HDFC Nifty Banking ETF · NSE:HDFCNIFBAN
HDFC Nifty Banking ETF — HDFC Small Cap Fund — Investor Presentation (January 2020)
25 slides from HDFC Nifty Banking ETF's investor presentation, January 2020
Slide 1: HDFC Small Cap Fund
HDFC Small Cap Fund (An open ended equity scheme predominantly investing in small cap stocks) Small is Powerful! Riskometer This product is suitable for investors who are seeking*: January 2020 • To generate long-term capital appreciation /income. • Investments predominantly in Small-Cap companies.
Slide 2: Table of Contents
Table of Contents • Small Cap Universe • Why Small Caps? • Sector-wise presence – Large Cap vs Small Caps • Correction of excesses in small cap segment • Correction in small caps : Right time to invest ? • Long Term approach to small cap investing • Scope for bottom-up stock picking • HDFC Small Cap
Slide 3: Small Caps
"Ty AHDFC BHAROSA APNO KA Small Caps
Slide 4: Small Cap Universe
Small Cap Universe Parameters Details Small-Cap Universe Companies beyond 250th company in terms of full market capitalization Rs 8,227 Cr and below Large Rs 26,290 Cr Market Cap Range (As of 31st December 2019) caps – 100 and above Companies Allocation to Small- 65%-100% Cap Stocks Rs 25,587 Cr to
Slide 5: Why Small Caps?
Why Small Caps? Scope for returns • Size of the company increases • Analysts start tracking stocks • Institutional holding increases • Better disclosure levels can lead to greater familiarity and high multiples • As a result, smaller stocks which can be mis-priced get re-priced Under Researched: Lim
Slide 6: Sector-Wise Presence – Large Caps vs Small Caps
Sector-Wise Presence – Large Caps vs Small Caps Small Caps^ provides investment opportunities in segments of the economy which are not covered by Large Caps*. Key Statistics NIFTY 50 NIFTY Small Cap 100 Number of Industries 21 29 Top 5 Industries (%) 76 45 35 Top 10 Industries (%) 91 68 NIFTY 50 : H
Slide 7: Correction of excesses in Small Cap segment
Correction of excesses in Small Cap segment 1400 NIFTY 50 TRI NIFTY Small Cap 100 TRI Index Values (Rebased to 1st Jan 2004) 1200 1000 800 600 400 200 0 Source: HDFC AMC Internal Research, Bloomberg. All calculations as of December 31st 2019. Index Values rebased to 1st January 2004 which is the inc
Slide 8: Correction in Small Caps: Right time to invest?
Correction in Small Caps: Right time to invest? NIFTY Small Cap 100 TRI Index witnessed 1 Year loss exceeding 10% in 589 instances since inception*. However, 3 Year CAGR from such days was always positive with returns greater than 15% p.a. in ~ 68% instances NIFTY Small Cap 100 TRI: 3 Year CAGR afte
Slide 9: Long term approach to investing in small caps
Long term approach to investing in small caps As investment horizon increases, variability of returns reduces significantly. Long term approach to investing in small caps reduces volatility of returns. NIFTY Small Cap 100 TRI: Daily Rolling Returns Range 200 Maximum Minimum 166 150 100 72 CAGR (%) 5
Slide 10: Scope for Bottom up stock picking
Scope for Bottom up stock picking Return range of NIFTY 500 Companies for the 5 year period from 31st March 2014 to 31st March 2019 Returns of NIFTY 500 companies Top 100 101-250 251-500 >10x 0 1 6 5x-10x 1 9 26 3x-5x 15 27 35 2x-3x 15 31 38 50%-100% (2x) 28 16 28 Between 0 and 50 % 20 25 26 Between
Slide 11: HDFC Small Cap Fund
"Ty AHDFC BHAROSA APNO KA HDFC Small Cap Fund
Slide 12: Fund History and Investment Approach
Fund History and Investment Approach • Launched as Morgan Stanley A.C.E. Fund on April 3, 2008 as a multi-cap fund. • Scheme acquired by HDFC Mutual Fund in 2014* and fund repositioned as Fund History HDFC Small & Mid-cap Fund with a focus on small and midcap stocks. • Scheme repositioned** in Novem
Slide 13: Portfolio Construct
