Edition: XXXVI | SEPTEMBER-OCTOBER 2018 Wealth... · Currency depreciation has been and may continue to remain the most hotly debated and concerning topics in the recent times. Rupee

Edition: XXXVI | SEPTEMBER-OCTOBER 2018

Tabula Rasa 1

Fixed Income Strategy 2

India: Macro 4

Global: Macro 6

India: Equity Market 8

INOM – IndiaNivesh Optimisation Model 9

Scheme Recommendations

a. Money Market – Liquid Funds 10

b. Debt – UST & Low Duration Funds 11

c. Debt – Short Term Funds 12

d. Debt – Gilt Funds 13

e. Debt – Credit Risk Fund 14

f. Equity – Large Cap Funds 15

g. Equity – Large & Mid Cap 16

h. Equity – Multi Cap Funds 17

i. Equity – Mid Cap Funds 18

j. Equity – Small Cap Funds 19

k. Equity – Value & Contra Funds 20

l. Equity Linked Savings Schemes 21

m. Aggressive Hybrid Fund 22

IndiaNivesh Model Portfolios 23

Global Economic Variables 24

Contents

Currency depreciation has been and may continue to remain the most hotly debated and concerning topics in the recent times. Rupee has in fact slipped significantly against dollar to an all-time low of 72.68/$. The further it slides the more damage it does to our current account, fiscal balance and the investment outlook of the country and thus the currency. A catch-22 situation here, which needs an urgent solution to restore coherency. The dip in the domestic inflation here may give some reprieve but the global sentimental pull currently seems too much to handle.

Meanwhile another global factor that has been denting our current account deficit is the sharp rise in oil prices. The price of crude oil globally has risen due to restrained supply by the OPEC and some non-OPEC countries at a time when the global demand has been rising with higher economic growth. The impending oil sanctions on Iran is expected to further strain the international supply dynamics. Till the major oil exporting countries meaningfully increase or restore the global supply, it will remain a concern for India and other oil dependent economies alike. If demand slackens, as opined in the latest report by the OPEC about the global demand scenario in 2019, it may bring some respite.

The recent assurances from the government about sticking to its commitment of meeting the fiscal target may sound helpful in reviving the sentiments, but it may be more of optimism if the above two continue its upward trend.

All this and the protectionist policy measures or the show of power (tariffs wars) has lent a lot of volatility in the markets. Equities gained but gave up all the gains in the second half ending the last one month with negative 0.6% return. It remains a large cap favored market with focus on specific sectors and stocks. Such strong rupee decline makes it even more difficult for FIIs to look at Indian equities’ but the domestic investors continue to provide the backup support steadily. Strong inflows to the tune of Rs. 7,658 through SIPs in equity mutual funds have been a major liquidity support. To put things in perspective, MFs, in the current calendar year, have received nearly Rs. 41,800cr through SIPs as compared to a total inflow of Rs. 60,000cr in equity-oriented schemes, which is roughly 70%. At this steady pace, MF would continue to fuel the domestic liquidity push. After a long haul of several months and owing to sharp correction in the small and mid-cap space, the fund managers are enthused to re-open the schemes for subscription, which could be an indication that things may change for the better for the mid and small caps. SIPs are an excellent investment form, as it is the most simplistic yet disciplined approach. Irrespective of the market levels, one should continue to contribute to long term SIP obligations unhindered to reap its benefits.

1

Sanket DesaiHead – Research & Advisory (Wealth Management)

Happy Investing !!!

2

India: Fixed Income Strategyquarter of 2019 came at 2.4% of the GDP, marginally lower than 2.5% (bear in mind, the GDP, has galloped by 8.2%) in the same quarter previous year, in absolute terms the deficit has widened to $15.8bn from $15bn earlier.

In fact, Brent crude oil price has increased by $22/bbl over the past twelve months, it is expected to impact the deficit even further in reality. Oil prices had picked up owing to the OPEC nations and Non-OPEC oil producing nations agreeing to cut the global supply of oil to balance the demand and supply situation. However, of late the US sanctions on Iran have further strained the oil market. So far the sanctions do not cover Iran oil but come November, things would change as Iran oil faces US sanctions. Many countries importing oil from Iran

currently have gradually started halting it purchases ahead of the sanctions. While any success in arriving at a solution with US in the form of a waiver may help India in stabilizing a part of its oil source.

As Trump administration’s policies have been more disruptive to the global trade, the risk of oil price escalation remains real. Hence, Oil prices may be expected to remain at elevated level till the US sanctions and tariffs tensions defuses to amicable outcomes.

Double whammy: Rupee plummets:

If oil wasn’t enough, appreciating US dollar further threatens to worsen the twin deficits of India. Dollar has appreciated by nearly 11% in the last 6 months against rupee. Of course, it is the inherent strength of the greenback backed by the economic recovery and employment levels which has sidelined all other currencies including Indian rupee. As the US Fed continued to hike its policy rates, emerging countries

Over the past few weeks the debt markets in India have been under pressure from multiple sources. The 10-year G-Sec has swiftly moved from 7.75% to 8.05% in a very short span of time. In fact, the sovereign yield curve has shifted upwards owing to the external global environment impacting the domestic outlook. The upward shift in the near maturities has been to the tune of 20-40bps while the long maturities have witnessed a rise of 25-30bps. As the bonds go through this rough patch, debt portfolios continue to face the brunt of rising yields (falling prices). To highlight the pain the bond portfolios have faced in the recent while, let us look at the performance of debt funds across different categories. Long duration funds over the last 1 year have not generated any return for the investors, although not much is parked in it considering the total corpus of the category at only 1300cr. Medium to Long Duration

category which maintains duration between 4 to 7 yrs generated a meager return of 1.4% in one year. Medium & Short Duration saw 1 year return at 4-5%. Only categories that keep duration below a year were able to generate a real positive return.

The root cause of pain:

Over the past few months, crude oil price has increased significantly from its range of $65/bbl to $77/bbl and touching $80 momentarily during the period. This has a severe impact on a country such as India which remains significantly dependent on imports for satisfying its oil demand. Since oil remains a significant portion of India’s import basket in value terms, trade deficit also remains extremely sensitive to international oil price changes. For better understanding the impact, every $10 increase in crude oil price leads to nearly half percent increase in Current Account Deficit (CAD) as a percentage of GDP. India’s trade deficit ballooned to $18bn in July highlighting the stress point and signs of pain in the coming time on fiscal side. Although the CAD for the first

Source: Bloomberg, IndiaNivesh Research

6.50

7.00

7.50

8.00

8.50

1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y

YIELD CURVE

Latest 1month ago


0

10

20

30

40

50

60

70

80

Jan

/15

Mar

/15

May

/15

Jul/

15

Sep

/15

No

v/1

5

Jan

/16

Mar

/16

May

/16

Jul/

16

Sep

/16

No

v/1

6

Jan

/17

Mar

/17

May

/17

Jul/

17

Sep

/17

No

v/1

7

Jan

/18

Mar

/18

Brent Crude Spot $/bbl

3

Investment View:

Given the twin problem of currency and oil price rise to remain in the fore, it would be prudent to keep a short-term approach of investing in the fixed income segment. Moreover, the rising fiscal pain along with expectations of high government spends ahead of the general elections could even lead to higher borrowing. High inflationary expectations also create further risk of yield spikes and rates hikes in the coming months. We maintain our investment recommendation of staying invested at the short end of the yield curve. Portfolios/Funds which have low interest rate risk should be preferred at the current juncture and a long duration investment can be availed

when the risks subside satisfactorily. Although at current levels of 8.07% Gsec benchmark yields may look attractive but it would be prudent to wait and watch. As a strategy, investors may also look at investing small portions in upcoming FMPs considering higher expected yields, if the investment horizon permits. Staggering the investment in FMPs would provide opportunity of investing at consecutively better yields rather than getting locked in with all money at lower levels.

continued to witness portfolio outflows to be invested back in US at better rates. India too has witnessed a significant outflow from the debt markets highlighting

the reversal of the carry trade. FII outflows from the debt markets has been to the tune of ¹ 418bn YTD as compared to ¹ 1.5tn of inflows in CY 2017. Currency depreciation further disincentivizes the flows of foreign capital in the country as it depresses the yield on the foreign portfolio. Equity flows have also been negative with intermittent bout of large outflows in a few months with Indian market going through a phase of price correction and high volatility. As discussed above, rise in crude oil prices along with currency depreciation has further

deteriorated the fiscal balance and thereby impact the investment attractiveness of the country.

