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Kotak NASDAQ 100 FOF Product Presentation
Kotak NASDAQ 100 FOF Product Presentation
Kotak NASDAQ 100 FOF Product Presentation
USA USA
41.5% 41.3%
Artificial Over-the-Top(OTT)
Intelligence/Machine Streaming
Learning
Disclaimer: The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may not necessarily fructify in the
expected timeline or as expected. Themes mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for development or implementation of an investment
strategy. It should not be construed as investment advice to any party. 3
Firms Shaping Our Future Trio Of Quality, Growth and Longevity
Disclaimer: The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may not necessarily fructify in
the expected timeline or in the expected manner. Stocks mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for development or
implementation of an investment strategy. It should not be construed as investment advice to any party. The stocks may or may not be part of our portfolio/strategy/ underlying scheme. Past
performance may or may not be sustained in future. 4
Going Forward, Trends Of Digitization Are Tailor-made For Tech
Source: McKinsey & Company, The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may not
necessarily fructify in the expected timeline or in the expected manner. Theme mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for
development or implementation of an investment strategy. It should not be construed as investment advice to any party. Past performance may or may not be sustained in future. 5
Digital Intensity Up In Almost Every Product And Service…
Source: McKinsey & Company, The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may not
necessarily fructify in the expected timeline or in the expected manner. Theme mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for
development or implementation of an investment strategy. It should not be construed as investment advice to any party. Past performance may or may not be sustained in future. 6
… These Trends Are Set To Last Beyond The Pandemic
The largest shifts during the crisis are also the most likely to stick through the recovery – Changing customer
expectations, remote working, migration of assets to the cloud
Source: McKinsey & Company, The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may not
necessarily fructify in the expected timeline or in the expected manner. Theme mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for
development or implementation of an investment strategy. It should not be construed as investment advice to any party. Past performance may or may not be sustained in future. 7
Tech’s Share Of Revenues And Earnings Has Been Increasing In US
Revenue share – S&P 500 (%) Earnings share – S&P 500 (%)
Source: S&P’s Factset, Credit Suisse, The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may
not necessarily fructify in the expected timeline or in the expected manner. Theme mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for
development or implementation of an investment strategy. It should not be construed as investment advice to any party. Past performance may or may not be sustained in future. 8
Margins Have Been Stable For The Broad Market But They Have
Been Rising For Technology Companies In US
EBIT Margins
Note: S&P 500 ex-Financials; Trailing 12-Month EBIT Margin; 4-Quarter Moving Average
Source: S&P’s Factset, Credit Suisse, The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may not
necessarily fructify in the expected timeline or in the expected manner. Theme mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for
development or implementation of an investment strategy. It should not be construed as investment advice to any party. Past performance may or may not be sustained in future. 9
To Compound Superior Revenue Growth, Technology Companies
Generate Twice As Much Free Cash Flow As The Others In US
Free cash flow as a % of Sales – TECH+ vs. S&P 500 ex-TECH+
New disruptors at global scale have been added to index in the past and same trend may continue
Source: Bloomberg, Stocks mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for development or implementation of an investment strategy. It
should not be construed as investment advice to any party. The stocks may or may not be part of our portfolio/strategy/ underlying scheme. Past performance may or may not be sustained in future.
11
Superior Earnings CAGR Of Last Decade Has Potential To Get Better
Nifty IT’s superior earnings growth over FY10-20 is thanks to the depreciation of Rupee, adjusted for which, Nasdaq 100
earnings growth would be far superior
Data Source: Bloomberg consensus Estimates,. The above benchmark comparison is depicted to highlight the earnings growth potential of the US Benchmark -NASDAQ 100, S&P 500 Index vis-à-vis the Indian
benchmark indices – Nifty 50 and Nifty IT Index. Past performance may or may not be sustained in future
12
In The Long Term, Market Weight Could Keep Inching Up With
Rising Tech Intensity In US
1 Year Forward PE – S&P 500 segments Market Weight – S&P 500 (%)
Source: S&P’s Factset, Credit Suisse, The slide is meant to illustrate the larger themes and under-currents that are in play which may be driving the growth in said stock(s)/index/theme. The same may not
necessarily fructify in the expected timeline or in the expected manner. Theme mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for
development or implementation of an investment strategy. It should not be construed as investment advice to any party. Past performance may or may not be sustained in future. 13
Hence, Premium Valuations At All-time High PE Are Justified
1 year Forward Price to Earning Ratio 1 year Forward Price to Book Ratio
Nasdaq 100 10 Yr Avg PE (x)
Nasdaq 100 10 Yr Avg PB (x)
PE (x)
6.0 PB (x)
38.0
32.7
4.0 4.8
28.0
2.0
18.0
8.0 0.0
Jun-08
Jun-13
Jun-18
Sep-09
Sep-14
Sep-19
Dec-10
Dec-15
Dec-20
Mar-07
Mar-12
Mar-17
Nov-05
Jun-05
Aug-10
Aug-19
Dec-02
Oct-06
Dec-11
Oct-15
Dec-20
Mar-04
Jan-08
Mar-13
Jul-14
Jan-17
May-09
May-18
Data Source: Motilal Oswal Financial Services Ltd, Bloomberg consensus Estimates, Past performance may or may not be sustained in future
14
INR / USD Movement Offers An Additional Hedge In Case
Of Weak Domestic Economy
A weak domestic economy may hurt the currency vis-à-vis the US dollar, which improves Rupee-denominated Nasdaq-
100 returns, offering an additional dimension of hedge.
