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Recommended Mutual Funds for 2015 – iFAST Investment Advisory Division 1

INDEX

Category Page

Equity

Large Cap Funds 4

Mid Cap and Small Cap Funds 9

Multi Cap Funds 14

Value Funds 19

Dividend Yield Funds 20

Equity Linked Savings Scheme (ELSS) 21

Global Funds 26

Banking Funds 28

Pharma Funds 29

Infrastructure Funds 30

FMCG Funds 31

Technology Funds 32

Debt

Short Term Funds 34

Dynamic Bond Funds 39

Income Funds 43

GILT – Long Term Funds 47

Corporate Bond Funds 49

Hybrid

Balanced Funds 51

Monthly Income Plans (MIPs) 54


Period Covered for Analysis

Category of Fund Time Periods used for Analysis

ELSS November 2011 to October 2014

Equity Funds December 2011 to November 2014

Debt Funds December 2013 to November 2014

Hybrid Funds December 2012 to November 2014

Note to Investors

All data points covered in this report such as the Scheme AUM, Fund Manager, Exit Load and

Performance along with Benchmark are as on November 28, 2014.


Recommended Equity Mutual Funds


Recommended Large Cap Fund

Axis Equity Fund

Inception: 05 January, 2010 AUM : Rs. 1408 Crore Fund Manager: Pankaj Murarka

Exit Load: 1.00% on or before 1 Year, NIL after 1 Year

Our Analysis Scheme Performance with Benchmark

The fund follows an active management strategy and the portfolio consists of strong growth companies with sustainable business models. As per the internal mandate of the fund, it is expected to maintain a minimum allocation of 70% of the corpus into large cap stocks. As such, the fund on an average has been holding 76% into large caps and 17% into mid-caps during the 1 year analysis period (December 2013 to November 2014). There have been ten stocks which have been consistently held for the 36 months under analysis. Among these 10 stocks, HDFC Bank has been among the top 5 holdings with an average allocation of 6.73%. During the last 7 months of analysis (May 2014 to November 2014), the following 5 stocks were the top holdings of this fund: Infosys, ICICI Bank, State Bank of India, HDFC Bank and Larsen & Toubro.

Fund Manager Comments

• The fund is large cap biased (70-100%) with midcap allocations of (0-30%). It makes allocation to attractive mid cap ideas on a bottom up basis

• It selects stocks based on their ability to grow earnings on a sustainable basis from a medium term perspective while maintaining a highly liquid and risk managed portfolio.

• While the portfolio has been largely stable in the last few months, we continue to make adjustments as needed as it looks at the evolving cycle and prospects for corporate earnings. In the previous month, the fund increased allocation to consumers while reducing allocation to commodities sector.

• Within the overall sector and market cap limits, the fund has a higher allocation (relative to its history) to quality stocks in the cyclical and midcap space in order to benefit from the expected improvement in the economy over the next 2-3 years.

1 Year 3 Years

47.79

27.46

39.06

21.15

AXIS Equity Fund CNX Nifty



Birla Sun Life Frontline Equity Fund

Inception: 30 August, 2002 AUM : Rs. 7711 Crore Fund Manager: Mahesh Patil

Exit Load: 1.00% on or before 1 year, NIL after 1 year

Our Analysis Scheme Performance with Benchmark (%)

The fund aims to be as diversified across industries/sectors as its benchmark index that is S&P BSE 200. The mandate is to invest into frontline stocks which according to the Fund Manager are stocks which provide superior growth opportunities. Over a period of 1 year (December 2013 to November 2014), the fund’s corpus has been mostly allocated into large cap stocks with an average allocation of 91%. As on November 2014, the fund held 73 stocks, out of which 27 have been a part of the portfolio for 36 months. Among these, ICICI Bank and ITC have been among the top 5 holdings during our entire period of analysis.


Birla Sun Life Frontline E F - Plan A: has an investment strategy wherein it endeavors to optimize diversification by having sectoral weightage in line with the S&P BSE200index.The scheme is managed using 3 key principles:

1. Discipline-The scheme targets to maintain sector exposure within +/-25% or absolute+/-3% whichever is higher, of these sectoral weight in the benchmark index i.e. S&P BSE200, in order to maintain diversification and avoid excessive concentration in a single sector.

2. Bottom up stock picking is the key to generating alpha. The Fund Manager carries out extensive research

to select companies mainly on its individual merits that offer higher growth potential.

3. Profit booking at opportune moments, particularly for midcaps where we have rotated exposure with in sectors from expensive stocks to cheaper stocks. This is a diversified scheme with a bias for large cap stocks but not exclusively focused on them. We intend to take advantage of select mid cap opportunities from time to time.

1 Year 3 Years 5 Years

51.65

27.73

15.70

42.47

21.61

10.77

BSL Frontline Equity Fund S&P BSE 200



Canara Robeco Equity Diversified

Inception: 16 September, 2003 AUM : Rs. 799 Crore Fund Manager: Ravi Gopalakrishnan

Exit Load: 1.00% on or before 1 year ,NIL after 1 year


The fund follows a bottom-up approach while selecting stocks.

Here the focus will be on companies with a strong competitive

position in good businesses and having quality management. The

market capitalization trend shows that during the 1 year period of

analysis (December 2013 to November 2014), the average

allocation into large caps and mid caps was to the tune of 81% and

15% respectively. The fund held 57 stocks in November 2014, out

of which only 14 have been a part of the portfolio during the 3

years of analysis. This is a clear indication that the fund is actively

managed. Among the 14 stocks, some of the prominent holdings

include names like HDFC Bank, ICICI Bank, Reliance Industries,

Infosys, Larsen & Toubro, etc.


Canara Robeco Equity Diversified focuses on growth oriented businesses which are expected to deliver capital appreciation over the medium to long term. The scheme predominately invests in large cap companies while taking small exposure to promising mid-cap companies. Through allocation to diverse sectors, the fund tries to mitigate concentration risk. It follows a blend of growth and value style of investing. Going forward we intend to increase our mid cap allocation in order to capture any attractive investment opportunities in the mid-cap space. We have a positive outlook on Consumer Discretionary sectors like auto, auto ancillary, food & beverages, textile etc. With the revival of economy, we expect consumer spending will increase which in turn will give a boost to these sectors


47.94

23.49 15.79

42.47

21.61

10.77

Canara Robeco Equity Diversified

S&P BSE 200



ICICI Prudential Focused Bluechip Equity Fund

Inception: 23 May, 2008 AUM : Rs. 8425 Crore Fund Manager: Manish Gunwani



The fund’s mandate is to invest into 20 large cap stocks and the universe of stock selection is top 200 stocks in terms of market capitalization on the NSE. However, as the AUM of the fund crosses INR 1000 crore, the fund manager has the freedom to take an exposure into more than 20 stocks. As far as the market capitalization trends are concerned, the fund is basically concentrated into large caps with an average allocation of 94% during December 2013 to November 2014. The fund as on November 2014 has 50 stocks and only 8 of them have been held for the entire period of analysis. The 8 consistent holdings in the portfolio included names like HDFC Bank, ICICI Bank, Infosys, ITC, Reliance Industries, Bharti Airtel, Hindustan Zinc and Grasim Industries. Since January 2012, HDFC Bank has been among the top 5 stocks with its allocation in the portfolio increasing from 1.44% in December 2011 to 7.29% by December 2014.


