Financial Data

January 2024

Version 1 Anand Rathi Wealth Limited

AMFI-Registered Mutual Fund Distributor
What is Management in general?

Step I
Define objective

Step II
Decide a well thought-out strategy to achieve it

Step III
Implement the well thought-out strategy

Step IV
Monitor the direction

1/68 slides
Source: As per the definition by George R. Terry General information
Core Values at Anand Rathi

FEARLESS DATA BACKED UNCOMPLICATED TRANSPARENT

APPROACH APPROACH APPROACH APPROACH

Transparency
Un-complicating Trust
Showing information Data that will help financial concepts to Implementation.
that you need to see, you take considered enable full Trust created with
without fear. decision. understanding before transparency.
your decision making Value created by
Implementation.

2/68 slides
Checking for appropriateness
 Where are we Today ?

Rs. in cr Current Portfolio

Investments Amount % 9%
High Risk Assets* 24%
Direct Equity 1.00 9%
Total High Risk Assets 1.00 9%
Medium Risk Assets*
Real Estate 6.00 52% 67%
Equity Mutual Funds 1.80 16%
Total Medium Risk Assets 7.80 67%
High Risk Assets Low Risk Assets
Low Risk Assets* Medium Risk Assets
Gold ETFs/Funds 1.50 13%
Taxable Bonds/NCDs 0.30 3%
Creation of a Private Trust Not Done
Employee Provident Fund 1.00 9%
Total Low Risk Assets 2.80 24%
Creation of a Will Not Done

Total Assets 11.60 100%

*Expected returns and risk are based on statistical and other analysis and may differ in the future
 Our Understanding Of Your Goals

■ Reaching a corpus of Rs. 23 crores in about 6 years and Rs. 46 crores in about 12 years
from Rs. 11.6 crores (the corpus is after payment of all taxes)

➣ Which means an expected 14% p.a. pre-tax return which is significantly higher
than HNWI inflation of 7.5% p.a.

■To limit the tax impact on the overall portfolio returns, on an annualized basis, at 13%
with an assumption that surcharge will be 10%.

■ Creating liability free asset to safeguard against external risks.

■Establishing a clearly laid out estate plan to ensure near zero transmission loss of
wealth from one generation to the next.

*Expected returns and risk are based on statistical and other analysis and may differ in the future
Value of Investments - Scenarios

159
HNWI Inflation 8% Current 7% Your Goal of 14%
Portfolio Value in Rs. cr
144.8
108.6
72.4
49
43 42
22 24 22
36.2
17 16
0
5 10 20
No. of Years

Purpose 5 Yrs 10 Yrs 20 Yrs

Value of investment with no changes (Rs. In cr) 16 22 42

Value of investment as per your goal (Rs. In cr) 22 43 159
Difference (Rs. In cr) 6 21 117
Determinants of Portfolio Performance
Source: ^“Determinants of Portfolio Performance II, An Update” by Gary Brinston, Brian D. Singer and Gilbert L. Beebower, Financial Analysts Journal May-June 1991

Investment ^ Impact on
Decisions Returns

Asset Allocation 93%

Security Selection < 5%

Market Timing < 2%

• In 1991, Brinson, Singer and Beebower published a study about asset allocation of 82 large pension funds in
US. They did regression analysis on the pension funds' stock, bond and cash selections with corresponding
market indices.
• The conclusion of the study was that Asset allocation determines about 93% of the return variation between
portfolios. Picking the right stocks, bonds and properties have 5% impact on returns whereas picking the
right time to buy and sell has just 2% impact on overall portfolio returns.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.
6/68 slides
General Information
In the Short term, Equity can be Volatile but it reduces over a period of time.....
100% Nifty 1 year Rolling Returns (1995 - 2023) Min: -52%
80% Max: 92%
60%
40%
20%
0%
-20%
-40%
-60%
1995
1996
1996
1997
1997
1998
1998
1999
1999
2000
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2015
2015
2016
2016
2017
2017
2018
2018
2019
2019
2020
2020
2021
2021
2022
2022
100% Nifty 5 year Rolling Returns (1995 - 2023) Min: -5%
80% Max: 44%
60%
40%
20%
0%
-20%
-40%
-60%
1999
2000
2000
2001
2001
2002
2002
2002
2003
2003
2004
2004
2004
2005
2005
2006
2006
2007
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2015
2015
2016
2016
2017
2017
2017
2018
2018
2019
2019
2019
2020
2020
2021
2021
2022
2022
2022
100% Nifty 10 year Rolling Returns (1995 - 2023) Min: 5%
80%
60%
Max: 20%
40%
20%
0%
-20%
-40%
-60%
2004
2005
2005
2005
2006
2006
2006
2007
2007
2007
2008
2008
2008
2009
2009
2009
2010
2010
2010
2011
2011
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2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
2018
2018
2018
2019
2019
2019
2020
2020
2020
2021
2021
2021
2022
2022
2022
10 year Average Return – 13.02% p.a. (From 3rd November 1995 to 31st March 2023) Relevant to Equity Mutual Funds
The above is an analysis of past data, which may or may not recur in future. You may independently review the data and its
relevance for your decision making for investing in Mutual Funds. Understanding Risk
7/68 slides
Inflation – The Silent Killer

How inflation has eroded the purchasing power of money over long term

7100
6024
6100

5100
Government Inflation HNWI Inflation
4100

3100
2343
2100

1100

100
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Source: World Bank - Inflation, Consumer Prices (Annual %) - India

Average CPI Inflation – 7.62% from 1979 to 2022

Average HNWI Inflation – 10% from 1990 to 2022

The above is an analysis of past data, which may or may not recur in future. You may independently review the data and its relevance
for your decision making for investing in Mutual Funds. 8/68 slides
Understanding Risk
Equity View
Equity View - Preamble

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Nifty
-16.20% 3.30% 71.90% 10.70% 36.30% 39.80% 54.80% -51.80% 75.80% 17.90% -24.60% 27.70%
Return

23 Years
Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
CAGR

Nifty
6.80% 31.40% -4.10% 3.00% 28.60% 3.20% 12.00% 14.90% 24.1% 4.3% 20% 13.2%
Return

Take Away:

• In 83% of the calendar years equity markets delivered positive returns.

• The perceived risk of equity is far greater than what has fructified.

• Therefore, is the perceived risk justified??

9/68 slides
Asset Information
Factors Impacting Equity Markets

Long Term – 3 Years and Beyond

Over an extended period, broad economic performance has strong impact on market movement.

Medium Term – 1 – 3 Years

Over the medium term, corporate profitability and valuation play big roles in market movement.

Short Term – 1 – 3 Months

Over the short term, market movement is influenced by news, events and investor sentiments.

Due to the differences in factors having greater influence on the market movements over different time
horizons, the duration for investment becomes an essential input in evaluating the view on the market.

10/68 slides
Asset Information
Long Term View :- Macro - Economic Outlook

Asset Information
India to continue as the fastest growing economy in the world

GDP Growth Financial Year Quarters 2023-24

2022-23 2023-24 Apr-Jun’23 Jul-Sep’23 Oct-Dec’23 Jan-Mar’24
AR estimates (2023-24) 7.2% 6.4% (E) 7.8% 7.6% 5.4% (E) 5.0% (E)

Forecasts on Real GDP Government RBI World Bank Fitch IMF

FY 2023- 24 6.5% 7.0% 6.3% 6.9% 6.3%

Take away
• At 6.4% GDP growth, India would be the fastest growing major economy. This is positive for the corporate earnings
and in turn market returns.
• There is a strong possibility that the second half GDP growth would be better than our expectations and the yearly
growth can reach close to 7%.

*The earlier estimate for GDP growth was 6.1% for Q2FY24 and 5.6% for H2FY24. these estimates are revised post Q2FY24
actual GDP data

Data Source: MOSPI, Anand Rathi 11/68 slides

Asset Information
Inflation sees temporary rise, likely to moderate

Inflation Q1 Q2 Q3 Q4 Annual
FY 2022-23 – Actual 7.3% 7.0% 6.1% 6.2% 6.7%
FY 2023-24 – RBI Forecast 4.6% 6.2% 5.6% 5.2% 5.4%
FY 2023-24 – Actual 4.6% 6.4% Oct- 4.87% Nov – 5.55%
10 Year Average 5.8%

Interest rates – 10
Q1 22-23 Q2 22-23 Q3 22-23 Q4 22-23 Q1 23-24 Q2 23-24 Oct’23 Nov’23 Dec’23
Year G Sec
Current Yields
7.34% 7.30% 7.35% 7.37% 7.07% 7.18% 7.35% 7.28% 7.18%
(Month end avg)
10 Year Average 7.50%

Take away

 Inflation rose to 5.55% in Nov’23, but within the RBI’s tolerance limit.

 With RBI pausing the interest rate hikes, bond yields are expected to be steady.

 Lower interest rates would result in higher equity valuation and therefore better return on equities.

