CANARA ROBECO FOCUSED EQUITY FUND

CANARA ROBECO VALUE FUND

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

NFO Open Date: Aug 13, 2021

NFO Close Date: Aug 27, 2021

Scheme Re-open Date: Sept 6, 2021

TABLE OF CONTENTS

ESSENCE OF INTRINSIC VALUE INVESTING

VALUE INVESTMENT OPPORTUNITY

CANARA ROBECO CAPABILITIES


INVESTORS SUITABILITY

“In general terms, intrinsic value is understood to be that value which is justified by the facts: the assets, the

earnings, dividends, definitive prospects”

- Benjamin Graham

‘INTRINSIC VALUE’ is a true value of an asset. It is the maximum

price one is ready to pay to hold the asset forever!

Essence of Intrinsic Value Investing

INTR

INSI

C V

ALU

E

Intrinsic Value Investing-The Concept

Intrinsic Value Investing is a broaderphilosophy which involves buyingcompanies at a price lower than theirintrinsic value

Keeping a margin of safety

Taking advantage of market inefficiencies

Above explanation is purely meant for Concept illustration only. Images Sources: Investor Trading Academy

“All sensible investing is Value Investing” -Charlie Munger

✓ Keeping margin of safety reduces downside risk

Intrinsic Value Investing- The ConceptAn Illustration:In general, a company with an Intrinsic value of Rs.1.00 isconsidered to have a good buffer when you buy it at a Priceof Rs.0.50. This gives a margin of safety equivalent to 50%.

✓ HIGHER THE MARGIN OF SAFETY; LOWER THE RISK

Above explanation is purely meant for Concept illustration only. Image Source: Edupristine

A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a

complex, unpredictable and rapidly changing world” -Seth Klarman

MA

RG

IN O

F SA

FETY

What is NOT Intrinsic Value Investing?

Source: Excerpts from STOIC Investor Article published

MYTH IValue investing

focusses only on assets and current

earnings

MYTH IIValue investing implies buying

any business that is cheap

MYTH IIIValue investing

doesn’t focus on future growth

MYTH IVValue investors

ignore intangibles

Value investing focusses only on assets and current earnings

Asset light businesses with heathy cashflows create value

Current earnings and multiples of cyclical business depend on business cycle▪ Commodity producers look cheap in upturn and

expensive when the business cycle bottom▪ Earnings estimates are usually optimistic after a

long upcycle, ultimately leading to disappointments

Private Market Value can be very different from current market price▪ Private market transaction like mergers and

acquisitions may help value discovery

MYTH I

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

FY 2011 FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

FY2020

FY2021

Rat

io

INR

Mn

Market Cap EV/EDBITA

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 -

20,000

40,000

60,000

80,000

100,000

INR

Mn

INR

Mn

Free Cash Flows Market Cap

As cash flows keep rising, Market cap goes up

Buy at high multiple and re-evaluate at

low multiple

Myth I: Illustrations

Source: Bloomberg/ Investec. The data/statistics are given to explain general market trends in the securities market, it should not be construed as any research report/researchrecommendation. The sector(s)/stock(s)/issuer(s) mentioned are for the purpose of illustration and do not constitute any research report/recommendation of the same and the Fundmay or may not have any future position in these sector(s)/stock(s)/issuer(s). The portfolio of the scheme is subject to changes within the provisions of the Scheme Informationdocument of the scheme.

11 15 55 158

6601000

1400 1500

2000

3000

3900

5400

0

1000

2000

3000

4000

5000

6000

-

200

400

600

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1,000

1,200

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Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21

Val

uati

on

Pri

ce

Zomato Valuation Infoedge Share Price

Info Edge's stock price rose as value of its investment in Zomato increased after every

PE deal in Zomato

Value investing implies buying any business that is cheap

Intrinsic value investing is not about buying businesses that investors don’t like▪ It is about buying businesses that investors

don’t like it temporarily

Certain businesses are rightly trading cheap▪ They entail low intrinsic value due to bad

businesses dynamics or management issues

Investors chasing ‘optically cheap’ stocks get lured into value traps▪ Focusing on intrinsic value guards you from

falling prey to such temptations

MYTH II

0

2000

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16000

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-06

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-20

Jan

-21

Inde

x V

alue

SECTOR: Nifty Pharma

300

400

500

600

700

800

900

1,000

0.00%

4.00%

8.00%

12.00%

16.00%

20.00%

FY16 FY17 FY18 FY19 FY20 FY21

Pri

ce

Ro

CE(%

)