The Scheme has adopted a "buy and hold" approach. The Scheme aims to identify companies that offer reasonable potential for long-term growth.

It intends to take aggressive position in high conviction stocks with an aim to generate alpha.

The focus is more on stock selection than sector selection. The stock selection follows the bottom-up approach. The Scheme’s benchmark hugging approach ensures that the portfolio is well diversified across sectors.

Currently large caps are trading at discount to midcaps and provide an attractive opportunity for long term investors to consider Focused Bluechip Equity Fund.


47.41

25.14 17.17

39.06

21.15

11.29

ICICI Prudential Focused Bluechip Equity Fund

CNX NIFTY Index



Reliance Top 200 Fund

Inception: 09 August, 2007 AUM : Rs. 1064 Crore Fund Manager: Ashwani Kumar & Sailesh Raj Bhan



The fund aims to invest into companies whose market capitalization is within the range of highest and lowest market capitalization of the S&P BSE 200 Index. Initially in December 2013, the fund had 78% of the corpus concentrated in large caps, while the remaining 20% was allocated among the midcap stocks. However, by November 2014, the allocation into large caps and mid-caps was to the tune of 91% and 6% respectively. The stock count of the fund as of November 2014 stood at 42, out of which 11 have been held continuously during the 3 years under analysis. It is interesting to note here that Infosys which had been among the top 5 stocks during December 2011 to October 2014 did not make it to this list in November 2014. HDFC Bank is the largest holding of the fund in November 2014 with an allocation of 7.20%.


Diversified portfolio with investments in market leaders and tactical exposure to midcaps offer wealth creation in the long term

• The fund endeavors to invest predominantly in top 100 companies by market cap (70%) and the balance in quality mid cap companies.

• Aims to generates alpha through active sector calls & stock selection • Investment Universe: Top 200 companies by Market Capitalization

Current Strategy o Focus on India revival themes like Consumer Discretionary (Auto, Media, and Hospitality)

Industrials (product Engineering companies) and Financials. o Investments in global beneficiary theme like IT, Pharma etc.


66.34

29.67

16.11

42.47

21.61

10.77

Reliance Top 200 Fund S&P BSE 200 Index


Recommended Mid & Small Cap Fund

Canara Robeco Emerging Equities

Inception: 11 March, 2005 AUM : Rs. 179 Crore Fund Manager: Ravi Gopalakrishnan & Krishna Sanghavi



The fund’s mandate is to invest into mid cap stocks which have the potential to emerge as bigger corporates in the future. In the case of this fund, mid and small companies are defined as those which are ranked from 151 to 500 on the basis of market capitalization. The 1 year analysis (December 2013 to November 2014) of the market capitalization trends shows that the fund’s average allocation into mid caps and small caps have been to the tune of 64% and 16%. During the same period, the average allocation into large cap stocks stood at 18%. An interesting observation that can be made here is that there has been only 1 stock (Wabco India) which has been held continuously for 36 months out of the total 61 stocks held in November 2014.


Canara Robeco Emerging Equities follows a bottom up stock picking approach to identify the future leaders in the mid-cap space. The ‘growth’ oriented style of investing combined with a ‘value’ approach creates a well diversified portfolio of fundamentally strong companies. This stock-picking strategy is also known as ‘GARP’ investing: Growth at a Reasonable Price. At the same time quality is very important for the fund. The fund aims to invest in good quality and fundamentally strong businesses. The Indian economy is undergoing a growth phase, in such a scenario midcaps usually deliver faster earnings growth and therefore offer attractive investment opportunities. We believe that mid-caps will continue to outperform over the long run. However, this might be associated with higher volatility as by nature, mid-caps tend to be more volatile than large cap stocks.


107.59

39.92 26.52

61.27

23.13 11.63

Canara Robeco Emerging Equities

CNX Mid Cap



DSP BlackRock Micro Cap Fund

Inception: 14 June, 2007 AUM : Rs. 1682 Crore Fund Manager: Vinit Sambre

Exit Load: 1.00% on or before 2 Years, NIL after 2 Years


As per the Investment strategy of this fund, “The Investment Manager will use a disciplined quantitative analysis of financial operating statistics”. The fund manager will be using a blend of both value and growth strategies while selecting stocks. True to its label, this fund has the maximum corpus concentrated in mid and small cap stocks. During the 1 year of analysis,(December 2013 to November 2014), the average allocation of the fund into mid caps and small caps were to the tune of 46% and 44%. The fund’s holding as on November 2014 stood at 62, out of which 11 have been a part of the portfolio continuously for 3 years. Among these 11 stocks, Indoco Remedies was the only stock which was among the top 5 holdings during the entire period of analysis. The top 5 stocks in the portfolio in November 2014 were: Indoco Remedies (5.12%), Repco Home Finance (3.51%), Symphony (3.35%), Sharda Cropchem (3.15%) and DCB Bank (2.99%).


111.81

37.22 25.99

84.78

22.75 8.43

DSP BlackRock Micro Cap Fund

S&P BSE Small Cap



HDFC Mid-Cap Opportunities Fund

Inception: 25 June, 2007 AUM : Rs. 8632 Crore Fund Manager: Chirag Setalvad



This will be a diversified fund consisting of small and mid-cap companies. Although the fund follows a buy and hold strategy, if valuations become too demanding then the fund manager will resort to selling, even if there are reasonable growth prospects in the long run. A perusal of the market capitalization trends showed that the fund’s average allocation into large caps, mid caps and small caps during the 1 year period (December 2013 to November 2014) stood at 37%,50% and 8% respectively. As on November 2014, the fund held 67 stocks out of which 30 have been a part of the portfolio during the entire 36 months under study. During August 2014 to November 2014, there have been 3 stocks which have been among the top 5 holdings of this fund and these included names like Aurobindo Pharma, AIA Engineering and Voltas.


HDFC Mid-Cap Opportunities Fund The Fund provides investors an opportunity to invest in a diversified portfolio of small and midsized companies with faster growth potential. Such a portfolio offers a higher return potential than one comprising primarily large cap companies but also carries relatively higher risk, particularly over the short and medium term. Small and mid – cap companies offer the potential of higher returns due to the following reasons:

• Relatively less known by market participants / price discovery by market is not full • Better growth prospects due to presence in a new segment / area that is growing at a faster pace • Ability to gain market share due to new technology / better product / service etc. • Room for P/E multiples to expand if the company transitions from a small / mid – cap to a large cap

Thus, this can provide diversification to an investor’s overall equity mutual fund portfolio as on 31st

Jan 2015, the corpus is 9653.40 Crs with 91.40% exposure to mid-cap. The fund has consistently beaten the benchmark over last 3 years.


