Emerging opportunities that could help to generate long term wealth - PowerPoint PPT Presentation

Emerging opportunities that could help to generate long term wealth Invest in Mar 2020

Large and Midcap MF Schemes – Where does it invest? Market Capitalization Top 100 Stocks Large “Investment 6500+ Stocks Cap Universe” listed on 101 st - 250 th Stocks Indian Stock Mid Exchanges, Cap BSE & NSE 251 st Stocks and Small below Cap Matured phase

Traits of Large Businesses Strong underlying Established Trusted Names High corporate business track record governance fundamentals Wealth Generally steady creators over Dividend paying returns for long term investors

Traits of Mid sized Businesses Adaptable to Potential to Mid sized market changing outperform companies conditions Large cap stocks Usually considered to be the front Have higher Emerging runners during risks attached leaders bull phases in the markets

Traits of Large and Midcap MF Schemes Large and Midcap Fund is blend of: Better risk adjusted proposition • Stability of large cap stocks than midcap and small cap funds • Growth potential of mid cap stocks Prudent stock selection and 250 well researched names sector diversification leads to alpha to invest in generation over the benchmark

Why Principal Emerging Bluechip Fund? Follows bottom-up stock selection process Actively managed fund ` We prefer to invest in businesses that are: • Showing potential in earnings growth • Run by competent and transparent Management • Diligent about their capital allocation • Trading at attractive valuations on stock exchanges Monitored closely for any divergence in the fundamentals of the underlying businesses Always almost fully invested with no prejudice to market movements DISCLAIMER: The investment strategy stated above may change from time to time without any notice and shall be in accordance with the strategy as mentioned in the Scheme Information Document of the scheme.

Why Principal Emerging Bluechip Fund? Over a decade long performance track record. Adequate diversification across 25-30 industries. ` With its inception closer to the Global Economic Meltdown of 2008, this Fund has experienced full market cycles in last 11 years of its existence. Invests in stocks and sectors that are likely to benefit from the Government of India’s focused developments. High beta portfolio for risk bearing investors. DISCLAIMER: The investment strategy stated above may change from time to time without any notice and shall be in accordance with the strategy as mentioned in the Scheme Information Document of the scheme.

Why Principal Emerging Bluechip Fund? NDA 2 Wins 130 Corporate Tax LTCG Rate Cuts Domestic reforms 120 introduction and 110 10.8X implementation Principal Emerging Bluechip Fund 100 NIFTY Large Midcap 250 TRI 90 Chinese 80 slowdown 70 Oil price correction 60 5.7X 50 Taper Eurozone Recovery post Global Part tantrum Debt Crisis the Sub Prime rally 40 of Sub 30 Prime 20 crisis 10 NAV movement of Principal Emerging Bluechip Fund vis-à-vis NIFTY Large Midcap 250 TRI rebased to 10 as on 12 th Nov 2008 0 Past performance may or may not be sustained in future. Data as on 28 th Feb, 2020. Different plans shall have a different expense structure. The performance details provided herein are of Regular Plan - Growth option. For other schemes managed by the Fund Manager, please refer to slide no. 21.

Performance Drawdown during various market events Major Market NIFTY Large Principal Emerging From Date To Date Out / Underperformance Event* Midcap 250 TRI Bluechip Fund 7.69% 12/11/2008 09/03/2009 E1 -13.69% -6.00% 09/03/2009 28/09/2010 E2 185.54% 264.57% 79.04% 28/09/2010 20/12/2011 E3 -30.51% -37.32% -6.82% 20/12/2011 31/01/2013 E4 41.00% 58.75% 17.76% 31/01/2013 28/08/2013 E5 -16.69% -19.56% -2.87% 67.59% 28/08/2013 06/08/2015 E6 101.71% 169.30% 06/08/2015 25/02/2016 E7 -18.44% -23.16% -4.73% 25/02/2016 23/01/2018 E8 83.56% 103.58% 20.02% 23/01/2018 22/08/2019 E9 -14.24% -19.44% -5.20% 22/08/2019 28/02/2020 E10 8.97% 16.10% 7.13% *Major Market Event; E1: Sub-prime Crisis; E2: Post sub-prime recovery; E3: Eurozone Debt Crisis; E4: Bounce back in the US and global rally; E5: Taper Tantrum; E6: Oil price correction; E7: Chinese economic slowdown; E8: Domestic reforms and implementation; E9: LTCG on equities, E10: NDA 2 Wins & Corporate Tax Rate Cuts During Flat Market Movements From To NIFTY Large Midcap 250 TRI Principal Emerging Bluechip Fund Out / Underperformance 9.98% 03/02/2012 03/09/2013 -0.47% 9.51% 17/10/2014 16/05/2016 0.20% 5.53% 5.33% Different plans shall have a different expense structure. The performance details provided herein are of PEBF Regular Plan - Growth option. Past performance may or may not be sustained in future. The returns given above are absolute returns. For detailed scheme performance data and performance data of other schemes managed by the Fund Manager, pls refer to the performance table Annexure in slide no. 21.

