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Sundaram Tax SaverDecember 2012
1For Private Circulation Only
2
Mutual Fund Investments are subject to market risks, read all scheme related documents
carefully . Copy of the SAI, SID, key information memorandum and application form may also be
obtained from the offices / investor service centres of Sundaram Asset Management, its distributors
and at www.sundarammutual.com
All mutual funds and securities investments are subject to market risks, and there can be no
assurance or guarantee that fund's objectives will be achieved. NAV may go up or down,
depending on the factors and forces affecting the securities market. Main types are market risk,
liquidity risk, credit risk and systemic risks. At times, liquidity of investments may be impaired.
There is uncertainty of dividend distribution and risk of capital loss. Past performance of the
Sponsor/Asset Management Company/Fund does not indicate the future performance. Investors
in the schemes are not being offered any guaranteed or indicated returns.
Sundaram Tax Saver is only the name of the scheme and do not in any manner indicate either
quality or future prospects and returns.
For detailed disclosures on risk factors and disclaimers refer slide 22 & 23
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Tax Saving investment options available
Key Comparables PPF NSC Bank Deposits ULIP ELSS
Lock In Period 15 Years* 6 Years5 Years &
above3 Years 3 Years
Minimum Investment Rs.500 Rs.100 Rs.1,000Depends on
PremiumRs.500
Maximum Deductable
u/s 80CRs.1,00,000 Rs.1,00,000 Rs.1,00,000 Rs.1,00,000 Rs.1,00,000
Interest Frequency Annual Half- yearly
Various
Options
available
Not assured Not assured
Returns 8.0% 8.6%Varies
between banksMarket Linked Market Linked
Taxation of Income Tax Free TaxableTaxable
> Rs10,000Tax Free
Dividend &
Capital Gains
are Tax Free
* Premature part withdrawal facility available after 6 years; Source: www.sbi.co.in,
www.Indiapost.gov.in, www.incometaxindia.gov.in, 80C of the Income Tax Act 1961
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Multiple Benefits of ELSS: Performance & Tax Saving
An Attractive Opportunity
Fiscal Incentives Stock Market
Save Income Tax Wealth Creation
Rs 1 lakh deduction under
Section 80C will reduce tax
outgo now
Tax-free dividends
No tax on capital gains
A lock-in period of three
years gives sufficient time
for growth in value
Realisation of any wealth
created even during the lock-
in period as dividends
Not just an investment
option for tax savings
but for wealth creation
on a long term basis
Global Outlook – Uncertain times
� Fiscal cliff means lower spending and higher taxes. Effects due to partial fiscal cliff:
� augmenting tax revenues by tapping into the high income households
� payroll tax would rise to 6.2% and would have a nontrivial impact on consumption demand as US
households do not save
� talks on the spending cuts and the debt ceiling are yet to come through
� drop in unemployment is due to drop in labour participation rate
� QE is expected to continue, though there is a drop in the unemployment rate as QE is linked to Fed’s
Forward guidance
� Global recovery continues, but has witnessed weakening in its pace. The Eurozone area is relatively stable,
but will remain volatile until clear steps to a banking union and fiscal integration arise.
� Greece continues to remain in the spot. Though it has secured a deal on a EUR13.5bn. of expenditure cuts,
the Greek budget for 2013 paints a grim picture with govt. debt touching 189% of GDP.
� The Chinese economy sees volatility on account of their re-balancing effort and a regime change at the
Polit bureau level.
� In addition to the growth in the Emerging & Developing Economies (EDEs), global growth rests actions of
Eurozone policy makers to ease the financial conditions in the periphery;
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Domestic Outlook – Uncertain times
• The Current Account Deficit has widened to 5.4% of the GDP and the Fiscal Deficit is expected to grow to
5.6% of the GDP which makes the situation grim.
• On the negative side, the spate of political scandals continue to hinder policy matters.
• On the positive side, we have seen few favourable announcements from the new FM such as FDI in retail,
setting up of National Investment Board.