82.31

34.60 24.73

61.27

23.13 11.63

HDFC Mid-Cap Opportunities Fund

CNX Midcap Index



Mirae Asset Emerging Bluechip Fund

Inception: 09 July, 2010 AUM : Rs. 610 Crore Fund Manager: Neelesh Surana

Exit Load: 2.00% on or before 6 months ,1.00% after 6 months but on or before 1 year ,NIL after 1 year


The funds focus is on stocks which are not part of the top 100 stocks by market capitalization and whose market capitalization is atleast INR 100 crore at the time of investment. The fund will be diversified across sectors and will have a large base of stocks in the portfolio which will help in reducing concentration and liquidity risk. The fund has a good mix of large cap, mid cap and small cap stocks in the portfolio. This can be seen from the market capitalization trends during the time period that is December 2013 to November 2014, wherein the large cap, mid cap and small cap stocks had an average allocation of 47%, 36% and 12% respectively. The fund’s stock count on November 2014 stood at 61 and out of these, 22 of the stocks have been held consistently for all the 36 months. As of November 2014, the top 5 stocks in the portfolio are: Sundaram Finance (3.43%), Yes Bank (3.40%), ICICI Bank (3.38%), Tech Mahindra (3.38%) and Karur Vysya Bank (2.68%). It is interesting to note here that it is only in July 2014 that Karur Vysya Bank found a place in the portfolio for the first time during our period of study.


MAEBF is our mid cap dedicated flagship product. Our strategy continues to follow strict investment discipline while selecting investment companies. While we follow a bottom-up approach for stock selection, the overall portfolio construction also considers the overall sector weights of benchmark. Key tenets of stock-selection approach are:

• We prefer businesses which has the potential to address large opportunity. Focus on businesses which have sustainable competitive advantage, and thus same needs to be reflected in high return ratios (ROE, ROI etc.)

• While choosing small companies, we have an internal criterion of preferring companies which have atleast Rs 100 Crore p.a. operating profit.

• We look of companies which are run by competent management with good governance track record. • We seek for enough “Margin of Safety”, i.e., buying growth businesses upto a reasonable price so that

underlying risks related to business, and liquidity are mitigated. Currently, we have a balanced portfolio which would capitalize on the expected recovery in the domestic market, as well as participate in secular businesses which may not necessarily be linked to domestic recovery.

1 Year 3 Years

90.40

37.88

61.27

23.13

Mirae Asset Emerging Bluechip Fund

CNX Midcap



Reliance Small Cap Fund

Inception: 21 September, 2010 AUM : Rs. 1320 Crore Fund Manager: Sunil Singhania

Exit Load: 2.00% on or before 1 year, 1.00% after 1 year but on or before 2 years, NIL after 2 years.


The fund will primarily invest into small cap stocks which will try to maximize return and minimize risk by adequate diversification. As per the mandate of the fund, small cap stocks are those stocks whose market capitalization is between the highest and lowest market capitalization of companies on S&P BSE Small Cap Index at the time of investment. In line with the mandate, the fund’s average allocation into mid caps and small caps stood at 33% and 47% during the 1 year period (December 2013 to November 2014). The fund had 57 stocks in the portfolio in November 2014, out of which 15 have been held consistently for all the months under study. Among the 11 stocks, only Atul Ltd has been among the top 5 holdings of the fund since March 2012. In November 2014, the top 5 holdings in the portfolio included names like L G Balakrishnan & Bros (4.38%), Atul (3.7%), TVS Motor Company (3.47%), HDFC Bank (2.99%) and CCL Products (2.91%).


A focused small cap fund investing primarily in Small cap (65%) with tactical allocation to other market caps.

Bottom up investment approach focused on stock specific opportunities.

Focus on identifying business with higher growth potential, reasonable size & quality management which are available at attractive valuations

Portfolio well diversified across stocks and sectors.

Current Strategy/Focus Themes:

o Domestic Economic Recovery – Product engineering co’s, Construction

o Policy action beneficiaries – Fertilizers, Banks

o Domestic Consumption – Apparel, Healthcare, consumer durables

o Niche plays - Chemicals, Hotels

1 Year 3 Years

107.38

40.85

84.78

22.75

Reliance Small Cap Fund

S&P BSE SMALL CAP Index


Recommended Multi Cap Fund

Franklin India Prima Plus

Inception: 29 September, 1994 AUM : Rs. 3445 Crore Fund Manager: Anand Radhakrishnan & R. Janakiraman

Exit Load: 1.00% on or before 1 year


The fund’s style of investing will be a blend of value and growth

and the portfolio will be created with a huge focus on large cap

stocks along with marginal exposure into small/mid cap stocks.

The market capitalization trends of this fund shows that over a

12 months period (December 2013 to November 2014), the

average allocation into large caps,mid caps and small caps stood

at 72%, 20% and 1% respectively. The portfolio consisted of 56

stocks in November 2014, out of which 21 have been a part of

the portfolio during the entire period of analysis. Among these

21 stocks, Bharti Airtel, Infosys and ICICI Bank, have been among

the top 5 stocks during the 36 months under analysis with an

average allocation of 6.68%, 6.41% and 6.16% respectively.


It is a diversified equity fund and invests in wealth creating companies whose competitive advantages are likely to translate into superior return on capital. The fund follows a bottom-up approach to stock selection, and in that sense, the sectoral allocations are a derivative of the individual picks rather than any top-down views. The portfolio comprises mainly of large cap stocks with some exposure to mid and small cap stocks (typically in the ratio of 80:20). The fund has delivered consistent and superior performance for over 20 years. Outlook: Even though the benchmark indices viz. CNX Nifty & S&P BSE Sensex are near their all-time highs, valuations are accommodative as they are around the long term average. With decreasing valuation gap between large caps and midcaps, we may see less divergence in the returns as compared to last year. Incremental returns for equities are likely to be led by corporate earnings growth.


60.69

27.09

17.48

45.03

22.01

10.79

Franklin India Prima Plus CNX 500



IDFC Premier Equity Fund

Inception: 28 September, 2005 AUM : Rs. 6639 Crore Fund Manager: Kenneth Andrade



The fund positions itself as part of the core long-term equity holdings of investors. In line with this, the funds endeavor is to adopt a well-balanced and prudent style of fund management so as to deliver good returns to its investors. A perusal of the market capitalization trends shows that during the 12 months under consideration (December 2013 to November 2014), the fund’s average allocation into large caps, mid caps and small caps stood at 29%, 56% and 7% respectively. The fund manager actively manages this portfolio. This can be seen from the fact that out of the 49 stocks held in November 2014, only 6 made it to in the portfolio continuously for 36 months. These 6 stocks included names like Page Industries, Blue Dart Express, Asian Paints, Bata India, Gujarat State Petronet and Coromandel International. During the entire period of study, Page Industries has been among the top 5 holdings with an average allocation of 5.4%.


IDFC Premier Equity Fund has built a portfolio of companies catering to the domestic economy. This is where our biggest opportunity lies. Demographics are our biggest strength, which is where our bias has always been. Over the next year or two we will continue to see corporate India deleveraging its balance sheet and throwing out cash flows. On the other hand the consumer will see leverage grow. The latter is very structural in nature and we would see this trend play out for a long period of time. This is why as a fund we have chosen to stay with the domestic opportunities and not spread ourselves thin across multiple sectors. Our approach to selection of companies has not changed, over the years we have been allocating to consolidators, cash flow positive businesses and companies with low debt, when we put all this together we have a portfolio of market leaders with deleveraged businesses who could leverage into the next cycle.


