Upgrade to Pro — share decks privately, control downloads, hide ads and more …

Investing in a bull run

Investing in a bull run

What are the fundamentals underlying the bull run in the equity markets and how do investors position their portfolio to reap returns and minimize downside risks? Find answers to what do investors expect from the future of the equity markets?
www.Quantumamc.com

601881d9b51b59092c7351d727cf0de9?s=128

Quantum Mutual Fund

September 08, 2021
Tweet

Transcript

  1. Investing in a Bull Run Where To From Here? Speaker:

    Mr. Nilesh Shetty, Fund Manager – Equities August 20th 2021
  2. 2 Vertical Takeoff after the Covid Scare 80 100 120

    140 160 180 200 220 240 260 280 300 320 340 360 380 400 420 440 460 480 500 520 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21 S&P BSE Smallcap Index S&P BSE Midcap Index S&P BSE Sensex Index Rebased in INR Source: Bloomberg Finance L.P., As of July 31, 2021, Past Performance may or may not be sustained in future. *Aug 28, 2013 is the day when the Rupee hit an all-time low and Sensex hit 2013 intra-day low
  3. 3 2020- Flight to Safety; 2021- Play on Recovery YTD

    CY CY CY CY CY CY CY CY CY CY CY CY 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 BSE-30 INDEX S&P BSE SENSEX 30 INDEX 11.0% 17.2% 15.7% 7.2% 29.6% 3.5% -3.7% 32.0% 10.7% 28.0% -23.6% 19.1% 83.3% BSE200 INDEX S&P BSE 200 IDX 17.4% 17.9% 10.4% 0.8% 35.0% 5.4% -0.2% 37.6% 6.2% 33.2% -26.0% 17.8% 90.9% BSE500 INDEX S&P BSE 500 IDX 19.8% 18.4% 9.0% -1.8% 37.6% 5.2% 0.4% 39.1% 5.0% 33.4% -26.4% 17.9% 92.7% BSETCD INDEX S&P BSE INDIA Cons.Dur IDX 20.0% 22.2% 21.5% -8.3% 102.9% -5.8% 24.8% 67.3% -23.9% 47.1% -16.2% 69.6% 100.6% SPBSHLIP INDEX S&P BSE INDIA HEALTHCARE IDX 21.1% 62.6% -2.8% -5.4% 1.1% -12.5% 15.9% 48.8% 24.9% 39.8% -12.1% 35.4% 71.2% SPBSITIP INDEX S&P BSE India IT IDX 28.5% 60.3% 11.8% 27.3% 13.3% -6.1% 6.4% 19.5% 62.3% 0.7% -14.6% 34.1% 135.9% BSETECK INDEX S&P BSE India TECK Index 22.5% 46.5% 11.1% 12.4% 18.8% -7.6% 5.4% 18.2% 49.3% 3.0% -15.5% 25.4% 69.9% SPBSCGIP INDEX S&P BSE India FMCG Index 8.9% 13.2% -2.2% 12.1% 33.3% 4.8% 3.6% 20.1% 12.5% 49.5% 11.7% 35.5% 43.3% BSEAUTO INDEX S&P BSE India Auto IDX 9.0% 14.3% -9.9% -21.3% 33.3% 10.4% 0.1% 53.8% 8.9% 42.8% -18.6% 40.3% 208.3% BSEOIL INDEX S&P BSE India Oil&Gas Index 13.3% -0.6% 10.6% -12.6% 37.8% 30.4% -1.2% 14.1% 5.9% 15.8% -28.3% 2.7% 75.0% BSEPOWR INDEX S&P BSE INDIA POWER INDEX 28.9% 11.4% -0.6% -14.3% 22.0% 3.0% -5.3% 25.5% -12.4% 12.8% -39.1% -5.4% 76.1% BSETCG INDEX S&P BSE India CapGoods IDX 27.3% 12.5% -8.8% -0.5% 41.4% -2.3% -7.8% 51.9% -4.0% 36.6% -47.1% 10.0% 106.1% BANKEX INDEX S&P BSE INDIA BANKEX IDX 9.5% -2.1% 21.1% 5.7% 40.0% 8.4% -9.0% 67.1% -8.0% 59.1% -30.7% 35.0% 86.8% BSEREAL INDEX S&P BSE India Realty Index 28.5% 9.2% 27.6% -30.7% 107.2% -5.3% -12.8% 9.4% -31.2% 54.4% -51.6% -25.7% 70.0% BSETPSU INDEX S&P BSE INDIA PSU IDX 37.4% -12.8% -1.1% -18.7% 22.7% 16.9% -14.9% 44.8% -16.5% 18.6% -31.6% 1.2% 82.5% BSEMETL INDEX S&P BSE INDIA METAL INDEX 83.9% 18.4% -10.2% -16.3% 52.8% 43.2% -28.8% 11.1% -7.5% 21.5% -46.5% 2.1% 238.8% Securities Name Source: Bloomberg Finance L.P.; based on daily total returns as of July 31, 2021. Past Performance may or may not be sustained in future.
  4. 4 Corporate Profits at an all time High, Expectations of

