IIFL FOCUS ED EQUITY FUND* (An open ended equity scheme investing in maximum 30 multicap stocks) *Formerly known as IIFL India Growth Fund
IIFL FOCUS ED EQUITY FUND (Formerly known as IIFL India Growth Fund) (An open ended equity scheme investing in maximum 30 multicap stocks) This product is suitable for investors who are seeking* • capital appreciation over long term; • Investment predominantly in equity and equity related instruments . Investors understand that the principal will be at moderately high risk * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. 1
IIFL FOCUS ED EQUITY FUND (Formerly known as IIFL India Growth Fund) (An open ended equity scheme investing in maximum 30 multicap stocks) INVESTMENT APPROACH : • Scheme endeavour to built concentrated portfolio of fast growing high quality companies. • The scheme aims to focus on investing in businesses with strong earnings growth, cash generating capital-light business model, high ROCE (Return on Capital Employed ) and ROE (Return on Equity) and attractive valuation relative to its peers. • Scheme will take concentrated positions in high conviction stocks. SCHEME PERFORMANCE AS ON MAY 31, 2018 : 31-05-15 31-05-17 to PTP to PTP 31-05-18 (Rs.) 31-05-18 (Rs.) SINCE INCEPTION CAGR PTP IIFL Focused Equity Fund -(Regular Plan)-Growth Option 9.75% 10,975 10.09% 13,353 11.32% 14,690 IIFL Focused Equity Fund -(Direct Plan)-Growth Option 11.43% 11,143 11.36% 13,822 12.62% 15,315 Benchmark (Nifty 50 TRI) 13.30% 11,330 9.79% 13,244 9.22% 13,720 Additional Benchmark (S&P BSE Sensex TRI) 15.08% 11,508 9.81% 13,251 8.81% 13,536 Past performance may or may not be sustained in future Different plans shall have different expense structure As on May 31, 2018; Point to Point (PTP) returns in Rs. is based on standard investment of Rs. 10,000; Since Inception date is 30-Oct-2014; Managed by the fund manager since November 03, 2016; Scheme has been in existence for more than 3 years but less than 5 years. The performance of the scheme is benchmarked to the Total Return variant of the Index. 2
INVES TMENT PHILOS OPHY GROWTH AT REASONABLE PRICE MARGIN OF SAFETY • Look for companies which are growing at 15-20% CAGR • Companies at prices considered which provide and are trading at a reasonable valuation. a margin of safety and has limited downside • It would endeavour to avoid high growth • It would try avoiding good companies which companies trading at exorbitant have run up beyond their fundamentals and multiples have little margin of safety RISK RETURN TRADE OFF MATRIX TOP DOWN + BOTTOM UP APPROACH ! • The risk-return payoff should be • Top down approach to identify key sectors significantly favourable • For companies, Strong management, • It would avoid companies that show unfavourable Robust balance sheet, clear earnings risk-return payoff visibility and consistency of growth 3
S ECTOR S ELECTION Concentrated Approach: Construct a portfolio of 20-25 high conviction stocks, with no restrictions on sector exposure. • Benchmark Agnostic Approach: Focus is on generating better risk adjusted returns. • NIFTY 50 IIFL FOCUSED EQUITY FUND Industry 31-Mar-18 31-Mar-18 31-Dec-17 30-Sep-17 30-Jun-17 31-Mar-17 31-Dec-16 30-Sep-16 30-Jun-16 31-Dec-15 Banking & Financial Services 37.65% 46.66% 52.84% 58.66% 54.52% 33.87% 30.77% 36.38% 35.37% 44.75% Capital Goods & Infra 5.89% 11.21% 10.77% 11.43% 5.53% 10.44% 11.30% Consumer Discretionary 20.29% 14.21% 10.05% 7.62% 11.02% 5.50% 16.52% 6.40% 7.32% 17.35% Consumer Staples 9.48% 9.51% 7.32% Healthcare & Pharmaceuticals 2.88% 10.10% 5.68% 2.91% 3.51% 9.41% 7.19% 6.84% 8.36% 5.61% IT & IT Service 12.59% 5.57% 3.73% 16.65% 14.27% 11.32% 11.59% 9.57% Metal & Mining 3.87% 1.45% Oil & Gas 13.97% 12.43% 12.53% 4.33% 6.10% 7.18% 8.13% 7.20% 1.72% Telecom & Telecom Equipments 1.77% 3.99% 4.63% 4.34% Utilties 1.09% 7.58% 7.20% 6.67% 8.79% 6.47% 8.50% 6.89% 4.12% 1.12% Diversified 5.46% 3.96% Cash & Cash Equivalent 4.66% 1.03% 0.18% 3.20% 6.99% 11.68% 9.03% 6.70% 1.26% Grand Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 4
