CANARA ROBECO

EMERGING EQUITIES

FEBRUARY 2018
This product is suitable for investors who are seeking*
• Capital appreciation over long term
• Investing in companies having a large market capitalization
*Investors should consult their financial advisers if in doubt about whether the product is suitable
Source: ICRA MFI Explorer
15000

10000
25000

0
5000
20000
30000

Jan-03
MID CAP OUTPERFORMANCE

May-03
Aug-03
Dec-03
Apr-04
Aug-04
Dec-04
Apr-05
Aug-05
Dec-05

Nifty 50 TRI
Apr-06
Aug-06
Dec-06
Apr-07
Aug-07
Dec-07
Apr-08
Nifty 50 TRI

Aug-08

Nifty Free Float Midcap 100 TRI

Nov-08
Mar-09
Jul-09
Nov-09
Mar-10
Jul-10
1219.01
1000.00
01-Jan-03

Nov-10
From Date

Mar-11
Jul-11
Nov-11
Mar-12
Jul-12
Nov-12
To Date

Mar-13
14358.71
Nifty Free Float Midcap 100 TRI

25008.10
28-Feb-18

Jul-13
Nov-13
Mid caps tend to outperform large caps

Mar-14
Jul-14
Oct-14
Feb-15
CAGR
17.65%
23.64%

Jun-15
Oct-15
Feb-16
Jun-16
Oct-16
Feb-17
Jun-17
Oct-17
Feb-18
 MID CAP PERFORMANCE

3500 Economic Uptrend 14

3000 12
2500 10
Index Values

2000 8

GDP %
1500 6
1000 4
500 2
0 0

Nifty 50 TRI Nifty Free Float Midcap 100 TRI GDP

Nifty Free Float GDP

Nifty 50 TRI
Midcap 100 TRI From To
CAGR 50.43% 80.46% 0.24% 9.68%

Mid Caps outperform Large Caps when economy is picking up

Source: Bloomberg, MFIE, ICRAOnline. Past performance may or may not be sustained in future
 MID CAP PERFORMANCE

3000 Range Bound Growth 11.00 3500 Economic Downtrend 12.00

2500 3000 10.00
10.00 2500
2000 8.00
Index Values

Index Values
2000

GDP %

GDP %
1500 9.00 6.00
1500
1000 4.00
8.00 1000
500 500 2.00
0 7.00 0 0.00

Jul-07

Jul-08

Apr-09
Apr-07

Oct-07
Oct-06

Apr-08

Oct-08
Jan-07

Jan-09
Jan-08
Nifty 50 TRI Nifty Free Float Midcap 100 TRI GDP Nifty 50 TRI Nifty Free Float Midcap 100 TRI GDP

Nifty Free GDP Nifty Free GDP

Nifty 50 TRI Float Midcap From To Nifty 50 TRI Float Midcap From To
100 TRI 100 TRI
CAGR 75.45% 95.62% 7.41% 10.55% CAGR 8.21% 6.98% 10.24% 4.99%

Every trough is followed by an expansion phase. Staying invested in Midcaps even during
economic slowdown is advantageous, to reap the benefits of economic revival.
Source: Bloomberg, MFIE, ICRAOnline. Past performance may or may not be sustained in future
 MID CAP PERFORMANCE

CY 2004 13 28
CY 2005 40
40
CY 2006 31 42
CY 2007 56 79
CY 2008 -58 -50
CY 2009 76 103
CY 2010 21
20 9 out of 15 times
CY 2011 -29-23
41
Midcap
CY 2012 29
CY 2013 -3 8 outperformed
CY 2014 33 59
CY 2015 9 Large Caps
-3
CY 2016 59
CY 2017 30 49
CY 2018 * -7 0

