N Cash Presentation


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N Cash Presentation

  1. 1. nCASH
  2. 2. Greed, Fear and Fair Value • Markets keep gyrating between greed and fear • Real value lies somewhere in between • Markets keep passing through real-value line quite effortlessly • Both Greed and Fear cause paralysis • When Fair Value band arrives – There is little money left • Behavioral science suggests, people normally act in herds
  3. 3. So, What Do We Do ? • Grab the bargains • Ascertain the right value-line with a higher degree of accuracy, with our capabilities • Deep-dive to grab opportunities that keep arising from time to time • Be disciplined to nCASH the gains and move back to liquid funds for the next opportunity
  4. 4. nCASH The Right Opportunity
  5. 5. nCASH • nCASH is a product that will make Contrary Allocations to Stocks Hammered due to market cycles. • The idea behind this allocation strategy is that investments in quality businesses can be made at attractive valuations by capitalising on opportunities to acquire mis-priced assets at distress valuations. • Sooner than later, beaten down stocks normally tend to revert to their fair values also referred to as „reversion to mean‟
  6. 6. Portfolio Strategy Focus on companies with: • Top 100 companies in terms of market capitalization • Strong and Robust businesses run by quality and superior managements • Adequate track record and available at reasonable valuations • Sudden / Sharp fall in price due to occurrence of an event
  7. 7. Portfolio Strategy The endeavor would be to identify and nCASH on Sudden / Sharp fall in price due to occurrence of events like • Disappointing results • Policy changes by Government • Sharp currency movements • Spike in commodity prices • Rise/Fall in interest rates • Global developments • Other events
  8. 8. Illustration CASE 1 : Ranbaxy 500 Buy Sell 450 400 350 300 250 200 2-Oct-09 4-Oct-09 6-Oct-09 3-Aug-09 5-Aug-09 7-Aug-09 9-Aug-09 2-Sep-09 4-Sep-09 6-Sep-09 8-Sep-09 25-Aug-09 27-Aug-09 22-Sep-09 24-Sep-09 11-Aug-09 13-Aug-09 15-Aug-09 17-Aug-09 19-Aug-09 21-Aug-09 23-Aug-09 29-Aug-09 31-Aug-09 10-Sep-09 12-Sep-09 14-Sep-09 16-Sep-09 18-Sep-09 20-Sep-09 26-Sep-09 28-Sep-09 30-Sep-09 Investment Made Reason to Enter or Exit First Purchase 2% of NAV at 325 Change in top head expected to drive growth story; worst in terms of earnings already in price; announcements expected regarding ANDA's Second Purchase 1% of NAV at 335 approval Exited 0.50% of NAV at 377 Sold at a profit of 16% Exited 1% of NAV at 407 Sold at a profit of 25% Exited 1.50% of NAV at 413 Sold at a profit of 24% There is no assurance or guarantee that past performance may be sustained in future. Investments in capital markets are subject to risks. Please refer Slide No. 25 for disclaimer. The above graph represents the values for the year 2009
  9. 9. Illustration CASE 2 : Sesa Goa 320 Buy Sell 270 220 170 120 70 20 19-Aug-09 31-Aug-09 12-Sep-09 24-Sep-09 11-Aug-09 13-Aug-09 15-Aug-09 17-Aug-09 21-Aug-09 23-Aug-09 25-Aug-09 27-Aug-09 29-Aug-09 10-Sep-09 14-Sep-09 16-Sep-09 18-Sep-09 20-Sep-09 22-Sep-09 26-Sep-09 28-Sep-09 30-Sep-09 7-Aug-09 3-Aug-09 5-Aug-09 9-Aug-09 2-Sep-09 4-Sep-09 6-Sep-09 8-Sep-09 6-Oct-09 2-Oct-09 4-Oct-09 Investment Made Reason to Enter or Exit First Purchase 4% of NAV at 225 Concensus expected Iron ore prices expected to fall instead went up given strong china story; Contrarian call against market consensus of sell Second Purchase 1% of NAV at 219 call; expected some acquisition and strong numbers Exited 2% of NAV at 267 Sold at a profit of 19% Exited 2% of NAV at 263 Sold at a profit of 17% Exited 1% of NAV at 267 Sold at a profit of 22% There is no assurance or guarantee that past performance may be sustained in future. Investments in capital markets are subject to risks. Please refer Slide No. 25 for disclaimer. The above graph represents the values for the year 2009
  10. 10. Superior Performance 80.00% 70.71% 70.00% 50.00% Since Inception 42.04% 42.95% 60.00% 40.00% 48.46% 50.00% 42.04% 30.00% 40.00% 24.66% 30.00% 20.00% 18.48% 20.00% 11.42% 10.00% 9.05% 5.42% 10.00% 5.21% 5.42% 0.00% 0.00% 1 month 3 month 6 month Since Inception CAGR Standard Deviation Returns nCASH Nifty nCASH Performance as compared to benchmark performance i.e. Nifty (as on 30 Sep, 2009) Past Performance may or may not be sustained in future. The returns are absolute for the periods mentioned less than 1 year and in CAGR for period Inception Date: June 2, 2008 more than 1 year.
