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Smallcap Fund PPTEquities – Wealth Creation Journey
Source: Morgan Stanley. QE – Quantitative Easing, EU – European Union, GDP – Gross Domestic Product, GST – Goods and Services Tax
Historically despite short term volatilities, equity markets have created wealth for investors over long term
CASE FOR
future leaders (Largecaps)
the early stage of their life cycle.
SHARE PRICES FOLLOW RE-RATING
fairly valued which may lead to
appreciation in share price
Wealth Creation Journey
The Smallcap segment maybe volatile in the short term, but in the long term the category has created wealth
Source: BSE. All data as of December 31, 2020. Smallcap Index considered is S&P BSE Smallcap Index. Past performance may or may not sustain in future. The performance figures pertain to the
Index and do not in any manner indicate the returns/performance of the Scheme.
Rs. 10 Lakhs
Rs. 34.9 Lakhs
J a n - 0
J u l-
D e c - 2
0
Value of Rs. 10 Lakhs invested in S&P BSE Smallcap Index
Multibagger Category
In the last 5 Years, out of the top 500 stocks listed,
Smallcap segment has created most of the multi-baggers
The universe considered Nifty 500 Index. Top 100 Companies by market cap are classified as Largecap, The next 101st-250th companies by market cap are classified as Midcap; 250 and beyond are considered as Smallcaps. Data is as of
December 31, 2020. Source: Capitaline. Returns generated are of the past 5 years and in absolute terms. Securities which are currently listed and were not listed 5 years ago are not considered. Past performance may or may not sustain in
future
52
N o . o f S
t o c k s
Largecap Companies Midcap Companies Smallcap Companies
Ample Opportunities
Owing to a relatively broader universe, the opportunity to identify quality stocks increases manifold
Total securities available
Mcap between Rs. 10,024 Crs and Rs.
33,508 Crs No. of Stocks: 150
Mcap > Rs. 33,508 Crs
No. of Stocks: 100
No. of Stocks: 688
TOTAL STOCKS in the Smallcap category is 3550
The universe considered is all listed stocks on NSE. Top 100 Companies by market cap are classified as Largecap, The next 101st-250th companies by market cap are classified as Midcap; 250 and beyond are considered as Smallcaps. Data is
as of Dec 31, 2020. Source: Capitaline and NSE. Securities for which Marketcap data is not available are not considered. The above data consists of only actively traded securities on NSE. This is only for reference purpose.
Ample Opportunities
Smallcaps can explore a relatively wide range of sectors which remain undiscovered otherwise.
This further helps in reducing sector skewness
Unexplored
Unexplored
Less skewed
Largecap: Nifty 50 Index, Smallcap is Nifty Smallcap 100 Index, Data as of Dec 31, 2020. Source: NSE. The sectors mentioned in this slide do not constitute any recommendation and ICICI Prudential Mutual Fund may or may not have any
future position in this sectors..
Unexplored
Automobile 0.80% 5.38%
Metals 1.37% 2.50%
Telecom 1.12% 2.03%
Power 0.77% 1.61%
The small-cap space has seen significant correction with current valuations close to the historic average.
This indicates that it is a good time to add smallcaps
2.6
1.0
1.4
1.8
2.2
2.6
D e c - 2
Average: 2.0
The correction in Smallcap space, has led to Marketcap divergence.
This indicates that it is time to add Smallcaps in a staggered manner
Top 100 indicates top 100 companies by market capitalization,101-250 indicates next 150 companies by market cap and above 250 indicates companies post the top 250 companies by market cap. Source : Edelweiss Research,
Data as of December 31, 2020
Share in the Overall Market Cap (%)
Index 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sep-20 Oct-20 Nov-20 Dec-20
Top-
100 79 75 74 71 79 77 78 79 78 81 75 74 72 65 70 74.0 74.1 73.5 73.3
101-
250 11 12 12 13 11 12 13 13 14 13 14 15 15 16 16 15.6 15.5 15.9 15.6
Above
250 11 13 14 16 10 11 9 8 8 6 10 11 14 18 14 10.4 10.5 10.6 11.0
Recent Underperformance
Smallcaps have underperformed sharply since Jan-18; making a case for adding Smallcaps to the portfolio
Source: NSE India. Data as of December 31, 2020. Data in % terms. Returns mentioned are absolute returns. Past performance may or may not sustain in future. The performance figures pertain to the Index and do
not in any manner indicate the returns/performance of the Scheme.
