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ETFs ETFs

Kotak PSU Bank Exchange Traded Fund updates

Investment goal and benchmark

The fund’s investment objective is “The scheme’s objective is to offer total returns that correspond to the total returns of the Nifty PSU Bank Index.”The NIFTY PSU Bank Total Return Index is used as a benchmark.

Portfolio Structure & Asset Allocate

The fund’s asset allocation is roughly 99.98 percent equities, 0.0 percent loans, and 0.02 percent cash and cash equivalents.The top 10 equity holdings account for roughly 96.27 percent of assets, while the top three sectors account for around 99.98 percent.The fund invests mostly in companies with a substantial market capitalisation, with 64.86 percent in giant and large cap companies, 33.04 percent in mid cap, and 2.1 percent in small cap companies.

Implications for Taxation

1. If units are surrendered within one year of purchase, gains are taxed at a rate of 15% (Short-term Capital Gains Tax – STCG).

2. Gains of up to Rs. 1 lakh accruing from units redeemed after one year of investment are free from tax in a financial year.

3. Gains of more than Rs. 1 lakh would be subject to a 10% tax rate (Long-term Capital Gain Tax – LTCG).

4. Dividend income from this fund will be added to an investor’s income and taxed according to his or her tax slabs for Dividend Distribution Tax.

5. In addition, for dividend income in excess of Rs 5,000 in a financial year, the fund house is required to withhold a TDS of 10%.

Source: Economic india

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
Technology Stocks

Seagen Reports Solid 2nd Quarter Results within Expectations; Maintaining FVE to $144

Operating expenses remain elevated compared with the previous year, which reflects Seagen’s investments to support the European launch of Tukysa and continued development of its pipeline. R&D expenses for the second quarter were $235 million and SG&A expenses were $165 million, representing increases of 19% and 31%, respectively.

Adcetris for lymphoma contributed $182 million in sales for the quarter, representing an increase of 9% compared with the prior-year period. Padcev for metastatic bladder cancer contributed $82 million in sales, representing growth of 44% from the second quarter of 2020. The FDA granted regular approval for Padcev in July 2021 and added a new indication for locally advanced or metastatic urothelial cancer. Tukysa for breast cancer reported revenue of $83 million, growing 427% year over year since the drug received FDA approval in April 2020. Seagen could gain regulatory approval later this year for its fourth-approved product, Tisotumab vedotin, or TV, for metastatic cervical cancer.

Company’s Future outlook

We believe Adcetris and Padcev provide ample near-term diversification, which we anticipate will further improve with additional label expansions and approvals of other indications. We expect Tukysa will gain steady market share as the drug recently received approval in the EU. We also anticipate a steady stream of licensing and collaboration revenue from its various partners. Our forecast implies a five-year projected revenue CAGR of about 16%.

Company Profile

Seagen Inc. (formerly known as Seattle Genetics) is a biotech firm that develops and commercializes therapies to treat cancers. Seagen’s therapies are based on antibody-drug conjugate technology that utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents directly to cancer cells. The company’s lead product, Adcetris, has received approval for six indications to treat Hodgkin lymphoma and T-cell lymphoma. Other approved products include Padcev for bladder cancer and Tukysa for breast cancer. The company has several other oncology programs in pivotal trials. Seagen also licenses its antibody-drug conjugate technology to several leading biotechnology and pharmaceutical companies.

(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
Commodities Trading Ideas & Charts

Vale’s Performance Has Been Boosted By Rising Iron Ore Prices Despite of Poor Operating Performance

Iron ore fines and pellets production surpassed the previous quarter by 11% to 84 million tones, supporting sales volumes to a total of 75 million tons, up 14% from the previous quarter. Elevated prices for Vale’s most important commodity more than offset a hit to cash costs from higher maintenance, equipment, and transportation costs. At our unchanged fair value estimate of USD 19, Vale’s shares trade at a 10% premium with the elevated iron ore price more than compensating for any residual concerns about their tailings dam disasters.

