august 2021 investment products macroscope aug... · 2021. 8. 5. · equity outlook 03 flows: fpis...

August 2021

Market

Macroscope

Investment Products

MARKET MACROSCOPE | INVESTMENT PRODUCTS | AUGUST 2021

Index

Contents Page No

From the MD’s Desk…………………………………………………………….. 1

Equity Outlook ……………………………………………………………………. 2-5

Fixed Income Outlook …………………………………………………………… 6-8

Deep dive – The Quality Alpha …………………………………………………. 9-13

Global Investing………………………………………………………………….. 14-17

Dots to Join……….……………………………………………………………….. 18-19

Index Performance ……….……………………………………………………… 20

Macro Economic Indicators ……………………………………………………… 21-22

India Horizons Portfolios …………...……………………………………………. 23-24

Crossword …………...……………………………………………………………. 25


From the MD’s desk

01

Dear Investors,

Rule No. 1: Never lose money. Rule no. 2: Never forget Rule No. 1- Warren Buffet

This is a good time to remind ourselves of the above quote. Equity markets globally have had a

strong run in the past 15 months. Indices have been hitting new highs and market breadth is also

high. In times such as these, it is easy to overlook one of the most important factors in successful

investing – “risk”. In a recent interview I was asked about the risks in equity markets, particularly in

the mid and small cap space. I believe that along with good companies, some of the less deserving

peers have also risen. This is a good time for investors to review their portfolios, particularly mid and

small cap companies, to weed out such companies. You can read the full interview on Money9.comwebsite at this link. HDFC Securities' Dhiraj Relli tells how to protect equity portfolio in case of any 'U' turnon D-Street (money9.com)

This month’s Deep Dive section focusses on one of the key risk parameters- namely “quality”, and

the importance of quality in equity investment decisions. It takes a data driven look into the

performance of quality companies across market cycles. Quality companies tend to underperform

during bull runs, particularly the sharp rallies of the kind we have seen over the last 15 months.

Nevertheless, they outperform during bear phases and indeed outperform over a full cycle. We hope

that the section improves your decision making in managing risks and enhancing your returns.

In this month’s Macroscope, we have a section discussing the recent trends, benefits and risks of

global investing. It details how you can invest in global markets. HDFC Securities’ tie up with Stockal

enables you to invest directly in 5,000+ individual US stocks/ ETFs. The tie-up also provides access

to Stacks which are curated/ thematic portfolios managed by experts available on the Stockal

platform.

In addition, the Macroscope contains the regular equity and debt markets outlook as well as the

“Dots to Join” and Crossword sections.

2021 is likely to be a record year for IPOs. The big IPO this month was Zomato and its spectacular

listing. It has opened up the path for a bunch of new-age tech companies to list on the exchanges.

Companies like PayTM, PolicyBazaar, Delhivery, Mobikwik, among others, are planning IPOs.

Irrespective of which side of the valuation debate you are on, this should boost the long term

development of India’s public and private equity markets and enhance choices for Indian investors.

On this hopeful note, wishing you all successful investing.

Yours Sincerely

Dhiraj Relli

MD and CEO – HDFC Securities

https://www.money9.com/news/markets/hdfc-securities-dhiraj-relli-tells-how-to-protect-equity-portfolio-in-case-of-any-u-turn-on-d-street-57708.html


Equity Outlook

02

Macroeconomic Review:

Domestic review: High frequency indicators (such as power consumption, GST Collections, google

mobility trackers) suggest that the economy continues to recover after the localized lockdowns were

relaxed.

India’s CPI inflation was 6.26% in June 2021 compared to 6.3% for May 2021. India’s 10-year bond

yields inched up to 6.2% (from the 6.0-6.1% band in June). We expect monetary policy to remain

accommodative and do not see any rate hikes in the near term as the RBI will likely remain focused

on economic recovery.

Monsoon rains picked up in the second half of July and rains as of date are about 1% below long

period averages (LPA). Kharif sowing also picked up and the average under sowing is currently 5%

below last year compared to a deficit of 12% two weeks ago. The Indian Meteorological Department

(IMD) expects monsoons to be normal in August and September. This should help bring down food

inflation over the next few months.

Global Review:

The S&P 500 is now about 32% higher than its pre-pandemic level in Feb 2020 and 91% higher than

its March 2020 low. However, the rally has been underpinned by better than expected earnings

which have continued to surprise positively. UBS now expects S&P 500 earnings in CY22 to be 30%

higher than pre-pandemic levels.

Global central banks are likely to continue with their low interest rate policies for a long time. The US

Fed statement, after its meeting in July, was widely interpreted as hinting at a taper of its bond

buying program. However, the prospect of tapering did not impact the global equity markets.

The Chinese government continued to target its tech sector with a slew of measures. China banned

for-profit tutoring and stocks in the sector crashed. China’s anti-trust regulator ordered Tencent Music

to give up its exclusive music licensing rights. Tencent share prices crashed after a government

owned Chinese newspaper denounced online gaming as “opium of the mind”. Share prices of

Meituan, the online food ordering company, crashed after it was asked to ensure that its workers

earned at least the minimum wage. It was already facing a probe about its exclusive partnership

program with restaurants.

Equity markets review:

Indian equity markets continue to make new highs and the breadth is also positive. The markets

cheered the positive results and overlooked any negatives (asset quality issues in the BFSI sector,

for instance).

The rally in July 2021 was really a mid and small cap rally, the smaller the better. The S&P BSE

Sensex gained 0.2 % in July while the S&P BSE Mid-cap and S&P BSE Small-cap indices gained

2.4% and 6.2% respectively. S&P BSE Auto, S&P BSE Power Index and S&P BSE Oil and Gas

Index were the worst performing sectoral indices losing 5.4%, 5.0% and 4.5% respectively this

month. S&P BSE Realty Index, S&P BSE Metal Index and S&P BSE Telecom indices were the best

performing indices and gained 16.1%, 12.6% and 4.9% respectively.

The best and worst performing stocks during June 2021 from the NSE 500 universe are shown in the

table below. Adani group stocks were again among the worst performers after a statement by the

government that SEBI and DRI were investigating Adani group companies regarding various

regulatory compliances.


Equity Outlook

03

Flows:

FPIs were net sellers with net sales of Rs. 11,308 cr of Indian equities in cash in the month of July

2021. DIIs were net buyers to the tune of Rs. 18,393 cr in July. (Source: NSDL, Moneycontrol.com)

IPO Review:

July 2021 was another strong month for IPOs with 6 companies looking to raise Rs. 14, 630 cr. The

overall subscription was close to 100 x for 4 out of the 6 IPOs (Zomato and Glenmark Life being the

exception). The 4 IPOs which had listed at the time of this writing gave strong returns with 3 of them

almost doubling from the issue price. Zomato was an exception but still listed at a 51% premium to

the issue price. Zomato was the biggest IPO by size, raising Rs. 9,375 cr. The strong subscription

and listing gains of Zomato has paved the way for a number of tech IPOs with Paytm, PolicyBazaar,

Cartrade, Nykaa, Delhivery and others planning an IPO.