-80 -60 -40 -20 0 20 40 60 80 100 120

Nifty Free Float Midcap 100 TRI Nifty 50 TRI

Source: ICRA MFI Explorer; CY = Calendar Year Data As On 28th Feb’18

 LONG TERM PERFORMANCE

100.00 Daily 3 year Rolling Return (%)

80.00 Nifty 50 TRI Nifty Free Float Midcap 100 TRI

60.00

40.00

20.00

0.00

-20.00
Dec-05

May-07
Dec-06

Feb-11

Nov-13

Oct-15
Mar-10

Nov-14

Sep-16
Jan-12
Jul-12
Jun-06

Apr-09

Mar-16

Mar-17

Feb-18
Nov-07
Apr-08
Oct-08

Dec-12

May-14
Sep-09

Aug-10

Aug-11

Jun-13

Aug-17
Apr-15
Probability of Outperformance of Midcap over Nifty

28%

72% Outperformance Underperformance

Source: ICRA MFI Explorer, Rolling Return (CAGR) for the above periods. Data as on 28th Feb’18
 LONG TERM PERFORMANCE

70 Daily 5 year Rolling Return (%)

60 Nifty 50 TRI Nifty Free Float Midcap 100 TRI
50
40
30
20
10
0
-10
Jul-08

Nov-11
May-09

Dec-09

Oct-13

Nov-14
Sep-10
Jan-11

Feb-12

Mar-13

Jan-14

Oct-16
Feb-15

Sep-15
May-15

Mar-16

Nov-17
Jan-17

Feb-18
Apr-08

Mar-10

Jul-11
Aug-09

May-12

Dec-12

Jul-14

Dec-15
Jan-08

Oct-08
Feb-09

Aug-12

Jun-13

Jun-16
Jun-10

Apr-11

Apr-17
Aug-17
Apr-14
Probability of Outperformance of Midcap over Nifty

16%

84% Outperformance Underperformance

Source: ICRA MFI Explorer, Rolling Return (CAGR) for the above periods. Data as on 28th Feb’18
 LONG TERM PERFORMANCE

30
Daily 10 year Rolling Return (%)
25
Nifty 50 TRI Nifty Free Float Midcap 100 TRI

20

15

10

0
Jan-13
Feb-13

Oct-13

Sep-15
Nov-15

Oct-16

Oct-17
Nov-13
Jan-14

Oct-14
Mar-14

Feb-15

Jan-17

Sep-17
Jul-14

Jan-16

Mar-17
May-17
Jul-17
May-15
Jul-15

Mar-16

Feb-18
May-14

Dec-14

Dec-16

Dec-17
Jun-13

Jun-16
Apr-13

Aug-13

Aug-14

Apr-15

Apr-16

Aug-16
Probability of Outperformance of Midcap over Nifty
1%

Outperformance Underperformance
99%

Source: ICRA MFI Explorer, Rolling Return (CAGR) for the above periods. Data as on 28th Feb’18
RIISK REWARD MATRIX
Since the risk associated
with mid & small cap funds is
high, the potential to
generate better returns is
also high Thematic Funds

Mid & Small

Cap Funds

Diversified Funds/ Multi

VOLATILITY

Cap Funds/ ELSS

Large Cap Fund

Index Funds

Balanced Fund

RETURN
LOW MEDIUM HIGH
INVESTMENT PHILOSOPHY

Bottom up
stock
picking

Canara
Robeco
Emerging
Equities
Growth at
Reasonable
Price
(GARP)

✓ We believe it is companies and not stocks that create wealth!

MID CAP ATTRIBUTES

• Intrinsic Value
• High Growth Potential
• Healthy Financial
• Market leadership
Business Valuation

Management

• Management Track Record

• Corporate Governance
BROAD THEMES

Technological
Edge

Distribution &
Logistics High Barriers to
Entry

Stocks
likely
beneficiary
of

Government Brand Play

Capex

Goods &
Services Tax
PORTFOLIO CONSTRUCT

Investments Consumption Exports

41% 35% 20%

Industrials Consumer Pharma

Auto – CV Auto Specialty Chemical

Corporate lenders Paints Auto Ancillaries

Infrastructure Branded Apparel Textile

Rating Agencies Branded Building Material Manufacturing exporters

Logistics Retail Financiers Agro Chemical

Power Media
RECENT TRENDS

 Improving competitive Edge

✓ Private banks and NBFCs at the cost of PSBs
✓ Unorganized to organized – Building material, logistics, Healthcare & diagnostic, Dairy products
✓ Auto OEMs – Product and geography gap fill up