With the US expected to raise the rates further in its process of policy normalization and balance sheet unwinding, US dollar is expected to remain strong amongst the global currencies.


58

60

62

64

66

68

70

72

74

Jan

/17

Feb

/17

Mar

/17

Ap

r/1

7

May

/17

Jun

/17

Jul/

17

Au

g/1

7

Sep

/17

Oct

/17

No

v/1

7

Dec

/17

Jan

/18

Feb

/18

Mar

/18

Ap

r/1

8

May

/18

Jun

/18

Jul/

18

Au

g/1

8

Sep

/18

$/? Rate


-100,000

-50,000

0

50,000

100,000

150,000

200,000

2015 2016 2017 2018

Portfolio Flows (?cr)

FII Equity FII Debt

4

Domestically the price of petrol and diesel are hitting all-time highs with petrol costing Rs. 88.75 per litre and diesel costing Rs. 78 per litre, a rise of 5% in just one month.

Our View:

The moderation in core and overall inflation is a welcome sign from an inflationary expectation perspective but would make the task of the RBI a little more complex in its next meeting scheduled in the first week of October. At a time when the currency has been under extreme stress and economy on steady growth, the expectations have been high about a rate hike. It will be a question of what reasoning weights more in the scheme of things at that time that could swing the needle either side. Bond yields are already pricing in an imminent rate hike and have reacted sharply to rupee plunge and oil price escalations. Given the base effect this time and the continued pressure from external sources, inflation may continue to remain at elevated levels.

Index of Industrial Production

India's industrial output moderated marginally to 6.6% in the month of July as compared to a revised growth of 6.9% in July. The growth in industrial output was more or less in line with the general street expectations. The steady growth in the industrial output has so far complimented the forecast of revival in economic growth. The manufacturing sector logged a growth of 7% for the month of July as compared to 6.7% in the previous month and -0.1% (decline) in the previous year same period. There has been a decent growth in this segment for the period of Apr-July to the tune of 5.6% and remains the key area for improved performance in the IIP performance with a weightage of more than 2/3rd in the overall index. In terms of industries as well, 22 out of 23 industry groups in the manufacturing sector showed positive growth during July 2018, indicating a strong broad-based upswing.

Electricity sector growth stood at 6.7% vis-à-vis 8.5% in the previous month while the mining saw a little dip with the sector growing at 3.7% as compared to 6.6% in the previous month. IIP for the period of Apr-Jul has grown at 5.4% a pick up from 1.7% in the same period last year. Looking at the overall trendline, the growth of near 7% in the previous month was more on account of the favourable base effect, which put this month's number in a better light, if we strip off the base impact.

From a Use based perspective, primary goods which accounts for 33% of the index grew by 6.9% as compared

The recent reading on the CPI inflation front has brought some cheer to the flagging sentiments in the market. CPI for the month of August was recorded at 3.69% as compared to 3.3% for August a year ago and 4.17% in the previous month. The fall in inflation partly has been on the back of deflation in prices of vegetables, pulses and sugar and confectionary products, which have witnessed prices dropping below the previous year’s level. CPI food inflation stood at 0.29% in August compared to 1.37% in July. Nearly all the items in the food and beverage index saw decline in price over the year except for meat, fish and spices. The general CPI index has also benefited due to a favourable base effect, as previous year during the same time the index had shot up nearly by a percent in one month. Given the disposition, CPI was expected to decline. The effect of base was also seen in the Housing index which fell to 7.59% as compared to 8.45% in the previous month.

Miscellaneous items which account for 27% of the general index saw rise in inflation levels. Nearly every item, which includes household goods and services, health, transportation and communication, recreation, education and personal care, this index has seen rise in price of goods and services over the past one year. But on a sequential month on month basis the index overall saw a marginal moderation in inflation to 5.52% as compared to 5.8% in July.

The above moderation in miscellaneous index was the key reason why the Core inflation eased to 5.9% as compared to 6.3% in July.

Rise in crude oil prices globally and its resultant impact on domestic fuel prices led the Fuel and light inflation to rise to 8.47% in August up from 7.96% in July. Not only has the rise in crude oil price impacted inflation, but the rupee depreciation has also been hitting the import cost of fuel.

India: MacroInflation

Source: Mospi

3.69

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Jan

/15

Ap

r/1

5

Jul/

15

Oct

/15

Jan

/16

Ap

r/1

6

Jul/

16

Oct

/16

Jan

/17

Ap

r/1

7

Jul/

17

Oct

/17

Jan

/18

Ap

r/1

8

Jul/

18

CPI

5

to 9.3% in the previous month (helped by the sharp drop in base). The growth in intermediate and capital goods segment has moderated to 1.2% and 3% while the consumer durables continued to remain the top performer with 14.4% in July atop a similar 13.4% in the previous month.

Our view:

The rise in commodity prices has been impacting the growth in intermediate goods due to cost pressures and remains a cause of concern. The rupee depreciation too adversely impacts the input costs and thus the final output in the absence of pricing power. However aggregate consumer demand has been supportive and has been a major pull factor in the elevated overall growth as seen from the growth in consumer durable and non-durables segment. The festive demand in the coming months could push up the growth but an adverse base effect would act in opposite direction statistically,

hence IIP in the coming months may be expected to remain volatile with a negative bias.

India PMI

Manufacturing PMI expanded for the 13th month in a row, but the pace of expansion slowed down to a trickle in the month of August. The pace of expansion lost steam for the second consecutive month. The PMI index for the month of August was reported at 51.7, as compared to the level of 52.3 for the month of July. A reading above 50 indicates expansion. As indicated by the survey, the slower growth was reflective of slower gains in output and new orders. The slowdown in manufacturing led to job growth suffering in the manufacturing sector. Even as the rate of expansion has suffered, there is no respite for the Indian manufacturing on the input cost pressures front. Though moderately, but manufacturers continued to pass-on the price burden onto the consumers to protect their margins. The streak of rise in selling prices

has now extended to 13 consecutive months. The rise in cost pressures was largely attributed to depreciating INR.

One of the positives coming out of the August month PMI report was that export orders remained robust. The export orders have now risen for 10 consecutive months and the latest growth was the strongest since February 2018. The underlying demand too remained strong, even as the rate of growth in new orders slowed. This was evident from the fact that, pre-production stocks grew at a marginal pace whereas post-production stocks shrank at a sharp pace. Manufacturing companies maintained optimistic projections for rise in output over the next 12 months, but the level of sentiment was below the historical average.

Our View:

The PMI index dropped for the second consecutive month, but can be expected to recover and stay in

expansionary zone going ahead as demand conditions have remained strong. The firmness in export orders too bodes well for the Indian manufacturing companies. Our view corroborates with the one mentioned in the PMI report and believe that the headwinds over the near to medium term would be high oil prices, rising interest rates and capital outflows.

The lead indicator of economic growth is hinting towards a slowdown in pace going ahead. The higher than expected rate of expansion witnessed in Q1 FY19 might be difficult to maintain going ahead; the headwinds mentioned above coupled with benefits of base effect waning could drag the headline GDP growth lower. The slowing growth, though, is not expected to have any effects on the monetary policy stance of RBI. Going by the PMI report, even as the pace of expansion slowed there was no respite from inflationary pressures and this is where the RBI’s focus will remain.