Data Source: MOSPI, RBI 12/68 slides

Asset Information
Tax Collection remains buoyant

Direct Tax Collection (in Rs. Lakh cr) GST Collection (in Rs. Lakh cr)
Period Period
2022 – 23 2023 - 24 Growth 2022 – 23 2023 - 24 Growth

Apr – 17th Dec 11.36 13.70 20.7% Apr – Dec 11.91 13.32 11.9%

Take away

 The robustness in GST collection shows pick up in economic activity and corporate sales. The growth in direct tax
collection also indicates improved corporate earnings and higher personal incomes.

13/68 slides
Data Source: Ministryof Finance Asset Information
Borrowing in FY24 similar to FY23, may even be lower
2022-23 2023-24 Apr-Nov’23 As % of Past
Sr. No Particulars % Growth
(Rs. lakh cr) (Rs. lakh cr) (Rs. lakh cr) Budgeted Average
Total Receipts(1 + 2) 41.89 45.03 7.5% 26.52 58.9% 63.4%
1 Revenue Receipts (a + b) 23.84 26.32 10.4% 17.20 65.3% 55.3%
a Net Tax Revenue (Centre) 20.97 23.31 11.1% 14.36 61.6% 53.7%
b Non Tax Revenues 2.86 3.02 5.5% 2.84 94.3% 62.6%

2 Capital Receipts (c + d) 18.05 18.71 3.6% 9.32 49.8% 80.1%

Non Debt receipts (Divestment + Loan
c 0.72 0.84 16.4% 0.25 30.3% 37.9%
recovery)
d Debt Receipts 17.33 17.99 3.8% 9.07 50.7% 85.3%
- Net Market Borrowings (G-sec) 11.08 11.81 6.6% 8.39 71.1% -
- Securities against Small Savings 3.96 4.71 19.0% 1.94 41.1% -
- Investment (-) / Redemption (+) of
0.00 0.00 - -2.71 - -
Surplus Cash

Take away
• Total tax collections stood at 61.6 % of the budgeted target during Apr-Nov’23 of the fiscal.

• The non-tax revenue estimate for FY 24 is likely to exceed the budgeted estimates as RBI had paid dividends in
excess than the budgeted.

• With lower borrowings by the government, bond yields would continue to fall. This would help high corporate
valuations which is supportive for equity markets. 14/68 slides
Data Source: CGA, Budget 2023-24
Fiscal Deficit to GDP falling, share of capital spending rising
2022-23 2023-24 Apr-Nov’23 As % of Past
Sr. No Particulars % Growth
(Rs. lakh cr) (Rs. lakh cr) (Rs. lakh cr) Budgeted Average
Total Expenditure (3+4) 41.89 45.03 7.5% 26.52 58.9% 63.3%
3 Revenue Expenditure 34.53 35.02 1.4% 20.67 59.0% 63.8%
Interest Payment and Servicing of Debt 9.28 10.80 16.3% 6.08 56.0% -
Pensions 2.46 2.35 -4.3% 1.66 70.6% -
Defence 2.56 2.70 5.4% 1.94 72.0% -
Subsidies (Food, Fertiliser and Petroleum) 5.31 3.75 -29.4% 2.43 65.0% -
4 Capital Expenditure 7.36 10.01 35.9% 5.86 58.5% 60.1%
Defence 1.43 1.63 13.8% 0.86 53.0% -
Transport (Railways and National
3.57 4.85 36.1% 3.44 70.9% -
Highways)
Loans and Advances (States, UT and
1.08 1.64 51.6% 0.81 49.4% -
Urban Development)
Deficit Statistics
Year 2022 -23 2023 -24 Apr-Nov’23 As % of Budgeted Past Average
Fiscal Deficit (in Rs Lakh Crs) 17.33 17.87 9.07 50.7% 84.0%
Fiscal Deficit (% of GDP) 6.4% 5.9%
Take away

 Government is borrowing to fund capital spending rather than consumption.

 Fiscal deficit at 50.7% of the budgeted target in the first eight months of FY is lower than the long term average
of 84% in the same period.
DataSource:CGA, Budget2023 -24 15/68 slides
 Falling deficit will support lower yields on bonds. Asset Information
Long Term Equity View: Positive

Nominal GDP Growth and NIFTY 50 Return

Year FY 2001-12 FY 2012-23 Total 22 years 2001-23

Nifty Return (CAGR) 14.9% 11.4% 13.1%
Nominal GDP growth (CAGR) 13.6% 10.9% 12.3%

DataSource: MOSPI, RBI, NSE

Conclusion

 Data for the past 22 years suggest that the Nominal GDP growth and NIFTY returns are closely associated.

 With inflation expected to be around 5 – 5.5%, nominal GDP growth would range around 11-12% for FY 2023-
24. In the past, similar level of GDP growth, on an average, resulted in Nifty 50 return of 11-12%.

 Investments through mutual funds are expected to deliver an alpha of 2% - 3% over Nifty 50. Therefore, equity
MF portfolio should grow in the range of 13% - 15% over a 2 – 4 year period.

16/68 slides
Asset Information
Medium Term View :- Corporate Earnings Outlook and Valuation

Asset Information
Improved corporate earnings outlook for FY 23-24

EPS Growth
FY 23 -24E AR AR Estimates
FY 21-22A FY 22-23 A FY22 – 23
Estimate FY 2023-24

Nifty 50 774 821 969 6% 18%

Large cap
814 820 960 1% 17%
(Nifty 100)
Mid cap
443 506 658 14% 30%
(Nifty Mid cap 150)
Small Cap
413 521 592 26% 14%
(Small cap 250)
Comments:
In FY 22-23, the earnings for Nifty 50 have been below our expectation. This is mainly due to below factors:
• One time loss reported by Axis Bank to account for purchase of Citibank Consumer Business.
• High windfall tax levied by Government on Oil and Gas companies impacting profitability.
Take away
Low base, strong economic activity coupled with normalization of above factors would lead to improvement in growth in FY 23-24.

17/68 slides
Asset Information
Corporate Earnings for FY 23-24

Quarterly EPS –
Q1 Q2 Q3 Q4 Full Year
Nifty 50
All companies All companies All companies All companies All companies

FY 23 Actual 187 195 218 221 821

FY24 Actual 245 234 242 (E) 248 (E) 969 (E)

Y-o-Y Growth 31% 20% 11% 12% 18%

Quarterly EPS –
Q1 Q2 Q3 Q4 Full Year
Nifty 100
All companies All companies All companies All companies All companies

FY 23 Actual 227 188 193 212 820

FY24 Actual 243 231 238 (E) 248 (E) 960 (E)

Y-o-Y Growth 7% 23% 23% 17% 17%

Take away

Better than expected growth in H1 has led to increased EPS projection for the full financial year for large caps.

18/68 slides
Asset Information
Corporate Earnings for FY 23-24
Quarterly EPS –
Q1 Q2 Q3 Q4 Full Year
Nifty Midcap 150
All companies All companies All companies All companies All companies
FY 23 Actual 153 97 108 148 506
FY24 Actual 168 167 154 (E) 169 (E) 658 (E)

Y-o-Y Growth 10% 72% 42% 14% 30%

Quarterly EPS –
Q1 Q2 Q3 Q4 Full Year
Nifty Smallcap 250
All companies All companies All companies All companies All companies
FY 23 Actual 157 121 119 124 521
FY24 Actual 150 137 (E) 145 (E) 160 (E) 592 (E)
Y-o-Y Growth -4% 13% 21% 29% 14%

Take away

The small cap segment in Q1 FY23-24 was impacted as the high raw material cost continued. This is expected to reverse second quarter
onward with a larger impact in H2 FY 23 -24. However, the overall EPS projection is reduced to 14% from earlier 22%.

The midcap segment is benefitting from the low base and with Q2FY23- 24 earnings being better than projection, the earnings estimate for
full year is revised upwards.
19/68 slides
Asset Information
Valuations look reasonable
To evaluate whether market valuations are fair, we compute the froth level in market.

Froth in market = Current value of Nifty – Reasonable value of Nifty

Reasonable Value of Nifty = EPS of next 4 quarters * Reasonable P/E

Computation of froth for Nifty 50, Nifty Midcap 100 and Nifty Smallcap 250 is as follows:

Nifty 50 Nifty 100 Nifty Midcap 150 Nifty Small Cap 250

*Current Nifty level (A) 21731 21919 17077 14041

#Expected EPS 23-24 (B) 1076 1075 750 681

Reasonable PE (C) 20 20 22 23

Reasonable Nifty (D= B*C) 21518 21500 16492 15665

Froth (A-D) 213 418 585 -1624

Extent of Froth 1.0% 1.9% 3.4% -12%

Take away
• Above data indicates markets are in a fair value zone for large cap and very attractive for small cap.
20/68 slides
*Data as of 29th Dec’ 23. #Expected EPS is for FY 2023-24
Asset Information
Medium Term Equity View
Conclusion:
Computation of market level at the end of Mar’ 25 is as follows:

Nifty 50 Nifty 100 Midcap 150 Small Cap 250

Current Nifty* (A) 21731 21919 17077 14041

Expected EPS (2025-26) (B) 1194 1204 855 783

*Reasonable PE (C) 20 20 22 23

Target Nifty (D= B*C) 23885 24080 18801 18015

Return ((D-A)/A) 9.9% 9.9% 10.1% 28%

• To arrive at the estimated Nifty level at the end of FY 2024-25, we need to look at earnings estimate of FY 2025 – 26. The
FY 26 EPS is estimated to grow at 11% i.e. an EPS number of 1194 (i.e. growth of 11% over FY 25 EPS of 1076).

