MULTIPLE -STRATEGY TREND RATED

AUTOMATIC TRADING SYSTEM

Portfolio Management Services (PMS)

Performance Update

30 November 2010

Vivek Mavani – Vice President and Senior Portfolio Manager

BRICS Growth Synopsis

BRICS Growth is a Long only Diversified Equity Product aimed at generating Absolute Returns

The Objective is :

To generate Steady & Consistent returns over medium to long term

Maintain Low Volatility

Margin of Safety

The Focus is therefore on Stock Picking with a Buy and Hold philosophy

Invest in high quality and high growth companies at reasonable valuations and hold them

over a period of time. (Not trade in & out frequently)

Our conservative approach to managing investments, (especially during periods of volatility) is

reflected in our superior performance.

Portfolio Update and Outlook

Markets went through a correction in November and although the indices lost less than 10%, individual

stocks saw prices correct by 10-30% in less than three weeks

We were cautious throughout the last few months as highlighted in our previous updates

Dilemma in a Bull Market. Choice between:

Losing an Opportunity in a fast rising market

Losing money in event of an anticipated sharp correction

We were clear in our Choice. This led to short term underperformance against the benchmark’s in a

rising market but We will continue to “Stick to Our Convictions.” This was evident during the

corrective phase

Last month, we held high levels of liquid balances, (due to part profit booking) at higher levels. We

deployed part of the liquid balances at lower levels, during the corrective phase. We added Large Cap

Banks (Axis Bank), Technology (Infosys) and Capital Goods Sectors (BHEL)

Our contrarian call and conviction on ICICI Bank has yielded good results. Partly booking profits in

Axis Bank at higher levels and re-entering at lower (5-10%) levels also has had a good payoff

Although, we reduced our Mid-cap exposure especially where they had a very sharp run-up. Selectively

Mid-caps could continue to be an attractive space as individual performances are likely to shine

However, Credo of Sticking to Quality will always remain and will never be compromised

Absolute Performance – 30 November 2010

Inception Date: 1 October, 2009 Portfolio returns are audited and net of fees & expenses