51

.15

2.4

50

.55

0.7 5

1.7

51

.8 52

.65

2.1

54

.45

2.3

49

.6 50

.45

0.7

52

.55

2.5

51

.65

0.9

47

.95

1.2

51

.25

0.3

52

.65

4.7

52

.45

2.1

51 5

1.6

51

.25

3.1

52

.35

1.7

47.00

48.00

49.00

50.00

51.00

52.00

53.00

54.00

55.00

56.00

Feb

-16

Ap

r-1

6

Jun

-16

Au

g-1

6

Oct

-16

De

c-1

6

Feb

-17

Ap

r-1

7

Jun

-17

Au

g-1

7

Oct

-17

De

c-1

7

Feb

-18

Ap

r-1

8

Jun

-18

Au

g-1

8

Nikkei India Manufacturing PMI

Source: Nikkei, IndiaNivesh ResearchSource: MOSPI, IndiaNivesh Research

1.8

32

.40

.71

.81 1

.33

.72

.29

0.8

3.1

4 7.2 5

.2 67

.38

4.5

45

4.2

5.1

2.4

3.5

1.2

4.4

3.2

2.9

-0.3

14

.84

.11

.88

.57

.3 7.5

6.9

5.3

4.5

3.9

6.9

6.6

-2

0

2

4

6

8

10

Jan

/15

Mar

/15

May

/15

Jul/

15

Sep

/15

No

v/1

5

Jan

/16

Mar

/16

May

/16

Jul/

16

Sep

/16

No

v/1

6

Jan

/17

Mar

/17

May

/17

Jul/

17

Sep

/17

No

v/1

7

Jan

/18

Mar

/18

May

/18

Jul/

18

Index of Industrial Production (%)

6

Global bond yields

Global: MacroCrude Oil

After correcting gradually for three consecutive months, oil prices rose sharply during the previous month. The brent crude prices reversed from the low of $69 per barrel, reached in mid-August, and touched a high of $79 per barrel by mid-September. The concerns regarding global growth outlook on the back of trade tensions still remain, but the supply issues took precedence and led to oil prices spiking.

As indicated by the International Energy Agency monthly report, the continuous fall in production from Venezuela and the impending trade sanctions on Iran are the two biggest factors that have pushed the oil prices higher. Even as the global oil supply remained healthy in the month of August, the ability of the major producers to replace the Venezuelan and Iranian supply is in doubt. The supply from these nations is falling at a swift pace, whereas the excess supply from other producers may come online with a lag.

The global bond yields continued to remain volatile with an upward bias during the period under purview. The bond yields across the globe, in both developed as well as emerging markets, rose during the month gone by. The yields traded in a narrow range bound manner till the last week of August and started trending upwards from there on. Even though the movement of yields was similar for both developed and emerging markets, the reasons for the same were starkly different. The improving growth prospects of developed economies and expectations that these economies would start normalising their respective monetary policies kept an upward pressure on bond yields. The US is at the fore front of policy normalisation and the process can continue, as was indicated by Fed chief Jerome Powell. The rising interest rate in world's reserve currency affects all the nations.

The interest rates are rising in emerging markets as well, but instead of normalisation it is a response towards controlling inflation. The monetary policy tools, especially rate hikes, are also being used to stem the rout in their respective currencies. The vicious cycle of depreciating currency and foreign investors selling emerging market debt has been one of the key reasons behind the rise in bond yields.

Outlook

The movement in global bond yields has been unidirectional but the factors triggering the same have been varied. Thus, we expect the movement in yields going ahead too can be divergent.

As discussed above, the improving growth prospects have led to developed market yields to harden but the global risk sentiment has taken a beating. Given the resurgence in concerns regarding global trade war and the turmoil in emerging markets, the flight to safety can lead to developed market yields not hardening and even easing marginally from current levels. The emerging economies' bond yields can harden further as apart from the macroeconomic issues there remains a high possibility of a policy response to support their respective currencies.

Outlook

The sharp rise in oil prices is normally associated with potential geopolitical flare-ups and the reactions to demand-supply imbalances tend to be more gradual in nature. The success achieved by the OPEC and affiliated nations in pushing up the prices by cutting the supply has brought the demand-supply dynamics in sharp focus.

The supply cuts of the previous year were accompanied by improving global growth outlook. The growth outlook still remains firm led by US, but the pace of growth can decelerate going ahead as trade disputes take centre stage and the emerging markets engage themselves in protecting their currencies. In the near term, the oil prices can trend higher on the back of supply concerns but the impact on demand can cap further gains. For countries such as India which face a double whammy of


DateUS 10 Yr

Yield (%)

UK 10 Yr

Yield (%)

JP 10 Yr

Yield (%)

Germany 10

Yr Yield (%)

India 10 Yr

Yield (%)

2.963

2.860

2.810

2.866

12-Sep-18

31-Aug-18

24-Aug-18

16-Aug-18

1.482

1.427

1.278

1.240

0.113

0.107

0.101

0.102

0.410

0.326

0.345

0.320

8.134

7.952

7.873

7.861


46

.14

46

.18

49

.73

46

.43 54

.06

54

.89

55

.49

51

.97

52

.98

50

.87

46

.89

48

.69

51

.40

55

.16

57

.62

62

.58

64

.21

68

.99

65

.42

66

.44

71

.63

76

.65

75

.19

74

.44

73

.13

77

.51

20

30

40

50

60

70

80

90

Au

g'1

6Se

p'1

6O

ct'1

6N

ov'

16

Dec

'16

Jan

'17

Feb

'17

Mar

'17

Ap

r'1

7M

ay'1

7Ju

n'1

7Ju

l'17

Au

g'1

7Se

p'1

7O

ct'1

7N

ov'

17

Dec

'17

Jan

'18

Feb

'18

Mar

'18

Ap

r'1

8M

ay'1

8Ju

n'1

8Ju

l'18

Au

g'1

8Se

p'1

8

WTI Crude Oil ($/bbl)

7

disruption could keep the emerging market currencies under pressure; given the export dependency to support growth. An aggressive intervention by their respective central banks can temporarily support these currencies in the near term.

Gold

The rout in gold prices continued unabated; the slide in gold has now continued for six months in a row. The strength in USD was the major reason behind the correction in the prices of dollar denominated asset. There have been concerns regarding global trade on the

back of tarrifs imposed by the Trump administration, but even those have benefited the greenback as growth remained strong in US. The safe haven demand has largely been to dollar denominated interest yielding assets.

The historical returns of the shining asset too has failed to generate interest from new buyers; negative five year returns (INR terms) does not bode well for any asset class. The investment demand has remained lacklustre; the only steady demand source currently are the global central banks.

Outlook

Unless there emerge some key triggers that result in USD losing its position of strength, the outlook for gold would continue to remain weak. Apart from the currency related headwinds, gold is also suffering from dwindling demand.

There are few positives building-up, such as gold being utilised by investors as a hedge against the rising strength of USD and inflationary risks rising in developed economies as growth gets fuelled by low interest rates. In the near to medium term, the gold outlook gets marred by strengthening USD.

rising crude prices and depreciating currency the fall in demand can happen quickly. In the absence of rise of geopolitical concerns we expect further gains, if any, to be gradual as the potential demand destruction is brought into consideration.

Currency Markets

The movement in currency markets was largely in line with the one seen in bond markets. The USD maintained its position of strength vis-à-vis other major currencies, from developed as well as emerging nations. The trade war concerns, rising yields and improving growth indicators have benefitted the USD as it benefits from the safe haven flows. Apart from US, Japan is the other major currency that has appreciated on the back of safe haven flows. The BREXIT concerns keep any gains in pound under check and the euro too is marred by the weak fiscal condition of its member nations.

weakness in emerging market currencies may abate and relatively better performing economies' currencies might stabilize did not materialize. The currencies from fiscally weak economies (Argentina and Turkey) continued to slide and the rise in oil prices led to INR also joining the band wagon. The INR too continued to depreciated and breached the 72 mark against the USD, with no respite in sight.

