Mirae Asset India-China
1 / 22

Mirae Asset India-China Consumption Fund An open ended equity oriented scheme - PowerPoint PPT Presentation

  • Uploaded on

Mirae Asset India-China Consumption Fund An open ended equity oriented scheme NFO Opens on : 9 th March, 2011 NFO Closes on: 23 rd March, 2011 Scheme re-opens for continuous sale & repurchase on or before 5 th April, 2011. The case for India-China consumer theme & sectors.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about ' Mirae Asset India-China Consumption Fund An open ended equity oriented scheme' - burke-bolton

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Mirae Asset India-China

Consumption Fund

An open ended equity oriented scheme

NFO Opens on : 9th March, 2011

NFO Closes on: 23rd March, 2011

Scheme re-opens for continuous sale & repurchase on

or before 5th April, 2011.

Why india china consumer theme
Why India - China Consumer Theme?

  • Take advantage of the structural growth trend in both India and China, which will leads to the domestic consumption boom caused by improving economic condition.

  • Demographic profiles of these two countries points to long term opportunity in consumer related products ranging from FMCG and high-end products to indirect play on consumer products in healthcare, financial, and tourism.

By 2020 China GDP is forecast to be over US$12tn

and India at US$3.4tn

China & Indian population – Below 25 years as % of total

Percentage (%)

Percentage (%)

GDP (trillion)

Source: CLSA Asia-Pacific Markets., 2010

Source: CLSA Asia-Pacific Markets, 2010

The case for Indo-China consumer

Rise of Asian Middle Class

  • Just over 60% of the region’s middle class is in China, and 10% is in India

  • China will account for two-thirds of those entering the Asia ex-Japan middle class, growing its middle-class members to 600m, with India’s total reaching 140m.

  • India and China lead growth in the size of middle class and in discretionary spending within the region which drives consumerism

Middle-class population and spending CAGR,


Percentage (%)

Source:CLSA, 2010

Source:CLSA, 2010, CAGR – Compounded Annualised Growth rate

The case for Indo-China consumer

Large Populations & Rising Incomes

  • India & China have the largest populations in Asia and we expect their disposable incomes to grow at the fastest rates in the region.

  • For developing countries like India & China, higher incomes are the biggest driver of consumption growth

Population, disposable income growth versus

middle-class growth

Disposable income per capita versus population growth, 2009

Percentage (%)

Population (1000 Million)

Source:CLSA, 2010

Source:CLSA, 2010

A look at their demographic profiles

The case for Indo-China consumer

A look at their demographic profiles

  • In 2010, 945m Chinese (68% of population) are in the key consuming 15-59 age bracket.

  • In India, the corresponding figures are 725m or 63% of population.

China’s demographic profile - 2010

India’s demographic profile – 2010

Age Group

Age Group

Population (million)

Population (million)

Source: Statistical Outline of India; China Statistical Yearbook., 2010

Source: Asian Demographics, 2010

Consumption Driver 4: Urbanization

  • Better economic prospects and living standards are key drivers for people to move to urban areas.

Under-Urbanization n China and India

Urbanization rates in China and India



Source: United Nations and CLSA, Oct 10

Source: Morgan Stanley, Oct 10

Our Investment Proposition



Consumer Non Durables

Rising Middle Class

India & China

Consumer Stocks


GDP Per Capita Income Growth

Consumption J Curve

Household Appliances


Declining Dependency Ratio


  • A Combination of factors like Urbanization, Growth in Middle Class, Declining Dependency Ratio provide fillip to the Consumption J Curve in a wide range of consumption and related sectors in the long run

India china consumer a rising force

Why India - China consumer sectors?

India - China consumer – a rising force

  • Different Consumption & Consumption related sectors have out-performed broader indices at various points of time: Past Performance may or may not be sustained in the future

  • Key here is picking the right sector.

Source: Factset as on 31st Dec 10

Why India - China consumer sectors?


  • India’s car sales lags China by 6 years. India & China have similar car sales p.a at a given per capita income (PCI) in PPP terms. Going by this trend, India’s car consumption could hit 10 mn p.a by FY 16E

  • China: J curve trajectory commenced in 2000 at USD 1000 PCI

  • India: J curve trajectory may commence in 2012 at USD 1200 PCI

India & China: Direct relationship between

Car sales and PCI

Source: Enam Research, Dec 10

The Tipping Point for Accelerated Car Sales

across regions

India & China Head Global Passenger Car Sales



Car Sales Growth %

Per Capita Income



Source: Enam Research, Dec 10

Source: Enam Research & Bloomberg, Dec 10.

Why India - China consumer sectors?