• As can be seen above, Nifty 50 return could be around 10% over the next 15 months (Mar-25) from current levels.

*Data as of 29th Dec’ 23 21/68 slides

Asset Information
What should Investors do?

Investors whose portfolios are aligned to strategy –

Stay Put -
• Given the medium to long term view on equities, equity investing should lead to 11% - 12% p.a. return.
Investments through mutual funds are expected to deliver an alpha of 2% - 3% over Nifty, therefore Equity
MF Portfolio should grow in the range of 13% - 15%.
Therefore, one should make no changes in the Equity MF portfolio.

Investors who need to populate the Equity MF portfolio-

While there can be periods of volatility, the probability is reducing with time. One should look at investing
new money in weekly installments over the next 1 month.

22/68 slides
Asset Information
Internal Criterion for Products Distributed
For High, Medium & Low - Medium Risk* Products
Parameter Acceptable Range Logic
The benchmark (Nifty) has delivered a CAGR return of 13.2% from Jan 2001 till December
Expected Returns* >13%
2023. Hence Equity Linked product should at least fetch a return greater than 13%
The benchmark (Nifty) has risk of 11.6% hence Equity Linked product should have a risk
Risk (SD)* <13%
which is less than that of Nifty
Cost/ERR Not more than 15% The cost of any product should not be more than 15% of the returns
Liquidity Anytime The investment should be available to the investor whenever required
Tax Not more than 20% The tax paid on gains of any product should not be more than 20%
Expected Risk
Cost Cost/ERR Liquidity Taxation Score (%) DISTRIBUTION STATUS
Returns* (SD)*
Equity PMS 15% 15% 3.0% 20.0% Yes 15% 60% X
Equity AIFs 12% High 4.0% 33.3% No 24% 0% X
Equity Mutual Funds 14% 13% 1.9% 13.6% Yes 10% 100% 
ULIPs 10% 9% 4.5% 45.0% No 0% 40% X
Direct Equity/Stocks 10% 29% 0.5% 5.0% Yes 10% 60% X
Real Estate AIFs/Funds 9% High 3.1% 34.4% No 20% 20% X
Real Estate NCDs 14% High 4.0% 28.6% No 30% 20% X
Private Equity AIF/Funds 5% High 3.2% 64.0% No 20% 20% X
Non-PP Structured Product 14% 4% 1.4% 10% Yes 20% 100% 

The above is ARWL’s internal criterion for selection of products for distribution and should not be construed as advice or
recommendation. The client should carefully consider and use their own judgement to arrive at a decision for his/her investments.
23/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Checking for appropriateness
Internal Criterion for Products Distributed
For Low Risk* Products
Parameter Acceptable Range Logic

Expected Return* >=6.50% The 3 year risk free rate of return in India is ~6.5%

Interest Rate Risk* ~ 4 Year MoD The product should have a Modified Duration of around 4 years
Cost/ERR Not more than 15% The cost of any product should not be more than 15% of the returns
Liquidity Anytime The investment should available to the investor whenever required
Income should be exempt from tax or should be taxable under the head of Capital
Head of Income# Capital Gains, Exempt
Gains, as taxes are manageable under the head
#Refer the Annexure
Capital Loss
Expected Interest Rate DISTRIBUTION
Cost Cost/ERR Liquidity set off Score (%)
Returns* Risk (MoD)* STATUS
available?
Endowment Plans** 5.0% 0.00 8.0% 160.0% Yes** No 40% X
Tax Free Bonds 5.0% 7.05 0.0% 0.0% Yes NA 60% X
Fixed Deposits 6.0% 0.00 0.0% 0.0% Yes No 60% X
Debt Mutual Funds 6.5% 3.66 1.0% 15.0% Yes Yes 100% 
Arbitrage Funds 6.5% 0.21 1.0% 15.0% Yes Yes 100% 
Provident Fund 7.1% 0.00 0.0% 0.00% Yes** NA 100% 
Taxable Bonds/NCDs 7.0% 5.12 0.0% 0.00% Yes No 60% X
Debt AIF 8.7% High 3.4% 39.1% No No 20% X

The above is ARWL’s internal criterion for selection of products for distribution and should not be construed as advice or
recommendation. The client should carefully consider and use their own judgement to arrive at a decision for his/her investments.
*Expected returns and risk are based on statistical and other analysis and may differ in the future
**Endowment policy holders who have paid premium for minimum of 3 years and Employee should be in service for 5 years to be 24/68 slides
eligible to get loan against Provident Fund Checking for appropriateness
Summary of Products Shortlisted for Distribution

Medium Risk Products

• Equity Mutual Funds

Low-Medium Risk Products

• Non-PP Structured Products

Low Risk Products

• Debt Mutual Funds

• Arbitrage Funds

• Provident Funds

The above is ARWL’s internal criterion for selection of products for distribution and should not be construed as advice or
recommendation. The client should carefully consider and use their own judgement to arrive at a decision for his/her investments.
*Expected returns and risk are based on statistical and other analysis and may differ in the future
**Endowment policy holders who have paid premium for minimum of 3 years and Employee should be in service for 5 years to be 25/68 slides
eligible to get loan against Provident Fund Checking for appropriateness
Equity Mutual Funds

Product Information
We believe in Professional Management…

The table and graph below shows the performance of a Crore invested equally in Nifty and in a basket of
private sector equity mutual funds on 31st March 1995.

Return Multiple
Equity Mutual Fund 5 yrs 10 yrs 15 yrs 20 yrs 28 yrs
Birla SL Advantage Fund 6 7 16 31 81
Nifty Equity Mutual Fund
Franklin India Blue-chip 1 3 10 18 42 80.0 72
Franklin India Prima 3 7 22 47 142 70.0
Franklin India Prima Plus 2 6 15 37 119 60.0
HDFC Capital Builder 1 3 9 18 54 50.0
HDFC Equity Fund 3 7 26 52 166 40.0
HDFC Large & Mid Cap Fund 2 3 7 10 31 30.0 25 22
ICICI Pru Multicap Fund 2 4 10 19 61 20.0 12
9
5
JM Equity Fund 2 2 4 6 13 10.0 1.5 2.3 2.1 4.4
Taurus Bonanza Fund 1 2 4 6 13 0.0
5 yrs 10 yrs 15 yrs 20 yrs 28 yrs
Average 2.3 4.4 12 25 72
Benchmark: Nifty 1.5 2.1 5 9 22

Relevant to Equity Mutual Funds

The above is an analysis of past data, which may or may not recur in future. You may independently review the data and
its relevance for your decision making for investing in Mutual Funds.

Data Source: ACE MF

Note: Date range 31st March’95 to 31st December’23 26/68 slides
Mutual Fund NAVs are adjusted to bonus units Product Information
Equity Mutual Fund Model Portfolio
Aim: The aim of the equity model portfolio is to have a basket of diversified equity mutual funds which
endeavors to give an alpha of 2% - 3% p.a. over and above NIFTY 50*.

Process to arrive at Equity Model Portfolio

• Step 1 – Deciding Market Cap Allocation:
Decision taken basis relative return potential,
Futuristic
relative risk, market cap and liquidity of the 3 Historical Data Analytics Behaviour
market cap based benchmarks. Analytics

• Step 2(i) – Deciding the number of schemes Covariance Down Capture Return
Target Returns
in the Model Portfolio Efficiency Ratio Value at Risk
3Y (Point to Point) Other
• Step 2 (ii) – Identification of categories for Semi Deviation
Return Parameters
recommendation: Average Drawdown Standard Deviation Active Weight
Longest Down 1 year Rolling Return
Holiday NAVs
• Step 3 - Process to arrive at schemes for Streak Return (last 3 years)
Model Portfolio.
Applying the AUM & track record filters to • Step 4 - Qualitative assessment of funds:
arrive at relevant universe. Qualitative Judgements are applied by the
investment committee to understand Fund
Selection of quantitative parameters that can Manager views and his stock picking
help pick funds that would perform well in capabilities
future
27/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Product Information
Equity Mutual Fund Model Portfolio Performance

For the period 01-06-2013 till 30-11-2023

Value of Rs.10 Cr invested CAGR Growth in %
AR Model Portfolio 49.18 16.39%
Nifty 50 33.61 12.24%
Differential 15.58 4.15%

Key Takeaway:

• The Model Portfolio has delivered an annualized alpha of 4.15% over Nifty 50 in the last 10
years, since inception of the AR Model Portfolio.

• In value terms, this means that for each 10 Cr invested in the Model Portfolio, it has generated
15.58 crore rupees in excess of what it would have been in Nifty 50, equivalent to the principal
amount invested.

28/68 slides
Product Information
Arbitrage Funds

Product Information
Arbitrage Fund Selection
What is Arbitrage:
• Arbitrage is the strategy of benefitting from the price differential of an asset between two
markets.
• In equity markets it is an opportunity to benefit from price differential of the same security in two
different markets mostly between spot (cash) market and derivatives (futures) market.
• The difference in the current price of the securities in the cash market over the future market is
called arbitrage spreads.
• An arbitrage scheme generates returns from this spread; the higher the spread, the better would
be the returns and vice versa.

