MULTIPLE -STRATEGY TREND RATED

AUTOMATIC TRADING SYSTEM

Portfolio Management Services (PMS)

Performance Update

15 September 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:

Generate Steady & Consistent returns over medium to long term

Low Volatility

Cautious on 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

Since the last update, (August, 2010) the portfolio has been realigned keeping in mind the changed

view from being defensive to being slightly aggressive

Increased the weightage of large caps by increasing the exposure to Reliance Industries and

Large Cap Banks (Axis Bank and ICICI Bank)

During a market correction, mid-caps generally, witness a sharper correction. Therefore, we

reduced our exposure to mid-caps by booking profits in some our holdings which had very sharp

rallies. It is to reduce the portfolio volatility, (at least partly).

Cash levels this month are lower than last month

As we opportunistically deployed the surplus cash to ride on the momentum, and,

as the invested portfolio value has increased, (cash had obviously not)

Credo of sticking to Quality remains and will never be compromised

Can stick to this credo as we see no serious compulsion to deploy funds at higher levels.

Wouldn’t mind sitting it out for a while than take undue risks

Global macroeconomic risks remain and we are cautious of the same as highlighted repeatedly

in the previous updates. However, capitalizing on the opportunity to play the momentum for at

least part (<15%) of the portfolio

Absolute Performance – 15 September 2010

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

Weekly Monthly Quarterly Half YearlyYTD

(Calendar)

Since

Inception

BRICS Growth 2.33% 5.29% 21.68% 31.43% 37.60% 49.30%

NIFTY 4.51% 7.50% 12.23% 14.27% 12.69% 15.30%

SENSEX 4.48% 7.35% 12.00% 13.62% 11.67% 13.81%

S&P CNX 500 2.98% 6.23% 12.67% 14.83% 12.29% 18.02%

S&P CNX MIDCAP 1.16% 4.87% 14.66% 22.27% 22.90% 36.38%

Consistency in our Month-on-Month Performance

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%

Performance ahead of benchmark indices month after month

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 3 month returns

Compared to Top 20 Mutual Funds

Rank Scheme Name Performance

1 Mth % 3 Mths % 6 Mths %

1 IDFC Premier Equity Fund - Plan A - Growth 6.03 21.86 29.58

2 Brics Growth 5.29 21.68 31.43

3 Reliance Equity Opportunities Fund - Growth 8.49 20.07 29.58

4 HDFC Equity Fund - Growth 7.10 18.31 26.22

5 Franklin India High Growth Companies Fund - Growth 8.09 17.50 16.35

6 HDFC Long Term Equity Fund - Growth 7.50 17.44 25.26

7 HDFC Growth Fund - Growth 8.15 17.41 26.00

8 Canara Robeco Emerging Equities - Growth 4.22 17.39 27.93

9 Quantum Long-Term Equity Fund - Growth 7.61 17.31 24.14

10 SBI Magnum Global Fund 94 - Growth 6.54 17.08 24.27

11 DSP BlackRock Opportunities Fund - Growth 8.08 17.07 25.10

12 DSP BlackRock Equity Fund - Growth 6.91 16.98 22.42

13 Kotak Emerging Equity Scheme - Growth 5.85 16.62 24.57

14 Morgan Stanley A.C.E Fund - Growth 6.71 16.26 19.77

15 Templeton India Growth Fund - Growth 9.49 16.12 17.83

16 Fortis Future Leaders Fund - Growth 6.28 16.10 28.64

17 Tata Select Equity Fund - Appr 7.65 15.82 17.62

18 JPMorgan India Equity Fund - Growth 7.42 15.63 21.33

19 Franklin India Opportunity Fund - Growth 5.97 15.23 16.80

20 Morgan Stanley Growth Fund - Growth 6.18 15.09 16.85

The comparison includes 250 Diversified Equity Funds across all Fund Houses

Ranked on 6 month returns

Compared to Top 20 Mutual Funds

Rank Scheme Name Performance

1 Mth % 3 Mths % 6 Mths %

1 Brics Growth 5.29 21.68 31.43

2 IDFC Premier Equity Fund - Plan A - Growth 6.03 21.86 29.58

3 Reliance Equity Opportunities Fund - Growth 8.49 20.07 29.58

4 Fortis Future Leaders Fund - Growth 6.28 16.10 28.64

5 Canara Robeco Emerging Equities - Growth 4.22 17.39 27.93

6 HDFC Equity Fund - Growth 7.10 18.31 26.22

7 HDFC Growth Fund - Growth 8.15 17.41 26.00

8 HDFC Long Term Equity Fund - Growth 7.50 17.44 25.26

9 DSP BlackRock Opportunities Fund - Growth 8.08 17.07 25.10

10 Kotak Emerging Equity Scheme - Growth 5.85 16.62 24.57

11 SBI Magnum Global Fund 94 - Growth 6.54 17.08 24.27

12 Quantum Long-Term Equity Fund - Growth 7.61 17.31 24.14

13 Fidelity Equity Fund - Growth 6.87 14.87 23.46

14 DSP BlackRock Equity Fund - Growth 6.91 16.98 22.42

15 ICICI Prudential Fusion Fund - IP - Growth 5.73 14.00 22.31

16 Fidelity India Growth Fund - Growth 7.02 14.65 22.27

17 Escorts Growth Plan - Growth 2.75 12.20 22.10

18 JPMorgan India Equity Fund - Growth 7.42 15.63 21.33

19 Birla Sun Life Long Term Advantage Fund - Growth 6.96 14.79 20.74

20 Franklin India Prima Fund - Growth 5.83 15.06 19.97

BRICS Growth NAV Trend

BRICS Growth has delivered absolute &

consistent returns during both periods:

Performance has been a result of our :

Stock Picking

Low churn in the portfolio, and

Conservative attitude (not taking

excessive risks)

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BRICS Growth Nifty Sensex

S&P 500 CNX Midcap

BRICS Growth NAV v/s Indices (normalised)

Performance

Between 1 Oct.

2009 – 25 May

2010 *

Between 25 May

2010 – 15

Sept.2010

Range bound

markets with

volatility

Sharp rally

across the board

BRICS Growth 15.70% 29.04%

Nifty -5.44% 21.93%

Sensex -6.50% 21.72%

S&P 500 -2.84% 21.47%

CNX Mid-Cap 10.32% 23.62%

* 25 May 2010, Indices bottomed out, when the

current rally started.

BRICS Growth Outperformance

Our out-performance has been increasing

over a period of time

Our Strategy has been to :

Buy during panics/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

Adequate liquidity helps :

Protect against volatility

Provides enough courage and

conviction to buy into panics

Current cash/liquid balances ~ at 15% of the

Portfolio

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Nifty Sensex S&P 500 CNX MidCap

BRICS Growth NAV Outperformance vis-a-vis Indices

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 Cap53%

Mid Cap15%

Small Cap17%

Cash15%

Market Cap Breakup

Banking & Finance23.27%

Branded Garments &

Retail12.81%

Cash15.35%

FMCG14.74%

Infrastructure4.31%

Media5.93%

Oil & Gas23.59%

Sectoral Allocation

Low Portfolio Turnover (Buy & Hold at work)

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

Portfolio Turnover

Portfolio Turnover Average turnover

How did we do during periods of Volatility - 10 Biggest falls since October 2009

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.

Date

Points

Fall -

Nifty

% Fall -

Nifty

Points

Fall -

Sensex

% Fall -

Sensex

% Fall -

BRICS

Growth

27-Jan-10 -159.65 -3.19% -490.64 -2.92% -2.29%

03-Nov-09 -147.80 -3.14% -491.34 -3.09% -0.36%

19-May-10 -146.55 -2.89% -467.27 -2.77% -0.84%

25-May-10 -137.20 -2.78% -447.07 -2.71% -1.62%

05-Feb-10 -126.70 -2.61% -434.02 -2.68% -0.47%

27-Oct-09 -124.20 -2.50% -387.10 -2.31% -0.65%

21-Jan-10 -127.55 -2.44% -423.35 -2.42% -1.32%

01-Jun-10 -116.10 -2.28% -372.60 -2.20% -1.24%

26-Nov-09 -102.60 -2.01% -344.02 -2.00% -0.95%

07-Jun-10 -101.50 -1.98% -336.62 -1.97% -0.99%

04-Feb-10 -86.50 -1.75% -271.10 -1.64% -0.28%*Beta measures the volatility of the

portfolio relative to the index

Against -- Nifty Sensex

Beta * 0.4156 0.4133

Market Outlook

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

repercussions on India over a period of time, if not in the short term

Global liquidity flooding Indian markets has been the primary reason for the current rally. Some

sectors (like banking, Auto’s) have seen a huge rerating

Overall Valuations are definitely not cheap. If the current sharp momentum continues Valuations

could become a concern as they approach a bubble territory

In some sectors/stocks valuations already factor in fairly aggressive growth rates for FY11

and FY12. Corporate performances could potentially disappoint given high expectations

Price corrections from current high levels could be very sharp, if earnings disappoint

However, markets have also been very discriminative against corporates under-performing

expectations. This is very evident in the current rally since May-end 2010 where broad based

participation is lacking, (the type we have seen in the past, 2006, 2008)

Serious concerns will start when the liquidity driven rally takes even the stocks with bad/doubtful

fundamentals to new high’s

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

valuations still leave room for upside.

However we continue to remain cautious of the market levels/individual stocks prices and

valuations and would use sharp rallies as profit booking opportunities

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 time

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

Banking & Financial Services,

Gas Transportation & Distribution

Domestic Consumption oriented sectors including Paints, Branded Garments, Media etc.

Thank You

Vivek Mavani – Vice President & Senior Portfolio Manager

vivek.mavani@bricssecurities.com

BRICS SECURITIES LIMITED1st Floor, Sadhana House,570, P. B. Marg,Behind Mahindra Towers,Worli, Mumbai – 400 018.Tel: 91-22-6636 0000.

Happy Investing