The IPO pipeline remains with 5 companies having already announced IPOs to close in the first 10

days of August (at the time of this writing). About 12 companies have already raised Rs. 27,000 cr in

the 4 months from April to July. Almost 40 more companies are likely to come out with an IPO during

the rest of the fiscal year looking to raise around Rs. 70,000 cr.

The table below summarizes the IPOs which either closed or listed during July 2021:

Best Performing Stocks Among NSE 500 in July 2021

Large Cap Mid Cap Small Cap

Stock Name Returns Stock Name Returns Stock Name Returns

Tata Steel 22.9% JSW Energy Ltd. 49.1% Indo Count Industries 55.1%

Jubilant Foodworks Ltd. 22.6% Dhani Services 29.3% Jindal Stainless Ltd. 47.9%

Ambuja Cements 20.7% L&T Technology Services Ltd. 27.8%Gujarat

Fluorochemicals Ltd.47.8%

DLF Ltd. 20.1% Manappuram Finance Ltd. 22.8% Jindal Stainless (Hisar) 40.2%

Havells India Ltd. 19.8% Laurus Labs Ltd. 29.8% Vardhman Textiles 39.7%

Worst Performing Stocks NSE 500 in July 2021

Large Cap Mid Cap Small Cap

Stock Name Returns Stock Name Returns Stock Name Returns

Adani Total Gas Ltd. -12.6% Indian Overseas Bank -13.0% Venky's (India) Ltd. -13.7%

Dr. Reddy's

Laboratories -13.1%

General Insurance Corporation

of India-13.4%

Housing & Urban

Development Corp. Ltd. -14.8%

Tata Motors Ltd. -13.4% Bank of Maharashtra. -13.8% Infibeam Avenues Ltd. -14.9%

Adani Transmission -15.0% Vodafone Idea -16.9% Future Consumer Ltd. -15.7%

Adani Green Energy

Ltd.-20.5% Alembic Pharmaceuticals -19.9% Suzlon Energy Ltd. -22.1%

Source: NSE

Name of the companySize of IPO

(Rs. Cr)

Issue close

Date

IPO price

(Rs. Per

share)

Listing

date open

(Rs. Per

share)

%

Inc/(Dec)

from issue

price

Overall

Subscripti

on (times)

QIP

Subscripti

on (times)

G R Infraprojects Limited 963 09-Jul-21 837 1,700 103.10% 102.6 168.6

Clean Science & Tech Ltd 1547 09-Jul-21 900 1784.4 98.30% 93.4 156.4


Equity Outlook

04

Name of the company

Size of

IPO (Rs.

Cr)

Issue close

Date

IPO price

(Rs. Per

share)

Listing

date open

(Rs. Per

share)

%

Inc/(Dec)

from issue

price

Overall

Subscripti

on (times)

QIP

Subscripti

on (times)

Zomato Limited 9,375 16-Jul-21 76 115 51.30% 38.3 51.8

Tatva Chintan Pharma Chem Ltd 500 20-Jul-21 1083 2111.8 95.00% 180.4 185.2

Glenmark Life Sciences Ltd 1,514 29-Jul-21 720 - 0.00% 44.2 37

Rolex Rings Ltd 731 30-Jul-21 900 - 0.00% 130.4 143.6

Source: NSE,BSE

Recommended reading for the month:

This month’s recommended reading is a blogpost by Prof Aswath Damodaran on the IPO of Zomato and its

Valuation. The article is remarkable, not for the valuation it ascribes, but for two things- the evaluation process and

uncertainty it outlines. The process requires estimation of market size, competition, unit economics, costs,

reinvestment requirements, operating margins etc. Each of the above is still evolving and may change dramatically

in the years to come. This uncertainty is what makes tech valuations difficult and controversial. We will confront

these uncertainties in the upcoming tech IPOs. The uncertainty will likely drive large swings in Zomato’s share price

over the next few years. At the very least, we hope the article will make you sympathetic towards us research

analysts and why we like to give long winded answers to seemingly simple questions like target price.

Outlook:

Earnings review: Several companies have already reported results. Companies in IT sector (Infy,

TCS, L&T Tech etc.) showed strong results with sequential growth and large order pipeline. Cement

and metal companies (Ultratech, JSW, Vedanta etc.) continued to benefit from elevated commodity

prices. Auto companies’ (Maruti, Bajaj etc.) June quarter results were impacted by the localized

lockdowns and high commodity prices during the quarter. Banks and NBFCs (ICICI, IDFC First bank,

Bajaj Finance, Cholamandalam) reported mixed results. Asset quality pressures surfaced as a result

of the lockdowns in most NBFCs with retail financing buckets like vehicle financing and microfinance

seeing the highest impact on asset quality. Results of consumer staples companies (HUL, Asian

Paints) were largely in line with expectations. Overall, companies were largely able to meet or

exceed expectations but there were far fewer positive surprises compared to the previous quarter.

Focus on Risk, Not Returns: Indian equity markets have rallied strongly from the March 2020 lows.

The mid and small caps have outperformed the large caps handsomely. A rising tide lifts all boats is

certainly applicable to the Indian equity markets over this period and even stocks with suspect long

term prospects have delivered strong returns. Quite often, returns from such stocks do not sustain

over the long term.

Typically, periods of strong returns are followed by periods of poor or negative returns. We believe

that this is a period where investors should focus on the downside risks associated with each stock in

their portfolio. Investors should reduce exposure to low quality, high risk stocks and increase

weightage of higher quality stocks. This would enable investors to “lock-in” the gains from the current

stock market rally. As we show in the Deep Dive section, high quality stocks tend to outperform

significantly during bear market phases.

The table below shows select “buy” and “reduce”/“sell” rated stocks as rated by HDFC Securities’

Institutional equities team. The full list of stocks rated and their target prices can be accessed at our

website.


Equity Outlook

05

(Source: HSL IE)

The table below gives select positional buy calls issued by the HDFC Retail Research team:

(Source: HSL Retail Research)

All of the above institutional equities reports and retail research calls can be accessed at our website.

HDFC Securities Baskets/ Portfolios:

HDFC Securities’ Institutional Equities team has launched two baskets –

i) Largecap Legends (Report Link - Largecap Legends)

ii) Majestic Multi-cap (Report Link - Majestic Multi-cap)

The stocks in the basket have been selected through a bottom-up evaluation process and can be

used for making incremental investments into the equity markets.

In addition, we have 2 curated portfolios- India Horzions Bellwether portfolio and India Horizons All

Star portfolio. The portfolios comprise of high quality stocks with structural growth drivers and are

expected to generate superior returns over the long term.

Greater details about these baskets can be accessed in the basket investing section of our website.

