HDFC Nifty 100 Low Volatility 30 ETF · NSE:HDFCLOWVOL
HDFC Nifty 100 Low Volatility 30 ETF — HDFC MNC Fund — Investor Presentation (March 2023)
31 slides from HDFC Nifty 100 Low Volatility 30 ETF's investor presentation, Mar 3, 2023
Slide 1: HDFC MNC Fund
1 F O p e r i o d: N 17- February March 03, 2023 HDFC MNC Fund & (An open ended equity scheme following multinational company (MNC) theme) None of the entities of which names have been used above or of which names bear resemblance to the names which have been used above are affiliated with HDFC Asset
Slide 2: Table of Contents
TableofofContents Table Contents Why Invest in MNCs? Risk-Return profile HDFC MNC Fund’s Portfolio Strategy Investible universe Risk-reward positioning & Investment Suitability Team background For disclaimer refer slide 30 02
Slide 3: Why invest in MNCs?
Why invest in MNCs? Good Corporate Strong Brand Identity Superior Technological Strong Financial Attractive returns Governance Capabilities Position Have a track record Strong brand identity Strong R&D resulting Strong growth Attractive return of good corporate across multiple in superior opportunit
Slide 4: MNCs are deep rooted and firmly placed in India
MNCs are deep rooted and firmly placed in India Due to unique combination of good corporate governance, trusted brands, focus on innovation and strong balance sheets, MNCs have longevity Number of countries Sr. Inception Indian Company Name Major Brands Industry In India since Global MNC Global HQ wi
Slide 5: Well-known brands with strong presence in everyday life
Well-known brands with strong presence in everyday life None of the entities of which trademarks have been used above are affiliated with HDFC Asset Management Company Limited., or any of its holding companies, subsidiaries or affiliates, and the inclusion of the entities on our Presentation does not
Slide 6: Unique Combination of trusted brands with focus on innovation
Unique Combination of trusted brands with focus on innovation 1 MNCs generally provide unique combination of innovation and brand creation. They have access to superior products and technology due to R&D focus of parent companies. This allows them to focus on brand creation R&D Exp to Net Sales % (A
Slide 7: Strong Growth with Higher Profitability
Strong Growth with Higher Profitability 1 Over the last 10 years, NIFTY MNC Index has delivered better top line 10 Year PAT Growth % CAGR growth vis-a-vis NIFTY 500; and with higher profitability 13% 12.5% 12% 11% 10.7% 10% 9% Sales Growth % 8% 40% 7% 35% 6% NIFTY MNC NIFTY 500 30% 25% 20% 10 Year PAT
Slide 8: Stronger Balance Sheets
Stronger Balance Sheets 1 Along with profitability, MNCs generally have greater focus on cash flows and balance sheets, thereby resulting in low leverage Debt to Equity (Ex Financials) NIFTY MNC NIFTY 500 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 - FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Sourc
Slide 9: Superior Capital Allocation
Superior Capital Allocation 1 MNCs tend to have a good track record of free cash flow generation and high dividend payout Free Cash Flow to EBIDT % (Ex Financials) Average Dividend Payout % 120% 60% 54% 100% NIFTY MNC NIFTY 500 50% NIFTY MNC NIFTY 500 80% 40% 60% 30% 24% 40% 20% 20% 10% 0% 0% FY13 FY
Slide 10: Higher Return Ratios
Higher Return Ratios 1 18% 17% NIFTY MNC NIFTY 500 16% 15% 14% Strong profitability and superior 12% 12% 12% capital allocation track record results in consistently higher 10% return ratios, thereby aiding 8% wealth creation 6% 4% 2% 0% Average ROCE % (Ex Financials) Average ROE % Source : Capitaline
Slide 11: MNC interest in India continues to grow
MNC interest in India continues to grow 1 Bosch to invest more than INR 1000 Cr. in automotive technolo localization of advan gies over the next fiv ced 3rd February 2022, P e years ress Release s i n A u r a n g a b a d p r o d u c t i o n f acility for bogie s t a t e - o f - t h e - a rt L i m i
Slide 12: Valuations remain at a premium
Valuations remain at a premium 1 Valuations are at a premium in terms of P/E but offer superior dividend yield Valuation vs Long Term Average NIFTY MNC Valuation Divergence P/E Bands - NIFTY MNC (No. of companies) 8 (1 Year Forward P/E) 7 7 6 6 6 5 5 5 12 Current P/E > 5 Year Average 4 17 Current P/
Slide 13: Superior wealth creation track record over longer time-frames
Superior wealth creation track record over longer time-frames 1 Diversification MNCs provide- NIFTY unique500combination and NIFTY MNCofIndex innovation andeach outperform brand creation. other They at different haveinaccess points to superior time, thereby products presenting and a strong case for d
Slide 14: Risk-Return Profile
Risk-Return Profile 1 For 10 year period (Dec’12 to Dec’22) and 15 year period (Dec’07 to Dec’22), NIFTY MNC Index has delivered relatively better returns at relatively lower volatility vs NIFTY 500 25% 23.0% NIFTY MNC Index NIFTY 500 19.6% 20% 17.1% 17.6% 14.6% 13.8% 15% 12.2% 10% 8.6% 5% 0% P2P Ret
Slide 15: Better resilience during bouts of volatility
