FUND PHILOSOPHY*

The focus of IDFC Sterling Value Fund has been on building a portfolio of Leader/Challengers and Emerging businesses with an emphasis on bottom up stock selection. As part of the current strategy, the portfolio looks to build on the leaders/challengers – these are the market leaders in the Non-Nifty sectors (like Tyres, Bearings) or Top Challengers in the Nifty sectors (such as FMCG, Banks). The key parameters that we look at while selecting the companies here are low debt to operating cash flow and ROIC (Return on Invested Capital) greater than the Cost of Capital (CoC). The other part of the portfolio focuses on the Emerging Businesses. These are businesses in down cycles or where scale is yet to be achieved or where companies can fund growth without repeated dilutions. Many a times, earnings do not capture fair value of the businesses in down cycles or that are yet to achieve scale and hence popular ratios such as P/E ratio might not be the relevant metric to value the company. Thus, we believe that a better parameter for relative value evaluation could be the Enterprise Value (EV)/Sales ratio & Price/Book (P/B). We also filter stocks for Sustained improvement in RoE (Return on Equity) and RoCE (Return on Capital Employed) and those with Earnings Growth higher than Nifty. This segregation helps in easy management of risk & liquidity aspects of the portfolio.

      OUTLOOK

Q2 FY22 corporate earnings result ended on a strong note and RBI maintained its stance as accommodative and kept the policy rate unchanged in its bi-monthly policy.

Aggregate profit of S&P BSE 200 companies touched higher than the previous peak of Mar’21 quarter.

Going forward, factors which would largely drive the market could be the macroeconomic data and the upcoming state elections on domestic side, while on the global term it would be the decision of central banks as well as the highly mutated Omicron variant of Covid-19 which could change the course of the pandemic.

Key sectors where earnings are forecasted to show strength/sustain in the near term could be the Banks, Automobiles, Telecom and Oil & Gas. Hopefully, the earnings estimate for FY22 and 23 could maintain the path of surprise, as has been the case till now.”

     FUND FEATURES: (Data as on 30th November'21)

Category: Value
Monthly Avg AUM: Rs4,276.10 Crores
Inception Date: 7th March 2008
Fund Manager:
Mr. Anoop Bhaskar (w.e.f. 30/04/2016) & Mr. Daylynn Pinto (w.e.f. 20/10/2016)
Other Parameters:
Beta: 1.11
R Square: 0.97
Standard Deviation (Annualized): 29.68%
Benchmark^^: S&P BSE 400 MidSmallCap TRI (w.e.f. 11th November, 2019)
Minimum Investment Amount: Rs5,000/- and any amount thereafter.
Exit Load:
• If redeemed/switched out within 365 days from the date of allotment:
➧ Upto 10% of investment:Nil,
➧ For remaining investment: 1% of applicable NAV.
•If redeemed / switched out after 365 days from date of allotment: Nil. (w.e.f. May 08, 2020)
SIP Frequency Monthly (Investor may choose any day of the month except 29th, 30th and 31st as the date of instalment.)
Options Available: Growth, IDCW@ (Payout, Reinvestment and Sweep (from Equity Schemes to Debt Schemes only))

PORTFOLIO

(30 November 2021)

     SECTOR ALLOCATION

     RISKOMETER

Scheme risk-o-meter

Benchmark risk-o-meter