SBI Funds Management Limited · NSE:SBIFUNDS
SBI Funds Management — SBI Funds Management Private — Investor Presentation (March 2015)
35 slides from SBI Funds Management's investor presentation, Mar 10, 2015
Slide 1: NFO Opens 10th March 2015; Product Suitability
NFO Opens: 10th March 2015 NFO Closes: 24th March 2015 Scheme Re-Opens: On or before 10th April 2015 This product is suitable for investors who are seeking*: Income and capital appreciation Dynamic Asset allocation between equity related Instruments and fixed income instruments so as to provide
Slide 2: Index
Index • The Asset Allocation Puzzle • Need for Asset Allocation • Why have a Dynamic Asset Allocation Strategy? • SBI Dynamic Asset Allocation Fund • Key Features • Why Invest? • Investment Team
Slide 3: The Asset Allocation Puzzle
de SBI MUTUAL FUND PARTNER FOR LIFE The Asset Allocation Puzzle SBI FUNDS MANAGEMENT PRIVATE LIMITED A joint venture between SBI & AMUNDI
Slide 4: The Asset Race: Winners change frequently
The Asset Race: Winners change frequently Equity Calendar Year Performance Winner Debt Cash 30% 2014 14% Equity 9% 9% 2013 9% Cash 4% 26% 2012 9% Equity 9% 8% 2011 7% Cash -25% 17% 2010 5% Equity 5% 81% 2009 5% 4% Equity 9% 2008 8% -52% Debt The top & bottom performing asset class changes from year
Slide 5: The Asset Allocation Puzzle!
The Asset Allocation Puzzle! What do I do?
Slide 6: Need for Asset Allocation
de SBI MUTUAL FUND PARTNER FOR LIFE Need for Asset Allocation SBI FUNDS MANAGEMENT PRIVATE LIMITED A joint venture between SBI & AMUNDI
Slide 7: Every asset has its place in the puzzle
Every asset has its place in the puzzle Equity Debt Cash Long term Wealth Regular Income Generator High Liquidity Lower risk Higher potential for gain Safe avenue for parking Potential to preserve extra cash Potential Hedge against capital in times of Inflation downturn Conservative High Risk Invest
Slide 8: In times of crisis, correlation comes to the forefront
In times of crisis, correlation comes to the forefront In the long term, equity, debt & cash have low correlation with each other However, when markets crash, equity has a negative correlation with debt & cash Equity Debt Long Term Correlation (Mar 2002 to Jan 2015) Debt 0.13 Cash 0.04 0.31 Correlat
Slide 9: Diversifying the portfolio leads to stability
Diversifying the portfolio leads to stability Combining equity with debt stabilizes the portfolio without compromising on growth 100% Rolling 3 year return (Mar 2002* – Jan 2015) Higher Return – Higher Risk 80% Lower Return – Lower Risk 60% 40% 20% Average Average Average Average Return Return Retur
Slide 10: Diversification solves the Asset Allocation puzzle
Diversification solves the Asset Allocation puzzle Diversifying across asset classes helps generate superior risk adjusted returns under different market cycles Falling Equity markets Rising Equity markets Risk Return for the period: Risk Return for the period: 8% Dec 07 to Dec 09 25% Dec 12 to Jan
Slide 11: Why have a Dynamic Asset Allocation Strategy?
Why have a Dynamic Asset Allocation Strategy?
Slide 12: Dilemma faced by Investors
Dilemma faced by Investors Asset Allocation is important. But how do I manage my portfolio? How do I control my bias while taking investment decisions? How do I time the markets? How do I allocate assets & rebalance my portfolio in a cost effective manner?
Slide 13: Traditionally past performance drives flows
Traditionally past performance drives flows Before After Equity Fund Equity returns Inflows in Equity returns (Mar 07 – Mar 08): Mar 07 – Mar 08: What (Mar 08 – Mar 09): 19.7% +ve happened -37.9% Rs. 46,933 crs Equity Fund Equity returns Outflows in Equity returns (Mar 11 – Mar 13): Mar 12 – Mar 13:
Slide 14: Dynamic Asset Allocation: The Solution
Dynamic Asset Allocation: The Solution Model driven asset allocation which decides the appropriate allocation to equity, debt & cash No Emotional Bias No need for timing the market Operationally Effective – both from cost & tax perspective & reduces transactional hassles
Slide 15: SBI Dynamic Asset Allocation Fund
SBI Dynamic Asset Allocation Fund
Slide 16: SBI Dynamic Asset Allocation Fund at work
SBI Dynamic Asset Allocation Fund at work Objective: To dynamically allocate across asset classes in order to generate superior risk adjusted returns Rate of Change in Momentum Momentum Equity: 0 to 100% Debt & Money Market Instruments: 0 to 100% Exhaustion of Momentum Market Weakness Market Strengt
Slide 17: Parameters driving the model
Parameters driving the model Rate of Change in Exhaustion of Momentum Momentum Momentum Attempts to pinpoint market Indicates trends & Mitigates the effect peaks or bottoms change in the of sharp Purpose psychology of movements in Identifies likely market participants markets momentum exhaustion poi
Slide 18: Average Equity Allocation
Model dynamically allocates between assets Average Equity Allocation along with Index Levels Sensex moved from Sensex moved from 20,287 to 9,647 15,455 to 19,427 80% Equity markets fell by 52% in 2008 Equity markets rose by 26% in 2012 30,000 71% 68% S&PBSE Sensex Index Level Average Equity Allocati
Slide 19: Average Debt Allocation
Model dynamically allocates between assets Average Debt Allocation with Index Levels 10 year G Sec moved from 8.82% to 7.86% 35% 10 year G Sec moved from 2,800 5.26% to 7.59% Gilt Index rose by 14.1% in 2014 Gilt Index fell by 8.7% in 2009 29% 2,600 30% 26% 2,400 Average Debt Allocation Crisil 10 Ye