    Strong Demand Rebound Corporate profitability hit a record in Q4FY21 driven by strong revenue growth and strict control on costs Demand is expected to rebound post unlock driving sales, but higher input costs and normalizing other costs may see profit growth lag revenue growth Source: CMIE- Economic Outlook. Past Performance may or may not be sustained in future.
  5. 5 Consensus Earnings Upgrades After Many Years of Flat Growth

    Source: Bloomberg Finance L.P; as of July 31, 2021. Past Performance may or may not be sustained in future.
  6. 6 Demonetization, GST, Covid: Large Companies Getting Larger 14% 3%

    3% -1% -7% -8% -16% 9% 14% 6% -5% -15% -12% -18% -25% -13% -17% 6% 16% 5% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% Paints Steel Cement Ceramic tiles Passenger cars Two-wheelers CV Bank Credit AMC AUM Gen. Ins. Premium Listed Company Growth YoY Industry Growth YoY Source : CMIE, RBI, IRDAI Note : YoY growth in FY21, Volume Growth for manufacturing sectors like paint,steel,auto etc. Credit growth for private sector banks is compared to systemic credit growth. Source: CMIE- Economic Outlook, Data as of March 2021
  7. 7 Economic Activity Gradually recovering Economic activity in some sectors

    are at similar or higher than pre Covid-19 level. Production Trends June 2021 as % of Feb 2020 Credit and Consumption Trends June 2021 as % of Feb 2020 Cement Production 89.2% Bank Credit 107.1% Steel Production 99.2% Bank credit to Industry 102.7% Fertilizer Production 108.4% 2 Wheeler Sales 87.3% Coal Production 65.5% Passenger Car Sales 93.2% Crude Oil Production 103.5% Tractor Sales 185.5% Natural Gas Production 120.2% Air Cargo 88.5% Petroleum Refinery Products 87.9% Rail Freight traffic 105.9% Electricity Generation 108.6% Port cargo 96.1% Source: Advisor Office of Economic, RBI Bulletin, SIAM, CMIE, Tractor Manufacturer Association, AAI, Indian Railways, Indian Port Association Data as on June 2021.
  8. 8 Risks to the Recovery Low Vaccine coverage increases probability

    of a third wave. Festive season to start from Sep 2021 Job Losses amongst salaried employees and Rising Inflation may impact consumer discretionary spend Since the pandemic began, there has been a reduction in number of employed by 20 million Inflation in Raw materials and increase in Crude prices may force RBI to raise interest rates
  9. 9 Covid Containment To Accelerate Inflows Period Net Foreign Activity

    (USD bn) Net Local Activity (USD bn) Total Activity (USD bn) Change in S&P BSE-30 TRI in that period (% ) ( % USD) CY 2003 6.6 0.1 6.7 +86.5% CY 2004 8.7 -0.3 8.4 +20.5% CY 2005 10.7 3.0 13.7 +40.2% CY 2006 8.1 3.4 11.5 +51.6% CY 2007 17.7 1.7 19.4 +67.0% CY 2008 -12.0 3.3 -8.7 -60.8% CY 2009 17.5 -1.2 16.3 +90.3% CY 2010 29.4 -6.1 23.3 +24.2% CY 2011 -0.4 1.3 0.9 -35.7% CY 2012 24.4 -3.9 20.5 +24.1% CY 2013 20.1 -3.7 16.4 -1.9% CY 2014 16.1 3.9 20.0 +29.2% CY 2015 3.2 11.1 14.3 -8.1% CY 2016 3.2 7.1 10.3 +0.9% CY 2017 7.8 18.4 26.2 +37.8% CY 2018 -4.4 17.6 13.2 -2.0% CY 2019 14.4 7.6 22.0 +13.1% CY 2020 23.0 -7.5 15.5 +14.5% YTD 2021 6.8 0.6 7.4 +9.0% July 2021 -1.5 2.6 1.1 +0.2% Cumulative 200.9 56.4 257.3 +1218.9% Source: Sebi.gov.in, NDSL, As of July 31, 2021. Past Performance may or may not be sustained in future.
  10. 10 Domestic Institutional Flows Come Back After Second Wave ebbs

    Source: CLSA and Bloomberg Finance L.P., as of July 31, 2021
  11. 11 Rise & Rise of the Retail Investor