Weekly Monthly QuarterlyHalf

Yearly

YTD

(Calendar)Annual

Since

Inception

BRICS Growth 0.07% -4.26% 3.78% 24.02% 36.59% 45.16% 48.20%

NIFTY -0.05% -2.58% 8.26% 15.71% 12.72% 16.49% 15.33%

SENSEX 0.32% -2.55% 8.26% 15.76% 11.77% 15.33% 13.92%

S&P CNX 500 -0.78% -3.85% 4.91% 14.20% 10.45% 15.34% 16.08%

S&P CNX

MIDCAP-1.95% -4.84% 1.95% 15.82% 19.84% 24.59% 32.99%

Performance ahead / at least keeping pace with Indices month after month

Month BRICS Growth Nifty Sensex S&P CNX 500 CNX Mid Cap

Oct-09 -0.67% -7.31% -7.23% -6.46% -1.77%

Nov-09 2.79% 6.81% 6.48% 7.59% 8.65%

Dec-09 6.27% 3.35% 3.18% 4.43% 3.97%

Jan-10 -1.84% -6.13% -6.34% -4.00% -3.11%

Feb-10 0.75% 0.82% 0.44% -0.69% -0.48%

Mar-10 6.24% 6.64% 6.68% 4.50% 7.50%

Apr-10 3.77% 0.55% 0.18% 1.27% 4.62%

May-10 1.86% -3.63% -3.50% -3.24% -3.79%

Jun-10 5.81% 4.45% 3.83% 4.59% 4.83%

Jul-10 3.84% 1.04% 1.56% 1.23% 3.50%

Aug-10 7.25% 0.65% 0.58% 1.39% 3.14%

Sep-10 4.13% 11.35% 11.30% 8.06% 4.88%

Oct-10 4.03% 0.44% 0.38% 0.95% 1.68%

Nov-10 -4.26% -2.58% -2.55% -3.85% -4.84%

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 6 month returns

Compared to Top 20 Mutual Funds as of 30 Nov. 2010

Rank Scheme Name Performance

6 Months % 1 Year %

1 Sundaram Rural India Fund - Growth 25.53 24.25

2 BRICS Growth 24.02 45.16

3 Kotak Lifestyle Fund - Growth 23.77 32.21

4 IDFC Premier Equity Fund - Plan A - Growth 23.66 38.11

5 HDFC Equity Fund - Growth 23.31 31.87

6 HSBC Unique Opportunities Fund - Growth 23.23 23.87

7 Sahara Wealth Plus Fund - VP - Growth 23.10 30.66

8 Religare Mid N Small Cap Fund - Growth 22.60 46.97

9 Reliance Quant Plus Fund - Ret - Growth 22.59 24.23

10 Sahara Wealth Plus Fund - FP - Growth 22.56 29.56

11 Sundaram Growth Fund - Growth 22.39 21.46

12 Quantum Long-Term Equity Fund - Growth 22.15 31.42

13 Franklin India Flexi Cap Fund - Growth 21.97 25.69

14 Templeton India Equity Income Fund - Growth 21.93 24.94

15 Religare AGILE Fund - Growth 21.86 14.01

16 IDFC India GDP Growth Fund - Growth 21.68 22.98

17 HDFC Mid-Cap Opportunities Fund - Growth 21.45 40.37

18 L&T Midcap Fund - Growth 21.38 27.44

19 Canara Robeco FORCE Fund - IP - Growth 21.26 36.02

20 Sundaram India Leadership Fund - Growth 21.25 23.87

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 1 year returns

Compared to Top 20 Mutual Funds as of 30 Nov. 2010

Rank Scheme Name Performance

6 Months % 1 Year %

1 Religare Mid N Small Cap Fund - Growth 22.60 46.97

2 BRICS Growth 24.02 45.16

3 HDFC Mid-Cap Opportunities Fund - Growth 21.45 40.37

4 HSBC Small Cap Fund - Growth 18.65 39.10

5 Canara Robeco Emerging Equities - Growth 17.08 38.75

6 Reliance Equity Opportunities Fund - Growth 20.49 38.61

7 IDFC Premier Equity Fund - Plan A - Growth 23.66 38.11

8 DSP BlackRock Small and Midcap Fund - Growth 18.11 36.32

9 UTI Master Value Fund - Growth 20.37 36.17

10 SBI Magnum Sector Umbrella - Emerging Businesses - Growth 19.32 36.02

11 Canara Robeco FORCE Fund - IP - Growth 21.26 36.02

12 Religare Mid Cap Fund - Growth 20.32 35.96

13 Canara Robeco FORCE Fund - Ret - Growth 21.21 35.86

14 ICICI Prudential Fusion Fund - IP - Growth 19.65 34.90

15 ICICI Prudential Discovery Fund - IP - Growth 15.79 34.86

16 ING Dividend Yield Fund - Growth 17.05 34.85

17 BNP Paribas Future Leaders Fund - Growth 18.79 34.82

18 JPMorgan India Smaller Companies Fund - Growth 20.94 34.56

19 Taurus Ethical Fund - Growth 14.22 34.10

20 Kotak Midcap Fund - Growth 20.35 33.60

Performance has been a result of our:

Stock Picking

Low churn in the portfolio, and

Conservative attitude (not taking

excessive risks)

Our Strategy has been to :

Buy during panics/declines

Use sharp rallies to partially book

profits

Opportunistically ride the momentum

for a part of the portfolio (<15%)

Remain adequately liquid at all times

Adequate liquidity helps :

Protect against volatility

Provides enough courage and

conviction to buy into panics

Current cash/liquid balances ~ at 16% of

the Portfolio

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BRICS Growth Nifty Sensex

S&P 500 CNX Midcap

BRICS Growth NAV v/s Indices (normalised)

BRICS Growth NAV Trend

Performance

Between

1 Oct. 2009 –

25 May 2010 *

Between

25 May 2010 * -

5 Nov. 2010

Between

5 Nov. 2010 ** -

30 Nov. 2010

Range bound with

volatility

Sharp rally across

the board

Correction across

the board

BRICS Growth 15.70% 36.73% -6.32%

Nifty -5.44% 31.32% -7.12%

Sensex -6.50% 31.10% -7.06%

S&P 500 -2.84% 29.86% -8.00%

CNX Mid-Cap 10.32% 31.54% -8.36%

* 25 May 2010, Indices bottomed out and then the rally started .

** 5 November 2010, Indices peaked and the corrective phase started.

BRICS Growth has delivered absolute & consistent returns across different market phases

Significant out-performance in a range bound volatile market, (Stock Picking was the Key)

Kept pace even during the sharp rally (Buy and Hold, Profit booking at higher levels)

The fall in NAV during the corrective phase was lower (Large Cash Balances, 20+%)

BRICS Growth Outperformance Trend

How did we do during periods of Volatility – 12 Biggest Falls between Oct.-’09 – Nov.-’10

How much a portfolio falls during a

correction / sharp downturn is as

important as how much it gains in a

bull market

Protecting capital is often more

important during periods of volatility

Downside protection equally

contributes to superior returns over a

period of time

We have managed to fall less than

the indices during each of the sharp

falls / panics since our inception

Large liquidity during periods of

volatility & a low beta portfolio helped.