Why Arbitrage Funds:

Since Arbitrage Funds are categorized as Equity from a tax standpoint, these funds benefit from the
low tax rate making it a better post tax return low-risk product.

Process to arrive at Model Portfolio:

The funds have been selected on the basis of -
1. Net expected return
2. Historical track record compared to peers
3. AMC comfort.

29/68 slides
Product Information
Arbitrage Funds – A good alternative to Debt Mutual Funds
Finance Act 2023 introduced Section 50AA in March 2023 which changed the taxability of debt
mutual funds. According to the new section, the new tax rule is as below:
Particulars Holding period is Holding period is
3 year or more less than 3 years
Units of Debt Mutual Funds purchased before 1st April 20% taxation with As per tax slab
2023 Indexation benefit applicable
Units of Debt Mutual Funds purchased on or after 1st April Deemed short term and tax as per tax
2023 slab applicable

Particular Arbitrage Fund Debt MF

Amount invested 1,00,00,000 1,00,00,000
Return Expected* 6.50% 6.50%
Holding Period (Years) 1 1
Amount after 1 Year 1,06,50,000 1,06,50,000
Gain 6,50,000 6,50,000
Tax Rate* 11.44% 34.32%
After Tax Amount 575640 426920
Post Tax CAGR 5.76% 4.27%
*Expected returns and risk are based on statistical and other analysis and may differ in the future
30/68 slides
*Tax rate = Tax rate + 10% surcharge + 4% cess Product Information
Non-PP Structured Products

Product Information
NIFTY Accelerator – 100% Payoff
Nifty Product Product
Nifty Perf. Nifty IRR ~14.24%
Values Return IRR Product IRR*
43800 100.0% 100.0% 14.2% 14.2%
32850 50.0% 100.0% 8.1% 14.2% Tenor – 1900 Days Standard Target
29127 33.0% 100.0% 5.6% 14.2% Expiry – Avg. of 44, 47,
Deviation Nifty Perf.
28908 32.0% 22.0% 5.5% 3.9% 50, 53, & 56 Months
4.46% 33%.
28689 31.0% 21.0% 5.3% 3.7%
24309 11.0% 1.0% 2.0% 0.2%
24090 10.0% 0.0% 1.8% 0.0% NIFTY Accelerator Probability
23652 8.0% 0.0% 1.5% 0.0% Particulars No %
21900 0.0% 0.0% 0.0% 0.0%
Total Observation 4559
21600 -1.4% 0.0% -0.3% 0.0%
% of Product Has Given
20805 -5.0% 0.0% -1.0% 0.0% 3883 85.17%
19710 -10.0% 0.0% -2.0% 0.0% Maximum Returns
19708 -10.01% -14.01% -2.01% -2.86% % of time Product has given 0 or
4504 98.79%
17520 -20.0% -28.0% -4.2% -6.1% +ve returns
15330 -30.0% -42.00% -6.6% -9.9%
12045 -45.0% -48.00% -10.8% -11.8%
2190 -90.0% -66.00% -35.7% -18.7%
2188 -90.01% -90.01% -35.8% -35.8%
0 -100.0% -100.0% -100.0% -100.0%

The information provided is this communication is reproduction of factual details. No part of information provided herein should be
construed as investment advice by ARWL and/or its employee. Investor/Client must make their own investment decisions based on their
own specific investment objectives and financial position. This communication does not constitute an offer or solicitation for the 31/68 slides
purchase or sale of any financial instrument/security. Product Information
Non-PP Structured Products since Inception

Non-PP Structured Products Issued from 2013 to 2023

Total Non-PP SP issued till Date 3,080
Investment Value 19,605 Cr
Non-PP Structured Products from 2013 to 2023
Total Non-PP SPs matured in the last 10 years 1,428
Investment Value of these Non-PP SPs 7,452 Cr
Maturity Value of these Non-PP SPs 11,801 Cr
Profit Generated of these Non-PP SPs 4,350 Cr
Performance of these Non-PP SPs (CAGR) 15.1%

Key output data points on the matured 1,428 Non-PP Structured Products
Non-PP SPs giving at least Principal back 1,428 (100% of Matured Non-PP SP’s)
Non-PP SPs delivering at least 6%p.a. 1,402 (98% of Matured Non-PP SP’s)
Non-PP SPs desired or Max. Coupon 1,341 (94% of Matured Non-PP SP’s)

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client should
independently review this data and consider their own financial situation to arrive at a decision for his/her investments. 32/68 slides
Product Information
Volatility of Nifty -10 Years
The period of the analysis Jan 2001 to Dec 2023. The below calculation is done on a 10 Year Rolling basis with a monthly
shift. The first observation was for the period Jan 2001 to Jan 2011. The CAGR of Nifty was computed and represented as
the first observation. Similarly the second observation was computed by taking data of Feb 2001 to Feb 2011. The
cumulative data was analysed and we observed the following
Average CAGR – 12.51%
Standard Deviation – 3.75%
Returns Distribution of returns
<-5% 0.00%

No of Observations
-5% to 0% 0.00%
0% to 5% 0.64% 47.77%
5% to 10% 29.94%
10% to 12.51% 17.20%
12.51% to 20% 51.59%
52.23%
>20% 0.64%
Total 100.00%
47.77% 52.23%
Based on the data above, the probability of returns extrapolated Returns (CAGR )
for the next 10 years is mentioned below:
Future Return Ranges of Nifty under normal distribution* Probability of the same
12.51% + 3.75% = Range of 8.76% -16.26% 68.27%
12.51% + (3.75% X 2) = Range of 5.01% -20.02% 95.45%
12.51% + (3.75% X 3) = Range of 1.25% - 23.77% 99.73%
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client should
independently review this data and consider their own financial situation to arrive at a decision for his/her investments. Understanding Risk
*Expected returns and risk are based on statistical and other analysis and may differ in the future
33/68 slides
Volatility of Nifty -3 Years
The period of the analysis Jan 2001 to Dec 2023. The below calculation is done on a 3 Year Rolling
basis with a monthly shift. The first observation was for the period Jan 2001 to Jan 2004. The CAGR
of Nifty was computed and represented as the first observation. Similarly the second observation
was computed by taking data of Feb 2001 to Feb 2004. The cumulative data was analysed and we
observed the following
Average CAGR – 15.12%
Standard Deviation – 11.58%
Returns Distribution of returns
<-5% 0.00%

No of Observations
-5% to 0% 3.73%
0% to 5% 13.28% 62.66%
5% to 10% 20.33%
10% to 15.12% 25.31%
15.12% to 20% 12.03%
37.34% Returns (CAGR )
>20% 25.31% μ
Total 100.00%
62.66% 37.34%

Since the 3 year nifty returns has a pattern that does not conform to a normal distribution, 68-95-99 rule of
statistics cannot be applied to predict future Nifty Returns.
The above distribution is a ~chi – squared distribution

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client should
independently review this data and consider their own financial situation to arrive at a decision for his/her investments.
34/68 slides
Understanding Risk
Distribution of Non-PP Structured Products - 3 Years
The period of the analysis Jan 2001 to Dec 2023. The below calculation is done on a 3 Year Rolling
basis with a monthly shift. The first observation was for the period Jan 2001 to Jan 2004. The CAGR
of returns given by one of the Non-PP Structured Products* was computed and represented as the
first observation. Similarly the second observation was computed by taking data of Feb 2001 to Feb
2004. The cumulative data was analysed and we observed the following :

Average CAGR – 13.24%

Standard Deviation – 5.74%
Returns Distribution of returns
<-5% 0.00%

No of Observations
-5% to 0% 0.00%
0% to 5% 17.84% 19.92%
5% to 10% 1.66%
10% to 13.24% 0.41%
13.24% to 15% 5.81% Returns (CAGR )
80.08% μ
>15% 74.27%
Total 100.00% 19.92% 80.08%

The above distribution is a ~inverse chi – squared distribution

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client should
independently review this data and consider their own financial situation to arrive at a decision for his/her investments.
35/68 slides
*NIFTY Accelerator Understanding Risk
Risk to Rewards of Products

Target NIFTY Expected

Risk* Asset Feature Product Type
p.a. Returns p.a.*

Growth
Medium Equity MF 10-12%+ 13% - 15%+
(Unlimited)

Non-PP
Growth
Low- Medium Structured 3%-5.5% 12% - 14.5%
(Capped)
Products

Extremely Arbitrage
Low NA 6% - 6.5%
Stable Funds

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.

36/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Product Information
Optimal Portfolio Construction

Product Information
What is an Efficient Frontier ?
 Harry Markowitz is credited for introduction of Nobel prize winning efficient frontier theory and its application to the
selection of portfolios.

 The efficient frontier is the set of mathematically constructed optimal portfolios from multiple portfolio
combinations, which exhibits
• lowest level of risk for a defined level of return or
• highest returns for a given level of risk

 Portfolios that lie below the efficient frontier are not optimal because they do not provide enough return to
compensate for an increase in risk or vice-versa

 Statistical average return (Y-Axis) of an investment is used as the return component while standard deviation (X-Axis)
depicts the risk metric.