Investors can invest in the above baskets with a single click. The baskets are regularly monitored

and rebalanced every quarter.

Risks: Inflation, both local and global, are the key long term risks for the equity markets. Sustained

higher inflation may force global central banks to raise interest rates higher and faster than they

would otherwise prefer. This could impact the economic recovery and equity markets. Valuations

currently appear to be at the higher end of their historical trading bands and are a key risk to long

term returns. Covid-19 and a possible third wave, the impact of the Delta plus variant and vaccines’

efficacy against such variants are a key risk to watch.

Company Name Reco date Entry price CMPTarget 2

(Rs/share)% Upside

Zee Entertainment 25-May-21 203.5 215.3 250 16.1%

Motilal Oswal 11-Jun-21 783.0 790.3 940 18.9%

CSB Bank 28-Jun-21 348.0 340.6 430 26.3%

HDFC Sec Institutional Equities: Select "Buy" rated stocks

Name Industry Target price CMP % Upside

Cholamandalam Investment & Finance Company BFSI- NBFC 613 516.8 18.6%

Capacite Infraprojects Construction 300 244 23.0%

Gail Oil & Gas 195 143.3 36.1%

Galaxy Surfactants Chemicals 3540 3170 11.7%

Mahindra & Mahindra Auto 900 770 16.9%

HDFC Sec Institutional Equities: Select “Sell/Reduce" rated stocks

Name Industry Target price CMP % Downside

New India Assurance Insurance 110 161 -31.7%

Bajaj Finance BFSI 4,832 6,315 -23.5%

Berger Paints Paints 610 845 -27.8%

Vinati Organics Chemicals 1,320 1,968 -32.9%

V-Mart Retail 2,500 3,940 -36.5%

https://www.hdfcsec.com/hsl.docs/HSL_Large-Cap Legend Report_June 2021-202106300910373806619.pdf

https://www.hdfcsec.com/hsl.docs/HSL_Majestic Multi-Caps_Report_June 2021-202106300910414123254.pdf


Fixed Income Outlook

06

Domestic 10yr bond yield moved up gradually during Jul; new 10yr benchmark announced

During the month of Jul 2021, the 10yr (old) G-sec yield rose by 17 bps and closed at 6.23% led by a

mix of factors including announcement of new 10yr benchmark, high CPI inflation print, rise in

commodity prices, absence of liquid securities in G-SAP auction and devolvement on primary

dealers in weekly G-sec auctions indicating weakness in investor demand/higher yield expectations

by market.

Governor Das on various forums has been providing reassurance of maintaining accommodative

stance to prioritise growth despite CPI inflation printing higher than RBI’s upper tolerance band of 6%

for last two months. Furthermore, during the month RBI also altered the G-sec auction methodology

for 2-14yr tenor and floating rate bonds from multiple to uniform price method to boost the market

sentiment and allow government borrowing to sail through in a non-disruptive manner.

RBI announced new 10yr benchmark during the month and its coupon was set relatively higher at

6.10%. Unlike old 10yr benchmark for which RBI maintained yield at around 6% level for a

substantial period, the yield for new 10yr rose by 10bps during the month to close at 6.20% as of Jul

end. It remains to be seen if RBI intervenes in the secondary market/weekly G-sec auctions to bring

down yield on 10yr or allows the yield to adjust as per market dynamics.

India 10yr (old) G-sec bond yield moved up gradually during Jul

India CPI Inflation surprised positively on the downside vs. market expectations

CPI headline inflation surprised positively, remaining largely unchanged at 6.26% in Jun-21 (May-21:

6.30%) and came in lower than the consensus estimate of 6.6%. The headline inflation stayed above

the RBI’s upper threshold of 6.0% for the second consecutive month in Jun-21. Sequentially (MoM),

CPI inflation grew by 0.56% in Jun-21 (May: 1.65%).

Core CPI inflation (excluding food and fuel) eased to 6.2% in Jun-21 from 6.4% in the previous

month. Fuel inflation rose to 12.7% in Jun-21 amid a lower base and reflecting higher crude oil

prices.

CPI inflation has become broad-based and has been caused largely by global reflationary pressures

and domestic supply disruptions owing to the pandemic. Metal and fuel prices have been increasing

on expectations of a global economic recovery, while food prices are inching higher due to supply

disruptions at both the domestic and global level.

Source: investing.com

6.03

6.23

5.80

5.90

6.00

6.10

6.20

6.30

6.40



07

In near term, CPI inflation is likely to stay above/close to RBI’s upper tolerance band of 6.0%. Prices

of perishables such as vegetables and fruits are likely to remain under pressure due to seasonal

effects while higher crude oil prices are likely to weigh on fuel and miscellaneous segment. Monsoon

turnout, crude oil prices, higher input cost pressure and higher service inflation remain key drivers

impacting CPI inflation, going forward.

India CPI inflation continues to remain above RBI’s upper threshold

US bond yield continues to remain volatile; US CPI Inflation inched further up

US 10yr bond yield remained volatile during the month of Jul-21 and fell by 23 bps to 1.23%. The US

Fed in its latest monetary policy meeting held its benchmark interest rate near zero. The policy was

slightly less hawkish than market expectations as market had expected a slightly hawkish tone to be

adopted by the central bank before announcing a formal tapering timeline. On tapering, the central

bank said that while progress has been made towards its threshold to start tapering, more time was

needed to assess the progress at upcoming meetings.

The Fed highlighted that economic activity and employment have continued to strengthen with

progress on vaccinations and strong policy support. The Fed would continue to increase its holdings

of treasury securities by at least USD 80 bn per month and of agency mortgage-backed securities by

at least USD 40 bn per month until substantial further progress has been made toward its maximumemployment and price stability goals.

US 10yr bond yield fell gradually during Jul following dovish comments by Fed

Source: MOSPI

6.236.73 6.69

7.27 7.616.93

4.594.06

5.035.52

4.23

6.30 6.26

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

0.01.02.03.04.05.06.07.08.0

Jun

-20

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

De

c-2

0

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

CPI YoY (LHS) CPI MoM (RHS)

1.63

1.23

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

Source: investing.com



08

US CPI inflation surprised on the upside in Jun-21, clocking a higher print of 5.4% (13-year high)

YoY vs. market expectation of 4.9%, largely led by the reopening of the economy. On a sequential

basis, CPI inflation rose by 0.9%. Core-CPI (excluding food and energy components) rose to a 30-

year high of 4.5% in Jun-21. A high inflation reading fuelled market expectations of faster monetary

tightening than earlier anticipated. The US Fed reiterated that inflationary spikes are the result of

transitory factors and did not pose a risk to the economy or the Fed’s policy plans. In addition, the

Fed said that inflation readings are likely to come down over time.

US CPI Inflation spiked to multi-year high

Outlook

Domestic bond yields are likely to remain supported in the short-term led by the RBI’s interventions,

despite high CPI inflation prints (above RBI’s upper tolerance limit of 6%) during last two months.

