Communication Kit eBook June 2015.cdr
Transcription
Communication Kit eBook June 2015.cdr
COMMUNICATION KIT PPFAS Long Term Value Fund (An Open Ended Equity Scheme) A scheme designed for genuine Long Term Investors! MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. PPFAS MUTUAL FUND - COMMUNICATION KIT About the Fund Why PPFAS has sponsored a Mutual Fund Page 3 This is a 'Different' Mutual Fund Page 4 The Fund's Beliefs and Values Page 5 The Fund's approach to Money Management Page 6 About the Scheme Note on PPFAS Long Term Value Fund Page 8 Profile of Rajeev Thakkar Page 10 We have our 'Skin in the Game' Page 11 From Parag Parikh's desk Letter to Investors Page 12 Mr. Parag Parikh's Interview The value investor who walks the talk Page 14 Investment Process Investment Process of the Scheme Page 16 Fund Factsheet May 2015 Page 17 How to Invest How to Invest: New Investors Page 20 How to Invest: Existing Investors Page 20 PPFAS LONG TERM VALUE FUND PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE FUND Why PPFAS has sponsored a Mutual Fund After over seventeen years of providing Portfolio Management Services (PMS), we at Parag Parikh Financial Advisory Services Limited (PPFAS) have embarked on the next step in asset management, by sponsoring a mutual fund. While some feel that the mutual fund landscape is already too crowded, and may wonder why we have taken this step, our main reasons for setting up the Asset Management Company (AMC) are : It is a very transparent investment vehicle. A mutual fund scheme's performance, portfolio etc. is tracked by independent agencies on a regular basis. This helps an investor in making comparisons and allocating capital accordingly. The account opening process is simple and swift in case of Mutual Funds. An investor is able to invest smaller amounts of money in a mutual fund scheme. This is especially helpful when they are testing the waters. For fund managers too, a mutual fund is operationally easier to manage as it does not call for segregation of individual accounts, separate order placement etc. A mutual fund scheme is treated as a pass-through vehicle, thereby making it an extremely tax-efficient vehicle for investors. Our mission: Help investors achieve their long-term financial goals through prudent fund management. PPFAS LONG TERM VALUE FUND 3 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE FUND This is a 'Different' Mutual Fund We are Different You may consider it a bold statement... But this is why we feel so: 1. We do not try to please everyone: Attempting to be something to everyone usually results in a loss of focus. We are steadfast believers in the time-tested principles of value investing. The manner in which we manage PPFAS Long Term Equity Fund reflects this. Our investment choices are not dictated by glamourous factors such as momentum, technical analysis, algorithms etc. We prefer to stick to metrics like cash flow, low debt etc. What? Another while constructing the portfolio. This is our circle of competence and we will mutual fund... never stray too far from it. Our approach may not appeal to investors who are seeking an 'action-oriented' fund manager but we can live with that... After all, one cannot please everyone. 2. We strive to educate you before you invest: It is said that an educated investor is an empowered investor. Hence, our Yes. But with a difference. relationship managers are trained to educate you in detail regarding our investment approach before you sign up. This ensures that you will sign up with us only if you truly believe in our style of money management. It also increases the probability of you remaining invested with us for a long time, which in turn drastically reduces the chances of you redeeming your money with a feeling of disappointment. We are also convinced that happy investors can serve as great brand ambassadors and that is why it is worthwhile to invest time and efforts in ensuring that the right investors invest with us. 3. We see ourselves as asset managers and not asset gatherers: We are clear that our primary objective is to manage our scheme’s corpus entrusted to us, in the most efficient manner. While growth in assets is desirable, it is not our main objective. That is why we are probably the only mutual fund, whose investment management team size exceeds that of the marketing team. That is also the reason why we will not launch a slew of equity schemes. We believe that the performance of PPFAS Long Term Value Fund will serve as our most effective marketing tool in the years ahead. 