Outlook

The USD could maintain its position of strength based on the above discussed factors. The trade war related risks have worked in its favour and has the policy normalisation path well charted out with policy rates continuing to be tweaked higher. The sharp rise in oil prices too aids its strength as the price for the commodity are quoted in USD and as the price rises it increases the global demand for USD.

There is no immediate respite in sight for the emerging market currencies. The fiscal concerns in few of the economies had triggered the rout as foreign investors sought the safety of their home currencies and the situation has only worsened with oil prices moving higher. The inflationary concerns and the risks of trade

The emerging market currencies continued to depreciate against the USD. The expectations that the broad based

Date GBP/USD USD/JPY EUR/USD USD/INR USD/CNY

Source:Bloomberg, IndiaNivesh Research

12-Sep-18

31-Aug-18

24-Aug-18

16-Aug-18

1.299

1.296

1.285

1.272

111.500

111.030

111.240

110.900

72.181

70.996

69.909

70.158

6.869

6.832

6.811

6.885

1.158

1.160

1.162

1.138


1276

1340

13381327

1266

1234

1151

1192

1236

12311271

1246 1260

1238

1284

13151282

1282

12671331

1332

1326

1335

1303

1280

1238

1200

1197

1000

1050

1100

1150

1200

1250

1300

1350

Jun

-16

Au

g-1

6

Oct

-16

De

c-1

6

Feb

-17

Ap

r-1

7

Jun

-17

Au

g-1

7

Oct

-17

De

c-1

7

Feb

-18

Ap

r-1

8

Jun

-18

Au

g-1

8

Gold ($/Ounce)

8

India: Equity Market2,

488

-11,

108

-10,

759

1,92

3

19,1

80

-4,7

47

12,9

84

-12,

491

13,1

14

-6,2

10

-9,6

60

-2,5

77

1429

-2,0

29

11,8

00 17,9

41

17,4

57

9,06

7

12,0

80

8,33

3

9,02

3

16,1

81

9,25

6

11,2

93

13,6

19

9,23

1

3919

4,09

5

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

Jul-1

7

Aug

-17

Sep-

17

Oct

-17

Nov

-17

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

FII & MF Flows (Rs crores)

FII MF

Equity markets maintained the positive momentum gained in the month of July and posted healthy returns in August as well. The rally in the stock markets remained broad based, as against the recent trend of investors’ favoring large cap stocks. The high valuations in mid and small cap had pushed investors towards the relative safety of large cap stocks. The correction in this space led to some value buying emerging. The optimism in large cap stocks pushed further up and led to key benchmark indices, Nifty and Sensex, continuing to make fresh all-time highs in the month of August.

The factors which led to the markets turning around in the month of July continued to support sentiments. The first half of August was especially conducive for risk-on trade in domestic equities. The oil prices trended lower during that period, thereby keeping a lid on current

account and fiscal deficit concerns. The FII diaspora were net buyers during the first half of August. Additionally, there was no change in domestic investor sentiment; reflected in the net inflows received by the mutual fund industry. The mutual fund industry was net buyers to the tune of Rs. 4K crores. The healthy earnings season also helped in soothing the investor concerns regarding elevated valuations. Corporates managed to beat analyst estimates, despite expectations factoring-in the positive base effect available because of the disruption caused by GST implementation during previous year. India was one of the best performing emerging markets.

The Sensex and Nifty both reported gains of 2.8% for the month of August. The Mid and Small cap too maintained an upward trend and reported monthly gains of 5.5% and 2.72% respectively. Auto sector took a backseat in the month of August and the growth was driven by gains in export oriented sectors of Pharma and IT. Metal and FMCG were another two sectors that contributed to gains. The performance of Banking stocks was lackluster for the month.


Domestic markets peaked towards the end of August and traded thereon with heightened volatility. The first fortnight of September took out all the gains registered in the month of August. The uptick in crude prices was the primary trigger that led to worsening of sentiments. The sharp up move in crude oil prices coupled with depreciation of INR led to domestic petrol prices touching all-time highs. If the crude prices continue to inch upwards and the government has to lower the taxes out of political compulsions, the fiscal deficit concerns too would impact the growth

Our View:

After the bull rally for two consecutive months (July and August), risk-off sentiment has started taking hold

globally. The trade war concerns have returned to haunt the markets as US threatens to impose ever growing tariffs on Chinese imports, with China retaliating with tariffs of its own. Additionally, the news is also making rounds that the Chinese intend to appeal to World Trade Organization seeking sanctions on US. The rising trade war concerns coupled with the rout in emerging economies in the form of depreciating currencies and rising interest rates could keep the global cues subdued for some time. Apart from the weak global cues, India grapples with the twin issues of rising crude and weak INR. Amid all the issues discussed above, the silver lining is the improvement in domestic GDP growth rates; evident also from the turnaround in corporate earnings. The recent turmoil has not impacted India growth story as yet and these concerns may turn out to be an opportunity to enhance exposure to equities. Having said that the volatility can continue to rule the roost and thus investors would be recommended to invest in a staggered manner.

outlook and eventually the FII flows in the country.


0

10

20

30

40

50

60

Mid-Cap Nifty

Large Cap v/s Mid Cap PE Valuation Gap

are applied to the schemes or products which have successfully come through Primary Stage. The parameters in the Secondary Stage are quantitative, like performance indicated by returns, consistency in performance measured by rolling returns, risk adjusted returns indicated by Treynor Ratio or Sharpe Ratio and portfolio quality — composition by way of AAA and AA rated papers.

The Third Stage takes cognizance of the qualitative parameters such as AMC vintage/rating and fund manager experience as well. The third stage introduces a human element in to the scheme selection process in order to fine tune the quantitative selection.

The Final Stage is the selection of schemes which are most preferred.

The scheme selection process at IndiaNivesh is basedon a methodology known as INOM. It stands for lndiaNivesh Optimisation Model. INOM forms thecore of our scheme selection process and therefore,of the recommendations.

- INOM uses a three stage selection process. In the first stage certain basic criteria are applied and this is called the Primary Stage. The objective of this stage is to eliminate those products which do not conform to certain basic criteria. In the context of mutual funds it may be a certain minimum size of assets for the mutual fund, a certain minimum size for the specific scheme a certain number of years of track record for the product etc. In the Primary Stage, those products which do not conform to the criteria are eliminated.

In the Second Stage the actual selection criteria

9

Stage 1- Filtration

Process of scheme selection under INOM Model

INOM - IndiaNivesh Optimisation Model_INOM A Proprietary Scheme selection model of IndiaNivesh

Stage 2- Quantitative Analysis

Stage 3- Qualitative Analysis

QuantitativeAnalysis

QualitativeAnalysis

RecommendedSchemes

10

Money Market - Liquid Funds

Recommended Funds

st Returns < 1yr are annualised and returns more than 1yr are CAGR, as on 31 Aug 2018

Data Source: ACEMF

Risk-o-meter of the above recommended schemes is shown alongside

Liquid Liquid Liquid Liquid Liquid Liquid Liquid Liquid

Point to Point Returns

Benchmark Crisil Liquid Fund Index


Nil Nil Nil Nil Nil Nil Nil Nil

DevangShah

Hetal P. Shah

Kumaresh Ramakrishnan Kapil Punjabi

Rahul Goswami

Krishna Venkat

Cheemalapati

Shriram Ramanathan

Amit Somani

Scheme Name

Axis Liquid Fund

Baroda Pioneer

Liquid Fund

DHFL Pramerica Insta Cash

Fund

ICICI Pru Liquid Fund

Invesco India

Liquid Fund

Tata Liquid Fund

No Change No Change

DHFL Pramerica Insta Cash

Plus

No Change No Change No Change No Change No ChangeErstwhile

Name

Erstwhile Category

7.01

7.09

7.35

7.40

7.10

6.99

7.15

7.39

7.42

7.09

6.97

7.04

7.30

7.36

7.02

6.98

7.07

7.34

7.33

7.04

7.09

7.13

7.38

7.37

7.07

6.95

7.07

7.32

7.33

7.03

7.02

7.09

7.36

7.36

7.05

6.98

7.05

7.36

7.37

7.06

2 Weeks

1 Month

3 Months

6 Months

1 Year

2 Weeks

1 Month

3 Months

6 Months

1 Year

7.07

7.48

7.59

7.53

7.13

30,065

35

7.07

7.48

7.59

7.53

7.13

9,530

23

7.07

7.48

7.59

7.53

7.13

14,288

44

7.07

7.48

7.59

7.53

7.13

26,026

37

7.07

7.48

7.59

7.53

7.13

7,508

29

7.07

7.48

7.59

7.53

7.13

59,208

37

7.07

7.48

7.59

7.53

7.13

15,284

52

7.07

7.48

7.59

7.53

7.13

24,458

32

AUM in Crs.