INR / USD
80
75
70
65
60
55
50
45
40
May-10
May-12
May-14
May-16
May-18
May-20
Jan-09
Jan-11
Jan-13
Jan-15
Jan-17
Jan-19
Jan-21
Sep-09
Sep-11
Sep-13
Sep-15
Sep-17
Sep-19
Source: Bloomberg, Past performance may or may not be sustained in future. 15
Hedging Potential Against INR
1400
1200 NASDAQ 100 TRI in INR grew 11.3 times
1000 NASDAQ 100 TRI in USD grew 6.8 times
800
600
400
200
0
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
NASDAQ 100 TR Index (INR) NASDAQ 100 TR Index (USD)
Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
NASDAQ 100 TRI (INR) 23.1 22.1 54.6 22.0 15.0 10.1 24.9 9.2 42.5 52.7
NASDAQ 100 TRI (USD) 3.7 18.4 36.9 19.4 9.8 7.3 33.0 0.0 39.5 48.9
Difference 19.5 3.8 17.7 2.6 5.2 2.8 -8.1 9.1 3.1 3.8
As on 31st Dec 2020
Data Source: Bloomberg, The Index performance is only to illustrate the behavior of NASDAQ 100 TRI based investing and should not be construed as promise of returns. Past performance may or may not
be sustained in future. 16
Diversify Exposure To Businesses That Will Disrupt, Than Get
Disrupted…
Retailers fear AMAZON Cabs have no answer to UBER
Cinemas fear getting obliterated by NETFLIX Airbnb is making hotels rethink their models
Source: Bloomberg, Stocks mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for development or implementation of an investment strategy. It
should not be construed as investment advice to any party. The stocks may or may not be part of our portfolio/strategy/ underlying scheme. 17
…Which Get Valued Disproportionately Higher Than
Traditional-model Peers
Market Capitalization (bn$) Cars sold 2019 (Mn)
19
NASDAQ 100 Index -Tech Skew But Other Long Haul Businesses Too
Data Source: Bloomberg, stocks/sectors mentioned above are used to explain the concept and is for illustration purpose only and it should not be used for development or implementation of an investment strategy.
It should not be construed as investment advice to any party. The stocks / sectors may or may not be part of our portfolio/strategy/ underlying scheme. The above benchmark comparison is depicted to highlight the
performance potential of the US Benchmark -NASDAQ 100 Index vis-à-vis the Indian benchmark indices – Nifty 50 and Nifty 500. Past performance may or may not be sustained in future
22
Does NASDAQ 100 TRI Investments Add Value To Investors?
NASDAQ 100 TRI (INR) has outperformed Nifty 50 TRI, Nifty 500 TRI and Nifty IT TRI significantly during last 10 year
1400
1230
1200
1000
800
600
400
307
200 301
0
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
NASDAQ 100 TRI (INR) NIFTY 50 TRI Nifty 500 TRI
Note: Index data rebased to 100 since January 2010 till December 2020
Source: Bloomberg, The Index performance is only to illustrate the behavior of NASDAQ 100 TRI based investing and should not be construed as promise of returns. The above benchmark comparison is depicted
to highlight the performance potential of the US Benchmark -NASDAQ 100 TRI vis-à-vis the Indian benchmark indices – Nifty 50 TRI and Nifty 500 TRI. Past performance may or may not be sustained in the future.
