brics pms performance update - 16 august 2010

MULTIPLE -STRATEGY TREND RATED

AUTOMATIC TRADING SYSTEM

Portfolio Management Services (PMS)

Performance Update

16 August, 2010

Vivek Mavani – Vice President and Senior Portfolio Manager

BRICS Growth Synopsis

BRICS Growth is a Long only Diversified Equity Product aimed at generating Absolute

Returns

The Objective is:

Generate Steady & Consistent returns over medium to long term

Low Volatility

Cautious on Margin of Safety

The Focus is therefore on Stock Picking with a Buy and Hold philosophy

Invest in high quality and high growth companies at reasonable valuations and

hold them over a period of time. (Not trade in & out frequently)

Our conservative approach to managing investments, (especially during periods of

volatility) is reflected in our superior performance.

Absolute Performance – 16 August, 2010

Inception Date: 1 October, 2009 Portfolio returns are net of fees & expenses

Weekly Monthly Quarterly Half YearlyYTD

(Calendar)

Since

Inception

BRICS Growth 3.28% 7.60% 18.11% 30.78% 30.41% 41.50%

NIFTY -1.24% 0.45% 6.38% 11.59% 4.18% 6.59%

SENSEX -1.29% -0.44% 9.76% 10.83% 3.36% 5.34%

S&P CNX 500 -0.55% 0.69% 11.04% 11.36% 5.21% 10.57%

S&P CNX MIDCAP 0.71% 3.48% 14.96% 22.32% 17.27% 30.13%

Performance Snapshot

Inception Date: 1 October, 2009 Portfolio returns are net of fees & expenses

-3%

2%

7%

12%

17%

22%

27%

32%

Monthly Quarterly Half Yearly YTD (Calender) Since Inception

BRICS Growth NAV Nifty Sensex S&P CNX 500 CNX Mid Cap

Consistency in our Month-on-Month Performance

Month Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 July-10 Aug-10

BRICS Growth -0.67% 2.79% 6.27% -1.84% 0.75% 6.24% 3.77% 1.86% 5.81% 3.84% 6.87%

NIFTY -7.31% 6.81% 3.35% -6.13% 0.82% 6.64% 0.55% -3.63% 4.45% 1.04% 0.94%

SENSEX -7.23% 6.48% 3.18% -6.34% 0.44% 6.68% 0.18% -3.50% 3.83% 1.56% 1.02%

S&P CNX 500 -6.46% 7.59% 4.43% -4.00% -0.69% 4.50% 1.27% -3.24% 4.59% 1.23% 1.77%

CNX MID-CAP -1.77% 8.65% 3.97% -3.11% -0.48% 7.50% 4.62% -3.79% 4.83% 3.50% 3.58%

Month-on-Month Comparison

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10

BRICS Growth Nifty Sensex S&P CNX 500 CNX Mid Cap

Compared to Top 20 Mutual Funds

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 1 month returns

Rank Scheme Name Performance

1 Mth % 3 Mths % 6 Mths %

1 Brics Growth 7.60 18.11 30.78

2 IDFC Premier Equity Fund - Plan A - Growth 6.75 15.67 25.75

3 Canara Robeco Emerging Equities - Growth 4.50 16.03 27.15

4 Escorts Growth Plan - Growth 4.20 7.76 22.76

5 HDFC Equity Fund - Growth 4.19 12.93 22.36

6 Franklin India Opportunity Fund - Growth 3.98 9.69 14.87

7 Fortis Future Leaders Fund - Growth 3.93 13.18 24.37

8 SBI Magnum Global Fund 94 - Growth 3.71 12.82 18.64

9 Kotak Emerging Equity Scheme - Growth 3.57 13.58 22.03

10 DSP BlackRock Equity Fund - Growth 3.48 9.90 18.26

11 Reliance Equity Opportunities Fund - Growth 3.43 13.18 25.93

12 Tata Select Equity Fund - Appr 3.15 7.52 13.06

13 Morgan Stanley A.C.E Fund - Growth 3.06 9.72 17.14

14 HDFC Long Term Equity Fund - Growth 2.95 12.06 19.17

15 Quantum Long-Term Equity Fund - Growth 2.83 10.22 19.49

16 Franklin India High Growth Companies Fund - Growth 2.82 9.71 13.88

17 Franklin India Prima Fund - Growth 2.65 11.55 17.98

18 DSP BlackRock India Tiger Fund - Growth 2.58 9.42 15.75

19 DSP BlackRock Opportunities Fund - Growth 2.57 10.6 19.68

20 Religare Growth Fund - Growth 2.55 9.08 15.33






1 Brics Growth 7.60 18.11 30.78










11 HDFC Growth Fund - Growth 2.32 11.30 19.17

12 Fidelity Equity Fund - Growth 1.93 10.75 20.59


14 JPMorgan India Equity Fund - Growth 2.19 10.38 18.68



17 Morgan Stanley A.C.E Fund - Growth 3.06 9.72 17.14

18 Franklin India High Growth Companies Fund - Growth 2.82 9.71 13.88

19 Franklin India Opportunity Fund - Growth 3.98 9.69 14.87

20 Fidelity India Growth Fund - Growth 1.45 9.65 18.78






1 Brics Growth 7.60 18.11 30.78





6 Escorts Growth Plan - Growth 4.20 7.76 22.76



9 Fidelity Equity Fund - Growth 1.93 10.75 20.59



12 ICICI Prudential Fusion Fund - IP - Growth 2.02 9.59 19.37

13 HDFC Growth Fund - Growth 2.32 11.30 19.17


15 Fidelity India Growth Fund - Growth 1.45 9.65 18.78

16 JPMorgan India Equity Fund - Growth 2.19 10.38 18.68



19 ICICI Prudential Discovery Fund - Growth 1.66 7.70 18.11


BRICS Growth NAV Trend

Indices have been range bound in the

last nine months, with interim periods of

volatility

Yet BRICS Growth has delivered steady

& consistent returns in line with our

objective

Performance has been a result of our

Stock Picking

Leading to consistency in our

performance as well as increasing out-

performance of our returns compared to

the benchmark indices

85

90

95

100

105