4. We have also invested in our scheme: We firmly believe that the interests of the promoters and employees of PPFAS Mutual Fund should be aligned with those of the investors of the scheme. Hence, our senior management team as well as other employees are co- investors in the Some of these practices may be followed by other mutual funds currently. However, we scheme. In other words, we win if you win. We are also voluntarily disclosing the may be the only mutual fund investment details of the Sponsor, Asset Management Company and the Key to follow ALL these practices. Employees of the mutual fund on our website. Hence we maintain that we are different from our peers. PPFAS LONG TERM VALUE FUND 4 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE FUND The Fund's Beliefs and Values While investing need not be a complicated affair it also should not be oversimplified. We therefore follow simple rather than simplistic methods. We are guided by: The "Law of the Farm" which states that one cannot sow today and reap tomorrow. Investments too must be undertaken with this underlying principle in mind. The strong conviction that "Money Management is a profession rather than a business". Hence we strive to be custodians of our clients' funds by avoiding reckless investments which could potentially destroy their capital. We believe in the Law Of The Farm! Our beliefs guide our actions: We ignore momentary blips and vagaries of the share market and focus on long term success. We define "investing" as purchase of businesses rather than merely purchasing stocks. Companies forming part of our portfolio must comply with stringent criteria such as being managed by honest and competent managements, high pricing power, high return on equity, high free cash flow and high entry barriers, to name a few. Most important, we maintain our patience and discipline and do not get swayed during excessively frothy times. Often, our portfolio may comprise fundamentally sound stocks which are being ignored or feared by investors for various reasons. In other words, we are often greedy when others are fearful. At PPFAS Mutual Fund we follow a process which involves fundamental research coupled with the application of the concepts of behavioral finance. We would like to be seen as the first choice of patient investors. While it is natural for investors to expect their money to multiply, we look forward to associating with investors who temper this expectation with the understanding that such multiplication should happen through the magic of compounding of returns over several years and not merely a few days or months. PPFAS LONG TERM VALUE FUND 5 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE FUND The Fund's approach to Money Management We realise that when clients entrust their hard-earned money to us, they are foregoing current consumption in the hope of making reasonable returns in the future. Hence we will refrain from any adventurist approach while managing your money. After all, don't forget, we have invested along with you. Disciplined 'Bottom-Up' investing! While there are different approaches to managing money, we are most comfortable with the 'value investing' approach. PPFAS Long Term Value Fund employs a rational decision-making process with an overlay of behavioral finance principles. We prefer the 'Bottom-up' approach While we do not ignore the macros, we prefer to adopt a bottom-up approach that focuses on individual stock selection while constructing our portfolio. We are delighted whenever we come across a company which has the following characteristics (to name a few) : Ÿ A high return on capital Ÿ A strong balance sheet with low gearing Ÿ High cash flow generation Ÿ Robust market share with a high probability of it being maintained in the future. While statistical cheapness plays a role in determining our short-list, soft factors like 'management quality' also play an important role in our final choice. Our basic belief is that the price one pays for an investment makes a significant difference in the long-term returns that an investor receives. That is why, as value investors, we take a contrary view to the often emotional process of buying and selling stocks. Disciplined investing Apart from stock selection, we are extremely disciplined when it comes to pulling the trigger. We are not momentum-driven investors. Once we purchase a company, we usually hold on for long periods. We are also not averse to staying in cash in case lofty valuations preclude us from finding investment worthy ideas. Continued to next page PPFAS LONG TERM VALUE FUND 6 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE FUND Also, in all cases, valuations (both, peer and intrinsic) and not merely low values, determine our entry and exit points. Our view on 'risk’ “Risk comes from not knowing what you are doing” - Warren Buffett Sure, all investors in equities expose themselves to the risk of capital loss due to changes in market prices. This is unavoidable. However, as Sun Tzu says “Every battle is won or lost before it is ever fought. Hence, before we invest, our research team attempts to mitigate other attendant risks such as : Valuation Risk : Though we do not believe in timing the market, we attempt to ensure that our purchase price is significantly lower than our estimate of its current worth, thereby mitigating the risk of purchasing at high valuations. We