 Value Migration
✓ Auto ancillaries – Low end to high end and High cost to Low cost
✓ Aspiration & ‘Premium’isation - Multiplex, Consumer durables and non-durables
✓ Physical assets to financial assets – Financial saving mobilisers such as MFs, Wealth desks, Private
Equities
✓ Generic molecules to complex R&D based molecules – Niche R&D driven pharma & specialty chemical
companies

 Balance Sheet and P&L Improvement

✓ Faster Govt. project approvals and reforms – Selective Infra & OMCs
✓ Improving operating & financial metrics – Cement, Garments, Industrials
VOLATILITY & RISK CONTROL

 Concentration risk management can be seen from the following:

Feb’18
No of Stocks in the Portfolio 65
Highest Stock Exposure in the Portfolio 3.83%
Top 3 sector exposure 34.00%
Top 10 holdings 28.03%

 The fund follows stringent risk control measures:

▪ Liquidity of the portfolio to be maintained such that at least 60% of the portfolio can be liquidated within 7
working days with due consideration to average daily volume of the stocks.
 PORTFOLIO SNAPSHOT

Top 10 Holdings Industry Classification % of Net Assets Top 5 Sector break up (% to NAV)

Bajaj Finserv Ltd Finance 3.83% Consumer Non Durables | 13.13%

Reliance Industries Ltd Petroleum Products 3.63% Pharmaceuticals | 13.02%

ITC Ltd Consumer Non Durables 2.99% Finance | 7.85%

Atul Ltd Chemicals 2.90% Auto Ancillaries | 7.58%

Chemicals | 5.58%
Piramal Enterprises Ltd Pharmaceuticals 2.63%
0% 2% 4% 6% 8% 10% 12% 14%
Container Corporation Of
Transportation 2.55% Asset Allocation
India Ltd

Biocon Ltd Pharmaceuticals 2.47% 3.73% -0.20%

Equities I 96.47%

Britannia Industries Ltd Consumer Non Durables 2.35%

Money Market
96.47% Instruments I 3.73%
Dabur India Ltd Consumer Non Durables 2.34%
Others I -0.2%
MRF Ltd Auto Ancillaries 2.34%

Data as on 28th Feb’18

 PORTFOLIO SNAPSHOT

Market Capitalisation (%) Investment Style

3.54
Large Cap
Growth Blend Value
12.22 12.61
Mid Cap
Large Cap Mid Cap Small Cap
Small Cap

Debt, Cash & Diversified Thematic Sector

71.63 Others

Quantitative Information
Criteria Values
Standard Deviation 17.34
Portfolio Beta 0.97
Portfolio Turnover Ratio 0.54 times
R-Squared 0.86
Sharpe Ratio 0.64

Data as on 28th Feb’18

 PERFORMANCE AT A GLANCE
Canara Robeco Emerging Equities has generated Rs. 98,150
on an investment of Rs.10,000 since inception

Current Value of Standard Investment of

Returns (%)
Rs.10,000 in the
Period Nifty Free
Nifty Free Float
Float S&P BSE Sensex S&P BSE
Scheme Scheme Midcap 100
Midcap 100 TRI ## Sensex TRI ##
TRI#
TRI#
Last 1 Year 27.32% 20.80% 20.46% 12,732 12,080 12,046

Last 3 Years 17.19% 15.80% 6.85% 16,110 15,542 12,204

Last 5 Years 30.34% 22.65% 14.28% 37,647 27,768 19,496

Since Inception (CAGR) 18.85% 16.90% 16.32% 94,080 80,524 71,162

The past performance may or may not be sustained in the future. Returns are based on growth NAV of Regular plan and are calculated on compounded annualized basis for a period of
more than (or equal to) a year and absolute basis for a period less than a year. Inception Date: March 11, 2005. Different plans have a different expense structure. The performance
details provided herein are of Regular Plan. The current fund managers Mr. Ravi Gopalakrishnan is managing the scheme since 13-May-16 and Mr. Kartik Mehta is managing the
scheme since 11-Aug-16. Performance as on 28th Feb’18.
#Scheme Benchmark , ##Additional Benchmark . Load is not taken into consideration for computation of returns. Returns of dividend option under the scheme for the investor would be net of distribution
tax as applicable. The performance of other funds managed by fund manager of Canara Robeco Emerging Equities is on the slide number 24.
 PERFORMANCE AT A GLANCE - SIP

