All returns are post fees & net of expenses (TWRR). The returns are as on 20^th August 2021. Inception Date & Benchmark:

Consistent Compounders Portfolio: Inception: 1^st Dec,2018 Benchmark: Nifty 50 TRI Little Champs Portfolio: Inception:28^th Aug,2019 Benchmark: S&P BSE Small Cap TRI Kings of Capital Portfolio: Inception:28^th July ,2020 Benchmark: Bank Nifty TRI

When and how does Marcellus Churn its portfolio??

Most of our partners are now well aware of the process that Marcellus follows to identify companies and our whole idea to churn the portfolio bare minimum possible. However, one question that is often asked is when does Marcellus churn the portfolio or what leads to churn in portfolio and here is an answer to it!!

There are three types of churn that Marcellus’ portfolios have:

1.       Complete exit from a stock due to deterioration in Marcellus research analysts’ view of the said company’s strength and sustainability (longevity) of competitive advantages

2.       Optimising portfolio concentration through an exit when a new stock is being included in the portfolio-

– due to an increase in conviction levels on strength and longevity of competitive advantages of the new company (which was hitherto not in the portfolio)

3.       Partial selling of a stock as part of portfolio rebalancing to bring it in sync with relative conviction on fundamentals of the stock vs other stocks in the portfolio. This partial selling can be triggered by either of the following two reasons:

a.       Change in weight of the stock in the model portfolio because of a change in the conviction levels on the fundamentals of that stock (quantified through scores in our longevity framework) relative to others in the portfolio

b.      Changes in share price of the stock which leads to significant deviation in stock allocation in a client’s portfolio compared to the model portfolio weights (which are related to relative conviction on fundamentals of one stock vs others)

Examples of churn:

·                  During January 2020, we exited from Marico due to our conviction level on the fundamentals of the company as cited in point 3(a); during January,2019 we exited from GRUH FINANCE due to the change in management. For more details refer to our newsletters: https://marcellus.in/newsletter/consistent-compounders/prudent-capital-allocation-is-critical-for- consistent-compounding/

https://marcellus.in/newsletter/consistent-compounders/why-india-is-blessed-with-consistent- compounders/

    The rebalancing exercise which we carried out in April 2020 when we bought 2x more of Bajaj Finance in our clients’ portfolios after Bajaj Finance fell by 70% during the Covid crash – that is an example of 3(b) highlighted above.

Regardless of whether the portfolio churn relates to point 1, 2, or 3 highlighted above, if the stock undergoing the churn is illiquid, then we spread out the churn over few days to avoid price impact of our trades.

Please find below links to our latest newsletters and presentations:

**For product/sales related queries please write to sales@marcellus.in**

OPERATIONS UPDATE:

·         FOS – Form Support Service from Marcellus

To enhance onboarding experience for our channel partners & clients. Marcellus has taken an initiative to extend support on Prefilling of all New Clients PMS & Requisite Demat + others forms by Marcellus Onboarding Team. Through this initiative we expect to solve complexities involve in PMS documentations due to multiple set of accounts to be opened for single client with different entities.

Key benefits of this Process are listed down:

·         Enable KRA check and identify need for IPV/OSV upfront and filter AML Validation.

·         Improvise TAT of account opening and enable clients to invest sooner.

·         Eliminate Re-iteration of seeking information and ratification from client to solve observations.

·         Service & Operations efficiency at both Marcellus and Business Partner end.

Process Steps for the Marcellus Form Support:

·         Download the Client Information Form [CIF] for Resident Client, NRI & Non individual through links shared below:

Ø  Resident Client: https://marcellus.in/new-cif-for-individual-clients-ver-2-0/

Ø  All Non-Individual: https://marcellus.in/new-cif-for-non-individual-clients-ver-2-0/

Ø  Non-Resident Indian: https://marcellus.in/new-cif-for-nri-clients-ver-2-0/

·         Fill in complete client (s) details in CIF and refer to supporting KYC documents to be shared along with CIF.

·         Ensure to share CLEAR scan copies of supporting documents & confirm dispatch address details.

·         Email CIF and Supporting KYC documents to clientsupport@marcellus.in for validation.

·         Respective SRM will validate the complete information in CIF and supporting KYC documents.

·         If Validation is complete, team will carry of necessary KRA AML checks and prepare the Prefilled form based on the CIF & KYC documents.

·         In case of need for IPV & OSV respective SRM will reach back to Partners.

·         Prefilled forms will be couriered to the requested address with T+1 days of the complete validation date. (Refer Workflow attached)

Important Notes:

·         All information in CIF is mandatory and will be used in filling of complete form.

·         Incomplete CIF, or missing info. or unclear documents will be rejected by SRM at the time of validation process and will not be processed for form preparations.

·         Request clients to share clear images of the proof scan copies requested and in the readable format, unclear copies will not be accepted.

·         All CIF submitted before 12:00 pm will be considered for validation on same day and dispatch by next working day.

·         All CIF Received after 12.00 PM will be considered for dispatch on T+2 working day.

·         Ensure to mention the “Dispatchment Address” in the CIF.

·         If CIF is valid, forms will be prepared and dispatched by end of next working day evening.

·         In case of any further queries & clarification, request you to connect with your respective Service Relationship Manager for assistance.

**For operation related queries please write to clientsupport@marcellus.in**