Reb
ased
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ues
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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Nippon India Multi Asset Fund
NFO Open Date: 7th August 2020 | NFO Close Date: 21st August 2020
This product is suitable for investors who are seeking* Long term capital growth Investment in equity and equity related securities, debt & money market
instruments and Exchange Traded Commodity Derivatives and Gold ETF*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.
(An open ended scheme investing in Equity, Debt and Exchange Traded Commodity Derivatives and Gold ETF)
Contact your financial advisor I Visit www.nipponindiamf.com
International Equity Domestic EquityDebtGold*
Re
bas
ed
Val
ue
s (i
n R
s.)
Gold Debt Domestic Equity International Equity
The scheme will invest in Gold ETF/ETCD/Sovereign Gold Bonds. Investors are requested to note that investment into physical Gold is neither envisaged nor is part of the core investment strategy in the scheme
A Multi Asset Fund which invests in a combination of Equity, Debt, International Equity and Gold ETF/ Exchange Traded Commodity Derivatives (ETCD) and other ETCDs as permitted by SEBI from time to time. These asset classes are weakly/ negatively co-related and tend to perform at
different periods of time. Aim to benefit from portfolio diversification.
Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment.Source: Bloomberg.*Gold Futures prices from MCX.
Aim to have a Portfolio Suited for all Market Conditions
Over the last decade we have seen divergent returns among Asset classes
Winners keep changing among Asset classes
Different Asset Classes outperform in different years.
Top Performers:
*Gold - 5 years | Equity – 3 years | Debt – 2 years
Note: 1) *Gold Futures prices from MCX; 2) For Equity, S&P BSE 100 TRI returns are considered; 3) For Debt, CRISIL Short Term Bond Fund Index returns are considered; 4) Source: Bloomberg, MFI Explorer
The scheme will invest in Gold ETF/ETCD/Sovereign Gold Bonds. Investors are requested to note that investment into physical Gold is neither envisaged nor is part of the core investment strategy in the scheme.
Note: 1) For Large Cap, S&P BSE 100 TRI returns are considered; 3) For Mid Cap, S&P BSE Mid Cap TRI returns are considered; 4) For Small Cap, S&P BSE Small Cap TRI returns are considered; 5) For Short Term Debt, Crisil Short Term Bond Fund Index returns are considered; 6) For Long Term Debt, Crisil 10 yr Gilt Index returns are considered; 7) Source: MFI Explorer.Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment.
Even within asset classes there is significant variation in returns
Hence, staying invested across Asset classes is quintessential.
Top Performers in Equity:
Large Caps - 4 years
Mid Caps – 4 years
Small Caps – 2 years
Top Performers in Debt:
Short Term Debt - 6 years
Long Term Debt – 4 years
2019Gold
24.6%Equity 10.9%
Debt 9.5%
2018Gold 7.6%
Debt 6.7%
Equity 2.6%
2017Equity 33.4%
Gold 6.3%
Debt 6.0%
2016Gold
10.1%Debt 9.8%
Equity 5.0%
2015Debt8.7%
Equity -2.0%
Gold -6.6%
2014Equity 34.2%
Debt 10.5%
Gold -6.0%
2013Debt 8.3%
Equity 7.6%
Gold -7.9%
2012Equity 32.0%
Gold 12.4%
Debt 9.1%
2011Gold
32.5%Debt 7.9%
Equity -24.8%
2010Gold
24.2%Equity 17.2%
Debt 4.7%
Data for last 10 yrs
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Large Cap
10.9%
Large Cap
2.6%
Small Cap
61.0%
Mid Cap9.3%
Mid Cap
8.7%
Small Cap
71.1%
Large Cap
7.6%
MidCap
40.4%
Large Cap
-24.8%
MidCap
17.7%
Mid Cap
-2.1%
Mid Cap
-12.5%
Mid Cap
50.0%
Large Cap
5.0%
Small Cap
7.7%
Mid Cap
56.9%
Mid Cap
-4.0%
Small Cap
34.8%
Midcap
-33.3%
Small Cap
17.3%
Small Cap
-5.9%
Small Cap
-22.8%
Large Cap
33.4%
Small Cap
2.7%
Large Cap
-2.0%
Large Cap
34.2%
Small Cap
-9.7%
Large Cap
32.0%
Small Cap
-41.7%
Large Cap
17.2%
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Long Term Debt
10.5%
Short Term Debt6.7%
Short Term Debt6.0%
Long Term Debt
14.9%
Short Term Debt8.7%
Long Term Debt
14.1%
Short Term Debt8.3%
Long Term Debt
10.6%
Short Term Debt7.9%
Short Term Debt4.7%
Short Term Debt9.5%
Long Term Debt6.0%
Long Term Debt0.0%
Short Term Debt9.8%
Long Term Debt7.4%
Short Term Debt
10.5%
Long Term Debt-0.7%
Short Term Debt9.1%
Long Term Debt1.9%
Long Term Debt3.1%
Equity
Debt
How does Asset Allocation help?