Portfolio Construct • Invests at least 65% in small-cap companies. • Targets high quality small cap business which are undervalued and have a sustainable business. • Well diversified portfolio at all times. Market Cap * ( In Rs. Crore) Weighted Average Market Cap ** (in Rs Crore) HDFC Small Cap Fund
Slide 14: Scheme Sector-wise Allocation
Scheme Sector-wise Allocation 25 Alpha generation by maintaining portfolio differentiated from the benchmark 20 HDFC Small Cap Fund NIFTY Small Cap 100 Index % of Net Assets 15 10 5 - FERTILISERS & TELECOM MANUFACTURING TEXTILES CEMENT & CEMENT FINANCIAL SERVICES CONSTRUCTION CHEMICALS AUTOMOBILE PH
Slide 15: Differentiated portfolio
Differentiated portfolio Overweight / (Underweight) 10 5 % of Net Assets - (5) (10) (15) INDUSTRIAL MANUFACTURING CONSTRUCTION FINANCIAL SERVICES AUTOMOBILE CEMENT & CEMENT PRODUCTS MEDIA & ENTERTAINMENT SERVICES CONSUMER GOODS Source:-Bloomberg (Sector classification as per AMFI). As of 31st Decemb
Slide 16: Consistently Low Portfolio Turnover Ratio - High Portfolio Conviction
Consistently Low Portfolio Turnover Ratio - High Portfolio Conviction 50 Portfolio Turnover Ratio Average Consistently Low Portfolio Turnover Ratio indicating high conviction in stock picking and long term approach to investing. 40 30 PTO (%) 20 18 10 3 - Source:-MFI Explorer .As of 31st December 20
Slide 17: Well Diversified Portfolio
Well Diversified Portfolio 80 75 Top 10 % (LHS) Number of Stocks (RHS) 70 70 60 Top 10 holdings (%) 65 Number of stocks 50 40 60 34 32 31 30 30 30 29 28 29 26 25 26 26 26 55 20 50 10 0 45 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Average Parameter (Si
Slide 18: Portfolio Statistics
Portfolio Statistics Top 10 Holdings (Dec’ 19) Portfolio Statistics Company Name % to NAV Top 5 Holding % 14.20% NIIT Technologies Ltd. 3.33 Top 10 Holding %. 25.83% Sonata Software Ltd. 2.98 Sharpe Ratio * 0.102 Inox Leisure Ltd. 2.73 Beta 0.669 Portfolio Turnover Ratio (Last 1 DCB Bank Limited 2.5
Slide 19: Taking the SIP Route
Taking the SIP Route Why SIP Why SIP in HDFC Small Cap Fund • Imbibes financial discipline. • An open ended Fund with a well defined portfolio strategy. • Drops of water help fill a glass – Small and regular investments build a corpus over • Targeted allocation to small cap stocks time. with good gr
Slide 20: Fund Facts
Fund Facts Type of Scheme An open ended equity scheme predominantly investing in small cap stocks Inception Date April 3, 2008 (Date of allotment) To provide long-term capital appreciation /income by investing predominantly in Small-Cap Investment Objective companies. Fund Manager$ Mr. Chirag Setalv
Slide 21: Asset Allocation
Asset Allocation Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows: Type of Instruments Minimum Maximum Allocation Risk Profile of Allocation (% of Total Assets) the Instrument (% of Total Assets) Equity and equity related instruments 65 100 High of Small
Slide 22: Scheme Performance
Scheme Performance Value of Rs 10,000 invested Additional Additional Scheme Benchmark Benchmark Benchmark Scheme Benchmark Returns (%) Returns (%) # Returns (%) (Rs)# (Rs)## ## Last 1 year -9.49 -8.54 13.48 9,051 9,146 11,348 Last 3 years 10.17 1.32 15.63 13,374 10,401 15,468 Last 5 years 8.45 3.08
Slide 23: Scheme Performance
Scheme Performance Cumulative Performance Scheme managing 3 year 5 year since 1 year (in %) Scheme CAGR (in %) CAGR (in %) Chirag Setalvad manages 9 schemes Performance of Top 3 schemes managed by Mr. Chirag Setalvad HDFC Long Term Advantage Jan 02, 01 10.11 12.94 9.71 Fund S&P BSE SENSEX TRI 15.66
Slide 24: Disclaimer
Asset Allocation The presentation dated 13th January, 2020. has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines only, whic
Slide 25: Thank You
BHAROSA APNO KA Thank You
HDFC Small Cap Fund — Investor Presentation (January 2020) on 6ix