Manager

Average Maturity (Days)

Exit Load

Fund

HSBC Cash Fund

DSP Liquidity

Fund

11

Debt - UST & Low Duration Funds

Recommended Funds


Data Source: ACEMF


*These schemes fall in the moderate profile as per the risk-o-meter. Please refer to Income Funds section to see the suitable risk-o-meter.

UST UST UST UST UST UST UST UST


Benchmark Crisil Liquid Fund Index


Nil Nil Nil Nil Nil Nil Nil Nil

Kaustubh Gupta

Kumaresh Ramakrishnan

Deepak Agrawal

Rajeev Radhakrishnan

Rahul Goswami

Deepak Agrawal

Rajeev Radhakrishnan

Akhil Mittal

No Change No Change No Change No Change Tata Ultra ST Fund

Erstwhile Name

Erstwhile Category

6.66

7.19

7.98

7.31

6.50

6.82

7.18

7.80

7.47

6.87

6.60

7.11

7.90

7.38

6.60

6.66

7.22

8.14

7.51

6.67

6.51

7.16

8.17

7.14

6.38

7.11

7.54

8.06

7.77

7.22

6.01

7.08

7.57

7.38

6.58

6.83

7.34

8.19

7.21

6.60

2 Weeks

1 Month

3 Months

6 Months

1 Year

2 Weeks

1 Month

3 Months

6 Months

1 Year

7.07

7.48

7.59

7.53

7.13

18,353

7.07

7.48

7.59

7.53

7.13

1,961

7.07

7.48

7.59

7.53

7.13

7,986

7.07

7.48

7.59

7.53

7.13

3,899

7.07

7.48

7.59

7.53

7.13

17,573

7.07

7.48

7.59

7.53

7.13

8,043

7.07

7.48

7.59

7.53

7.13

4,221

7.07

7.48

7.59

7.53

7.13

11,839AUM in Crs.

Manager

Average Maturity (Days)

Exit Load

UST Low Duration

Scheme Name

Aditya Birla SL Savings

Fund

DHFL Pramerica

Ultra ST

Kotak

Savings Fund

SBI Magnum Ultra Short Duration Fund-Reg

ICICI Pru Flexible

Income Plan

SBI Ultra Short Term Debt Fund

No Change

168 128 124 91 225 201 268 235

ICICI Pru Savings

Fund

SBI Magnum Low

Duration Fund

Tata Treasury

Advantage Fund

UTI Treasury

Advantage Fund

12

Debt - Short Term Funds

Scheme NameAxis Short Term Fund

DHFL Pramerica

Short Maturity Fund

HDFC Short Term Debt Fund

ICICI Pru Short Term Plan

SBI Short Term Debt Fund

UTI ST Income Fund-Inst

Erstwhile Name

No Change No Change

HDFC Short Term

Opportunities Fund

No Change No Change No Change

Erstwhile Short Term Short Term Short Term Short Term Short Term Short Term

AUM in Crs.

Average Maturity (Years)

1.50 1.20 1.38 1.43 1.70 1.22

Exit Load Nil0.50% on or

before 6M, Nil after 6M

Nil0.25% on or

before 7D, Nil after 7D

Nil Nil

Fund Manager Devang Shah Puneet Pal Anil Bamboli Manish BanthiaRajeev

RadhakrishnanSudhir Agarwal


Data Source: ACEMF


*These schemes fall in the moderate profile as per the risk-o-meter. Please refer to Income Funds section to see the suitable risk-o-meter.

Recommended Funds

Category

1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

5.83

7.46

6.04

4.56

7.22

8.40

6.20

7.85

6.30

4.63

7.40

8.61

4,798

5.88

7.06

5.53

4.42

7.58

8.67

6.20

7.85

6.30

4.63

7.40

8.61

1,564

6.46

8.07

6.67

5.51

7.55

8.82

6.20

7.85

6.30

4.63

7.40

8.61

9,441

5.44

7.01

5.35

3.77

7.60

8.85

6.20

7.85

6.30

4.63

7.40

8.61

7,892

5.57

7.15

5.58

4.17

7.19

8.28

6.20

7.85

6.30

4.63

7.40

8.61

6,513

6.50

7.71

6.20

4.62

7.57

8.72

6.20

7.85

6.30

4.63

7.40

8.61

9,573

1 Month

3 Months

6 Months

1 Year

3 Years

5 Years


Benchmark Crisil Short Term Bond Fund Index


13

Debt - Gilt Funds

Recommended Funds

-1.24

6.00

5.61

-0.83

8.10

9.77

2.18

5.88

5.63

1.07

7.49

9.64

150

2.18

5.88

5.63

1.07

7.49

9.64

968

2.18

5.88

5.63

1.07

7.49

9.64

1,974

2.18

5.88

5.63

1.07

7.49

9.64

499

1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

0.78

5.28

7.06

0.10

8.01

9.89

-1.74

3.59

4.87

-0.89

7.48

9.84

1.88

4.98

7.00

0.16

7.82

9.48

Scheme NameAditya Birla

SL G-Sec FundReliance Gilt

Securities FundSBI Magnum Gilt Fund UTI Gilt Fund

Erstwhile NameAditya Birla Sun Life

Gilt Plus PF No Change SBI Magnum Gilt-LTP UTI Gilt Adv-LTP

Gilt Gilt Gilt GiltErstwhile Category


Benchmark


AUM in Crs.


Exit Load

Fund Manager Pranay Sinha Prashant Pimple Dinesh AhujaAmandeep Singh

Chopra

0.25% on or before

15D, Nil after 15DNilNil

0.50% on or before 90D, Nil after 90D

I-BEX (I-Sec Sovereign Bond Index)

3.105.463.974.68

Debt - Gilt Funds



Data Source: ACEMF

14

Debt - Credit Risk Funds


Recommended Funds

Scheme Name

Erstwhile Name

Erstwhile Category

Benchmark


AUM in Crs.


