Nisty Next 100 Portfolio

return on capital over a long time frame.

• Well diversified across secular sectors, with less exposure to commodity cyclicals

• Core focus is to buy companies with strong balance sheets, good capital allocation track record and high

• Endeavors to deliver returns higher than Large Cap Fund, without taking undue risk/volatility of small c aps.

• Nisty Next 100 Portfolio is a diversified portfolio which would primarily invest in Large and Mid Caps.

• Focus would be on top 150 stocks (excluding NIFTY 50).

• It captures a sweet spot between Large Caps and Mid Caps with a perfect balance of growth and quality.

Portfolio Construct

Catego Weight Stocks

Next 100 stocksby Market cap 65%-100%

Rationale

Diversified set of stocks balancingQuality, Growth & Safety

HDFC Life, Kansai Nerolac,Apollo Hospitals

High convictionideas outsideNext 100 stocks

0%-35%Leverage opportunities inselect high growth stocks

across Nisty 50 /Small capsAxis Bank, ABFRL

Investment Process:

Piotroski ScoreROE & D/E Filters

Valuation ScreenerPotential upside of100% in 4-5 years

Apply Quantitative Screeners

Track the Nisty Next 100 Universe

Management meetingsDealer/Channel ChecksPlant/Facto Cisits

Value investing & Portfoliooptimisation

Select 15-25 quality companies with high growth and potential upside

Reject the companies which do not filter through the screeners

Around half of remaining companies pass this filter

Extensive Fundamental Research

Portfolio Management ServicesAditya Birla Sun Life AMC Limited

1800-270-7000

Current Portfolio Allocation

Basis the above investment framework the current portfolio is invested as below:

Equity Outlook

The last 3 months have been truly exceptional where the investor sentiment has change from panic and anguish as markets corrected almost 40% in a matter of few weeks to hope and optimism as the markets moved up more than 30% reacting to the global stimulus packages and flatting of infection curve in many countries. While the Indian economy is gradually opening up, it might take some more time in India as the number of Covid cases are still rising, albeit at a slowing rate. A positive here is the high recove rate witnessed among Indians & also the low mortality rate compared to the Western world.

The rural & agri demand seems to be back to pre Covid levels while consumer durables, staples, pharma,

On 12 May, Prime Minister Narendra Modi had announced an economic package to the tune of Rs.20 lakh crore which is roughly 10% of the GDP. While the quantum of stimulus is clearly higher than expectation, bulk of the stimulus is in the form of moneta support with fiscal spending being much lower at around 1% of the Indian GDP. PM’s focus on land & labour laws, which if executed suitably may provide a much-needed impetus to India’s manufacturing sector. Also, the key thrust now is on self-reliance & local manufacture.

Allocation %Indust allocation

Financials

Materials

Health Care

Consumer Staples

Consumer Discretiona

Industrials

Cash

22.7

21.9

18.7

14.8

9.5

7.4

5.0

Weight %Market cap bias

Large cap

Mid cap

Small cap

Cash

74.4

15.6

5.0

5.0

Portfolio Data as on May 31, 2020

Portfolio vs Benchmark- Higher Growth/ROE’s with lower leverage

Top 10 Portfolio Holdings

Sr. No.

1

2

3

4

5

6

7

8

9

10

% to Net AssetsCompany Name

ICICI Lombard General Insurance Company

Shree Cement

Biocon

HDFC Life Insurance Company

Divis Laboratories

Axis Bank

JK Lakshmi Cement

SBI Life Insurance Company

United Breweries

Pidilite Industries

7.5

6.1

5.7

5.6

5.3

4.5

4.3

4.3

4.2

4.0

Nisty Next 100Nisty JuniorNisty

34.1

26.0

18.7

32.8

23.4

17.7

33.3

22.9

18.4

26.3%

PE (x)

27.9%

90.3%

-93.3%

ROE (%)

EPS growth(%)

FY1 9A

FY1 9A

FY1 9A

FY20E

FY20E

FY20E

FY21E

FY21E

FY21E

Net debt toEquity (%) FY1 9

Prem/Discto benchmark

(FY22E)

Prem/Discto benchmark

(FY22E)

Prem/Discto benchmark

(FY22E)

Prem/Discto benchmark

14.9%

10.9%

13.3%

14.1%

10.9%

11.0%

12.7%

11.0%

10.0%

29.2%

-0.6%

12.8%

4.0%

11.2%

6.0%

-1.5%

2.0%

-4.0%

6.1%

91.3%

82.2%

24.1

19.1

15.6

FY22E

FY22E

FY22E

16.1%

12.6%

11.5%

38.1%

20.0%

18.0%

Nisty Next 100Nisty JuniorNisty

Nisty Next 100Nisty JuniorNisty

Nisty Next 100Nisty JuniorNisty

Coming to portfolio positioning, most of our portfolios are conservatively positioned with higher weight to sectors like Telecom, Pharmaceuticals and Consumption while lower weight to cyclicals and leverage companies. Considering the uncertain macro environment and sharp run up in markets, we consider it appropriate to be conservative in our positioning.

