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NFO SBI Balanced Advantage Fund Presentation
NFO SBI Balanced Advantage Fund Presentation
Excitement; Over-confidence
Complacency / Ignorance
Thrill to invest more
Anxiety
Optimism
Denial
Positive outlook
Optimism
Fear
Relief
Panic
Increase allocation
to Equity Hedge with a
portion of Arbitrage
Buy low, Sell high strategy
To navigate through volatile market, investor should ignore the noise and focus on things under their control to build wealth in the long term
Index: S&P BSE Sensex; Source : Historical PE value – BSE India, Monthly Net inflow in MF – Internal data (for 96% of the MF industry): represents Equity net flow (including ETF) Data above is for March 2014 –
March 2021 period
Timing the market within a particular asset class like equities
is difficult…
Past 1 year return (%, LHS) Total equity net sales (Rs. crores, RHS)
(Source: AMFI, Internal analysis, Bloomberg. Historical 1-year returns is for Nifty 50 TRI Index. Equity net sales data is for equity/growth-oriented schemes which includes ELSS category but excludes Arbitrage and
Hybrid EquityCategory)
…Even timing within broad asset classes is difficult in short term
(Source: ICRA mfie, Crisil, Bloomberg. Debt represented by Crisil Composite Bond Fund Index, Cash represented by Crisil Liquid Fund Index and Equity represented by Nifty 50 TRI Index)
Relatively lower risk-return asset classes have a role in the portfolio
Rolling 3 years Standard Deviation Rolling 3 years Correlation with Nifty 50 TRI
• Debt and Cash as an asset class display significantly lower volatility as compared to equities as an asset class
• The correlation of Debt and Cash asset classes with equities also has been relatively low to negative correlation across mosttime periods
Combining asset classes with different risk-return profile in a single portfolio, can help in generating optimal risk-adjusted returns
(Source: Crisil, Bloomberg. Standard deviation and correlation based on 3 years monthly rolling returns)
So how to get the right Asset Mix?
Option 1 Option 2
Understand the Equity & Fixed Income market
Select Stocks / Instruments / Funds Invest in
Keep a close watch on how equity & debt market is SBI Balanced Advantage Fund
changing
&
Devise a strategy to calculate the asset mix and adjust
for changing market conditions Relax
Buy / Sell securities / stocks / funds accordingly
Pay taxes whenever exiting a stock while rebalancing
your portfolio
Presenting
SBI Balanced Advantage Fund – Fine tune your asset allocation needs!
ARBITRAGE
FIXED
Basis several parameters, the fund manager will INCOME
DYNAMIC have complete flexibility to manoeuvre
ALLOCATION assets in the range of 0 – 100% across asset
EDGE classes
TRUE TO LABEL
MACRO FIXED
TRENDS EQUITY INCOME TAXATION
SBI Balanced Advantage Fund – About (2/2)
Current Strategy
Long Equity
Fixed Income (for Wealth
(to provide Stability) creation)
Equity
0%-35%
65%-100%
Arbitrage
(to limit the
downside risk)
Taxation
The Scheme will have Equity taxation when the allocation to equity is >=65%
While, it will have Debt taxation when the return prospect is higher in Fixed Income market and hence the allocation to
debt is >35%
Three-tiered Investment Strategy
(Proposed strategy)
• Asset allocation at any given point of time will be decided by the Fund Managers, using parameters such as
Sentiment Indicator, Valuations and Earnings Drivers
• Depending on the opportunity to generate higher alpha, Fund Managers will move between the asset classes
without any restriction
Tier 1: Finding the right Asset mix
Step 1:
Sentiment Indicator Valuations
Multiple parameters to determine a value Metrics used for evaluation
• Breadth of the market • Trailing PE
• Retail participation • Shiller PE
• Mutual Fund flows • Earnings yield/ Shiller Earnings yield
• Primary market activities, etc. • Bond yield spread
Step 2:
Earnings Drivers
The Asset Allocation decision is taken basis various macro inputs like:
Fiscal/Monetary positions, real rates, monetary policy framework, variables of offshore markets, etc.
