Boi mf NFO Business Cycle PPT Business cycle fund is suitable for all the seasons

Business cycle fund is suitable for all the seasons

2. What are
Business Cycles?
Expansion:
RisingGDP,increasingemployment,
consumerconfidence,andspending.
Peak:
Economicgrowthslowsdown,
inflationmayrise,interestrates
might be high, and market
valuationscanbestretched.
Contraction:
DecliningGDP,rising
unemployment,reduced
consumerandbusinessspending.
Trough:
Economicactivitybottomsout,
signs of recovery begin to
appear.
2

3. Key Parameters Expansion Peak Contraction Trough
BusinessVolumes Rising Stablegrowth Declining/slowgrowth Phaseofweak/no
growth
Pricingpower Improving High Reducing Weak
Competition Low,businesseslook
toincreasemarketshare
Low Focusshiftsonprotecting
marketshare
High
CostControls Usuallylowas
profitabilityishigh
Low Assalesandmarginscome
underpressure,CCbuilds
in
High
CapitalExpenditure
(Capex)Outlays
Capexplansare
consideredandplanned
Highcapextakinginto
accountpast
growth/sometimesleads
toexcesses
Freshcapexplans
cancelled,existingones
delayed
Capexplansare
realigned
ReturnonCapital
employed(ROCE)
Rising High Declining,withnew
capacitiescominglive
LowROCE,oftenraising
questionsonpastcapex
Industry/Consumer
Sentiment
Improving High Weakening Pessimism
3

4. •Macro Factors refer to broader
developmentsthatmayberelated
todemographical,ecological,
political,economic,socio-cultural
andtechnologicalenvironment’
•Macrofactorsplayacrucialrolein
influencing&creatingmediumto
long term trends / themes,
therebyimpactingbusinessesand
industrysectors
•BusinessCycleacrossSectors/
Industriesgetimpactedtovarying
extent and degree due to mega-
trends/themescreateddueto
unfoldingof MacroFactors
HowMacro
Factors impact
BusinessCycles
Techinnovationsboost
productivity,transform
industries,andcreate
market advantages,
drivingeconomicgrowth.
Demographicshiftslike
urbanization,rural
depopulation,formalisationand
valuemigrationalterconsumer
spending,labourmarkets,and
sectorgrowthpaths.
Regulations,scarcity,and
extreme weather drive
industries toward
sustainability,renewable
energy,andresilience.
Manufacturingdrives
andimportcuts aimfor
economicindependence,
reducingglobalsupply
chainrisks.
4

5. Dynamicinvestment
strategy to identify
focusedthemes
Endeavorstoinvestin
businessesin/atthecuspof
expansionaryphaseof
businesscycle
Capitalizeson
economic/
demographicshifts
Mitigates
cyclicalrisks
Alignswithmacro
factors/megatrends
Focusesonridingbusinesscyclesandutilizes
emergingmarkettrendstooptimizereturns.
5

6. Prominent
Macro-factors
atplayinIndia
Information
technology
Telecomm
unications
E-commerce EnergyAgriculture Insurance
EducationHealthcare RealEstate Renewable
Energy
Manufac
turing
Pharma
ceuticals
6

7. SpaceRaceandAerospace
Reason:Government contracts and
technologicaladvancementsinaerospaceand
defenceduringtheColdWar-eraspacerace.
1960s
1970s
EnergyCrisisandOilBoom
Reason:Rising global demandfor oil amid
geopoliticaltensionsandsupplydisruptions.
1980s
2000s
TechnologyandPersonalComputing
Reason:Pioneeringthepersonalcomputing
revolutionandtechnologicalinnovation
Internetand Dot-comBubble
Reason:Rapidgrowthoftheinternet,
e-commerce,andtechnologicalinfrastructure
duringthedot-combubble
1990s
2010s
CommoditiesSuperCycle
Reason: Soaring commodityprices driven by increasing
globaldemand,particularlyfromemergingmarkets.
RenewableEnergyandSustainability
Reason:Transition towards renewable energy
sourcesandsustainabilityinitiativesglobally.
7

8. E-Commerce
Digitisation
ArtificialIntelligence(AI)
Electronics
Manufacturing
PLI
Urbanisation
ValueMigration
Formalization
Sustainability
Renewableenergy
WaterSolutions/Recycling
1 2
34
8