63.48

29.82 21.60

44.19

21.46

10.72

IDFC Premier Equity Fund S&P BSE 500



Kotak Select Focus Fund

Inception: 11 September, 2009 AUM : Rs. 1400 Crore Fund Manager: Harsha Upadhyaya



The fund’s mandate is to invest into companies without any market cap bias. However, the fund manager will invest in a few selected sectors depending on their potential to grow in the future. Despite the fact that this fund does not have any market capitalization bias, it tends to be predominantly invested into large caps. Over a period of 1 year (December 2013 to November 2014), the average allocation into large caps and mid caps were to the tune of 82% and 13% respectively. As on November 2014, the fund held 47 stocks out of which only 7 have been a part of the portfolio continuously during the 36 months of analysis. ICICI Bank, Infosys, HDFC Bank, Federal Bank, Reliance Industries, IndusInd Bank and Whirlpool of India were the 7 consistent holdings in the fund. Except for December 2011, ICICI Bank has been among the top 5 stock holdings during our entire period of study.


The investment philosophy is built on the premise that different sectors of the economy perform varyingly over different periods of economic cycle. The focus is to invest in select sectors that are likely to outperform broader market. Once the sectors are selected through top-down analysis, the individual investment ideas within those sectors are picked up through bottom-up approach. Currently, we remain positive on interest rate sensitive sectors such as Banking&Financials, Auto&auto-ancillaries and consumer discretionary. The interest rate trajectory which has just turned downwards is likely to benefit these sectors. We also like Cement sector as a play on infrastructure spend.


63.28

29.10

16.35

42.81

21.83

10.64

Kotak Select Focus Fund CNX 200



Mirae Asset India Opportunities Fund

Inception: 04 April, 2008 AUM : Rs. 812 Crore Fund Manager: Neelesh Surana & Sumit Agrawal

Exit Load: 2.00% on or before 6 months ,1.00% after 6 months but on or before 1 year ,NIL after 1 year


The investment strategy of this fund clearly states that it does not have any bias towards a particular theme, sector, market cap, or style in picking investment opportunities. The fund manager is given the flexibility to aggressively manage this portfolio vis-à-vis a diversified equity fund. During the 1 year period (December 2013 to November 2014), the fund’s corpus was mostly allocated into large cap stocks with the average allocation into the same being at 75%. On the other hand, during the same time period, the mid cap and small cap categories had an average allocation of 14% and 7% respectively. The fund held 56 stocks in November 2014, out of which 26 were a part of the portfolio during the entire 3 years of analysis. ICICI Bank and Infosys were among the top 5 stocks during all the 36 months of analysis with an average allocation of 6.59% and 5.99% respectively.


The fund is our flagship in the multi-cap category. It is a large cap biased diversified fund, which has the flexibility to invest across sectors, market capitalization, themes, and investment styles. In general, midcaps are about 25% of the portfolio, with focus on larger midcaps. The overall investment approach is to build a portfolio of solid businesses that could perform creditably over all time frames. While we follow a bottom-up approach for stock selection, the overall portfolio construction also consider the overall sector weights of benchmark. Key tenets of stock-selection approach are:

• We prefer businesses which has the potential to address large opportunity. Focus on businesses which have sustainable competitive advantage, and thus same needs to be reflected in high return ratios (ROE, ROI etc.)

• We look of companies which are run by competent management with good governance track record. • We seek for enough “Margin of Safety”, i.e., buying growth businesses upto a reasonable price so that

underlying risks related to business, and liquidity are mitigated. Currently, we have a balanced portfolio which would capitalize on the expected recovery in the domestic market, as well as participate in secular businesses which may not necessarily be linked to domestic recovery.


59.90

28.89

18.28

42.47

21.61

10.77

Mirae Asset India Opportunities Fund

S&P BSE 200



Reliance Equity Opportunities Fund

Inception: 31 March, 2005 AUM : Rs. 10347 Crore Fund Manager: Sailesh Raj Bhan



The fund aims to analyze the performance of the economy and industry on a continuous basis. A combination of value and growth approach would be followed while selecting stocks. The funds average allocation into large caps, mid caps and small caps stood at 52%, 41% and 6% respectively during December 2013 to November 2014. During our period of study, out of the 59 stocks in the portfolio in November 2014, 19 were held continuously for the whole 36 months. Among these 19 holdings, only Divis Laboratories have been among the top 5 stocks during all the months under analysis.


• The fund approach is based on buying “growth companies at reasonable valuations”. It follows a

Diversified flexi cap strategy investing across market caps and sectors. • Normally 40-60% of the portfolio is invested in large caps and the rest in mid caps. • The fund offers an optimal blend of

o Large Cap Stability o Established Mid Caps o Emerging Themes and o Deep Value Stocks

Current strategy: o Focus on Domestic Recovery themes which can benefit from improving macros, competitive

advantage & Operating leverage. Ex:, Financial Services, Consumer Discretionary, Retailing o High ROE businesses with Global Advantage - IT, Healthcare o Emerging Themes - Big emerging opportunities, Non Traditional sectors with high growth potential.

Ex: Internet, Media, Restaurants, Insurance


71.86

32.63 22.54

39.93

21.42

10.83

Reliance Equity Opportunities Fund

S&P BSE 100 Index


Recommended Value Fund

ICICI Prudential Value Discovery Fund

Inception: 16 August, 2004 AUM : Rs. 7690 Crore Fund Manager: Mrinal Singh



The funds mandate is to invest into companies which are trading at a discount to their fair value after considering other factors like earnings, asset value, free cash flow and dividend yield. The fund is diversified across the market capitalization spectrum with average allocation into large caps, mid caps and small caps being at 44%, 41% and 8% respectively during December 2013 to November 2014. As on November 2014, the fund held 61 stocks out of which 25 have been held continuously for 3 years under study. ICICI Bank is the top holding of this fund in November 2014 followed by Reliance Industries, Sadbhav Engineering, Amara Raja Batteries and Wipro with an allocation of 7.07%, 3.87%, 2.99%, 2.92% and 2.52% respectively.


We may use contra investing strategy which involves selection of stocks that are not popular at the moment but have the potential to do well over time because of factors such as strong fundamentals, future turnaround in the business cycle and revival in economic growth. Indian IT peers may benefit from several billion dollar worth of renewal deals which has potential to power growth in the sector and explains the scheme’s overweight stance on Software. There is no visible pick up in the demand environment in Consumer Non-Durables & Retailing and valuations are expensive too. Hence, we are underweight on FMCG.


