SERIES 1 An Annual Interval Scheme investing in Equity and Equity - - PowerPoint PPT Presentation
IIFL CAPITAL ENHANCER FUND - SERIES 1 An Annual Interval Scheme investing in Equity and Equity Related Securities CURRENT ASSET ALLOCATION: INDIAN SCENARIO The current asset allocation* of Indian investors is skewed in favour of fixed income
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The current asset allocation* of Indian investors is skewed in favour of fixed income as against equity
* Asset allocation based on MF Industry AUM and Bank Deposits **Source: RBI report (March 2004 – Dec 2017) ^Source: Association ofMutual Funds of India (AMFI) Website,AUM as on 31-Dec-2017
Inflation Index 10Year G-Sec Yields
2 4 6 8 10 12 14 16 18 Mar 04 Aug 04 Jan 05 Jun 05 Nov 05 Apr 06 Sep 06 Feb 07 Jul 07 Dec 07 May 08 Oct 08 Mar 09 Aug 09 Jan 10 Jun 10 Nov 10 Apr 11 Sep 11 Feb 12 Jul 12 Dec 12 May 13 Oct 13 Mar 14 Aug 14 Jan 15 Jun 15 Nov 15 Apr 16 Sep 16 Feb 17 Jul 17 Dec 17
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Although volatile in the short term, equities have created value in the long term
Periods of Capital Erosion
1771.9 10530.7 2000 4000 6000 8000 10000 12000 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Nifty Returns (2004 -2017) CAGR – 15%
Sub-prime Crisis Euro Crisis Greece Default and China Metldown Demonetisation
Source: Bloomberg
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268.54 22.76 37.75 102.43 50 100 150 200 250 300 Debt Mutual Funds Balanced Funds
31-Dec-16 31-Dec-17
Source: Associationof Mutual Funds of India (AMFI)
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Source: Bloomberg 2 4 6 8 10 12 02-Jan-08 23-Jan-08 13-Feb-08 05-Mar-08 26-Mar-08 16-Apr-08 07-May-08 28-May-08 18-Jun-08 09-Jul-08 30-Jul-08 20-Aug-08 10-Sep-08 01-Oct-08 22-Oct-08 12-Nov-08 03-Dec-08 24-Dec-08
January - December 2008
CRISIL Balanced Fund Nifty
Fall in Nifty: 50% Fall in CRISIL BLFD: 40%
8.6 8.8 9 9.2 9.4 9.6 9.8 10 10.2 30-Jan-18 06-Feb-18 13-Feb-18 20-Feb-18 27-Feb-18 06-Mar-18 13-Mar-18 20-Mar-18
February-March 2018
Balanced Funds Nifty
Fall in Nifty: 10% Fall in CRISIL BLFD: 5%
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has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves”
Peter Lynch
a device for transferring money from the impatient to the patient”
rains gold, put out the bucket, not the thimble”
Warren Buffet
edge an investor can have is a long-term
Seth Klarman
investing adage that comes close to a rock solid principle its this – Time in the market is more important that timing the market” Charles Schwab
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ENSURE PORTFOLIO LIQUIDITY – GET OPPORTUNITIES TO REBALANCE IF MARKET CONDITIONS CHANGE
Mutual Fund investments are subject to market risks, read all scheme related documents carefully
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investing in a put option
market
capitalize on the exponential acceleration in the Indian economy
that will lead the economic growth
LIMIT THE DOWNSIDE MAXIMISE THE UPSIDE
Equity Scrips forming part of Nifty 50 Universe Other Equity Scrips with a Market Cap of > USD 2BN Nifty 50 Put Option Premium for Hedge
75-100% 0-25% 0-8% Dual advantage of limiting the downside and potentially unlimited upside benefits
For complete details on investment strategy (Including illustrations on derivative strategies refer SID/KIM available on the website www.iiflmf.com) *Indicative Allocation at the time of initial portfolio construction, post closure of NFO. IIFL Mutual Fund/AMC is not guaranteeing returns on investments made in this scheme. The portfolio allocation is subject to change depending on the market conditions. Please refer the risks factors associated with the investmentin SID/KIM.
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before the specific expiry date.
LIMITS THE DOWNSIDE ENABLES UNCAPPED UPSIDE
The investment strategy of hedging by investing in NIFTY 50 PUT Option may or may not enable the downside protection. The strategy of protecting the downside is based only on the movement of value of NIFTY 50 and not the scheme’s stock portfolio. Using Index Option of NIFTY 50 PUT for the purpose of hedging may not be efficient due to mis–pricing, improper valuations, portfolio composition and coloration and liquidity. For complete Risk Factors, please read the offer document.
