MONTHLY COMMUNIQUE

REPORT AS ON FEBRUARY 28, 2023

IVY
portfolio management services

Equity markets drifted lower in Feb with the Nifty and the Sensex losing 2%
and 1% respectively. Breadth stayed weak with the NSE 100 Index
shedding 3%, and Nifty Mid Cap 150 and Nifty Small Cap 250 indexes losing
1.6% and 3.6% respectively. While there was an initial boost to sentiment
from the Union Budget which prioritized capital expenditure growth, the
global narrative around sticky inflation and hence higher for longer
interest rates turned sentiment weak again. Sectorally, the texture of
markets has been broadly defensive in 2023 so far with Tech, FMCG,
Capital Goods and Auto amongst the leaders while Power, Oil & Gas,
Metals, Real Estate and Banks are amongst the laggards.

10

2.6
1.6
1.0
0.5
% YTD change
-3.1

-10
-4.4
-4.6
-4.8
-5.5
-5.7
-6.2
-6.2
-6.5
-6.7
-6.7
-8.6
-9.0
-10.1
-17.1
-24.8

-30
CONSUMER…

MID CAP
PSU
POWER

LARGE CAP

BSE 500
OIL & GAS

HEALTHCARE

BSE 100

FMCG
METALS

BANKEX
TELECOM

REAL ESTATE

SENSEX

CAP GOODS
IT
AUTO
SMALL CAP

NIFTY

Source: Bloomberg, SBIFM Research

Elevated valuations, tightening liquidity and its potential fallout on growth have been headwinds for equities
for the past many months even as longer-term tailwinds of reviving corporate profitability and potential
revival in manufacturing and investment cycle have provided a floor to the market. We expect the tug of war
to continue till there is a decisive pullback on bond yields that in turn opens space on equity valuations.

Tightening global liquidity may weigh on domestic economy and earnings

Global money supply growth

25%

20%

15%

10%

5%

0%
Jul-05

Jul-08

Jul-11

Jul-20
Oct-04

Oct-07

Oct-10

Apr-12

Jul-14

Oct-22
Oct-13

Oct-16
Jul-17

Oct-19
Apr-06

Apr-09

Apr-15

Apr-18

Apr-21
Jan-19
Jan-04

Jan-07

Jan-10

Jan-13

Jan-16

Jan-22

-5%

Source: Bloomberg, SBIFM Research. Note: Approximated by adding up US, Eurozone and China money supply measures.
 MONTHLY COMMUNIQUE
REPORT AS ON FEBRUARY 28, 2023
IVY
portfolio management services

Tightening in global policy has been accompanied by a significant deceleration in global money supply growth.
This in our view should lead to a slowdown in economic activity. Recent earnings prints have continued to
moderate corroborating a growth slowdown. We expect this trend to continue largely owing to global
headwinds. Beyond the near term however, there is room to be optimistic as the profits to GDP cycle in India
has decisively turned higher after the secular decline of the past decade and more.

Near term earnings continue to moderate even as longer-term profit cycle looks encouraging

8.0

7.1
6.8
120
101
7.0

5.6

5.5
100 LTA: 3.4%

5.3

5.2

5.1
6.0

4.9
81

4.5
80 5.0

4.0

3.9
3.7
3.5
3.5

3.3
3.2
4.0

3.0
60

2.7
2.6
2.5
2.4

2.1
3.0

2.1
2.0
36

2.0

1.8
1.8
40 1.5

1.5
1.5

1.2
23
22

2.0
25
21
17
15
14
10

20
15

1.0
9

11
7
7
7

5
5

9
1

0.0
3

0
-1

FY92

FY14
FY94

FY16
FY96

FY18

FY22
FY98

FY20
FY00
FY02
FY04
FY06
FY08
FY10
FY12
0
-2

-20
-3
-3
-6
-6

-7
-12

-32
-21

-40
Corporate Profit (% GDP)
Jun-21
Mar-22
Jun-15

Jun-18
Mar-16
Dec-16

Mar-19
Dec-19

Dec-22
Sep-14

Sep-17

Sep-20

FY92-FY21 data is based on a sample of ~30,000 listed

companies in CMIE (includes both financial and non
financial companies)
Ni�y quarterly PAT (% y-o-y)

Source: CMIE Economic Outlook, Bloomberg, MOSL, SBIFM Research

While slow growth should be headwind for risk assets, it may also help alleviate the inflation challenge. We
think bonds should do better than equities in such an environment. Asset diversification should therefore
help. Within the equity portfolio, being diversified across market capitalizations, across styles such as value
and quality, as well as from a sectoral standpoint should work better in the interim versus the largely
pro-cyclical themes that have worked well over the past two years.