80.40

36.38

23.11

61.27

23.13

11.63

ICICI Prudential Value Discovery Fund

CNX Midcap Index


Recommended Dividend Yield Fund

Tata Dividend Yield Fund

Inception: 22 November, 2004 AUM : Rs. 327 Crore Fund Manager: Rupesh Patel



The fund intends to invest into stocks which have a high dividend yield. In this case, dividend yield will be considered high if it is greater than the dividend yield of the S&P BSE Index last published by S&P BSE. An analysis of the market capitalization trends shows that the funds average allocation into large caps, mid caps and small caps stood at 60%, 31% and 6% respectively over a period of 1 year (December 2013 to November 2014). The fund is actively managed as can be seen from the fact that out of the 39 stocks held in November 2014, only 1 (Infosys) has been a part of the portfolio during the 3 years of study. It has also been observed that since May 2014, ICICI Bank, HCL Technologies and HDFC Bank have been among the top 5 holdings of this fund.


Tata Dividend Yield Fund (TDYF) is an open ended equity fund that aims to invest at least 70% of its assets in shares with high dividend yields. The Fund focuses on buying businesses which are generating cash and paying dividends consistently along with reasonable growth at times when such stocks are attractively valued and have better margin of safety. The strategy to buy businesses with strong fundamental attributes and cash flows has delivered across market cycles. Following the strategy to invest using dividend yield as a metric allows the fund manager to consider such strong businesses for investing when they are undervalued. As the outlook for growth improves, both the earnings and multiples tend to improve, indicating a positive outlook over a longer period for a value focused fund like Tata Dividend Yield Fund.


50.08

22.09 16.89

45.03

22.01

10.79

Tata Dividend Yield Fund CNX 500


Recommended Equity Linked Savings Schemes (ELSS)

Axis Long Term Equity Fund

Inception: 29 December, 2009 AUM : Rs. 3199 Crore Fund Manager: Jinesh Gopani

Exit Load: NIL


The fund’s mandate is to invest into a diversified portfolio of strong growth companies with sustainable business models. The fund manager uses a bottom-up approach to select stocks and the investments are not limited to companies constituting the benchmark that is S&P BSE 200. The fund also has the flexibility to invest across the entire market capitalization spectrum. During our period of study (November 2011-October 2014), the fund’s total stock holdings have been in the range of 35 to 44 respectively. As on October2014, the fund held 38 stocks, out of which 18 of them have been a part of the portfolio during the entire 3 years of analysis. During the last year (November 2013-October 2014), 3 stocks which were among the top holdings of this fund included names like HDFC Bank, Kotak Mahindra Bank and Larsen & Toubro. On the sectoral front, Banks and Finance have been among the top 5 picks for the entire period under study having an average allocation of 15% and 13% respectively.


• The fund invests across market cap with large caps around 50-100% and midcaps up to 50% • 3 year lock-in eliminates near term pressure on stock selection & helps support quality businesses

through their market cycle • The fund is focused on long term earnings growth prospects and quality as key criteria for stock selection. • With a view of capturing growth over the next 3-5 years, the portfolio has a higher allocation to the

domestic economy and in sectors where the Indian consumer opportunity can be leveraged, such as private sector banks, autos, auto ancillary, housing & consumption sector etc.

• The fund also includes bottom-up stock selection ideas in Pharma, IT and defence sectors. Normally, the portfolio avoids highly cyclical stories and highly regulated sectors.

The fund looks at opportunities across the market cap and the portfolio remains balanced between its large and mid-cap allocations. While short term volatility may continue, we don’t see any major concerns from a medium term perspective.

1 Year 3 Years

69.50

34.60 42.47

21.61

Axis Long Term Equity Fund

S&P BSE 200



Canara Robeco Equity Tax Saver

Inception: 31 March, 1993 AUM : Rs. 887 Crore Fund Manager: Krishna Sanghavi

Exit Load: NIL


The investment strategy of the fund is focused towards identifying companies with strong competitive position in good business and having quality management. The stocks in the portfolio are selected on the basis of the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. The fund has been holding stocks in the range of 52 to 61 during our period of study (November 2011-October 2014).The fund’s stock holdings as on October 2014 stood at 52, out of which only 11 have found a place in the portfolio during the 36 months of analysis. Among these 11 stocks, HDFC Bank has been among the top 5 stock picks during the entire period of analysis with an average allocation of 6%. The fund manager has been biased towards the banking space as can be seen from the fact that the average allocation into this sector has been at 21% over a period of 3 years. It is also interesting to note here that banks and software have been among the top 5 sectoral picks in all the months under analysis with the average allocation into the latter standing at 12%.


Canara Robeco Equity Tax Saver is an ELSS with a 3 year lock-in period providing Tax Benefits under Section 80 C of Income Tax. Thus it offers dual benefit of tax saving along with equity investing. The scheme follows a blend style of investing with significant exposure to large cap companies. The government has already taken certain steps to bolster economic growth. Some of these measures like labour reforms, launch of online clearance window for forest approvals, ‘Make in India’ campaign etc. are expected to create an environment conducive for business growth. We believe that these factors coupled with the improving macro-economic factors and benign interest rate scenario may benefit the rate sensitive sectors. Accordingly, the fund has a positive outlook towards these sectors.


53.33

25.05

17.26

39.93

21.42

10.83

Canara Robeco Equity Tax Saver

S&P BSE 100



Franklin India Taxshield

Inception: 10 April, 1999 AUM : Rs. 1568 Crore Fund Manager: Anand Radhakrishnan & Anil Prabhudas

Exit Load: NIL


The style of investing followed by this fund is a combination of growth and value. The portfolio is made up of stocks spread across sectors and market capitalization and the fund manager follows a bottom-up approach in selecting stocks. During the last 3 years (November 2011-October 2014), the number of stocks in the portfolio has been in the range of 44 to 58. A detailed analysis of the portfolio shows that the fund as of October 2014 held approximately 54 stocks, out of which 21 have been in the portfolio during the entire period of analysis. An observation that can be made here is that Infosys and Bharti Airtel were the only 2 stocks which were among the top 5 picks during these 36 months of analysis having an average allocation of 6.78% and 6.76 % respectively. The fund has been taking a huge exposure into banks with the average allocation into the same remaining at 20% during our period of study. The fund has also been positive on 2 other sectors namely software and pharmaceuticals whose average allocation in the portfolio was to the tune of 10% and 11% respectively in our current analysis.


It is an open end Equity Linked Savings Scheme (ELSS), where the fund manager seeks steady growth by maintaining a diversified portfolio of equities across sectors and market-caps. Therefore the fund is market-cap agnostic, with focus on bottom up stock selection. The fund’s investment style is a mix of growth and value (blend). The fund has a long term performance and dividend track record of over 15 years. Outlook: At the domestic level, a lot of earlier headwinds such as inflation, current account deficit, high interest rates and policy logjam seem to have subsided, and have actually turned into tailwinds. Presently, market valuations are around long term averages, and are still accommodative. With re-rating already factored in valuations, the headroom for P/E multiple expansion is limited. Hence incremental returns are likely to be led by corporate earnings growth. We believe that gradual recovery in economic growth is likely to continue and translate into stronger earnings growth in the long term.