BUSINESS: Capital Misallocation impacting business

RoCE Stock Price

Myth II: Illustrations

Period when Pharma temporarily was out of favor due

to US business

✓ Buying businesses that investors don’t like TEMPORARILY

Low RoE due to capital misallocation has led to muted rise in Market cap

✓ Optically cheap stocks could be VALUE TRAP

Source: Bloomberg/ MFIE, ICRA Online. The data/statistics are given to explain general market trends in the securities market, it should not be construed as any researchreport/research recommendation. The sector(s)/stock(s)/issuer(s) mentioned are for the purpose of illustration and do not constitute any research report/recommendation of thesame and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer(s). The portfolio of the scheme is subject to changes within the provisions of theScheme Information document of the scheme.

Value investing doesn’t focus on future growth

Investing for growth is not the opposite of value investing

However, investors are more comfortable with ‘visible’ existing business cashflows rather than future ‘uncertain’ ones

Growth can create value if the assumptions are conservative with a margin of safety

MYTH III

Value investors ignore intangibles

Having a competitive advantage or ‘business moat’ helps create and increase intrinsic value

Intrinsic value investing considers these intangibles to value businesses

Brand Equity

Intellectual Property

High Switching Costs

Network effect

Access to technology

✓ Drivers of long-term competitive advantage for businesses

MYTH IV

TABLE OF CONTENTS






HOPE

OPTIMISM

EUPHORIA

SCEPTISIM

PESSIMISM

PANIC

SENTIMENT

“The biggest investing errors come not from factors that

are informational or analytical, but from those that are psychological.” –

Howard MarksMarket Sentiment oscillates between

euphoria and panic, creating opportunities for Intrinsic Value Investors

MARKET WIDE

Events e.g., Dotcom Bubble, GFC, Pandemic

SECTOR SPECIFIC

Out of favour due to various challenges

STOCK SPECIFIC

Company specific short-term issues

Value opportunities can be found

across market cycles, sector as

well as companies

Value Investment Opportunities

2000-20:Events which led to

market falling more than 50% and creating value

opportunities

Source: MFIE, ICRA Online, Nifty 50 data for the period – 3rd July 1990 - 30th June 2021

In the last two decades there have been many market wide value investment opportunities

Sector specific value opportunities are more frequent

Source: MFIE, ICRA Online; Annual Returns of Indices representing each sector - Auto: Nifty Auto, Financials Services: Nifty Financial Services, Cons Disc:S&P BSE Consumer Disc Goods & Services, FMCG: Nifty FMCG, Energy: Nifty Energy, Oil & Gas: S&P BSE Oil & Gas, Metals: Nifty Metal, Utilities: S&P BSEUtilities, Infra: Nifty Infrastructure, Realty: S&P BSE Realty, IT: Nifty IT, Media: Nifty Media, Pharma: Nifty Pharma, Telecom: S&P BSE Telecom

Value investors generally pick up good businesses which are going

through temporary downturn

Stock specific – company specific short-term issues

TEM

PO

RA

RY

ISSU

ES Business downturn

Management Changes

Restructuring

New Entrant- Temporary increase in competitive intensity

Disruptive regulatory changes

Value investing is a long-term compounding opportunity; with a relatively lower risk

…during correction; value investor’s stick to companies which are attractively valued

✓ Better Returns with Lower Risk as compared to broader market

0

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IND

EX V

ALU

ES

Value Outperformance v/s Broad Market

Nifty 50 Value 20 Nifty 50

Source: NSE and MFI Explorer, ICRA Online

Particular Nifty 50 Value 20 Nifty 50

Returns

CAGR 5 Year 17.19% 13.66%

Statistics

Risk Std Deviation 16.90% 18.27%

Beta* 0.80 1

Fundamentals

PE 23.82 28.33

PB 4.42 4.24

Dividend Yield 2.41 1.26

During corrections, value investors stick to companies that are attractively

valued and more likely to compound

Note: Avg. daily std. deviation is annualised over last 5-years. *Beta isbased on 5 -Year data; Data as on 30th June 2021

Value investing also protects on the downside as compared to broader markets

…during correction; value investor’s stick to companies which are attractively valued

Source: MFI Explorer, ICRA Online, The period taken is from 1st Jan 2009 to 30th June 2021, Data as on 30th June 2021

Particular Nifty 50 Value 20 Nifty 50

3 Year Rolling Returns (%)

Minimum -0.27 -5.73

Maximum 38.94 27.47

Average 11.89 9.80

Std Deviation 6.18 5.43

Probability of –ve returns 0.13 3.27-10

-5

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RO

LLIN

G R

ETU

RN

S (%

)

3 Year Rolling Returns (%)

Nifty 50 Nifty 50 Value 20

Illustration based on 3 Year Rolling Return basis

Focus on ‘INTRINSIC VALUE’ and Invest with ‘MARGIN OF SAFETY’

TABLE OF CONTENTS






Our expertise in

selecting

companies seeks

to deliver better

risk-adjusted

returns

.