37/68 slides
Product Information
Mathematical Construct of a Optimal Portfolio
To design the most efficient sample portfolio using the Efficient Frontier which has:

1. Pre-Tax Expected returns potential of 14% + p.a.

2. Skewness near 50:50

3. 3 Y Standard Deviation (market risk) should be the least amongst all possible combinations which

achieves 14% p.a.

Logic being:

– In order to meet aspirations, portfolio should be designed which endeavours to generate a real rate

of return of 5-6% over and above expected HNWI Infla on of ˜8% and hence target a return

potential of 14% p.a.

– Skewness of 50:50 creates predictability using the 68-95-99 Rule of Statistics.

– For example 3 Y Std. Dev. of ~10% leads to an outcome which has a 84% probability of giving a return

equal or higher than fixed deposit return of 6.5%, as well as 97% probability of not losing capital

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.
*Expected returns and risk are based on statistical and other analysis and may differ in the future 38/68 slides
Product Information
STEP 1 – Simulation of Portfolios
 A portfolio is designed using the following 3 components:
• Equity Mutual Funds
• Non-PP Structured Products
• Arbitrage Funds

 Using combination of these three components multiple portfolios were simulated by taking a jump
of 1% allocation in each product category.

 The total number of portfolio combinations thus generated is 5151.

39/68 slides
Product Information
STEP 2 – Evaluation of Portfolio Combinations
All the 5151 portfolios were evaluated on the basis of the following statistical parameters:
Understanding of Statistical Parameters

Category Parameter Definition

This parameter tells us the average return made by different investors who
Statistical Average
invested for a rolling period of 3 Y with monthly shifts from Jan 2001 till Nov
Returns*
Returns* 2023
It is the futuristic human intervened anticipated rate of return that an investor
Expected Rate of Return*
expects on his investment
3 Y Standard Deviation* It is the mean variation in a set of data values from its average.

This metric is a measure of extent of absolute potential loss, if any, across any 3
Risk* Worst Absolute Loss
year investment cycle between Jan 2001 and Nov 2023

Risk to Return and Risk to These are futuristic parameters indicating the probability of generating returns
Capital higher than fixed deposit and not losing capital

It is a historical measure of total number of occurrences where investors would

Skewness: Above/Below
Predictability have experienced returns greater/lesser than statistical average for a 3 year
Statistical Average
investment horizon between Jan 2001 and Nov 2023

NOTE: Expected Rate of Return of Equity Mutual Funds, Non-PP Structured Products and Arbitrage Funds is assumed to be 14%, 13.7% and
6.5% p.a. respectively 40/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Product Information
STEP 3 – Efficient Frontier
 In order to identify efficient portfolio combinations statistical average returns (Y-axis) and standard deviation (X-
axis) of all the 5151 portfolios are plotted graphically

Example of an efficient portfolio combination:

For a return of 16% p.a., multiple portfolios could be designed using EMF, AF and Non-PP SP where 3 Y SD varies
between
10.3% - 11.9%. Among all these portfolio combinations the most efficient portfolio would be the one which has least
amount SD of 10.3% whereas the least efficient portfolio would be the one with the highest SD of 11.9%.
Most Efficient
Portfolio

Least Efficient
Portfolio

Statistical
Risk (SD) Future Return Ranges traversing 1 SD
Average Returns
Most Efficient Portfolio 16% 9.2% 16% + 9.2% = Range of 6.8% -25.2%

Least Efficient Portfolio 16% 12.0% 16% + 12.0% = Range of 4.0% -28.0%
41/68 slides
Product Information
STEP 4 – Shortlisting of Portfolios
Number of Portfolios

5151 Total universe of portfolios simulated

Non-PP Structured Products allocation not to

exceed 35%
3006 Historically, allocating 35% to Non-PP Structured
products would lead to a normal distribution of
the portfolio, hence leading to predictability of
future outcomes.

For a pre-defined level of expected rate of return,

5 we get a choice of the 5 most efficient portfolios

42/68 slides
Product Information
Portfolio Constructs for a defined Expected Rate of Return

Product Information
Portfolio Construct for an Expected Rate of Return of 14%

Most Efficient Portfolio

Returns Risk Predictability
Construct
Low -
Medium Probability – Returns Skewness
Low Risk Medium Statistical
Risk Wtd. Avg Standard Worst Greater than
Risk Average
ERR Deviation Abs. Loss 6% (FD 0% (Capital Above Below
Equity Arbitrage Non-PP Returns
MF Funds SP Return) Protection) Stat Avg Stat Avg

65% 0% 35% 15.7% 14.0% 9.2% -7.5% 85.6% 95.7% 46% 54%
70% 0% 30% 15.9% 14.0% 9.6% -8.1% 84.9% 95.2% 46% 54%
75% 0% 25% 16.0% 14.0% 10.0% -8.6% 84.3% 94.6% 45% 55%
80% 0% 20% 16.2% 14.0% 10.4% -9.2% 83.8% 94.1% 45% 55%
85% 0% 15% 16.4% 14.0% 10.8% -9.8% NA NA 44% 56%

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.

NOTE: Expected Rate of Return of Equity Mutual Funds, Non-PP Structured Products and Arbitrage Funds is assumed to be 14%, 13.7% and
6.5% p.a. respectively 43/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Product Information
Risk to Return- Sample Portfolio
Statistical Average 15.7%

Std Dev* 9.2%

15.86% 34.14% 34.14% 15.86%

-1 SD 15.7% +1 SD

6.5% 24.9%

34.14% + 34.14% + 15.86% = 84.14%

This portfolio construct leads to an outcome which has an 84.14% probability of

giving a return* higher than fixed deposit return of 6.5%.

This means that there will be 1 cycle in 6 three year cycles (18 years) where returns from the portfolio*
will be lower than FD return of 6.5%.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.
44/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Understanding Risk
Risk to Capital- Sample Portfolio
Statistical Average 15.7%

2 Std Dev* (9.2%*2) = 18.5%

2.28% 47.72% 47.72% 2.28%

-2 SD 15.6% +2 SD

-2.8% 34.2%

47.72% + 47.72% + 2.28% = 97.72%

This portfolio construct leads to an outcome which has an 97.72%
probability of protecting your capital*.

This means that there will be 1 cycle in 44 three year cycles (132 years) where there is risk of losing
your capital*.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments. 45/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Understanding Risk
Portfolio Construct for an Expected Rate of Return of 13%

Most Efficient Portfolio Construct Returns Risk Predictability

Low -
Medium Probability – Returns
Low Risk Medium Statistical Skewness
Risk Wtd. Avg Standard Worst Greater than
Risk Average
ERR Deviation Abs. Loss
Arbitrage Non-PP Returns 6% (FD 0% (Capital Above Below
Equity MF
Funds SP Return) Protection) Stat Avg Stat Avg
54% 11% 35% 14.7% 13.1% 8.0% -3.9% 86.2% 96.7% 47% 53%
59% 11% 30% 14.9% 13.1% 8.4% -4.5% 85.5% 96.2% 46% 54%
64% 11% 25% 15.0% 13.1% 8.8% -5.1% 84.8% 95.6% 45% 55%
69% 11% 20% 15.2% 13.1% 9.2% -5.7% 84.1% 95.1% 45% 55%
74% 12% 14% 15.3% 13.1% 9.6% -6.0% NA NA 44% 56%

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.

NOTE: Expected Rate of Return of Equity Mutual Funds, Non-PP Structured Products and Arbitrage Funds is assumed to be 14%, 13.7% and
6.5% p.a. respectively 46/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Product Information
Risk to Return
Statistical Average 14.7%

Std Dev* 8.0%

15.86% 34.14% 34.14% 15.86%

-1 SD 14.7% +1 SD

6.7% 22.7%

34.14% + 34.14% + 15.86% = 84.14%

This portfolio construct leads to an outcome which has an 84.14% probability of
giving a return* higher than fixed deposit return of 6.5%.

This means that there will be 1 cycle in 6 three year cycles (18 years) where returns from the portfolio*
will be lower than FD return of 6.5%.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.
47/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Understanding Risk
Risk to Capital
Statistical Average 14.7%

2 Std Dev* (8.0%*2) = 16.1%

2.28% 47.72% 47.72% 2.28%

-2 SD +2 SD
14.7%

-1.6% 30.8%

47.72% + 47.72% + 2.28% = 97.72%

This portfolio construct leads to an outcome which has an 97.72%
probability of protecting your capital*.

This means that there will be 1 cycle in 44 three year cycles (132 years) where there is risk of losing
your capital*.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments. 48/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Understanding Risk
Portfolio Construct for an Expected Rate of Return of 12%

Most Efficient Portfolio

Returns Risk Predictability
Construct
Low -
Medium Probability – Returns
Low Risk Medium Statistical Skewness
Risk Wtd. Avg Standard Worst Greater than
Risk Average
ERR Deviation Abs. Loss
Equity Arbitrage Non-PP Returns 6% (FD 0% (Capital Above Below
MF Funds SP Return) Protection) Stat Avg Stat Avg
42% 23% 35% 13.5% 12.2% 6.6% -0.1% 87.2% 97.9% 48% 52%
47% 23% 30% 13.7% 12.2% 7.0% -0.6% 86.3% 97.4% 47% 53%
51% 24% 25% 13.8% 12.2% 7.4% -0.9% 85.6% 97.0% 45% 55%
56% 24% 20% 14.0% 12.2% 7.8% -1.5% 84.7% 96.4% 45% 55%
61% 24% 15% 14.2% 12.2% 8.2% -2.0% NA NA 44% 56%

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.