Portfolio Positioning Fund Manager’s View Fund Positioning • The economic situation is broadly stable with interest rates heading 1 Predominantly large and midcap portfolio downwards, economy bottoming out and rural consumption is expected to recover in next 6-12 months. • We also continue to remain overweight on Consumer Good sector Adequate diversification across 25-30 industries 2 by adding more stocks under this segment to our portfolio. • Good monsoon may pave the way to increase in farm production over next 2 seasons which may give a boost to the rural economy. 3 Bottom up stock selection • The overweight stance on Speciality Chemicals is owing to the growing tailwinds emerging out of the stricter environmental norms in China which may open global markets for Indian players. Monitored closely for divergence in fundamentals 4 of the underlying businesses • Autos are expected to recover on the back of expected pick up in consumption demand which may come off the low base. Also this sector is currently at attractive valuations. Invests in stocks and sectors that are likely to 5 benefit from Government of India’s focused developments • We have also exited select IT stocks where in the business model seemed to be undergoing stress. Disclaimer: • The sectors referred above should not be construed as recommendation from Principal AMC/ Principal Mutual Fund. The scheme may or may not have any future positions in these sectors. The views given above may change from time Disclaimer: • to time without any notice. The investment strategy stated above may change from time to time without any notice The investment strategy stated above may change from time to time without any notice and shall be in and shall be in accordance with the strategy as mentioned in the Scheme Information Document of the scheme. accordance with the strategy as mentioned in the Scheme Information Document of the scheme. • The data/statistics/comments are given to explain general market trends in the securities market, it should not be construed as any research report/research recommendation.

Rolling Returns based Performance Percentage of observations 1 Year 3 Years 5 Years 7 Years Returns Range PEBF Benchmark PEBF Benchmark PEBF Benchmark PEBF Benchmark Greater than 20% 44.49% 35.03% 48.87% 26.43% 56.41% 15.41% 51.85% 7.37% Greater than 15% but less than 20% 6.04% 8.08% 12.71% 24.23% 30.25% 38.56% 47.87% 27.98% Greater than 12% but less than 15% 3.71% 5.14% 8.73% 18.72% 8.23% 22.11% 0.19% 54.91% Greater than 8% but less than 12% 5.33% 7.22% 8.73% 5.90% 5.12% 23.53% 0.09% 9.64% Greater than 0% but less than 8% 13.82% 23.97% 16.73% 20.72% 0.00% 0.39% 0.00% 0.09% Lesser than 0% 26.57% 20.56% 4.22% 4.00% 0.00% 0.00% 0.00% 0.00% Total Number of Observations 2,533 2,038 1,544 1,055 25.0 21.8 0 20.5 17.8 9 19.9 1 15.5 14.7 0 3 3 0 14.49 Average Rolling Returns (%) PEBF Benchmark PEBF Benchmark PEBF Benchmark PEBF Benchmark PEBF – Principal Emerging Bluechip Fund; Benchmark – NIFTY Large Midcap 250 TRI Past performance may or may not be sustained in future. Returns (in %) are calculated on Compounded Annualised Basis (CAGR). Data as on 28 th February, 2020. Different plans shall have a different expense structure. The performance details provided herein are of Regular Plan - Growth option. Daily rolling returns since inception of the Fund i.e. 12 th Nov 2008. For complete performance details, refer to data in slide no. 20.

Year on Year Performance Only 2 out of 11 instances of underperformance on Calendar Year basis. 160.00% 140.00% Principal Emerging Bluechip Fund 120.00% NIFTY Large Midcap 250 TRI 100.00% Out/Under Performance 47.16% 80.00% 31.79% 60.00% 15.90% 10.34% 40.00% 5.14% 5.06% 4.32% 2.46% 2.53% 1.89% 0.73% 20.00% 0.00% -5.80% -6.72% -20.00% -40.00% CY 2008 CY 2009 CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019 CYTD (Since (28th Feb Inception) 2020) Past performance may or may not be sustained in future. Returns (in %) are calculated on Compounded Annualised Basis (CAGR). Data as on 28 th February, 2020. CYTD Returns are absolute. Different plans shall have a different expense structure. The performance details provided herein are of Regular Plan - Growth option. For complete performance details, refer to data in the slide 20 .