Category: Research

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IPO Watch

MapmyIndia lists at 54% premium above the issue price

The company aimed to raise Rs 1,039.61 crore via the primary route, which was entirely an offer for sale of 10,063,945 equity shares, with a face value of Rs 2 each by existing shareholders and promoters of the company. Investors PhonePe India, Zenrin, and Qualcomm held 19.15 percent, 8.78 percent, and 5.07 percent shareholding, respectively, in the company.

The IPO issue date was open from 09 to 13 December 2021. The lot size consisted of 14 shares. The price range was 1000- 1033 per equity share. The minimum amount of the subscription was INR 14,462 (01 lot) and maximum amount of subscription was 188,006 (13 lots). The Book Running Lead Managers of this IPO were Axis Capital, DAM Capital Advisors Ltd., JM Financial Consultants Private Limited and Kotak Mahindra Capital Company Limited.

The public issue was subscribed 15.20 times in the retail category, 196.36 times in the QIB category, and 424.69 times in the NII category. The total subscription of the IPO was 154.71 times.  

MapmyIndia listed on the bourses on 21 December 2021, with the listing price ₹1,581, a 54% premium.

The competitive strengths of MapmyIndia are; they are the pioneers of digital mapping in India having an early mover advantage, it is a leading the B2B and B2B2C market for digital maps and location intelligence in India, proprietary technology and network effect resulting in competitive edge, independent, global geospatial products and platforms company with strong data governance, prestigious customers across sectors with strong relationships and consistent profitable financial track record.

The digital maps offered by the company cover 6.29 Mn Km of roads in India, representing 98.50% of India’s road network. The company’s digital map data provides location, navigation, analytics, and other information for 7,933 towns, 6,37,472 villages, 17.79 Mn places across many categories such as restaurants, retail shops, malls, ATMs, hotels, police stations, electric vehicle charging stations, etc., and 14.51 Mn house or building addresses. The company’s ‘RealView’ maps provide actual roadside and on-ground views based on over 400 Mn geo-referenced photos, videos, and 360-degree panoramas across India.

About the company:

MapmyIndia is a leading provider of advanced digital maps, geospatial software, and location-based IoT technologies in India. The company is a data and technology products and platforms company, offering proprietary digital maps as a service (MaaS), software as a service (SaaS), and platform as a service (PaaS). The company provides products, platforms, application programming interfaces (APIs), and solutions across a range of digital map data, software, and IoT for the Indian market under the (MapmyIndia) brand, and for the international market under the (Mappls) brand. The company serves the BFSI, telecom, FMCG, industrials, logistics, and transportation sectors. MapymyIndia has also entered into various memorandums of understanding with key government organizations such as the Indian Space Research Organisation (ISRO), NITI Aayog, National eGovernance Division, Ministry of Electronics and Information Technology, and Government of India. Some of the company’s customers include PhonePe, Flipkart, Yulu, HDFC Bank, Airtel, and Hyundai.

(Source: economictimes.com, chittorgarh.com)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
LICs LICs

Carlton Investments Limited: A diversified portfolio

Carlton Investments Limited (CIN) is an investment company listed on the Australian Securities Exchange (ASX). It is required to release its net tangible asset (NTA) backing per ordinary share to the ASX after each month end. At the end of each quarter the Company also releases, as part of its NTA announcement, a listing of its top twenty equity investments. Group companies also invest funds in term deposits. The Group has no debt. The investment strategy is to invest in established, well managed Australian listed entities that are anticipated to provide attractive levels of sustainable income and also long-term capital growth. The Group also invests in companies that enable a high portion of income to be received as fully franked dividends.  Investments are held for the long term and are generally only disposed of through takeover, mergers or other exceptional circumstances that may arise from time to time. Group entities do not act as share traders nor do they invest in speculative stocks.

Investment Team:

The Group has an experienced Board of Directors, consisting of Mr Alan G Rydge, Mr Murray E Bleach and Mr Anthony J Clark AM. It is an objective of the Board to maximise shareholder return through both the payment of fully franked dividends and longer-term capital growth in the value of the company’s shares whilst maintaining an investment portfolio with an acceptable level of investment risk.

