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Portfolio Management Services...Niſty Next 100 Portfolio Portfolio Management Services Aditya Birla...

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Niſty Next 100 Portfolio Portfolio Management Services Aditya Birla Sun Life AMC Limited adityabirlacapital.com Focus would be on top 150 stocks (excluding NIFTY 50). Endeavors to deliver returns higher than Large Cap Fund, without taking undue risk/volatility of small caps. Well diversified across secular sectors, with less exposure to commodity cyclicals It captures a sweet spot between Large Caps and Mid Caps with a perfect balance of growth and quality. Niſty Next 100 Portfolio is a diversified portfolio which would primarily invest in Large and Mid Caps. Core focus is to buy companies with strong balance sheets, good capital allocation track record and high return on capital over a long time frame. Portfolio Construct Catego Weight Stocks Next 100 stocks by Market cap 65%-100% Rationale Diversified set of stocks balancing Quality, Growth & Safety HDFC Life, Kansai Nerolac, Apollo Hospitals High conviction ideas outside Next 100 stocks 0%-35% Leverage opportunities in select high growth stocks across Niſty 50 /Small caps Axis Bank, ABFRL Investment Process: Piotroski Score ROE & D/E Filters Valuation Screener Potential upside of 100% in 4-5 years Apply Quantitative Screeners Track the Niſty Next 100 Universe Management meetings Dealer/Channel Checks Plant/Facto Cisits Value investing & Portfolio optimisation Select 15-25 quality companies with high growth and potential upside Reject the companies which do not filter through the screeners Around half of remaining companies pass this filter Extensive Fundamental Research
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Page 1: Portfolio Management Services...Niſty Next 100 Portfolio Portfolio Management Services Aditya Birla Sun Life AMC Limited adityabirlacapital.com • Focus would be on top 150 stocks

Nisty Next 100 Portfolio

Portfolio Management ServicesAditya Birla Sun Life AMC Limited

adityabirlacapital.com

• Focus would be on top 150 stocks (excluding NIFTY 50).

• Endeavors to deliver returns higher than Large Cap Fund, without taking undue risk/volatility of small c aps.

• Well diversified across secular sectors, with less exposure to commodity cyclicals

• It captures a sweet spot between Large Caps and Mid Caps with a perfect balance of growth and quality.

• Nisty Next 100 Portfolio is a diversified portfolio which would primarily invest in Large and Mid Caps.

• Core focus is to buy companies with strong balance sheets, good capital allocation track record and high

return on capital over a long time frame.

Portfolio Construct

Catego Weight Stocks

Next 100 stocksby Market cap 65%-100%

Rationale

Diversified set of stocks balancingQuality, Growth & Safety

HDFC Life, Kansai Nerolac,Apollo Hospitals

High convictionideas outsideNext 100 stocks

0%-35%Leverage opportunities inselect high growth stocks

across Nisty 50 /Small capsAxis Bank, ABFRL

Investment Process:

Piotroski ScoreROE & D/E Filters

Valuation ScreenerPotential upside of100% in 4-5 years

Apply Quantitative Screeners

Track the Nisty Next 100 Universe

Management meetingsDealer/Channel ChecksPlant/Facto Cisits

Value investing & Portfoliooptimisation

Select 15-25 quality companies with high growth and potential upside

Reject the companies which do not filter through the screeners

Around half of remaining companies pass this filter

Extensive Fundamental Research

Page 2: Portfolio Management Services...Niſty Next 100 Portfolio Portfolio Management Services Aditya Birla Sun Life AMC Limited adityabirlacapital.com • Focus would be on top 150 stocks

Current Portfolio Allocation

Allocation %Indust allocation

Financials

Health Care

Consumer Discretiona

Industrials

Materials

Consumer Staples

Cash

ETF

Basis the above investment framework the current portfolio is invested as below:

29.7

14.5

13.3

11.9

11.8

8.1

8.0

2.9

Weight %Market cap bias

Largecap

Midcap

ETF

Cash

64.4

24.7

2.9

8.0

Portfolio Data as on Dec 31, 2019.

Portfolio Data as on Dec 31, 2019.

Portfolio vs Benchmark- Higher Growth/ROE’s with lower leverage

Sr. No.

1

2

3

4

5

6

7

8

9

10

Top 10 Portfolio Holdings

% to Net AssetsCompany Name

Axis Bank

ICICI Lombard General Insurance Company

SBI Life Insurance Company

The Indian Hotels Company

Shree Cement .

Apollo Hospital Enterprise

United Breweries

Aditya Birla Fashion and Retail

ABB India

HDFC Life Insurance Company

6.8

6.3

5.2

4.8

4.7

4.5

4.4

4.4

4.3

4.1

39.6

30.6

23.8

36.2

27.0

21.6

29.5

22.8

18.7

29.1%

PE (x) FY1 9 FY20EPrem/Disc

to benchmark(FY21E)

45.4%

35.2%

FY21E

-97.4

ROE (%) FY1 9 FY20E FY21E

EPS growth(%)

FY1 9 FY20E FY21E

Net debt toEquity (%)

FY1 9

Prem/Discto benchmark

(FY21E)

Prem/Discto benchmark

(FY21E)