Exit Load

Fund Manager

1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

1 Month

3 Months

6 Months

1 Year

3 Years

5 Years

6.52

8.93

7.55

5.65

8.60

7.78

9.29

7.67

6.51

8.18

9.71

0.11

5.68

4.66

0.91

7.21

9.08

8,327

0.11

5.68

4.66

0.91

7.21

9.08

7,148

6.33

7.54

7.03

5.50

7.70

9.13

6.52

7.94

6.42

5.29

7.98

9.16

6.39

8.59

6.50

5.28

7.85

8.96

1.83 3.00 1.79 2.17 2.17

0.11

5.68

4.66

0.91

7.21

9.08

11,412

0.11

5.68

4.66

0.91

7.21

9.08

5,367

0.11

5.68

4.66

0.91

7.21

9.08

11,064

Nil upto 15% of

units,1% in excess

of limit on or

before 365D and

Nil after 365D

Nil upto 10% of

units, For remaining

units - 3% on or

before 12M, 2%

after 12M but on or

before 24M, 1%

after 24M but on or

before 36M,

Nil after 36M

Nil upto 10%

of units and 1%

on remaining units

on or before

1Y, Nil after 1Y

Nil for 10% of

investment and 1%

for remaining

Investment

on or before

1Y, Nil after 1Y

Nil for 10% of

units and 1%

for remaining

units on or

before 12M,

Nil after 12M

Maneesh Dangi Santosh Kamath Manish Banthia Deepak Agrawal Prashant Pimple


Crisil Composite Bond Fund Index

Aditya Birla SL Credit Risk Fund

Franklin India Credit Risk Fund

ICICI Pru Credit Risk Fund

Kotak Credit Risk Fund

Reliance Credit Risk Fund

Aditya Birla SL Corp Bond Fund

Franklin India Corporate Bond Opportunities

ICICI Prudential Regular Savings

Fund

Kotak Income Opportunities

Fund

Reliance Reg Savings Fund-Debt

Option

Accrual Accrual Accrual Accrual Accrual

st Returns < 1yr are absolute and returns more than 1yr are CAGR, as on 31 Aug 2018

Data Source: ACEMF

15

Equity - Large Cap Funds

Recommended Funds


Data Source: ACEMF

3 Months6 Months

1 Year3 Years5 Years


13.3015.2014.78

25.9621.0816.77

17.7718.2816.04

19.0919.1217.25

6.467.089.67

13.4220.27

7.1115.3021.1715.3919.44

7.518.53

15.0115.1019.82

9.838.15

16.5514.1622.85

Scheme NameAditya Birla SL

Frontline Equity FundICICI Prudential Bluechip Fund

Large Cap Large CapLarge CapLarge Cap

Axis Bluechip FundReliance Large Cap

Fund

Reliance Top 200 FundAxis Equity FundNo Change

Scheme Point to Point Returns

ICICI Pru Focused Bluechip Equity Fund

Scheme SIP Returns

Benchmark Point to Point Returns

Benchmark NIFTY 50 - TRI NIFTY 50 - TRI NIFTY 100 - TRI S&P BSE 200 - TRI


3 Months6 Months


25.0719.8215.44

25.0719.8215.44

10.460.47

2839

23.1719.9416.18

15.910.77

19836

21.5119.8516.63

11.700.67

11601

9.4512.4319.4015.0817.82

9.4512.4319.4015.0817.82

9.1111.5718.2715.4819.08

8.8810.7417.7515.8919.97

Benchmark SIP Returns

AUM in Crs.

Exit Load

Fund Manager

Risk Ratios

Treynor

Information Ratio

Nil for 10% of investments and 1% for remaining investments on or

before 12M, Nil after 12M

Nil upto 10% of units on or before

12M, For remaining units 1% on or

before 12M and Nil after 12M

1% on or before 1Y, NIL after 1Y

1% on or before 1Y, Nil after 1Y

Mahesh Patil Shreyash Devalkar Sankaran Naren Shailesh Raj Bhan

16.190.25

21880

Erstwhile Name

Erstwhile Category

16

Equity - Large & Mid Cap

Recommended Funds

Scheme NameCanara Rob Emerg

Equities FundIDFC Core Equity

FundKotak Equity

Opportunities FundInvesco India

Growth Opp FundSundaram Large

and Mid Cap Fund

Invesco India Growth

IDFC Classic Equity Fund

Kotak Opportunities

Fund

Sundaram

Equity Multiplier

No ChangeErstwhile Name

Erstwhile Category


Mid Cap Large Cap Multi CapMulti Cap Multi Cap

3 Months

6 Months

1 Year

3 Years

5 Years

3 Months

6 Months

1 Year

3 Years

5 Years

6.21

5.81

13.94

18.73

35.40

8.88

10.74

17.75

15.89

19.97

4.54

4.72

10.31

16.42

18.55

8.88

10.74

17.75

15.89

19.97

7.85

10.21

18.91

16.03

22.49

7.40

8.44

17.00

16.69

22.22

5.10

4.23

6.74

13.63

21.25

8.71

10.48

17.54

15.69

19.79

7.48

10.32

20.68

16.99

24.11

8.71

10.48

17.54

15.69

19.79

Treynor

Information Ratio

1 Year

3 Years

5 Years

12.93

20.86

24.35

10.49

17.32

15.76

20.88

21.12

18.45

8.24

15.13

15.94

21.38

21.21

19.36

1 Year

3 Years

5 Years

21.51

19.85

16.63

21.51

19.85

16.63

17.89

19.96

17.94

21.03

19.69

16.39

21.03

19.69

16.39

Scheme SIP Returns

S&P BSE 250 Large

MidCap 65:35

Index - TRI

NIFTY 200 - TRI NIFTY 200 - TRIS&P BSE 200 - TRI S&P BSE 200 - TRIBenchmark

AUM in Crs.

Exit Load

Fund Manager

14.62

1.04

4033



Risk Ratios

1% on or before

1Y, Nil after 1Y

1% on or before

365D

1% on or before

1Y, Nil after 1Y

1% on or before

1Y, Nil after 1Y

1% on or before

12M, Nil after 12M

Ravi Gopalakrishnan

Anoop Bhaskar Taher Badshah Harsha Upadhyaya S. Krishnakumar

20.10

0.81

3040

13.16

1.61

884

18.91

0.52

2569

16.02

1.26

450


Data Source: ACEMF

17

Equity - Multi Cap Funds

Recommended Funds


Data Source: ACEMF

Scheme Name

Erstwhile Name

Erstwhile Category


Scheme SIP Returns

Benchmark


S&P BSE 200 - TRI NIFTY 500 - TRI S&P BSE 500 - TRI NIFTY 200 - TRI S&P BSE 500 - TRI


Risk Ratios

AUM in Crs.

Exit Load

Fund Manager

3 Months

6 Months

1 Year

3 Years

5 Years

Treynor

Information Ratio

1 Year

3 Years

5 Years

1 Year

3 Years

5 Years

3 Months

6 Months

1 Year

3 Years

5 Years

1% on or before 365D, Nil

after 365D

1% on or before 1Y

1% on or before 18M, Nil after 18M


1% on or before 1Y,Nil after 1Y.

Anil ShahAnand

Radhakrishnan

George Heber Joseph

Harsha Upadhyaya

Anup Upadhyay

Franklin India Prima Plus Fund

Kotak Select Focus Fund

No Change No Change No Change

Multi Cap Multi Cap Multi CapLarge Cap

Aditya Birla SL Equity Fund

Franklin India Equity Fund

ICICI Pru Multicap Fund

Kotak Standard Multicap Fund

SBI Magnum Multicap Fund

5.86

6.04

9.39

16.31

25.79

7.15

6.60

12.32

12.41

22.66

11.30

10.80

18.48

14.71

22.78

7.91

8.97

12.08

16.14

24.26

4.65

5.35

10.84

15.56

24.88

Large Cap

12.04

17.50

18.24

14.47

14.69

15.74

22.71

18.05

17.37

16.91

18.50

18.61

10.63

16.43

18.06

21.51

19.85

16.63

18.31

19.32

16.58

18.52

19.49

16.70

21.03

19.69

16.39

18.52

19.49

16.70

34.10

0.68

10307

12.54

-0.06

12330

18.76

0.23

3047

18.75

0.69

21927

17.04

0.75

6176

8.88

10.74

17.75

15.89

19.97

7.86

8.81

16.33

15.84

20.42

7.88

8.91

16.53

16.02

20.42

8.71

10.48

17.54

15.69

19.79

7.88

8.91

16.53

16.02

20.42

18

Recommended FundsEquity - Mid Cap Funds

Recommended FundsEquity - Mid Cap Funds


Data Source: ACEMF

Scheme Name

Erstwhile Name

Erstwhile Category

3 Months6 Months


1 Year

3 Years

5 Years

3 Months6 Months


2.171.66

10.1915.1828.76

5.843.74

14.2119.2628.90

0.800.568.71

15.6832.13

5.861.92

10.1516.4726.16

1.880.387.64

17.8032.01

5.861.92

10.1516.4726.16

-0.23-2.125.41

13.9429.21

6.012.589.65

17.6327.58

Benchmark Nifty Midcap 100 - TRI NIFTY MIDCAP 100 - TRI

NIFTY MIDCAP 100 - TRI

S&P BSEMidcap-TRI

Franklin India Prima Fund

Kotak Emerging EquityScheme

L&T Midcap Fund Sundaram Midcap Fund

No ChangeNo Change No ChangeSundaram Select

Midcap Fund

Mid Cap Mid CapMid CapMid Cap

Exit Load 1% on or before 1Y 1% on or before 12M1% on or before 1Y, Nil

after 1Y1% on or before 1Y, Nil

after 1Y

AUM in Crs.