Better resilience during bouts of volatility 1 NIFTY NIFTY Outperformance From Date To Date 500 TRI MNC TRI of NIFTY MNC Correction Correction TRI vs NIFTY 500 TRI Tech During periods of market Bubble Feb-00 Sep-01 -63% -32% +31% downswings, NIFTY MNC Index has managed to GFC Jan-08 Oct-08 -63% -52%
Slide 16: Better resilience during bouts of volatility
Better resilience during bouts of volatility 1 Average returns No. of Months with No. of Months with Average returns during months with positive NIFTY 500 Negative NIFTY 500 during months with positive NIFTY 500 returns * returns * negative NIFTY 500 returns (Absolute) returns (Absolute) NIFTY 500 T
Slide 17: Introducing HDFC MNC Fund
1 Introducing HDFC MNC Fund For disclaimer refer slide 30 17
Slide 18: Portfolio Strategy
Portfolio Strategy 1 Bottom-up approach to portfolio construction Core of portfolio would consist of MNCs, which will include Companies having foreign promoter shareholding >50% or Companies that form part of Nifty MNC index. Focused strategy of maximum 30 stocks as per current investment strategy F
Slide 19: Investible Universe (eligible MNCs breakup by market cap)
Investible Universe (eligible MNCs breakup by market cap) 1 MNC Eligible Number of NIFTY MNC MNC Eligible in MNCs Eligible outside NIFTY companies Index NIFTY 500 across universe 500 Large-Cap 10 10 0 10 Mid-Cap 19 27 0 27 Small-Cap 1 17 88 105 Total 30 54 88 142 Companies Total Market 22,60,419 26,
Slide 20: NIFTY MNC – Market Cap Composition over the years
NIFTY MNC – Market Cap Composition over the years 1 Number of 100 Large Cap Mid Cap Small Cap Total companies 90 80 70 Dec-19 13 16 1 30 60 50 40 Dec-20 11 18 1 30 30 20 10 Dec-21 10 19 1 30 0 Dec-19 Dec-20 Dec-21 Dec-22 Large Mid Small Dec-22 10 19 1 30 As of 30-Dec-22, Market Cap Composition on ye
Slide 21: Diversification across sectors – NIFTY MNC Index
Diversification across sectors –NIFTY MNC Index 1 NIFTY MNC (COUNT %) NIFTY MNC Index provides exposure to 7 sectors Materials 10% Consumer Staples Low overlap with broader index like NIFTY 500 provides Consumer Discretionary 23% 10% investors diversification benefit Communication Services 3% Informati
Slide 22: MNC Eligible companies in NIFTY 500 (54 Companies): Key Metrics
MNC Eligible companies in NIFTY 500 (54 Companies) : Key Metrics 1 Higher Top-line and Growth MNC Eligible from NIFTY 500 NIFTY 500 Bottom-line growth 10 Year Net Sales Growth % CAGR 11.1% 8.7% vs NIFTY 500 10 Year Operating Profit Growth % CAGR 12.7% 9.7% 10 Year PAT Growth % CAGR 11.7% 10.7% NIFTY
Slide 23: Risk Reward Positioning
Risk Reward Positioning 1 Sectoral: Other Eg. IT, Banking, Thematic: Thematic: Pharma Expected Return Smallcap Diversified Diversified Eg. Business Eg. Housing, Midcap Cycle, Infra Multicap MNC Large and Flexicap Midcap Large Cap Expected Risk In view of the individual circumstances and risk tolerance
Slide 24: Investment Suitability
Investment Suitability 1 This product is suitable for investors who are seeking to To generate long term capital appreciation / income via investment predominantly in equity or equity related instruments of Multi-National Companies (MNCs) Diversify the portfolio and invest in a portfolio having low
Slide 25: Large and Experienced Team with a rigorous investment process
Large and Experienced Team with a rigorous investment process 1 1 Fund Manager : Rahul Baijal, Senior Fund Manager, Equities 2 Experienced Team: 28 Investment professionals with average experience of 18 years 3 Robust risk management team 4 Wide and deep stock coverage ~ 400 stocks in the core list
Slide 26: Know Your Fund Manager
Know Your Fund Manager 1 Mr. Rahul Baijal Rahul has an experience spanning over 20 years in Equity Research and Fund Management. Senior Fund Manager Equities He joined HDFC Asset Management Company Limited in July’22. Prior to joining HDFC Asset Management Company Limited, Rahul spent 6 years with S
Slide 27: Fund Facts
Fund Facts 1 To provide long-term capital appreciation by investing predominantly in equity and equity related instruments of multinational Investment Objective companies (MNCs). There is no assurance that the investment objective of the Scheme will be realized. Fund Manager$ Mr. Rahul Baijal Propos
Slide 28: Asset Allocation
Asset Allocation 1 The scheme will invest predominantly in Multi National Companies (MNCs) across sectors and market cap segments Under normal circumstances, the asset allocation (% of Net Assets) of the Scheme's portfolio will be as follows: Minimum Allocation Maximum Allocation Type of Instruments
Slide 29: Product Labeling and Riskometer
Product Labeling and Riskometer 1 HDFC MNC Fund An Open-ended Equity Scheme following multinational company (MNC) theme This product is suitable for investors who are seeking*: Riskometer# • To generate long-term capital appreciation / income • Investment predominantly in equity & equity related ins
Slide 30: Disclaimer & Risk Factors
Disclaimer & Risk Factors 1 This presentation dated 9th February 2023 has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines
Slide 31: Thank You
Thank You