also refrain from bottom-fishing. Hence, once we have an estimate of the intrinsic value, we do not fear a fall in the stock price. In fact, we welcome it, as it gives us an opportunity to add to our holdings. Risk comes from not knowing what you're doing - Warren Buffett Business Risk : As mentioned earlier, we prefer companies possessing strong balance sheets, robust 'return' ratios, low levels of debt, etc. Such companies have greater ability to withstand adverse business conditions. This in turn, means that any fall in their price often results in temporary, rather than permanent capital loss. Portfolio Risk : While the prevailing Regulations, preclude us from holding concentrated portfolios, we go beyond the mere letter of the law. We believe that a reasonable amount of diversification serves as a useful shock-absorber to the portfolio. At the same time, we do not believe that portfolio risk can be reduced merely by following thumb rules like only purchasing large-caps, 'blue-chips', etc. Hence, our portfolio comprises a mix of stocks across the marketcapitalisation spectrum. PPFAS LONG TERM VALUE FUND 7 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE SCHEME Note on PPFAS Long Term Value Fund PPFAS Long Term Value Fund is a diversified equity scheme. It is also the only equity scheme that PPFAS Mutual Fund will ever launch. Its investment universe is not restricted by any self-imposed limitations in terms of sector, market capitalisation, geography, etc. For True Long Term Investors only! While, an average of 65% of its corpus is invested in listed Indian equities in order to benefit from the current provisions pertaining to Long Term Capital Gains tax, a portion of the balance 35% is invested in international equities. We do not use the 'Feeder Fund' route for this purpose as it adds an needless layer of cost for the investor. Very few (if any) equity schemes in India offer this combination of Indian and international equities within the same scheme. The domestic portion of the scheme is managed by Mr. Rajeev Thakkar, while Raunak Onkar is managing the foreign investment component. Ruchak Mehta is responsible for the 'fixed income' investment component. This scheme is only suitable for 'true' long term investors.... Hence, if you are an investor who: Ÿ Tracks stock prices every minute and Mutual Fund Net Asset Values Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ everyday. Believes that 'Long Term” is merely a year or two. Seeks excitement through your investments Treats stock market volatility as your enemy Believes you have the ability to time the market Prefers complex mutual fund products to simple ones. Depends on periodic income in the form of mutual fund dividends we suggest you stay away from our scheme, because you are likely to be disappointed. However, if you are an investor : Ÿ Who know the perils involved in instant gratification Ÿ For whom the term 'long term' means a minimum period of five years. Ÿ Who get excited rather than repelled, when stock prices and valuations are low. Ÿ For whom purchasing a stock is no different from purchasing a business. Continued to next page PPFAS LONG TERM VALUE FUND 8 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE SCHEME Then we urge you to partner with us, as PPFAS Long Term Value Fund has been designed with you in mind. We follow a simple (though not simplistic) investment process. As we will not pay mere lip service to value investing, it may mean that often we will be purchasing businesses which are going through a painful phase and are therefore unloved. Each of them will blossom at different points and that is why, there may be extended periods when you may feel that 'nothing is happening'. While some may regard us as boring, we are adamant that we will never sacrifice prudence for the sake of providing excitement. We will not sacrifice prudence in order to provide excitement! Also, our fund managers attempt to profit from various cognitive and emotional biases displayed by companies and market participants. In other words, along with the dissection of financial statements, there will also be an overlay of the study of human emotions. Since we strongly believe in the age-old principle of 'Compounding', we will offer our investors only the 'Growth Option” and not the 'Dividend Option'. It is well known that to be successful in investing one must invest when others are fearful and divest when others are greedy. However, considering that PPFAS Long Term Value Fund is an open ended scheme, its ability to invest during bear markets will depend on your behaviour as investors. If investors desert us when prices are low, it will naturally constrain our ability to invest when valuations are alluring. PPFAS LONG TERM VALUE FUND 9 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE SCHEME Profile of Rajeev Thakkar Rajeev Thakkar CHIEF INVESTMENT OFFICER AND ASSOCIATE DIRECTOR He is performing his duties as a Chief Investment Officer (CIO) and Director of the Company. Rajeev Thakkar possesses over 16 years of experience in various segments of the Capital Markets such as investment banking, corporate finance, securities broking and managing clients' investments in equities. His tenure at PPFAS Limited (The Sponsor of PPFAS AMC), began in 2001. His passion for researching and analysing the fundamentals of companies was evident. from the very beginning and very soon he was heading the Research division at PPFAS.Limited. His responsibilities soon expanded as he was appointed the Fund Manager for the flagship scheme of the Portfolio Management Service, titled "Cognito" in 2003. Rajeev is a strong believer in the school of "value-investing" and is heavily influenced by Warren Buffet and Charlie Munger's approach. His keen eye for ferreting out undervalued companies by employing a diligent and disciplined approach has been instrumental in the scheme's stellar performance ever since he assumed the mantle. Apart from his technical ability, what distinguishes him from many others is his ability to stand his ground and remain unflappable during difficult times. This trait enables him to resist the temptation of purchasing stocks during extremely bullish times as he believes that it is not appropriate to wager on clients' funds and faith by chasing companies that one does not have any conviction in. He strongly believes that only stocks purchased at right valuations will provide long-term returns and is unperturbed by short-term underperformance. Rajeev's academic inclination is evident in the plethora of degrees earned by him. He is a Chartered Accountant, Cost Accountant and CFA Charterholder. Rajeev is supported by Raunak Onkar (for overseas investments) and Ruchak Mehta (Debt investments). PPFAS LONG TERM VALUE FUND Visit youtube.com/ppfasltd to view Rajeev’s videos on markets and investing. 10 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT ABOUT THE SCHEME We have our skin in the game Total number of units held by 'Insiders' in the scheme as at 29th April 2015 = 3,72,91,960. This amounts to around 10.50% of the scheme corpus. 'Skin in the game' is an American colloquialism for putting one's money where one's mouth is... We strongly believe in the concept of long term value investing. We believe in what we are doing and hence we are investing in PPFAS Long Term Value Fund. Various stakeholders - such as the Sponsor, key employees, independent directors and trustees - have actually invested in PPFAS Long Term Value Fund along with you. When we ask you to invest we do the same and thus have our interests aligned. It is our commitment to follow best practices. Details of Holding by the sponsor company and its Directors as at May 29, 2015. Name Designation Number of units held PPFAS Limited Sponsor Company 4,88,172 Suneel Rasmikant Gautam Director 97,79,549 Sahil P Parikh Director 7,89,253 Ashish Rasik Shah Director 38,861 Note: These holdings include those of the individual as well as his immediate/dependent family members. Details of Holding by Directors of the company as at May 29, 2015. Name Designation Number of units held Parag S Parikh - 1,64,37,020 Rajeev Navinkumar Thakkar Director and CIO 35,17,472 Neil Parag Parikh Chairman and CEO 8,84,072 Kamlesh Mafatlal Somani Independent Director 50,000 Note: These holdings include those of the individual as well as his immediate/dependent family members. Holdings of other employees can be viewed by visiting the 'We have invested too' page on amc.ppfas.com. PPFAS LONG TERM VALUE FUND 11 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT FROM PARAG PARIKH'S DESK Letter to Investors Dear Investor, The Offer Document prepared by us as Parag Parikh was the Founder of PPFAS Mutual Fund. per the statutory format is quite detailed and informative. We urge you to read and understand the same. The points below are intended to highlight some of the principles and the processes of this scheme which we think are important for a prospective investor to keep in mind. Why Long Term? Investing is putting money to work and is governed by the universal law of nature: you cannot sow something today and reap tomorrow. A seed sown, has to go through various seasons before it grows in to a tree. So is the case with investments. Equity investing is akin to partnering in a business and businesses have their ups and downs. True benefits accrue to those who have the conviction and the patience to ride through the market turbulences. There are no Shortcuts We are in an era of instant gratification. We want everything fast, here and now. The stock markets do offer such delusions by way of trading, derivatives, etc which give instant profits. We do not believe in this school of thought and we would humbly admit that we do not possess the skill or have the ability to time the markets and trade to make short term gains. This scheme is not suitable for short term investors. Is Long Term Investing difficult? It may seem