1. Asset classes follow different cycles over different time periods
2. It is difficult to predict which Asset class will outperform
3. Asset allocation is considered to be the key driver of portfolio returns
4. Helps in Portfolio Diversification
5. Could lead to Optimal Returns
Asset Allocation is considered to be Key to Long term wealth creation
Investment Objective & Asset Allocation
#According to a Study in 2001 “More than 90% of the portfolio returns are based on asset allocation decisions”. Asset
Allocation 90%
Stock Selection& Others 10%
#Source: Does Asset Allocation Policy Explain 40%, 90% or 100% of Performance?
Presenting
Nippon India Multi Asset Fund (NIMAF)(An open ended scheme investing in Equity, Debt and Exchange Traded Commodity Derivatives and Gold ETF)
A one stop solution which may help to reap benefit of Growth of Equity, Stability of Debt & Diversification from Commodities
The primary investment objective of Nippon India Multi Asset Fund is to seek long term capital growth by investing in equity and equity related securities, debt & money market instruments and Exchange Traded Commodity Derivatives and Gold ETF as permitted by SEBI from time to time
*Includes Gold ETF and Exchange Traded Commodity Derivatives (ETCDs) where participation will be limited to derivatives contracts in Metals, Energy and Indices as permitted by SEBI from time to time.
Rebalancing will be done on a Quarterly basis to adjust for any deviation in asset allocation due to any mark to market movement.
INDICATIVE ASSET ALLOCATION
50 – 80%
Equity & Equity related
securities (including Overseas
Securities/Overseas ETF)
10 – 20%
Debt & Money
Market Instruments
10 – 30%
Commodities*
1. Indian Equity Investment (50%)
Multi Cap investment
strategy
Bottom Up selection approach
Stock selection based on gap between fair
value and market price
No bias towards growth or value
stocks
Focus on the scalability of the business model
PortfolioConstruct
Large Caps: 50-70%; Rest predominantly in Mid Caps;
of Equity portfolio
Terminal Value &Business scalability
–key criteria
Alpha creation through stock
selection
The above exposure is subject to change within the limits of SID depending on the market conditions.
Investment Strategy & Probable Allocation
2. Overseas Equity Investment (20%)
Investment across geographies based on prevailing view/tactical opportunity
MSCI World Index will be the investment universe. It tracks performance of stocks/sectors across 23 developed markets.
Overseas Equity investment could act as an effective diversification tool as well as benefit from any currency depreciation
Source: www.msci.com, Data as of June 2020
Domestic Equity - Investment Framework
Overseas Equity - Investment Framework
Active Share <50 Deviation from Benchmark in the Top Sectors Banks & Financials – not more than 25% Energy, IT and FMCG – not more than 40%
*Based on Internal assessment of Business Risk, stocks have been classified under four rating buckets: A,B,C,D with A being the best and D being the worst. While it may appear all the investments should be concentrated in the A or B bucket, the stocks may not be reasonably priced. At the same time, stocks rated C or D may offer opportunities at reasonable valuations.
The above exposure is subject to change within the limits of SID depending on fund managers views and the market conditions.
