MULTIPLE -STRATEGY TREND RATED

AUTOMATIC TRADING SYSTEM

Portfolio Management Services (PMS)

Performance Update

15 October 2010

Vivek Mavani – Vice President and Senior Portfolio Manager

BRICS Growth Synopsis

BRICS Growth is a Long only Diversified Equity Product aimed at generating Absolute Returns

The Objective is :

To generate Steady & Consistent returns over medium to long term

Maintain Low Volatility

Remain cautious on Margin of Safety

The Focus is therefore on Stock Picking with a Buy and Hold philosophy

Invest in high quality and high growth companies at reasonable valuations and hold them

over a period of time. (Not trade in & out frequently)

Our conservative approach to managing investments, (especially during periods of volatility) is

reflected in our superior performance.

Portfolio Update and Outlook

Most market participants this time seem Bullish but “Reluctantly” and have been skeptical

throughout. Rarely has a correction been anticipated so strongly by a very large section of the

market

Dilemma in a Bull Market. Choice between:

Losing an Opportunity in a fast rising market

Losing money in event of an anticipated sharp correction

We are clear in our Choice. This could/will lead to short term underperformance against the

benchmark’s but We will “Stick to Our Convictions” and “Not Act on Emotions”

Last month, we increased the weightage of large caps by increasing the exposure to Large Cap

Banks, to play the momentum. We swiftly booked profits also especially in Axis Bank. We may

look to buy it again on declines

We may, to capitalize on few momentum opportunities deploy a part of the portfolio (<15%) to

ride the momentum in stock ideas where we have strong conviction

Mid-caps had very sharp run-up in the last few months. We significantly reduced our exposure in

this segment, by booking part profits especially where valuations look stretched

However, selectively mid-caps could continue to see sharp rallies as individual performances are

likely to shine amidst a range bound market

However, Credo of Sticking to Quality remains and will never be compromised

Absolute Performance – 15 October 2010

Inception Date: 1 October, 2009 Portfolio returns are audited and net of fees & expenses