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Portfolio Illustration based on the following assumptions
Nifty 50 Today +5% +10% +15% +20% +25% Nifty 50 Levels Today
Loss capped at 4% (option premium cost)
0%
+10% +20% +30%
* Premium of 4% based on counterparty quotes received by IIFL AMC. Actual premium may or may not be at the same levels and shall depend on market conditions at the timeof deploymentevery year
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Illustration based on the following assumptions: Invested Amount = Rs.100, Cost of Put = 4% of hedged amount, Allocation to Stocks Portfolio = 96.15% NIFTY 50* Level = 10000 Downside protection as put payoff offsets loss in the portfolio Enables Uncapped Upside due to investment in equities
The above illustrates the payoff in multiple scenarios of index levels at maturity. For e.g., if the index falls to 8000 after 3 years (i.e. a 20% fall), the scheme falls only by 3.85% assuming 0% outperformance. However, given an outperformance of 3% over the 3 year period, the scheme returns -0.96% (see row corresponding to NIFTY 50 level at 8000). The scheme thereby aims to provide downside protection. However, in scenarios with higher index levels, the scheme delivers commensurate returns with no upside cap.
The above illustration does not in any manner offer any assured returns and is subject to market risks. The above illustration does not take expenses into account and that the returns shown are assumed figures and not to be constructed as actual returns and/or guaranteed returns. IIFL AMC is not guaranteeing returns on investments made in the Scheme. The information provided herein is used to explain the concept and is given for illustrative purposes only. The same is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as an investment advice to any party. Past performance may or may not be sustained in future. In view of the individual circumstances and risk profile, each investor is advised to consult his / her professional advisor before makinga decision to invest in the scheme. *NIFTY 50 has been used for illustration purpose. Benchmark ofthe fund is Crisil Balanced (Aggressive) Index. # Outperformance inthis illustrationrefers to excess returns over the NIFTY 50 index post fees.
NIFTY 50* Level at Maturity NIFTY 50* Returns Fund Return (with 0% Outperformance) Fund Return (with 3% Outperformance)#
5000
6000
7000
8000
9000
11000 10.00% 5.77% 8.65% 12000 20.00% 15.38% 18.27% 13000 30.00% 25.00% 27.88% 14000 40.00% 34.62% 37.50% 15000 50.00% 44.23% 47.12%
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SCENARIO 1
NIFTY Strategy* Year 1 30% 28% Year 2 20% 18% Year 3
Overall 3% 14%
doesn’t impact overall returns significantly
100 130 156 109 100 128 151 150 80 130 Today Year 1 Year 2 Year 3
Nifty Strategy
* Strategyrefers to hedged portfolio computed on back testedbasis Considered out performanceof 3% over Nifty, post all expenses Back tested results are no assurance of future performance.Above illustrationis only for reference
The above illustration explains the behavior of the strategy in various scenarios and does neither in any manner, reflect, assure, assume the returns of the actual portfolio, nor is it a recommendation made by IIFL AMC. IIFL MF/AMC is not guaranteeing any returns on investments made in the schemes.
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SCENARIO 2
NIFTY Strategy* Year 1
Year 2 20% 18% Year 3 20% 18% Overall 5% 11%
returns, provides ability to recover faster when markets rally
when markets correct 100 80 96 115 100 99 117 139 60 110 160 Today Year 1 Year 2 Year 3
Nifty Strategy
* Strategyrefers to hedged portfolio computed on back testedbasis Assumed out performance of3% over Nifty,post all expenses Back tested results are no assurance of future performance.Above illustrationis only for reference
The above illustration explains the behavior of the strategy in various scenarios and does neither in any manner, reflect, assure, assume the returns of the actual portfolio, nor is it a recommendation made by IIFL AMC. IIFL MF/AMC is not guaranteeing any returns on investments made in the schemes.
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SCENARIO 3
NIFTY Strategy* Year 1 40% 37% Year 2
Year 3 30% 28% Overall 13% 20%
returns 100 140 112 146 100 138 136 174 90 140 190 Today Year 1 Year 2 Year 3 PERFORMANCE ILLUSTRATION Nifty Strategy
* Strategyrefers to hedged portfolio computed on back tested basis Assumed out performance of3% over Nifty,post all expenses Back tested results are no assurance of future performance.Above illustrationis only for reference
The above illustration explains the behavior of the strategy in various scenarios and does neither in any manner, reflect, assure, assume the returns of the actual portfolio, nor is it a recommendation made by IIFL AMC. IIFL MF/AMC is not guaranteeing any returns on investments made in the schemes.
