BRICS PMS Performance Update - 16 August 2010
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Transcript of BRICS PMS Performance Update - 16 August 2010
MULTIPLE -STRATEGY TREND RATED
AUTOMATIC TRADING SYSTEM
Portfolio Management Services (PMS)
Performance Update
16 August, 2010
Vivek Mavani – Vice President and Senior Portfolio Manager
BRICS Growth Synopsis
BRICS Growth is a Long only Diversified Equity Product aimed at generating Absolute
Returns
The Objective is:
Generate Steady & Consistent returns over medium to long term
Low Volatility
Cautious on Margin of Safety
The Focus is therefore on Stock Picking with a Buy and Hold philosophy
Invest in high quality and high growth companies at reasonable valuations and
hold them over a period of time. (Not trade in & out frequently)
Our conservative approach to managing investments, (especially during periods of
volatility) is reflected in our superior performance.
Absolute Performance – 16 August, 2010
Inception Date: 1 October, 2009 Portfolio returns are net of fees & expenses
Weekly Monthly Quarterly Half YearlyYTD
(Calendar)
Since
Inception
BRICS Growth 3.28% 7.60% 18.11% 30.78% 30.41% 41.50%
NIFTY -1.24% 0.45% 6.38% 11.59% 4.18% 6.59%
SENSEX -1.29% -0.44% 9.76% 10.83% 3.36% 5.34%
S&P CNX 500 -0.55% 0.69% 11.04% 11.36% 5.21% 10.57%
S&P CNX MIDCAP 0.71% 3.48% 14.96% 22.32% 17.27% 30.13%
Performance Snapshot
Inception Date: 1 October, 2009 Portfolio returns are net of fees & expenses
-3%
2%
7%
12%
17%
22%
27%
32%
Monthly Quarterly Half Yearly YTD (Calender) Since Inception
BRICS Growth NAV Nifty Sensex S&P CNX 500 CNX Mid Cap
Consistency in our Month-on-Month Performance
Month Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 July-10 Aug-10
BRICS Growth -0.67% 2.79% 6.27% -1.84% 0.75% 6.24% 3.77% 1.86% 5.81% 3.84% 6.87%
NIFTY -7.31% 6.81% 3.35% -6.13% 0.82% 6.64% 0.55% -3.63% 4.45% 1.04% 0.94%
SENSEX -7.23% 6.48% 3.18% -6.34% 0.44% 6.68% 0.18% -3.50% 3.83% 1.56% 1.02%
S&P CNX 500 -6.46% 7.59% 4.43% -4.00% -0.69% 4.50% 1.27% -3.24% 4.59% 1.23% 1.77%
CNX MID-CAP -1.77% 8.65% 3.97% -3.11% -0.48% 7.50% 4.62% -3.79% 4.83% 3.50% 3.58%
Month-on-Month Comparison
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10
BRICS Growth Nifty Sensex S&P CNX 500 CNX Mid Cap
Compared to Top 20 Mutual Funds
The comparison includes 250 Diversified Equity Funds across all Fund Houses
Ranked on 1 month returns
Rank Scheme Name Performance
1 Mth % 3 Mths % 6 Mths %
1 Brics Growth 7.60 18.11 30.78
2 IDFC Premier Equity Fund - Plan A - Growth 6.75 15.67 25.75
3 Canara Robeco Emerging Equities - Growth 4.50 16.03 27.15
4 Escorts Growth Plan - Growth 4.20 7.76 22.76
5 HDFC Equity Fund - Growth 4.19 12.93 22.36
6 Franklin India Opportunity Fund - Growth 3.98 9.69 14.87
7 Fortis Future Leaders Fund - Growth 3.93 13.18 24.37
8 SBI Magnum Global Fund 94 - Growth 3.71 12.82 18.64
9 Kotak Emerging Equity Scheme - Growth 3.57 13.58 22.03
10 DSP BlackRock Equity Fund - Growth 3.48 9.90 18.26
11 Reliance Equity Opportunities Fund - Growth 3.43 13.18 25.93
12 Tata Select Equity Fund - Appr 3.15 7.52 13.06
13 Morgan Stanley A.C.E Fund - Growth 3.06 9.72 17.14
14 HDFC Long Term Equity Fund - Growth 2.95 12.06 19.17
15 Quantum Long-Term Equity Fund - Growth 2.83 10.22 19.49
16 Franklin India High Growth Companies Fund - Growth 2.82 9.71 13.88
17 Franklin India Prima Fund - Growth 2.65 11.55 17.98
18 DSP BlackRock India Tiger Fund - Growth 2.58 9.42 15.75
19 DSP BlackRock Opportunities Fund - Growth 2.57 10.6 19.68
20 Religare Growth Fund - Growth 2.55 9.08 15.33
The comparison includes 250 Diversified Equity Funds across all Fund Houses
Ranked on 3 month returns
Compared to Top 20 Mutual Funds
