Discover the true value , before the world does. Presenting HDFC - PowerPoint PPT Presentation

Discover the true value , before the world does. Presenting HDFC Capital Builder Value Fund (An open ended equity scheme following a value investment strategy) Please refer page 24 for product labelling September, 2018

HDFC CAPITAL BUILDER VALUE FUND Investment philosophy and approach The Scheme’s approach is opportunity dependent, primarily buying value stocks. Focus on undervalued stocks that are trading below intrinsic value, as measured require a contrarian view. The Scheme may own good businesses going through Seeks to buy companies with strong track record. As a result, Avoids companies where management quality is poor and there is history of corporate governance issues. Overall preference is to buy companies with good cash fl ows and strong management and own them for an 2 For complete scheme related details kindly refer Key Information Memorandum / Scheme Information Document

HDFC CAPITAL BUILDER VALUE FUND A Value Investment Strategy No Market cap bias Being a multj-cap fund benchmarked to the NIFTY 500 there is an atuempt to have good representatjon across market capitalizatjons based on opportunity and risk-reward . No Sector bias Well diversified across sectors-with a bias towards aturactjve companies in each sector (Refer page 6). Value Bias The Scheme will generally maintain a minimum of 50% of the equity portgolio in stocks where Trailing P/E (Price/Earnings) or trailing P/B (Price /Book Value) Ratjo is less than Median P/E or P/B of stocks in the NIFTY 500 Index (Refer page 4). 4 GUIDING PRINCIPLES FOR PORTFOLIO CREATION Focus on buying value stocks Ensuring consistency of risk adjusted returns 3 HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in this scheme. The current investment strategy is subject to change depending on the market conditions.

HDFC CAPITAL BUILDER VALUE FUND Value biased What has worked ? • (Refer page 9) • as a value fund w.e.f. M ay 23, 2018. 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 50% What has worked in the past (value bias) to continue going forward 4 Inception Date - February 01, 1994

HDFC CAPITAL BUILDER VALUE FUND Risk management through wide sectoral div ersific ation The Scheme has maintained e xposu re to a t least 13 out of 18 sectors in the benchmark (NIFTY 500 TRI) over last 4 fiscal years. Outperformance generated over benchmark (Refer page 9) SECTOR SEP .14 DEC.14 MAR.15 JUN.15 SEP .15 DEC.15 MAR.16 JUN.16 SEP .16 DEC.16 MAR.17 JUN.17 SEP .17 DEC.17 MAR.18 JUN.18 Financial Services 27.4 30.9 28.4 27.2 28.2 24.3 22.9 25.1 27.0 27.8 28.0 29.4 30.2 29.7 31.3 31.9 Energy 11.4 11.5 12.1 12.1 11.6 13.3 11.3 9.6 9.8 9.1 10.9 10.1 11.0 12.0 14.2 15.3 Consumer Goods 8.4 7.5 7.1 7.4 7.7 9.0 9.6 7.3 7.9 7.6 10.1 11.1 9.3 9.5 9.4 10.2 IT 15.0 13.9 11.4 11.3 11.7 10.9 9.7 11.3 8.9 9.4 8.4 8.6 7.5 6.8 7.5 9.7 Pharma 9.5 8.9 9.0 9.5 9.9 9.3 6.8 8.2 9.1 9.1 6.8 7.9 8.0 7.3 6.6 6.9 Construction 5.5 6.5 8.2 9.3 8.6 10.1 9.2 9.3 10.0 10.5 10.6 10.7 10.3 10.3 8.1 5.6 Industrial Manufacturing 3.9 3.8 3.1 2.8 3.6 4.1 2.2 2.0 1.5 1.7 1.8 1.7 2.7 2.9 2.9 3.1 Metals 1.0 - 0.9 1.6 1.4 1.4 1.2 1.8 0.9 1.2 1.3 3.3 6.3 5.7 5.2 5.0 Services 1.2 1.2 1.1 1.0 1.2 1.6 2.4 3.4 4.2 4.0 4.7 4.4 4.5 5.4 5.0 3.9 Media & Entertainment 2.0 1.6 1.7 2.5 3.2 4.5 4.3 4.4 4.5 4.0 3.6 3.6 3.3 3.6 2.7 2.1 Chemicals 5.7 5.0 5.6 5.4 2.6 2.6 2.1 1.8 1.7 1.9 1.9 1.9 2.0 2.0 1.6 2.2 Cement & Cement Products 1.5 2.0 3.9 4.0 3.7 5.4 4.2 4.7 3.7 3.5 - - 0.8 0.9 1.6 1.9 Automobile 5.5 5.5 6.2 4.9 4.4 5.9 6.2 6.7 6.1 6.0 5.5 5.2 4.6 3.1 2.7 1.9 Telecom 2.2 1.8 1.4 1.3 2.2 2.8 3.3 4.4 4.2 4.0 3.7 2.6 0.6 0.2 1.1 - Effective div ersification across wide ar ray of sectors to manage risk 5 Source: Bloomberg - Sector classification as per IISL Stocks/sectors referred above are illustrative and are not recommended by HDFC Mutual Fund/AMC. The Fund may or may not have any present or future positions in these stocks/sectors. The above statements / analysis should not be construed as an investment advice or a research report or a recommendation to buy or sell any security covered under the respective sector/s .The same has been prepared on the basis of information which is already available in publicly accessible media.