Weekly Monthly QuarterlyHalf

Yearly

YTD

(Calendar)Annual

Since

Inception

BRICS Growth -0.77% 2.95% 17.69% 32.73% 41.66% 53.23% 53.70%

NIFTY -1.97% 3.32% 12.58% 14.83% 16.43% 18.53% 19.12%

SENSEX -1.82% 3.19% 12.37% 14.09% 15.23% 17.04% 17.45%

S&P CNX 500 -1.77% 2.75% 11.78% 14.57% 15.38% 19.91% 21.26%

S&P CNX

MIDCAP-1.49% 2.31% 11.93% 17.97% 25.74% 32.88% 39.53%

Consistency in our Month-on-Month Performance

Month BRICS Growth Nifty Sensex S&P CNX 500 CNX Mid Cap

Oct-09 -0.67% -7.31% -7.23% -6.46% -1.77%

Nov-09 2.79% 6.81% 6.48% 7.59% 8.65%

Dec-09 6.27% 3.35% 3.18% 4.43% 3.97%

Jan-10 -1.84% -6.13% -6.34% -4.00% -3.11%

Feb-10 0.75% 0.82% 0.44% -0.69% -0.48%

Mar-10 6.24% 6.64% 6.68% 4.50% 7.50%

Apr-10 3.77% 0.55% 0.18% 1.27% 4.62%

May-10 1.86% -3.63% -3.50% -3.24% -3.79%

Jun-10 5.81% 4.45% 3.83% 4.59% 4.83%

Jul-10 3.84% 1.04% 1.56% 1.23% 3.50%

Aug-10 7.25% 0.65% 0.58% 1.39% 3.14%

Sep-10 4.13% 11.35% 11.67% 8.55% 5.58%

Performance ahead / at least keeping pace with the Indices month after month

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 3 month returns

Compared to Top 20 Mutual Funds as of 15 Oct. 2010

Rank Scheme Name Performance

3 Months % 6 Months % 1 Year %

1 Templeton India Equity Income Fund - Growth 19.83 18.50 32.07

2 Religare AGILE Fund - Growth 19.59 12.74 20.82

3 Sundaram BNP Paribas PSU Opportunities Fund - Growth 18.16 26.66 N/A

4 Escorts High Yield Equity Plan - Growth 17.76 28.11 41.14

5 BRICS Growth 17.69 32.73 53.23

6 Templeton India Growth Fund - Growth 17.30 17.36 34.20

7 HSBC Unique Opportunities Fund - Growth 17.28 19.37 26.04

8 Religare Mid N Small Cap Fund - Growth 17.23 25.35 57.16

9 Sundaram BNP Paribas Rural India Fund - Growth 17.04 26.60 32.18

10 Kotak Lifestyle Fund - Growth 16.70 27.76 35.10

11 HSBC Midcap Equity Fund - Growth 16.66 20.21 33.36

12 Religare Mid Cap Fund - Growth 16.23 22.38 44.52

13 Reliance Quant Plus Fund - Ret - Growth 16.06 20.98 23.45

14 IDFC Premier Equity Fund - Plan A - Growth 15.88 23.04 46.25

15 SBI Magnum Sector Umbrella - Emerging Businesses - Growth 15.52 18.69 44.57

16 Reliance Long Term Equity Fund - Growth 15.20 23.86 39.59

17 IDFC Strategic Sector (50-50) Equity Fund - Plan B - Growth 15.19 20.49 21.45

18 Sundaram BNP Paribas Select Midcap - IP - Growth 15.16 23.50 34.42

19 IDFC Strategic Sector (50-50) Equity Fund - Plan A - Growth 15.16 20.44 21.42

20 Kotak Midcap Fund - Growth 15.15 25.29 40.53

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 6 month returns

Compared to Top 20 Mutual Funds as of 15 Oct. 2010

Rank Scheme Name Performance

3 Months % 6 Months % 1 Year %

1 BRICS Growth 17.69 32.73 53.23

2 Escorts High Yield Equity Plan - Growth 17.76 28.11 41.14

3 Kotak Lifestyle Fund - Growth 16.70 27.76 35.10

4 Sundaram BNP Paribas PSU Opportunities Fund - Growth 18.16 26.66 N/A

5 Sundaram BNP Paribas Rural India Fund - Growth 17.04 26.60 32.18

6 Birla Sun Life Dividend Yield Plus - Growth 15.03 26.36 38.79

7 Sahara Wealth Plus Fund - VP - Growth 14.22 25.44 30.90

8 Religare Mid N Small Cap Fund - Growth 17.23 25.35 57.16

9 Kotak Midcap Fund - Growth 15.15 25.29 40.53

10 Sahara Wealth Plus Fund - FP - Growth 13.97 24.89 29.81

11 Canara Robeco FORCE Fund - IP - Growth 15.12 24.54 40.67

12 Canara Robeco FORCE Fund - Ret - Growth 14.98 24.49 40.51

13 DSP BlackRock Small and Midcap Fund - Growth 14.71 24.40 47.56

14 Reliance Long Term Equity Fund - Growth 15.20 23.86 39.59

15 DSP BlackRock Micro Cap Fund - Reg - Growth 9.81 23.77 67.00

16 Sundaram BNP Paribas Select Midcap - IP - Growth 15.16 23.50 34.42

17 HDFC Equity Fund - Growth 14.73 23.31 34.40

18 Sundaram BNP Paribas Select Midcap - Growth 14.99 23.16 34.07

19 IDFC Premier Equity Fund - Plan A - Growth 15.88 23.04 46.25

20 UTI Master Value Fund - Growth 13.40 22.91 47.06

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 1 year returns

Compared to Top 20 Mutual Funds as of 15 Oct. 2010