• We believe that Indian economy is close to the bottom and we expect gradual recovery as we get into
CY13. Key drivers for the recovery would be:
– RBI has indicated high probability of rate-cut in Jan’2013
– Commodity prices have been correcting due to global slowdown, which should help both inflation as
well as twin deficits
– With significant INR depreciation, Indian markets once again have become attractive from foreign
investors’ perspective
• IIP for the month October FY 13 moved up sharply to 8.2% much above the consensus of 5.1% growth
• Though the monsoons were delayed, the latter part of the monsoon season saw a pickup that would
greatly help in augmenting the Rabi crop.
• FY13 is likely to see growth in the range of 5.5 – 5.7% and a probable bottoming out.
• Inflation for FY13 is likely to average above ~7%.
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Product Strategy
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� Cautious on commodities
• China slowdown poses a significant downside
risk to global commodity prices
• With little support from rest of the globe,
commodity prices can remain under pressure
• This, however, bodes well for domestic industry
and inflation
� Key Risks
• Eurozone crisis remains the single largest risk
• Further currency weakness can neutralize lower
commodity advantage
• Continued political paralysis may hinder capex
decisions of corporate India
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Stock Strategy
• Strong management & fundamentals
• long term growth story
• Reasonable valuations
• Low turnover
• No trading calls
• Deliver performance in medium to 3 years
Sector Strategy
• Active sector, stock, trading and cash calls
Portfolio Strategy
• Bottom-up approach
• Aggressive approach towards mid-& small-cap stocks atleast 55%
• Focuses on long term growth story & Large cap stocks
Sundaram Tax Saver
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Portfolio Snapshot
Cipla
State Bank of India
Larsen & Toubro
Indusind Bank
Madras Cements
Done well in the last 6 months due to change in the management; earlier was
working on the partnership model, now moving towards generics; one of the largest
pharma company that was under performing and is back in growth path.
Stock might rally due to change in interest rate cycle; credit cost of the bank has been
reduced; has the strength in numbers; strong growth because of base effect;
One of the biggest south based cement producer; excellent corporate governance;
almost 20% growth in the last cycle; fair amount of capacity available to ramp as and
when demand grows; attractive valuation;
Growing private sector bank; credit cost growth less compared to others; good
management;
With the Government action, the CAPEX sector is reviving; Multiple re-rating
opportunities; growth in the project order books; Dedicated freight corridor projects
& metro projects orders from Middle East
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Top Five Holdings: Rationale
Top 10 stocksWeight in
%
Cipla 5.6
State Bank of India 5.1
Madras Cements 4.4
IndusInd Bank 4.3
Larsen & Toubro 4.1
Bajaj Auto Finance 3.8
Satyam Computers 3.7
Karur Vysya Bank 3.7
Shriram City Union Finance 3.5
Bharti Airtel 3.4
Equity 99.5
Derivatives -
Fixed Income -
Cash 0.5
Average AUM (Rs. In Cr) 1437.8
# of stocks 51
Stock Bets Portfolio
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Madras Cements
Karur Vysya Bank
State Bank of India
Indraprastha Gas
Larson & Toubro
Bharti Infratel
Overweight Underweight
Portfolio Analysis
Market Cap Profile
Weighted Average Market Cap
Rs. 49,082 crore
Median Market Cap
Rs. 16,987 crore
Source: Fact Sheet, Bloomberg
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Metals
Energy -Utilities
Consumer Goods
Cement
Financial Services
IT
Overweight
Underweight
Sector Profile
Sector Bets Preferred Sectors
Source: Fact Sheet
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Performance Snapshot
Fund Benchmark Excess
Since Launch 18.7 12.6 6.1
Last 10 Years 26.9 20.2 6.7
Last 7 Years 13.9 11.5 2.4
Last 5 Years 2.1 -0.5 2.6
Last 3 Years 4.8 4.3 0.5
Last 2 Years -0.2 -1.3 1.1
Last 1 Years 23.2 22.4 0.8
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Value of Rs 1000-a-month SIP
