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June 2019
Equinomics: Portfolio Management Services
SEBI Registration No. INP000006208
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Only “Linear Equity Fund” Scheme intends to invest a major portion (70%) of the corpus inthe large cap stocks (above Rs.20,000 crore market cap);
Equinomics’ PMS Fund “Disequilibria” would primarily focus on value stocks largely withinmid-cap and small cap segments. The scheme would invest a small portion of the corpus inthe large cap stocks for the sake of some stability to the equity portfolios and also for generatingsome liquidity from the portfolios, if environment warrants. Otherwise, primary focus would beon mid-cap segments;
By nature, equity asset class is quite risky asset class. Within the equity asset class, the small andmid-cap stocks are more risky. Hence, only those investors, who can absorb possible higherrisk to their capital, can subscribe to “Disequilibria” PMS Fund;
Conservative investors may consider ‘Linear Equity Fund’ which would largely invest in the largecap stocks (above rs.20,000 crore);
However, we will not compromise on the Management quality; Balance Sheet strength; andValuation Comfort in stock selections;
“Linear Fund”
to Focus on Large Cap
Stocks
Disclosure
Possible Risks involved in becoming PMS Clients of Equinomics
“Disequilibria
Fund” to Focus on Mid Cap Segment
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Equinomics: Who are we?
The concept of Equinomics comes from Mr. G. Chokkalingam, who has over 35 years of experience in
Economics, Market Research and Equity Research;
His passion for ‘Equity & Economics’ drove him to open an exclusive boutique equity research &
advisory firm in 2014 under Investment Advisory License from the regulator;
Name ‘Equinomics’ derives from Equity Economics. Equinomics believes in “Value investing for
Wealth creation in long term through Equinomics’ perspectives”;
Equinomics Perspective arise from strong fundamental research by using different methodologies to
identify multi-bagger ideas. The different methodologies such as thematic approach, perception
driven PE, bottom-up & top-down approach etc.
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Equinomics Team
Mr. Nisarg ShahFund Manager
Over 4 years ofExperience in EquityResearch;
Post GraduationDiploma in BusinessManagement;
Bachelor’s degree inFinancial Markets fromMumbai University;
NISM Certified ResearchAnalyst;
Certified CreditResearch Analyst-CCRA, AIWMI;
Over 35 years of Experience in Economics, Equity Research, Market Research & Knowledge Management 15 years experience with Enam Group Worked with Barclays Wealth, Centrum Wealth, DSJ Group & Institute of Economic Growth
Mr. G Chokkalingam - Chief Investment Officer: Research & Strategy
Mr. Sanket DaragshettiFund Manager
Over 5 years ofExperience inInvestment Advisory,Equity Analysis andPortfolio ManagementServices;
MBA in Finance fromCULC, London. BEMechanical;
Earlier worked withRBL Bank and CentrumWealth;
Certified FinancialPlanner (CFP);
Ms. Sampada MahakalEquity Advisory
10+ years of experiencein Corporate Treasury &Financial ServiceIndustry;
Worked with Syntel andSajjan India in thecapacity of ManagerFinance & PortfolioManager;
MMS Finance fromMumbai University;
NISM Certified ResearchAnalyst;
NISM- CertifiedInvestment Adviser;
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Equinomics: Discretionary PMS Funds
Equinomics Disequilibria Opportunity Fund’: Primary Focus on MidCap Stocks
‘Equinomics Linear Equity Fund’: Primary Focus on Large Cap Stocks
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Discretionary PMS Funds
Allocation to Large versus SMC segments
Considering the Primary Focus of ‘Disequilibria’ Fund on the Small & Mid cap space,
Conservative investors are advised to consider ‘Linear Equity Fund’
Exposure Linear Equity Fund Disequilibria Opportunity Fund
Large Cap (Mkt cap > Rs.20,000 crore) 70% 30%
Small & Mid Cap (Mkt cap <Rs.20,000 crore)
30% 70%
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Fund 1: Equinomics Linear Equity Fund
Key Features:
Primarily a Large Cap Fund: Around 70% exposure to Large Cap stocks (> Rs.20,000 crore of
market cap);
Around 30% to Small & Mid cap Stocks to create alpha over a period of time; Actively use
Tactical Opportunities created by market forces to enhance portfolio returns;
Fee Structure: Two Options:
A Nominal Fee of 1.5% per annum; OR
A nominal fee of 0.3% per annum with 10% profit sharing over 10% hurdle rate;
No Brokerage Commission for Equinomics – Trades to be executed directly on main Broker
platform, not through Equinomics as an AP (Authorized Person);
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Features of ‘Equinomics Linear Equity Fund”
Key Traits of Large cap companies:
• Well established track records of Management;
• Sound financials and balance sheets;
• Relatively Less Governance Issue;
