INVESTOR COMMUNIQUE

FOR THE MONTH ENDED MAY 31, 2024

IVY PMS

The outcome of 2024 General Elections was a surprise for markets. While the
NDA is still expected to form the government, BJP is clearly short of the
half-way mark thus entailing reliance on coalition partners. While it is too
early to gauge how this will impact the direction of policy making, this may
just be the trigger for a cool off in the overheated market sentiment. We have
been highlighting that market sentiment, as measured by our proprietary
index, has stayed stretched, suggesting a high degree of complacency going
into this event. With the eventual outcome turning out to be worse than
expected, there is reason to expect moderation in sentiment which could
weigh on markets in the near term.

Equity sentiment readings reflected high complacency going into the event

2.50 80%
Zone of Complacency => SELL
2.00 60%
1.50
40%
1.00
0.50 20%

0.00 0%
Dec-06

May-12
Apr-11
Jan-08

Mar-10

Dec-19

May-24
Jun-13

Apr-23
Jul-14

Aug-15

Oct-17

Jan-21

Mar-22
Feb-09

Sep-16

Nov-18

-0.50 -20%
-1.00
-40%
-1.50
-2.00 -60%
Zone of Pessimism => BUY
-2.50 -80%
1 year Fwd Ret Nifty ESI

Source: Bloomberg, FactSet, SBIFM Research; Note: ESI stands for Equity Sentiment Index

Stage set for the comeback of Quality

Value outperforming
3 year rolling return Quality
30%
20%
10%
0%
-10%
-20%
-30% Quality outperforming Value
Sep-05

May-07
Mar-08
Jan-99

May-02
Mar-03

Jan-09

May-12
Mar-13

May-17
Mar-18
Nov-99
Sep-00

Jan-04

Jul-06

Nov-09
Sep-10

Jan-14
Jul-01

Nov-04

Jul-11

Nov-14

Jan-19

May-22
Mar-23
Sep-15
Jul-16

Nov-19

Jan-24
Sep-20
Jul-21

Value over Quality

Source: FactSet, SBIFM Research

INVESTOR COMMUNIQUE
FOR THE MONTH ENDED MAY 31, 2024
IVY PMS

More importantly, a related change should be a change in market preference towards quality. For over three
years now, ever since 2021, quality stocks have been underperforming. With political uncertainty returning
and speculative action likely to subside, we believe focus should move back to bottom-up fundamentals.
Quality of management, strength of balance sheets and sustainability of growth should become important
again.

Warm Regards

Gaurav Mehta
CIO Alternatives - Equity
SBI AEON ALPHA
INVESTOR COMMUNIQUE AS ON MAY 31, 2024
IVY PMS

An All-Weather Portfolio Strategy

A 3-in-1 portfolio aiming to have 15 - 20 stocks which will be a combination of long-term structural ideas,
medium-term tactical opportunities and active cash calls

Active Cash Management

A recourse available in case of inadequate opportunities
Aims to reduce drawdown
Helps to avoid forced buying
Allocation range to be 0% -35% of the overall portfolio

Active Cash CORE CORE Holdings

Management Holdings Focus on long-term earnings compounders
Absolute return portfolio with low churn
Allocation range: 50% or more of the equity portion

SATELLITE SATELLITE Holdings

Focus on medium-term tactical opportunities
Holdings
Relative return with a “high risk - high reward” expectation
Clearly defined exit strategy resulting in a higher churn ratio
Allocation range: Upto 50% of the equity portion

Type of scheme An Open-ended PMS strategy

Investment objective of this portfolio will be to generate long-term capital growth through investment
Investment objective
in well-researched stocks

Equity strategy – Endeavour to have 15 to 20 stocks

Portfolio attributes Portfolio will have core and satellite along with active cash allocation
Stock limit - 10% at the time of investment; No sector bias

Equity & Equity-related instruments including derivatives - Up to 100% Debt and Money Market
Asset Allocation
Instruments - Up to 100%

Benchmark NIFTY 50 TRI Index

Fund Manager Mr. Gaurav Mehta

Min. investment size

Rs. 50 lacs
(initial purchase)

Additional Purchase Rs. 1 lac

Minimum Redemption Rs. 1 lac subject to minimum balance of INR 50 lacs

Exit Load For exit between 0 and 12 months: 1%; For exit after 12 months-NIL
SBI AEON ALPHA
INVESTOR COMMUNIQUE AS ON MAY 31, 2024
IVY PMS