Household Appliances

  • India’s Household appliances industry ( TV, washing machine, refrigerator & air conditioner ) stood at USD 5 bn in 2009

  • Chinese domestic demand of AC is 17x and washing machine is 11x that of India.

  • While India passenger car penetration lags by 6 years to China, for consumer durables it is around 12 years

India 1995 & 2010 Penetration

China 1995 & 2010 Penetration









Source: Enam Research, Crisil, NBSC, 2010

Why India - China consumer sectors?

Consumer Non Durables

  • Chindia’s GDP growth has improved in the past decade. However, per capital consumption of various consumer products in China and India is still significantly lower than in many developing economies due to the lower income levels.

  • The low penetration levels suggest high potential for growth in the consumer products space in the form of FMCG.

How big will India’s FMCG market be in 2020?

How big will China’s FMCG market be in 2020?

Source: CLSA Asia Pacific Markets, 2010.

Source: CLSA Asia Pacific Markets., 2010

India china consumer a rising force1

Why India - China consumer sectors?

India - China consumer – a rising force


  • China and India are one of the fastest growing regions in the world. (Source: IMF,2010)

  • Spending power set to rise as industrialization spurs greater urbanization. This fuels demand for higher margin branded consumer products.

  • We are already seeing more urban population growth in China and India

  • Expert stock picks can yield gains irrespective of consumer cycle.

  • From a macro perspective in the long term, China and India are expected to continue to see secular consumer boom.


  • Consumer sector valuations look stretched. However recent correction in India & Chinese markets could help correct this .

  • Policy tightening in India & China

  • Rising commodity prices coupled with limited pricing power creates downside risk on earnings.

  • Any re-emergence of Sovereign Default Risks could lead to decline in financial markets across the globe

Fund Investment Universe

  • The fund seeks to invest in a basket of Consumer Stocks benefiting either directly or indirectly from consumption led demand in India/China

  • An illustrative list of these sectors include Consumer Discretionary, Consumer Staples, Autos, Realty, Healthcare, Education, Media & Entertainment, Banks & Financial Services, Telecom, Transportation, Food and Tourism & Hospitality but not limited to the specified ones

Mirae Asset India – China Consumption Fund


Performance at a glance
Performance at a glance..

  • Rs 10000 invested on 31st Dec 2005 is today worth

    • Rs 21091 (MSCI India Consumption Index (65%) + MSCI China Consumption Index (35%))

    • Rs 19502 (BSE Sensex)

    • On a CAGR basis, the customised Consumption Index has returned 15.79% ; whereas the BSE Sensex has returned 14.02% over this time frame. (CAGR – Compounded Annualised Growth Rate)

Rs 21091

Amount Invested (Rs)

Rs 19502

Source: Factset & ACEMF as on 31st Jan 11.

Fund investment strategy

Benefit from macroeconomic, industry and sectoral trends

Derived through our bottom-up approach to stock picking

Attractive Valuation

Atrractive relative valuation with the consideration of liquidity and volatility

Reliable Management

Capable and accountable management who care for shareholders’ values

Corporate Goverance Norms

Managements with good corporate governance track record

Fund Investment Strategy

Quality over Quantity

  • Our investment strategy focuses on companies with the following characteristics:

Fund manager s
Fund Manager(s)

  • Mr. Gopal Agrawal – Head of Equity & Dy. CIO

  • Mr. Gopal Agrawal is responsible for spearheading the equity investment management initiatives for the India operations. Mr. Agrawal is instrumental in developing investment philosophies for the domestic equity funds and building key investor relationship for the organization. Schemes being co-managed by Mr Surana are Mirae Asset India Opportunities Fund, Mirae Asset Global Commodity Stocks Fund, Mirae Asset China Advantage Fund and Mirae Asset Emerging Bluechip Fund. Aged 36, Mr. Agarwal is a Chemical Engineer by qualification and graduated from MBM at VGSOM, IIT Kharagpur. He has a rich work experience of over 13 years, out which 7 years has been with the Indian fund management industry.

Mr. Neelesh Surana – Senior Fund Manager (Equity)

Mr. Surana has professional experience of more than 10 years and is responsible for Portfolio construction & monitoring. Prior to this assignment, Neelesh was associated with ASK Investment Managers Pvt Ltd where he was responsible for tracking sectors like Metals, FMCG and Pharma. Schemes being co-managed by Mr Surana are Mirae Asset India Opportunities Fund, Mirae Asset Global Commodity Stocks Fund, Mirae Asset China Advantage Fund and Mirae Asset Emerging Bluechip Fund. Aged 40, Mr. Surana is a Mechanical Engineer by qualification and has done his Masters in Business Administration (Finance).