This quarter, Vale realized a sky-high average iron ore fines price of USD 183 per ton, up from USD 89 per ton at the same time last year. Vale is poised to ramp iron ore output in the second half with dry season and full capacity signaled from Serra Leste and Fábrica mines supporting the group’s unchanged full year target. Currently, production capacity is at 330 million tones and this is on track to increase to 400 million tons by the end of 2022, and to 450 million tones thereafter. This will ensure reliable supply is available, providing a buffer to unexpected operational challenges and swing capacity to meet strong demand.

Advancements have also been made in Vale’s base metals business. The Reid Brook deposit as part of the Voisey’s Bay Mine Expansion project has started production. The project represents a small step in the portfolio towards electrification and decarburization, but the investment is dwarfed by the importance of iron ore to Vale.

Company’s Future Outlook

We expect strong profitability to continue into the second half, principally a function of the still-lofty iron ore price. Nickel and copper suffered from the Sudbury labor disruptions causing stoppage expenses and softer production. Vale has put their nickel and copper guidance for the full year under review and we’ve reduced our full year group volume forecasts by 10% to 15%. However, with Returns and earnings from iron ore currently so strong, we View the impact as negligible.  The second part of the project, Eastern Deeps mine, is expected to start up in the second half of 2022. By 2025, the two mines are anticipated to contribute to an additional annual production of 40,000 tons of nickel, 20,000 tons of copper and 2,600 tons of cobalt as by-products

Company Profile

Vale is the world’s largest iron ore mine and one of the largest diversified miners, along with BHP and Rio Tinto. Earnings are dominated by the bulk materials division, primarily iron ore and iron ore pellets, with minor contributions from iron ore proxies, including manganese and coal. The base metals division is much smaller, primarily consisting of nickel mines and smelters with a small contribution from copper.

(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
Fixed Income Fixed Income

Principal Core Fixed Income A (CMPIX)

The team still intends to balance a higher-yielding corporate-bond stake with securitized fare and U.S. Treasuries, yet the strategy’s high-yield sleeve is now capped at 5% of assets (compared with a previous sleeve of 10% to 20% of assets). Corporate credit still typically accounts for 60% to 65% of assets and drives returns, while high quality securitized fare (20% to 25%), U.S. Treasuries (10% to 15%), and cash are intended to provide stability. This stake stood at 35% of assets as of March 31, 2021, which was 17% larger than the typical intermediate core bond peer. This translates to more credit risk relative to peers.

  • A new shift to higher quality is untested.

The managers employ a consistent, conventional investment process overseen by an adequately sized team. The strategy earns an Average Process Pillar rating. The team emphasizes corporate credit relative to Treasuries and securitized assets, with bottom-up analysis driving credit selection. Manager John Friedl and his team search for credits they believe will provide the best opportunities over a full market cycle; they have a stated preference for smaller offerings in energy, healthcare, utilities, and REITs buoyed by larger names in the financial sector. Prior to 2020, the team invested heavily in high-yield debt (usually 10% to 20% of assets). Now, the team is limited to a 5% sleeve in high yield after a mandate change in January 2020. The team does not make interest-rate calls and historically has kept the strategy’s duration within 15% of the Bloomberg Barclays U.S. Aggregate Bond Index.

  • Still a barbell construct with heavy credit exposure.

The strategy’s barbell structure is composed of income-generating corporate bonds on one end and high-quality securitized fare and Treasuries for ballast on the other. As of March 2021, the strategy’s corporate credit allocation sat at 57% of assets, including a BBB rated stake (35%) and BB and below (4%) that was about 17 and 3 percentage points higher, respectively, than its typical intermediate core bond category peer. The team has historically focused on oilfield services and pipelines in its energy stake (about 4%), given their resilience in the face of commodity price drops. Financials have made up a consistent overweighting relative to the benchmark (11% versus 6%), with the team focusing on the debt of large banks with strong balance sheets. The ballast end of the barbell, composed of agency mortgage-backed security pass through (20%), U.S. Treasuries (15%), and asset backed securities (3%), has not seen major sector shifts since 2013.

 (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.