Uti Asset Management Co. Ltd. · NSE:UTIAMC
Uti Asset Management — Investor Presentation (March 2016)
30 slides from Uti Asset Management's investor presentation, March 2016
Slide 1: UTI Long Term Advantage Fund – Series III
UTI Long Term Advantage Fund – Series III (A 10 year Close-ended Equity Linked Savings Scheme) This product is suitable for investors who are seeking*: • Capital appreciation over a period of 10 years • Investment in equity and equity related instruments of companies along with income tax benefit un
Slide 2: Agenda
Agenda Equity Market – Key Questions Equity Market – What can we learn from the past ? UTI Long Term Advantage Fund - Series III – Your Wealth Acceleration Plan
Slide 3: Equity Markets – Key Questions
Equity Markets – Key Questions 1. Why have the markets corrected sharply? 2. How low can they go from here? 3. Is it the right time to invest? 3
Slide 4: In the short run, the market is like a voting machine
“In the short run, the market is like a voting machine tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine assessing the substance of a company.” - Benjamin Graham What matters in the long run is a company’s actual underlying business perform
Slide 5: Key Factors for Growth
Key Factors for Growth SHORT TERM LONG TERM* INFLATION FUND FLOW INTEREST RATE SENTIMENT CREDIT GROWTH RISK ON – RISK OFF VALUATION CORPORATE PROFIT 5 * Equity Report Card from UTI MF
Slide 6: FIIs are significant owners of Indian companies
FIIs are significant owners of Indian companies FIIs holdings have risen in the last ten years and are at a record- high level. Change in FII holdings in S&P BSE 500 companies All Values in % 60 60 57 60 55 51 50 50 50 40 40 40 Percentage 30 30 30 23 20 20 18 20 16 13 10 11 10 10 10 8 10 8 6 5 5 2 2
Slide 7: Fund Flows: FII & Equity MF Inflows trend
Fund Flows : FII & Equity MF Inflows trend Net Equity MF Inflows in last 19 months ($ 22bn) is almost equal to prior 10 years combined inflows ($22bn) FII Inflow Equity MF Inflow 29.3 30 24.5 25 19.8 20 18.5 17.6 16.2 15 14.13 Bn USD 10 8.3 8.3 7.8 8.02 6.4 5 3.3 1.6 0.3 0 -0.5 -1.8 -5 -3.1 -2.9 -10
Slide 8: Global Backdrop
Global Backdrop FIIs have started pulling money out of EMs including India – Strong USD, on an eventual higher interest rate pathway in the US – Fears of a China slow-down and devaluation in the RMB – Sell-off in commodities and crude; sovereign funds cashing out – Geo-political tensions in the Mi
Slide 9: Equity Markets Report Card
Equity Markets Report Card Inflation witnessing a continuous decline Falling inflation ― Boosts consumption as fear of erosion in purchasing power recedes ― Facilitates a low interest rate regime Timeline Low interest rate Lower interest rates to spur growth – Spurs investment activity and p
Slide 10: Equity Markets Report Card (Contd.)
Equity Markets Report Card (Contd.) Overall credit growth remains resilient Excessive credit growth fuels a bubble in equity markets ― This is not a worry at present Timeline Corporate Profit: Expect earnings acceleration Earnings growth expected to accelerate around 4QTR FY16 after several
Slide 11: Equity Markets Report Card (Contd.)
Equity Markets Report Card (Contd.) Valuations are fairly attractive The recent price correction and expected earning growth valuation look attractive Timeline Market Cap to GDP Market cap to GDP near long term average: potential to grow Timeline Source: Bloomberg, PE: Price to Earnings Ratio,
Slide 12: Conclusion
Conclusion FII flows will determine the direction of the markets in the near term India well placed amongst EMs with strong fundamentals Recent correction makes valuations more attractive Provides a window of opportunity to enter the markets 12
Slide 13: Agenda
Agenda Equity Market – Key Questions Equity Market – What can we learn from the past ? UTI Long Term Advantage Fund - Series III – Your Wealth Acceleration Plan
Slide 14: Fact # 1: Equities work best in the long term!
