Debt Funds for investors

1. Speaker: Pankaj Pathak Pankaj Pathak Fund Manager Fund Manager – – Fixed Income Fixed Income April 26, 2021

2. Interest Rates at Historic Lows 10 10- -Year G Year G- -Sec Sec Yield Yield 3 3- -Months Treasury Bill Yield Months Treasury Bill Yield 10.0% 10.0% 9.0% 9.0% 8.0% 8.0% 7.0% 6.0% 7.0% 5.0% 6.0% 4.0% 5.0% 3.0% 4.0% 2.0% Source – Bloomberg; Quantum Research, Data as of 31stMarch 2021 Past performance may or may not sustained in Past performance may or may not sustained in future future

3. Dilemma of Fixed Income Investors What to do to Generate Higher Returns? Should one move to Longer Duration Fund categories? Should one move to Credit Funds? High Returns come with High Risk High Returns come with High Risk

4. Why do we need Fixed Income in our Portfolio? Liquidity Liquidity Income Income Diversification Diversification

5. Long Duration Funds are for Longer Period Crisil Composite Bond Index Crisil Composite Bond Index 16.0% 1 year Return 1 year Return 14.0% 3 Years Annualised Return 3 Years Annualised Return 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source – Bloomberg, Quantum Research, data as of 31stMarch 2021 Past performance may or may not sustained in Past performance may or may not sustained in future future

6. Credit Risk…??? Losses Are Generally Losses Are Generally Non Non- - Recoverable Recoverable • credit defaults causes permanent damage to portfolio Contagion Risk Contagion Risk • stress in a small pocket can cause system wide problem Illiquidity Illiquidity • difficult to sell to meet heavy redemptions or churn portfolio Unfavorable Risk Returns Unfavorable Risk Returns Dynamics Dynamics • upside is limited but downside could be severe • Low grade debt tends to struggle in slow economy & weak equity markets No Diversification No Diversification

7. The Pandemic Made it more Fragile… What do Headlines Say? What do Headlines Say? Source Source- - Newspapers

8. What is the Way Out???

9. Presenting a Barbell Strategy combining Safety First Approach of Quantum Liquid Fund with Active Duration Management of Quantum Dynamic Bond Fund

10. Quantum Liquid Fund – Stands Out ALWAYS Prioritize Safety over Returns ALWAYS Prioritize Safety over Returns Zero Private Corporate Debt Zero Private Corporate Debt Invests only in Government Bonds, Treasury Bill or AAA rated PSUs Invests only in Government Bonds, Treasury Bill or AAA rated PSUs Low Credit Risk = Low Liquidity Risk Low Credit Risk = Low Liquidity Risk A reasonable portion of portfolio in cash or overnight asset A reasonable portion of portfolio in cash or overnight asset

11. Our Safety First Approach IN ACTION

12. The IL&FS Crisis (2018) •IL&FS carried AAA Credit Rating carried AAA Credit Rating at the time of default •Funding stopped Funding stopped for many Private Companies (even AAA rated) post IL&FS •Our investment process ensured that companies like IL&FS could never become part of companies like IL&FS could never become part of Quantum Liquid Fund Quantum Liquid Fund •Quantum Liquid Fund remained unscathed Quantum Liquid Fund remained unscathed during the entire credit crisis triggered by the IL&FS debacle Our Safety First Approach works Our Safety First Approach works – – even in unprecedented times. We remain committed to even in unprecedented times. We remain committed to it! it!

13. The Covid-19 Crisis •Some of the Debt Funds were not able to meet redemptions as liquidity dried up liquidity dried up •Quantum Liquid Fund did NOT need the RBI’s liquidity window Quantum Liquid Fund did NOT need the RBI’s liquidity window to meet redemptions •Even though no one could have predicted the pandemic, the safety first approach at Quantum Liquid Fund helped us sail through it Our Safety First Approach works Our Safety First Approach works – – even in unprecedented times. We remain committed to even in unprecedented times. We remain committed to it! it!

14. Active Duration Management Quantum Dynamic Bond Fund Quantum Dynamic Bond Fund If interest rate expected to go down If interest rate expected to go down If interest rate expected to rise If interest rate expected to rise Focus on protecting value Focus on capital appreciation Invest in short term securities to make the portfolio less sensitive to rising interest rate Invest in long term securities to which gain more when interest rate falls In all market conditions In all market conditions fund maintains fund maintains credit risk credit risk at minimal levels by not investing in any at minimal levels by not investing in any Private Credit Private Credit

15. In Conclusion… Safety First is the ONLY sensible approach to take for your cash balances Safety First is the ONLY sensible approach to take for your cash balances Ride through the uncertain interest rate environment by having longer tenor Ride through the uncertain interest rate environment by having longer tenor Chasing the maximum possible return carries risk you do not want to take on Chasing the maximum possible return carries risk you do not want to take on Prudence is in lowering your returns expectation closer to market reality Prudence is in lowering your returns expectation closer to market reality

16. Product Label

17. Disclaimer – Terms of Use For AMFI/NISM Certified partners only. For private circulation only. The data in this presentation are meant for general reading purpose only and are not meant to serve as a professional guide/investment advice for the readers. This presentation has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required as per SEBI Mutual Fund Regulations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. None of the Sponsors, the Investment Manager, the Trustee, their respective Directors, Employees, Affiliates or Representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the data/information/opinions contained in this presentation. The Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required. Please visit Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme. Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-). Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956. 26 26th thApril April 2021 Mutual fund investments are subject to market risks, read all scheme related documents carefully. Mutual fund investments are subject to market risks, read all scheme related documents carefully. 2021

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