Performance:

Global Equity Fund1 month1 yr2 yrs3 yrsSince Inception
Total Return-0.16%13.94%19.00%–15.80%

About LIC:

Incorporated in 1928, Carlton Investments is the holding company for three subsidiaries whose principal activities are the acquisition and long term holding of shares and units in entities listed on the ASX. Investments have been made to create a diversified portfolio. At 30 June 2021 the Group held an investment portfolio with a total market value of $1,000,907 thousand, consisting of shares and units in over 85 entities. The Group has a significant holding in Event Hospitality & Entertainment (EVT) (formerly known as Amalgamated Holdings Limited), a group engaged in cinema exhibition (Event, Greater Union, BCC and Cinestar) in Australia, New Zealand and Germany, hotel operations and ownership (Rydges, Atura and QT), operation of the Thredbo Alpine Resort and investment property ownership.

(Source: www.carltoninvestments.com.au)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Shares Small Cap

Platinum Shares at discount as investors overlook its good traits

Business Strategy and Outlook

Platinum is an active manager founded in 1994, specialising in global equities. It concentrates on identifying unfashionable stocks with latent business and growth prospects. Platinum is not focused on asset allocation and pays little attention to its benchmarks. As a result, its portfolios often look little like–and returns often don’t resemble–their indexes. The firm manages about AUD 22 billion in FUM, and is one of the best known fund managers in Australia. 

Platinum eschews empire-building–such as special discounting to attract FUM, acquisitions or product proliferation–and prefers to spend most of its time managing money. Management is largely focused on minor product enhancements: clients can invest via unlisted funds, active ETFs, listed investment companies, mFunds, or investment bonds. Clients can also invest into performance fee class of funds. Moreover, the firm is making an effort to grow its client engagement and business development initiatives.

Financial Strength

Our fair value estimated to AUD 3.90 per share from AUD 4.25 after increasing the expected magnitude, and prolonging the duration, of net outflows to fiscal 2024. Platinum is in strong financial health, supported by a conservative balance sheet with no debt and a healthy cash balance. Platinum has maintained a very high dividend payout ratio since listing in 2007. An absence of debt, consistent earnings, strong cash flow conversion, and a durable balance sheet support the high dividend payout ratio target of close to 100%. High dividend payouts are a feature of the capital-light asset-management sector, delivering attractive shareholder returns while maintaining comfortable balance sheet settings.

Bulls Say’s 

  • Platinum is well known in Australian funds management. The firm may be able to take advantage of retail investors increasing allocation to global equities, if it improves medium-term performance. 
  • The long-term outlook is positive due to likely mandated increases in compulsory superannuation. However, fund underperformance, increasing competition and a trend to lower-cost passive investments are risks. 
  • Capital demands low, and free cash flow generation is strong. This supports a high dividend payout ratio and offers investors the opportunity of both growth and income returns.

Company Profile 

Platinum Asset Management is an Australian-based niche fund manager with a specialty in international equities founded in 1994. It offers region and industry-specific funds in addition to global portfolios. There is flexibility in the investment strategies at Platinum, with funds having the option to engage in short-selling, taking positions in foreign exchange markets, and derivative-based activities to manage risk and aid performance.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Funds Funds

MFS Institutional International Equity Fund

Approach

The managers rely on broad and thorough bottom-up research and a disciplined focus on moderately growing established companies with shares trading at decent prices. That is not unique, but the process is bred in MFS’ bones and has delivered strong results elsewhere, including Gold-rated MFS Global Equity MWEIX. The managers look for firms growing faster than global GDP. That’s a lower hurdle than more-aggressive growth funds since global GDP historic growth is in the single digits.

Portfolio

This is a diversified yet distinctive portfolio. It spreads its bets over its nearly 80 stocks. Most holdings were less than 2% of assets, and the fund had less than 30% of its money in its top 10 stocks. The strategy’s preference for competitively advantaged, moderately growing, developed-markets companies helps it stand out, though. More than two thirds of its holdings have wide or narrow economic moat ratings, much more than its foreign large-cap peers and relevant indexes, like the MSCI ACWI ex USA. It also had a large slug of assets in developed Europe, including the 2021 purchase of tire maker Cie Generale des establisment Michelin. 

Portfolio .png

People

The firm’s sprawling, yet experienced analyst team supports the managers. MFS has dozens of U.S. and nonU.S. equity analysts who divide responsibilities across eight global sectors. In addition, the firm’s large credit analyst team provides insights across the capital structure, and a quantitative research squad offers riskmanagement support. The equity analysts average more than 15 years of industry experience and nearly eight years’ firm tenure, and team turnover has been low. The managers also collaborate with the firm’s other non-U.S. portfolio managers, including Roger Morley and Ryan McAllister of Gold-rated MFS Global Equity.