• Demonstrated ability to pay dividends;
• Relatively stable companies as compared to midcaps;
• Wide research coverage;
• Often held by large institutional investors (FIIs, MFs and DIIs);
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Objectives of ‘Equinomics Linear Equity Fund”
Objectives:
• Cater to Conservatives investors, whose profile suits lesser Risk level associated with the Equity asset
class;
• Try to make nominal returns over market returns with lower risk levels;
• Risk associated with Large cap segment has also increased substantially in the recent period:
• Though the Sensex has fallen just about 9% from its 52-week high, over 60% of Top 100 companies (in terms of market
cap size) fell by 25% to 64% from their respective last 52-week highs;
• Hence, focus on diversified sectors without losing valuation comfort in the Large Cap space;
• Try using 30% of equity corpus for making returns superior to market by banking on value stocks in the
small and mid cap space;
• Also practice tactical opportunities to make use of any possible significant short term gains to remain
ahead of overall market;
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Fund 2: Equinomics “Disequilibria” Opportunity Fund
Features of “Disequilibria Open-ended Fund”
Primarily a Mid cap Fund : Over a period of time, around 70% to Small & Mid caps vs 30% to
Large cap;
Overall limit of up to 30% for the stocks with market cap of above Rs.20,000 crore and up to 70% for the
stocks with market caps in the range of Rs.300 crore to Rs.20,000 crore would be maintained;
Actively use Tactical Opportunities created by market forces to enhance portfolio returns;
Nominal Fee of 1.5% per annum;
No Brokerage Commission for Equinomics – Trades to be executed directly on main Broker
platform, not through Equinomics as an AP (Authorized Person);
No Profit Sharing;
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Projection of Future Stock Price = P E x EPS where PE = PRICE / EPS;
Even Infosys became victim of Perception Disequilibria when the CEO quit; same stock gave over 80% return when the
perception on the management stabilized;
Maruti crashed to around Rs.1400 in early 2014 when perception turned adverse when Suzuki of Japan proposed to set up its
own car manufacturing facility in India – same stock touched Rs.10,000 last year;
Disequilibria Opportunity Fund
Disequilibrium in stock valuations can be, at times, solely perception-driven. Perception drives UP or Down the prices
more than what stock fundamentals deserve;
This Fund tries to capture the opportunities created due Valuation Disequilibrium due to adverse Perceptions;
Perception Trend Element Fundamental
“Disequilibria” Opportunity Fund
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“Disequilibria” Opportunity Fund
Primarily a Mid Cap Fund, with maximum exposure to mid- caps and some limited exposure to large caps and small caps;
Up to 30% exposure will be allocated to stocks having Market cap of Rs.20,000 crore and above at the time of buying;
Up to 70% exposure will be in stocks above Rs.300 crore but below Rs.20,000 crore market cap at the time of buying;
Will use tactical opportunities created by market forces to enhance portfolio returns;
Examples of Disequilibrium in stock valuations caused by perceptions turning favourable:
Cyclical Business: On down-cycle, PE shrinks badly due to adverse perceptions, but expands on upturn. Eg. Hindustan Zinc
moved up from Rs.116 in deflationary conditions (early 2016) to over Rs.330 when metal space turns around;
BIOCON, was “boring stock” almost for 2 years; Low visibility & valuation despite large cash pile and rich valuation of its
subsidiary. But later visibility jumps and stock also jumps more than 3-folds in less than 3 years;
Vindhya Telelinks: Substantial growth of telecom business & rich investment in cement company; But takes 2 years to
get its recognition – stock multiplies 3 times in 3.5 years;
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Key Differentiating Factors
Equinomics Linear Equity Fund
Open Ended
Up to 70% in stocks with market cap more than Rs.20,000 crore
Up to 30% in stocks with market cap in the range of Rs.300 crore to Rs.20,000
croreTo be tilted towards Large caps
Single stock exposure would be <=10% and
Sector exposure would be <=25%
Investment horizon: Aims to create wealth in 1 to 2 years
Designed to take Lower Risk to make Modest Wealth
Management Fee: 1.5% p.a. OR
0.3% per annum with 10% profit sharing over 10% hurdle
Equinomics Disequilibria Opportunity Fund
Open Ended
Up to 30% in stocks with market cap more than Rs.20,000 crore
Up to 70% in stocks with market cap in the range of Rs.300 crore to Rs.20,000
croreTo be tilted towards mid & large mid cap
stocks
Single stock exposure would be <=10% and
Sector exposure would be <=30%
Investment horizon: Aims to create wealth in 1 to 3 years
Designed to take Modest Risk to make Modest Wealth
Management Fee of: 1.5% p.a.