Canara Robeco Emerging Equities has outperformed

the benchmark & S&P BSE SENSEX TRI over long term
35%
30%
25%
20%
15%
10%
5%
0%
1 Year 3 Years 5 Years 7 Years 10 Years Since Inception
Canara Robeco Emerging Equities Nifty Free Float Midcap 100 TRI # S&P Sensex TRI ##

Canara Robeco Emerging Equities 1 year 3 years 5 years 5 years 10 years Since Inception

Total Amt invested (INR) 1,20,000 3,60,000 6,00,000 8,40,000 12,00,000 15,60,000
Market Value (INR) 1,29,800 4,93,916 12,19,991 22,07,522 45,42,345 69,27,256
Investment date is taken to be 1st of the month or subsequent day if 1st is a holiday and investment of Rs.10,000 is taken. Returns are as on 28th Feb’18 and are CAGR. The calculations are based on the
regular growth plan NAVs. Past performance may or may not be sustained in the future. Scheme Benchmark# , Additional benchmark##. Inception Date: March 11, 2005
PRODUCT POSITIONING

CORE PORTFOLIO
Large Cap CR Large Cap +

Diversified CR Equity Diversified

SATELITE PORTFOLIO
Mid &
CR Emerging Equities
Small Cap

Thematic Fund CR Infrastructure CR FORCE

NEED BASED
ELSS CR Equity TaxSaver

Above positioning is for illustration purpose only

WHY INVEST

 Bottom-up stock picking employed on Mid Cap & Small Cap Companies endeavors to select the best among
the emerging companies form a part of portfolio

 Endeavour to identify companies which have the potential to become leaders of tomorrow in their
respective sectors

 Bias towards identifying Mid Cap Companies in the portfolio helps investors benefit from better growth
prospects of those companies

 Taking a Long Term View: The fund invests with a long term view. The aim is to stay away from herd
behaviour, chasing short term profits, running after certain market spurs. Such short term approach tends
to be very risk and may not pay off in the long term
 FUND FACTS

Fund Category Open ended Equity Scheme

To generate capital appreciation by primarily investing in diversified mid cap stocks. However, there can
Investment Objective
be no assurance that the investment objective of the Scheme will be realized.

Inception Date 11-Mar-05

Asset Allocation  Mid & Small Cap equity and equity related instruments: 65-100%
 Other Equity & related instruments: 0-35%
Domestic Debt and Money Market instruments : 0-35%
Plans/Options Regular & Direct Plan:
Options: Growth / Dividend with payout & Reinvestment
Facilities SIP/ SWP/ STP/ Dividend Transfer Facility
Fund Size Rs 3235.23 Crs (Month End AuM)
Load Structure Exit Load:1% - if redeemed/switched out within 12 months;
Nil- if redeemed/switched out after 12 months
Benchmark Nifty Free Float Midcap 100
Fund Manager Mr. Ravi Gopalakrishnan & Mr. Kartik Mehta

Data as on 28th Feb’18

Performance of Fund Manager

Data as on 28th Feb’18

DISCLAIMER

The information used towards formulating the outlook have been obtained from sources published by third parties. While such
publications are believed to be reliable, however, neither the AMC, its officers, the trustees, the Fund nor any of their affiliates or
representatives assume any responsibility for the accuracy of such information. CRMF, its sponsors, its trustees, CRAMC, its
employees, officer, directors, etc assume no financial liability whatsoever to the user of this document. Mutual Fund
Investments are subject to market risk. Investors are requested to read the Scheme related documents carefully before
investing.

Mutual Fund investments are subject to market risks, read all Scheme related documents carefully.