Performance
Consistent outperformance in the long run
Data Source: Bloomberg Analysis: In house ; As of December 2012
Past performance may or may not be sustained in the future
Worth of Rs 10,000 invested at launch
Sundaram Tax Saver: 95,701
BSE 200: 47,469
S&P CNX Nifty: 42,938
Consistent performer over the period
against the benchmark and the broad
market
14Data Source: Bloomberg Analysis: In house ; As of December 2012
Parameter Fund Benchmark
Average Annual Mean 21.21 16.16
Standard Deviation 27.59 28.88
Beta 0.91 1.00
Sharpe Ratio 0.47 0.28
Sortino Ratio 0.78 0.39
Treynor Ratio 14.36 8.07
Benchmark: BSE 200 Index
Risk-Return Metrics are based on month end NAVs since launch and have been annualised
The risk free rate considered for analysis is 8.0907% per annum (10 year T-Bill)
Parameter Fund
Alpha 5.71
Correlation 0.95
Tracking Error 9.04
Information Ratio 0.55
Turnover 110
Risk-Return Metrics
Past performance may or may not be sustained in the future
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Past performance may or may not be sustained in the future
Value as on December 31, 2012; Data Source: Bloomberg; Analysis: In House
Ahead of the Peers
Fund / Indices One Two Three Five Six Seven Ten
Year Years Years Years Years Years Years
Sundaram Tax Saver 34.47 0.19 4.3 0.46 9.48 12.44 26.86
Average
ELSS 31.55 -0.11 5.73 -0.84 6.93 9.84 23.1
All Equity Funds 30.31 0.21 5.9 0.29 7.87 11.51 22.69
Large-Cap Funds 29.62 0.02 5.72 0.79 8.87 13.04 23.08
BSE 200 30.98 -2.18 3.60 -1.81 6.56 10.74 19.91
BSE Sensex 25.7 -2.67 3.61 -0.86 5.87 10.92 19.1
S&P CNX Nifty 27.7 -1.89 4.32 -0.77 6.84 11.03 18.35
S&P CNX 500 31.84 -2.02 3.09 -2.39 6.25 9.83 19.88
Outpacing average of
ELSS funds; large-cap
funds & all equity funds
and broad markets on a
long-term basis
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Fund Facts
17
Allotment Date November 1999
NAV (December 31, 2012) Growth: Rs 47.9910 Dividend: Rs 11.3176
Objective To achieve capital appreciation by investing predominantly in equities
and equity-related instruments. A three-year lock-in period shall apply
in line with the regulation for ELSS Schemes
Asset allocation Equity and Equity related Instruments :: 80-100%
Corporate & PSU bonds :: Upto 20%
Money Market Instruments :: up to 20%
Plans Regular & Direct
Options Growth, Dividend (Pay Out, Reinvestment & Sweep); Default Option:
Growth; Default Sub-Option: Dividend Sweep
Load Structure Terms Of Offer: NAV; Exit Load: Nil for redemption after lock-in period
of 36 months.
Minimum Subscription
Amount
First Investment: Rs 500 Subsequent Purchase: Rs 500
SIP: Rs 1000 per week Rs 250 per month Rs 750 per quarter
Weekly SIP will be processed on Wednesdays
Data Source: Fact Sheet
Fund Facts
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Fund Manager Profile
J Venkatesan has been with Sundaram Asset Management as fund manager for more thanseven years now. With a rich experience of close to ten years in fund management, hejoined Sundaram Asset Management in January 2006.
Funds Managed
He jointly manages Sundaram Tax Saver with Ms. Srivjdhya Rajesh
Qualification & Previous Work Experience
He is a CFA charter holder and a Cost Accountant and a Post-Graduate in Commerce. Aseven-year stint at Canara Bank was followed by a shift to the asset management industrythrough Canbank Mutual Fund (now Canara Robeco).
Srividhya Rajesh has been with Sundaram Mutual for over fifteen years. She brings richexperience to fund management having tracked markets through several bullish andbearish phases.
She jointly manages Sundaram Tax Saver with Mr J Venkatesan
Qualification & Previous Work Experience
She is a CFA charter holder and is a management graduate from BITS Pilani. She has alsodone a specialised course in equity research and financial applications from ICFAI
A two-year stint at the broking arm Kotak Mahindra opened a window to the equitymarkets before she joined Sundaram Mutual in 1996.
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Returns are on a compounded annual basis for period more than one year & absolute for one-year
period based on NAV of Regular Plan (Growth Option) and is as of December 31, 2012. Value of
10,000 invested at inception is as on December 31, 2012.