Performance 

The fund has done well in a variety of environments. Its performance in the early 2020 pandemic-induced market collapse was mixed, though. Its 31% loss hurt but was less than the nearly 34% plunge of broader non-U.S. stock indexes. The typical foreign large-growth fund and growth benchmarks, however, shed about 30%. Pandemic-ravaged businesses like food service company Compass hurt, so did not owning more tech stocks.

Performance .png

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Shares Technology Stocks

NextDC benefits from industry megatrends

Business Strategy and outlook

NextDC is well-placed to benefit from industry megatrends, including the growing adoption of cloud computing, the Internet of Things, and artificial intelligence, leading to exponential growth in data creation. As per Morningstar analyst forecast NextDC will materially expand its capacity over our 10-year forecast period in order to meet growing demand for data center services. 

The COVID-19 pandemic has accelerated the digital transformation of many businesses and expedited demand for co-location data centers. Large numbers of employees have made the transition to remote working arrangements, leading to a greater reliance on digital technologies such as video conferencing and cloud-based platforms, and reducing the need to store servers at a centralized location. Beyond the COVID-19 pandemic, it is expected that remote working levels will remain elevated above pre-pandemic levels, resulting in continued demand for digital technologies and potentially less need for physical office space. This shift has increased demand for data centers and hybrid and multi cloud data storage solutions, which are supported by co-location data centers like NextDC. Hybrid solutions, which combine traditional infrastructure with cloud storage, can improve business outcomes through reduced latency and costs, increased security and resilience, and the flexibility to connect to multiple clouds based on business needs. These solutions provide greater flexibility and allow businesses to scale their data storage capacity based on workflow. 

As per Morningstar analyst, interconnection services are becoming increasingly important for NextDC as more businesses make the transition to hybrid cloud storage models. As of fiscal 2021, interconnection revenue contributed 8% of NextDC’s total recurring revenue and this will trend higher over time as its network ecosystem matures.

Financial Strength

NextDC is in sound financial health. The company raised AUD 862 million in fiscal 2020 via an institutional placement and share purchase plan. Proceeds from the equity raising will be used to fund the development of a third Sydney data center and further capacity expansion at its existing and new sites. Morningstar analyst forecast, gearing, measured as net debt/EBITDA, to deteriorate to above 3.6 times in fiscal 2023 as NextDC continues to invest heavily in portfolio expansion, before recovering from fiscal 2024 as capacity utilization improves. Morningstar analyst forecasted that NextDC will invest about AUD 4.0 billion during the 10 years to fiscal 2031 to grow total power capacity at a CAGR of 16%. It is also expected that NextDC will only consider paying dividends when it has accrued sufficient franking credits, otherwise the capital would be better spent on investments or repaying debt.

Bulls Say

  • NextDC is well placed to benefit from industry megatrends including the growing adoption of cloud computing, the Internet of Things and artificial intelligence leading, to exponential growth in data creation. 
  • The shift to cloud-based services increases the need for enterprises to connect to numerous cloud providers and the connection is fastest, safest and most efficient in a co-located data center. 
  • The COVID-19 pandemic has accelerated the digital transformation of many businesses and is leading to increased demand for cloud-based services.

Company Profile

NextDC is an Australia data center developer and operator with a focus on co-location and interconnection among enterprise and government customers, global cloud and information and communications technology, or ICT, providers, and telecommunication networks. NextDC provides physical space, cooling, power, and security services and offers optional technical and project management support. The company’s tenants house their servers within the data center and can connect to each other via physical and virtual connections.

 (Source: Morning Star)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Funds Funds

Pfizer strong pipeline development increasingly sets ups near term growth

Business Strategy and Outlook

Pfizer’s size establishes one of the largest economies of scale in the pharmaceutical industry. In a business where drug development needs a lot of shots on goal to be successful, Pfizer has the financial resources and the established research power to support the development of more new drugs. Also, after many years of struggling to bring out important new drugs, Pfizer is now launching several potential blockbusters in cancer, heart disease, and immunology. Pfizer’s vast financial resources support a leading salesforce. 