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Period NIFTY Returns CRISIL Balanced Fund Returns Strategy* CY 2003 72% 43% 68% CY 2004 11% 7% 9% CY 2005 36% 23% 34% CY 2006 40% 25% 37% CY 2007 55% 37% 52% CY 2008
CY 2009 76% 46% 72% CY 2010 18% 14% 16% CY 2011
CY 2012 28% 21% 26% CY 2013 7% 5% 6% CY 2014 31% 25% 29% CY 2015
0%
CY 2016 3% 6% 2% CY 2017 29% 20% 27%
Notes: * Strategyrefers to hedged portfolio computedon back tested basis; Considered Net Outperformance of 3% per annum post management feesand expenses The aboveillustration aims to explain the strategyof the scheme,if it had existed in the past; Back tested results are no assuranceof futureperformance
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management, low leverage and which offer a large margin of safety
PREFERRED SECTORS/THEMES
Preferred segments - Private Banks, NBFC’s and Insurance
bank loans
UTILITIES
Key Segments – Energy
growing industrial and local demand in urban and especially rural India.
improving gas demand of industrial sector due the pollution concerns around pet coke and as well as government’s thrust on city gas distribution penetration
FINANCIALS
solutions- Digital services are growing rapidly and forming a formidable chunk of IT portfolio- grown from ~-10% to 20%+ of overall revenue
IT
For names of sectors mentioned are currently part of the benchmark and are provided for illustration purposes only, to depict the diversified nature of the
may not have any presentor future positions in these industries.IIFL Mutual Fund/AMC is not guaranteeingany returns on investmentsmade in the scheme.
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Calendar Year Returns (%)* Sector 2013 2014 2015 2016 2017 NIFTY Auto 9.4 56.7
10.7 31.4 NIFTY Bank
64.6
7.4 40.5 NIFTY Financial Services
57.3
4.9 41.4 NIFTY FMCG 12.2 18.2 0.3 2.8 29.4 NIFTY IT 58.0 17.8 0.0
12.2 NIFTY Metal
7.0
45.2 48.5 NIFTY Pharma 26.5 43.4 9.3
NIFTY Media 1.5 33.0 10.3
32.7 NIFTY Energy 0.4 8.5
19.7 38.7 NIFTY 6.8 31.4
3.0 28.6 Max Outperformance 51.2 33.2 14.4 42.2 19.9 Max Underperformance
* Source: Bloomberg
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SCHEME NAME IIFL CAPITAL ENHANCER FUND – SERIES 1 OBJECTIVE To achieve long term capital appreciation by investing in equity and equity related securities, with strategy
However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved. TYPE Annual Interval Scheme investing in Equity and Equity Related Securities* NFO OPEN DATE April 23rd 2018 NFO CLOSE DATE May 4th 2018 BENCHMARK CRISIL Balance Fund – Aggressive Index FUND MANAGER
Wealth Group since inception and has been instrumental in setting up the equity desk at IIFL Wealth Group. As a Chief Executive Officer of IIFL Asset Management Limited (IIFL AMC), he has been instrumental in launch of various products under Mutual Fund, Alternative Investment Fund and PMS platform of IIFL AMC. He is a MBA from IIM Ahmedabad and B Tech from IIT Kanpur. His previous assignment includes a stint in JP Morgan, London and heading Irevna (a Standard & Poor’s company). PLANS OFFERED Regular Plan and Direct Plan OPTIONS OFFERED Growth & Dividend Option ASSET ALLOCATION Equity or Equity Related Instruments including Derivatives: 65 – 100% Debt and money market instruments: 0 - 35% MINIMUM APPLICATION AMOUNT
period) Investments above the minimum amount mentioned, shall be made in multiples of Re. 1. LISTING The units of the Scheme will be listed on the National Stock Exchange (NSE). Exit Load not applicable
*The first STP (Specified Transaction Period) of the Scheme may occur beyond a period of 12 months from the close of the New Fund Offer (NFO) but not later than June 30, 2019. The subsequentSTPs shall occur at an interval of 12 months.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully
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This product is suitable for investors who are seeking* Long Term Capital Growth; Investments in equity and equity related securities with a Strategy of hedging by buying NIFTY 50 Put Option and other Equity derivatives;
* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY
This presentation has been prepared and issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact and terms and conditions `and features of IIFL Capital Enhancer Fund. This document is for information purposes and private circulation only and is not an offer to sell or a solicitation to buy any mutual fund units / securities. The information/ data here in alone is not sufficient and shouldn't be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions, figures, charts/graphs, estimates and data included in this presentation are as on date and are subject to change without notice. This presentation is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to local law, regulation or which would subject IIFL and affiliates to any registration or licensing requirement within such jurisdiction. The units / securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. While utmost care has been exercised while preparing this document, the Sponsors/the AMC/ the Trustee Company/ their associates/ any person connected with it, does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising
uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Readers shall be fully responsible / liable for any decision taken on the basis of this presentation. No part of this document may be duplicated in whole or in part in any form and/or redistributed without prior written consent of the IIFL Mutual Fund / IIFL Asset Management Limited. Readers should before investing in the Scheme make their
with it, accept any liability arising from the use of this information.
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Contact us at Customer Service: (91-22) 39585896 / 5172 / 5600 6th Floor, IIFL Centre, Kamala Mills Compound, Lower Parel, Mumbai 400 013 www.iiflmf.com