  11. 11. NAV Movement nCASH Performance to Benchmark 16 NAV Per Unit Rebased Nifty 14 12 10 8 6 4 02-Jul-08 02-Jul-09 02-Apr-09 02-Oct-08 02-Nov-08 02-Dec-08 02-Aug-08 02-Sep-08 02-Aug-09 02-Sep-09 02-Jun-08 02-Jan-09 02-Jun-09 02-May-09 02-Feb-09 02-Mar-09 There is no assurance or guarantee that past performance may be sustained in future. The above graph represents the values for the year 2008 & 2009
  12. 12. Opportunities Exist In a rising market, we saw 5 major corrections. Source: www.nseindia.com
  13. 13. Need for Speed • Market dynamics are rapid and changes are quick. • Stock and Sector rotation is the order of the day, given the global scenario. • Volatility could be opportunity. • Greed and fear swings are more protracted. • All markets scenarios give opportunities.
  14. 14. Product Features & Pricing Structure Rs. 25,00,000/- per Individual account or as mutually agreed between Minimum Account Size the Portfolio Manager and the Client. 1% for clients subscribing after Nov 1, 2007 & withdrawing the same Redemption Charge within 1 year from date of investment on FIFO basis. Investors are recommended to seek advice on taxation from their Taxation independent financial advisors / tax consultant / accountant before making any investments. Option I - Upfront Fees : 2.25 % Fixed Fee Annualised Fees : 2 % Basic Fixed : 2% Investment Portfolio Performance Portfolio Manager's Share Management & (Annualised Returns) Option II - Upto 15% NIL Advisory Fixed Plus 20% of the excess Fees Above 15% upto 30% Variable Fees over 15% 25% of the excess Beyond 30% over 15% For further details please refer Disclosure Document dated March 31, 2009 & subsequent addendum if any to the Disclosure Document
  15. 15. Privileged Account Service A Discretionary Portfolio Management Service, created for very elite, very discerning clients LIKE YOU
  16. 16. Privileged Account Service (PAS) • PAS is a highly customized portfolio management service from Birla Sun Life Asset Management Company Ltd. that helps HNIs like you fulfill their financial goals • With an investment philosophy that seeks consistent, long-term results by adopting a research-based, methodical approach to investing • After fully understanding your particular needs, your portfolio manager will put together the optimal portfolio for you, which takes into account your financial goals, time horizon, risk appetite and investment outlook • Investment excellence within the framework of transparent and rigorous risk control
  17. 17. The power behind PAS : Birla Sun Life Asset Management Company Ltd. Birla Sun Life Asset Management Company Ltd. One of the Winner of top 5 MF various Houses in awards in India „08 More than a Investor base 100 branches of more than Assets under across India 22 Lakh (as on Management and 700 plus 30 Sep 09) in excess of people Rs. 63,000 Cr (as on 30 Sep 09) Past Performance is no guarantee of future results. Mutual Fund investments are subject to market risks. Please read the Statement of Additional Information / Scheme Information Document carefully before investing.
