Hdfc Asset Management Co. Ltd. · NSE:HDFCAMC
Hdfc Asset Management — Investor Presentation (January 2024)
22 slides from Hdfc Asset Management's investor presentation, Jan 12, 2024
Slide 1: It's time to recognise the potential of Bharat's PSU banks
rusted IT’S TIME TO RECOGNISE THE POTENTIAL OF BHARAT’S PSU BANKS! NFO Dates: HDFC NIFTY PSU Bank ETF 12th January 2024 to 23rd January 2024 January 2024 HDFC Asset Management Company Limited has been managing equity Index Solutions for over 20 years. For disclaimer refer slide 21
Slide 2: Why invest in NIFTY PSU Bank Index?
Why invest in NIFTY PSU Bank Index? Banks are vital for economic growth, providing loans for capex, working capital, purchasing homes, autos etc. PSU Banks have made several sustainable improvements relative to the previous cycle including strengthening their balance sheet and changing their lending
Slide 3: Balance Sheet Improvements (1): Capital adequacy at a decade high
Balance Sheet Improvements (1) Capital adequacy for PSU banks is at a decade high Capital Adequacy Ratio (CRAR) for PSU banks, March fiscal year-ends (%) 20 16 14.7 15.5 13.5 13.3 13.1 13.2 14.0 12.4 12.1 12.2 12.9 11.4 11.4 11.8 11.7 12 8 4 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 4: Balance Sheet Improvements (2): Steep decline in bad loans and slippages
Balance Sheet Improvements (2) Steep decline in bad loans and slippages GNPA Ratio for PSU Banks (%) GNPA ratios declining steadily 20.0 The Gross Non-performing Assets (GNPA) Ratio^ is a 16.0 measure of asset quality – a lower GNPA is preferable 12.0 After peaking in FY18, GNPA ratios have been ste
Slide 5: Balance Sheet Improvements (3): Provision Coverage Ratio & Return on Assets
Balance Sheet Improvements (3) Provision Coverage Ratio & Return on Assets approaching a decade high Provision Cover Ratio for PSU Banks (%) Provision Coverage Ratio at a decade high 80 Provision Coverage Ratio (PCR) is the ratio of provisions to gross Non-Performing Assets (NPAs) – it indicates 64
Slide 6: Improved Lending Patterns
Improved Lending Patterns Loan book has diversified away from corporates towards housing & other retail Loan break-up for PSU Bank 1 (%) Loan break-up of PSU Bank 1 Housing Other retail Agriculture SME Corporate International 100 The loan break-up of Leading PSU bank 1 has seen the 80 14 16 16 18 18
Slide 7: Well positioned for Higher-for-Longer interest rate scenario
Well positioned for Higher-for-Longer interest rate scenario due to low Cost-of-Funds CASA Ratio for PSU Banks (%) Savings Current CASA Ratio remains near decade high… 50 For PSU Banks the CASA ratio, ie. ratio of Current 40 Account and Savings Account deposits as a % of Total 30 Deposits, is close
Slide 8: PSU banks are embracing the Digital Revolution
PSU banks are embracing the Digital Revolution Highlights of PSU Bank 1 DIGITAL LOANS DIGITAL LOANS SANCTIONED BY VALUE SANCTIONED BY NUMBER No. OF NEW DIGITAL SAVINGS ACCOUNTS OPENED PER DAY 21,560 Crore 11.63 Lakh ~23,000 in FY2022 24,314 Crore in FY2022 13.39 Lakh in FY2023 in FY2023 Highlights o
Slide 9: Why to invest now? Valuations lagging improvement in Fundamentals
Why to invest now? NIFTY PSU Bank Valuations lagging improvement in Fundamentals 1-year forward Price to Book ratio for PSU banks (adjusted book) 2.5 1y forward Price to Book ratio Long term average 2.0 1.5 1.0 0.5 - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 10: Snapshot of NIFTY PSU Bank Index
Snapshot of NIFTY PSU Bank Index Captures the performance of the PSU banks. Currently has 12 constituents Stocks capped at 33% each, top 3 stocks capped at 62% in aggregate Index is re-balanced on a semi-annual basis in March and September Constituent Weightages (%) Key Index Stats NIFTY PSU Bank 1.