9. 1
Efficiency&CustomerExperience-Examples
SBI with the launch of its flagship Yono App in 2017,
was able to provide omni channel banking experience
to its customers vs its earlier avatar of only branch
banking. Within few years of its launch, YONO platform
became one of the largest digital lenders in the country
and today majority of the new savings A/C for SBI are
opened via Yono App.
Innovation&Disruption-Example
Digital payment platforms such as Paytm, PhonePe, and
Google Payhavetransformedhowpeoplemake
transactions, fostering financial inclusion and reducing
relianceoncash.Smartalgorithmsand dataanalyticshave
also facilitated credit scoring, loan disbursement, and risk
assessment,makingfinancialservicesmore accessibletoa
broaderpopulation. Zomato via its flagship apps – Zomato and Blinkit were
able to change the way India was ordering food &
grocery – providing highest level of user convenience
largely led by user friendly tools\& app architecture
Source Zomato: https://www.tice.news/tice-trending/zomato-eyes-directto-consumer-dominance-through-blinkit-expansion-3848663
Source YONO SBI 1: https://www.bseindia.com/xml-data/corpfiling/AttachHis/d7eaa420-b619-4865-b196-519921e57cbc.pdf
Source YONO SBI 2: https://www.businesstoday.in/industry/banks/story/inside-account-of-how-
sbis-yono-became-one-of-the-largest-digital-lenders-in-india-310152-2021-10-22
Disclaimer: The names of companies/brands used in the slide are only
for illustration purpose and Bank of India Mutual Fund/Bank of India
Investment Managers Pvt Ltd is not recommending/ providing any
investment advisory into these stocks/brands.
9

10. ThegrowinginternetpenetrationinIndiasurpassedanewmilestoneof
800Mn as total Active Internet Users reached 820MN in 2023, meaning
morethan55%ofIndianshaveusedinternetlastyear.
Source: https://cxotoday.com/press-release/internet-in-india-2023-
report/#:~:text=The%20growing%20internet%20penetration%20in,h
ave%20used%20internet%20last%20year.
1
10

11. •
•
•
•
•
3.32%
TotalFDIInflows
$27.85Bn
Export of Drugs &
Pharmaceuticals(FY2023-24)
$22.52Bn
FDI(Apr2000toMar2024
Source:
https://www.investindia.gov.in/sector/pharmaceuticals#:~:text=The%20pharmaceutical
%20industry%20in%20India,served%20by%20Indian%20pharma%20exports.
2
11

12. Byincentivizingdomestic
production, the PLI scheme aims
to reduce import dependency,
create employment opportunities,
foster technological
advancements, and integrate
Indianmanufacturersintoglobal
supplychains.
PLIschemeis
instrumentalin
acceleratingindustrial
growth, promoting Make
inIndiainitiatives,and
positioning India as a
preferredmanufacturing
destinationglobally.
The Production Linked
Incentive(PLI)Scheme
has led to a production
orsalesworth
Rs 8.7 lakh crore and
generatedemployment
forover7lakhs
The scheme targets
specific sectors deemed
crucialforeconomic
growth and self-reliance,
such as electronics,
pharmaceuticals,
automobiles,textiles,and
renewableenergy.
21 43
Source:https://economictimes.indiatimes.com/small-biz/sme-
sector/pli-scheme-has-benefited-176-msmes-created-7-lakh-jobs-says-
governments-economy-review/articleshow/107229064.cms?from=mdr
2
12

13. Source:
https://www.investindia.gov.in
/sector/electronic-systems
$155Bn $30Bn
0% 75%
•
•
Source:https://inc42.com/buzz/70-boat-
products-made-india-cofounder-aman-gupta/
2
Disclaimer: The names of companies/brands used in the slide are only for illustration
purpose and Bank of India Mutual Fund/Bank of India Investment Managers Pvt Ltd is
not recommending/ providing any investment advisory into these stocks/brands.
13

14. -Environmental
Regulations
-ClimateActionPlans
-SocialWelfare
Programs
-Green
Technologies
-Digital
Transformation
-Corporate
Sustainability
-CircularEconomy
-Awareness
Programs
-Capacity
Building
-Global
Partnerships
-Climate
Diplomacy
3
14