NOTE: Expected Rate of Return of Equity Mutual Funds, Non PP Structured Products and Arbitrage Funds is assumed to be 14%, 13.7% and
6.5% p.a. respectively 49/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Product Information
Risk to Return
Statistical Average 13.5%

Std Dev* 6.6%

15.86% 34.14% 34.14% 15.86%

-1 SD 13.5% +1 SD

6.9% 20.1%

34.14% + 34.14% + 15.86% = 84.14%

This portfolio construct leads to an outcome which has an 84.14% probability of
giving a return* higher than fixed deposit return of 6.5%.

This means that there will be 1 cycle in 6 three year cycles (18 years) where returns from the portfolio*
will be lower than FD return of 6.5%.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments.
50/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Understanding Risk
Risk to Capital

Statistical Average 13.5%

2 Std Dev* (6.6%*2) = 13.2%

2.28% 47.72% 47.72% 2.28%

-2 SD 13.5% +2 SD

0.3% 26.7%

47.72% + 47.72% + 2.28% = 97.72%

This portfolio construct leads to an outcome which has an 97.72%
probability of protecting your capital*.

This means that there will be 1 cycle in 44 three year cycles (132 years) where there is risk of losing
your capital*.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation.
The client should independently review this data and consider their own financial situation to arrive at a decision
for his/her investments. 51/68 slides
*Expected returns and risk are based on statistical and other analysis and may differ in the future Understanding Risk
 Data as shared
Expected Wtd
Amount( % Allocat
Asset Class Product Rate of Average
Rs Cr.) ion
Return * Return

High Risk Assets -

High Risk Assets* Direct Equity 11.0% 1.00 9% 0.9%
9%
Sub Total High Risk Assets 1.00 9%
Medium Risk Assets -

Medium Risk Assets* Real Estate 4.0% 6.00 52% 2.1%

67% Equity Mutual Funds 14.0% 1.80 16% 2.2%
Sub Total Medium Risk Assets 7.80 67%
Low Risk Assets -
Gold ETFs/Funds 5.0% 1.50 13% 0.6%
Low Risk Assets* Taxable Bonds/NCDs 7.0% 0.30 3% 0.2%
24%
Employee Provident Fund 8.1% 1.00 9% 0.7%
Sub Total Low Risk Assets 2.80 24%

*Assumption: Nifty will grow at CAGR of 11% p.a. over the next 3 years 11.60 100% 6.7%
with equity mutual funds alpha of 3% p.a.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client
should independently review this data and consider their own financial situation to arrive at a decision for his/her
investments.
*Expected returns and risk are based on statistical and other analysis and may differ in the future
 Sample Portfolio I
Expected Wtd
Amount( % Allocat
Asset Class Product Rate of Average
Rs Cr.) ion
Return * Return

Medium Risk Assets -

Medium Risk Assets* Equity Mutual Funds 14.0% 7.54 65% 9.1%
65%
Sub Total Medium Risk Assets 7.54 65%
Low Medium Risk Assets -
Low Medium Risk
Assets* Non-PP Structured Products 13.7% 4.06 35% 4.8%
35%
Sub Total Medium Risk Assets 4.06 35%

*Assumption: Nifty will grow at CAGR of 11% p.a. over the next 3 years 11.60 100% 13.9%
with equity mutual funds alpha of 3% p.a.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client
should independently review this data and consider their own financial situation to arrive at a decision for his/her
investments.

*Expected returns and risk are based on statistical and other analysis and may differ in the future
 Sample Portfolio II
Expected Wtd
Amount( % Allocat
Asset Class Product Rate of Average
Rs Cr.) ion
Return * Return

Medium Risk Assets -

Medium Risk Assets* Equity Mutual Funds 14.0% 6.26 54% 7.6%
54%
Sub Total Medium Risk Assets 6.26 54%
Low Medium Risk Assets -
Low Medium Risk
Assets* Non-PP Structured Products 13.7% 4.06 35% 4.8%
35%
Sub Total Medium Risk Assets 4.06 35%
Low Risk Assets -

Low Risk Assets* Employee Provident Fund 8.1% 1.00 9% 0.7%

11% Arbitrage Fund 6.5% 0.28 2% 0.2%
Sub Total Low Risk Assets 1.28 11%

*Assumption: Nifty will grow at CAGR of 11% p.a. over the next 3 years 11.60 100% 13.3%
with equity mutual funds alpha of 3% p.a.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client
should independently review this data and consider their own financial situation to arrive at a decision for his/her
investments.

*Expected returns and risk are based on statistical and other analysis and may differ in the future
 Sample Portfolio III
Expected Wtd
Amount( % Allocat
Asset Class Product Rate of Average
Rs Cr.) ion
Return * Return

Medium Risk Assets -

Medium Risk Assets* Equity Mutual Funds 14.0% 4.87 42% 5.9%
42%
Sub Total Medium Risk Assets 4.87 42%
Low Medium Risk Assets -
Low Medium Risk
Assets* Non-PP Structured Products 13.7% 4.06 35% 4.8%
35%
Sub Total Medium Risk Assets 4.06 35%
Low Risk Assets -

Low Risk Assets* Employee Provident Fund 8.1% 1.00 9% 0.7%

23% Arbitrage Fund 6.5% 1.67 14% 0.9%
Sub Total Low Risk Assets 2.67 23%

*Assumption: Nifty will grow at CAGR of 11% p.a. over the next 3 years 11.60 100% 12.3%
with equity mutual funds alpha of 3% p.a.
The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client
should independently review this data and consider their own financial situation to arrive at a decision for his/her
investments.

*Expected returns and risk are based on statistical and other analysis and may differ in the future
Tentative Range of Outcomes at Different Nifty Levels
Value (Rs. In cr)
Nifty Performance
Current Sample Sample Sample
Absolute CAGR Portfolio Portfolio I Portfolio II Portfolio III

-20% -7.2% 12.53 10.79 11.25 11.69

-10% -3.4% 12.81 11.55 11.87 12.17
0% 0.0% 13.09 12.3 12.5 12.66
20% 6.3% 13.65 15.77 15.71 15.6
37% 11.1% 14.12 17.19 16.92 16.56
50% 14.5% 14.49 18.03 17.59 17.06
80% 21.6% 15.33 20.29 19.47 18.52
CAGR
Nifty Performance
Current Sample Sample Sample
Absolute CAGR Portfolio Portfolio I Portfolio II Portfolio III

-20% -7.2% 2.6% -2.4% -1.0% 0.3%

-10% -3.4% 3.4% -0.1% 0.8% 1.6%
0% 0.0% 4.1% 2.0% 2.5% 3.0%
20% 6.3% 5.6% 10.8% 10.6% 10.4%
37% 11.1% 6.8% 14.0% 13.4% 12.6%
50% 14.5% 7.7% 15.8% 14.9% 13.7%
80% 21.6% 9.7% 20.5% 18.8% 16.9%
*Expected returns and risk are based on statistical and other analysis and may differ in the future
Note -
• We have considered an alpha of 3% p.a. on equity mutual funds.
• The above sensitivity analysis is only for estimation purposes and is based on certain assumptions. Actual performance may vary.
Performance of Sample Portfolio in last ~ 9 years
#
# Portfolio Alpha
Sample Portfolio Gains on a base Portfolio Alpha
Year NIFTY IRR Beta on a base of Rs
Portfolio - IRR of Rs 10Cr (In Rs Cr) (% p.a.)
10Cr (In Rs Cr)
2014-23* 12.38% 11.12% 18.59 0.48 3.64% 7.34
# Refer to the working in table below
• Sample Portfolio Return is nearly equal to targeted return & is slightly higher than NIFTY50 returns.
• However risk of the portfolio measured by Beta is 0.48 which implies that risk of the sample portfolio is 52% less compared to
NIFTY50.
• For the period 2014-22, Sample Portfolio IRR was 13.37% and Portfolio Alpha was 3.90% p.a. (Portfolio Alpha on a base of Rs
10Cr was Rs 6.7Cr). NIFTY IRR during the same time period was 12.67%.
For the period from 1st April 2014 till 31st March 2023
48% allocation to NIFTY 50 Index
Beta of the portfolio is 0.48 which implies
52% allocation to Risk Free (Fixed Deposit)
NIFTY IRR for the period 11.12%
Risk Free Rate of Return for the period 6.50%
Portfolio IRR with same Beta generated by benchmark 8.74%
(Risk Adjusted Return)
This leads to, the Portfolio Alpha (% p.a.) 3.64%
Value of Rs 10 Cr invested in the Sample portfolio 28.59
Value of Rs 10 Cr invested in portfolio with same Beta as Sample portfolio 21.26
Portfolio Alpha in Rs Cr. 7.34
Total Portfolio Gains on a base of 10 Cr for the period in Rs Cr. 18.59
Portfolio Alpha as a percentage of Total Portfolio Gains 39.46%
*The Performance of this Sample Portfolio is audited by one of the big fours till 31st March 23. 57/68 slides
Limiting taxation, on an annualized basis, at 13%
Concept of Annualized Tax Rate
• Investments either require an annual tax outflow [eg: Fixed Deposits, PMS Gains,
Interest from Taxable Bonds] or tax outflow only upon actual redemption/exit [eg:
MF, Non-PP SP’s, Direct Equity] .
While both the types of investments could have the same tax rate, the annualized
tax would be lower for the latter as the taxes are being deferred to the year of
redemption/exit.

