FUND PHILOSOPHY*

The fund builds a portfolio of quality stocks with lower relative valuations. Quality (for non-financial stocks) is ascribed on three fronts – conversion of EBIDTA to operating cash – OCF as % of EBIDTA > 33%; Moderate leverage: Debt/EBIDTA <3x; Profitability: EBIDTA / Net operating Assets >30%. Companies that qualify on these three parameters and those which are relatively cheaper within a peer group on P/B basis form part of the ‘quality’ universe. Roughly 50% of the portfolio will comprise of such quality companies; ~30% would be for financial sector and balance 20% would be invested in benchmark heavyweights and themes, which we expect to play out over next 6/12 months. On a tactical basis, the fund may take a part of its overall holding through near month stock futures.

      OUTLOOK

• With the spread of the pandemic and the lockdown during Q1 FY21, earnings for the year FY21 were sharply downgraded.

• However, the swifter than expected economic recovery led to a more robust Q2 FY21.

• Upgrades exceeded downgrades 3x, a rarity, after years of earnings disappointment.

• FY21 estimates, quickly rebounded from negative to positive territory, despite the Q1 debacle.

• The fall during Mar’20 lasted less than 35 trading days, erasing between 36-43% across the indices – Large, Mid and Small Caps. Supportive action from Central Banks was quicker.

• As investors searched for stable earnings, rotation from one sector to another, as exhibited from Apr-Dec’20 phase was evident.

• Staples after outperforming in Mar-Apr, have underperformed since then. Pharma and IT services outperformed during May-Sept; Banks/NBFC, after underperforming from Mar-Sept,20; outperformed during Oct-Dec’20.

• After the debacle of Mar’20, Small caps outshone the rest of the market – for the first time since CY17.

• If economic recovery is robust and RBI does not move aggressively into high real interest zone, Small caps could benefit the most.

     FUND FEATURES: (Data as on 31st December'20)

Category: Large & Mid Cap
Monthly Avg AUM: Rs2,199.75 Crores
Inception Date: 9th August 2005
Fund Manager: Mr. Anoop Bhaskar (w.e.f. 30/04/2016)
Benchmark: LargeMidcap 250 TRI (w.e.f. 7th October 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, Dividend - (Payout, Reinvestment and Sweep (from Equity Schemes to Debt Schemes only))
Other Parameters:
Beta: 0.98
R Square: 0.98
Standard Deviation (Annualized): 23.94%

PORTFOLIO

(31 December 2020)

     SECTOR ALLOCATION

     RISKOMETER