Growth Fund Annualised returns (%)
Fund
BSE 200
(Benchmark)
S &P CNX Nifty
(Broad Market)
Excess over
Benchmark
Since Inception 18.8 12.6 11.7 6.2
31/12/2011 - 31/12/2012 (%) 34.5 31.0 27.7 3.5
31/12/2010 - 31/12/2011 (%) -25.4 -27.0 -24.6 1.6
31/12/2009 - 31/12/2010 (%) 13.1 16.2 17.9 -3.16
Last 3 Years 4.3 3.6 0.7
Last 5 Years 0.5 -1.81 2.3
Last 8 Years 17.5 13.4 4.1
Past performance may or may not be sustained in the future
Sundaram Tax Saver - Performance
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Since Inception
Fund
31/12/11 to
31/12/12
31/12/10 to
31/12/11
31/12/09 to
31/12/10 Returns 10000
Select Focus 21.6 (23.7) 12.5 23.4 89,449
Benchmark 27.7 (24.6) 17.9 19.0 61,470
S&P CNX Nifty 27.7 (24.6) 17.9 19.0 61,470
Tax Saver 34.5 (25.4) 13.1 18.8 95,701
Benchmark 31.0 (27.0) 16.2 12.6 47,469
S&P CNX Nifty 27.7 (24.6) 17.9 11.7 42,938
Growth Fund 29.2 (27.2) 17.6 17.9 132,146
Benchmark 31.0 (27.0) 16.2 12.8 66,618
S&P CNX Nifty 27.7 (24.6) 17.9 11.5 55,333
Rural India 34.1 (23.1) 20.8 8.4 17,091
Benchmark 31.2 (27.4) 16.4 6.7 15,379
S&P CNX Nifty 27.7 (24.6) 17.9 7.5 16,178
Financial Services 47.1 (32.9) 35.5 17.6 20,965
Benchmark 56.5 (32.4) 30.6 18.2 21,454
S&P CNX Nifty 27.7 (24.6) 17.9 6.4 13,270
Entertainment Opportunities 38.5 (32.6) 1.3 8.1 14,218
Benchmark 69.5 (30.2) 20.6 4.9 12,425
S&P CNX Nifty 27.7 (24.6) 17.9 5.8 12,914
PSU Opportunities 14.0 (26.8) (0.4) 9,880
Benchmark 8.9 (31.1) (11.8) 6,884
S&P CNX Nifty 27.7 (24.6) 4.0 11,249
Performance of other funds managed by J Venkatesan
Returns are on a compounded annual basis for period more than one year & absolute for one-year
period based on NAV of Regular Plan (Growth Option) and is as of December 31, 2012. Value of
10,000 invested at inception is as on December 31, 2012.
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Performance of other funds managed by Srividhya RajeshSince Inception
Fund
31/12/11 to
31/12/12
31/12/10 to
31/12/11
31/12/09 to
31/12/10 Returns 10000
Tax Saver 34.5 (25.4) 13.1 18.8 95,701
Benchmark 31.0 (27.0) 16.2 12.6 47,469
S&P CNX Nifty 27.7 (24.6) 17.9 11.7 42,938
Select Focus 21.6 (23.7) 12.5 23.4 89,449
Benchmark 27.7 (24.6) 17.9 19.0 61,470
S&P CNX Nifty 27.7 (24.6) 17.9 19.0 61,470
CAPEX 19.3 (39.7) 5.1 8.7 18,314
Benchmark 34.7 (47.7) 9.2 11.5 22,037
S&P CNX Nifty 27.7 (24.6) 17.9 11.9 22,615
Equity Plus 14.5 - - 6.9 11,126
Benchmark 22.3 - - 11.2 11,882
S&P CNX Nifty 27.7 - - 5.8 10,946
Energy Opportunities 12.6 -24.6 0.3 -6.0 7,331
Benchmark 13.1 -29.0 1.2 -8.5 6,414
S&P CNX Nifty 27.7 -24.6 17.9 -0.8 9,611
Balanced Fund 21.7 -20.4 13.0 13.6 95,701
Benchmark 21.3 -14.4 -24.6 - 47,469
S&P CNX Nifty 27.7 -24.6 17.9 11.7 42,938
Returns are on a compounded annual basis for period more than one year & absolute for one-year
period based on NAV of Regular Plan (Growth Option) and is as of December 31, 2012. Value of
10,000 invested at inception is as on December 31, 2012.