No profit sharing
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DPMS
1. Corpus Rs.25 lakh or more
2. Execution By Equinomics
3. Custodial Service Orbis Financial
4.Brokerage Commission No for Equinomics
5. Customization of Portfolio No, will follow standard model for all investors; No interaction with clients on stocks to Buy and Sell; Final decision to Buy/Sell by Equinomics Fund Managers;
6. Sector/Stock Concern Follows Standard Portfolio Model of Equinomics; No major deviation;
7. Fees 1.5% p.a for Equinomics Linear Equity Fund or 0.3% p.a plus10% profit sharing on 10% hurdle.
1.5% p.a for Equinomics Disequilibria Opportunity Fund;
Equinomics: DPMS
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FEE Details for Schemes
Scheme Equinomics Linear Equity FundEquinomics Disequilibria
Opportunity FundMinimum Initial Investment (Rs.) 25,00,000 25,00,000
Minimum Add-on Investment (Rs.) 50,000 50,000
Upfront Fee (One Time) NA NA
Performance FeesFee of 0.3% p.a plus 10% profit sharing on 10% hurdle.
NA
OR
Fixed Fees (per annum) * 1.50% 1.50%
Exit Charges
Between 0 to 12 months up to 2% up to 2%
>12 months & upto 24 months up to 1% up to 1%
>24 months & upto 36 months No Exit load No Exit load
Greater than 36 months No Exit load No Exit load
Service Charges for Custody & Fund Accounting Services
Custody Charges 0.02% p.a. on AUC (payable monthly)
Fund Accounting Charges 0.02% p.a. on AUC (payable monthly)
Transaction Charges 0.01% or Rs.25 whichever is lower (per transaction)
Depository At Actual
Out of pocket expensesIncludes but not limited to Share Transfer Stamps, Charges payable to regulators, Postage and Courier, Chartered Accountant’s Fees for calculation of TDS for NRI clients and any other expenses on Client’s Instructions.
Taxes extra As applicable from time to time at actuals
Recurring ExpensesIn addition, account opening charges, Audit Fees, GST or any other such statutory levies or transaction expenses, as applicable will be payable by the client.
Distribution Charges (on buying / selling)
Equinomics 0%
Broker 0.05% to 0.3%
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Equinomics Research and Advisory Pvt Ltd (“Equinomics”) is a registered Portfolio Manager with Securities and Exchange Board of India.
This presentation / newsletter / report is strictly for information and illustrative purposes only and should not be considered to be an offer, to buy or sell any securities or toenter into any Portfolio Management agreements. This presentation/newsletter/report is prepared by Equinomics strictly for the specified audience and is not indented fordistribution to public and is not to be disseminated or circulated to any other party outside of the intended purpose. This presentation/newsletter/report may containconfidential or proprietary information and no part of this presentation / newsletter / report may be reproduced in any form without its prior written consent to Equinomics.If you receive a copy of this presentation / newsletter / report and you are not the intended recipient, you should destroy this immediately. Any dissemination, copying orcirculation of this communication in any form is strictly prohibited.
Neither Equinomics nor any of their respective affiliates or representatives make any express or implied representation or warranty as to the adequacy or accuracy of thestatistical data or factual statement concerning India or its economy or make any representation as to the accuracy, completeness, reasonableness or sufficiency of any of theinformation contained in the presentation / newsletter / report herein, or in the case of projections, as to their attainability or the accuracy or completeness of theassumptions from which they are derived, and it is expected each prospective investor will pursue its own independent due diligence. In preparing this presentation /newsletter / report, Equinomics has relied upon and assumed, without independent verification, the accuracy and completeness of information available from public sources.Accordingly, neither Equinomics nor any of its affiliates, shareholders, directors, employees, agents or advisors shall be liable for any loss or damage (direct or indirect)suffered as a result of reliance upon any statements contained in, or any omission from this presentation / newsletter / report and any such liability is expressly disclaimed.
You are expected to take into consideration all the risk factors including financial conditions, Risk-Return profile, tax consequences, etc. You understand that the pastperformance or name of the portfolio or any similar product do not in any manner indicate surety of performance of such product or portfolio. You further understand that allsuch products are subject to various Market Risks, Settlement Risks, Economical Risks, Political Risks, Business Risks, Financial Risks etc. You are expected to thoroughly gothrough the terms of the arrangements / agreements and understand in detail the Risk-Return profile of any security or product of Equinomics or any other service providerbefore making any investment. You should also take professional / legal /tax advice before making any decision of investing or disinvesting. Equinomics or Equinomicsassociates may have financial or other business interests that may adversely affect the objectivity of the views contained in this presentation / newsletter / report.
Equinomics does not guarantee the future performance or any level of performance relating to any products of Equinomics or any other third party service provider.Investment in any product including mutual fund or in the product of third party service provider does not provide any assurance or guarantee that the objectives of theproduct are specifically achieved. Equinomics shall not be liable to client for any losses that you may suffer on account of any investment or disinvestment decision based onthe communication or information or recommendation received from Equinomics on any product. Further Equinomics shall not be liable for any loss which may have arisenby wrong or misleading instructions given by you whether orally or in writing.
Disclaimer
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Thank You!!!
Equinomics Research and Advisory Pvt LtdAddress: 101, Simba, 12, Aradhana Industrial Estate, Off. Western Express Highway,
Near Virwani Industrial Estate , Goregaon East, Mumbai - 400063
Ph No. +91-7710074647