DSP BlackRock A.C.E. Fund ( Analysts Conviction Equalized ) Series - PowerPoint PPT Presentation

November 2017 DSP BlackRock A.C.E. Fund ( Analyst’s Conviction Equalized ) Series 1 Multi Cap Fund - A close ended equity scheme investing across large cap, mid cap, small cap stocks

ACE = People + Process + Protection v i c n t i o o n C • • E s q ` ’ + + = DSP BlackRock u t s a y A.C.E. Fund^ l l i a z e n d A People Process Protection* 2. *Put Option limits downside, from the underlying security, up to the cost of Put ^DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 (The Scheme)

Why DSP BlackRock A.C.E. Fund*? People: Together. Everyone. Achieves. More.^ Analysts out of a 16 member Investment T.E.A.M. pick top ideas from the stock pool Process We believe a consistent Investment Process precedes Strong Performance Protection: Risk Management Important to protect downside when markets are at above average valuations. *DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 (The Scheme) ^ Refer Slide 18 for details on the Equity Investments Team 3.

Reasons to Invest in the DSP BlackRock A.C.E. Fund* ` High Conviction No Sector No Stock Downside Stock Ideas Allocation Bias Allocation Bias Protection Across Sectors The Scheme invests Portfolio protected The Scheme will Equal weights for in Analysts’ High against falling markets have sector all stocks Conviction ideas through put options allocation in-line within a sector across each sector available at a with NIFTY 500 reasonable price *DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 (The Scheme) 4.

A Consistent Investment Process Precedes Strong Performance PROCESS GOOD BAD DSP BlackRock A.C.E Fund* aims to be in this quadrant Well deserved Dumb luck (Sustained success) HIGH SUCCESS LOW Temporary Obvious (Persistence leads to high success) 5. By J. Edward Russo and Paul J. H. Schoemaker from the book Winning Decisions *DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 (The Scheme)

Stock Coverage Our eyes, ears and minds are always open to new ideas Active coverage UNIVERSE COVERAGE OWNERSHIP ANALYST CONVICTION IDEAS Stocks BSE 500+ Covered ~340 Owned ~240 45-55 Stocks ~US$ 1.96 trn ~US$ 1.72 trn ~US$ 1.33 trn Market Cap We own 50 stocks across our portfolios which are outside the top 500 stocks by market cap. 6. Source: DSP BlackRock, as of October 2017 Above information on stock pool is across all schemes of DSP BlackRock.

Idea Generation (Portfolio Managers + Analysts) INTERNAL EXTERNAL Together. Everyone. Achieves. More Our Network creates our Networth Daily morning calls Interactions with 400+ companies a year Weekly all-day team meeting 15+ conferences a year every Wednesday Industry experts, supply chain checks Weekly calls with global BlackRock teams Sell-side interactions Internal screens Source: DSP BlackRock, as of October 2017 7.

In-depth Company Analysis Investment Philosophy: Growth at a Reasonable Price We focus on incremental ROE and Price/Book , STEP Focus on Companies in addition to other fundamental parameters and Earnings 01 Investment Comfort STEP Across each of the 340 stocks under coverage Price Target 02 Conviction Expressed DSP BlackRock A.C.E. Fund* STEP Strong buy Buy Large portion of the portfolio aims to Stock Recommendation be in Strong Buys and Buys 03 Hold Sell Strong sell Overall at a fund house level our endeavour is to maintain ~70% of our scheme portfolios in Strong Buys and Buys 8. *DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 (The Scheme)

Our proprietary EQ & IQ framework EQ IQ Emotional Quotient Intelligence Quotient (Subjective) (Objective) Stocks under coverage are assigned a binary rating across 7 parameters Analyst view on earnings growth trajectory over the next 2-3 quarters EQ SHORT TERM GROWTH (STG) 10 year market-cap CAGR greater than broader market* IQ LONG TERM GROWTH (LTG) Analyst view of stock valuation (combination of relative and absolute) versus the sector EQ VALUE (VAL) Either absolute ROE > 15% or an improving ROE trajectory IQ RETURN ON EQUITY (ROE) Analyst view of business / quarterly shocks EQ PREDICTABILITY (PRE) Threshold of stock volatility being lower than market volatility IQ VOLATILITY (VOL) Analyst view of management quality EQ QUALITY (MQ) Name RECO STG LTG VAL ROE PRE VOL MQ Some of our Bharat Petroleum Strong Buy 1 1 1 1 0 1 1 indicative Maruti Suzuki Strong Buy 1 1 0 1 1 1 1 recommendations / ratings Federal Bank Buy 1 1 1 0 1 0 1 Bharti Airtel Hold 0 0 1 0 0 1 0 Source: DSP BlackRock, as of October 2017. | *Or as many years as available if <10years; Broader market refers to NIFTY 500. Refer Slide 10 for details on Simulated Portfolio mapping to EQ & IQ framework. The above information is only for illustration purpose 9. and should not be construed as recommendation of the stocks. There is no guarantee of returns/income generation in the Scheme.

