Hdfc Asset Management Co. Ltd. · NSE:HDFCAMC
Hdfc Asset Management — Investor Presentation (July 2020)
24 slides from Hdfc Asset Management's investor presentation, Jul 22, 2020
Slide 1: Discover the true value, before the world does
we ddiers Discover the true value, before the world does. Presenting HDFC Capital Builder Value Fund. HDFC Capital Builder Value Fund (An open ended equity scheme following a value investment strategy) is suitable for investors who are seeking* July 20 * to generate long-term capital appreciation /
Slide 2: Table of Contents
Table of Contents • Market Outlook • What is definition of Value for HDFC Capital Builder Value Fund? • Why invest in HDFC Capital Builder Value Fund • Investment Approach • Stock Selection • Sector Allocation • Large/Mid/Small-Cap break-up • Portfolio Characteristics • Portfolio Statistics • Top 10
Slide 3: Market Outlook
"Ty AHDFC BHAROSA APNO KA Market Outlook
Slide 4: Equity Markets Update – Valuation near previous lows
Equity Markets Update – Valuation near previous lows India market cap to GDP ratio, calendar year-ends, 2000-21E (%) Source: Kotak Insti Equities, CY20 & CY21 ratio based on current Market cap and GDP estimates of CY20 & CY21 • Markets were down by 23% in March 20 (one of the sharpest monthly falls)
Slide 5: Low Market Cap to GDP – What does history tell us?
Low Market Cap to GDP – What does history tell us ? Marketcap to End of Calendar Next 1 year NIFTY Next 3 year NIFTY GDP Year returns returns % 2003 48 11% 111% 2004 55 36% 195% 2008 56 76% 113% 2011 61 28% 79% 2013 65 31% 30% June 2020 ~64 ? ? Source: Kotak Insti Equities, Bloomberg • Marketcap to
Slide 6: FPIs selling, will the trend reverse?
FPIs selling, will the trend reverse? FPI Flows Rs crs 35.0 FPI outflows % NIFTY FPI flows USD bn 90 days 29.3 Outflows next 360 as % of India Return 30.0 Year period * days total Market next 360 24.5 ending 25.0 Cap days 20.0 2006 11-Aug-06 -4,758 95,307 -0.2% 33% 20.0 16.2 2008 29-Oct-08 -30,428 1
Slide 7: Equity Markets Summary: Opportunity in adversity
Equity Markets Summary : Opportunity in adversity • Significant impact on corporate profits in FY21 likely; however, minimal impact expected on intrinsic values of most businesses. • Indian equity markets in aggregate are trading at attractive valuations; • Marketcap to GDP is ~64% and reflects good
Slide 8: HDFC Capital Builder Value Fund
HDFC Capital Builder Value Fund 8
Slide 9: What is definition of Value for this Fund?
What is definition of Value for this Fund ? Investment strategy of this fund would be to focus on : • Companies trading below intrinsic value, as measured by potential earnings or asset values, and/or future cash flow growth • Companies in turnaround phase – Good businesses that have gone through a
Slide 10: Why Invest in HDFC Capital Builder Value Fund?