Equity
• Stock picking based on Fund Manager conviction
• Portfolios are based on the highest conviction ideas of the analyst team
Tier 3:
Stock / Security
Selection
Fixed Income
• High credit / sovereign portfolio to maintain liquidity
• Duration management to generate alpha – across the yield curve
Stock Selection Process
• Market capitalization
• Value / Growth / Quality • Generating alpha through Equity
• Sector preference • Stability through Debt
Asset Allocation
Experts to manage
Dynamically managed
Why struggle when you Asset allocation basis the
can leave the work for the market outlook
experts
TARGET AUDIENCE
Type of
Scheme
An open-ended dynamic asset allocation fund
Fund • Mr. Gaurav Mehta & Mr. Dinesh Balachandran for Equity portion
Manager • Mr. Dinesh Ahuja for Debt portion
• Mr. Mohit Jain is the dedicated fund manager for managing overseas investments
Benchmark
CRISIL Hybrid 50+50 – Moderate Index TRI
Index
• NIL - If units purchased or switched in from another scheme of the Fund are redeemed or switched out
up to 10% of the units (the limit) purchased or switched on or before 1 year from the date of allotment
• 1% of the applicable NAV - If units purchased or switched in from another scheme of the Fund are
Exit Load
redeemed or switched out in excess of the limit on or before 1 year from the date of allotment
• NIL - If units purchased or switched in from another scheme of the Fund are redeemed or switched out
after 1 year from the date of allotment
Need
We make investments to plan for a better future. But all of us have the need for regular cash flow.
Systematic Withdrawal Plan (SWP) is a ready-made tool to get regular cash flows in a very simple and
tax-efficient manner.
Benefits:
SWPs provide the confidence of getting a fixed Indexation Indexation benefit on LTCG for non-equity funds.
Confidence
amount at a pre-determined frequency.
Wealth Long-term wealth creation opportunity along with Allows the investor to change the withdrawal
regular & steady cash flow. Flexibility amount and frequency of withdrawal at any time.
Creation
Smooth &
Tax Tax efficient option as compared to traditional Transparent The entire process is hassle-free and transparent.
Efficient withdrawal plans (Dividend, MIP etc.) Process
Multiple options
Applicable months for different frequency: Monthly– All months; Quarterly - December, March, June, September; Half yearly – March & September; Yearly – March; Any amount – Applicable months as per chosen frequency
Strong Established Partnership
Strong Indian presence:
extended international reach
62.9261*% 36.9566%
*Source: Fortune Global 500 List; SBI Analyst Presentation as on end March end. 1 USD = Rs. 73.0407 Source: Amundi website as on March end 2021 *SBI along with its nominees. The nominee shareholders hold
only 2000 shares in the Company. Individuals hold 0.1173% of shares of the company which are shares allotted under ESOP scheme 2018.
SBI Funds Management Private Limited
Gaurav Mehta, CFA Dinesh Balachandran, CFA Dinesh Ahuja Mohit Jain, CFA
Fund Manager - Overseas
Fund Manager - Equity Fund Manager - Equity Fund Manager - Debt Investments
Industry Experience: 15 Years Industry Experience: 20 years Industry Experience: 23 years Industry Experience: 9 years
Dinesh joined SBI Funds Dinesh Ahuja joined SBI Funds Mohit Jain joined SBI Funds
Gaurav Mehta joined SBI Funds
Management Private Limited in Management Private Limited Management Private Limited
Management Private Limited
2012. Prior to being nominated as (SBIFM) in 2010. Prior to joining (SBIFM) in 2015. Mohit is a credit
(SBIFM) in November 2018. Prior
Portfolio Manager, he was the Head SBIFM, Dinesh was a portfolio analyst and has fund management
to joining SBIFM, he worked as
of Research. He joined as a Senior manager at L&T Asset responsibilities. Prior to joining
Portfolio Manager at Ambit
Credit Analyst. Dinesh started his Management and Reliance Group SBIFM, Mohit was working as a
Investment Advisors. Previously,
career with Fidelity in Boston, USA for four years. Dinesh started his Senior Research Analyst in CRISIL
he worked with Ambit Capital and
in 2001, where as an analyst he career in 1998 as a fixed income Limited. He is a Charter holder of
Edelweiss Capital. Gaurav has
covered Structured Finance, and dealer on the sell side. Thereafter the CFA Institute, USA.
completed B.Tech (Chemical
Engineering) from IIT, Bombay and local US fixed income market over he worked in leading broking
holds a post graduate diploma in 10 years. Dinesh holds a B.Tech outfits for eight years before
Management from IIM, degree from IIT, Mumbai and M.S. moving on the buy side in 2006.
Lucknow. Gaurav is also a Charter degree from Massachusetts
Institute of Technology (MIT). He is Dinesh is a Commerce graduate
holder of the CFA Institute, USA.
also a Charter holder of the CFA and holds his Masters degree in
Institute, USA. Finance from Mumbai University.
Disclaimer
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 internal
data, publicly available information & other sources believed to be reliable. Any calculations made
are approximations meant as guidelines only, which need to be confirmed before relying on them.
These views alone are not sufficient and should not be used for the development or
implementation of an investment strategy. It should not be construed as investment advice to any
party. All opinions and estimates included here constitute our view as of this date and are subject
to change without notice. Neither SBI Funds Management Private Limited, SBI Mutual Fund nor
any person connected with it, accepts any liability arising from the use of this information. The
recipient of this material should rely on their investigations and take their own professional advice.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.