TOP PICKS : CONS IS TENCY OF EARNINGS GROWTH BAJAJ FINANCE (4.81X) MERCK (1.57X) 170 Bajaj Finance Nifty 520 Merck Nifty 160 470 150 420 Added Added 370 140 Added 320 130 First entry 270 120 First ent ry Added 220 110 170 100 120 90 70 80 May/15 Aug/15 Nov/15 Feb/16 May/16 Aug/16 Nov/16 Feb/17 May/17 Aug/17 Nov/17 Feb/18 May/18 9/Mar/18 29/Mar/18 18/Apr/18 8/May/18 28/May/18 INVESTMENT RATIONALE INVESTMENT RATIONALE One of the fastest growing NBFCs, tapping the opportunity in Two Merck Ltd. is the first Asian subsidiary of the US-based drug • • wheeler Finance, SME Business and Consumer Finance Segments. manufacturer Merck. It is a leading company for innovative and A Strong Management driving balance-sheet growth, greater focus top-quality high-tech products in healthcare, life science and • on Asset Quality. performance materials. Management ability to use technology to identify new product It is a market leader in functional and pearl luster effect pigments. • • areas, identify new customer segments, manage asset quality was Its key products include tablets & capsules, reagents, far ahead of the industry syrups/ointments, injections and bulk drugs. Entry in Oct – Nov 14 at average price of Rs ~285, held till date, Entry in portfolio March 18 at average adjusted price of ~Rs, 1500 • • current market price Rs~2109.90 (Stock adjusted for corporate currently quoting at ~Rs 2338.75 (as on 31-May-2018) actions) (as on 31-May-2018) The securities mentioned above do not construe to be research analysis or investment advice to buy/sell any securities . 5
TOP PICKS : REAS ONABLE VALUE, MARKET MIS PRICE BANDHAN BANK (1.25X) TATA GLOBAL BEVERAGES (TGBL) (1.61X) 145 Bandhan bank Nifty Tata Global Beverages Nifty 140 200 135 130 180 125 160 120 115 140 110 120 105 100 100 95 26/Mar/18 10/Apr/18 25/Apr/18 10/May/18 25/May/18 80 11/Jul/17 11/Oct/17 11/Jan/18 11/Apr/18 INVESTMENT RATIONALE INVESTMENT RATIONALE Bandhan Bank is the new age full-service private sector bank which TGBL has consistently expanded its market share in the Indian tea • • acquired license from RBI under new licensing guidelines in FY14. market and maintained its leadership position led by its strong The Bank commenced operations in Aug’15 post which the curre brands, namely, Tata Tea, Tata Tea Gold, Agni and Kanan Devan. nt parent company Bandhan Financial Services transferred its M Going forward, led by TGBL’s strong initiatives to revive slowing • icrofinance business to Bandhan Bank. growth (through restructuring of non-profitable businesses) and Bandhan has an advantage on the PSL requirement due to lending t new innovative launches, expect overseas subsidiaries to witness a • o under banked lower income segment revival in growth, going forward. Bought during the IPO in March 2018, entry price of Rs~375, CMP Initiated buying during July – August 2017 at average price of ~Rs • • at 470.50 (as on 31-May-2018) 171, CMP ~Rs 263.25 (as on 31-May-2018) The securities mentioned above do not construe to be research analysis or investment advice to buy/sell any 6 securities .
TOP HOLDING AS ON MA Y 31, 2018 SCRIP WISE ALLOCATION SECTOR ALLOCATION % To NAME OF THE INSTRUMENT INDUSTRY Net SECTOR Net Assets Assets Finance 29.65% Bajaj Finance Limited Finance 8.15% Banks HDFC Bank Limited Banks 7.73% 17.69% Software CESC Limited Power 6.96% 13.51% Merck Limited Pharmaceuticals 6.27% Pharmaceuticals 10.72% Tech Mahindra Limited Software 5.42% Power 6.96% Tata Global Beverages Limited Consumer Non Durables 5.33% Consumer Non Durables 6.02% IIFL Holdings Limited Finance 5.32% Cement 3.66% Infosys Limited Software 5.09% Auto 3.49% State Bank of India Banks 4.95% Ferrous Metals 3.14% Sun Pharmaceutical Industries Limited Pharmaceuticals 4.45% Commercial Services 2.18% SBI Life Insurance Company Limited Finance 4.15% Healthcare Services 1.83% Dalmia Bharat Limited Cement 3.66% Construction 0.52% Tata Motors Ltd DVR Shares Auto 3.49% Bajaj Finserv Limited Finance 3.25% Cholamandalam Investment and Finance Company Finance 3.16% Limited Shankara Building Products Limited Ferrous Metals 3.14% Zensar Technologies Limited Software 3.00% Ujjivan Financial Services Limited Finance 2.94% Reliance Nippon Life Asset Management Limited Finance 2.68% Bandhan Bank Limited Banks 2.59% The Federal Bank Limited Banks 2.42% Quess Corp Limited Commercial Services 2.18% Shalby Limited Healthcare Services 1.83% GlaxoSmithKline Consumer Healthcare Limited Consumer Non Durables 0.69% Peninsula Land Limited Construction 0.52% Cash Cash 0.63% 7
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