  18. 18. Why PAS • An institutional quality investment management • Long-term track record • No conflict of interest - neither into broking nor investment banking • Emphasis on proprietary research • Adherence to portfolio universe and disciplined investment process • Emphasis on risk management • Strict internal and external compliances • Outstanding responsiveness and comprehensive communication with client
  19. 19. How it Works • Investment Strategy • Investment Philosophy • Strong research process
  20. 20. Investment Strategy Top-down Strategies Duration Sector Yield Curve Quantitative Credit Analysis Trading Research Bottom – Up Strategies
  21. 21. Investment Philosophy Robust Industry Dynamics Strong Management Reasonable Valuations Stock Sustainable Business Model Sustainable Strong Competitive Earnings Advantage Growth The goal is to find an outstanding business at a sensible price, not an mediocre business at a bargain price
  22. 22. Strong Research Process Industry Analysis Business Analysis Management Analysis • Demand & supply scenarios • Strategies for growth •Promoter‟s performance & track • Raw material scenario • Productivity analysis record • Industry cycles & seasonal • Working capital management •Performance of group companies factors • Capital expenditure plans •Internal control systems • Impact of export / imports • Competitive positioning •Capabilities under stress • Competitive advantage Financial Analysis Other Issues • Analysis of key financial docs & Regulatory Environment • Repayment track record accounting policies • Impact of govt. policies • Feedback from other creditors & • Cashflow analysis • Impact of changes in tax & duty rating agencies • Sensitivity analysis structures • Contingent liabilities of the • CAR, ALM profile, ageing • Import / export benefits company analysis • Market share analysis • Payback period analysis
  23. 23. Tailored solutions for unique needs Products Equity Debt Custom NLD • Value We provide customized Dynamic Fixed • High Dividend Yield portfolio for investment Accelerator Series Income Portfolio • nCASH above 2.5 Cr. • Growth • India Reform Portfolio
  24. 24. Team of Professionals at your service Jinesh Gopani – Fund Manager (Equity) • An MBA in Finance , he was, for last two and half years, working in USA based FII Voyager Investments as a Senior Research Analyst. • Earlier, he worked with Emkay share and stockbrokers for four years, where he was designated as Research Analyst Apurvi Sharma – Fund Manager (Debt) • A CFA & CA, prior to joining Birla Sun Life she was associated with BenchMark Mutual Fund as AVP • She has a total work experience of 9 years
  25. 25. Risk Factors & Disclaimer Investments in securities are subject to market risks & there can be no assurance or guarantee that the objectives of the product will be achieved. The past performance of the Portfolio Manager in any product is not indicative of the future performance in the same product or in any other product either existing or that may be offered. There is no assurance that past performances in earlier product will be repeated. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. Risk arising from the investment objective, investment strategy and asset allocation: Market risk, political and geopolitical risk and risk arising from changing business dynamics, which may affect portfolio returns. At times, portfolios of individual clients may be concentrated in certain companies/industries. The performance of the portfolios would depend on the performance of such companies / industries / sectors of the economy. While utmost care has been exercised, Birla Sun Life AMC Ltd. or any of its officers, employees, personnel, directors make no representation as to the accuracy, completeness or reliability of the content and hereby disclaim any liability with regard to the same. Recipients of this material should exercise due care and read the disclosure document (including if necessary, obtaining the advice of tax / legal / accounting / financial / other professionals) prior to taking of any decision, acting or omitting to act. The document is solely for the information and understanding of intended recipients only. Further, the recipient shall not copy / circulate contents of this presentation, in part or in whole, or in any other manner whatsoever without prior and explicit approval of BSLAMC. Risks associated with investment in Equity and equity related instruments: Equity and Equity related securities by nature are volatile and prone to price fluctuations on a daily basis due to both macro and micro factors. In respect of investments in equity and equity-related instruments, there may be risks associated with trading volumes, settlement periods and transfer procedures that may restrict liquidity of investments in equity and equity-related securities. In the event of inordinately large number of redemptions or of a restructuring of the Product's investment portfolio, there may be delays in the redemption of units. The value of the Product's investments, may be affected generally by factors affecting securities markets, such as price and volume volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government, taxation laws or policies of any appropriate authority and other political and economic developments and closure of stock exchanges which may have an adverse bearing on individual securities, a specific sector or all sectors including equity and debt markets. Consequently, the value of the portfolio may fluctuate and can go up or down. The Portfolio Manager may choose to invest in unlisted securities that offer attractive yields. Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger amount of liquidity risk, in comparison to securities that are listed on the exchanges or offer other exit options to the investor, including a put option. This may however increase the risk of the portfolio. Investors may note that Portfolio Manager's investment decisions may not always be profitable, as actual market movements may be at variance with anticipated trends. Risk Associated with Investments in Fixed Income and Money Market Instruments: Some of the common risks associated with investments in fixed income and money market securities are mentioned below. These risks include but are not restricted to: Interest Rate Risk: As with all debt securities, changes in interest rates will affect the valuation of the Portfolios, as the prices of securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices of longer-term securities generally fluctuate more in response to interest rate changes than do shorter-term securities. Interest rate movements in the Indian debt markets can be volatile leading to the possibility of large price movements up or down in debt and money market securities and thereby to possibly large movements in the valuation of Portfolios Liquidity or Marketability Risk: This refers to the ease at which a security can be sold at or near its true value. The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Liquidity risk is characteristic of the Indian fixed income market. Credit Risk: Credit risk or default risk refers to the risk, which may arise due to default on the part of the issuer of the fixed income security (i.e. risk that the issuer will be unable to make timely principal and interest payments on the security). Because of this risk debentures are sold at a yield spread above those offered on Treasury securities, which are sovereign obligations and generally considered to be free of credit risk. Normally, the value of a fixed income security will fluctuate depending upon the actual changes in the perceived level of credit risk as well as the actual event of default. Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities under a particular Portfolio are reinvested. The additional income from reinvestment is the “interest on interest” component. The risk refers to the fall in the rate for reinvestment of interim cashflows.
  26. 26. Thank You