american market analysis presentation.pptx

american market analysis presentation.pptx

1. US Equity Opportunities Fund (An open ended equity scheme following US focused theme)

2. Most advanced country in the world Source: World Bank, U.S. Bureau of Economic Analysis, Global Research and Development Expenditures: Fact Sheet, World Trade Organization (WTO), World Economic Forum, Fortune.com, US Energy Information Administration The data herein above is meant only for information purposes and should not be construed as recommendation. Largest economy in the world 2020 GDP (Current U.S. Dollars): $20.9 trillion 24.7% of Global GDP (2020) 122 Fortune Global 500 companies (2021) Nexus of Innovation: 30% share of global R&D (2019) Ease of Doing Business, Rank 6 (2020) Global Competitiveness Index by World Economic Forum, Rank 2 (2019) World’s 2nd Largest goods exporter (2020) World’s Largest services exporter (2020) World’s Largest crude oil producer (2020)

3. Economic Growth The data herein above is meant only for information purposes and should not be construed as recommendation. Gross domestic product 2021: +5.7% Annual Changes +4 +2 - 2 - 4 +6 +8% ‘95 ‘90 ‘85 ‘05 2000 1980 ‘10 ‘15 ‘20 Source: US Bureau of Economic Analysis, The New York Times

4. Consumption driven economy Source: Statista.com, US Bureau of Economic Analysis, NIMF Research The data herein above is meant only for information purposes and should not be construed as recommendation. Consumer spending accounts for ~70% of GDP - 4% 18% 18% 68% Personal Consumption Expenditure Gross Private Domestic Investment Government Consumption Expenditure and Gross Investment Net Exports of Goods and Services US GDP 2021 Components

5. Inflation Consumer price index, percent change from a year ago All item in U.S. city average Source: Bureau of Labor Statistics, CNBC, Data as of Dec. '21 Note: Shaded areas indicate U.S. recessions. - 5 5 10 15 1995 1990 1985 2005 2010 2015 2020 2000 1980 The data herein above is meant only for information purposes and should not be construed as recommendation. 7%

6. US Market – Large and Diversified No. 1 – NYSE (Market Cap: $27.7 trn), No. 2 - NASDAQ (Market Cap: $24.6 trn) ~2400 companies listed on NYSE ~3700 companies listed on NASDAQ NYSE has 514 non- U.S. stocks* Foreign sales as % of S&P 500 companies’ revenues is ~40% World’s Largest Stock Exchanges Global composition Geographical Diversification Wide Investment Universe Source: World Federation of Exchanges, NYSE, NASDAQ, J.P. Morgan Asset Management; Data as on Dec 2021, * as on Feb 2022 The data herein above is meant only for information purposes and should not be construed as recommendation.

7. Corporate earnings hit a new all- time high in 2021 - 60% - 20% - 40% 20% 0% - 31% 19% 24% 13% 15% 47% - 6% - 40% 60% 40% 80% 100% ‘07 ‘08 ‘05 ‘06 ‘03 ‘04 ‘11 ‘12 ‘09 ‘10 ‘01 ‘02 16.9% 3.0% - 0.6% 0.3% 71.7% 6.0% Share of EPS growth 2021* Avg. ‘01- 20 Margin 55.3% 2.8% Revenue Share Count Total EPS 15% 11% 17% 22% 4% - 22% - 11% 5% 6% 72% 2021* 0% ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 Source: Factset, Compustat, Standard & Poor’s, JP Morgan Asset Management S&P 500 year-over-year operating EPS growth Annual growth broken into revenue, changes in profit margin & changes in share count Earnings bolstered by increased consumer demand and higher productivity (reduced costs) The data herein above is meant only for information purposes and should not be construed as recommendation. 19% 15%

8. Sources of market return Note: Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment. The data herein above is meant only for information purposes and should not be construed as recommendation. Percent change in S&P 500, earnings and valuations Year-to-date, indexed to 100 85 105 95 125 115 145 135 Share of return 2021 26.9% 34.5% - 7.6% Earnings growth Multiple growth S&P 500 price return Apr ‘21 Jun ‘21 Aug ‘21 Oct ‘21 Dec ‘21 Source: Factset, Compustat, Standard & Poor’s, JP Morgan Asset Management Feb ‘21 Dec ‘20