Actively managed with an attempt to generate consistent returns along with reasonable alpha.
Investments with reference to MSCI World Index i.e. 65% weight to US, 20% to Japan & Europe including UK, and rest in Others
Fund would have approximately 25 stocks – 15 in US, 5 in Europe including UK and the rest in others
Fund would broadly keep the country exposures similar – especially to US and Europe
The above exposure is subject to change within the limits of SID depending on fund managers views and the market conditions.
Stock Concentration* Not more than 4% in any C rated stocks Cumulative exposure to C rated stocks: 35% (in line with index) Cumulative exposure to D rated stocks < 3%
3. Commodities – A Distinct & Unique Asset Class (15%)
Commodities – A Distinct & Unique Asset Class
Asset Allocation beyond Equity & Debt:Commodity an important tool for Diversification
Upside Potential owing to inherent demand
Offers Portfolio Diversification
Considered as Safe Haven during Economic Distress
Hedge against Curren-cy Depreciation
Diversification within commodities – Metals, Energy & Indices as
permitted by SEBI from time to time
Hedge against Inflation
1 2 3
Flexibility to invest in various Commodities@ to
provide diversification even within commodities
Investment in Exchange Traded Commodity
Derivatives (ETCDs) of Metals, Energy and
Indices as permitted by SEBI from time to time
Gold$ will be a key diversifier given low
correlation to Equity & Debt
Commodity Investment Framework
Minimum 10% exposure to Gold through ETF or ETCD route. Fund may also invest in Sovereign Gold Bonds.
5% allocation to other commodities: Silver, Energy, Commodity Indices & other commodities through ETCDs as permitted by SEBI from time to time.
In absence of any opportunities, Fund may follow arbitrage strategy in commodities.
Flexibility to invest in various Commodities to provide diversification
even within commodities
Investment will be predominantly into Gold
ETF/ETCD.
Gold$ will be a key diversifier given low
correlation to Equity & Debt
The above exposure is subject to change within the limits of SID depending on fund managers views and the market conditions.
@as permitted by SEBI from time to time
$The scheme will invest in Gold ETF/ETCD/Sovereign Gold Bonds. Investors are requested to note that investment into physical Gold isneither envisaged nor is part of the core investment strategy in the scheme.
Investment Rationale
Fund seeks to provide
diversification across asset
classes with an aim to provide superior risk
adjusted returns
Fund also offers diversification
under respective asset classes
Benefit from Tax efficiency through
rebalancing within the Fund
A one stop solution which
may help to reap benefit of
Growth of Equity, Stability of Debt & Diversification
from Commodities
Correlation between Asset classes
Note: 1) For Equity, S&P BSE 100 TRI returns are considered; 2) For Debt, CRISIL Short Term Bond Fund Index returns are considered; 3) For Overseas Equity, returns of MSCI World Net Return Index (in INR terms) are considered; 4) For Commodities, returns of Thomson Reuters/CoreCommodity CRY Commodity Index (in INR terms) are considered. Correlation has ben arrived based on 1-yr rolling return for last 10 yrs (August 2010 - July 2020) rolled on a daily basis.Source: Bloomberg, MFI Explorer.
Weak or negative correlation between asset classes helps in Portfolio Diversification
Model Portfolio vs Individual Asset Class Returns - PTP Returns
*July 2020
4. Fixed Income Investment (15%)
Debt portfolio will be managed with a moderate duration profile, following a duration range of 1.25 – 2.25 years.
Focused on Accrual Income and could outperform in a bull steepening environment
Endeavor to capture short end of the yield curve with a focus on stable returns with moderate volatility.