Pfizer’s commitment to postapproval studies provides its salespeople with an armamentarium of data for their marketing campaigns. Further, Pfizer’s leading salesforces in emerging countries position the company to benefit from the dramatically increasing wealth in nations such as Brazil, Russia, India, China, and Turkey. Pfizer’s recent decision to divest its off-patent division Upjohn to create a new company (Viatris) in combination with Mylan should drive accelerating growth at the remaining innovative business at Pfizer. With limited patent losses and fewer older drugs, Pfizer is poised for steady growth.

Financial Strength

Pfizer holds a very strong financial position with a large degree of flexibility. As of the end of 2020, debt/capital stood at 39% and debt/EBITDA was 2.9, which suggests that Pfizer remains on solid financial footing. With the majority of its cash flow derived from a diverse portfolio of products, it’s not expects a high degree of volatility with future earnings. After a deep dive on several of Pfizer’s pipeline drugs combined with continued strong data for COVID-19 treatment Paxlovid, it has increased our projections for several key drugs leading to a fair value estimate increase to $48 from $45.50. The strong pipeline increasingly supports our wide moat rating for the firm. For the core business of Pfizer, it is expected to close to 6% annual sales growth between 2020 and 2025 as new drugs offset generic competition. 

Bulls Say’s 

  • Bega is shifting investment to the spreads and grocery business, which we view as less commoditised and higher margin than dairy, with strong niche positions in Vegemite and peanut butter 
  • External factors outside of Bega’s control, such as the weather, can adversely impact supply and demand dynamics. This can impact commodity prices, inputs costs and the firm’s supply chain and lead to volatile earnings 
  • Changing consumer trends toward dairy-free and vegan diets could lead to declines in per-capita dairy and cheese consumption, weighing on the majority of Bega’s earnings

Company Profile 

Pfizer is one of the world’s largest pharmaceutical firms, with annual sales close to $50 billion (excluding COVID-19 vaccine sales). While it historically sold many types of healthcare products and chemicals, now, prescription drugs and vaccines account for the majority of sales. Top sellers include pneumococcal vaccine Prevnar 13, cancer drug Ibrance, cardiovascular treatment Eliquis, and immunology drug Xeljanz. Pfizer sells these products globally, with international sales representing close to 50% of its total sales. Within international sales, emerging markets are a major contributor.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
ipo IPO Watch

The Medplus Health Service IPO Subscribed 52.59 times on its final day

Incorporated in 2006, Medplus Health Services is India’s second-largest pharmacy retailer. The company offers pharmaceutical and wellness products .

 The IPO comprises a fresh issue of equity shares worth Rs 600 crore and an offer-for-sale (OFS) of Rs. 798.30 crore. The Medplus Health Service IPO opened at Dec 13, 2021, and closed at Dec 15, 2021 and listed on both NSE & BSE at Dec 23, 2021.The minimum lot size comprises 18 shares at a price band of Rs.780 -796 per equity share. A retail-individual investor can apply for up to 13 lots.

The objective of the issue is to fund the working capital requirement of the subsidiary, Optival; and for general corporate purposes.

Axis Capital, Credit Suisse Securities (India), Edelweiss Financial Services and Nomura Financial Advisory and Securities (India) were the managers to the offer. 

Medplus Health Services IPO has got 50 per cent reserved for qualified institutional buyers (QIBs) and 15 per cent reserved for non-institutional investors (NIIs). The remaining 35 per cent of the issue is available for retail investors.

The scrip got listed at Rs 1,040.00 a piece on the National Stock Exchange (NSE), thereby registering a gain of 30.65 per cent from its offer price of Rs 796.00, while on the BSE, it opened at Rs 1,015.00, up 27.51 per cent from the issue price.

Medplus IPO Subscription Status

The Medplus Health IPO was subscribed 52.59 times on Dec 15, 2021.The public issue subscribed 5.24 times in the retail category, 111.90 times in the QIB category, and 85.33 times in the NII category.

About the Company

Incorporated in 2006, Medplus Health Services is India’s second-largest pharmacy retailer in terms of the number of stores and revenue. The company offers pharmaceutical and wellness products i.e. medicines, vitamins, medical devices, test kits, and fast-moving consumer goods i.e. home and personal care products, baby care products, sanitizers, soaps, and detergents, etc. It is also the first pharmacy retailer in India to offer an omnichannel platform wherein customers can purchase products through stores, place orders over the telephone, online orders, and a Click and Pick facility.