More than 13

years* of strong

investment track-

record of

investing across

market

capitalization

.

* Considered since the JV of Canara Robeco in September 2007

Competent Management

Reasonable Valuations

Robust Business Fundamentals

Investment Universe

Macro Research

• Macro Research & Intelligence

• Identification of themes• Tracking business cycles

Stock - Specific Ideas

• In-house fundamental research

• Management meetings• Sell-side research and

sector specialists

✓IDEATE ✓SCREEN ✓DESIGN

Final Portfolio

Internal Risk Management Limits• Tracking Error• Ratio Var

Investment Mandate

• Market Cap of the stock

Regulatory Limits

• Individual Stock Limits

Investible Ideas

Note: The above is only for general understanding purposes, and should not be construed as CRAMC investment policy, portfolio construction or theperformance of the scheme.

Canara Robeco Investment process

Intrinsic Value Investing understands and provides for Risk

Our aim is to identify securities, which offer favourable risk adjusted returns

Risk control process to manage risks through various tools such as stock limit and sector limit; to ensure that the portfolio liquidity is maintained without compromising on the return

With the aim of controlling risks, the investment team will carry out rigorous in-depth analysis of the securities proposed to be invested in the fund as well as monitoring the portfolio on an ongoing basis

01

02

03

The above is only indicative in nature. There is no assurance or guarantee that the investment objective of the scheme will be achieved. Mutual fund investments are subject to market risks, please read scheme related documents carefully before investing.

Kiran Shetty (Macro & Quant Analyst)Years of Experience: 15; Years with Canara Robeco: 12

Silky Jain (Research Analyst)Years of Experience: 14; Years with Canara Robeco: 6

Meenakshi Gururaj (Assistant Dealer)Years of experience: 13; Years with Canara Robeco: 11

U P Bhat (Dealer)Years of experience: 40; Years with Canara Robeco: 31

Amit Kadam (Research Analyst)Years of Experience: 14; Years with Canara Robeco: 3

Bibhishan Jagtap(Research Analyst)Years of Experience: 9; Years with Canara Robeco: 0

Shreesti Rastogi (Research Analyst)Years of Experience: 6;Years with Canara Robeco: 0

Akshay Chheda (Research Analyst)Years of Experience: 3;Years with Canara Robeco: 3

Shridatta Bhandwaldar(Head - Equities)

Years of experience: 15; With Canara Robeco: Since July 2016

Vishal Mishra(Fund Manager)

Years of Experience: 17; With Canara Robeco: Since May 2021

Miyush Gandhi(Fund Manager)

Years of Experience: 13; With Canara Robeco: Since March 2018

Nimesh Chandan (Head – Investments, Equities)

Years of experience: 21; With Canara Robeco: Since July 2008

HEAD INVESTMENT & FUND MANAGER

Fund Management Expertise - EQUITYDEALING & RESEARCH

Vishal Mishra is Fund Manager – Equities at Canara Robeco Asset Management Company. He hasbeen associated with Canara Robeco since May 2021. Vishal is a Chartered Accountant and aCommerce Graduate from Mumbai University.

Vishal Mishra has over 17 years of experience across company research, equity research and fundmanagement. Vishal comes with a strong background in fundamental company research workingwith organisations like Quantum Information Services, Crisil Research & Information Services, IL&FSInvestsmart and Collins Stewart India. In his last assignment with Daiwa Portfolio Advisors, Vishalwas Portfolio Manager for Daiwa Asset Management’s (SEBI Registered FPI) India-dedicatedoffshore funds.

Vishal believes in fundamental research driven long term investment strategies with a focus on riskadjusted returns. At Canara Robeco, Vishal is the co-fund manager for Canara Robeco Equity TaxSaver Fund, Canara Robeco Infrastructure and Canara Robeco Bluechip Equity Fund.