Early economic indicators point towards a gradual recovery following relaxation of Covid lockdowns

by many states. However, the recovery in services and contact intensive sectors still remains below

pre-pandemic levels and continued fiscal and monetary support is required to support the growth

momentum.

We expect the bond yields to rise gradually in the medium-term given the huge G-sec borrowings in

FY22. We continue to witness lack of investor demand at current yield levels in the weekly G-sec

auctions as evidenced from frequent devolvement on primary dealers and high underwriting

commission cut-off levels. RBI’s withdrawal of accommodative policy and surplus liquidity is likely to

be gradual to avoid disruption in government’s borrowing programme and ensure financial stability.

We expect the MPC to maintain status quo on both policy rate and stance in the upcoming meeting

on 06-Aug-21, given the growth recovery is still underway. With high CPI inflation prints in recent

months, the headroom available with RBI to maintain accommodative policy stance for longer has

reduced. An upward revision in inflation forecasts by RBI can’t be ruled out even though the RBI

Governor has recently emphasised that inflation was largely supply-driven, referring to it as a

temporary rise and expecting it to moderate gradually.

The G-sec yield curve is quite steep up to 5yr segment and 10yr G-sec is inverted compared to 7-9yr

segment. Beyond the 10yr segment the risk-reward scenario looks unfavourable at current juncture.

Hence, fixed income investors should avoid the long end of the curve. Steepness at the short end of

the curve provides lucrative opportunities to lock carry by investing up to 3yr segment with low to

moderate interest rate risk. The steepness in the curve shall compensate for any MTM losses in the

near to medium term.

Source: tradingeconomics.com

0.61.0

1.3 1.4 1.2 1.2 1.4 1.41.7

2.6

4.2

5.05.4

0.0

0.2

0.4

0.6

0.8

1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Jun

-20

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

De

c-2

0

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

CPI YoY (LHS) CPI MoM (RHS)

09

Introduction:

Quality is an important factor in systematic investing. Global studies have suggested that high quality

companies deliver excess returns over the long term. How does quality impact returns in the Indian

equity markets?

We had the following key questions:

1. How does quality impact returns across a cycle? How do high quality companies fare during the

bull market phase? How do high quality companies do over the bear market phase?

2. What is the shareholding pattern of companies across the quality spectrum? Do institutional

shareholders have a higher bias towards quality companies? Do retail shareholders have a higher

shareholding in low quality companies?

3. What is the impact of market capitalization on quality? Are large cap companies generally high

quality? Are small cap companies of poor quality?

Which time periods and companies did we consider?

We considered the time period from 2004 till date. We divided the time period into 5 market cycles-

cycles 1 to 5. Each cycle was further split into a bull phase and a bear phase. Overall we had 5 bull

phases and 4 bear phases. The bear phase for the last cycle (5th cycle) has not started yet. (See the

chart below)

At the beginning of each cycle, we considered all listed companies at that time. We then excluded all

companies below a certain market cap threshold. We did not want our results to be unduly influenced

by a large number of nanocap companies. We also excluded all financial companies like banks and

NBFCs as our methodology is not suited for financial sector companies. In cycle 1, we had around 380

companies. In cycle 5, the number of companies considered for analysis was around 1,000.

Our analysis was conducted on static buckets - meaning our high quality buckets remained the same

throughout a market cycle. Most quality indices /systematic funds are dynamic and would update their

portfolios after each quarterly result. Despite this limitation, our results showed a clear outperformance

of high quality companies.


Deep Dive – The Quality Alpha

Source: ACEMF

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Bull run 1

Bull run 2

Bull run 3

Bull run 4

Bull run 5

Bear phase

1

Bear phase

2

Bear phase

3

Bear phase 4

Nifty 50 Index Movement Since 2000

10

How did we define quality?

We assess Quality on the basis of 3 characteristics:

• Profitability (RoE)

• Safety (Debt to EBITDA)

• Earnings quality (CFO/ EBITDA, Dividend payout ratios)

Averages of each of the parameters over a trailing 4-year period was computed for each company.

The average values were used to rank companies on each of the above characteristics. We then used

weights to arrive at a composite ranking score for each of the companies.

The weights assigned to each parameter was as follows:

• RoE: 40%

• Debt to EBITDA: 30%

• CFO/EBITDA:15%

• Dividend payout ratio: 15%

The companies were then divided into ten deciles based on the composite quality score. D1

companies are considered to have the highest quality and as we move down the deciles the quality

deteriorates. We have considered D1 to D3 as high quality companies, D4 to D6 as average

quality companies and D7 to D10 can be considered as poor quality companies.

The use of the above characteristics/ parameters for assessing the quality of the companies is

consistent with academic literature. The Nifty 100 Quality 30 Index uses similar parameters in

selecting companies in the index. More sophisticated analysis could use a larger number of

parameters, a dynamic quarterly rebalancing or more sophisticated statistical analysis (use of z-scores

etc.).

We believe that our simplified analysis did not compromise the validity of our results. The higher

quality deciles tended to be populated with companies with strong business models and consistent

profitability and are generally considered high quality by research analysts. The lower quality deciles

tended to be populated with companies with inconsistent profitability, high leverage and poor dividendpayment track record. These companies were generally considered low quality by research analysts.

Decile wise performance for all the 5 cycles considered are listed below: The returns shown

below are median CAGR returns for each decile. Our conclusions would not have been altered even if

we had considered average returns for each decile.



Cycle 1 : Jun 04 to Mar 09

Source: Capitaline

38%

45%

49%

D1 - D3 D4 - D6 D7 - D10

Bull Returns : Jun 04 - Jan 08

-55%

-70% -73%

D1 - D3 D4 - D6 D7 - D10

Bear Returns : Jan 08 - Mar 09

4%

2%

0.5%

D1 - D3 D4 - D6 D7 - D10

Consolidated Returns : Jun 04 -Mar 09

11MARKET MACROSCOPE | INVESTMENT PRODUCTS | AUGUST 2021


Cycle 2 : Mar 09 to Dec 11

Source: Capitaline

Cycle 3 : Aug 13 to Mar 16

Source: Capitaline

Cycle 4 : Dec 16 to Aug 19

Source: Capitaline

Cycle 5 : Mar 20 to Jun 21

Source: Capitaline

104%

108%

114%

D1 - D3 D4 - D6 D7 - D10

Bull Returns : Mar 09 - Nov 10

-27%

-45%

-51%-60%

-50%

-40%

-30%

-20%

D1 - D3 D4 - D6 D7 - D10

Bear Returns : Nov 10 - Dec 11

34%

22%

16%

10%

20%

30%

40%

D1 - D3 D4 - D6 D7 - D10

Consolidated Returns : Mar 09 -Dec 11

70%65%

33%

D1 - D3 D4 - D6 D7 - D10

Bull Returns : Aug 13 - Mar 15

-11%

-16%

-22%

D1 - D3 D4 - D6 D7 - D10

Bear Returns : Mar 15 - Mar 16

29%

24%

10%

D1 - D3 D4 - D6 D7 - D10

Consolidated Returns : Aug 13 -Mar 16

43%

57%54%

D1 - D3 D4 - D6 D7 - D10

Bull Returns : Dec 16 - Jan 18

-23%

-38%

-53%

D1 - D3 D4 - D6 D7 - D10

Bear Returns : Jan 18 - Aug 19

-2%

-10%

-23%

D1 - D3 D4 - D6 D7 - D10

Consolidated Returns : Dec 16 -Aug 19

95%

135% 138%

D1 - D3 D4 - D6 D7 - D10

Bull Returns : Mar 20 - Jun 21

12

Results:

Result 1: High quality companies lag during the bull markets: During bull phase, across cycles

analyzed above, top decile companies tend to underperform bottom decile companies in a bull run.