difficult but it is not so. Take the case of a young person starting his career at the age of 25. Assuming he retires at 65 he has 40 years where he can save and invest. Indians would invest in long term investments like Public Provident Fund (PPF), life insurance policies and gold over many years. But when it comes to equities they think short term. So it is not that people don't believe in long term investing but problem is the mindset towards equities. Investment Process Visit amc.ppfas.com for 'Parag's Views', and interviews of Parag Parikh We look at equity ownership as buying a business. Hence the investment Continued to next page PPFAS LONG TERM VALUE FUND 12 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT process considers factors like management quality, industry/sector FROM PARAG PARIKH'S DESK Parag Parikh's Books characteristics, financial leverage and risk, intangible assets, competitive advantage, pricing power and above all attractive valuations. Application of Behavioral Finance: The Missing Link This is where most investors lose out. They fall prey to their own and sometimes others’ mistakes due to the use of emotions in financial decisionmaking. This concept is known as behavioral finance. In other words the study of behavioral finance is the study of how people in general and investors in particular make common errors in their financial decision making due to their emotions. It is the study of psychology and finance. Behavioral Finance and Stocks to Riches: Insights on Investor Behavior how it affects markets is the key to a successful investment strategy. Wearing Publisher: Tata McGraw - Hill Education the cloak of patience, eschewing greed and conquering fear, form the basis of these strategies. We evaluate companies on their intrinsic strengths and long term potential but use the behavioral traits of the market to identify any mispricing in their stocks. Single Scheme Too many choices lead to decision paralysis and confuse investors. Hence this scheme is intended to be the only general value equity scheme by our fund. We do not believe in multiple schemes and will aim to take advantage of investment opportunities available in this scheme itself rather than float multiple schemes. Alignment of Interest and Disclosure Value Investing And Behavioral Finance: Insights to Indian Stock Market Realities Publisher: Tata McGraw - Hill Education We firmly believe that the interests of the promoters and employees associated with the running of the fund should be aligned with those of the investors of the scheme. Our senior management team including myself would be co-investors with the outside investors in the scheme. All other employees are also encouraged to do so. PPFAS Mutual Fund will be voluntarily disclosing the investment details of the Sponsor, Asset Management Company and the Key Employees of the mutual fund on its website for outside investors to monitor. This will include details of additional investments made in the the scheme and redemptions made. We urge you to consider the suitability of our scheme with your financial needs, goals, risk appetite and your patience before investing. Warm Regards, Parag Parikh Chairman PPFAS LONG TERM VALUE FUND 13 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT INTERVIEW The value investor who walks the talk Excerpts from an interview with Hindu Business Line - February 2, 2014 Parag Parikh’s fund house has only one tiny scheme but all its employees have put their money in it. About Parag Parikh Meeting Parag Parikh, veteran value investor and portfolio manager, was like running into Tamil movie-star Rajnikanth. If Rajnikanth intoned ‘En vazhi thani vazhi’ (my way is a very different way) in Padayappa, Parikh has actually practised it in his career. He has used every opportunity to rebel against market fads. The interaction was peppered with punch lines. Parikh has authored two books on value investing – Value Investing and Behavioural Finance and Stocks to Riches – which bring an Indian context to these concepts. Recently, Parikh, a stock broker for 25 years, has decided to diversify from managing money for affluent clients, to doing it for retail investors. But his mutual fund is different too. It isn’t actively marketed and manages just one scheme – the Long Term Value Fund. Parikh has got his own money invested in it and argues that every mutual fund manager should have ‘his skin in the game’. “I don’t want to market my fund, I want to make people buy my fund.” This was just one of the several googlies that Parag Parikh, veteran investor and the CEO of Parag Parikh Mutual Fund, bowled at us when we met him at Chennai. With just one scheme managing Rs. 313 crore, the fund is a David in a world of Goliaths. But Parikh isn’t defensive. “We don’t worry about assets or fee structure. Me and my employees have invested in our fund, we have our skin in the game. This ensures that we work in the interest of the investors. We have just one scheme