THE ARQ ENGINE

The Future of Wealth Management

 The Importance of Financial Goal Planning

Reach bigger milestones. With ease. Sooner in life.

Retirement

Child’s Education

Buy Home
 A Typical Goal – Saving for Retirement

Rs30,000 12 months 30 years

Fixed
Rs2.25
Deposit
@ 4.5%* crore

Cover monthly expense of Rs1 Lakh during retirement

* Post tax return assuming 30% tax rate

 How much do you really need ?

You actually need

Rs5 crore; i.e. 2x

Assuming
Inflation @ 5%
 So now what?

Rs30,000 Save 2x Rs 60,000

Movies Shopping

Travel Dining out

 Protect your portfolio from Inflation

16.2%

5% 4.5%

Note - FD returns are post tax

- Equity returns is Sensex last 10 year return as on 06 Mar 19
 Power of Compounding

Rs5 crore
2x Fixed Deposit returns

35% in Equities
Rs10,500 @ 12.5%

Rs30,000/month
65% in Fixed deposit
Rs19,500 @ 4.5%
 Comparison of various assets

➢ Post tax and transaction costs, Equity return is highest

13.3%

9.4%
7.7%

4.5%

FD Gold Real estate Equity (Sensex)

20 year CAGR
 Think Beyond Interest!

➢ Equities have clearly outperformed other asset classes over

the last three years
14.1%

4.5% 4.8%
3.4%

FD Gold Real estate Equity (Sensex)

Note: Real Estate returns as per NHB Residex for top 9 cities
 Equity Culture need of the hour

USA India

$8.3 trillion
44%
$10.4 trillion Rs. 89 lakh
56% crores
96%

Bank Deposits Equity Mutual Funds

 Sharp increase in Retail Investor flows
MF Equity Inflows – Strong Trends, even higher future outlook

200

171
150

100 114
Rs '000 Cr

71 74 70
50
47

4 2 0
-
(13) (15) (9)

(50)
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
(Ann.)
Source: AMFI, Angel Research
Pitfalls of Buying Mutual Funds
without Proper Advice
 MF Performance – Picking right scheme is key

➢ First the good news. Around 90% diversified MF Schemes have outperformed the
Sensex over the last five years.
➢ But 10% have still underperformed, making right Scheme selection vital

Top 25% Next 25%

Average Return 20.2% Average Return 16.6%

Outperformance 9.3% Outperformance 5.8%

Bottom 25% Next 25%

Average Return 11.2% Average Return 14.4%

Outperformance 0.4% Outperformance 3.6%
 MF Performance – Lot of divergence

➢ There is large divergence in performance of best and worst-performing diversified schemes

5 Year 5 Year
Top Performing Schemes Returns Bottoming Schemes Returns
(%) (%)
Mirae Asset Emerging Bluechip Fund (G) 25.5 IDFC Focused Equity Fund (G) 11.21
Canara Robeco Emerging Equities (G) 25.4 UTI-Value Opportunities Fund (G) 11.19
Principal Emerging Bluechip Fund (G) 21.6 Taurus Starshare (Multi Cap) Fund (G) 11.07
L&T India Value Fund (G) 21.2 Aditya Birla SL Dividend Yield Fund (G) 11.05
Quant Large and Mid Cap Fund (G) 20.7 Sahara Wealth Plus - Fixed Pricing (G) 10.25
Reliance Focused Equity Fund (G) 20.5 BOI AXA Large & Mid Cap Equity Fund (G) 10.15
Aditya Birla SL Pure Value Fund (G) 20.2 Union Multi Cap Fund (G) 9.61
Invesco India Contra Fund (G) 20.1 Sahara Growth Fund (G) 9.42
Tata Equity P/E Fund - (G) 19.7 LIC MF Multicap Fund - (G) 8.98
Quant Focused Fund (G) 19.3 HDFC Growth Opportunities Fund (G) 8.95
Top 10 21.4 Bottom 10 10.2
 Large Size ≠ Future performance

➢ We selected the top 5 diversified schemes by AUM at the end of FY2015 and
checked their next 3 year returns
➢ None of these funds appeared in the top 50 schemes based on returns between
FY2015-18
Rank
Scheme 3 Year Return (%)
(out of 78 schemes)
HDFC Equity Fund - (G) 7.7 55
Reliance Multi Cap Fund (G) 5.6 71
ICICI Pru Value Discovery Fund (G) 6.3 68
IDFC Multi Cap Fund (G) 6.5 65
UTI-Value Opportunities Fund (G) 4.7 75
Average 6.1

Top 5 Schemes gave an average annualised return of 15.6% during this period
 Past returns ≠ Future performance
18.1

Top 5 best diversified scheme over 2006-11

IDFC Multi Cap Fund (G) 10.4

Tata Equity P/E Fund - (G)