Above mentioned name is of the Fund Manager for Canara Robeco Value Fund. The above information is generalin nature and is not indicative of the performance of the schemes

Vishal Mishra,

Fund Manager

About the Fund Manager- Canara Robeco Value Fund

TABLE OF CONTENTS






Portfolio Structure

f

Scan the universe based on various financial parameters

I

Using the most suitable valuation technique, identify undervalued companies

II

Generate Bull case, Bear case scenarios for the company’s Intrinsic Value

III

Select companies based on factors including high upside to downside ratio

IV

Allocate Portfolio weights considering factors including rerating triggers

V

Construct Portfolio keeping in mind opportunity size and risk limits

VI

Use of quant model to aid portfolio construction

VII

The above is only indicative in nature. There is no assurance or guarantee that the investment objective of the scheme will beachieved. Mutual fund investments are subject to market risks, please read scheme related documents carefully before investing.

Fund Positioning

Large Cap Fund

Thematic Fund

Large & Mid Cap Fund

VO

LATI

LITY

VALUE FUND/Flexi Cap Fund/

ELSS

Small Cap Fund

Focused Equity Fund

VO

LATI

LITY

EXPECTED RETURN

The above diagram is only indicative in nature. There is no assurance or guarantee that the investment objective of the scheme will beachieved. Mutual fund investments are subject to market risks, please read scheme related documents carefully before investing.

Focuses on ‘INTRINSIC VALUE’ and Invests with

‘MARGIN OF SAFETY’

“VALUE FUND”

Why Canara Robeco Value Fund?

Fund discovers stocks available at a discount to their Intrinsic Value, and have the potential to do well due to strong fundamentals, aiding to wealth creation

Fund invests in undervalued stocks which provides reasonable margin of safety and helps to minimize downside risk

Fund aims to benefit over the full investment cycle making it an ideal fit for investor’s core portfolio

Fund being a diversified portfolio with a market cap agnostic approach, is suitable for investors who have over 3 years of investment horizon

The above is only indicative in nature. There is no assurance or guarantee that the investment objective of the scheme will be achieved. Mutual fundinvestments are subject to market risks, please read scheme related documents carefully before investing.

Name of the Scheme Canara Robeco Value Fund

Type An open-ended equity scheme following a value investment strategy

Investment ObjectiveThe fund aims to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity relatedinstrument, with higher focus on value stocks. There is no assurance or guarantee that the investment objective of the scheme will berealized.

Asset Allocation

Type of InstrumentsIndicative allocations

(% of total assets) Risk ProfileMinimum Maximum

Equity and Equity-related Instruments 65% 100% Medium to High

Debt and Money Market Instruments 0% 35% Low to Medium

Units issued by REITs and InvITs 0% 10% Medium to High

Units of MF schemes 0% 5% Medium to High

Equity Exchange Traded Funds 0% 10% Medium to High

Plans & Options

Regular Plan & Direct Plan(a) Growth(b) Income Distribution cum capital withdrawal option:- Payout of Income Distribution cum capital withdrawal option- Reinvestment of Income Distribution cum capital withdrawal option

Load Structure

Entry Load: NilExit Load: In respect of each redemption / switch-out of units, 1% - if redeemed/switched out within 365 days from the date of allotment.Nil - if redeemed/switched out after 365 days from the date of allotment.

Benchmark S&P BSE 500 TRI

Fund Facts

TABLE OF CONTENTS






Investors focusing on underlying businesses

and looking for diversification /

differentiated portfolio

Patient investors seeking value

approach to investing – with focus on

investing in stocks having adequate margin of safety

Investors looking for a fund with a potential to

deliver better risk adjusted returns in the

long term

Investors with a long-term investment

horizon of at least 3 years

Who should invest in this fund?

There is no assurance or guarantee that the investment objective of the scheme will be achieved. Mutual fund investments aresubject to market risks, please read scheme related documents carefully before investing.

Disclaimers: The information used towards formulating the outlook have been obtained from sources published by third parties. While such publications are believed to be reliable, the opinionsexpressed in this document are of personal nature and does not constitute the views of Canara Robeco Asset Management. It is hereby expressly stated that, neither the AMC, its officers, thetrustees, the Fund or any of their affiliates or representatives assume any responsibility for the accuracy of such information or the views thereof. Further, CRMF, its Sponsors, its Trustees, CRAMC, itsemployees, officer, Directors, etc. assume no financial liability whatsoever to the user of this document. This document is for general information purposes only and should not construed assolicitation to invest in the Mutual Fund schemes.

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Product Labelling & Disclaimers

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

This product is suitable for investors who are seeking*:

Canara Robeco Value Fund (An open-ended equity scheme following a

value investment strategy)

• Long term capital growth.

• Investment in equity and equity related

instruments by following value investing

strategy.

Documents

CANARA ROBECO FOCUSED EQUITY FUND