised SD) 1 Year 2 Years 3 Years 5 Years 7 Years 10 Years Edelweiss BAF 9.08 9.66 11.57 10.26 9.85 9.56 Nifty 50 - TR 15.82 16.21 22.51 19.00 17.70 16.86 Average Large cap Funds 15.96 15.99 20.95 18.19 17.31 16.79 Average Large & Midcap 17.48 16.94 22.81 20.37 19.36 18.80 Average Flexi cap Funds 17.05 16.71 21.15 18.85 18.16 17.94 Comparable returns with much lower volatility. Apt for conservative investors 25
  • 26.
    But if youwant All Three... No negative returns on 3 years plus horizon Only for internal reference. Rolling performance since inception of the fund to 31st May 2022. Returns in CAGR. Rolling Return Minimum Maximum Average Returns 3 Year Rolling Return 2.21 18.51 10.33 5 Year Rolling Return 2.65 15.02 10.60 CAGR Return Range % of times - 3 Year Rolling Returns % of times - 5 year Rolling Return Less than 0 % 0% 0% 0% to 7% 22% 11% 7% to 15% 65% 89% Above 15% 14% 0% Total Observations 2,406 1,915 • The Fund has never given negative returns on 3 and 5 years horizon 26 79% of times – 3 years returns has been above 7% 89% of times 5 years returns has been above 7%
  • 27.
    But if youwant All Three... Performance vs Benchmark Only for internal reference. Performance as on 31st May 2022. Scheme Name Edelweiss Balanced Advantage Fund NIFTY 50 Hybrid Composite Debt 50:50 Index NIFTY 50 TRI Last 1 Year 4.99% 4.65% 7.90% Last 3 Years 12.73% 10.80% 13.03% Last 5 Years 10.66% 10.40% 12.97% Since Inception 10.17% 10.34% 12.17% 27
  • 28.
    But if youwant All Three... Rolling SIP Performance Analysis Only for internal reference. 3 Years SIP Returns Data as on Edelweiss Balanced Advantage Fund (XIRR %) NIFTY 50 – TR (XIRR %) May-22 13.48 18.06 Apr-22 15.89 20.77 Mar-22 17.11 15.11 Dec-21 20.32 25.13 Sep-21 22.70 29.00 Jun-21 19.76 22.62 Mar-21 17.51 19.53 Dec-20 12.31 14.83 Sep-20 8.78 6.02 Jun-20 4.36 -1.46 Mar-20 -2.85 -15.12 Dec-19 7.02 11.89 Sep-19 6.20 9.38 Jun-19 7.16 12.73 Mar-19 7.94 14.15 Dec-18 7.21 11.68 Sep-18 8.05 13.92 Jun-18 9.03 14.13 Consistently generated SIP returns 28
  • 29.
    But if youwant All Three... Portfolio Quality - Debt Only for internal reference. Portfolio as on 31st May 2022 Edelweiss BAF invests only in AAA rated bonds 29 Rating ABSL Balanced Advantage Fund Axis Dynamic Equity Fund Baroda BNP Paribas BAF DSP Dynamic Asset Allocation Fund Edelweiss Balanced Advantage Fund ICICI Pru Balanced Advantage Fund IDFC Balanced Advantage Fund Kotak Balanced Advantage Fund Nippon India Balanced Advantage Fund Tata Balanced Advantage Fund Union Balanced Advantage Fund A / A+ / A- 0.86 1.03 A1 / A1+ / A1- 3.16 1.65 5.26 1.50 0.73 3.38 1.51 0.96 AA / AA+ / AA- 5.48 1.42 4.02 4.88 5.13 2.08 AAA 10.36 3.19 13.05 12.35 4.26 1.49 5.46 0.39 7.66 15.05 6.81 Cash & Equivalent 6.56 28.43 11.01 2.75 12.34 3.61 6.23 8.29 6.14 1.40 14.42 D 0.13 0.00 Others 74.31 50.37 61.06 66.67 74.76 66.67 67.91 69.82 66.85 71.62 71.81 SOV 16.58 9.21 12.98 7.13 21.77 17.03 20.47 12.71 8.89 6.97
  • 30.
    But if youwant All Three... True-to-Label approach Only for internal reference. Portfolio as on 31st May 2022 Conservative Approach Multi cap Portfolio with Largecap bias Well Diversified 90 Stocks Low Sector biases with a conservative approach. Un-Biased Dynamic Asset Allocation Asset Allocation Strategy is based on model and intervention of Fund manager is mainly for stock selection High Quality Investment No allocation to bonds below ‘AAA’ Credit rating 30
  • 31.
    But if youwant All Three... Outlook 31 The ongoing crude and commodities shock in the wake of the Russia-Ukraine conflict has led to negative implications on global growth post covid. This has accentuated already highly volatile market led by hawkish commentary and inflation concerns. India is better placed to absorb the impact of oil price shock given sufficient buffers built through FX reserves and tax collection and strong DII flows have been able to withstand FII outflows. With economic activity is gaining momentum which is evident from pick up in pace of high frequency indicators we believe the recovery in capital market will be swift as geopolitical situation normalize. Therefore, a dynamic asset allocation fund will deliver better risk adjusted returns in such market scenario. Our core equity portfolio in EBAF continues to focus on companies which has shown high visibility of earnings and strong balance sheet. Consequently, we have OW stance on BFSI and Auto & auto ancillaries while being UW in Oil & Gas and power sector . We continue to remain conservative on debt portfolio and will actively seek ideas on open offer/buybacks/delisting/IPO listings to enhance our non-equity linked returns. As on 31st May 2022
  • 32.
    But if youwant All Three... What are the risks associated with the Fund? Only for internal reference. Performance Risk Liquidity Risk* Fund Manager Risk • Fund may have mixed performance during range bound markets. However, in the long history of markets there have been very few years where markets have not displayed any trends. • The Fund is suitable for long term investor with horizon of 5 years or a complete market cycle • The not is not suitable for Aggressive investors looking for pure Equity returns • The Fund predominantly invest in large market cap stocks which are mostly in liquid stocks and redemption requests does not face difficulty • While sizing individual bets in our portfolio, we pay close attention to this aspect. We believe it is important to balance performance with liquidity in the long-term interests of all our investors • The Fund follow a consistent 4 pillar investment process driven approach which includes Universe Selection, Stock Selection, Portfolio Construction & Risk Management • These processes are true to label and are religiously followed by our fund management team even if the members or the fund managers change over time *Liquidity is the ability of an investment manager to meet redemptions in an orderly manner without compromising interests of investors who are not redeeming 32