Treynor

Information Ratio

6.07

15.00

18.74

8.99

20.24

21.46

18.52

0.62

6829

2.57

15.15

20.45

5.97

16.78

18.78

20.88

0.76

3453

2.47

19.06

22.57

5.97

16.78

18.78

18.25

1.11

3308

-1.61

13.19

18.42

6.45

17.46

19.55

21.87

0.65

6336



Risk Ratios

Scheme SIP Returns

1 Year

3 Years

5 Years

Fund Manager R. Janakiraman Pankaj Tibrewal Soumendra Nath Lahri S. Krishnakumar


19

Equity - Small Cap Funds

Recommended FundsEquity - Small Cap Funds


Data Source: ACEMF

Recommended Funds

Scheme Name

Erstwhile Name

Erstwhile Category

3 Months6 Months


1 Year

3 Years

5 Years

3 Months6 Months


-3.27-5.904.79

17.0929.55

-2.67-4.565.02

15.0131.46

0.280.93

23.2921.6126.51

0.25-2.0411.0822.81

-1.47-6.790.88

15.4825.46

Benchmark Nifty Smallcap 100

- TRINifty Smallcap 250

- TRINIFTY SMALLCAP 100

- TRIS&P BSE Smallcap -

TRI

Aditya Birla SL Small Cap Fund

Franklin India Smaller Cos Fund

HDFC Small Cap Fund L&T Emerging Businesses Fund

No Change No Change No ChangeAditya Birla SL Small &

Midcap Fund

Mid & Small Mid & SmallMid & SmallMid & Small

Exit Load1% on or before 365D,

Nil after 365D 1% on or before 1Y1% on or before 1Y, Nil

after 1Y1% on or before 1Y, Nil

after 1Y

AUM in Crs.

Treynor

Information Ratio

-8.20

14.39

19.60

-9.23

13.07

15.54

19.62

0.97

2327

-5.34

12.45

18.76

-9.37

12.29

16.54

21.12

0.78

7430

8.85

24.09

22.50

-9.23

13.07

15.54

15.59

1.88

5111

1.90

23.37

0.00

-3.15

16.59

18.76

19.37

1.47

5539



Risk Ratios

1 Year

3 Years

5 Years

Fund Manager Jayesh Gandhi R. Janakiraman Chirag Setalvad Soumendra Nath Lahri

-1.54-8.511.29

14.4027.72

-1.47-6.790.88

15.4825.46

0.09-4.708.28

17.0828.23


Scheme SIP Returns

Recommended Funds

20

3 Months6 Months


3 Months6 Months




Risk Ratios

AUM in Crs.

Exit Load

Fund Manager


Erstwhile Name

Erstwhile Category

Benchmark

3.46

3.63

10.29

19.47

28.46

4.94

4.48

16.40

16.20

23.93

4.37

0.72

6.72

15.62

28.39

7.86

8.81

16.33

15.84

20.42

8.88

10.74

17.75

15.89

19.97

9.97

14.03

23.20

15.21

17.32

18.31

19.32

16.58

21.51

19.85

16.63

28.53

20.89

15.67

14.021.353828

18.790.738450

31.071.144969

Treynor

Information Ratio

Scheme NameHDFC Capital Builder Value

FundL&T India Value Fund Tata Equity P/E Fund



1% on or before 18M, Nil after 18M

Miten Lathia Venugopal Manghat Sonam Udasi

HDFC Capital Builder No Change No Change

Multi Cap Multi Cap Multi Cap

Nifty 500 - TRI S&P BSE 200 - TRI S&P BSE Sensex - TRI


Data Source: ACEMF


Scheme SIP Returns

11.14

18.51

17.68

-0.40

14.57

19.55

7.95

19.95

20.50


Value & Contra Funds

Recommended Funds

Note:


Data Source: ACEMF

No Change No Change No Change No Change No Change

Scheme NameAditya Birla SL Tax

Relief '96Axis LT Equity

FundDSP Tax Saver

FundL&T Tax Advt

FundReliance Tax Saver

(ELSS) Fund

Treynor

Information Ratio

6.538.28

19.7116.4025.89

5.7213.0321.1114.6826.96

6.135.138.65

15.1223.52

2.822.839.95

15.5521.89

3.44-6.78-2.1210.4324.78

8.8810.7417.7515.8919.97

8.8810.7417.7515.8919.97

7.868.81

16.3315.8420.42

8.8810.7417.7515.8919.97

9.4311.6118.0215.5118.75

3 Months6 Months


3 Months6 Months


Benchmark S&P BSE 200 - TRI S&P BSE 200 - TRI NIFTY 500 - TRI S&P BSE 200 - TRI S&P BSE 100 - TRI

13.601.327020

11.460.72

18752

23.650.574750

16.721.083426

12.040.31

10546

ELSS

Erstwhile Name

ErstwhileCategory


ELSS ELSS ELSS ELSS

Ajay Garg Jinesh Gopani Rohit Singhania Ashwani KumarSoumendra Nath

Lahiri

AUM in Crs.

Risk Ratios

Fund Manager


Ø Investment done in ELSS qualifies for tax deduction under Section 80C of IT Act, 1961

Ø Investment upto Rs. 1.5 lakh are eligible for deductions from taxable income

Ø You can save upto Rs. 45,000 tax

Ø ELSS has 3 years lock-in period

Equity Linked Saving Schemes

21

22

Aggressive Hybrid Fund

Recommended Funds

TreynorInformation

Ratio

Scheme NameABSL EquityHybrid '95

Fund

Canara Rob Equity Hybrid

Fund

ICICI Prudential Equity & Debt

Fund

L&T Hybrid Equity Fund

Reliance Equity Hybrid Fund

SBI Equity Hybrid Fund

Erstwhile NameAditya Birla SL Balanced '95

Fund

Canara Robeco Equity Debt

Allocation Fund

ICICI Pru Balanced Fund

L&T India Prudence Fund

Reliance Reg Savings Fund-Balanced Plan

SBI Magnum Balanced Fund

Erstwhile Category

Balanced Balanced Balanced Balanced Balanced Balanced

Nil upto 15% of units,1% in excess of limit on or before 365D and Nil

after 365D

Nil upto 10% of units on or before 1Y, 1% for more than

10% of units on or before 1Y, Nil

after 1Y

Nil on 10% of units within

1Y and 1% for more than 10% of units within 1Y, Nil after 1Y

Nil for 10% of investments and 1% for

remaining on or before 12M, Nil

after 12M

Nil for 10% of units and 1% for remaining units on or

before 1Y, Nil after 1Y

Nil for 10% of investments and 1% for remaining

investment on or before 12M,

Nil after 12M

Fund Manager Mahesh PatilRavi

Gopalakrishnan Sankaran NarenSoumendraNath Lahiri

Sanjay Parekh R. Srinivasan

Exit Load

3 Months6 Months


3.714.506.36

12.2119.32

5.256.76

10.4412.2719.31

6.257.84

11.7512.9916.29

5.403.66

10.1313.6420.32

6.257.84

11.7512.9916.29

2.673.926.97

11.5120.17

6.257.84

11.7512.9916.29

4.674.148.56

13.1220.54

6.257.84

11.7512.9916.29

3.505.34

11.6711.7019.80

6.257.84

11.7512.9916.29

7.5912.2613.76

13.1614.0914.37

9.5014.1314.75

7.5612.6114.33

9.4414.0514.79

9.9513.2114.06

6.257.84

11.7512.9916.29


14.6814.7213.50

14.6814.7213.50

14.6814.7213.50

14.6814.7213.50

14.6814.7213.50

14.6814.7213.50


Scheme SIP Returns

8.18

0.12

15001

8.24

-0.08

1750

8.89

0.67

29032

7.46

0.12

10971

8.21

0.46

14481

11.22

-0.29

28105

Benchmark Point to Point

Returns


Risk Ratios

3 Months6 Months



AUM in Crs.