with a wide mandate that ensures that we can invest in the right asset at the right time.” One of the secrets to his composure could be that he does not watch the ticker with bated breath through the trading day. He claims there are no computer terminals at the Parag Parikh office. “What about TV?”, we ask incredulously, to Continued to next page PPFAS LONG TERM VALUE FUND 14 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT INTERVIEW which he shakes his head with a smile. “Watching prices going up and down is just entertainment and totally unnecessary. Am I there for deriving entertainment from other people’s money?”, he quips. We then delved into the role of behavioural finance in stock-picking, his pet theme. He explains that you can analyse not just investor behaviour, but company behaviour too. Behavioural analysis How? “Tracking the company’s behaviour consists of tracking what they say in the press, what the press talks about them,” he explains. “If the CEO of a company is asked in an AGM, “Why did you buy a jet for your wife?” and he replies, ‘This is the way I work. If you don’t like it, sell your shares,’ we will not touch that company." "We prefer companies that walk the talk,” he adds. Understanding anomalies in investor behaviour can help you avoid mistakes, he explains. “Consider the example of the Reliance Power offer. Every single mutual fund applied for this. The behavioural anomaly in this was, there was a grey market premium on the stock and it was offered at a PE of about 5,000. But herd mentality was at work. Everyone wanted to be with Reliance group. The greater fool theory got to work. Everyone knew that the issue was wrongly priced, but they all thought they could exit on the listing day.” So behaviourally speaking, does he think a bull market is on right now? “There are still value-picks in the market. From time-to-time, certain sectors catch the market’s fancy. When you buy such stocks, you pay a fancy price and when the rally ends there is a fancy loss. TV channels talk about improving prospects of a sector and ask you to buy it. But you do not buy a stock when its prospects have improved. You should buy when it is neglected.” Value investing We then divert him towards his favourite theme, value investing. How does he go about it? “Investment is very simple, it is not rocket science. We buy businesses run by credible management, which are sustainable and businesses that have a strong moat around them by way of clients, distribution network and patents." "We choose businesses that need least capital with little or no debt. And most important, the business must have pricing power. Energy is in shortage in our country, but I will never buy an energy stock because the government, with the stroke of a pen, can reverse their fortune. Similarly, I love State Bank of India. But I will never buy that because a loan waiver can be announced at any time,” he adds. What about timing your buys and sells? “It is important to buy a stock at the right price, but right price is not what shows in the market. When price of DLF fell from ₹1,300 to ₹700, the anchor of a TV channel was screaming that it had become a value buy. How can you call it a value? Afterwards the stock price fell to ₹130.” He emphasizes that he only tracks and invests in the companies he believes in. “Today if someone asked me what I think of a stock, I will say - Ask Bejan Daruwalla. I can not talk about more than 25 stocks.” Views are personal and may not necessarily correspond with those of PPFAS Mutual Fund. PPFAS LONG TERM VALUE FUND 15 BACK TO TOP INVESTMENT PROCESS PPFAS MUTUAL FUND - COMMUNICATION KIT Investment Process Objective The investment objective of the Scheme is to seek to generate long-term capital growth from an actively managed portfolio primarily of equity and Equity Related Securities. Scheme shall invest in Indian equities, foreign equities and related instruments and debt securities. Buying securities at a discount to intrinsic value will help to create value for investors. Our investment philosophy is to invest in such value stocks. Long Term refers to an investment horizon of 5 years and more. Process Fundamental Research Identifying Investments ¬ Review public filings ¬ Industry Analysis ¬ Periodic quantitative screens ¬ Competitive Analysis of business v/s Peers ¬ Tracking known businesses & industries ¬ Review historical financial & operational data ¬ Peer review of businesses ¬ Qualitative evaluation of business & management Valuation Study Portfolio Construction ¬ Historical normal valuation ¬ Buy / Sell Discipline: Opportunistic ¬ Peer comparison ¬ Security Risk Control: Not more than 10% of ¬ Internal estimates & range of intrinsic value portfolio in a single security (as per SEBI Guidelines) ¬ Follow portfolio guidelines Portfolio Guidelines Sr Parameter Guideline 1 Ideal Market Cap Any Market Cap 2 Max Cash in Portfolio Opportunistic retention or use of Cash (upto 35%) 3 Max International Limit 