Top 10 Holdings (With Current % Allocation) Top 10 Holdings by Returns

Compa ny Wei ght (%) Compa ny Returns (%)*
FINOLEX INDUSTRIES LTD. 6.51 GOKALDAS EXPORTS LTD. 93.74
HDFC BANK LTD. 5.83 EIH LTD. 78.83
ICICI BANK LTD. 5.46 FINOLEX INDUSTRIES LTD. 76.35
MUTHOOT FINANCE LTD. 5.23 DODLA DAIRY LTD. 68.63
WHIRLPOOL OF INDIA LTD. 5.18 ZF C. V. CONTROL SYSTEMS INDIA LTD. 63.63
CARBORUNDUM UNIVERSAL LTD. 5.13 WENDT (INDIA) LTD. 62.49
DIVIS LABORATORIES LTD. 4.98 MUTHOOT FINANCE 46.20
GOKALDAS EXPORTS LTD. 4.80 CARBORANDUM UNVRSL 38.97
ICICI LOMBARD 4.70 ICICI LOMBARD 34.83
HAWKINS COOKER LTD. 4.54 DIVI'S LABORATORIES LTD. 26.10

Sectorwise Allocation (in %) Market Cap Break Up (%)

Consumer Discretionary 30.40 *

21
Financials 23.64

Materials 19.70

Health Care 9.18

47
Consumer Staples 3.70

Industrials 3.53 23
Large Cap
Information Technology 0.54 Mid Cap
Small Cap
- 5.00 10.00 15.00 20.00 25.00 30.00 35.00 Cash & Equivalent is 9%

Fund Performance as on May 31, 2024

% Returns 1 Month 3 Months 6 Months 1 Year 2 Year 3 Year 4 Year 5 Year Since Inception YTD

SBI AEON 0.85% 8.42% 12.60% 38.36% 27.11% N.A. N.A. N.A. 20.42% 10.03%

NIFTY 50 TRI 0.03% 2.86% 12.51% 23.02% 17.86% N.A. N.A. N.A. 11.97% 4.23%

DISCLAIMER - SBI Aeon Alpha Portfolio; Inception Date : 21-01-2022

Returns presented are time-weighted returns. Time weighted - Daily valuation method is used for rate of return calculation. Periodic returns are
geometrically linked. Total return includes realized and unrealized gains and income. Accrual accounting is used for the calculations. Dividend
is accrued on ex-date and reinvested in the portfolio. Trades are booked on trade date. Net returns are calculated after deducting actual
management fees and all other expenses. Benchmark returns are presented gross of non-reclaimable withholding taxes.

*Returns mentioned are the returns of the stock in the last 1 year or since the time the stock has been included in the portfolio in case the stock has not completed 1 year.
SBI AEON ALPHA
INVESTOR COMMUNIQUE AS ON MAY 31, 2024
IVY PMS

Disclaimer : All opinions, figures, charts / graphs, estimates and data included in this document are as on date and are subject to change without
notice. While utmost care has been exercised while preparing this document, SBI Funds Management Limited does not warrant the completeness or
accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers should before
investing in the Strategy make their own investigation and seek appropriate professional advice. Investments in Securities are subject to market and
other risks and there is no assurance or guarantee that the objectives of any of the strategies of the Portfolio Management Services will be achieved.
Clients under Portfolio Management Services are not being offered any guaranteed / assured returns. Past performance of the Portfolio Manager
does not indicate the future performance of any of the strategies. The name of the Strategy does not in any manner indicate its prospects or return.
The investments may not be suited to all categories of investors. Neither SBI Funds Management Limited (SBIFML), nor any person connected with
it, accepts any liability arising from the use of this material. The Portfolio Manager is not responsible for any loss or shortfall resulting from the
operation of the strategy. Recipient shall understand that the aforementioned statements cannot disclose all the risks and characteristics. The
recipient is requested to take into consideration all the risk factors including their financial condition, suitability to risk return, etc. and take
professional advice before investing. As with any investment in securities, the value of the portfolio under management may go up or down depending
on the various factors and forces affecting the capital market. For tax consequences, each investor is advised to consult his / her own professional tax
advisor. This document is not for public distribution and has been furnished solely for information and must not be reproduced or redistributed to any
other person. Securities investments are subject to market risk. Please read the offer disclosure document carefully before investing.

If you wish to invest, please contact your financial advisor or to invest Direct please contact us on pmsops@sbimf.com

Portfolio Manager:
SBI Funds Management Limited
(A Joint Venture between SBI & AMUNDI), (CIN: U65990MH1992PLC065289)
9th Floor, Crescenzo, C-38 & 39, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051