15. Source
AsofMarch
2022
AsofMay2023%ofEnergyMix
Coal 204.08 205.23 49.1
Lignite 6.62 6.62 1.6
Gas 24.89 24.82 6
Diesel 0.51 0.58 0.1
Hydro 46.72 46.85 11.2
Nuclear 6.78 6.78 1.6
Renewables 109.88 125.69 30.2
Total 399.49 417.66 100
AsofMay31st,2023,datafromIndia’sMinistryofNewandRenewableEnergyshowsthatIndia’sinstalledrenewableenergy
capacityreached179GW,ofwhichsolarandwindcomprised67GWand43GW,respectively.Theremainderiscomposedof
smallhydro,biomass,andothersources.
Followingaredetailsoftotalpowersourceinstalledcapacityandsplitbetweendifferentrenewableenergysources
India’sTotalInstalledCapacitybyPowerSource(GW) RenewableEnergyMixbySource(GW)
Source:MinistryofPower&CentralElectricityAuthority
Source:IndianCentralElectricityAuthority
3
Source
AsofMarch
2022
Asof May2023Targetfor2030
WindPower 40.35 42.86 140
SolarPower 53.99 67.07 280
BiomassPower 10.20 10.24 10
SmallHydro 4.84 4.94 70
Waste-to-Energy 0.477 0.55 (Notarget)
Total 109.88 125.69 500
15

16. 3
2
5
6
1
4
Urbanizationboosts
consumer demand and
technologicaladoption,while
enhancinginfrastructureand
supplychains.
Value Migration drives
demand for higher-quality
products,fosteringbrand
loyalty and higher profit
margins.
Formalizationensures
regulatorycompliance,
betteraccesstofinance,
andopportunitiesfor
marketexpansion.
Demographictrendsmakeahuge
impactonvarioussectoralthemes
4
Source: https://asianinsiders.com/2024/02/20/indias-
retail-market-is-rapidly-growing-and-
modernising/#:~:text=As%20India's%20social%20and%2
0economic,for%20global%20brands%20to%20ignore.
16

17. https://sproutsocial.com/insights/instagram-stats/
https://economictimes.indiatimes.com/tech/technology/top-
end-beauty-products-demand-to-outpace-mass-segment-nykaa-
says/articleshow/101046152.cms?from=mdr
4
17

18. Benefitsofformalization
Integrationinto
FormalEconomy
Improved
WorkingConditions
Contributionto
NationalDevelopment
EnhancedCredibility
andTrust
2
Facilitationof
BusinessExpansion
1
4
MarketAccess
andOpportunities
3
6
5
4
18

19. Growth themes are themes that have the potential
to expand and develop in the coming years
19

20. 2
Top down
approach to
portfolio
construction
1
Macro/Trends
based investing
3
Sector&Market
capagnostic
4
Intended investmentin
themes&businesses
that are at the cusp-of
or undergoing
expansionaryphasein
BusinessCycle
20

21. 1
Equity
2
Debt
3
Others
21

22. 2
1
4
3
AimstocaptureimpactofMacrofactors&Mega-
Trends on business themes that are likely to be
impactedpositivelyacrossmediumtolongterm
Portfolio construct would be mainly Top-down with endeavor to
providefocusedexposureacross3-5relevantgrowththemes,witha
dynamicapproachtonavigatingimpactonBusinessCycles
Theme based investing helps build wider exposure across the whole
spectrumofsectors,marketcaps&stocksimpactedbytheadventofa
new Mega trend and are likely to see an expansionary phase; the fund
allocationconstructwouldbesector&marketcapitalizationagnostic
Identifiedthemesget reviewedandrevalidatedateverystageof the
BusinessCycleandportfolioallocationsmaybealteredaccordingly
1.AluminiumFrame
2.TemperedGlass-toprotectcells
3.Encapsulantmaterial-e.g.EVAfilm
4.Siliconsolarcells-60or72connectedinseries
5.Encapsulantmaterial
6.Backsheet-variousmaterialsused
7.Junctionboxtypicallyusing12vwiring
Source:https://www.solarchoice.net.au/learn/solar-
energy/how-are-solar-panels-made/
22

23. WellResearched
Themes
DynamicTopDown
Approachto
portfolioconstruction
MarketCap &
SectorAgnostic
Risk graded
portfolioapproach
23