• Annualized tax rate (%) = Difference in Pre & Post Tax IRR X 100
Pre-Tax IRR

• For example:
If Pre-Tax IRR is 15% and Post-Tax IRR is 13.5%.
Tax Differential is 1.5%.
Therefore, annualized tax rate will be 1.5% ÷ 15% = 10% p.a.

58/68 slides
Calculation of Annualized Tax Rate for Non-PP SP (NIFTY Accelerator)

Time Horizon - 5 Years

Investment Date 01-04-2022
Investment Amount 1,00,00,000

Redemption Date 31-03-2027

Redemption Value 1,94,57,676

Tax Amount at 22.88% 21,63,916

Post Tax Value 1,72,93,760

Pre Tax IRR 14.24% A

Post Tax IRR 11.58% B
Tax Differential 2.66% C

Annualized Tax Rate 18.70% C/A

Assumptions:
Education cess of 4% and Surcharge of 10%, for income between Rs 0.5cr-1cr, is factored in
while calculating Annualized Tax Rate
59/68 slides
Annualized Tax Rate for all AR Products

Time
ERR (Pre- ERR (Post- Difference Annualized
Asset Type Horizon
Tax) Tax) in ERR Tax Rate
(Years)
A B C=A-B D=C/A
Equity MF 3 14.00% 12.57% 1.43% 10.22%
Arbitrage Funds 3 6.50% 5.80% 0.7% 10.83%
NIFTY Accelerator 5 14.24% 11.58% 2.66% 18.70%
NIFTY Magnifier 5 13.12% 10.63% 2.49% 18.97%

Assumptions:

• Education cess of 4% and Surcharge of 10%, for income between Rs 0.5cr-1cr, is factored
in while calculating Annualized Tax Rate

60/68 slides
Annualized Tax Rate for Sample Portfolio I
Calculation of Weighted Average Annualized Tax Rate:

Portfolio’s
Weight in Weighted Annualized
Asset Type ERR Annualized
Portfolio Avg ERR Tax Rate
Tax Rate
A B C=A*B D E = D*C/ΣC
Equity MF 14.00% 65% 9.10% 10.22% 6.67%
NIFTY Accelerator 14.24% 23% 3.32% 18.70% 4.45%
NIFTY Magnifier 13.12% 12% 1.53% 18.97% 2.08%
TOTAL 100% 13.95% 13.20%

Hence, the post tax return is 12.11% p.a.

Assumptions:

• Education cess of 4% and Surcharge of 10%, for income between Rs 0.5cr-1cr, is factored
in while calculating Annualized Tax Rate
61/68 slides
Annualized Tax Rate for Sample Portfolio II
Calculation of Weighted Average Annualized Tax Rate:
Portfolio’s
Weight in Weighted Annualized
Asset Type ERR Annualized
Portfolio Avg ERR Tax Rate
Tax Rate
A B C=A*B D E = D*C/ΣC
Equity MF 14.00% 54% 7.56% 10.22% 5.89%
Arbitrage Funds 6.50% 11% 0.72% 10.83% 0.59%
NIFTY Accelerator 14.24% 23% 3.32% 18.70% 4.73%
NIFTY Magnifier 13.12% 12% 1.53% 18.97% 2.21%
TOTAL 100% 13.13% 13.42%

Hence the post tax return is 11.37% p.a.

Assumptions:
• Education cess of 4% and Surcharge of 10%, for income between Rs 0.5cr-1cr, is factored
in while calculating Annualized Tax Rate
62/68 slides
Annualized Tax Rate for Sample Portfolio III
Calculation of Weighted Average Annualized Tax Rate:
Portfolio’s
Weight in Weighted Avg Annualized
Asset Type ERR Annualized Tax
Portfolio ERR Tax Rate
Rate
A B C=A*B D E = D*C/ΣC
Equity MF 14.00% 42% 5.88% 10.22% 4.91%
Arbitrage Funds 6.50% 23% 1.50% 10.83% 1.32%
NIFTY Accelerator 14.24% 23% 3.32% 18.70% 5.08%
NIFTY Magnifier 13.12% 12% 1.53% 18.97% 2.37%
TOTAL 100% 12.23% 13.69%

Hence the post tax return is 10.55% p.a.

Assumptions:
• Education cess of 4% and Surcharge of 10%, for income between Rs 0.5cr-1cr, is factored
in while calculating Annualized Tax Rate

63/68 slides
Increasing Tax Efficiency in a Portfolio
• Longer the period of investment, lower the annualized tax rate:

• Extending the Non-PP SP tenure from 3 years to 5 years lowers the annualized tax rate
by ~2%
• Wherever there is an option of rollover in a Non-PP SP, the same should be exercised as
it lowers annualized tax rates
• Equity Mutual Funds should be redeemed only if there is a change in
recommendation/allocation or if there is a liquidity requirement
• PMS have a shorter investment horizon because of churning of underlying securities,
therefore Equity MF offers a lower annualized tax rate compared to Equity PMS

• Tax on LTCG is lower than tax on other types of income, therefore, investments
that give rise to LTCG is preferable

#Refer to Annexure

64/68 slides
Purpose of Trust
Purpose of the Trust

Objective 1 - Ring Fencing

If a portion of your wealth

Unpredictable & is in a Safety-Net, it would
unforeseen adversities help your family maintain
Any negative act of God
could arise where the same lifestyle and
cannot be anticipated
personal assets could be protects your wealth
attached from any unanticipated
liabilities*

*Provided there is no malafide intention & 2 years has passed since gifting to the Trust
65/68 slides
Purpose of the Trust

Objective 2 - Mitigating the risk of Estate Duty

Create a Trust and transfer assets A Trust may help save one level of
irrevocably while there is no Estate estate duty from one generation to the
Duty other

66/68 slides
Structure of a Private Family Trust

SETTLOR
(You)
Creator of the
Irrevocable Trust
Manage money & Trust Contribute to Trust
operations Corpus

Trustees Irrevocable
Discretionary Money is managed
1. Managing Trustee (You)
Private Family including distribution
2. 2nd Trustee (Confidant)
Trust at Trustee’s Discretion

BENEFICIARIES Wealth used for the

(Your Wife and Beneficiaries
Children)

67/68 slides
Estate Planning through a WILL

DEFINE YOUR DESIRES OF TRANSMISSION R E G I S T R AT I O N O F W I L L

WILL should clearly mention the desired manner of

Registration of WILL is not mandatory but highly
transmission of assets.
recommended as the authenticity of the person
E.g. - One may have criss-cross WILL (i.e. Husband to Wife signing the WILL is not questionable
and vice versa) or in a % form to more than one legatee

J O I N T H O L D I N G & N O M I N AT I O N S
A S S E T D E TA I L S N O T T O B E OF ASSETS
M E N T I O N E D E XC E P T R E A L
E S TAT E : It is strongly recommended to have investments
The WILL should be simple with no details of movable in either or survivor mode of holding as well as
have nominations in all the asset classes,
assets mentioned due to the dynamic nature of the wherever possible
assets.
Real Estate – need to be listed out

68/68 slides
 GAP Sheet Examples – Sample Portfolio I
(Rs in cr) Data as shared Sample Portfolio I GAP
Investments Amount % Amount % Rs in cr
High Risk Assets*
Direct Equity 1.00 9% - 0% (1.00)
Total High Risk Assets 1.00 9% - - (1.00)
Medium Risk Assets*
Real Estate 6.00 52% - 0% (6.00)
Equity Mutual Funds 1.80 16% 7.54 65% 5.74
Total Medium Risk Assets 7.80 67% 7.54 65% (0.26)
Low Medium Risk Assets*
Non-PP Structured Products 0.00 0% 4.06 35% 4.06
Total Low Medium Risk Assets 0.00 0% 4.06 35% 4.06
Low Risk Assets*
Gold ETFs/Funds 1.50 13% - 0% (1.50)
Taxable Bonds/NCDs 0.30 3% - 0% (0.30)
Employee Provident Fund 1.00 9% - 0% (1.00)
Total Low Risk Assets 2.80 24% 0.00 0% (2.80)