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DisclaimerMutual Fund Investments are subject to market risks. Please read the Statement of Additional Information (SAI) and Scheme Information Document (SID) carefully before investing. Copy of
the SAI, SID, key information memorandum and application form may also be obtained from the offices / investor service centres of Sundaram Asset Management, its distributors and at
www.sundarammutual.com. Fund Facts: Name: Sundaram Tax Saver; Type: Open-end equity-linked savings scheme; Investment Objective; To seek capital appreciation by investing
predominantly in equities and equity-related instruments; Asset Allocation: Equity and equity linked instruments: 80%-100% Corporate and PSU Bonds up to 20% Money market instruments:
up to 20 %. Benchmark: BSE 200 Index. Minimum amount is Rs 500 and multiples of Rs 1. Terms of offer: NAV. Exit load: nil for redemption after lock-in period of 36 months. There is no
entry/exit load for bonus units and dividend re-investment. NAV publication/sale/redemption will be done on all business days. An investment in this scheme also qualifies for deduction under
Section 80C of the Income Tax Act subject to a lock-in period of three years from the date of allotment.
Disclaimers: Value Research Rating: Value Research Fund Ratings are a composite measure of historical risk-adjusted returns. In the case of equity and hybrid funds this rating is based on the
weighted-average monthly returns for the past three- and five-year periods. These ratings do not take into consideration any entry or exit load. Five-stars indicate that a fund is in the top 10 per
cent of its category in terms of historical risk adjusted returns and four stars indicate that a fund is in the next 22.5 per cent of its category.The number of schemes in the relevant category of
Equity Tax Planning Schemes is 28. These fund ratings are as on December 31, 2010 Value Research Ratings are published in Monthly Mutual Fund Performance Report and Mutual Fund Insight.
The Ratings are subject to change every month. The Rating is based on primary data provided by respective funds. Value Research does not guarantee the accuracy. Past performance is no
guarantee of future result. Source: Value Research
Comparison with ELSS funds: The returns for the ELSS funds are based on the average for the category of Value Research. The number of schemes in the ELSS-cap category is given in the
accompanying table. This comparison does not reflect the effect of objectives, style, asset allocation, entry load, exit load and fess & expenses. This is not intended for ranking purposes and
does not also constitute ranking. This is only meant for comparison purposes.
The number of schemes covered for different periods is given in the accompanying table.
Number of 1 2 3 5 6 7
schemes Year Years Years Years Years Years
ELSS 42 42 42 30 26 22
Mid-cap funds 20 20 20 18 15 13
All-equity funds 345 344 332 253 202 176
Large-cap funds 19 19 18 16 16 13
This comparison does not reflect the effect of objectives, style, asset allocation, entry load, exit load and fees & expenses. This is not intended for ranking purposes and does not also constitute
ranking. This is only meant for comparison purposes. The average of returns for the all equity schemes and mid-cap category has been sourced from the Value Research Daily Performance
Report. The average returns are as on December 31, 2010 and is based on compounded annual returns (computed using NAV of the Growth Option and/or NAV adjusted dividend reinvestment)
for more than one year. Past performance is no guarantee of future result. Comparison with all equity funds’ returns: The returns for all equity diversified funds comprise all funds classified in
Equity Diversified and Tax-Planning categories by Value Research. The funds in the two categories have been considered together and there has been no separate sub-classification by
Sundaram Asset Management. The number of schemes covered for different periods is given in the accompanying table. This comparison does not reflect the effect of objectives, style, asset
allocation, entry load, exit load and fess & expenses. This is not intended for ranking purposes and does not also constitute ranking. This is only meant for comparison purposes.Comparison
with large-cap funds: The returns for the large-cap funds is based on the average of returns of a sub-category created by Sundaram Asset Management from the broad category of funds
classified as equity diversified by Value Research. This sub-category includes funds that consistently invest at least 85%-90% in large-cap stocks. The funds have been chosen in good faith based
on the allocation to the top 50 stocks by market cap and the consistency in maintaining such a profile. The number of schemes in the large-cap category is given in the accompanying table. This
comparison does not reflect the effect of objectives, style, asset allocation, entry load, exit load and fess & expenses. This is not intended for ranking purposes and does not also constitute
ranking. This is only meant for comparison purposes.