The only exception being the bull run of Aug-13 to Mar-15 (bull run of 3rd cycle). This cycle had

started after a long sideways market. The initial valuations for all deciles, including high quality,

were generally low. Unlike other cycles, high quality companies were not trading at a substantial

premium over low quality companies. High quality companies therefore outperformed in the bull

phase as well.

Result 2: High quality companies significantly outperform during bear markets: During the

bear phase, across market cycles, top declie companies had lower drawdowns and outperformed

bottom decile companies by wide margins.

Result 3: High quality companies deliver significant alpha over moderate/poor quality

companies across a market cycle: Across a full market cycle, returns of top decile companies are

significantly higher as compared to bottom decile companies in each of the four market cycles.

Result 4: Market cap vs quality: Large cap companies generally tend to have higher quality.

Almost 61% of the large cap companies fell in the D1-D3 bucket while only 16% of large cap

companies fell in the D7-D10 buckets. In small cap companies, only 23% of the companies could

qualify for the D1-D3 bucket while 46% of the companies fell in the D7-D10 bucket. Please refer to

the pie charts below

Result 5: Quality vs retail holding: Institutions tend to have a higher shareholding in high quality

companies with shareholding in D1-D3 companies being around 17-20%. Institutional shareholding

in poor quality companies was half of that. On the other hand, HNI and retail investors tend to have

a higher shareholding in poor quality companies. Chart below lists the median shareholding pattern

as on 31st March 2021 across deciles



D1-D3, 61%

D4-D6, 23%

D7-D10, 16%

Large Cap - Decile wise grouping

D1-D3, 47%

D4-D6, 25%

D7-D10, 28%

Mid Cap - Decile wise grouping

D1-D3, 23%

D4-D6, 32%

D7-D10, 46%

Small Cap - Decile wise grouping

Source: Capitaline

Source: Capitaline

18

14

9

18

2528

D1 - D3 D4 - D6 D7 - D10

Median Insti & Non Insti Shareholding

Institutional Non Institutional

13

How can the above results be explained:

Typically, at the beginning of a bull cycle, high quality companies trade at a substantial premium to

poor quality ones. As the economic growth improves, poor quality companies see a faster expansion

in operating margins, are able to raise equity to deleverage and have a higher P/E expansion during

the bull phase. This tends to explain their higher returns during the bull phase. However, during the

bear phase, the above factors reverse completely. Operating margins fall, leverage increases and P/E

multiples compress more for poor quality companies. High quality companies typically show resilience

in operating parameters and consequently P/E compression is lower. High quality companies

therefore outperform across a cycle.

Summary:

High quality companies tend to lag in bull market phases and during sharp rallies. However, these

companies significantly outperform during the bear market phases. Viewed over a complete cycle,

high quality companies deliver significant alpha over poor quality companies.

At times of high equity market valuations, increasing allocation towards high quality companies can

help reduce the overall risk from the portfolio and “lock-in” the gains from the bull market rally.

Equity funds that outperform during bull market phases may have done so, inter alia, through a higher

allocation to companies with lower quality scores which tend to have a higher beta and pro-cyclical

characteristics. However, these same companies are likely to underperform during bear market

phases. Equity fund selection should not rely only on near term historical performance alone. Fund

selection process should evaluate historical returns across a market cycle.

Above results are consistent with studies in other markets which suggest higher returns for high

quality companies over the long run. If anything, above results suggest that the quality premium in

India could be substantial. This is possibly because of the wide difference in quality between the top

and bottom companies.




Global Investing

Global Investing:

Global investing refers to investments in financial / real assets in countries other than your home

country. The main objective of global investing usually is diversification of portfolio across

geographies and thereby distributing risk among different markets. With the world increasingly

moving towards globalization, global investing is becoming relevant now, especially for individual

investors.

Global Equity Investing in India: Global investing in India is still fairly at an early stage. However,

India has seen a significant surge in investments in global equities over the last few years. AuM of

mutual funds and ETFs investing in global equities has gone up 4x over the last 1 year to appx Rs.

30,000 crs as at June 2021. In this note, we cover the benefits and risks of global investing and the

various options available for HDFC Securities investors.

Global Investing Benefits:

• Diversification to geographies: Global investment aids geographical diversification across

multiple countries

• Greater Selection: India accounts for appx 2.5% of global equity market capitalization. Investors

investing only in India are ignoring an opportunity that is appx 40 times bigger

• Risk Diversification: investing in global markets reduces the risk of single country exposure

• Currency Advantage: Investing in global markets can help investors get the benefit of foreign

exchange appreciation. The INR has depreciated appx 7% vs. USD on average over the last 10

years.

• Access to Global Innovators: India ranks 48 in the list of most innovative countries. Global

investing offers an opportunity to invest in the most innovative companies in the world across

different geographies

• Global Corpus: Global investing allows the investor to build a corpus outside of India. This may

be useful considering the restrictions on overseas remittance

Risks / Disadvantages of Global Investing:

• Political & Economic Events: It is difficult for investors to understand political, social or economic

events in countries outside of their home country.

• Currency Risk: Unfavorable currency movement can have a negative impact on investments in

global markets

• Liquidity Risk: Another challenge when investing abroad is the lack of liquidity in some of the

international markets

• Difficult to analyze: Global stocks can be difficult to analyze as compared to stocks in own

country

How to invest in Global Equities:

An Indian investor typically has two options to invest in Global Equities:

1. Invest through the ‘Funds’

Investment through funds is the easiest route for investments in global securities. Investments in

global equities can be done either through Mutual Funds, which are typically international fund of

funds or feeder funds feeding into offshore funds or through the ETF route which closely track an

overseas index or a basket of stocks.


Global Investing

Mutual Funds: Investment in these funds are treated like investment into any other domestic fund,

there are no additional regulatory requirement for an investor to invest into these funds. LRS

(Liberalised Remittance Schemes) limits are also not applicable for such investments. These funds

are actively managed by professional fund managers who have the expertise, technology as well as

research capabilities to identify investment opportunities and monitor stocks and portfolios.