Slide 20: Dynamic Asset Allocation Model performs in the long term
Dynamic Asset Allocation Model performs in the long term Dynamic Asset Allocation Model generates stable risk adjusted returns in the long term 1600 Growth of Rs. 100 (Period: May 2002 to Jan 2015) 1400 1200 1000 800 Equity 600 Debt SDAAF Model 400 200 0 May-02 Oct-09 Oct-10 Jun-03 Jun-04 Jul-05 Sep
Slide 21: Optimal Asset Allocation is the key to reducing volatility
Optimal Asset Allocation is the key to reducing volatility Dynamic Asset Allocation Model reduces the volatility in the portfolio which in turn minimizes the drawdown 70% Rolling 3 year returns (May 2002 – Jan 2015) 60% 50% 40% 30% Average Return Average Return 24% 20% 20% 10% Average Return 5% 0% -
Slide 22: Dynamic Asset Allocation helps to navigate volatility
Dynamic Asset Allocation helps to navigate volatility Dynamic Asset Allocation Model reduces the period required to recover from market crisis Months to recover from a crisis Subprime Crisis (Sep 2008) Equity 32 SDAAF Model 11 Rupee Crisis (July 2013) Debt 15 SDAAF Model 2 Past performance may or ma
Slide 23: Model helps to minimize drawdowns
Model helps to minimize drawdowns Dynamic Asset Allocation Model attempts to minimize the portfolio drawdown in order to generate stable returns May-02 Nov-11 Aug-06 Aug-07 Sep-08 Dec-12 Dec-13 Jun-03 Jun-04 Oct-09 Oct-10 Jan-15 Jul-05 0% 10% 20% 30% 40% Equity 50% Debt 60% SDAAF Model 70% Past perf
Slide 24: Fund Philosophy & Asset Allocation
Fund Philosophy & Asset Allocation • Aims to provide investors with an opportunity to invest in a portfolio of a mix of equity and equity related securities and fixed income instruments which will be managed dynamically so as to provide investors with long term capital appreciation • Invests across
Slide 25: Key Features
Key Features The Scheme has two plans viz. Regular plan & Direct plan. Both plans would offer Growth & Dividend options. Dividend Plans/ Options option will have the facility of Reinvestment, Payout & Transfer Benchmark 50% Crisil 1 year CD Index + 50% BSE S&P Sensex For Equity & Equity related, Deb
Slide 26: Clarifications on Tax
Clarifications on Tax Query Clarification Can be both Equity Oriented Scheme or Non-equity What will be the category of the fund? Oriented scheme Based on the equity shareholding of the fund of last How will the category of the scheme be defined? 12 months What is the % of equity shareholding requir
Slide 27: Tax Illustration
Tax Illustration Asset class Term Average of classification classificatio Tenure the monthly for taxation Date of n for Current Date of of averages of (equity Sale/ taxation applicable Investment holding percentage oriented/other Redemption (short term tax rates* in days equity than equity /long sha
Slide 28: Why Invest?
Why Invest? Model driven dynamic asset allocation 1 Dynamically allocates between equity, debt & cash based on prevailing market & economic conditions; solves the dilemma of selecting the correct asset class No Emotional bias 2 The allocation and rebalancing decisions in this fund are based on well
Slide 29: SBI Funds Management Private Limited
SBI Funds Management Private Limited • India’s premier and largest bank with • Global leader in asset management over 200 years experience (Estd: 1806) • Backed by Credit Agricole and Société • Asset base of USD 404 bn* Générale • Pan-India network of ~22,635 branches • More than 2,000 institutional
Slide 30: SBI Funds Management: India's First Bank Sponsored Funds
SBI Funds Management: India’s First Bank Sponsored Funds Established in 1987: A leading asset manager in India • Expertise in managing assets across mutual funds, Broad AUM Investor USD 14.09 bn segregated managed accounts, domestic advisory and Base Broad AAUM offshore advisory business Investor Rs
Slide 31: Annexure
de SBI MUTUAL FUND A PARTNER FOR LIFE Annexure SBI FUNDS MANAGEMENT PRIVATE LIMITED A joint venture between SBI & AMUNDI
Slide 32: Investment Team
Investment Team Navneet Munot Dinesh Balachandran CFA – Chief Investment Officer CFA - Portfolio Manager Navneet joined SBIFM as Chief Investment Officer in Dinesh has over 12 years of industry experience. 2008. Navneet is responsible for overseeing Dinesh joined SBIFM in 2012 as a senior credit inv
Slide 33: SBIFM: A Complete Framework
SBIFM: A Complete Framework Group Advantage 25 years of experience Both domestic and international strengths Investors trust Expertise Risk Highly experienced Management team Six member Strong industry independent team relations International standards Complete in-house research Coherent monitoring
Slide 34: Current Tax Rates
Current Tax Rates MF Taxation Debt & Liquid Equity Schemes Schemes and FOF Dividend Dividend Capital Gains Capital Gains Distribution Tax Distribution Tax Short Term Short Term Individual/ HNI – Nil Capital Gains – Capital Gains – At 25% 15% marginal tax rate Long Term Capital Long Term Capital Othe
Slide 35: Disclaimer
Disclaimer Mutual Fund investments are subject to market risks, read all scheme related documents carefully. This presentation is for information purposes only and is not an offer to sell or a solicitation to buy any mutual fund units/securities. The views expressed herein are based on the basis of
SBI Funds Management Private — Investor Presentation (March 2015) on 6ix