Predominantly invest in Good credit quality assets Issuer: LT rating min 85% AAA, rest AA+ & AAInstrument: AAA/ A1+ >=85%, short term not below A1+
CorrelationDomestic
EquityOverseas
EquityDebt Commodity
Domestic Equity 1.00 0.19 0.10 -0.01
Overseas Equity 1.00 -0.06 0.46
Debt 1.00 -0.61
Commodities 1.00
Calendar Year Returns for last 10 yrs (2010-2019)
Asset ClassAverage
Return (%)Standard Deviation
(%)
Model Portfolio 11.6 11.0
Domestic Equity 11.6 18.5
Overseas Equity 14.9 13.1
Debt 8.1 1.8
Gold 9.7 14.1
PTP Returns as on 31st July 2020
Asset Class 1-Yr 3-Yr 5-Yr 10-Yr
Model Portfolio 11.1% 6.9% 8.8% 10.6%
Domestic Equity 2.0% 3.5% 6.6% 8.6%
Overseas Equity 17.4% 13.1% 11.0% 14.8%
Debt 11.1% 8.4% 8.6% 8.6%
Gold 54.2% 23.7% 16.7% 11.7%
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Model Portfolio vs Individual Asset Class Movement
Portfolio Gold International Equity Debt Domestic EquityYTD*
Model Portfolio vs Individual Asset Class - Rolling Returns
Disclaimer: The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers Certain factual and statistical information (historical as well as projected) pertaining to Industry and markets have been obtained from independent third party sources, which are deemed to be reliable. It may be noted that since Nippon Life India Asset Management Limited (NAM India) (formerly known as Reliance Nippon Life Asset Management Limited) has not independently verified the accuracy or authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been processed or arrived at NAM India does not in any manner assures the accuracy or authenticity of such data and information. Some of the statements assertions contained in these materials may reflect NAM India’s views or opinions, which in turn may have been formed on the basis of such data or information.
Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsors, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Note: 1) Model Portfolio comprises of weighted allocation to S&P BSE 100 TRI (25%), S&P BSE Mid Cap TRI (25%), MSCI World Net Return Index (in INR terms) (20%), Gold Futures prices from MCX (10%), Crude Oil prices (in INR terms) (5%) and CRISIL Short Term Bond Fund Index (15%); 2) For Equity, S&P BSE 100 TRI returns are considered; For International Equity, MSCI World Net Return Index returns (in INR terms) are considered; For Debt, CRISIL Short Term Bond Fund Index returns are considered; 3) Average Returns & Standard Deviation are calculated based on calendar year returns for last 10 years. Source: Bloomberg, MFI Explorer.
Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment. Model Portfolio is for illustrative purpose only just to explain the concept of asset allocation and should not be construed as an investment advice or direct or indirect solicitation for the scheme or the performance.
Note: 1) Model Portfolio comprises of weighted allocation to S&P BSE 100 TRI (25%), S&P BSE Mid Cap TRI (25%), MSCI World Net Return Index (in INR terms) (20%), Gold Futures prices from MCX (10%), Crude Oil prices (in INR terms) (5%) and CRISIL Short Term Bond Fund Index (15%); 2) For Equity, S&P BSE 100 TRI returns are considered; For International Equity, MSCI World Net Return Index returns (in INR terms) are considered; For Debt, CRISIL Short Term Bond Fund Index returns are considered; 3) Returns & Standard Deviation are calculated based on 3-year rolling returns rolled on a daily basis for the period between August 2010 - July 2020. Total No. of Instances: 1652^The scheme will invest in Gold ETF/ETCD/Sovereign Gold Bonds. Investors are requested to note that investment into physical Gold is neither envisaged nor is part of the core investment strategy in the scheme.Source: Bloomberg, MFI Explorer.
3-yr Rolling Returns for last 10 yrs (August 2010 - July 2020)
Portfolio Gold^ DebtDomestic
EquityOverseas
Equity
Average 12.0% 4.4% 8.5% 12.0% 14.8%
Minimum -1.8% -8.3% 6.9% -6.4% 2.4%
Maximum 19.5% 22.0% 10.2% 24.7% 29.4%
Standard Deviation 3.4% 6.6% 0.8% 5.6% 5.9%
Negative Instances (%) 0.2% 27.3% 0.0% 3.8% 0.0%
Above 8% 90% 25% 65% 83% 92%
Above 10% 79% 21% 1% 72% 76%
Above 12% 49% 16% 0% 52% 60%