Reliance Value Fund (G)
HDFC Equity Fund - (G)
UTI-Dividend Yield Fund (G)
FY06-11 FY11-16

17.3

Top 5 best diversified scheme over 2011-16

12.4
Canara Robeco Emerging Equities (G)
SBI Focused Equity Fund (G)
ICICI Pru Value Discovery Fund (G)
IDFC Multi Cap Fund (G)
Franklin India Equity Fund - (G)
FY06-11 FY11-16
 Holding same scheme for years not paying off

2015 2016
L&T India Value Aditya Birla SL Equity

Mirae Emerging Bluechip Mirae Emerging Bluechip

Motilal Oswal Multicap 35 Principal Emerging Bluechip
Quant Focused Quant Large and Mid Cap
Quant Large and Mid Cap Tata Equity P/E

2017 2018
Aditya Birla SL Pure Value AXIS Focused 25

Canara Emerging Equities Canara Equity Diversified

IDFC Focused Equity Kotak India EQ Contra
IDFC Sterling Value UTI-Dividend Yield
Principal Emerging Bluechip UTI-Equity
 The ARQ Engine
The Future Of Wealth
Management
 ‘ARQ’ Engine – A superior tool

GOAL APPROACH RESULT

Solving Real-world ➢ Machine Learning ➢ Tested Billions of

challenges of Retail ➢ Cognitive Algorithms Combinations
customers ➢ Expert Insights ➢ Developed Models
➢ Teraflops of with highest
processing power predictive power
 Redefines Existing Mutual Fund Advice

Predicts good-
performing No more buying Mutual
Proven model schemes for next Funds only based on their
developed year past performance!
 How does it Work

➢ 2 Schemes recommended in each

Category – to be invested equally

➢ Each Recommendation valid for 1 year

➢ Can be invested through Lumpsum or

SIP route

➢ Removes challenge of selecting best

schemes out of thousands
 Strong outperformance over Benchmarks

ARQ Large cap Portfolio is beating Sensex by 7.6%

18.0% 16.6%
16.0%
14.0%
12.0%
10.0% 9.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Returns
ARQ Largecap Sensex

*Back-tested 1 year average performance from May 11-Aug 17

 Strong outperformance over Benchmarks

ARQ Multi cap Portfolio is beating BSE 500 by 5.1%

20.0%
18.0% 17.3%
16.0%
14.0% 12.2%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Returns
ARQ MultiCap BSE 500

*Back-tested 1 year average performance from Aug 11-Aug 17

 Strong outperformance over Benchmarks

ARQ Mid Cap Portfolio is beating Nifty Midcap 100 by 8.5%

30.0%
26.3%
25.0%

20.0% 17.8%

15.0%

10.0%

5.0%

0.0%
Returns
ARQ MidCap Nifty MidCap100
*Back-tested 1 year average performance from Oct 12-Aug 17
Indian markets have huge opportunities for stock-picking and identifying hidden gems. But which scheme will have the best
winners in the next year? ARQ Midcap Portfolio is adept at identifying such schemes!
 More Advantages of ARQ Advisory

Why 1 year optimization?

We will never advise to churn before 1-year, so that you never have
to pay exit load & capital gains tax

Automated Rebalancing & Follow-up

After 1-year, receive automated portfolio health check to retain or
switch schemes, so that you always have best-performing schemes

Eliminates Emotions when Investing

With advanced technology and automatic rebalancing, eliminate
emotions and inertia in investing, so that your portfolio never stagnates.

Best Mutual Fund Brands

ARQ recommends best schemes of the most trusted Mutual Fund
companies, having the most reputed fund management teams
 How much does this advisory cost?

Your cost on Your cost on

Non Advisory ARQ based
Products Advisory

ARQ’s advanced advisory comes with no additional cost and no

minimum investment amount
 ARQ MF
Personalized
Buying Journey
 Risk Profiled Personalized Advice

➢ No longer does an investor have to pay

hefty fees to get HNI-level of customized
financial advice

➢ Simple and intelligent risk questionnaire

assess profile with fewest questions

➢ Balances two aspects: Willingness and

Ability to take risk

➢ Complete transaction can be done

conveniently at the click of a button
using Web or Mobile App
 Angel Broking Mobile App

Buying Journey: Extremely Convenient & Fully Digital

Step 1 Step 2 Step 3

Navigate to Advisory Answer a short questionnaire Check our recommendation
 Angel Broking Web App

Step 1:
Navigate to
ARQ

Step 2 :
Fill a short
questionnaire
 Angel Broking Web App

Step 3:
Check our
recommendation
s

Step 4 :
Start Your
Investment
 THANK YOU

Published in FYI 2016. © Angel Broking 2016-17.

Angel Broking All rights reserved. Corporate Office: 6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 4000 3600 / 3935 7600

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