Crisil Hybrid 35+65 - Aggressive Index


Data Source: ACEMF


23

l-Conserve The most conservative of the portfolios; the focus here is preservation of capital combined with the ability to generate consistent alpha over risk free or bank deposit rate. The marginal exposure to equity is maintained so as to create a synthetic conservative structure, akin to a MIP.

_I-Build The focus is to improve the return profile without disproportionately increasing the risk profile. The allocation to equity goes up and also to duration debt, as the concentration to conservative debt goes down.

_ I-Balance/I-Grow/I-Multiply —The need for further improvement in returns also increases the risk in the p o r t fo l i o , t h e r e b y e m p h a s i s i n g f u r t h e r diversification. One more basket is introduced in these portfolios in the form of Alternate Asset Class. The allocation to Equity and Alternate Asset Class increases in these portfolios as the focus on capital appreciation is on upward trajectory. The Alternate Asset Class works as an effective diversifier as well, given the fact that they may not strictly have a positive correlation to Equity.

Equity Risk Free Dept Long/Short Dept Alternative

Conservative Aggressive

I-Conserve I-Build I-Balance I-Grow I-Multiply

Risk Suitability

(A) Debt - Conservative

Fixed Deposits - Banks/Corporates

Bonds - PSU Bonds, Tax Free Bonds, etc.

Fixed Maturity Plans and Interval Funds

Liquid/Ultra Short Term/Arbitrage Funds

(B) Debt - Aggressive/Duration

Short Term Funds

Income Funds

MIPs

Accrual Funds

Gilt-Medium to Long Term

(C) Equity

Diversified Equity Funds

Direct Equity/Derivatives

Equity PMS

Private Equity

(D) Alternate

Gold ETFs/Funds

Real Estate Products (REITs)

Structured Products

(A)+(B)-(C)+(D)

65% 50% 30% 20% 15%

30% 35% 30% 20% 15%

5% 15% 30% 40% 50%

0% 0% 10% 20% 20%

100% 100% 100% 100% 100%

Key Global Economic Variab l e s

24

Japan

Australia

New Zealand

Indonesia

Singapore

South Korea

Philippines

Malaysia

BRICS

Brazil

Russia

India

China

South Africa

United States

Canada

Mexico

Germany*

UK

France*

Italy*

Spain*

Portugal*

Greece*

Poland

Switzerland

1.00%

1.90%

8.20%

6.70%

0.40%

6.50%

7.25%

6.50%

4.35%

6.50%

12.53%

8.86%

8.13%

3.68%

9.12%

4.19%

3.10%

3.69%

2.30%

5.10%

-0.48%

2.20%

-1.90%

1.30%

-2.50%

74%

13%

69%

48%

53%

Country GDP Growth Policy Rate 10yr Yield Inflation CAD/GDP Debt/GDP

Americas

Europe

Asia

2.90%

1.90%

2.60%

2.00%

1.50%

7.75%

2.96%

2.33%

8.01%

2.70%

3.00%

4.90%

-2.40%

-3.00%

-1.60%

105%

90%

46%

2.00%

1.30%

1.70%

1.20%

2.70%

2.30%

1.80%

5.10%

3.40%

0.00%

0.75%

0.00%

0.00%

0.00%

0.00%

0.00%

1.50%

-0.75%

0.42%

1.50%

0.73%

2.78%

1.45%

1.87%

4.03%

3.22%

-0.04%

2.00%

2.50%

2.30%

1.60%

2.20%

1.20%

1.00%

2.00%

1.20%

8.00%

-4.10%

-0.80%

2.80%

1.90%

0.50%

-0.80%

0.30%

9.80%

64%

85%

97%

132%

98%

126%

179%

51%

30%

1.00%

3.40%

2.70%

5.27%

3.90%

2.80%

6.00%

4.50%

-0.10%

1.50%

1.75%

5.50%

1.06%

1.50%

4.00%

3.25%

0.11%

2.60%

2.55%

8.52%

2.46%

2.26%

6.88%

4.17%

0.90%

2.10%

1.50%

3.20%

0.60%

1.40%

6.40%

0.90%

4.02%

-3.10%

-2.80%

-1.70%

19.50%

5.60%

-0.80%

1.30%

253%

42%

22%

29%

111%

38%

42%

51%

This document is prepared by the Research Division of IndiaNivesh Securities Ltd (The Company) on the publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been taken based upon this information. lndiaNivesh Securities Ltd does not warranty either expressly of impliedly, the accuracy, completeness or reliability of any information provided herein. Neither IndiaNivesh Securities Ltd nor any of its employees / Directors / authorized representatives shall be liable for any direct, indirect, special consequential, punitive or exemplary damages including lost profits arising in any way from the information contained in this material, and hereby disclaims any liability with regard to the same. This report is disseminated for the information of authorized recipients only and is not to be relied upon or taken is substitution for the exercise of due diligence and judgment by any recipient. This report does not provide individually tailored investment advice; investor should seek independent financial advice with respect to the merits and risks involved in any of the matters concerning investment in the Schemes / products mentioned in the report. "MUTUAL FUND INVESTMENTS ARE SUBJECT T0 MARKET RISKS READ ALL SCHEME RELATED DOCUMENTS CAREFULLY BEFORE INVESTING. PAST PERFORMANCE MAY OR MAY NOT BE SUSTAINED IN FUTURE." Returns are for Growth Option. Calculations of return assume that all payouts during the period have been reinvested in the Scheme at the then prevailing NAV. Return of less than one year are absolute returns and returns of one year and more are compounded annualized returns.

Disclaimer:

25

Contacts

Sanket P Desai Head - MF Research & Advisory Mumbai +91-9619200278

Sandeep Singh Senior Manager – Sales Mumbai +91-9004688740

Sunita Karkera Manager - Customer Service Mumbai +91-7738393413

Mahesh Vemula Asst Manager - Customer Service Mumbai +91-9967538848

Siddhi Sawant Senior Officer - Customer Service Mumbai +91-9619532021

Anand Singh Regional Head – North Delhi +91- 9971493313

Pooja Khanna Relationship Manager Delhi +91-9810038243

Aakash Sharma Manager - Sales & Customer Support Delhi +91-9811898906

Aditya Kumar Jain Regional Head – East Kolkata +91-9830970958

Alok Chiranya Team Leader Kolkata +91- 9007056355

Vinod Kalra Regional Head – Punjab Chandigarh +91-9988100022

Krishnachander C Regional Head – South Chennai +91-9884036432

Digvijay Mohite Area Manager Kolhapur +91-8691047470

Raj Kumar Saini Branch Manager Kota +91-9166880777

Shailesh S Gharpure Regional Manager Nagpur +91-8691047474

Investor Support & Services

Phone: 022: 6240 6309 Email: [email protected]

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