Total Assets 11.60 100% 11.60 100% 0.00

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client
should independently review this data and consider their own financial situation to arrive at a decision for his/her
investments.
*Expected returns and risk are based on statistical and other analysis and may differ in the future
 GAP Sheet Examples – Sample Portfolio II
(Rs in cr) Data as shared Sample Portfolio II GAP
Investments Amount % Amount % Rs in cr
High Risk Assets*
Direct Equity 1.00 9% - 0% (1.00)
Total High Risk Assets 1.00 9% - - (1.00)
Medium Risk Assets*
Real Estate 6.00 52% - 0% (6.00)
Equity Mutual Funds 1.80 16% 6.26 54% 4.46
Total Medium Risk Assets 7.80 67% 6.26 54% (1.54)
Low Medium Risk Assets*
Non-PP Structured Products 0.00 0% 4.06 35% 4.06
Total Low Medium Risk Assets 0.00 0% 4.06 35% 4.06
Low Risk Assets*
Gold ETFs/Funds 1.50 13% - 0% (1.50)
Taxable Bonds/NCDs 0.30 3% - 0% (0.30)
Employee Provident Fund 1.00 9% 1.00 9% (0.00)
Arbitrage Fund 0.00 0% 0.28 2% 0.28
Total Low Risk Assets 2.80 24% 1.28 11% (1.52)

Total Assets 11.60 100% 11.60 100% 0.00

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client
should independently review this data and consider their own financial situation to arrive at a decision for his/her
investments.
*Expected returns and risk are based on statistical and other analysis and may differ in the future
 GAP Sheet Examples – Sample Portfolio III
(Rs in cr) Data as shared Sample Portfolio III GAP
Investments Amount % Amount % Rs in cr
High Risk Assets*
Direct Equity 1.00 9% - 0% (1.00)
Total High Risk Assets 1.00 9% - - (1.00)
Medium Risk Assets*
Real Estate 6.00 52% - 0% (6.00)
Equity Mutual Funds 1.80 16% 4.87 42% 3.07
Total Medium Risk Assets 7.80 67% 4.87 42% (2.93)
Low Medium Risk Assets*
Non-PP Structured Products 0.00 0% 4.06 35% 4.06
Total Low Medium Risk Assets 0.00 0% 4.06 35% 4.06
Low Risk Assets*
Gold ETFs/Funds 1.50 13% - 0% (1.50)
Taxable Bonds/NCDs 0.30 3% - 0% (0.30)
Employee Provident Fund 1.00 9% 1.00 9% (0.00)
Arbitrage Fund 0.00 0% 1.67 14% 1.67
Total Low Risk Assets 2.80 24% 2.67 23% (0.13)

Total Assets 11.60 100% 11.60 100% 0.00

The above data and its interpretation is illustrative and should not be construed as any advice or recommendation. The client
should independently review this data and consider their own financial situation to arrive at a decision for his/her
investments.
*Expected returns and risk are based on statistical and other analysis and may differ in the future
Annexure
Heads of Income under Income Tax

There are 5 broad heads of Income under the Income Tax Act, 1961:
I. Income from Salary
II. Income from House Property
III. Profits and Gains from Business/Profession
• Normal Business Income
• Speculative Business Income
IV. Capital Gains
• Short Term Capital Gains
• Long Term Capital Gains
V. Income from Other Sources

This is important to know to understand set-off and carry forward of losses

1/8 slides
Set Off of Losses in the same Financial Year

*Loss under head House Property can be set off to the extent of Rs. 200,000 only during
the same year
**Number of Subsequent Assessment Years up to which loss can be carried forward.
***Speculative Business loss can be carried forward only for 4 subsequent assessment
years and can be adjusted against Speculative Income only

Note: Once carried forward, losses can be used to set off gains within the same head only.

2/8 slides
Real Estate View

Asset Information
Real Estate Sector - Huge pile up of unsold inventory

Below is some data on the build-up of unsold inventory, as per a report by AnaRock:

Around 1.7 Years

needed to exhaust
this inventory

14 month 22 month 23 month 21 month

21 month
22 month inventory inventory inventory 21 month inventory
inventory
inventory inventory

The data indicates that Supply is equal to 21 months of Demand.

Therefore, Can Real Estate Prices Go Up?

Data as on Dec’22

Data Source: : Anarock, Milestone Year for Indian Residential Real Estate Report (2022) 3/8 slides
Asset Information
Real Estate Sector – More Information
Table 1
Falling Market Cap Market Cap in Rs. Cr
Developers have witnessed a fall of more Developer Location Fall in
than 80% in their Market Cap in the last 12 Dec' 2007 Apr’ 2023* Market
Cap
years. 392
Unitech Ltd. Delhi 79,261 -99.51%
Hubtown Ltd. Mumbai 8,021 289 -96.40%
DLF Ltd. Delhi 1,83,065 1,02,268 -44.14%
Banks have stopped lending to builders 1,074
Ajmera Realty & Infra India Mumbai 4,849 -77.85%
With bank credit drying up, borrowing cost
Puravankara Ltd. Bengaluru 9,739 1,878 -80.72%
for builders is at astonishing levels of 22% -
Peninsula Land Ltd. Mumbai 4,027 438 -89.12%
25%.
Table 2
Number of Stalled Estimated Value
City
Rise in number of stalled projects Units (in Rs. Cr)
Under-construction projects are delayed by NCR 2,40,610 1,81,410
48 - 60 months on an average, across cities. MMR 1,28,870 1,84,226
Pune 44,250 27,533
Hyderabad 11,450 11,310
Developers are cash-strapped and are not
Bangalore 26,030 28,072
finding lenders in the market.
Chennai 5,190 3,731
Kolkata 23,540 11,847
Therefore, Can Real Estate prices go up? Total 4,79,940 4,48,129

Table 1: *Data as at 13th Apr’23. Table 2: Data as at May’22 4/8 slides

Data Source: Table1: Bloomberg, Ace Equity. Table 2: Outlook India article. Asset Information
Investment trend in physical assets
Households have been over allocating to physical assets like Real estate and gold over the last
few years.

Household investment in physical assets have gone up by 50% - 70% of the 1990’s level and is
near all time high levels

As it reverts to long term average levels, Real Estate would be under significant pressure.

Therefore, Can Real Estate prices go up?

5/8 slides
Data Source: Bloomberg. Asset Information
Equity View

Asset Information
Short Term View:- News, Events and Sentiments

Asset Information
Short Term impact due to news and events
Current Status
Index Previous Peak Date Previous Peak Fall Date Fall Level Fall % Current Level*
Nifty 50 15-Sep-23 20192 26-Oct-23 18857 6.6% 21731
In the current year, markets had been impacted due to geopolitical tensions. As seen above, Nifty 50 had witnessed a
fall of 6.6% from its previous peak and recovered within 40 days.
The recent behavior of market correction and rebound is similar to what we have seen in last 22 years. We have split
these drawdowns into 3 parts:
Category 1: High probabilistic events. The current market situation falls in this category.
Average maximum drawdown of Nifty witnessed in a year No. of days taken to recover for Nifty post fall
11% 57 (about 2 months)
Category 2: Low probabilistic events.
Average maximum drawdown of Nifty witnessed in a year No. of days taken to recover for Nifty post fall
15% 192 (about 6-7 months)

Category 3: Very low probabilistic events.

Average maximum drawdown of Nifty witnessed in a year No. of days taken to recover for Nifty post fall
35% 402 (over a year)

Currently, the market is facing events that fall in Category 1. One can expect market fall to be in the range of
10-15% and the rebound may happen within 2-3 months

*Nifty Level as of 29th Dec’ 23 Data Source: NSE 6/8 slides

Asset Information
Impact of FII and DII flows on short term market movement

FII and DII Flow and Short term market behavior

H1 2022 H2 2022 H1 2023 H2 2023
Months
(Jan-Jun) (Jul-Dec) (Jan-Jun) (Jul-Dec)
FII Net Flow (in Rs Crs) -2,17,358 95,919 76,407 94,700

DII Net Flow (in Rs Crs) 2,30,994 44,732 86,568 98,082

Nifty 50 absolute returns -9.07% 14.73% 6.0% 13.25%

Comments:
• After being net sellers in the first half of 2022, FPI inflows turned positive since July 2022.
• Post selloff in Sep – Oct’23, since Nov’23 FPIs have invested USD 9 billion in equities.
• Interest rate pause and expectations of rate cut in 2024 is driving higher inflows in equities.
• DII flows continue to remain strong.

Data Source: NSDL, Moneycontrol 7/8 slides

Asset Information
Key events that could impact short term market movement

Key events and Conclusion:

Positive events:
• Central Banks have paused the rate hikes and indications of rate cuts in 2024 to be supportive for markets.
• Macro economic data from US remain strong. Treasury yields have softened to below 4% from Oct’23 peak of 5%.
• Resilient domestic economy, strong external balances and growth upgrade by various agencies reflect strong fundamentals
for India.
• India’s inclusion in JP Morgan government bond index effective Jun’24 shall result in higher FPI inflows in the debt market
thus supporting lower yields.

Negative events:
• Situation in Middle-East and Russia – Ukraine standoff continue to remain top risks escalating geopolitical and economic
conflicts.
• Slowdown in China and Eurozone likely to impact global trade.
• Below normal rainfall and lower agriculture harvest may impact inflation trajectory and elevated interest rates for longer
time.
• Rising populist policies and freebies amid the election year may affect the government finances.

Take away:

The downside risk from here on is far lower compared to the upside potential in the short term.
8/8 slides
Asset Information
 THANK YOU
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