Analyst Portfolio^ on the proprietary EQ & IQ framework % of Analyst Portfolio with Binary Rating of 1 across EQ & IQ parameters LT ST Quality ROE Value Predictability Volatility Growth Growth (Management) 73% 67% 84% 37% 57% 92% 49% Analyst Portfolio 55% 47% 68% 38% 53% 82% 76% BSE 100 Binary ratings across EQ & IQ parameters Binary Rating Count of Companies (No. of 1s across EQ & IQ parameters) 0 0 1 0 2 3 3 5 4 14 5 17 6 12 7 0 Total Companies 51 10. Source: DSP BlackRock, as on September 29, 2017 | ^ Portfolio simulated with the investment process and strategy proposed for the Scheme. The above information is only for illustration purpose. There is no guarantee of returns/income generation in the Scheme.

Portfolio Construction for DSP BlackRock A.C.E. Fund* No Stock No Sector Analysts’ Allocation Bias Allocation Bias Conviction 45 - 55 High Conviction stocks Adherence to = weights for stocks picked across sectors from the NIFTY 500 within a sector coverage pool sector weights Portfolio Downside Rebalancing/ Protection Reconstitution Stock allocation= ~ 94% Quarterly re-balancing Real time re-balancing stock Put allocation = ~ 6% inclusion/exclusion 11. *DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 | ^Refer Slide 16-17 for illustration on how NIFTY 50 Put Option can be used to hedged portfolio against down markets.

Performance: Analyst Portfolio^ vs. Active Diversified Equity Funds, NIFTY 500 TRI & NIFTY 50 TRI Alpha of portfolio Portfolio has over peers/indices better Return/Risk Performance in % α 2012 2013 2014 2015 2016 YTD Absolute CAGR Standard Return / Risk 2017 Deviation Analyst Portfolio^ 36.5 6.4 51.2 -1.7 9.6 31.1 210.1 21.8 -- 14.5 1.50 29 Diversified 34.1 5.9 52.4 3.4 5.6 23.6 193.2 20.4 1.4 17.3 1.18 Equity Funds*# NIFTY 500 TRI 33.5 4.8 39.3 0.2 5.1 24.6 155.9 17.8 4.0 14.8 1.20 (Total Return Index) 127.6 15.4 6.4 15.1 1.02 NIFTY 50 TRI 29.4 8.1 32.9 -3.0 4.4 20.9 Analyst Portfolio vs. Diversified Equity NIFTY 500 NIFTY 50 Funds Universe Beta 0.97 1.01 1.03 Correlation 0.95 0.95 0.92 High conviction Ideas held for the long term – evident in low portfolio turnover of ~40% vs. avg. of ~68% for 29 Diversified Equity Funds Source – DSP BlackRock, MFIE, Factset. Data from December 30, 2011 to September 29, 2017. | ^ Portfolio simulated with the investment process and strategy proposed for the Scheme; Returns are post expense of 2.5% | *Average Returns. # Diversified Equity Funds with minimum INR 1,000 crores in AUM, and Average last 6 months portfolio allocation: <75% in Large Cap and <55% in Mid+Small+Micro Cap. 12. Figures for indices are on Total Return basis. These figures pertain to performance of the simulated portfolio out of Analysts’ Top Picks and do not in any manner indicate the returns/performance of the Scheme. Past performance may or may not be sustained in future.

Annexures 13.

DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 Investment Objective: The primary investment objective of the Scheme is to generate capital appreciation by investing predominantly in portfolio of equity and equity-related securities NIFTY 500 Index Benchmark: M. Suryanarayanan Fund Manager: Under normal circumstances, it is anticipated that the asset allocation of the Scheme Asset Allocation: shall be as follows: A. Equity and equity related securities: 80% to 100% B. Debt and money market instruments: 0% to 20%. C. Units issued by REITs & InvITs: 0% to 10% 37 months from the date of allotment Tenure: Minimum Application Amount (Applicable only during New Applicable to both Regular & Direct Plan: Rs. 1,000 Fund Offer Period): NFO opens: 17 Nov, 2017 NFO closes: 01 Dec, 2017 NFO Details: 14.