Rank Scheme Name Performance

3 Months % 6 Months % 1 Year %

1 DSP BlackRock Micro Cap Fund - Reg - Growth 9.81 23.77 67.00

2 Religare Mid N Small Cap Fund - Growth 17.23 25.35 57.16

3 BRICS Growth 17.69 32.73 53.23

4 Reliance Equity Opportunities Fund - Growth 13.27 22.13 48.47

5 DSP BlackRock Small and Midcap Fund - Growth 14.71 24.40 47.56

6 UTI Master Value Fund - Growth 13.40 22.91 47.06

7 IDFC Premier Equity Fund - Plan A - Growth 15.88 23.04 46.25

8 HDFC Mid-Cap Opportunities Fund - Growth 12.88 21.31 45.10

9 SBI Magnum Sector Umbrella - Emerging Businesses - Growth 15.52 18.69 44.57

10 Religare Mid Cap Fund - Growth 16.23 22.38 44.52

11 Canara Robeco Emerging Equities - Growth 10.69 20.54 43.87

12 IDFC Small & Midcap Equity Fund - Growth 12.03 19.31 42.53

13 ING Dividend Yield Fund - Growth 12.90 22.62 42.03

14 ICICI Prudential Discovery Fund - IP - Growth 10.81 17.20 41.38

15 Escorts High Yield Equity Plan - Growth 17.76 28.11 41.14

16 Canara Robeco FORCE Fund - IP - Growth 15.12 24.54 40.67

17 Tata Dividend Yield Fund - Growth 13.16 21.75 40.54

18 Kotak Midcap Fund - Growth 15.15 25.29 40.53

19 Canara Robeco FORCE Fund - Ret - Growth 14.98 24.49 40.51

20 HDFC Core & Satellite Fund - Growth 13.59 18.62 40.26

BRICS Growth NAV Trend

BRICS Growth has delivered absolute &

consistent returns during both periods:

Managed a significant out-performance

in a range bound volatile market

Managed to keep pace even during a

sharp rallies

Performance

Between 1 Oct.

2009 – 25 May

2010 *

Between 25 May

2010 – 15 Oct.

2010

Range bound

markets with

volatility

Sharp rally

across the board

BRICS Growth 15.70% 32.84%

Nifty -5.44% 25.98%

Sensex -6.50% 25.61%

S&P 500 -2.84% 24.81%

CNX Mid-Cap 10.32% 26.47%

* 25 May 2010, Indices bottomed out, when the

current rally started.

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BRICS Growth Nifty Sensex

S&P 500 CNX Midcap

BRICS Growth NAV v/s Indices (normalised)

BRICS Growth Outperformance

Performance has been a result of our:

Stock Picking

Low churn in the portfolio, and

Conservative attitude (not taking

excessive risks)

Our Strategy has been to :

Buy during panics/declines

Use sharp rallies to partially book

profits

Opportunistically ride the momentum

for a part of the portfolio (<15%)

Remain adequately liquid at all times

Adequate liquidity helps :

Protect against volatility

Provides enough courage and

conviction to buy into panics

Current cash/liquid balances ~ at 37% of

the Portfolio

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Nifty Sensex S&P 500 CNX MidCap

BRICS Growth NAV Outperformance vis-a-vis Indices

Portfolio Breakup

Large Cap. More than Rs 5,000 crores

Mid-Cap. Rs 1,000 - 5,000 crores

Small Cap. Less than Rs 1,000 crores

Large Cap39.28%

Mid Cap7.33%

Small Cap16.85%

Cash36.54%

Market Cap BreakupBanking & Finance13.07%

Branded Garments &

Retail14.77%

Cash36.54%

FMCG8.60%

Infrastructure & Capital Goods9.94%

Media4.18%

Oil & Gas12.90%

Sectoral Allocation

Low Portfolio Turnover (Buy & Hold at work)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

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0.80

0.90

1.00

Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10

tim

es

Portfolio Turnover

Portfolio Turnover

Turnover increased as

we booked profits in

stocks that witnessed

very sharp rallies

How did we do during periods of Volatility – 12 Biggest Falls between Oct.-’09 – Oct.-’10

How much a portfolio falls during a

correction / sharp downturn is as

important as how much it gains in a

bull market

Protecting capital is often more

important during periods of volatility

Downside protection equally

contributes to superior returns over a

period of time

We have managed to fall less than

the indices during each of the sharp

falls / panics since our inception

Large liquidity during periods of

volatility & a low beta portfolio helped.