  12. 12 Spiking PER Overstates Valuation Given The Prior Quarter’s Gap

    Down Source: Bloomberg Finance L.P., as of July 31, 2021. Past Performance may or may not be sustained in future.
  13. 13 PER Elevated – Will Mid Caps Deliver on Market

    Expectations? Source: Bloomberg Finance L.P., as of July 31, 2021. Past Performance may or may not be sustained in future.
  14. 14 Scenarios To Ponder Corporate Earnings Liquidity Equity Valuations Equity

    Returns Rising Easy High Positive Rising Tight Moderate Slight Decline Stagnant/Falling Easy Moderate Slight Decline Falling Tight Falling Sharp Correction Most Likely Scenario, But Returns may moderate
  15. 15 Don’t Be Distracted By Global Macro: Economic Activity Led

    To A 10x Growth In Earnings Source: CLSA and Bloomberg Finance L.P., as of July 31, 2021 CY 21 and CY 22 are estimate numbers. Past Performance may or may not be sustained in future.
  16. 16 Portfolio Reflects Value QLTEVF As % Of S&P BSE-30

    Index S&P BSE-30 Index** Number of equity stocks 28 30 Median market capitalization (USD mn) 11,693 39% 30,317 Weighted dividend yield 1.4% 132% 1.1% Weighted PER: March 2023E 13.7x 71% 19.3x Weighted EPS Growth: March 2023E 22.6% 98% 23.0% PEG Ratio (excludes cash) 0.61x 72% 0.84x T12M PE 22.6x 62% 36.6x Weightage of stocks with PER > 20 72% 91% Weightage of stocks with PER > 30 47% 66% Source: Quantum AMC As of July 31, 2021| QLTEVF - cash weight excluded | ** S&P BSE-30 Index weight is based on free-float. % S&P BSE 30 Index column depicts the QLTEVF as a percentage of S&P BSE 30 Index fundamentals. The figures mentioned in WTD PER, WTD EPS and PEG ratio are calculated on the basis of Bloomberg consensus estimates for companies owned by the Composite as well as the companies in the S&P BSE 30 as of the reporting date i.e. July 31, 2021. Past Performance may or may not be sustained in future.
  17. Keep 6-24 months of expenses in Liquid Fund, Bank Fixed

    Deposit to be withdrawn in case of emergency Trying to Time Markets is a Folly Follow a Simple Asset Allocation Strategy to Deal with Market Cycles ₹ Please note that the above is the suggested fund allocation only and is not to be considered as investment advice / recommendation, please seek independent professional advice and arrive at an informed investment decision before making any investments • Liquid Fund/ Bank Deposit 6-24 months Expenses • 4-5 Diversified Mutual Funds Balance Surplus 80%-85% • Gold/Gold ETF 15%-20% Wealth Builder Stress case scenario Diversification 17
  18. 2021- A Simple Asset Allocation Strategy to Deal with Market

    Cycles
  19. Solutions to meet Sustainable Development Goals: SGD-17 SMILE was born

    out of our desire to support credible NGOs and create a steady stream of money flow for them Since 2018, Quantum MF investors have supported 7 NGOs from diverse sectors via the SMILE facility WHAT IS SMILE? THE SMILE STORY OUTCOME SO FAR SMILE enables Quantum MF investors to contribute 10% of their investment in eligible schemes to charities vetted by HelpYourNGO + = “SMILE”
  20. SMILE Process Flow Q Long Term Equity Value Fund Q

    Equity Fund of Funds Q Dynamic Bond Fund Q Multi Asset Fund of Funds Q Gold Savings Fund Q Liquid Fund Donated to NGOs selected by investors and vetted by HelpYourNGO HelpYourNGO sends donation receipts and 80G Liaises with NGO grantees Monitors & reviews INVEST IN SMILE FACILITY DONATE TO NGO’S DONATION RECEIPTS Investors receive periodic program reports from HYNGO on the NGOs supported by them Investors receive periodic program reports from HelpYourNGO on the NGOs supported by them * Q Stands for Quantum for scheme names
  21. Product Label

  22. Product Label

  23. Product Label

  24. Product Label

  25. Disclaimer – Terms of Use The data in this presentation

    are meant for general reading purpose only and are not meant to serve as a professional guide/investment advice for the readers. This presentation has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required as per SEBI Mutual Fund Regulations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. None of the Sponsors, the Investment Manager, the Trustee, their respective Directors, Employees, Affiliates or Representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the data/information/opinions contained in this presentation. The Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required. Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme. Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-). Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956. 20th August 2021 Mutual fund investments are subject to market risks, read all scheme related documents carefully.
  26. Thank You 26