23
Performance
52.7
36.5 36.7
33.4
26.7
23.2
17.9
16.1
13.4 12.7
11.3
7.9
6M 1 Yr 3 Yr 5 Yr
Source: Bloomberg, Returns greater than 1 year are compounded annualized (CAGR). The Index performance is only to illustrate the behavior of NASDAQ 100 TRI based investing and should not be
construed as promise of returns. The above benchmark comparison is depicted to highlight the performance potential of the US Benchmark -NASDAQ 100 TRI vis-à-vis the Indian benchmark indices –
Nifty 50 TRI, Nifty 500 TRI. Past performance may or may not be sustained in the future. 24
Historical Performance
Year Nifty 50 TRI Nifty 500 TRI NASDAQ 100 TRI (INR)
CY10 19.2 15.3 15.4
CY11 -23.8 -26.4 23.1
CY12 29.4 33.5 22.1
CY13 8.1 4.8 54.6
CY14 32.9 39.3 22.1
CY15 -3.0 0.2 15.0
CY16 4.4 5.1 10.1
CY17 30.3 37.7 24.9
CY18 4.6 -2.1 9.2
CY19 13.5 9.0 42.5
CY20 16.1 17.9 52.7
Source: Bloomberg , All returns are absolute. The Index performance is only to illustrate the behavior of NASDAQ 100 TRI based investing and should not be construed as promise of returns. The above
benchmark comparison is depicted to highlight the performance potential of the US Benchmark -NASDAQ 100 TRI vis-à-vis the Indian benchmark indices – Nifty 50 TRI, Nifty 500 TRI. Past performance
may or may not be sustained in the future. 25
Reduced risk
Indian Markets Have Low Correlation With NASDAQ 100 TRI
Since CY04 Nifty 50 TRI Nifty 500 TRI NASDAQ 100 TRI (INR)
Diversification could be achieved by including assets that are not perfectly correlated to each other.
Data Source: Bloomberg. Correlation of weekly total returns as of Jan, 2004 to Dec 31, 2020. The above benchmark comparison is depicted to highlight the performance potential of the
US Benchmark -NASDAQ 100 TRI vis-à-vis the Indian benchmark indices – Nifty 50 TRI, Nifty 500 TRI Index. Past performance may or may not be sustained in the future.
26
Better Risk Adjusted Returns
Risk Adjusted Returns (%) 1 Year 3 Year 5 Year 7 Year 10 Year 15 Year
NASDAQ 100 TRI (INR) 1.48 1.27 1.20 1.18 1.34 0.88
Nifty 50 TRI 0.52 0.54 0.75 0.79 0.57 0.56
Nifty 500 TRI 0.62 0.40 0.73 0.85 0.60 0.56
NASDAQ 100 TRI (INR) 52.7 33.4 26.7 24.3 26.7 19.6
Nifty 50 TRI 16.1 11.3 13.4 13.4 9.9 12.6
Nifty 500 TRI 17.9 7.9 12.7 14.2 10.1 12.2
NASDAQ 100 TRI (INR) 35.7 26.4 22.2 20.7 20.0 22.3
Nifty 50 TRI 30.9 20.8 17.9 17.0 17.3 22.6
Nifty 500 TRI 29.1 20.0 17.5 16.7 16.8 21.9
Data Source: Bloomberg, As on 31/12/2020, Returns greater than 1 year are compounded annualized (CAGR). The above benchmark comparison is depicted to highlight the performance potential
of the US Benchmark -NASDAQ 100 TRI vis-à-vis the Indian benchmark indices – Nifty 50 TRI, Nifty 500 TRI . Past performance may or may not be sustained in the future. 27
SIP Return
250 250
200 200
150 150
100 100
50 50
Portfolio 1 Portfolio 2 ( Nifty 50 TRI (80%) + NASDAQ 100 TRI (20%)) Portfolio 1 Portfolio 2 ( Nifty 500 TRI (80%) + NASDAQ 100 TRI (20%))
Note: Index data rebased to 100 since January 2010 till December 2020, Performance is in INR
NASDAQ 100 TRI (INR) allocation has improved portfolio performance significantly
Data Source: Bloomberg, Performance as on 30/10/2020 . The Portfolio 2 is a simulation based on 80:20 allocation between Nifty 50 TRI / Nifty 500 Index and NASDAQ 100 TRI Index in INR Terms. The above is
only a test of concept and is not a guarantee of future return. The above benchmark comparison is depicted to highlight the performance potential of the US Benchmark -NASDAQ 100 TRI vis-à-vis the Indian
benchmark indices – Nifty 50 TRI, Nifty 500 TRI. Past performance may or may not be sustained in the future. 29
Why Invest In Kotak NASDAQ 100 Fund Of Fund ?
NASDAQ 100 Index has very long track record, since January 31, 1985
NASDAQ 100 Index is home to some of the most well-known names in technology
30
Fund Features & Risk Factors
31
Product Structure
Kotak iShares
Indian
NASDAQ NASDAQ
Investor
100 FOF 100 ETF
Note: Kotak Nasdaq100 FOF would invest in IShares Nasdaq100 ETF , Lyxor Nasdaq 100 ETF and USAA NASDAQ-100 Index fund or similar overseas ETF/ and/or Index Fund based on NASDAQ 100
Index as mentioned in scheme information document. 32
iShares NASDAQ 100 UCITS ETF USD (Acc)
The Fund seeks to track the performance of an index composed of 100 of the largest non-financial companies listed on the
NASDAQ Stock Market.