61.04

27.09 18.45

45.03

22.01

10.79

Franklin India Taxshield CNX 500



ICICI Prudential Tax Plan

Inception: 19 August, 1999 AUM : Rs. 2413 Crore Fund Manager: Chintan Haria

Exit Load: NIL


The investment strategy of the fund will be an active value based approach to stock picking. The stocks will be selected on the basis of the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. The fund has been holding stocks in the range of 47 to 64 during the 36 months of analysis (November 2011-October 2014). As of October 2014, the fund’s total stock holdings were 49, out of which 9 have been held continuously during our period of study. Some of these 9 stocks included names like Reliance Industries, ICICI Bank, Infosys, Texmaco Rail & Engineering, etc. A perusal of the sectoral trends show that Banks, Software and Pharmaceuticals have been among the top 5 picks during the 36 months under study with an average allocation of 15%, 12% and 10% respectively.


Currently, the scheme is majorly invested in large cap stocks. After strong performance of midcaps in the recent past, the scheme is likely to be biased towards large caps. The government has started taking several policy initiatives in order to revive the stalled projects and initiate new projects. This will revive the investment activity and support credit offtake. Hence, the scheme has high exposure to Banks & Finance. The scheme is a suitable avenue to park money for long term investing. It aims to provide long term risk adjusted returns to the investors.


59.73

30.14

18.76

45.03

22.01

10.79

ICICI Prudential Tax Plan CNX 500 Index



Reliance Tax Saver (ELSS) Fund

Inception: 22 September, 2005 AUM : Rs. 3618 Crore Fund Manager: Ashwani Kumar

Exit Load: NIL


The fund’s focus will be towards actively managing the portfolio and in this process will take defensive/aggressive positions depending on the available opportunities. During the 3 years under analysis (November 2011 to October 2014), the fund held stocks in the range of 30 to 51. The fund as on October 2014 held 51 stocks out of which 15 have been a part of the portfolio during the entire period of study. Since September 2013, TVS Motor Company has been the top holding of this fund with an average allocation of 6%. As far as the sectoral trends are concerned, Industrial Capital Goods, Auto and Industrial Products have been among the top 5 sectoral picks during our period of analysis.


• The fund is diversified equity offering that attempts to invest in market leaders and long term alpha

creators. • The fund attempts to maintain almost equal allocations to Top 100 companies and growth oriented Mid

cap companies • Around 20%-30% of the portfolio is invested in high quality MNCs which are leaders in technology/

brands and quality managements • Current Strategy: Attempt to create a balanced portfolio on a macro basis

o Domestic Capex Revival/ economic recovery: Financials, Capital Goods o Domestic Consumption oriented themes like Autos, FMCG etc o Global plays – Healthcare and IT Services sectors o Contrarian Investments – Out of favor and deep value stocks


96.97

37.37

22.25

39.93

21.42 10.83

Reliance Tax Saver (ELSS) Fund S&P BSE 100 Index


Recommended Global Fund

JPMorgan JF Greater China Equity Off-Shore Fund

Inception: 26 August, 2009 AUM : Rs. 123 Crore Fund Manager: Namdev Chougule

Exit Load: 1.00% on or before 18 months ,NIL after 18 months


The fund invests into the parent fund, JPMorgan Funds - Greater China Fund, an equity fund which invests primarily in a diversified portfolio of companies that are domiciled in, or carrying out the main part of their economic activity in a country of the Greater China region. The underlying fund will invest into companies from the People’s Republic of China, Hong Kong and Taiwan (Greater China). As on November 2014, the country-wise allocation of the portfolio is: China (55.3%), Taiwan (25.4%) and Hong Kong (18.8%).


JPMorgan India Greater China Fund The Greater China region provides equity investors with the most flexible way to access investment opportunities related to China. Opportunities include the operational gearing of Taiwanese technology companies’ ongoing global demand for consumer electronics, tapping Chinese domestic consumption power as well as selective sectors that could benefit from China’s structural reform measures. China's supportive reform initiatives With the benchmark interest rates being reduced in November 2014, the Chinese authorities have indicated that monetary policy is likely to be relaxed in a more comprehensive manner over months and quarters ahead to support growth. Fiscal policy could also play an important role in keeping growth in line with government’s target. With structural reforms gathering momentum, we continue to expect the “new economy” to be the main reform beneficiaries, including internet and software, health care, green energy and environmental protection. Equities in these sectors should outperform traditional sectors like industrials, energy and financials. 2015 is also expected to be a year where markets start to build expectations over the 13th Five Year Plan that will run from 2016 to 2020. Greater China Equities

• In an environment of a strong USD, we believe that the currencies of Hong Kong, China and Taiwan can be more resilient relative to some other emerging markets. The Hong Kong dollar is officially pegged to the USD.

• Meanwhile, China and Taiwan both run healthy current account surpluses. A gradual improvement in export performance is likely to reinforce this position. All three economies also enjoy sizeable foreign exchange reserve position. Attractive market valuations

• In terms of trailing price to book (P/B) and 12-month forward price to earnings (P/E) ratios, Hong Kong and Taiwanese equities are trading below their 10-year averages. In the case of China, valuations are even more compelling with the forward PEs of 11x for the China A-share market and 9.3x for overseas listed MSCI China.

JPMorgan Greater China Fund The fund is overweight in Chinese internet stocks, selected information technology stocks, renewable energy stocks and consumer discretionary stocks to take advantage of reform measures and strong domestic consumption trends. The fund is underweight in defensive sectors (telecoms and utilities) and is positioned to take advantage of structural growth trends in the Greater China region.

*Data for Benchmark is not available on NAV India.


4.90

19.70

12.32

JPMorgan JF Greater China Equity Off-Shore Fund

*Benchmark: MSCI Golden Dragon Index


Recommended Global Fund

*Scheme follows a custom benchmark which is a blend of the following indices-MSCI ACWI Industrials, MSCI ACWI Real

Estate, MSCI ACWI Utilities, MSCI Materials and MSCI Energy. The weights assigned to each individual index while calculating

the custom benchmark are 20%, 20%, 10%, 20% and 30% respectively.

L&T Global Real Assets Fund

Inception: 11 February, 2010 AUM : Rs. 62 Crore Fund Manager: Abhijeet Dakshikar



The fund will invest into Fidelity Funds-Global Real Asset Securities Fund, an offshore fund launched by Fidelity Funds. The underlying fund will invest atleast 70% of the corpus into companies which have an exposure into commodities, property, industrials, utilities, energy, materials and infrastructure. The top 5 sectors of this fund as on November 2014 are: Energy (26.84%), Materials (20.25%), Industrials (20%), Financials (16.48%) and Consumer Discretionary (4.21%).