*Beta measures the volatility of the

portfolio relative to the index

Against Nifty Sensex CNX

Midcap

Beta * 0.4201 0.4187 0.4648

Date

Points

Fall -

Nifty

% Fall -

Nifty

Points

Fall -

Sensex

% Fall -

Sensex

% Fall -

BRICS

Growth

27-Jan-10 -159.65 -3.19% -490.64 -2.92% -2.29%

3-Nov-09 -147.80 -3.14% -491.34 -3.09% -0.36%

19-May-10 -146.55 -2.89% -467.27 -2.77% -0.84%

25-May-10 -137.20 -2.78% -447.07 -2.71% -1.62%

5-Feb-10 -126.70 -2.61% -434.02 -2.68% -0.47%

27-Oct-09 -124.20 -2.50% -387.10 -2.31% -0.65%

21-Jan-10 -127.55 -2.44% -423.35 -2.42% -1.32%

1-Jun-10 -116.10 -2.28% -372.60 -2.20% -1.24%

26-Nov-09 -102.60 -2.01% -344.02 -2.00% -0.95%

7-Jun-10 -101.50 -1.98% -336.62 -1.97% -0.99%

15-Oct-10 -121.85 -1.97% -372.59 -1.82% -0.77%

4-Feb-10 -86.50 -1.75% -271.10 -1.64% -0.28%

Market Outlook

Global macro economic risks will continue to weigh on the markets. Will definitely have

repercussions on India over a period of time, if not in the short term

Global liquidity flooding Indian markets has been the primary reason for the current rally across

all emerging markets. Ride till funds flow

Valuations are definitely not cheap, in fact they already look rich in some sectors. If the current

momentum continues, Valuations could become a concern as they could get into bubble zone

In some sectors/stocks valuations already factor in fairly aggressive growth rates for FY11

& FY12. Corporate performances could potentially disappoint given very high expectations

Price corrections from current high levels could be very sharp, if earnings disappoint

Serious concerns will start when the liquidity driven rally takes even the stocks with bad/doubtful

fundamentals to new high’s

Early signs of euphoria emerging as witnessed from the over subscription of IPO’s. The large

pipeline of IPO’s itself could be a dampener for secondary markets as significant quantum of

funds could be diverted

Pockets of opportunities still available in those stocks/sectors where growth is steady and

valuations still leave room for upside. Better still wait for a correction for fresh entry.

We continue to remain cautious of the market levels/individual stocks prices and valuations. We

would wait for a decent correction before committing significant funds

Our Strategy

“Time” in the markets is more important than “Timing” the markets

Superior long-term sustainable returns are not made by timing the markets in terms of selling at

the peaks. They are a result of purchase prices that are attractive in terms of valuations with

adequate margin of safety

Our strategy going ahead would continue to be, bottom up stock picking and be extremely

selective:

Buy on declines

Use sharp rallies to partially book profits

Opportunistically ride the momentum for only a small part of the portfolio

Remain adequately liquid at all times

The sectors that we are bullish are and continue to be over weight are all domestic themes

namely:

Banking & Financial Services,

Infrastructure Construction

Gas Transportation & Distribution

Domestic Consumption themes like Paints, Branded Garments, Media etc.

Thank You

Vivek Mavani – Vice President & Senior Portfolio Manager

vivek.mavani@bricssecurities.com

BRICS SECURITIES LIMITED

1st Floor, Sadhana House,

570, P. B. Marg,

Behind Mahindra Towers,

Worli, Mumbai – 400 018.

Tel: 91-22-6636 0000.

Happy Investing