cement & metals demand has picked up as the high frequency indicators confirm. Banks are still facing uncertainty with almost 40% of the borrowers loans being under moratorium as per the latest data from RBI. While this reduces the liquidity stress for borrowers, it also makes Banks’ balance sheets less transparent with asset quality issues being deferred into the future. For NBFCs, while new business acquisition has been slow, focus is on collections & processing pending cases. On an overall basis, we expect the larger, dominant players which have resilient balance sheet to benefit at the expense of smaller, weaker players going forward.

Portfolio Update

In the month of May, JK Lakshmi Cement, Shree Cement, Hindustan Zinc, Aditya Birla Fashion and Retail and Avenue Supermarts have contributed positively to the portfolio. Our investment process like P-score, apart from the framework of preferring companies with good quality balance sheet, low leverage, high management integrity with focus on business growth helps us identify good quality high growth stocks with limited downside risks. Going forward, the portfolio might benefit on account of decent exposure to high quality companies with strong earnings growth visibility.

Disclaimer: The views expressed above are the views of the Fund Managers of Nisty Next 100 Portfolio and should not be construed as an investment advice. Investments in securities are subject to market risks and there can be no assurance or guarantee that the objectives of the Product will be achieved. Past performance may or may not be sustained in future.

(Source: Bloomberg, ABSLAMC Internal Research)

One India Bulls Centre, Tower 1, 17th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai - 400 013.

Tel: 4356 8000. Fax: 4356 8110 / 8111

Security investments are subject to market risks and there is no assurance or guarantee that the investment objective will be achieved.

Aditya Birla Sun Life AMC LimitedCIN: U65991MH1994PLC080811.

For any service related queries, please contact us:

1800 270 7000 care.pms@adityabirlacapital.com

Risk Factors and Disclaimers:

Investments in securities are subject to market risks and there can be no assurance or guarantee that the objectives of the Product will be achieved. Any information contained in this publication does not constitute and shall be deemed not to constitute an advice, an offer to sell/ purchase or as an invitation or solicitation to do so for any securities ofany entity. Please note that this is not an advertisement. The document is solely for the information and understanding of intended recipients only. If you are not the intended recipient, you are hereby notified that any use, distribution, reproduction or any action taken or omitted to be taken in reliance upon the same is prohibited and may be unlawful. Aditya Birla Sun Life Asset Management Company Ltd. (ABSLAMC) / its subsidiaries / affiliates or their officers, employees, personnel, directors shall not be liable for any loss, damage, liability whatsoever for any direct or indirect loss arising from the use or access of any information that may be displayed in this publication from time to time. Recipients of the information contained herein should exercise due care and caution and read the disclosure document (including if necessa, obtaining the advice of tax / legal / accounting / financial / other professionals) prior to taking of any decision, acting or omitting to act, on the basis of the information contained herein. Aditya Birla Sun Life AMC Limited-Portfolio Managers has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the PMS and / or its affiliates and which may have been made available to the PMS and / or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The PMS however does not warrant the accuracy, reasonableness and / or completeness of any information. The actual investments / portfolio decisions are a result of complex technical & fundamental valuations at the disposal of the portfolio manager. Investors are advised against replication of strategies implemented. Information contained herein shall not be copied/circulated/reproduced/quoted in any form or manner (in part or whole) without the express written consent of Aditya Birla Sun Life Asset Management Co. Ltd. Any forward-looking word, phrase or expression is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the said forward-looking word, phrase or expression.

Model Portfolio refers to portfolio of earliest investor in the product and in case of redemption of the model client, portfolio of earliest client in the said product rebased for computation of returns. It refers to specific investments that the investor will have in his portfolio when it is completely built-up over a period of time. Past performance may not be sustained in the future. Investments in securities are subject to market risks. Please refer to disclosure document. The returns are absolute for the period mentioned less than 1 year and in CAGR for the period more than 1 year. Individual portfolios of investors may va from the model portfolio due to factors such as timing of ent and exit, timing of additional flows and redemptions, individual investor mandates (if any), specific portfolio construction characteristics or structural parameters. These factors may have bearing on individual portfolio performance and hence individual returns of investors for the said portfolio type may va from the data on performance of the portfolio depicted above. Neither the Portfolio Manager nor the Asset Management Company, its Directors, employees or sponsors shall in any way be liable for any variation in the actual returns of individual portfolios.