Rank Scheme Name Performance
1 Mth % 3 Mths % 6 Mths %
1 Brics Growth 7.60 18.11 30.78
2 Canara Robeco Emerging Equities - Growth 4.50 16.03 27.15
3 IDFC Premier Equity Fund - Plan A - Growth 6.75 15.67 25.75
4 Kotak Emerging Equity Scheme - Growth 3.57 13.58 22.03
5 Fortis Future Leaders Fund - Growth 3.93 13.18 24.37
6 Reliance Equity Opportunities Fund - Growth 3.43 13.18 25.93
7 HDFC Equity Fund - Growth 4.19 12.93 22.36
8 SBI Magnum Global Fund 94 - Growth 3.71 12.82 18.64
9 HDFC Long Term Equity Fund - Growth 2.95 12.06 19.17
10 Franklin India Prima Fund - Growth 2.65 11.55 17.98
11 HDFC Growth Fund - Growth 2.32 11.30 19.17
12 Fidelity Equity Fund - Growth 1.93 10.75 20.59
13 DSP BlackRock Opportunities Fund - Growth 2.57 10.6 19.68
14 JPMorgan India Equity Fund - Growth 2.19 10.38 18.68
15 Quantum Long-Term Equity Fund - Growth 2.83 10.22 19.49
16 DSP BlackRock Equity Fund - Growth 3.48 9.90 18.26
17 Morgan Stanley A.C.E Fund - Growth 3.06 9.72 17.14
18 Franklin India High Growth Companies Fund - Growth 2.82 9.71 13.88
19 Franklin India Opportunity Fund - Growth 3.98 9.69 14.87
20 Fidelity India Growth Fund - Growth 1.45 9.65 18.78
The comparison includes 250 Diversified Equity Funds across all Fund Houses
Ranked on 6 month returns
Compared to Top 20 Mutual Funds
Rank Scheme Name Performance
1 Mth % 3 Mths % 6 Mths %
1 Brics Growth 7.60 18.11 30.78
2 Canara Robeco Emerging Equities - Growth 4.50 16.03 27.15
3 Reliance Equity Opportunities Fund - Growth 3.43 13.18 25.93
4 IDFC Premier Equity Fund - Plan A - Growth 6.75 15.67 25.75
5 Fortis Future Leaders Fund - Growth 3.93 13.18 24.37
6 Escorts Growth Plan - Growth 4.20 7.76 22.76
7 HDFC Equity Fund - Growth 4.19 12.93 22.36
8 Kotak Emerging Equity Scheme - Growth 3.57 13.58 22.03
9 Fidelity Equity Fund - Growth 1.93 10.75 20.59
10 DSP BlackRock Opportunities Fund - Growth 2.57 10.60 19.68
11 Quantum Long-Term Equity Fund - Growth 2.83 10.22 19.49
12 ICICI Prudential Fusion Fund - IP - Growth 2.02 9.59 19.37
13 HDFC Growth Fund - Growth 2.32 11.30 19.17
14 HDFC Long Term Equity Fund - Growth 2.95 12.06 19.17
15 Fidelity India Growth Fund - Growth 1.45 9.65 18.78
16 JPMorgan India Equity Fund - Growth 2.19 10.38 18.68
17 SBI Magnum Global Fund 94 - Growth 3.71 12.82 18.64
18 DSP BlackRock Equity Fund - Growth 3.48 9.90 18.26
19 ICICI Prudential Discovery Fund - Growth 1.66 7.70 18.11
20 Franklin India Prima Fund - Growth 2.65 11.55 17.98
BRICS Growth NAV Trend
Indices have been range bound in the
last nine months, with interim periods of
volatility
Yet BRICS Growth has delivered steady
& consistent returns in line with our
objective
Performance has been a result of our
Stock Picking
Leading to consistency in our
performance as well as increasing out-
performance of our returns compared to
the benchmark indices
85
90
95
100
105
110
115
120
125
130
135
140
145
150
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BRICS Growth Nifty Sensex
S&P 500 CNX Midcap
BRICS Growth NAV v/s Indices (normalised)
BRICS Growth Outperformance
Our out-performance has been
increasing over a period of time
Our Strategy has been to :
Buying during panics
Book partial profits during sharp
rallies
Remain liquid in the interim
Large liquidity helps :
Protect against volatility
Provides enough courage and
conviction to buy into panics
Current cash/liquid balances ~ at 18% of
the Portfolio
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
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Nifty Sensex S&P 500 CNX MidCap
BRICS Growth NAV Outperformance vis-a-vis Indices
Portfolio Breakup
Large Cap. More than Rs 5,000 crores
Mid-Cap Rs 1,000 - 5,000 crores