23
DisclaimerRanking Disclaimer: The ranking for Sundaram Tax Saver indicated in this document is based the equity tax planning schemes category of Value Research. This category
comprises 33 schemes. Performance data and ranking for the indicated periods for schemes in this category has been provided by Value Research. In the full category of
equity tax planning schemes of Value Research, the ranking is given in the accompanying table. The performance for ranking purposes has been reckoned as on December
31,2010 and is based on compounded annual returns (computed using NAV of the Growth Option and/or NAV adjusted dividend reinvestment) for more than one year. The
comparison does not take account into scheme-specific features such as launch period entry/exit loads, expenses and fees, to name a few. Attributes such as style and
portfolio composition may also differ. Past performance is no guarantee of future result. Quartile Disclaimer: The ranks derived on the basis of the methodology described in
the Ranking Disclaimer has been used as the basis for categorising funds into first quartile (top 25% of funds by rank), second quartile (the second 25% by rank), third quartile
(the third 25% by rank) and fourth quartile (the fourth 25% by rank). For example, if there are 100 funds, funds ranked between 1-25 will be quartile I, 26-50 Quartile 2, 51-75
Quartile 3 and 76-100 Quartile 4. The research on historical performance on which the quartiles and ranking are based has been sourced from Value Research, NAV India (an
independent third party vendor of fund intelligence in India) and Bloomberg. The performance for ranking purposes has been reckoned December 31,2010. The analysis of
the information has been carried in good faith in-house by Sundaram Asset Management. The comparison does not take account into scheme-specific features such as
specific asset allocation pattern, specific cap-curve or thematic orientation, entry/exit loads, expenses and fees and respective benchmarks for each fund considered for
analysis. Attributes such as style and portfolio composition may also differ though the funds invest predominantly in equity and this latter aspect provides a common thread
for creating a sub-category of comparable funds. Past performance does not guarantee future result.
Scheme-Specific Risk Factors: Change in Government policy in general and changes in tax benefits applicable to mutual funds may impact the returns to Investors.
General Risk Factors: All mutual funds and securities investments are subject to market risks, and there can be no assurance or guarantee that fund's objectives will be
achieved. NAV may go up or down, depending on the factors and forces affecting the securities market. Main types are market risk, liquidity risk, credit risk and systemic
risks. At times, liquidity of investments may be impaired. There is uncertainty of dividend distribution and risk of capital loss. Past performance of the Sponsor/Asset
Management Company/Fund does not indicate the future performance. Investors in the schemes are not being offered any guaranteed or indicated returns. Sundaram Tax
Saver is only the name of the scheme and does not in any manner indicate either quality or future prospects and returns.
General Disclaimer: This document is issued by Sundaram Asset Management; an investment manager registered with the Securities and Exchange Board of India in India
and is produced for information purposes only. It is not a prospectus, scheme information document, offer document, offer and solicitation, to name a few, to buy any
securities or other investment. Information and opinion contained in this document are published for the assistance of the recipient only; they are not to be relied upon as
authoritative or taken as a substitution for exercise of judgment by any recipient. They are subject to change without any notice and not intended to provide the sole basis of
any evaluation of the instrument discussed or offer to buy. It is neither a solicitation to sell nor shall it form the basis of or be relied upon in connection with any contract or
commitment whatsoever or be taken as investment advice.The information and opinions contained in this communication have been obtained from sources that Sundaram
Asset Management believes to be reliable; no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be
relied upon as such. Sundaram Asset Management neither guarantees its accuracy and/or completeness nor does it guarantee to update the information from time to time.
This communication is for private circulation only and for the exclusive and confidential use of the intended recipient(s) only. Any other distribution, use or reproduction of
this communication in its entirety or any part thereof is unauthorized and strictly prohibited. By accepting this document you agree to be bound by the foregoing limitations.
This communication is for general information only without regard to specific objectives, financial situations and needs of any particular person who may receive it and
Sundaram Asset Management is not soliciting any action based on this document. Statutory: Mutual Fund: Sundaram Mutual Fund is a trust under Indian Trusts Act, 1882
Sponsors. Liability for sponsors is limited to Rs 1 lakh. Sponsors: Sundaram Finance Ltd & Asset Management. Investment Manager: Sundaram Asset Management Company
Ltd. Trustee: Sundaram Trustee Company Ltd.