Global equities delivered positive returns (in US dollar terms) in a volatile fourth quarter. The Federal Reserve (Fed) ended its quantitative easing programme, but other central banks continued to increase money supply in order to support growth, which boosted equity markets. The crude oil price has continued to decline since mid-June, particularly after the Organization of the Petroleum Exporting Countries (OPEC) decided not to cut production, which resulted in volatility, especially in emerging market equities. A strengthening US dollar also weighed on commodity prices. From a regional perspective, US equities advanced as the domestic economy continued to perform well amid hopes that a lower oil price would sustain momentum in the consumer-led recovery. This was despite the threat of rising interest rates and associated market volatility. European equities were negatively impacted by concerns about the pace of global growth and fears about Greece exiting the eurozone. The Japanese market registered strong positive returns in yen terms as further monetary policy easing by the Bank of Japan (BoJ) sent the Yen lower. The re-election of Prime Minister Shinzo Abe and his decision to delay another consumption tax increase boosted investor sentiment. Emerging markets, which delivered negative returns, underperformed developed markets. Russian equities were particularly weak amid deteriorating domestic data, the falling oil price and pressure on the rouble. On the other hand, an interest rate cut by the central bank supported the Chinese market. At a sector level, consumer discretionary stocks outperformed, while energy stocks tracked oil prices lower.


1 Year 3 Years

-5.50

11.57

L&T Global Real Assets Fund

*Custom Benchmark


Recommended Banking Sector Fund

ICICI Prudential Banking & Financial Services Fund

Inception: 22 August, 2008 AUM : Rs. 608 Crore Fund Manager: Venkatesh Sanjeevi



The fund will invest into companies which are engaged in banking and financial services. The funds portfolio will consist of banks and non-banking financial companies. The funds average allocation into large caps and mid caps stood at 69% and 27% respectively, over a period of 1 year (December 2013 to November 2014). During the 3 years under analysis, the number of stocks in the portfolio was in the range of 16 to 22. As on November 2014,the fund held 21 stocks out of which 8 have been a part of the portfolio during the 36 months under analysis. Among these stocks, ICICI Bank and HDFC Bank were the top 2 holdings during the entire period of analysis with an average allocation of 19.78% and 15.85% respectively. It is interesting to note here that half of the corpus of this fund is concentrated into private sector banks. The average allocation of the fund in private sector banks, public sector banks and finance companies stood at 55%, 19% and 22% respectively during the period of study.


Demand for corporate credit remains weak due to a subdued capex cycle and fall in working capital demand while retail segment is the silver-lining where demand continues to remain healthy. During the 3rd quarter, asset quality pressures intensified for most banks largely due to pressures in the Small and Medium Enterprises (SME) segment. In the short term, banks may gain due to treasury profits. Economic revival and lower borrowing costs can reduce the Non-Performing Assets of the banks and boost loan growth. This may directly benefit the banking and financial services sector.


69.76

36.02

19.74

66.63

29.16

16.14

ICICI Prudential Banking & Financial Services

S&P BSE BANKEX


Recommended Pharmaceutical Sector Fund

SBI Pharma Fund

Inception: 14 July, 1999 AUM : Rs. 358 Crore Fund Manager: Tanmaya Desai

Exit Load: NIL


The funds mandate is to invest into pharmaceutical companies.

An analysis of the market capitalization trends shows that the

funds average allocation into large caps, mid caps and small caps

over a 1 year period (December 2013 to November 2014) stood

at 80%, 13% and 5% respectively. As on November 2014, the

total stocks in the portfolio were 16 and out of this, 5 were a part

of the portfolio for 36 months. Among these 5 stocks, Dr. Reddys

Laboratories was the only stock which had been among the top 5

holdings during the entire period of study. An important

observation regarding this fund is that Sun Pharmaceutical has

been the top holding of this fund since August 2012 with an

average allocation of 19.46%.


SBI Pharma Fund Investing in SBI Pharma Fund is a good way to capitalize on the Pharmaceutical opportunity. The 2 key growth markets for Pharma are India (growth sound & stable @ 12-14%) and USA. (10% market share in the largest pharmaceutical market). Prospects continue to be quite promising. The Fund seeks to outperform the benchmark by taking active positions in mid/small cap stocks that can outperform the large cap stocks and by tapping market inefficiencies in select large cap names. As the risk of regulatory issues on Pharma companies is quite high, the fund tries to have small but many active weight positions.


62.40

38.54 28.60

57.42

35.21

25.71

SBI Pharma Fund

S&P BSE HEALTH CARE Index


Recommended Infrastructure Sector Fund

Canara Robeco Infrastructure

Inception: 02 December, 2005 AUM : Rs. 101 Crore Fund Manager: Ravi Gopalakrishnan & Yogesh Patil



The funds mandate is to invest into those companies which will benefit from the huge infrastructure spending that will happen in the country. The emphasis will be on companies with reasonable valuation and a high earnings potential. A perusal of the market capitalization trends shows that during December 2013 to November 2014, the average allocation into large caps, mid caps and small caps stood at 69%, 19% and 9% respectively. As on November 2014, the fund held 33 stocks out of which 12 have been consistently a part of this portfolio for 36 months under analysis. Since July 2014, there were 3 stocks which have been the top holdings of this fund and these included names like Ultra Tech Cement, Power Grid Corporation of India and HDFC Bank.


Canara Robeco Infrastructure aims to invest in companies which directly or indirectly participate in India’s Infrastructure story. The scheme aims to have concentrated holdings with a bias towards Large Market Capitalization Stocks. Within the Infrastructure space, we are positive on cements, railways, water and roads as we believe these are the low hanging fruits and are likely target area for the government in the near term. To give an illustration, to carry on “Swachh Ganga Abhiyan” campaign proper infrastructure such as pipes, affluent treatments etc would have to be in place; this in turn would benefit water sanitation and supply companies. Other projects like 100 smart cities, dedicated freight corridor etc. would require huge investments in infrastructure, giving a push to this sector.


71.98

20.91 12.19

39.93

21.42

10.83

Canara Robeco Infrastructure S&P BSE 100


Recommended FMCG Sector Fund

SBI FMCG Fund

Inception: 14 July, 1999 AUM : Rs. 222 Crore Fund Manager: Saurabh Pant

Exit Load: NIL


The fund will invest into FMCG companies. The market capitalization trends for the time period, December 2013 to November 2014 shows that the fund is predominantly a large cap fund with the average allocation into the same being 77%. On the other hand the mid cap and small cap average allocation during the same time period was to the tune of 12% and 9% respectively. The fund held 16 stocks in November 2014, out of which 3 have been a part of the portfolio continuously for 3 years under study. During the entire period of analysis, ITC has been the top holding of this fund with an average allocation of 40.91%.The other 2 stocks were United Spirits and Agro Tech Foods, with an average allocation of 5.56% and 4.76% respectively during our period of study.


SBI FMCG Outlook:

• The sector may face headwinds with deceleration in income growth esp. rural. Benign input cost may benefit the sector in the very short term but large part of the benefit will go away as companies may pass on part of the benefits to consumers over the medium term and nominal growth rate will be lower due to lower inflation. From a long term perspective secular drivers like low penetration and low per-capita usage will continue to aid growth as distribution reach of organized consumer companies increases and disposable incomes grow. To sum it up secular factors will continue to drive growth but a cyclical downturn is very much probable over the next one year.

• Sector’s valuation relative to its own history and relative to market is well above average. Considering that we expect some moderation in sector’s growth, risk reward is not favorable. Having said that the current valuation premium of the sector is largely a function of weakness in other sectors and if macro conditions deteriorate the premium may continue or expand.

