brics pms performance update - 31 august 2010

MULTIPLE -STRATEGY TREND RATED

AUTOMATIC TRADING SYSTEM

Portfolio Management Services (PMS)

Performance Update

31 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 – 31 August 2010

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

Weekly Monthly Quarterly Half YearlyYTD

(Calendar)

Since

Inception

BRICS Growth -0.49% 7.25% 17.84% 32.34% 30.88% 42.00%

NIFTY -1.87% 0.65% 6.21% 9.75% 3.87% 6.28%

SENSEX -1.86% 0.58% 6.06% 9.38% 2.90% 4.88%

S&P CNX 500 -1.89% 1.39% 7.35% 9.93% 4.81% 10.15%

S&P CNX MIDCAP -2.93% 3.14% 11.91% 21.10% 16.78% 29.59%

Performance Snapshot

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Monthly Quarterly Half Yearly YTD (Calender) Since Inception

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

Portfolio returns are audited and net of fees & expensesInception Date: 1 October, 2009

Consistency in our Month-on-Month Performance

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

Oct-09 -0.67% -7.31% -7.23% -6.46% -1.77%

Nov-09 2.79% 6.81% 6.48% 7.59% 8.65%

Dec-09 6.27% 3.35% 3.18% 4.43% 3.97%

Jan-10 -1.84% -6.13% -6.34% -4.00% -3.11%

Feb-10 0.75% 0.82% 0.44% -0.69% -0.48%

Mar-10 6.24% 6.64% 6.68% 4.50% 7.50%

Apr-10 3.77% 0.55% 0.18% 1.27% 4.62%

May-10 1.86% -3.63% -3.50% -3.24% -3.79%

Jun-10 5.81% 4.45% 3.83% 4.59% 4.83%

Jul-10 3.84% 1.04% 1.56% 1.23% 3.50%

Aug-10 7.25% 0.65% 0.58% 1.39% 3.14%

Performance ahead of benchmark indices month after month

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 Month % 3 Months % 6 Months %

1 Brics Growth 7.25 17.84 32.34

2 HDFC Long Term Equity Fund - Growth 5.09 13.15 22.05

3 DSP BlackRock Equity Fund - Growth 4.77 12.37 20.13

4 HDFC Growth Fund - Growth 4.06 11.97 22.40

5 IDFC Premier Equity Fund - Plan A - Growth 4.03 19.19 26.99

6 SBI Magnum Global Fund 94 - Growth 3.98 13.91 20.55

7 HDFC Equity Fund - Growth 3.95 13.45 22.31

8 Quantum Long-Term Equity Fund - Growth 3.73 12.45 20.52

9 Canara Robeco Emerging Equities - Growth 3.69 14.73 28.77

10 Reliance Equity Opportunities Fund - Growth 3.63 14.85 25.76

11 Fortis Future Leaders Fund - Growth 3.53 13.17 26.82

12 Franklin India High Growth Companies Fund - Growth 3.51 12.09 15.02

13 DSP BlackRock Opportunities Fund - Growth 3.17 11.48 20.78

14 Tata Select Equity Fund - Appr 3.15 9.35 14.32

15 DSP BlackRock India Tiger Fund - Growth 3.08 9.81 16.30

16 Franklin India Prima Fund - Growth 3.00 12.61 20.49

17 Kotak Emerging Equity Scheme - Growth 3.00 14.41 23.90

18 Morgan Stanley A.C.E Fund - Growth 2.60 11.61 17.64

19 Templeton India Growth Fund - Growth 2.56 7.40 13.25

20 Morgan Stanley Growth Fund - Growth 2.44 9.37 14.45







2 Brics Growth 7.25 17.84 32.34











13 Franklin India High Growth Companies Fund - Growth 3.51 12.09 15.02




17 JPMorgan India Equity Fund - Growth 1.80 10.20 18.30

18 Fidelity Equity Fund - Growth 1.36 9.84 19.54

19 DSP BlackRock India Tiger Fund - Growth 3.08 9.81 16.30

20 Franklin India Opportunity Fund - Growth 2.33 9.81 13.35






1 Brics Growth 7.25 17.84 32.34






7 Escorts Growth Plan - Growth 1.66 9.09 23.00









16 ICICI Prudential Fusion Fund - IP - Growth 1.36 9.22 19.85

17 Fidelity Equity Fund - Growth 1.36 9.84 19.54

18 JPMorgan India Equity Fund - Growth 1.80 10.20 18.30


20 Fidelity India Growth Fund - Growth 0.69 9.41 17.62

BRICS Growth NAV Trend

BRICS Growth has delivered steady &

consistent returns during both periods:

of range bound market with sharp

volatility between October 2009-May

2010

and when markets witnessed sharp

rally between May-August 2010

Performance has been a result of our :

Stock Picking

Low churn in the portfolio and,

Conservative attitude (not taking

excessive risks)

Leading to consistently increasing out-

performance of returns as compared to the

benchmark indices

85

90

95

100

105

110

115

120

125

130

135

140

145

150

1-O

ct-

09

1-N

ov-0

9

1-D

ec-0

9

1-J

an

-10

1-F

eb

-10

1-M

ar-

10

1-A

pr-

10

1-M

ay-1

0

1-J

un

-10

1-J

ul-

10

1-A

ug

-10

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 :

Buy only during panics

Use sharp rallies to partially book

profits

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 25% of

the Portfolio

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1-O

ct-

2009

1-N

ov-2

00

9

1-D

ec-2

00

9

1-J

an

-2010

1-F

eb-2

010

1-M

ar-

2010

1-A

pr-

2010

1-M

ay-2

010

1-J

un

-2010

1-J

ul-2010

1-A

ug-2

010

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

Banking & Finance

13%

Branded Garments & Retail

15%

Cash25%

FMCG14%

Infrastructure4%

Media6%

Oil & Gas23%

Sectoral Allocation

Large Cap32%

Mid Cap25%

Small Cap18%

Cash25%

Market Cap Breakup

Low Portfolio Turnover (Buy & Hold at work)

0.00

0.20

0.40

0.60

0.80

1.00

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

Portfolio Turnover

Portfolio Turnover Average 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 * 0.4075 0.4068

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 within 10-15% with sharp interim

volatility. Short term we maintain a view of negative bias and perhaps a sharp correction

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.

Corporates that have delivered/exceeded expectations have witnessed significant re-rating in

the last one year and have had a sharp bounce back after each panic/fall

However, markets have also been very discriminative against corporates under-performing

expectations. As a result markets have de-rated them over a period of time. This will continue as

these stocks may not bounce back for a while even if the overall markets do, post a correction

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

favourable. However continue to remain cautious of the market levels and valuations and buy

only on dips / correction

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 - 31 august 2010

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