Even as India’s economic growth slows down in FY24, we expect growth to become more balanced. Mass
consumption has lagged in the recovery thus far owing largely to loss in real incomes because of high
inflation. As inflation moderates, expect this part of the economy to recover even as exports driven sectors
face headwinds. We continue to think of 2023 as a year of adjustment, where growth slows down but at the
same time becomes more balanced setting stage for a more sustainable recovery on the other side.

Warm Regards

Gaurav Mehta, CIO Alternatives

 SBI ESG PORTFOLIO
REPORT AS ON FEBRUARY 28, 2023
IVY
portfolio management services

Portfolio Positioning

Invest in businesses which benefit disproportionately

by underlying economic growth, present in universe
conducive for multi-fold growth. Expected to grow at
high double-digit in the next 3-5 years and be an
outperformer to the underlying sector

Respecting the interests of all stakeholders

Company's dealings with employees, customers and

communities are cordial

Avoid environment destructing businesses

Stock Selection Process

STEP 1: Qualitative Factors

(1) Analysis of business model (2) Impact of Macro-economic variables on the business model (3) Company
analysis based on factors including Porter’s Five Factors (4) Sell-side research interaction

STEP 2: External Analysis

(1) Geo-Politics and its impact on business (2) Channel checks (3) Management Meetings
(4) Work place / Plant visits

STEP 3: Quantitative Factors

Derive Quality Score with input of ROE, ROIC, Earnings Risk and Debt repayment capabilities

STEP 4: Investment Thesis

(1) Financial analysis of last 5 years (2) Building investment thesis (3) Valuation model
(4) Target price (5) Strategic fit with other stocks in the portfolio

STEP 5: Investment Decision

(1) Market cap bucket fit (2) Stock weight allocation based on degree of conviction (3) Entry and
exit points (4) Dissemination of new information (5) Ongoing monitoring

The strategy and the composition mentioned above, of the portfolio is subject to change within the provisions of the disclosure document. The
parameters stated above are only for illustration purpose and may or may not be exhaustive. Please refer to the disclosure document for details.
 SBI ESG PORTFOLIO
REPORT AS ON FEBRUARY 28, 2023
IVY
portfolio management services

Investment Objective Investment objective of this portfolio will be to generate long-term capital growth through
investment in well-researched stocks.

Portfolio Attributes Investing in companies meeting positive standards of Environmental, Social, Governance responsibility.
Will focus on niche businesses having conducive universe for multi-fold growth with longevity.
Invest in companies which are disproportionately high beneficiaries of Economic Growth

Benchmark S&P BSE 500 Index, ESG Multicap Index

Investment Horizon More than 3 years

Min. Investment Size Rs. 50 lakh

(initial purchase)

Additional Purchase Rs. 1 lakh

Subscription On Each Business Day

Redemption On Each Business Day

Valuation On Each Business Day

Top 10 Holdings (With Current % Allocation) Top 10 Holdings by Returns

Compa ny Wei ght (%) Compa ny Returns (%)*
ICICI BANK LTD. 6.10 WENDT (INDIA) LTD. 68.69
ZF C. V. CONTROL SYSTEMS INDIA LTD. 5.85 RAJRATAN GLOBAL WIRE LTD. 56.78
BLUE STAR LTD. 5.14 AUTOMOTIVE AXLES LTD. 48.23
PHOENIX MILLS LTD. 5.02 PHOENIX MILLS LTD. 44.46
HDFC BANK LTD. 4.95 ZF C. V. CONTROL SYSTEMS INDIA LTD. 39.78
NEOGEN CHEMICALS LTD. 4.89 BLUE STAR 35.56
PAGE INDUSTRIES LTD. 4.74 ICICI BANK LTD. 15.79
UNO MINDA LTD. 4.67 HDFC BANK LTD. 13.49
AUTOMOTIVE AXLES LTD. 4.65 STATE BANK OF INDIA 9.89
P & G HYGIENE & HEALTH CARE LTD. 4.33 BHARTI AIRTEL LTD. 8.59