Small Cap. Less than Rs 1,000 crores
Cash 18%
Construction 6%
Media 6%
Consumer Goods 13%Oil & Gas
22%
Banking & Finance 14%
Branded Garments & Retail 21%
Sectoral Allocation
Large Cap 34%
Mid Cap 29%
Small Cap 19%
Cash 18%
Market Cap
Low Portfolio Turnover (Buy & Hold at work)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
tim
esPortfolio Turnover
Portfolio Turnover
10 Biggest falls since October 2009
How much a portfolio falls during a
correction / sharp downturn is as
important as how much it gains in a bull
market
Protecting capital is often more important
during periods of volatility
Downside protection equally contributes
to superior returns over a period of time
We have managed to fall less than the
indices during each of the sharp falls /
panics since our inception
Date
Points
Fall -
Nifty
% Fall -
Nifty
Points
Fall -
Sensex
% Fall -
Sensex
% Fall -
BRICS
Growth
27-Jan-10 -159.65 -3.19% -490.64 -2.92% -2.29%
03-Nov-09 -147.80 -3.14% -491.34 -3.09% -0.36%
19-May-10 -146.55 -2.89% -467.27 -2.77% -0.84%
25-May-10 -137.20 -2.78% -447.07 -2.71% -1.62%
05-Feb-10 -126.70 -2.61% -434.02 -2.68% -0.47%
27-Oct-09 -124.20 -2.50% -387.10 -2.31% -0.65%
21-Jan-10 -127.55 -2.44% -423.35 -2.42% -1.32%
01-Jun-10 -116.10 -2.28% -372.60 -2.20% -1.24%
26-Nov-09 -102.60 -2.01% -344.02 -2.00% -0.95%
07-Jun-10 -101.50 -1.98% -336.62 -1.97% -0.99%
04-Feb-10 -86.50 -1.75% -271.10 -1.64% -0.28%*Beta measures the volatility of the
portfolio relative to the index
Against -- Nifty Sensex
Beta * 0.4023 0.3995
Market Outlook
Global macro economic risks will continue to weigh on the markets. Will definitely have
repercussions on India over a period of time, if not on a daily basis
Rest of 2010, Markets are likely to remain range bound with negative bias and sharp
interim volatility
Markets have been very discriminating against corporates under-performing expectations. As a
result valuations/multiples could de-rate over a period of time. These stocks may not bounce
back for a while even if the overall markets do
Corporates that have delivered/exceeded expectations have witnessed re-rating of multiples and
have seen sharp bounce backs after each panic/fall
Overall Valuations are reasonable, but definitely not cheap
In some sectors/stocks valuations already factor in fairly aggressive growth rates for FY11
and FY12. Corporate performances could disappoint in those cases given high
expectations
Q1 FY2011 results have just about met the expectations. In fact most sectors under-
performed the expectations on profit margin front.
Pockets of opportunities still available in those stocks where growth v/s valuations are still
favourable
Our Strategy
“Time” in the markets is more important than “Timing” the markets
Superior long-term sustainable returns are not made by timing the markets in terms of selling at
the peaks. They are a result of purchase prices that are attractive in terms of valuations with
adequate margin of safety
Even in range bound markets there are enough stocks providing consistent and absolute returns.
Stock picking therefore is the key
Our strategy going ahead would continue to be:
Buy on declines/panics
Use the sharp rallies for part profit booking
Hold large cash/liquidity during interim periods
The sectors that we are bullish are and continue to be over weight:
Banking & Financial Services,
Gas Transportation & Distribution
Domestic Consumption oriented sectors including Paints, Branded Garments, Media etc.
Thank You
Vivek Mavani – Senior Portfolio Manager
BRICS SECURITIES LIMITED
1st Floor, Sadhana House,570, P. B. Marg,Behind Mahindra Towers,Worli, Mumbai – 400 018.Tel: 91-22-6636 0000.
Happy Investing