110

115

120

125

130

135

140

145

150

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BRICS Growth Nifty Sensex

S&P 500 CNX Midcap

BRICS Growth NAV v/s Indices (normalised)

BRICS Growth Outperformance

Our out-performance has been

increasing over a period of time

Our Strategy has been to :

Buying during panics

Book partial profits during sharp

rallies

Remain liquid in the interim

Large liquidity helps :

Protect against volatility

Provides enough courage and

conviction to buy into panics

Current cash/liquid balances ~ at 18% of

the Portfolio

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

1-O

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Nifty Sensex S&P 500 CNX MidCap

BRICS Growth NAV Outperformance vis-a-vis Indices

Portfolio Breakup

Large Cap. More than Rs 5,000 crores

Mid-Cap Rs 1,000 - 5,000 crores

Small Cap. Less than Rs 1,000 crores

Cash 18%

Construction 6%

Media 6%

Consumer Goods 13%Oil & Gas

22%

Banking & Finance 14%

Branded Garments & Retail 21%

Sectoral Allocation

Large Cap 34%

Mid Cap 29%

Small Cap 19%

Cash 18%

Market Cap

Low Portfolio Turnover (Buy & Hold at work)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10

tim

esPortfolio Turnover

Portfolio Turnover

10 Biggest falls since October 2009

How much a portfolio falls during a

correction / sharp downturn is as

important as how much it gains in a bull

market

Protecting capital is often more important

during periods of volatility

Downside protection equally contributes

to superior returns over a period of time

We have managed to fall less than the

indices during each of the sharp falls /

panics since our inception

Date

Points

Fall -

Nifty

% Fall -

Nifty

Points

Fall -

Sensex

% Fall -

Sensex

% Fall -

BRICS

Growth

27-Jan-10 -159.65 -3.19% -490.64 -2.92% -2.29%

03-Nov-09 -147.80 -3.14% -491.34 -3.09% -0.36%

19-May-10 -146.55 -2.89% -467.27 -2.77% -0.84%

25-May-10 -137.20 -2.78% -447.07 -2.71% -1.62%

05-Feb-10 -126.70 -2.61% -434.02 -2.68% -0.47%

27-Oct-09 -124.20 -2.50% -387.10 -2.31% -0.65%

21-Jan-10 -127.55 -2.44% -423.35 -2.42% -1.32%

01-Jun-10 -116.10 -2.28% -372.60 -2.20% -1.24%

26-Nov-09 -102.60 -2.01% -344.02 -2.00% -0.95%

07-Jun-10 -101.50 -1.98% -336.62 -1.97% -0.99%

04-Feb-10 -86.50 -1.75% -271.10 -1.64% -0.28%*Beta measures the volatility of the

portfolio relative to the index

Against -- Nifty Sensex

Beta * 0.4023 0.3995

Market Outlook

Global macro economic risks will continue to weigh on the markets. Will definitely have

repercussions on India over a period of time, if not on a daily basis

Rest of 2010, Markets are likely to remain range bound with negative bias and sharp

interim volatility

Markets have been very discriminating against corporates under-performing expectations. As a

result valuations/multiples could de-rate over a period of time. These stocks may not bounce

back for a while even if the overall markets do

Corporates that have delivered/exceeded expectations have witnessed re-rating of multiples and

have seen sharp bounce backs after each panic/fall

Overall Valuations are reasonable, but definitely not cheap

In some sectors/stocks valuations already factor in fairly aggressive growth rates for FY11

and FY12. Corporate performances could disappoint in those cases given high

expectations

Q1 FY2011 results have just about met the expectations. In fact most sectors under-

performed the expectations on profit margin front.

Pockets of opportunities still available in those stocks where growth v/s valuations are still

favourable

Our Strategy

“Time” in the markets is more important than “Timing” the markets

Superior long-term sustainable returns are not made by timing the markets in terms of selling at

the peaks. They are a result of purchase prices that are attractive in terms of valuations with

adequate margin of safety

Even in range bound markets there are enough stocks providing consistent and absolute returns.

Stock picking therefore is the key

Our strategy going ahead would continue to be:

Buy on declines/panics

Use the sharp rallies for part profit booking

Hold large cash/liquidity during interim periods

The sectors that we are bullish are and continue to be over weight:

Banking & Financial Services,

Gas Transportation & Distribution

Domestic Consumption oriented sectors including Paints, Branded Garments, Media etc.

Thank You

Vivek Mavani – Senior Portfolio Manager

[email protected]

BRICS SECURITIES LIMITED

1st Floor, Sadhana House,570, P. B. Marg,Behind Mahindra Towers,Worli, Mumbai – 400 018.Tel: 91-22-6636 0000.

Happy Investing

mailto:[email protected]

brics pms performance update - 16 august 2010

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