Sectorwise Allocation (in %) Market Cap Break Up (%)

Consumer
39.91
Discretionary

Financials 17.10
32
Industrials 9.06 28
Materials 7.69

Real Estate 5.02

Consumer
4.33
Staples
Communication
2.78
Services
Information
Technology
0.14 Large Cap
Energy 27 Mid Cap
0.02
Small Cap
- 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 * Cash & Equivalent is 14%

*Returns mentioned are the returns of the stock in the last 1 year or since the time the stock has been included in the portfolio in case the stock has not completed 1 year.
 SBI ESG PORTFOLIO
REPORT AS ON FEBRUARY 28, 2023
IVY
portfolio management services

Fund Performance as on February 28, 2023

% Returns 1 Month 3 Months 6 Months 12 Months 24 Months 36 Months 48 Months 60 Months Since Incep�on YTD
SBI ESG Por�olio -0.46% -5.59% -5.87% 10.87% 18.87% 22.93% 23.15% 14.89% 14.41% -0.99%
ESG MULTICAP -2.41% -7.57% -5.28% -1.67% 7.17% 18.60% 14.34% N.A. N.A. -4.65%
BSE 500 Performance -2.92% -9.14% -5.53% 1.51% 9.17% 16.44% 12.92% 9.49% 11.59% -6.18%

DISCLAIMER - SBI ESG Portfolio (formerly known as SBI Growth With Values Portfolio) Inception Date : 08/07/2016
Returns presented are time-weighted returns. Time weighted - Daily valuation method is used for rate of return calculation. Periodic returns are
geometrically linked. Total return includes realized and unrealized gains and income. Accrual accounting is used for the calculations. Dividend
is accrued on ex-date and reinvested in the portfolio. Trades are booked on trade date. Net returns are calculated after deducting actual
management fees and all other expenses. Benchmark returns are presented gross of non-reclaimable withholding taxes.

SBI Funds Management is now GIPS-compliant.

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SBI Funds Management Limited (SBIFML), is an Investment Manager of all the schemes of SBI Mutual Fund, products launched as Alternative
Investment Funds. SBIFML offers Discretionary, Non-Discretionary and Advisory Portfolio Management Services to various High Net worth
Individuals, Corporates and Institutional Investors. SBIFML claims compliance with the Global Investment Performance Standards (GIPS®). GIPS®
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Disclaimer : All opinions, figures, charts / graphs, estimates and data included in this document are as on date and are subject to change without
notice. While utmost care has been exercised while preparing this document, SBI Funds Management Limited does not warrant the completeness or
accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers should before
investing in the Strategy make their own investigation and seek appropriate professional advice. Investments in Securities are subject to market and
other risks and there is no assurance or guarantee that the objectives of any of the strategies of the Portfolio Management Services will be achieved.
Clients under Portfolio Management Services are not being offered any guaranteed / assured returns. Past performance of the Portfolio Manager
does not indicate the future performance of any of the strategies. The name of the Strategy does not in any manner indicate its prospects or return.
The investments may not be suited to all categories of investors. Neither SBI Funds Management Limited (SBIFML), nor any person connected with
it, accepts any liability arising from the use of this material. The Portfolio Manager is not responsible for any loss or shortfall resulting from the
operation of the strategy. Recipient shall understand that the aforementioned statements cannot disclose all the risks and characteristics. The
recipient is requested to take into consideration all the risk factors including their financial condition, suitability to risk return, etc. and take
professional advice before investing. As with any investment in securities, the value of the portfolio under management may go up or down depending
on the various factors and forces affecting the capital market. For tax consequences, each investor is advised to consult his / her own professional tax
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