International funds also offer diversification across stocks, sectors and geographies.

Since these funds typically work as a feeder fund or fund of fund, there is a lag of day for applicable

NAVs for transactions.

Exchange Traded Funds: These are funds that are traded on the exchange and can be bought /

sold on the exchange like any other stock. An investor will need a trading and a de-mat account to

invest in ETFs. ETFs are low-cost passive investments which track indices / basket of stocks traded

in international markets.

The fund route to invest in global equities has gained significant popularity over the last few years.

AuMs in these funds have grown from appx Rs 2,500 crs to over Rs 30,000 crs over the last 5 years.

Approximately 65% of the AUM of all Overseas Funds is in US focussed funds, followed by Global

funds which invest across multiple geographies (including the US).

Top 5 Overseas Funds by AUM in India: (Performance as on 31st July)

2. Direct Investments: powered by ‘Stockal’ at HDFC Securities

Investors in India can get access to global stocks directly through platforms that offer such a facility.

In order to invest in global equities, an investor requires to remit money to an international account

through Librealised Remittance Scheme (LRS). Currently RBI limits transfer of USD 250,000 per

person per financial year under the LRS. LRS remittance hit a record of $ 18.8 billion in FY20.

2,468 2,158 2,174 2,859

7,165

31,471

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Jun

-16

No

v-1

6

Ap

r-1

7

Sep

-17

Feb

-18

Jul-

18

Dec

-18

May

-19

Oct

-19

Mar

-20

Au

g-2

0

Jan

-21

Jun

-21

AuM in Global MFs + ETFs

U.S., 64.5%

Others, 1.3%

Global, 23.7%

China, 6.2%

U.K., 2.7%

Emerging Market,

1.7%

Geographical Break-up of AUM (Jun-21)

Source: ACE MF

Fund Name Focus AUM 1 Year 3 Years 5 Years

Motilal Oswal (MOSL) Nasdaq 100 ETF U.S. 4,351 40.2 30.6 28.2

Franklin India Feeder - U.S. Opportunities Fund U.S. 3,610 30.7 26.1 23.3

Motilal Oswal Nasdaq 100 FOF U.S. 3,027 39.3 NA NA

Edelweiss Gr China Equity Off-Shore Fund China 1,838 22.4 23.0 21.9

Axis Global Innovation FoF Global 1,721 NA NA NA

Index

S&P 500 (US) 42.3 11.5 12.8

Nifty 50 34.4 16.0 15.1

MOSL Nasdaq 100 ETF & Mirae Asset NYSE FANG+ETF are approved for distribution at HDFC Securities


Global Investing

HDFC Securities in 2019 announced a partnership with ‘Stockal’, a US based financial platform to

launch Globalinvesting.in (https://www.hdfcsec.com/globalinvesting) which allows investors to invest

in global equities. HDFC Securities is a referrer for the platform, whereas Drivewealth is the SEC

registered broker/dealer.

Globalinvesting.in is a Do it Yourself (DIY) platform that offers investment in global equities directly

through stocks, ETFs and ‘Stacks’ – more on Stacks in the note below. Currently the platform offers

investment in over 5000+ securities which includes over 1000 ETFs in the US. Investments in

European and select Asian markets should be available on the platform soon. The platform currently

has an AuM of appx $ 100 million across 80,000+ clients.

Stacks:

Stacks are curated portfolios of global securities across diverse themes and asset classes where one

can invest with a single click. Each stack is developed by leading financial experts in U.S. to match

different investment strategies, risk-tolerance and investing goals. Multiple forward-looking macro &

micro uptrends are analyzed to identify drivers of value-creation in the ecosystem. Minimum

investment in Stacks is $ 1,000.

Key Features:

Diversification: Diversify your portfolio by investing in multiple asset classes

Expert Managed: Stacks are built by investment experts based on extensive research & financial

analysis

Auto Rebalancing: Active rebalancing to ensure alignment at all times

One-click investment: Easy & Convenient one-click investing

No Minimum Holding Period: No Lock-in, No exit loads, no minimum holding period requirement

Fees:

Each Stack has an “AUM Fee” which is computed as a percentage of the investment amount. The

AUM fee can range from 1% to 2.5% of the investment amount - and is charged on a periodic basis.

Stacks Portfolios*:

Please find below details on some of the Stack portfolios on the platform.

Electric Vehicle Portfolio: The stack focuses solely on investing in innovative high-growth potential

companies in the Electric Vehicle industry.

US Tech Blue Chip Portfolio: The stack invests in leading Global Technology companies with

strong sustainable competitive-advantages in their businesses.

Global ETF Portfolio: The stack comprises Equity Index-only ETFs diversified among US Equity

markets & Global Equity markets. The Stack offers broad diversified exposure to US & Global Equity

markets.

GlobalX Disruptors Portfolio: The GlobalX Disruptors Portfolio provides a structured approach on

how to combine and weigh different themes.

GlobalX Equity Portfolio: The Global X Equity Portfolio provides exposure to thematic equity within

a diversified U.S. sector portfolio. The key feature about this portfolio is its exposure to thematic

equity.

Value Investing Portfolio: Invests in companies with strong fundamentals and exhibiting high-

growth potential. The stack is managed by AlphaNiti, Findea Investment Advisors.

*Stack portfolio investments are subject to availability. Some Stack portfolios are available only for Gold / Silver pricing

https://www.hdfcsec.com/globalinvesting


Global Investing

Pricing Plans for Globalinvesting.in:

INR Pricing Plans

USD Pricing Plans – for NRIs

Benefits of HDFC Securities powered Global Investing Platform:

i. Easy to use platform

ii. No minimum investment amount

iii. Buy & Sell Fractional shares of stocks

iv. Digital on-boarding

v. Digital Fund Remittance & Remittance Support

vi. Account Insurance – SIPC up to $ 500,000

vii. Research and Analysis available

Annual Subscription FeeBasic Silver Gold

₹ 0 ₹ 3,999 ₹ 13,999

Commissions $ 2.99 / trade* $ 0.99 / trade** $ 0.01 / share

Research & Analysis Limited Limited All

Stacks - Curated Portfolios Limited All All

Invite-only events & Webinars r a a

Priority Hotline r r a

*Unlimited Value: $2.99 for trades upto 299 shares. 1 cent per share for trades over 299 shares

**Unlimited Value: $0.99 for trades upto 99 shares. 1 cent per share for trades over 99 shares

Annual Subscription FeeBasic Silver Gold

$0 $349 $399

Account Opening Fee $50 $0 $0

Commissions $ 10.99 / trade* $ 6.99 / trade** 2 cents / share

Research & Analysis Limited Limited All

Stacks - Curated Portfolios Limited All All

Invite-only events & Webinars r a a

Priority Hotline r r a

*Unlimited Value: $10.99 for trades upto 549 shares. 2 cents per share for trades over 549 shares

**Unlimited Value: $6.99 for trades upto 349 shares. 2 cents per share for trades over 349 shares

Dots to Join

18

1. India’s E-grocery segment: E-grocer Grofers signed a deal with Zomato and Tiger Global to

raise $120.0 mn, in a major consolidation move in the sector. Indian e-grocery market is estimatedto touch $22.0 bn by 2025. Industry data estimated the market at about $3.0 bn last year

2. Domestic Equity valuations: Valuations in the domestic markets across Large, Mid and Small

Cap are expensive, with 2 year forward PE ratios trading closer to their average + 2 SDs.