35% of overall portfolio 4 Max Single Position Size 10% (as per SEBI Guidelines) 5 No of Companies held 20-25 (in exceptional cases 25+) 6 Benchmark CNX500 7 Our Performance Focus Focus on absolute returns as well as beating the benchmark over the long term PPFAS LONG TERM VALUE FUND 16 BACK TO TOP Factsheet May 2015 2 2ND ANNIVER RY SA 2ND ANNIVERSARY PPFAS Long Term Value Fund (An Open Ended Equity Scheme) A scheme designed for genuine Long Term Investors! Investment Objective of the Scheme The investment objective of the Scheme is to seek to generate long-term capital growth from an actively managed portfolio primarily of Equity and Equity Related Securities. Scheme shall invest in Indian equities, foreign equities and related instruments and debt securities. Scheme shall be investing in Indian equities, foreign equities and related instruments and debt securities. Risk Category of the scheme Blue colour refers that principal investment will be at low risk BROWN - HIGH RISK Yellow Colour refers that principal investment will be at medium risk Brown Colour refers that principal investment will be at high risk Investors should consult their financial advisers if in doubt about whether this scheme is suitable for them. MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. FACTSHEET MAY 2015 PPFAS Long Term Value Fund About the fund: Investors should note that to the extent we increase our cash and arbitrage positions, our fund may under PPFAS Long Term Value Fund (PLTVF) is an open ended perform the broader market in a runaway bull market equity oriented scheme with flexibility to invest a scenario. We will be guided by valuations and capital minimum of 65% in Indian equities and up to 35% in preservation consideration and will not be driven by overseas equity securities and domestic debt / money momentum considerations. market securities. Name of the Scheme PPFAS Long Term Value Fund The core portfolio of PLTVF consists of equity investments made with a long term outlook and the factors considered while investing are quality of management, quality of the sector and the business (return on capital, entry barriers, capital intensity, use of debt, growth prospects etc) and Investment Objective To seek to generate long-term capital growth from an actively managed portfolio primarily of equity and equity related securities. the valuation of the companies. The endeavor of the fund management team is to identify opportunities for long Type of the Scheme An Open Ended Equity Scheme Inception Date May 28, 2013 Name of the Fund Managers Mr. Rajeev Thakkar - Equity Fund Manager (Overall 10 years of experience in fund management) Mr. Ruchak Mehta - Debt Fund Manager (Since December 31, 2014) Mr. Raunak Onkar - Fund Manager for Overseas Securities (Since Inception) Assets Under Management (AUM) as on May 29, 2015 ` 602.71 Crores Net Asset Value (NAV) May 29, 2015 Regular Plan: 16.7979 Direct Plan: 16.9597 Exit Load Exit load is changed w.e.f. July 7, 2014. You are requested to refer to the SID (Page 87). Expense Ratio Regular Plan : 2.50%* Direct Plan : 2.00%* Benchmark Indices CNX 500 term investments. However there are times when the opportunities are not attractive enough. While waiting for attractive opportunities, the fund invests in arbitrage opportunities between the cash and futures equity markets and special situations arbitrage where open offers / delisting / merger events have been announced. Investments are also made in money market / debt securities while waiting for deployment in core equity investments. Foreign equity investments: The fund invests in foreign equity securities. Since investors in PLTVF look for capital investment and returns in Rupee terms, PLTVF also looks at delivering in Rupee terms. PLTVF hedges most of the currency exposure using currency futures. Outlook: We do not have expertise in predicting short term market movements. We aim to buy stakes in businesses which are well run and wealth creating for shareholders and which are quoting at a discount to intrinsic value. Hence the emphasis on having a minimum of 5 year investment outlook for investing in this scheme. Since stock prices have run up, on a bottom up basis, it is difficult to get fresh investment ideas. Investors may see some increase in cash holdings or in arbitrage / special Minimum Application New Purchase: ` 1,000 Amount Additional Purchase: ` 1,000 situations investments pending deployment in core Monthly SIP: ` 1,000 equity positions in the coming months. Quarterly SIP: ` 5,000 * Excluding Service Tax PPFAS LONG TERM VALUE FUND 18 BACK TO TOP FACTSHEET MAY 2015 PPFAS Long Term Value Fund Portfolio Disclosure Sector Allocation Core Equity % of Net Assets Name Sector Axis Bank Banks 7.48% ICRA Ltd Finance 7.14% Maharashtra Scooters Ltd Auto Ancillaries 6.47% Zydus Wellness Ltd Consumer Non Durables 5.90% Noida Toll Bridge Co Ltd Transportation 4.90% ICICI Bank Ltd Banks 4.76% Cash & Cash Pharmaceuticals Equivalent: 3.50% 