FUND INSIGHT MAY 2017

IDFC PREMIER EQUITY FUND

A fund that encourages Systematic investing by being a SIP/STP fund

A Diversified Equity Fund

PRODUCT HIGHLIGHT
Every successful fund while maintaining a core investment thought process needs to adopt flexibility to remain
relevant as market cycles unfold. We continue to re-emphasize the key attributes which have been the driver of the
long term performance delivered by the fund during its first decade of existence. IDFC Premier Equity Fund further has
added a new element (Sell Discipline) to give the fund an extra dimension to sustain the strong long term performance.

Buying Quality companies, a key attribute, which has been critical for the fund s past performance is now being
detailed on the following factors: 1. High promoter holding; 2. Higher than sector profit growth over the medium
term; 3. Improving trend of RoE; 4. Low leverage and 5. Generating free cash flow. In addition, the fund will continue
to identify themes which offer investment opportunities over the medium to long term, where the company selection
will be driven by the above factors as well. Importantly, we have added a Sell discipline - PEG ratio of 3x+ for 2 year
forward earnings estimates, which will help us trim/exit stocks where valuations appear to have moved ahead of actual
performance.

Market seems to be favouring cyclical sectors and beaten down stocks like Infra, Materials, Financials etc., with NIFTY
Commodities Index generating higher returns the last year as compared to NIFTY Returns. We continue to focus on
high quality consumer focussed companies as these companies have historically created wealth over the long run. In
the last 10 years, NIFTY FMCG Index has generated CAGR returns of ~17.3% as compared to NIFTY returns of ~8.5% and
NIFTY Commodity Index returns of ~6.7%. The concentration of high quality consumer facing companies has
impacted the performance of IDFC Premier Equity fund in the near term but we believe the strategy can help generate
sustainable returns over the long term with limited downside in bear markets.

MARKET OUTLOOK
Over the month, consensus earnings estimates for the broad market (MSCI India) were revised downwards by 1% for

FY18E. The Street now estimates earnings growth of 17% for FY18 (E) for the Nifty. The breadth of earnings revisions

remains negative. For FY18 (E), 72% of universe saw cuts. Energy (Reliance), telecom (Idea, Bharti Airtel) and IT

(Infosys, Wipro) sectors saw notable downward earnings. To sum up, investor flows into Domestic MFs remain robust

as the attractiveness of alternate asset classes remains subdued. With green shoots of domestic growth visible, along

with favourable global macro, elevated valuations could potentially sustain. GST implementation remains a keenly

tracked event going forward with an expected multiplier impact on the economy over the medium to long term.

WHO IS THIS FUND FOR?

Investors who can invest for over 5 years and can bear market fluctuations
 Subscription Details: PORTFOLIO (28 April 2017)

Lumpsum - Currently Closed Name % of NAV Industry

Recommend - Invest via PE STP /SIP
/ STP Top 15 Equity 45.29

FAG Bearings India 3.44 Industrial Products

Fund Features:
Container Corporation of India 3.38 Transportation
Nature: Equity
JM Financial 3.35 Finance
Average AUM (Jan-Mar 2017):
5769.71 Crores VA Tech Wabag 3.31 Engineering Services

Inception Date: 28th September APL Apollo Tubes 3.24 Ferrous Metals
2005
Fund Manager: Mr. Anoop Bhaskar Maruti Suzuki India 3.22 Auto
(w.e.f. 30/04/2016)
Gujarat State Petronet 3.19 Gas
Benchmark: S&P BSE 500
Greaves Cotton 3.12 Industrial Products
Minimum Investment Amount: Asian Paints 3.04 Consumer Non Durables
10000/- and any amount thereafter.
(During the period when the fund is Voltas 2.94 Construction Project
open for lump sum subscription)
Blue Dart Express 2.89 Transportation
Exit Load: 1.00% if redeemed before Tata Chemicals 2.63 Chemicals
365 days
HDFC Bank 2.54 Banks
SIP Frequency: Monthly (Any day of
the month, except 29th, 30th & 31st Balrampur Chini Mills 2.53 Consumer Non Durables
day of the month)
Bharat Financial Inclusion 2.47 Finance
Minimum SIP Investment Amount:
2000/- [Minimum 6 installments]

Options Available: Growth, Dividend

- (Payout, Reinvestment and Sweep INDUSTRY ALLOCATION (%)
(from Equity Schemes to Debt
Schemes only))............................
16% 14.4

Other Parameters:
12% 10.6

Beta: 0.97 8.2 8.1

8%
6.3
5.4 5.3
R Square: 0.82 4.2
4% 3.4 3.3 3.2 3.2
2.5 2.5 2.3 2.3 2.1 2.1 2.0
Standard Deviation (Annualized): 1.5 1.4 1.4 1.1
15.60% 0%
Gas
Banks

Chemicals

Cement
Finance

Auto

Construction
Pharmaceuticals

IT Consulting & Other

Engineering Services

Industrial Capital Goods

Auto Ancillaries

Media & Entertainment

Ferrous Metals
Industrial Products

Consumer Durables
Consumer Non Durables

Construction Project

Petroleum Products
Trading
Transportation

Textiles - Cotton

Textile Products

Riskometer
Services

Investors understand that their principal

will be at Moderately High risk
This product is suitable for investors who are seeking*:
Create wealth over a long period of time
Investment predominantly in equity and equity
related instruments across market capitalisation

Ratios calculated on the basis of 3 years history of monthly data

*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.
RISK FACTOTRS: MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.