24. 2
Lookingforan equity
orientedportfoliothataims
toinvestdynamicallyacross
businessesandsectorsthat
areexpected tobeimpacted
positivelybymediumtolong
termgrowththemes
1
Suitablefor
HighRiskAppetite
3
Suitablefor
Investment horizon
of 5yearsandabove
24

25. 25

26. 30-60
26

27. 1
27
2
3

28. Compounders Challengers EmergingcompaniesTurnaround Cyclicals Intrinsicvalue
AttributesQuality,StablegrowthQuality,Highgrowth
Disruptor,early
adopter
Poorlymanaged.
Scopeto improve
Outcomesaligned
toindustrycycle
Valueunlocking
Businesscycle Mature Growing/mature Earlystage/inflectionGrowthrevival
Demand-supply
mismatch
Mature/Decline
Advantage
Proven moats,
Limitedcompetition
Righttowin Evolving
Cost,leverage
rectification
Costleadership
Assetvalue>
Marketcap
Growth
SimilartoIndustry
growth,GDP
Aheadof industry, GDP Nonlinear
Faster than
operatingcost
IndustrytailwindLowgrowth
EarningsqualityStablemargins
Stable margins/
operatingleverage
Scalability,
operatingleverage
Operating,
financialleverage
OperatingleverageLowgrowth
ReturnratioIndustrybenchmark Stable/Improving Volatile/ImprovingROEswitch
Oscillatesduring
businesscycle
Lowerthancostof
capital
Cashflows High/Stable Growing Volatile Improving
Leverageto
deleverage
Higherthan
earningsgrowth
Reinvestment
Limited/High
dividendpayouts
Opportunity/Low
dividendpayout
Aggressive
Leverage
constrain/dilution
Lumpy Low/Nil
28

29. The InvestmentobjectiveoftheScheme istogeneratelong-termcapitalappreciationbyinvestingpredominantlyinequityandequity
related securities through dynamic allocation across various sectors, industries and stocks at different stages of business cycles in the
economy.However,thereisnoassurancethattheinvestmentobjectiveoftheSchemewillbeachieved
Type Anopenendedequityschemeinvestinginsectorbasedonitsbusinesscycle
Benchmark FirstTierBenchmark:NIFTY500TotalReturnIndex.
FundManager Mr.AlokSingh
Plan&Options
Plans-DirectPlanandRegularPlan
OptionsundereachPlan(s):
Growth
IncomeDistributioncumCapitalWithdrawal(IDCW)(ReinvestmentofIDCW&payoutof IDCWoption)
ExitLoad •NIL–Therewillbe noexitloadwithin3monthsfromthedateofallotmentforredemption/switchoutupto10%of
the unitsallotted.
•1%-Anyredemption/switchoutinexcessoftheabovementionedlimitwouldbe subjecttoanexit loadof 1%,if
the unitsareredeemed/switchedoutwithin3monthsfromthedateofallotmentofunits.
•NIL–Therewillbenoexitloadonanyredemption/switchoutafter3monthsfromthedateofallotmentof units.
Minimuminvestment
amount
Rs.5,000andinmultiplesofRe.1/-thereafter
29

30. BankofIndiaBusinessCycleFund
(Anopenendedequityschemeinvestingin
sectorbasedonitsbusinesscycle)
SchemeRiskometer#
Thisproductissuitableforinvestorswhoare
seeking*:
•Longtermcapitalappreciation.
•Investmentinequityandequityrelated
instrumentswithafocusonnavigating
business cyclesthrough dynamic allocation
betweenvarioussectorsandstocksat different
stagesofbusinesscyclesintheeconomy.
Investorsunderstandthattheirprincipal
willbeatveryhigh risk.
As per AMFI, Tier I Benchmarkis NIFTY 500 TRI.
Benchmark Riskometer is at very high risk
*Investorsshouldconsulttheirfinancialadvisoriftheyarenotclearaboutthesuitabilityoftheproduct.
#Itmaybenotedthattheschemerisk-o-meterspecifiedaboveisbasedonthe internalassessmentofschemecharacteristicsandmayvarypostNFO,
whentheactualinvestmentsare made.
Benchmark Riskometer
30

31. 31