9. Tightening without turmoil Note: Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment 1954- 1957 1958- 1959 1961- 1966 1967- 1969 1972- 1974 1977- 1981 1983- 1984 1987- 1989 1994- 1995 1999- 2000 2004- 2006 2015- 2018 13.7% 24.5 7.0 3.7 - 8.6 11.5 13.2 16.2 4.1 10.5 8.2 8.4 How the S&P 500 performs in Fed rate-hike cycles Average annualized return Source: Truist Advisory Services Bloomberg.com

10. Currency adds to INR portfolio returns Note: Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment 80 75 70 65 60 55 50 45 40 Dec- 11 Dec- 12 Dec- 13 Dec- 14 Dec- 15 Dec- 16 Dec- 17 Dec- 18 Dec- 19 Dec- 20 Dec- 21 Source: Bloomberg USD/INR 3% Avg appreciation

11. India US Equity Opportunities Fund Research support powered by Morningstar Investment Adviser India Private Ltd, group company of Morningstar, Inc. Proprietary research methodology, focused on Economic Moats, to identify investment opportunities Economic Moat: Companies having sustainable competi- tive advantages that allow them to earn excess returns over a long period of time Nippon India US Equity Opportunities Fund proposes to follow the ‘Hare’ strategy for its investments Note: The current fund philosophy may change in future depending on market conditions or fund manager’s views.

12. Fund Strategy Note: The current fund strategy may change in future depending on market conditions or fund manager’s views. Selection Criteria Sustainable, above- average revenue and earnings per share growth Widening economic moat — competitive position similar/stronger in 5 years Management with good strategic execution & responsible capital allocation policies Strong balance sheet, cash flow predictability & free cash flow relative to net income Reasonable valuation, considering the growth profile and other financial attributes Hare Portfolio aims to invests in stocks of firms that are experiencing rapid growth, emphasizing those that possess sustainable competitive advantages Benchmark: S&P 500 Index

13. Company Selection FCF: Free Cash Flow For illustrative purpose only Note: The current fund strategy may change in future depending on market conditions or fund manager’s views. Growth Moat Secular industry tailwinds + market share gain + pricing = rapid, sustainable revenue growth Fixed costs = operating income grows faster than revenue Low capital intensity so FCF ≈ net income and FCF used for share repurchased or dividends EPS and FCF / share grow significantly faster than the banchmark Network effects so a service gets more valuable to both new and existing users as it grows Customer switching costs and a concolidated industry that encourages rational pricing Cost advantages that also improve with scale Reinforced by brands, data, and other intangibles

14. Current Positioning Core Growth Companies with: Strong track record of growth and profitability Reasonable valuations Sustainable growth. Have the potential to witness double digits EPS growth given their strong competitive advantages Defensive Value Considered primarily for valuation reasons Potential for attractive total return supported by free cash flow yields in high single/lower double digits Current preference towards value may work for this segment Speculative Growth Niche high risk plays with high return potential Small allocation in portfolio Potential opportunities incl long term growth, operating leverage, competitive compounding advantages Note: The current fund strategy may change in future depending on market conditions or fund manager’s views

15. Top 10 Holdings & Sectors (As on Jan 31, 2022) The sectors mentioned in the table is not a recommendation to buy/sell in the said sectors. The scheme currently holding investments in the said sectors may or may not have future position in the same. The stocks mentioned form a part of the portfolio of the scheme and may or may not form a part of the portfolio in future. Please read Scheme Information Document carefully for more details and risk factors. For complete details on Holdings & Sectors, please visit website https://mf.nipponindiaim.com Top 10 Holdings Alphabet Inc A Weightage 7.84% Microsoft Corp 7.24% Mastercard Incorporated 6.74% Iqvia Holdings 6.22% Fidelity National Information Services I 6.06% Enbridge Inc 5.82% Facebook Inc 5.23% Booking Holdings Inc 4.91% Amerisource Bergen Corp 4.68% Anthem Inc 4.50% Top 10 Sectors Data Processing & Outsourced Services Weightage 20.13% Interactive Media & Services 13.11% Managed Health Care 8.94% Systems Software 7.24% Life Sciences Tools & Services 6.22% Oil & Gas Storage & Transportation 5.82% Hotels, Resorts & Cruise Lines 4.91% Movies & Entertainment 4.88% Health Care Distributors 4.68% Trucking 4.66%