As of June 31, 2021, the company has a strong pharmacy retail network of 2,165 stores across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal, and Maharashtra. In fiscal 2021, its share of the organized pharmacy retail based on revenue from operations in Chennai, Bangalore, Hyderabad, and Kolkata reported at 30%, 29%, 30%, and 22% respectively. It follows a cluster-based approach for store network expansion wherein it first opens high store density in a populated residential area within a target market. The company’s warehouses are located in Bengaluru, Chennai, Hyderabad, Vijayawada, Kolkata, Pune, Bhubaneshwar, Mumbai, and Nagpur.

(Source: DRHP of Medplus Health Services Limited IPO)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Global stocks Shares

Novartis results beat consensus delivering revenue of US$12.95bn

Investment Thesis:

  • Relatively high barriers to entry, with a significant amount of funds deployed in R&D every year. 
  • Recent and upcoming divestments will streamline the business and provide increased focus to deliver shareholder returns. 
  • Recent product launches indicate solid sales momentum, with near-term product pipeline potentially providing further upside. 
  • Selective bolt-on acquisitions to supplement organic growth. 
  • Operating efficiency focuses to further support earnings growth. 
  • As the new management team improves Company culture, investors are less likely to ascribe a discount to the stock based on legacy issues.

Key Risks:

  • Recently launched products fail to deliver sales growth as expected by the market. 
  • New product pipeline fails to yield “blockbuster” products or delays in bringing key products to market. 
  • R&D programs do not yield new long-term ideas. 
  • Increased competition (pricing pressure & innovative products) from new entrants or existing players. 
  • Value destructive M&A. 
  • Regulatory / litigation risks.

Key highlights:

  • NOVN’s product development pipeline continues to progress well without any major disruptions.
  • Novartis (NOVN) 2Q21 results beat consensus on both top and bottom line, delivering revenue of US$12.95bn (vs estimates of US$12.49bn) and EPS of US$1.28 (vs estimate of US$1.08) as disruption from the pandemic waned, with management announcing the growth drivers and launches continue to show excellent momentum with +35% growth and now contributing to more than 50% of top line.
  • The Oncology business continued to recover delivering +7% growth with sales reaching US$3.9bn during the quarter, with management expecting to see accelerated growth if trends move toward pre-Covid-19 levels in 2H21.
  • Financial position remained strong with the Company not experiencing liquidity or cash flow disruptions during 2Q21 due to the Covid-19, ending the quarter with total liquidity of US$5.4bn.
  • FY21 net sales to grow low to mid-single digit, with Innovative Medicines to grow mid-single digit and Sandoz to decline low to mid-single digit, and core operating income to grow midsingle digit (ahead of sales), with Innovative Medicines growing mid to high-single digit, ahead of sales, and Sandoz declining low to mid-teens.
  • The Company retained strong capital structure (credit rating of A1/AA- by Moody’s/S&P), not experiencing any liquidity or cash flow (2Q FCF up +17% over pcp) disruptions during 2Q21 due to the COVID-19 pandemic.

Company Description: 

Novartis AG (NOVN) is an innovative healthcare company headquartered in Basel, Switzerland, with approximately 125,000 employees. In 2017, the Group reported net sales of US$49.1bn, while R&D throughout the Group amounted to approximately US$9.0bn. The Company sells its products in approximately 155 countries. The group has two segments which it reports on: (1) Innovative Medicines (Oncology / Pharmaceutical), and (2) Sandoz generics division.

(Source: Banyantree)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Funds Funds

Kotak Bond Direct Growth: Stable team supports the process and has the potential to outperform in the long term with its active duration positioning

Kotak Bond is actively managed and run by an experienced team with a robust investment strategy. The fund has delivered consistent returns, and we believe it is a strong choice for investors who seek a quality portfolio and are willing to occasionally take a higher investment risk for higher returns.

Approach 

The strategy is run using a team-based approach and has a strong fundamental process in place. The fund is more focused towards taking active duration bets and invests primarily in high-quality credits. Credit analysis is divided into banking, nonbanking financial companies, and manufacturing debt, further demarcated into three buckets based on the strength of the business, management, and corporate governance standards. The qualitative assessment is then followed by rigourous quantitative analysis wherein financial ratios such as leverage, coverage, and solvency ratios are considered.