Prem/Discto benchmark

15.5%

10.9%

13.3%

15.5%

10.9%

13.5%

18.3%

12.6%

14.2%

20.7%

-0.6%

12.8%

14.4%

13.3%

10.3%

24.5%

18.1%

15.1%

2.40%

91.3%

82.2%

Nisty Next 100

Nisty Junior

Nisty

Nisty Next 100

Nisty Junior

Nisty

Nisty Next 100

Nisty Junior

Nisty

Nisty Next 100

Nisty Junior

Nisty

Equity Outlook

Global trade has been impacted due the US-China trade issues, US-North Korea standoff, Brexit & now the US-Iran political deadlock. Some of the other economies are benefitting out of this & few Indian sectors like Chemicals have also seen tailwinds. FII influence on Indian stock markets seems to have reduced, unlike before when their buying or selling caused huge volatility; this can be attributed to the domestic institutional investors picking up.

The government has implemented some bold reforms in the last couple of years. While the economy might not be appearing ve vibrant at the moment, the government is taking steps to bring back the economy on the high growth path witnessed in the past & we are optimistic that the high frequency macro indicators are bound to pick up in the medium term & thus boost the economy.

Consumption is an integral part of Indian economy & is bound to continue doing well as the economic growth engine picks up. Demography, increasing proportion of working population & formalization of the economy will continue to benefit the consumption sector in 2020 as well.

Page 3: Portfolio Management Services...Niſty Next 100 Portfolio Portfolio Management Services Aditya Birla Sun Life AMC Limited adityabirlacapital.com • Focus would be on top 150 stocks

As a philosophy we are of the view that select companies might tend to outgrow their earnings w.r.t. the index & our investment process helps us identify the stocks which are expected to benefit in the medium to long term. Nisty earnings growth has not been encouraging with average EPS growth of around 5% for the last couple of years. What we have observed is businesses with established & time-tested business models have been disproportionately rewarded & thus market has identified them & these companies have rerated even as their peers have found it difficult to grow.

Risk Factors and Disclaimers:

Model Portfolio refers to portfolio of earliest investor in the product and in case of redemption of the model client, portfolio ofearliest client in the said product rebased for computation of returns. It refers to specific investments that the investor will havein his portfolio when it is completely built-up over a period of time. Past performance may not be sustained in the future.Investments in securities are subject to market risks. Please refer to disclosure document. The returns are absolutefor the period mentioned less than 1 year and in CAGR for the period more than 1 year. Individual portfolios of investors may vafrom the model portfolio due to factors such as timing of ent and exit, timing of additional flows and redemptions, individualinvestor mandates (if any), specific portfolio construction characteristics or structural parameters. These factors may have bearingon individual portfolio performance and hence individual returns of investors for the said portfolio type may va from the data onperformance of the portfolio depicted above. Neither the Portfolio Manager nor the Asset Management Company, its Directors,employees or sponsors shall in any way be liable for any variation in the actual returns of individual portfolios.

Investments in securities are subject to market risks and there can be no assurance or guarantee that the objectives of the Productwill be achieved. Any information contained in this publication does not constitute and shall be deemed not to constitute an advice,an offer to sell/ purchase or as an invitation or solicitation to do so for any securities ofany entity. Please note that this is not anadvertisement. The document is solely for the information and understanding of intended recipients only. If you are not theintended recipient, you are hereby notified that any use, distribution, reproduction or any action taken or omitted to be taken inreliance upon the same is prohibited and may be unlawful. Aditya Birla Sun Life Asset Management Company Ltd. (ABSLAMC) /its subsidiaries / affiliates or their officers, employees, personnel, directors shall not be liable for any loss, damage, liabilitywhatsoever for any direct or indirect loss arising from the use or access of any information that may be displayed in this publicationfrom time to time. Recipients of the information contained herein should exercise due care and caution and read the disclosuredocument (including if necessa, obtaining the advice of tax / legal / accounting / financial / other professionals) prior to takingof any decision, acting or omitting to act, on the basis of the information contained herein. Aditya Birla Sun Life AMC Limited-Portfolio Managers has used information that is publicly available, including information developed in-house. Some of the materialused in the document may have been obtained from members/persons other than the PMS and / or its affiliates and which mayhave been made available to the PMS and / or to its affiliates. Information gathered and material used in this document is believedto be from reliable sources. The PMS however does not warrant the accuracy, reasonableness and / or completeness of anyinformation. The actual investments / portfolio decisions are a result of complex technical & fundamental valuations at the disposalof the portfolio manager. Investors are advised against replication of strategies implemented. Information contained herein shallnot be copied/circulated/reproduced/quoted in any form or manner (in part or whole) without the express written consent ofAditya Birla Sun Life Asset Management Co. Ltd. Any forward-looking word, phrase or expression is subject to risks, uncertaintiesand assumptions that could cause actual results to differ materially from those contemplated by the said forward-looking word,phrase or expression.

One India Bulls Centre, Tower 1, 17th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai - 400 013.

Tel: 4356 8000. Fax: 4356 8110 / 8111

Security investments are subject to market risks and there is no assurance or guarantee that the investment objective will be achieved.

For any service related queries, please contact us:

1800 270 7000 [email protected]

Aditya Birla Sun Life AMC Limited (Investment Manager for Aditya Birla Sun Life Mutual Fund)CIN: U65991MH1994PLC080811.


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