HDFC CAPITAL BUILDER VALUE FUND Div ersific ation similar to the benchmark Heat Map :- Sector Overweight / Underweight vis-à-vis benchmark. Sectors Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- +/- Average Energy -0.04 1.18 2.68 2.17 2.32 2.89 0.61 -0.64 -0.90 -2.38 -0.58 -0.87 -0.75 -0.02 2.56 4.23 0.55 Media & Entertainment 1.07 0.59 0.75 1.54 2.22 3.41 3.28 3.30 3.34 2.92 2.42 2.50 2.25 2.51 1.60 1.13 2.25 Industrial Manufacturing 0.90 0.52 -0.35 -0.59 0.35 0.89 -0.75 -0.97 -1.39 -1.24 -1.23 -1.23 -0.04 0.08 0.24 0.60 -0.32 Services -0.95 -1.06 -1.22 -0.84 -1.06 -0.29 0.60 1.64 2.23 2.17 2.65 2.53 2.61 3.40 3.07 2.17 1.03 Construction 0.86 1.94 3.31 4.35 4.20 5.94 5.17 4.97 5.93 6.50 6.45 6.42 6.04 5.87 3.58 1.57 4.77 Pharma 2.51 2.36 1.60 1.48 1.11 1.14 -0.82 0.94 1.97 2.22 0.56 2.35 2.88 2.26 1.91 2.08 1.63 Chemicals 5.11 4.33 4.96 4.77 1.92 1.87 1.47 1.14 1.03 1.22 1.06 1.06 1.04 0.96 0.54 1.21 2.17 Metals -3.16 -3.71 -2.70 -2.02 -1.37 -1.47 -1.78 -1.25 -2.29 -2.29 -2.27 -0.44 1.99 1.39 1.04 1.07 -1.36 Paper -0.03 -0.03 -0.02 -0.03 -0.03 -0.05 -0.04 -0.05 -0.05 -0.05 -0.04 -0.04 -0.04 -0.04 -0.03 -0.02 -0.04 Healthcare Services -0.26 -0.25 -0.30 -0.29 -0.32 -0.33 -0.31 -0.28 -0.31 -0.32 -0.34 -0.39 -0.35 -0.37 -0.26 -0.26 -0.31 Cement & Cement Products -1.28 -0.62 1.14 1.33 1.10 2.69 1.23 1.46 0.37 0.58 -3.03 -2.39 -1.65 -1.54 -0.68 -0.59 -0.09 Textiles -0.51 -0.54 -0.47 -0.58 -0.59 -0.72 -0.67 -0.70 -0.67 -0.70 -0.68 -0.65 -0.66 -0.75 -0.69 -0.68 -0.64 Fertilisers & Pesticides -0.68 -0.64 -0.67 -0.73 -0.65 -0.64 -0.68 -0.80 -0.82 -0.97 -0.95 -1.02 -0.95 -0.93 -0.90 0.00 -0.80 Financial Services 1.63 1.91 0.50 -0.66 0.87 -2.69 -3.32 -1.99 -1.65 -0.22 -1.37 -1.32 -1.39 -0.28 -1.43 -0.43 -0.76 Telecom -0.39 -0.50 -1.00 -1.41 -0.12 0.38 1.06 2.35 2.53 2.23 1.96 0.71 -1.25 -1.89 -0.72 -1.61 0.26 IT 2.03 1.73 -1.24 -0.39 -1.58 -1.62 -3.95 -0.93 -1.57 -1.60 -1.39 -0.46 -1.19 -2.16 -2.37 -0.77 -1.11 Consumer Goods -3.22 -3.76 -4.31 -4.04 -4.18 -3.19 -2.71 -5.24 -4.09 -4.36 -2.12 -1.85 -2.92 -2.68 -3.16 -2.62 -3.46 Automobile -3.60 -3.43 -2.64 -4.06 -4.18 -3.21 -3.07 -2.85 -4.16 -3.92 -3.87 -4.45 -4.85 -6.37 -6.36 -6.70 -4.07 Sectoral presence similar to benchmark, coupled with bottom up stock picking has generated consistent alpha over the years (Refer page 9) 6 Source: Bloomberg - Sector classification as per IISL Stocks/sectors referred above are illustrative and are not recommended by HDFC Mutual Fund/AMC. The Fund may or may not have any present or future positions in these stocks/sectors. The above statements / analysis should not be construed as an investment advice or a research report or a recommendation to buy or sell any security covered under the respective sector/s .The same has been prepared on the basis of information which is already available in publicly accessible media.

HDFC CAPITAL BUILDER VALUE FUND Risk Management through portfolio div ersific ation Consistent approach to diversification Average T op 10 H olding (%) sin ce M ar ch 2015 = 41% Average N umber of stocks since M ar ch 2015 = 56 Top 10 Holding (%) Number of stocks Low portfolio concentration 7