Fact # 1: Equities work best in the long term! Probability of generating returns in different buckets over different time periods 1 Year 3 Years 13% For investment 28% horizon of 3 Years and above, average 39% 43% 29% market returns are 14% attractive (15%+ 19% 15% CAGR) 5 Years 10 Years 9% 2% L
Slide 15: Fact # 2: Returns depend on earnings growth & PE levels
Fact # 2: Returns in equities markets depends on (a) Earnings growth & (b) PE levels Historical Return Grid with 5-yr Earnings CAGR and 3-yr investment horizon for S&P BSE Sensex 5-yr EPS Earnings Range (CAGR) Range 30% to 20% 20% to 15% 15% to 7% 7% to 0% 0% to -5% 7 – 13 4% 12% 8% 42% 43% 13 – 16
Slide 16: Fact # 3: Active Fund Management adds value to your portfolio
Fact # 3: Active Fund Management Adds value to your portfolio Actively managed Equity Funds have beaten S&P BSE 100 Index Diversified Equity S&P BSE 100 Funds Alpha Index % of Funds Period (Median Return) (CAGR) No. of Funds (CAGR) Outperforming Index (CAGR) (a-b) (b) (a) 1 Year 0.47 -3.25 3.72 88%
Slide 17: Summing up
Summing up Equities work best in the long term! Returns in equities markets depends on earnings growth & entry PE levels Earnings growth is low (6.9% - 5yr) & PE is in mid-range (16x to 19x) Actively managed funds add value to your portfolio “The key to equity investment is PATIENCE, PATIENC
Slide 18: Agenda
Agenda Equity Market – Key Questions Equity Market – What can we learn from the past ? UTI Long Term Advantage Fund - Series III – Your Wealth Acceleration Plan
Slide 19: Presenting UTI Long Term Advantage Fund - Series III
Presenting UTI Long Term Advantage Fund - Series III Your Wealth Acceleration Plan
Slide 20: Fund Snapshot
UTI Long Term Advantage Fund - Series III Fund Snapshot A 10 year Close-ended Equity Linked Savings Scheme Type of scheme However investors can exercise redemption / Switchover on every business day at NAV based prices after the Lock-in-Period of 3 years from the date of allotment The investment obj
Slide 21: Investment Strategy
UTI Long Term Advantage Fund - Series III Investment Strategy Macro Criteria Micro Criteria Management Competence Companies in a transitional phase of weak earnings but where Business Fundamentals operational history is reasonable Growth Prospects Companies with Strong & Industry Scenario Sustainabl
Slide 22: Product Framework
UTI Long Term Advantage Fund - Series III Product Framework NFO Closes on Tuesday, March 22, 2016 Lock-in Period Lock-in-Period of 3 years from the date of allotment The Scheme will offer redemption / Switchover on every business day at NAV Liquidity based prices after the Lock-in-Period of 3 years
Slide 23: Few stock ideas for portfolio construction
Few stock ideas for portfolio construction… The above has been prepared based on discussion and views on the fund manager and is meant purely for information sharing. The above is to illustrate the concept of identifying stocks in the market. There is also a possibility of the expected event not hap
Slide 24: Large Private Bank with robust retail network
Large Private Bank with robust retail network Price Movement rebased to `100 (%) (%) 14.5% 50.0% 115 Price rebased to `100 14.0% 45.0% 40.0% 13.5% 105 35.0% 13.0% Stock Price in ` 30.0% 95 12.5% 25.0% 12.0% 20.0% 85 15.0% 11.5% 10.0% 75 11.0% 5.0% 10.5% 0.0% 65 FY2008 FY2010 FY2012 FY2014 Jan-15 Mar
Slide 25: Large size IT services company
Large size IT services company Price Movement rebased to `100 (%) 30.0 25.0% 115 Price rebased to `100 25.0 20.0 20.0% 105 15.0 15.0% 10.0 Stock Price in ` 118.9 17.7 18.2 95 5.0 6.8 9.7 10.0% - 85 (5.0) 5.0% (10.0) 75 (15.0) 0.0% FY2012 FY2013 FY2014 FY2015 9MFY16* Timeline 65 Total RG Organic RG J
Slide 26: Cost-efficient midcap cement player
Cost-efficient midcap cement player Price Movement rebased to `100 Volume Realization Adj. Profit 110 (lakh tons) (`/ton) (`) 140 121 115 Values have been scaled to `100 JK Lakshmi Price Cement Movement rebased to `100 105 120 105 108 100 101 100 89 100 Stock Price in ` 80 94 88 86 89 95 82 60 63 90
Slide 27: Reputed Capital Goods player
Reputed Capital Goods player Price Movement rebased to `100 (%) EBITDA Trend 125 16.0% Price Movement rebased to `100 Thermax 120 14.0% 115 12.0% 110 Stock Price in ` 10.0% 105 100 8.0% 95 6.0% 90 4.0% 85 2.0% 80 75 0.0% Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 FY03 FY05 FY07 FY09 FY11 FY13 FY15 Ti
Slide 28: Why Invest in this Fund?
UTI Long Term Advantage Fund - Series III Why Invest in this Fund? Horizon Longer investment horizon raises probability of higher returns Lower PE Current Valuations offer opportune entry point after the ~20% correction Earnings Low earnings base to drive double-digit earnings growth Recover
Slide 29: Glossary
Glossary Hldg. Holding US United States ADR/GDR American Depository Reciepts/Global Depository Reciepts IT Information Technology CPI Consumer Price Index AUM Assets under management WPI Wholesale Price Index FII Foreign Institutional Investor BoP Balance of Payments DII Direct Institutional Investo
Slide 30: Thank You
Thank You REGISTERED OFFICE: UTI Tower, „Gn‟ Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051. Phone: 022 – 66786666. UTI Asset Management Company Ltd (Investment Manager for UTI Mutual Fund) Email: invest@uti.co.in . (CIN- U65991MH2002GOI137867). For more information, please contact the nea
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