*Beta measures the volatility of the

portfolio relative to the index

Against Nifty SensexCNX

Midcap

Beta * 0.4580 0.4577 0.5069

Date

Points

Fall -

Nifty

% Fall -

Nifty

Points

Fall -

Sensex

% Fall -

Sensex

% Fall -

BRICS

Growth

27-Jan-2010 -159.65 -3.19% -490.64 -2.92% -2.29%

03-Nov-2009 -147.80 -3.14% -491.34 -3.09% -0.36%

19-May-2010 -146.55 -2.89% -467.27 -2.77% -0.84%

25-May-2010 -137.20 -2.78% -447.07 -2.71% -1.62%

05-Feb-2010 -126.70 -2.61% -434.02 -2.68% -0.47%

27-Oct-2009 -124.20 -2.50% -387.10 -2.31% -0.65%

21-Jan-2010 -127.55 -2.44% -423.35 -2.42% -1.32%

01-Jun-2010 -116.10 -2.28% -372.60 -2.20% -1.24%

16-Nov-2010 -132.90 -2.17% -444.55 -2.19% -1.44%

26-Nov-2009 -102.60 -2.01% -344.02 -2.00% -0.95%

12-Nov-2010 -122.60 -1.98% -432.20 -2.10% -1.81%

07-Jun-2010 -101.50 -1.98% -336.62 -1.97% -0.99%

Portfolio Breakup

Large Cap. More than Rs 5,000 crores

Mid-Cap. Rs 1,000 - 5,000 crores

Small Cap. Less than Rs 1,000 crores

Large Cap56.26%

Mid Cap7.51%

Small Cap19.98%

Cash16.25%

Market Cap Breakup

Banking & Finance19.48%

Branded Garments &

Retail16.36%

Cash16.25%

FMCG9.48%

Information Technology

11.16%

Infrastructure & Capital Goods12.57%

Oil & Gas14.70%

Sectoral Allocation

Low Portfolio Turnover (Buy & Hold at work)

0.00

0.10

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1.00

Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10

tim

es

Portfolio Turnover

Portfolio Turnover

Turnover increased as

we partly booked

profits at higher levels

Re-deployed part of

liquid balances at

lower levels

Market Outlook

Global macro economic risks will continue to weigh on the markets. Will definitely have

repercussions on India. Domestic political risk, though not serious at this point cannot be under-

estimated as there could be policy freeze due to political deadlock

Excess liquidity globally flooding the Indian markets has been the primary reason for the sharp

rallies across all emerging markets. Although there is a temporary pause in the fund flows, could

resume in first quarter of 2011. Ride the momentum with funds flow, but be Selective

Although Valuations have corrected in the last few weeks, they are still not very cheap. In fact they

still look rich in some sectors although it is clearly a Buy on Declines Market

The key concern is not so much about valuations but if earnings disappoint, price corrections

in individual stocks could be sharp

In sectors/stocks where valuations factor in fairly aggressive growth rates for FY11 & FY12,

corporate performances could potentially disappoint given very high expectations

Valuations v/s growth favour Mid-caps. Mid-caps could potentially be a very big opportunity

going forward albeit with a fair degree of price volatility

Large pipeline of IPO’s (more than Rs.50,000 Crs) could be a dampener for secondary markets as

significant quantum of funds could be diverted in next 3-4 months

Pockets of opportunities still available in stocks/sectors where growth is steady and valuations still

leave room for upside. Declines/corrections in individual stocks could be used as entry points for

fresh investments

Our Strategy

“Time” in the markets is more important than “Timing” the markets

Superior long-term sustainable returns are not made by timing the markets in terms of selling at

the peaks. They are a result of purchase prices that are attractive in terms of valuations with

adequate Margin of Safety

Our strategy going ahead would continue to be, bottom up stock picking and be extremely

selective:

Buy on declines

Use sharp rallies to partially book profits

Opportunistically ride the momentum for only a small part of the portfolio

Remain adequately liquid at all times

The sectors that we are bullish and continue to be over weight are:

Technology (Software Services),

Banking & Financial Services,

Capital Goods and Infrastructure Construction

Oil and Gas including Gas Transportation & Distribution,

Domestic Consumption themes like Paints, Branded Garments, Media etc.

Thank You

Vivek Mavani – Vice President & Senior Portfolio Manager

vivek.mavani@bricssecurities.com

BRICS SECURITIES LIMITED

1st Floor, Sadhana House,

570, P. B. Marg,

Behind Mahindra Towers,

Worli, Mumbai – 400 018.

Tel: 91-22-6636 0000.

Happy Investing