Mr. Basavraj Shetty – Fund Manager (Overseas Investments)

Mr. Shetty has 7.5 years experience in Equity Research Analysis role and is responsible for Investment Analysis, Advisory & Fund Management. His last assignment was with Centrum Broking Pvt. Ltd., as an Equity Research Analyst. Prior to that, he was with J P Morgan India Pvt. Ltd as an Investment Banking – Associate. Mr. Shetty has also worked with Middle East Brokerage Company, Oman & First Global Stock Broking Pvt. Ltd. as an equity research analyst. Aged 36, Mr. Shetty is a B. Tech by qualification and has done his Masters in Business Administration (Finance).

Mirae asset the group
Mirae Asset: The Group

  • Building on principles

  • Mirae Asset Financial Group is an independent financial organization engaged in many fields of finance which include asset management, investment banking, and life insurance. range of services and products. Based on our full range of services and products, we aim to become a true leader in the world’s capital market through the jurisdiction in which we always operate: by “Building on principles”.

Emerging market experts
Emerging Market Experts

  • One of the world’s largest investors in emerging market equities

  • We have been recognized as one the leaders in emerging market equities via various publications and surveys. In IPE’s (Investments Pensions Europe) “Investing in Emerging Market Equities” Survey, Mirae Asset marked no.1 (2008) and no.2 (2009, 2010) in terms of size of assets invested into emerging market equities.


Statutory Details:Trustee: Mirae Asset Trustee Company Private Limited; Investment Manager: Mirae Asset Global Investments (India) Private Limited (AMC); Sponsor: Mirae Asset Global Investments Company Limited.

Mirae Asset India-China Consumption Fund (An Open ended Equity Oriented Scheme) - Investment Objective: The investment objective of the scheme is to generate long term capital appreciation through an actively managed portfolio investing in equity and equity related securities of companies that are likely to benefit either directly or indirectly from consumption led demand in India/China. The Scheme does not guarantee or assure any returns. Load Structure: Entry Load: Nil. In terms of SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor effective August 1, 2009. Upfront commission shall be paid directly by the investor to the AMFI registered Distributors based on the investors' assessment of various factors including the service rendered by the distributor.  Exit Load:  Redemption within 1 year (365 days) from the date of allotment (Including SIP/STP/SWP) - 1.00%. Redemption after 1 year (365 days) from the date of allotment - NIL. Asset Allocation: (1) Indian Equities and Equity Related Securities of companies that are likely to benefit either directly or indirectly from consumption led demand: 65%-90% (2) Chinese Equities and Equity Related Securities of companies that are likely to benefit either directly or indirectly from consumption led demand: 0%-35%; Money market instruments / debt securities Instruments and/or units of debt/liquid schemes of domestic Mutual Funds : 0%-25%.Terms of Issue: The units are available at the face value of Rs.10/- per unit during the New Fund Offer Period.  The AMC will calculate and disclose the first NAV not later than 10 days from the closure of New Fund Offer Period.  Subsequently, the NAV will be calculated at the close of every working day and shall be published in two daily newspapers and on the AMC/AMFI website. Risk Factors:Mutual fund investments are subject to market risks and there is no assurance or guarantee that the objectives of the scheme will be achieved. As with any investment in securities, the Net Asset Value (NAV) of the units issued under the Schemes can go up or down depending on the factors and forces affecting the capital markets. Investments in mutual funds are prone to risks of fluctuation in NAVs, uncertainty of dividend distributions etc. Past performance of the Sponsor / AMC / Mutual Fund / Trustee does not guarantee the future performance of the Schemes of Mirae Asset Mutual Fund. The sponsors are not liable or responsible for any loss resulting from the operation of the fund beyond the initial contribution made by them of an aggregate amount of Rupees One Lakh towards setting up of the fund. The Scheme should have a minimum of 20 investors and no single investor should account for more than 25% of the corpus of such scheme/plan(s). In case of non-fulfillment with either of the above two conditions in a three months time period or the end of succeeding calendar quarter, whichever is earlier, from the close of the New Fund Offer (NFO) or on an ongoing basis for each calendar quarter, the schemes /plans shall follow the necessary guidelines as prescribed by SEBI in this regard. Mirae Asset India-China Consumption Fund is only the name of the scheme and does not in any manner indicate either the quality of the scheme or its future prospects or returns. Investors in the scheme are not being offered any guaranteed / indicative/ assured returns. Please see "Risk Factors", "Scheme Specific Risk Factors and Special Consideration" and "Right to limit redemptions" in the Scheme Information Document (SID). Please read the Scheme Information Document (SID) & Statement of Additional Information (SAI) carefully before investing. A copy of SAI / SID/ Key Information Memorandum cum Application form will be available at AMC offices/AMC web-site www.miraeassetmf.co.in / Investor Service Centre / Distributors on request.