Historically, from such levels, NIFTY returns has been marginally negative of about -3.2% over the

next 12 months as compared to its average 12 month return of about 13.7%. Though probability of

overall NIFTY Multiple going up is low, there can be sector specific rerating

3. Tax Payment: Corporate tax collection in FY21 fell by Rs. 1 tn or 18% YoY. However, tax paid by

listed companies, a subset of the corporate tax universe, grew by Rs. 35,000 crore YoY in FY21.

On the other hand, taxes paid by private limited companies, LLPs and one-person companies fell

by about Rs. 1.35 tn


Source – Business Standard

Source – Economic Times

Source – IDFC Report

Dots to Join

19

4. Global Equity Flows: Global flows to equities in the first half (H1) of 2021 were $517 Billion - the

largest inflows in the first half of any year on record. The flows are 2.6x larger than the prior record

in H1 2017. Fiscal and monetary stimuli have created huge liquidity flows to all assets

5. Top-10 Real estate developers’ market share: In the past 15 months, the market share of the

top-10 developers increased sharply as buyers preferred larger real estate developers. In FY21,

real estate sales in the top-7 cities in India declined by 34%. However, sales of top-10 listed real

estate developers increased by 8% yoy. Most large developers are targeting 2x sales in the next 3

to 4 years

.

6. International Gold Reserves: USA currently holds the highest amount of gold reserves at 8,133

tonnes, followed by Germany at 3,362 tonnes in gold reserves. For USA gold reserves are 79.2%

of its total reserves whereas for Germany, this proportion is 76.2%. USA’s gold reserves were

valued at $493 bn in 2020. India, with a purchase of 38.5 tonnes, is the only country in the top-10

to have bought gold in the last 12 months. Of the top-10, Russia and Germany were sellers with

sales of 6.9 and 4.5 tonnes respectively, during this period.


Source: Financial Times

Source: World Gold Council

Source: CLSA

Index Performance

20

Data as on 31st July 2021. Returns less than 1 year are in absolute terms and greater than 1 year are CAGR

Source: ACE MF, BSE, NSE

Index Performance (31-July-21)


Scheme Name 1 M 3 M 6 M 1 Y 2 Y 3 Y 5 Y 10 Y

NIFTY 50 0.3 7.7 15.6 42.3 19.1 11.5 12.8 11.1

S&P BSE SENSEX 0.2 7.8 13.6 39.8 18.4 11.8 13.4 11.2

S&P BSE 500 1.4 10.5 21.0 51.6 23.2 12.4 13.4 11.8

S&P BSE Mid-Cap 2.4 13.7 27.7 67.8 30.1 13.0 12.8 12.8

S&P BSE Small-Cap 6.2 23.6 48.9 105.7 45.3 17.3 16.8 12.4

NIFTY AUTO -5.2 4.2 2.4 38.0 21.1 -2.9 1.2 10.6

NIFTY BANK -0.5 5.5 13.1 59.8 9.4 7.6 12.8 12.2

Nifty Financial Services 0.1 5.8 12.9 53.5 13.8 12.2 16.0 14.2

NIFTY FMCG -0.1 7.2 8.8 16.8 11.4 5.2 10.1 13.2

NIFTY INFRA 2.1 9.4 20.7 40.6 19.8 12.0 8.4 3.9

NIFTY IT 4.5 18.8 23.7 68.7 39.7 27.8 22.8 17.0

NIFTY MEDIA -0.1 16.0 8.8 39.8 -4.2 -14.1 -8.6 2.7

NIFTY METAL 10.6 19.0 87.5 168.7 49.3 20.1 18.9 4.5

NIFTY NEXT 50 2.2 13.2 24.0 46.5 22.9 9.9 11.9 13.7

NIFTY PHARMA 0.8 7.1 18.5 29.4 34.4 16.3 4.3 11.5

NIFTY PRIVATE BANK -1.7 2.2 7.7 51.4 6.3 4.8 10.9 -

NIFTY PSU BANK -3.1 18.8 34.6 72.9 -5.9 -8.5 -3.1 -4.4

NIFTY REALTY 15.9 28.8 30.4 98.3 22.1 13.5 13.9 3.9

S&P BSE Consumer Durables 2.3 12.6 20.9 69.4 27.6 20.3 24.0 18.3

S&P BSE OIL & GAS Index -4.5 3.0 11.8 17.2 8.0 0.9 7.8 5.8

S&P BSE Power Index -5.0 5.5 30.5 70.0 15.4 9.8 4.7 0.6

S&P BSE Telecom 4.9 7.2 6.7 12.7 25.5 6.5 1.6 0.0

Macro Economic Indicators

21

GDP Growth (%): Inflation:

Industrial Production Growth: India Composite PMI:

Domestic Yield Movement: 10 Year US Treasury Yield Movement:

Jul-20 Oct-20 Jan-21 Apr-21 Jul-21

US Yields 0.53 0.87 1.07 1.63 1.23


Repo 4.00 4.00 4.00 4.00 4.00

1 Yr CD 3.85 3.80 4.03 4.13 3.98

10 Yr Gsec 5.84 5.88 5.95 6.03 6.20

May-20 Aug-20 Nov-20 Feb-21 May-21

IIP -33.4 -7.1 -1.6 -3.4 29.3

Jun-20 Sep-20 Dec-20 Mar-21 Jun-21

Composite PMI 37.8 54.6 54.9 56.0 43.1

June-20 Sep-20 Dec-20 Mar-21 June-21

WPI -1.81 1.32 1.95 7.89 12.07

CPI 6.23 7.27 4.59 5.52 6.26

Source : Ministry of Statistics & Programme Implementation

Source : investing.com, RBI, Bloomberg

Source : investing.com

Source :www.fxempire.comSource : Ministry of Statistics & Programme Implementation