Slide 11: Advantages of ETFs to get Sector Exposure
Advantages of ETFs to get Sector Exposure A single ETF gives the investor sector exposure to multiple PSU banking stocks – no need for individual stock selection Advantage of the ETF is: Less impact of company-specific risk Capture performance of the sector with lower volatility than its underlying c
Slide 12: Performance since inception
NIFTY PSU Bank TRI, NIFTY Bank TRI, NIFTY 500 TRI and NIFTY 50 TRI – Performance since inception CAGR* as on Dec 29, 2023 25000 Return Nifty PSU Bank TRI (10.7% CAGR*) Periods NIFTY PSU NIFTY NIFTY NIFTY 50 20000 Nifty Bank TRI (16.8% CAGR*) Bank TRI Bank TRI 500 TRI TRI Nifty 500 TRI (14.9% CAGR*)
Slide 13: FY Performance
NIFTY PSU Bank TRI, NIFTY Bank TRI, NIFTY 500 TRI and NIFTY 50 TRI – FY Performance FY NIFTY PSU Bank TRI NIFTY Bank TRI NIFTY 500 TRI NIFTY 50 TRI FY04 14.3% 6.0% -6.4% -7.2% FY05 26.6% 28.8% 24.7% 17.3% FY06 21.9% 33.9% 67.3% 70.0% FY07 -1.3% 16.2% 10.0% 14.3% Heatmap Key Rank 1 Rank 2 Rank 3 Rank
Slide 14: Presenting HDFC NIFTY PSU Bank ETF
Presenting HDFC NIFTY PSU Bank ETF An open-ended scheme replicating/tracking the NIFTY PSU Bank Index (TRI) 02 14
Slide 15: Why invest in HDFC NIFTY PSU Bank ETF?
Why invest in HDFC NIFTY PSU Bank ETF? Sustainable Valuations close to Exposure to multiple HDFC AMC - improvement in long-term average stocks through a Trusted for 20 Years Fundamentals single ETF PSU Banks have PSU Banks’ 1y Forward The HDFC NIFTY PSU HDFC AMC has been a strengthened their Price/B
Slide 16: Who should invest in HDFC NIFTY PSU Bank ETF?
Who should invest in HDFC NIFTY PSU Bank ETF? The HDFC NIFTY PSU Bank ETF could be suitable for investors who: Seek diversified exposure to the PSU bank sector Have a high risk appetite Prefer a low-cost investment option to earn index linked returns For disclaimers, refer Slide 21 02 16
Slide 17: Fund Facts: HDFC NIFTY PSU Bank ETF
Fund Facts: HDFC NIFTY PSU Bank ETF HDFC NIFTY PSU Bank ETF Type of Scheme An open ended scheme replicating / tracking NIFTY PSU Bank Index (TRI) The investment objective of the Scheme is to generate returns that are commensurate (before fees and expenses) with the performance Investment of the NIFT
Slide 18: Asset Allocation: HDFC NIFTY PSU Bank ETF
Asset Allocation: HDFC NIFTY PSU Bank ETF Under normal circumstances, the asset allocation of HDFC NIFTY PSU Bank portfolio will be as follows: Minimum Allocation Maximum Allocation Types of Instruments Risk Profile (% of Total Assets) (% of Total Assets) Securities covered by 95 100 Very High NIFTY
Slide 19: Product Labeling, Benchmark and Scheme Riskometers
Product Labeling, Benchmark and Scheme Riskometers This product is suitable for investors who are seeking*: Riskometer# Benchmark Riskometer • Returns that are commensurate (before fees and expenses) NIFTY PSU Bank Index (TRI) with the performance of the NIFTY PSU Bank Index (TRI), over long term, s
Slide 20: Stock Liquidity Risk in the event of Circuit Filter
Stock Liquidity Risk in the event of Circuit Filter Liquidity of stocks which are available only in cash segment and not in F&O segment gets adversely impacted in the event of a circuit filter imposed by any of the stock exchanges. This would also impact the subscription and redemption of ETF units,
Slide 21: Disclaimer
Disclaimer The views expressed herein are as of January 08, 2024 and are based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines only, which you must confirm before relying on them. The information
Slide 22: Thank You
Thank You
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