3.21% Brewers Diversified Consumer 1.08% Services: 0.32% Oil : 0.70% Industrial Conglomerates 3.02% Packaged Foods 3.06% Banks IT Consulting & Other Services 14.48% 3.80% Arbitrage/ 4.82% Special Situation Finance 10.91% 4.20% Logistics Software 6.13% Persistent Systems Ltd Software 3.90% IL&FS Investment Managers Finance 3.77% Gujarat Gas Co Ltd^ Gas 3.68% Indraprastha Gas Ltd Gas 2.37% Mahindra Holidays & Resorts India Ltd Hotels 2.36% Mphasis Ltd Software 2.23% IPCA Laboratories Ltd Pharmaceuticals 2.01% Balkrishna Industries Auto Ancillaries 1.70% HDFC Bank Banks 1.29% Pfizer Ltd Pharmaceuticals 1.24% Beta Selan Exploration Technology Ltd Oil 0.70% Standard Deviation MT Educare Ltd Diversified Consumer Services 0.32% Novartis Ltd Pharmaceuticals 0.25% 9.15% 4.90% Transportation Internet & Technology 6.05% Gas 5.90% 8.17% 4.24% Auto Ancillaries Hotels: 2.36% Consumer Debt & Money Non-durables Market Instruments Quantitative Indicators 0.51 10.30% Sharpe Ratio 2.18 Portfolio Turnover Arbitrage IDFC Ltd* 3.33% ITC* 1.49% Total 67.29% Overseas Securities, IDRS and ADRs 25.53% Above figures are annualised. Risk free rate assumed to be 7.7398% (91Day T-Bill rate as on May 29, 2015). Performance of the Scheme NAV as on May 29, 2015 - Direct : 16.9597, Regular : 16.7979 Google - C Class # Internet & Technology 9.15% United Parcel Services INC # Logistics 4.20% International Business Machines Corp # Nestle SA ADR # IT Consulting & Other Services 3.80% Packaged Foods 3.06% 3M Co # Industrial Conglomerates 3.02% Scheme 29.51 16,797.9 Anheuser Busch Inbev SA ADR # Brewers 1.08% CNX 500 20.90 14,632.6 Standard Chartered PLC Banks 0.55% CNX Nifty 17.69 13,864.0 Standard Chartered PLC IDR Banks 0.40% Sensex 17.81 13,892.9 Total 25.26% Particulars Returns (%) FDR Invested Total Cash and Cash Equivalent Net Assets # Currency hedge to the extent of approximately 90% of exposure. * Hedged by offsetting derivative position ^ Trading suspended till the completion of amalgamation PPFAS LONG TERM VALUE FUND Current Value of Investment Of ` 10,000 Direct Since Inception (CAGR %) 1 Year Debt and Money Market Instruments CBLO Regular Plan 3.24% Scheme 25.34 12,533.9 1.00% CNX 500 19.94 11,993.9 CNX Nifty 16.65 11,664.9 Sensex 14.91 11,491.1 96.79% 3.21% 100.00% Greater than one year returns are compounded Annualised Returns. * Past performance may or may not be sustained in future. 19 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT HOW TO INVEST How to Invest: New Investors Submit the duly filled form either to: Visit the 'Downloads' section on our website www.amc.ppfas.com and download the Application form Our Corporate Office address (vide Courier / Hand Delivery) : PPFAS Mutual Fund, Great Western Building, 1st Floor, 130/132, Shahid Bhagat Singh Marg, Diagonally opposite Lion Gate, Fort, Mumbai - 400 001. OR Hand Deliver it to the CAMS office closest to you. (The list of the CAMS office is available in the 'Investor Desk' section of our website.) How to Invest: Existing Investors Visit our website www.amc.ppfas.com. Click on the Invest Now and then select Existing Investor. Enter your Existing Folio No. and PIN No. Then Login. PPFAS LONG TERM VALUE FUND 20 BACK TO TOP PPFAS MUTUAL FUND - COMMUNICATION KIT PPFAS Long Term Value Fund Investment Objective of the Scheme To seek to generate long-term capital growth from an actively managed portfolio primarily of equity and equity Related Securities. Scheme shall be investing in Indian equities, foreign equities and related instruments and debt securities. Risk Category of the scheme Blue colour refers that principal investment will be at low risk BROWN - HIGH RISK Brown Colour refers that principal investment will be at high risk Yellow Colour refers that principal investment will be at medium risk Investors should consult their financial advisers if in doubt about whether this scheme is suitable for them. If you would like to invest visit here. www.amc.ppfas.com Investor Helpline Distributor Helpline 91 22 6140 6537 91 22 6140 6538 Email: ppfasmf@ppfas.com • Website: www.amc.ppfas.com Great Western Building, 1st Floor, 130/132, Shahid Bhagat Singh Marg, Near Lion Gate, Fort, Mumbai - 400 001. INDIA. Tel: 91 22 6140 6555 | Fax: 91 22 6140 6590 Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Disclaimer: In the preparation of the material contained in this document, the Asset Management Company (AMC) has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such expressions that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. The AMC (including its affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on this material.
Similar documents
Find the Investment Opportunities in Dubai at INV500
Are you looking for investment opportunities in Dubai? Find the investment pitches, lead business investors, entrepreneurs to partners and start up ideas in Dubai, UAE at inv500.com. Register today for free & access investment opportunities! Visit Us: http://inv500.com/
More information