Portfolio

In 2021, the manager maintained a high allocation to government securities mainly towards the medium and long end because of attractive yields. He is overweight at the medium end because he believes that, regardless of whether the yield went up or down, the middle of the segment would provide a good level of carry and roll-down advantage. At the same time, the steepness of the curve made the longer end of the curve look appealing. However, because of the uncertainty surrounding the rate hike, he kept a limited the fund avoids investing in anything below AAA segment and intermittently holds higher cash/money market instruments to take opportunistic trading calls when markets are bumpy.

People

Abhishek Bisen is an experienced manager who has been with the fund house since October 2006. He took over this fund in April 2008 along with Deepak Agrawal. From July 2015, Bisen has been sole manager after Agrawal moved out to manage credit and shorter-maturity funds. Bisen is well-engrained in Kotak’s philosophy, and his skills complement the investment process. The fixed-income strategies are run using a team-based approach that follows an inclusive culture. It fosters the collective input of the investment specialists closest to the source of investment information.

Performance

Abhishek Bisen has delivered robust returns during his tenure from April 2008 to November 2021. It ranked in the first quartile by outperforming 82% of its peers, delivering returns of 8.19% versus the category average of 7.39%. In 2021, he maintained a higher exposure to medium-duration bonds and government securities. This resulted in superior risk-adjusted returns for the fund. We believe the fund has the potential to outperform with its active investment strategy across interest-rate cycle. 

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Funds Funds

HDFC Corporate Bond Growth: A fund focused to generate optimise return by investing in high credit rated instruments

Approach 

The investment philosophy is to optimise returns without taking excessive duration or credit risk. with most performance is driven by selecting securities offering attractive yields within the AAA rated segment. Expectedly, the investment approach relies on fundamental research. It entails combining qualitative aspects with quantitative analysis. This in turn helps the managers to determine issuer exposure they can take, thereby acting as a risk-management tool for the individual portfolio and the fund company. The investment team lays more emphasis on risk control, thereby focusing on balancing safety, liquidity, and return.

Portfolio 

The fund’s investment mandate is to invest at least 80% of assets in corporate bonds having a rating of AA+ and above. Anupam Joshi’s emphasis on liquidity and risk control is borne out by the fund’s portfolio, where almost 100% of assets are invested in AAA or equivalent rated securities. Papers issued by public-sector undertakings such as NABARD, PFC, and REC continue to find a place in the portfolio. From the private sector, established names such as HDFC and Tata Sons, in which the manager has confidence, feature in the portfolio. On the duration front, the team believes interest rates will move up from where they are currently, but it will be a more gradual increase. In line with the same, the modified duration of the fund has been reduced in the past year to 2.72 years in November 2021 from 3.35 years in October 2020. Finally, Joshi will build cash when there aren’t attractive investment opportunities and to ride out periods of volatility and uncertainty.

People

Anupam Joshi joined HDFC Mutual Fund in October 2015 and has been managing this fund since then. Earlier, he was associated with IDFC Mutual fund as portfolio manager from 2008 till his exit from the fund house.

Performance

Under Anupam Joshi (October 2015-November 2021) the fund’s direct share class has clocked an annualised return of 8.45%, outperforming the category average (6.51%) and featuring in the top performance quartile. Under the difficult environment of 2020, the fund clocked a return of 12.09%, outperforming the category average of 9.10%. In 2021, too, the fund’s direct share class has delivered a top-quartile performance. The fund is also a top-quartile performer over the trailing one-, three- and five-year periods.

About the fund  

The scheme seeks to generate income/capital appreciation through investments predominantly in AA+ and above rated corporate bonds. Its benchmark against NIFTY Corporate Bond Index. The investment strategy is well-defined for this fund, which also paves way for its effective and predictable execution. It’s a low-risk, short- to medium-duration strategy that works on the philosophy of optimising returns for investors without exposing them to excessive duration or credit risk. Therefore, investments are made only in AAA rated securities and the duration is maintained within a range of 1.0 to 4.0 years.

Joshi brings in his own style of investing while managing this fund. For instance, earlier the fund was managed with an approach of holding majority of investments till maturity, thus allowing a linear roll-down in its average maturity. Joshi prefers managing the fund more actively. The strategy has its limitations: In times when credit markets are buoyant, the fund may find it hard to match peers that, within the defined mandate of the category, can go down the credit curve. The fund may also struggle against peers that follow a more dynamic approach to duration management, compared with Joshi’s measured approach, during fast changing interest-rate scenarios.

 (Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.