Portfolio Management Service

Investment Objective

BRAINPOINT Future Winners follows a growth driven approach with an objective to capture the upside by investing predominantly in Equity Mutual Funds to offer wealth creation opportunities. In case Portfolio Manager believes the risk-reward is unfavorable in equity related instruments, he / she may partially / fully stay invested in any of the debt mutual funds or any non-equity mutual funds.

Description of types of securities

All types of Mutual Fund schemes. The Portfolio Manager will invest in the direct plans (investments not routed through a distributor) of the Mutual Fund schemes.

Basis of selection of Mutual Fund schemes as part of the investment approach

The Portfolio Manager will aim to identify and invest in SEBI registered mutual fund schemes which offer the investors an opportunity to have a fair balance between safety and growth. The portfolio may invest in one or more mutual fund schemes. The selection of mutual fund schemes will be at the sole discretion of the Portfolio Manager which will depend on following parameters/methodology

1. Credentials of the fund house
2. Fund Manager’s experience and his past track record on various aspects
3. Corpus size of the fund
4. M-o-M / Q-o-Q consistent performance of the fund
5. Derivatives exposure
6. Cash Calls
7. Preferred category viz. Large cap / Midcap / Small cap/ Multi cap/ Diversified depending upon risk-reward offered at the given point of time in equity markets
8. Basis of selection of Fund Manager At BrainPoint we have bucketed Fund Managers depending upon their specialisation viz. large cap specialists, midcap specialists, small cap specialists and depending upon which category to invest in, we bank on those category specialists. At BrainPoint we have also identified Fund Managers who are best for bull runs who deliver best performance during market uptrends, and who are best for bear phase who usually fall the least and also who are evergreen Fund Managers who manage both well i.e. the upside as well as the downside. And depending upon the market scenario we bank on those Fund Managers. We have identified ‘Momentum’ Fund Managers too, who top the charts in uptrend but are at the bottom (worst performers) in the down trend. We avoid such Fund Managers with momentum style. To deliver consistent outperformance which will be our aim, we would be looking for the best of all parameters from:
   1. The right category at that point of time (Large cap / Midcap / Small cap / Diversified)
   2. Category Specialist Fund Managers
   3. Reasonable Corpus - too high a corpus to manage would be avoided. Our aim is always to predict ‘Future Winners’ rather than banking on ‘Past Winners’.
9. Dynamic asset allocation will involve switch to Liquid / Debt Funds from Equity Funds and vice versa.
10. Parameters for our Market Timing:
    1. Market Cap : GDP
    2. P/E
    3. P/BV
    4. Market Sentiment
    5. Mid & Small Caps action
    6. NFOs / IPOs
    7. Buying, selling trends of DIIs & FIIs
    8. Leverage position in the market
    9. Put-Call Ratio (PCR)
    10. Volatility Index (VIX)
    11. Relative Strength Index (RSI)

Allocation of portfolio across types of securities

Instruments	Indicative Allocations (% of portfolio values)
Units of Equity / Debt / other types of Mutual Fund schemes	0 - 100%
Cash	0 - 100%

The asset allocation pattern may change from time to time, keeping in view market conditions. The intention being at all times to seek to protect the interests of the Client.

The Portfolio Manager will invest in the direct plans (investments not routed through a distributor) of the Mutual Fund schemes.

Appropriate benchmark to compare performance and basis for choice of benchmark

BSE 500 TRI

BSE 500 TRI is a broad based index representing the top 500 companies based on full market capitalisation. As the investment approach will be a flexible strategy to predominantly invest in any of the types and categories of Equity funds across market capitalisations to maximise returns, BSE 500 TRI would be the most appropriate benchmark.

Indicative tenure or investment horizon

Ideally equity investing is for long term and hence 5-10 years or even more would be the ideal investment horizon to tide over the volatility.

Risks associated with the investment approach

The Portfolios will invest in schemes of Mutual Funds. Hence scheme specific risk factors of each such underlying scheme will be applicable to the portfolios. Following risks are also associated with the Investment Approach.

1. Change of Fund Manager of the Scheme
2. Change of controlling interest in the Asset Management Company
3. Regulatory changes governing the Scheme