Q3

FY20

Q4

FY20

Q1

FY21

Q2

FY21

Q3

FY21

Q4

FY21

Quaterly

GDP %3.3 3.0 -24.4 -7.4 0.5 1.6

Source : Ministry of Statistics & Programme Implementation


7.1

1.6

-30

-25

-20

-15

-10

-5

0

5

10

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Q1

FY2

0

Q2

FY2

0

Q3

FY2

0

Q4

FY2

0

Q1

FY2

1

Q2

FY2

1

Q3

FY2

1

Q4

FY2

1

-1.81

12.07

6.23 6.26

-5

0

5

10

15

Jun

-20

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

WPI CPI

-33.4

29.3

-50

0

50

100

150

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

37.843.1

0

10

20

30

40

50

60

70Ju

n-2

0

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

4.00 4.00

5.84

6.20

3.85 3.98

3

4

5

6

7

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

Repo Rate 10 Yr G-sec 1 Yr CD Rates

0.53

1.23

011111222

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

Macro Economic Indicators

22

FII Equity Flows (Rs cr): FII Debt Flows (Rs cr):

USD vs. INR: Gold Price (Rs/10gm):

Brent Crude (USD/Barrel):


Brent

Crude43.35 37.65 55.95 66.76 75.41


$ vs. ₹ 74.82 74.11 72.95 74.08 74.42


Gold Price 53,708 50,710 49,074 46,743 48,423


FII Debt

Flows-4.262 2,492 -4,824 224 4,035

Source : NSDL

Source :Oilprices.com

Source : India Bullion and Jewellers AssociationSource : Bloomberg


FII Equity

Flows7,563 19,541 19.473 -9,659 -11,308

Source : NSDL


(4,262)

4,035

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

7,563

(11,308) (20,000)

-

20,000

40,000

60,000

80,000Ju

l-2

0

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

74.82 74.42

70

71

72

73

74

75

76

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

53,708

48,423

40,000

43,000

46,000

49,000

52,000

55,000

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

43.35

75.41

30 35 40 45 50 55 60 65 70 75 80

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

No

v-2

0

Dec

-20

Jan

-21

Feb

-21

Mar

-21

Ap

r-2

1

May

-21

Jun

-21

Jul-

21

India Horizons All-star Portfolio

23

Portfolio Details:

Performance

Data as on 31st July 2021 Launch Date: 06-Apr-21, Returns less than 1 year are absolute, more than 1 year are CAGR


Stock % Stock %

Bank Bees 8.9% Sun TV Network 3.1%

Infosys 5.8% Minda Industries 3.0%

State Bank of India 4.7% PNC Infratech 3.0%

Axis Bank 4.4% Mahindra & Mahindra 2.9%

Reliance Industries 4.3% Mrs. Bectors Food Specialities 2.8%

Birla Corporation 4.3% Radico Khaitan 2.7%

Apollo Hospitals 4.1% Supreme Industries 2.7%

Somany Ceramics 4.0% Larsen & Toubro 2.6%

Saregama India 3.9% Thyrocare Technologies 2.6%

Atul Ltd 3.9% Zydus Wellness 2.6%

Laurus Labs 3.7% Bajaj Auto 2.1%

Jk Cement 3.5% Phoenix Mills 2.0%

Crompton G. Consumer Elec 3.4% KEC International 1.6%

Max Financial Services 3.2% Cash 4.2%

Large Cap40%

Mid Cap31%

Small Cap25%

Cash4%

Market Cap Allocation

2%2%3%

4%4%4%

6%6%

7%8%8%

10%16%

21%

POWER

RETAIL

MISCELLANEOUS

FERTILIZER & CHEMICAL

CASH

OIL & GAS

CAP GOODS &…

TECHNOLOGY

MEDIA

CEMENT

AUTO

PHARMA / HEALTHCARE

CONSUMER

BFSI

Sector Allocation

3.5

18.4

21.2

0.3

7.7 7.4

2.4

13.712.7

1 Month 3 Months Since Inception

India Horizons All-star Portfolio Nifty 50 S&P BSE Mid-cap

India Horizons Bellwether Portfolio

24

Portfolio Details:

Performance

Data as on 31st July 2021. Launch Date: 06-April-21. Returns less than 1 year are absolute, more than 1 year are CAGR


Stock % Stock %

Bank Bees 14.4% Bata India 3.4%

Infosys 5.7% Thyrocare Technologies 3.1%

SBI Life Insurance Company 5.3% KNR Constructions 3.1%

ICICI Bank 5.2% UPL Ltd 3.0%

United Spirits 5.0% Ultratech Cement 3.0%

State Bank of India 4.9% Sun TV Network 2.9%

ITC 4.8% Mahindra & Mahindra 2.7%

Reliance Industries 4.5% Bajaj Auto 2.7%

Dr. Reddy's Laboratories 4.4% Godrej Agrovet 2.1%

Carborundum Universal 3.9% Huhtamaki PPL 1.9%

TCS 3.9% KEC International 1.3%

Larsen & Toubro 3.7% Cash 5.4%

Large Cap73%

Mid Cap6%

Small Cap15%

Cash6%

Market Cap Allocation

1%2%3%3%3%3%5%5%5%

7%10%11%

12%30%

POWER

MISCELLANEOUS

MEDIA

CEMENT

FERTILIZER & CHEMICAL

RETAIL

Oil & Gas

CASH

AUTO

PHARMA / HEALTHCARE

TECHNOLOGY

CAP GOODS &…

CONSUMER

BFSI

Sector Allocation

0.7

11.1

14.6

0.3

7.7 7.4

1 Month 3 Months Since Inception

India Horizons Bellwether Portfolio Nifty 50

Crossword


Note : Solution for the above crossword will be provided in next month’s newsletter

Across

2 Share of any profits that the Fund manager of private equity funds receive as compensation.(7,8)

6 An option is __ ___ ___ when the stock price is equal to the strike price.(2,3,5)

8 The monetary value of the ownership of an investment.(6)

9_________ fund refers to a style of investing that looks for high-quality, low-growth companies that

are out of favor with the market(5)

11 Reverse of inflation.(9)

12 An asset is _________ if it is relatively easy to find a buyer or a seller for it.(6)

14 An investment made in order to reduce the risk of losing money on financial assets(5)

15Minimum rate of return on an investment a Fund manager has to deliver to charge performance

fees(6,4)

Down

1 An amount paid as an installment payment, for an insurance policy.(7)

3 The process of paying off an existing loan and establishing a new loan.(11)

4 The issuing party of a cheque(6)

5 Measures volatility in a stock’s price or fund relative to a benchmark(4)

7Penal fee charged by an AMC, if investors exit a scheme partially or fully within a certain period

from the date of investment(4,4)

10 A person who lets a property to another(6)

13 The return on a debt security expressed as a proportion of its price(5)

Answers of last month’s crossword: Across

2 Currency

4 Profit

9 Assets

10 Stagflation

13 Mortgage

14 Rent

15 Share

Down

1 Surplus

3 Bullion

5 Cashflow

6 Loan

7 Bankrupt

8 Receivable

11 Imports

12 Merger

1

2 3 4

5 6 7

8

9

10

11

12

13

14

15

Disclaimer

26

Investment in securities market are subject to market risks, read all the related documents carefully before investing.

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august 2021 investment products macroscope aug... · 2021. 8. 5. · equity outlook 03 flows: fpis...

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