1 Year 3 Year 5 Year 10 Year 2015 2016 2017 2018 2019 2020
iShares NASDAQ 100
52.1% 32.3% 25.8% 26.0% 14.2% 9.8% 23.9% 8.0% 41.0% 52.1%
ETF (INR)
NASDAQ 100 TRI (INR) 52.7% 33.4% 26.7% 26.7% 15.0% 10.1% 24.9% 9.2% 42.5% 52.7%
Source: Bloomberg, iShares Factsheet, The Performance shown above is of the iShares NASDAQ 100 ETF . The above stated performance may not translate fully into Kotak Nasdaq 100 FOF. FOF performance
may also get affected by fund expenses, cash balance with fund, fund transactions and currency play. Kotak Nasdaq100 FOF would invest in IShares Nasdaq100 ETF , Lyxor Nasdaq 100 ETF and USAA NASDAQ-
100 Index fund or similar overseas ETF/ and/or Index Fund based on NASDAQ 100 Index as mentioned in scheme information document. Past performance may or may not be sustained in future.
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Key Features
Name of the Scheme Kotak NASDAQ 100 Fund of Fund
Category of Scheme Fund of Fund
An open ended fund of fund investing in units of overseas ETF’s and/or Index Fund based on
Type of the Scheme
NASDAQ 100 Index
Benchmark Name NASDAQ 100 TRI
The investment objective of the scheme is to provide long-term capital appreciation by investing in
Investment Objective units of overseas ETF’s and/or Index Fund based on NASDAQ 100 Index
However, there is no assurance that the investment objective of the Scheme will be realized
• The Nasdaq-100® is one of the world’s preeminent large-cap growth indexes. It includes 100 of the largest domestic
and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization.
Key Features
• Index has very long track record, first index values starts since January 31, 1985
• The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial companies listed on The
NASDAQ Stock Market.
• The Index reflects companies across computer hardware and software, telecommunications, retail/wholesale trade
and biotechnology.
• Nasdaq-100 is home to some of the most well-known names in technology—including Apple, Microsoft, Alphabet,
Intel, and Facebook—the index also includes category-defining companies on the forefront of innovation in other key
industries such as Amgen, Starbucks, and Tesla.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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Disclaimer
These materials are not intended for distribution to or use by any person in any jurisdiction where such distribution would
be contrary to local law or regulation. The distribution of this document in certain jurisdictions may be restricted or totally
prohibited and accordingly, persons who come into possession of this document are required to inform themselves about,
and to observe, any such restrictions.
The information contained in this document is extracted from different public sources. All reasonable care has been taken
to ensure that the information contained herein is not misleading or untrue at the time of publication. This is for the
information of the person to whom it is provided without any liability whatsoever on the part of Kotak Mahindra Asset
Management Co Ltd, Kotak Mahindra Trustee Company Limited or any associated companies or any employee, directors
thereof. We are not soliciting any action based on this material and is for general information only.
These materials are not intended for distribution to or use by any person in any jurisdiction where such distribution would
be contrary to local law or regulation. The distribution of this document in certain jurisdictions may be restricted or totally
prohibited and accordingly, persons who come into possession of this document are required to inform themselves about,
and to observe, any such restrictions.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
38
Disclaimer
The Product(s) is not sponsored, endorsed, sold or promoted by Nasdaq, Inc. or its affiliates (Nasdaq, with its affiliates, are referred to as the “Corporations”). The Corporations have
not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Product(s). The Corporations make no representation or
warranty, express or implied to the owners of the Product(s) or any member of the public regarding the advisability of investing in securities generally or in the Product(s)
particularly, or the ability of the Nasdaq-100 to track general stock market performance. The Corporations' only relationship to Kotak Mahindra Asset Management Co. Ltd.
(“Licensee”) is in the licensing of the Nasdaq®, Nasdaq®, NASDAQ-100 ®, NASDAQ-100 INDEX®, and certain trade names of the Corporations and the use of the Nasdaq-100 which is
determined, composed and calculated by Nasdaq without regard to Licensee or the Product(s). Nasdaq has no obligation to take the needs of the Licensee or the owners of the
Product(s) into consideration in determining, composing or calculating the Nasdaq-100. The Corporations are not responsible for and have not participated in the determination of
the timing of, prices at, or quantities of the Product(s) to be issued or in the determination or calculation of the equation by which the Product(s) is to be converted into cash. The
Corporations have no liability in connection with the administration, marketing or trading of the Product(s).
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF NASDAQ-100 OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT(S), OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100
OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE
CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF
SUCH DAMAGES.
Nasdaq®, Nasdaq®, NASDAQ-100 ®, NASDAQ-100 INDEX®, are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for
use by Kotak Mahindra Asset Management Co. Ltd. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued,
endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
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Thank You
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