Canara Robeco Value Fund NFO

Canara Robeco Value Fund is an open-ended equity scheme which will follow a value investment strategy. The fund intends to take significant exposure into equities and aims to generate long-term capital appreciation from a diversified portfolio in the Indian markets with higher focus on undervalued companies.

• The fund tries to find companies which are trading at a discount to their ‘Intrinsic Value’.
• ‘Intrinsic Value’ strategy would look at overreaction of market participants to the short-term developments in industries/companies and exploit available opportunities for investment returns.
• This strategy would also rely on the analytical and behavioural edge to generate investor alpha.

Intrinsic Value Investing - The Concept:

• Intrinsic Value Investing is a broader philosophy which involves buying companies at a price lower than their intrinsic value
• Keeping a margin of safety
• Taking advantage of market inefficiencies

Essence Of Intrinsic Value Investing

• Value investing is an opportunity for investors to benefit from the mispricing opportunities (buy low), to only sell at a later stage where the valuations revert to the companies’ intrinsic value (sell high).
• An important aspect of intrinsic value investing is to keep an appropriate “MARGIN OF SAFETY”which significantly improves the risk-reward ratio associated with investing in a business.

Margin Of Safety

It is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. Margin of safety incorporates quantitative and qualitative considerations to determine a price target and a safety margin (or cushion) that discounts that target. In value investing, it is important to have a reasonable protection for the investment made i.e. margin of safety. Therefore, higher the margin of safety, lower is the likely risk.

Fund’s Portfolio Creation Approach

Who Should Invest In This Fund?

• Patient investors seeking value approach to investing with focus on investing in stocks having adequate margin of safety.
• Investors with a long-term investment horizon of at least 3 years
• Investors looking for a fund with a potential to deliver better risk adjusted returns in the long term
• Investors focusing on underlying businesses and looking for diversification / differentiated portfolio