Why Invest in HDFC Capital Builder Value Fund ? • Diversified multi-cap strategy with a value bias • Fund is managed true-to-mandate and invests at least 50% of the portfolio in companies which are trading at multiples lower than Median P/E (Price/Earnings) or Median P/B (Price/Book Value) of NIFTY
Slide 11: Investment Approach
Investment Approach •Emphasis on undervalued stocks Stock Selection •Preference for companies •(a) trading below intrinsic value •(b) In turnaround phase •(c) trading below historical average multiples •Active Overweight/Underweight vs benchmark Sector Allocation based on top down investment calls N
Slide 12: Stock selection
Stock selection • At the time of stock selection there is a preference for companies trading below intrinsic value, companies trading blow historical average multiples and companies in turnaround phase. • As of June’20, 79% of the portfolio is in preferred category as follows : Particulars % of Net
Slide 13: Sector Allocation
Sector Allocation • The Scheme also uses sector allocation and takes top down investment calls. • The Scheme is positioned to benefit from sectors which are beneficiaries of accelerated adoption of technology (IT and Telecom) ; higher healthcare spends (Healthcare), government capex on infra and Def
Slide 14: Large/Mid/Small Cap break-up
Large/Mid/Small Cap break-up • The Scheme invests across market capitalization • At present, the scheme has a large cap bias (~75% of Net Assets) • Market Cap Bias is an outcome of valuations and bottom up stock selection Market Cap Break-up 80 70 75 Large Cap Mid Cap Small Cap % of Net Assets 60 50
Slide 15: Portfolio Characteristics
Portfolio Characteristics Characteristics Scheme NIFTY 500 Return on Equity (ROE) FY20 12.7% 9.4% Trailing 12 Month - Price to Earnings Ratio (P/E) $ 27.6 27.2 Trailing 12 Month - Price to Book Value Ratio (P/B) $ 2.1 2.4 Source :Bloomberg $ As of 7th July 2020 15 15 15
Slide 16: Portfolio Statistics (As of June 30, 2020)
Portfolio Statistics (As of June 30, 2020) Particulars % To Net Assets Top 10 Equity And Equity Related Holdings 51.58% Total Equity & Equity Related Holdings 97.95% Cash, Cash Equivalents And Net Current Assets 2.05% Assets Under Management (Rs. In Crore) 3,595 Standard Deviation** 6.573% Beta** 1.
Slide 17: Top 10 Holdings (As of June 30, 2020)
Top 10 Holdings (As of June 30, 2020) Particulars GICS Sector % To Net Assets HDFC Bank Ltd. Financials 9.27 Reliance Industries Ltd. Energy 8.36 ICICI Bank Ltd. Financials 7.12 Information Infosys Limited 6.18 Technology ITC Ltd. Consumer Staples 5.32 Communication Bharti Airtel Ltd. 4.25 Services
Slide 18: Fund Suitability
Fund Suitability The scheme is suitable for investors who • Intend to invest in undervalued companies. • Would like to invest in a diversified portfolio with a long term horizon. • Want twin benefit of earnings growth as well as re-rating of valuation multiples • Are looking for a sound and discipli
Slide 19: Scheme Facts
Scheme Facts Type of Scheme An open ended equity scheme following a value investment strategy Inception Date February 01, 1994 (Date of allotment) Investment Objective To achieve capital appreciation/ income in the long term by primarily investing in undervalued stocks Fund Manager $ Mr Amit Ganatra
Slide 20: Asset Allocation Pattern
Asset Allocation Pattern Under normal circumstances, the asset allocation (% of net assets) of the Scheme’s portfolio will be as follows. Types of Instruments Normal Allocation (%) Risk Profile Equity and Equity related 65-100 High instruments Debt Securities (including 0-35 Low to Medium securitise
Slide 21: Scheme Performance Summary – HDFC Capital Builder Value Fund
Scheme Performance Summary – HDFC Capital Builder Value Fund Value of Rs 10,000 invested Additional Additional Scheme Benchmark Benchmark Benchmark Scheme Benchmark Returns (%) Returns (%) (Rs) Returns (%) (Rs) Last 1 Year -18.49 -11.13 -11.51 8,151 8,887 8,849 Last 3 Years -2.14 1.76 3.95 9,371 10,
Slide 22: Performance Summary of other Scheme(s) managed by the Fund Manager
Performance Summary of other Scheme(s) managed by the Fund Manager Returns (%) Managing scheme 3 year 5 year since 1 year Scheme CAGR (in %) CAGR (in %) Amit Ganatra manages total 3 schemes HDFC DYNAMIC PE RATIO FUND OF 20-May-20 -4.84 2.00 5.79 FUNDS # NIFTY 50 Hybrid Composite Debt 65:35 -2.04 6.2
Slide 23: Disclaimer
Disclaimer The presentation dated 22nd July 2020 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 only, which you must
Slide 24: Thank You
BHAROSA APNO KA Thank You
HDFC Asset Management Company — Investor Presentation (July 2020) on 6ix