30
50
70
90
110
130
A u g - 1
D e c - 2
R e
o 1
0 0
Nifty 50 Nifty Smallcap 250
10.2% Returns
-5.8% Returns
Benign Interest Rates & Smallcaps
Source: RBI, BSE India, Data as of December 31, 2020. Smallcap Index considered is S&P BSE Smallcap Index. The performance figures pertain to the Index and do not in any manner indicate the returns/performance of the Scheme.
Low interest rates, create conducive environment for Smallcaps, as
the cost of capital – a key driver of profitability for small quality companies comes down
Repo Rate Movement Vs S&P BSE Smallcap Index
4
5
6
7
8
9
10
1,000
5,000
9,000
13,000
17,000
21,000
a t e (
n d e x
Smallcaps recover faster
Source: RBI, BSE India, Data as of December 31, 2020. Past performance may or may not sustain in future. The performance figures pertain to the Index and do not in any manner indicate the returns/performance of the Scheme.
Smallcaps have outperformed large caps in 7 out of 14 time periods by a significant margin post corrections.
Hence, post the recent corrections, the Smallcap category offers a good entry point
-70%
-20%
30%
80%
130%
15
Presenting
Robust research &
screening process
Well Defined
Investment Strategy
& Portfolio Construct
Robust Investment
MAY 2018
small-cap space,
long term portfolio.
Research & Screening Process
The team of analysts provide the Fund Manager with their top picks and the same is reviewed by the fund manager.
Subsequently, weights are assigned. The small-cap universe of 250+ stocks is reduced to about 40-65 stocks following
the research and screening process. Filters used for the screening process is as follows
RoE – Return on Equity
Portfolio Construct & Strategy
The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors. The asset allocation and investment
strategy will be as per Scheme Information Document
No. of Stocks
common mistake of buying
‘HIGH’ and selling ‘LOW’.
of time
Ease of
Portfolio Statistics of ICICI Prudential Smallcap Fund
Source: CRISIL; Data as of December 31, 2020; The stocks/sectors mentioned in this slide do not constitute any recommendation and ICICI Prudential Mutual Fund may or may not have any future position in these stocks/sectors. the asset
allocation and investment strategy will be as per Scheme Information Document.
Top Sector Holdings
Birlasoft Ltd. 3.3
Jm Financial Ltd. 2.9
Company Name % to NAV
Portfolio Features
Type of Scheme An open-ended equity scheme, predominantly investing in smallcap stocks
Plans
Options Growth & Dividend (Monthly Dividend & Others)
Minimum Application Amount Rs. 5,000 (plus in multiples of Re.1)
Minimum Additional Application Amount Rs. 1,000 (plus in multiples of Re.1)
Minimum Redemption Amount Any amount
Entry Load Not applicable
More than 1 Year Nil
Fund Manager S. Naren & Harish Bihani
Priyanka Khandelwal for Overseas Investments.
Benchmark Index Nifty SmallCap 250 TRI
SIP / SWP / STP Available
Riskometer & Disclaimer
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
All figures and other data given in this document are dated. The same may or may not be relevant at a future date. The AMC takes no responsibility of updating any data/information in this material from
time to time. The information shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written
consent of ICICI Prudential Asset Management Company Limited. Prospective investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other finan-
cial implication or consequence of subscribing to the units of ICICI Prudential Mutual Fund. Data source: Bloomberg, except as mentioned specifically.
Disclaimer: In the preparation of the material contained in this document, ICICI Prudential Asset Management Company Ltd. (the AMC) has used information that is publicly available, including informa-
tion developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available
to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness
and / or completeness of any information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe”
and similar expressions or variations of such expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to
risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which
have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or
other rates or prices etc. ICICI Prudential Asset Management Company Limited (including its affiliates), the Mutual Fund, The Trust and any of its officers, directors, personnel and employees, shall not
liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material
in any manner. Further, the information contained herein should not be construed as forecast or promise. The recipient alone shall be fully responsible/are liable for any decision taken on this material.
ICICI Prudential Smallcap Fund is suitable for investors who are seeking*:
Long Term wealth creation
An open ended equity scheme that seeks to generate capital appreciation by predominantly investing in equity and
equity related securities of small cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
The Risk-o-meter(s) specified above will be evaluated and updated on a monthly basis. Please refer https://www.icicipruamc.com/news-and-updates/all-news for more details