• We continue to be positive on certain themes viz. packaged foods, decorative paints and feminine hygiene and will continue to stay invested in the stocks that ride them.

Investment Strategy: The benchmark is heavily concentrated. Four stocks comprise 83% of the benchmark. The fund has a limitation of investing not more than 10% or benchmark weight whichever is higher in a particular stock. Due to this constraint it is difficult to outperform the benchmark in periods when large caps do well. Our strategy during such periods is to increase coverage ratio. In other periods there is larger opportunity to generate alpha through selection of the right mid and small cap stocks. Coverage ratio of the fund has been between 50 to 65%. The floor has been maintained at 50% in order to mitigate benchmark risk. Identification of stocks is a function of growth, return on capital and management capability. Corporate governance is a key criteria in mid and small cap stocks. Current Positioning: We are underweight large caps by 21% and the same has been allocated to mid and small caps. Top underweight: HUVR (-17%) and ITC (-10%). Top overweight’s; P&G Hygiene (7%), Britannia (6%) and Kansai Nerolac (6%). All overweight’s fit the themes mentioned above. The scheme currently has 3% cash.


30.95 28.76 28.30

17.86

24.18 21.92

SBI FMCG Fund S&P BSE FMCG Index


Recommended Technology Sector Fund

ICICI Prudential Technology Fund

Inception: 03 March, 2000 AUM : Rs. 301 Crore Fund Manager: Mrinal Singh



The mandate of this fund is to invest into technology and technology-dependent companies. The funds average allocation into large caps, mid caps and small caps stood at 55%, 28% and 9% respectively, over a period of 1 year (December 2013 to November 2014). The stock count of the fund in November 2014 was 14. Among these 14 stocks, 7 were held consistently for the 3 years under analysis. During the 36 months of analysis, Infosys was the top holding of this fund with an average allocation of 31.78%. As on November 2014, the top 5 stocks of this fund were: Infosys (35.11%), Persistent Systems (10.13%), Wipro (8.4%), Tech Mahindra (7.81%) and Cyient (7.21%).


Portfolio Construction: The portfolio is constructed with a view to invest in businesses with sustainable volume growth. There is high concentration among selected equities with top five stocks constituting 71% of the portfolio. Stock selection is done with the primary objective of attractive valuation and long term return potential rather than currency view. Portfolio liquidity is also given due consideration.

A large share of the funds under management is invested in the software stocks. However, the Scheme would opportunistically invest in companies outside the companies listed on S&P BSE IT index, but which form part of Information Technology Services Industry.

Investment Approach: The Fund can invest across market capitalizations and uses growth investment style. The midcaps are expected to catch up and have potential to deliver returns. No aggressive INR estimates being considered.


42.54 36.15

26.19 33.20

26.81

18.71

ICICI Prudential Technology Fund

S&P BSE IT Index


Recommended Debt Mutual Funds


Recommended Short Term Fund

Birla Sun Life Short Term Opportunities Fund

Inception: 09 May, 2003 AUM : Rs. 3967 Crore Fund Manager: Kaustubh Gupta & Sunaina Da Cunha

Exit Load: 1.50% on or before 1 year ,0.50% after 1 year but on or before 540 days ,NIL after 540 days


The fund aims at identifying mispriced credit opportunities in the market and invests in them. This strategy helps them in enhancing the portfolio returns. The fund will invest into short and medium term securities to manage credit risk. The fund’s corpus is skewed towards the corporate debentures space with allocation into the same having increased from 58.36% in December 2013 to 77.86% in November 2014. The fund’s modified duration stood at 2.53 years in November 2014 vis-à-vis 1.09 years in December 2013.


The scheme is positioned as a short term income fund wherein we intend to invest pre-dominantly in well researched corporate bonds and credit structures. The portfolio endeavours to have a well balanced exposure across the credit profile to maintain a healthy risk return ratio. As on 31st Dec 2014, the scheme has 52% of its portfolio invested in AAA & equivalent papers including cash, cash equivalent and the remaining 46% in AA & below rated papers. The scheme predominantly invests in corporate bonds and debentures of varying tenures, currently upto 90% of the portfolio. We believe the rates in short end of the curve are likely to remain stable with downward bias, owing to RBI’s proactive approach on liquidity front, cautious approach on rate action to secure medium term inflation target of 6%, improving corporate balance sheets and economic fundamentals. The fund will continue to take active duration calls (within the fund level duration cap of 3 years) through exposure to AAA papers. The YTM& Modified Duration of the scheme is 9.40 and 2.50 years respectively.



11.54 10.90 9.53

Birla Sun Life Short Term Opportunities Fund

*Benchmark: CRISIL AA Short Term Bond Fund Index



Franklin India Short Term Income Plan

Inception: 31 January, 2002 AUM : Rs. 10079 Crore Fund Manager: Santosh Kamath & Kunal Agrawal



The fund’s focus will be on the shorter end of the curve. Over a period of 1 year, the fund has increased the allocation into corporate debentures from 61.05% in December 2013 to 95.28% in November 2014. On the other hand, the fund has been gradually reducing exposure into Pass-Through Certificates (PTCs) from 19.57% to 0.03% during December 2013 to November 2014.The average maturity of the fund was 2.59 years in November 2014 as against 1.92 years in December 2013.


The fund invests in fixed income securities at the shorter-end of the curve—primarily in corporate bonds, with a focus on high accrual income. It is one of the oldest short term funds in the industry, which has delivered consistent performance across time horizons and interest rate cycles. The fund has successfully tackled rising and easing interest rate scenarios. The fund uses a bottom-up security selection process involving in-depth fundamental credit research combined with top-down macro analysis to construct a portfolio that has the potential to generate attractive risk-adjusted returns. Outlook: The three key risks for fixed income funds (interest rate risk, credit risk and liquidity risk) now appear to be more benign in India. From an investment perspective, with yields still remaining elevated at the shorter end and with the credit environment improving, we continue to remain positive on corporate bonds and accrual strategies.


11.72 10.24 8.97

10.45 9.28

7.94

Franklin India Short Term Income Plan

Crisil Short-Term Bond Fund Index



Reliance Regular Savings Fund - Debt Option

Inception: 09 June, 2005 AUM : Rs. 4917 Crore Fund Manager: Prashant Pimple



The fund will invest into fixed income securities like Central Government Securities, Treasury Bills, Corporate Bonds, CBLO, etc. It may also take an exposure into Derivatives like Interest rate swaps. The fund’s mandate has fixed the exposure into government securities at 50% of the corpus. During the 1 year under study, the fund’s exposure into non convertible debentures stood at 80.12% in November 2014 as against 70.68% in December 2013. As far as the average maturity of the portfolio is concerned, it was 2.03 years in December 2013 vis-à-vis 2.09 years in November 2014.


The investment philosophy of this fund is to generate alpha by investment into credit assets at absolute high yields and attractive spreads in the 2-3 years horizon without carrying high duration (not above 2 years) in the fund.

• Currently, we are maintaining duration of around 1.72 with focus on higher accruals which is around 10.15%-10.20%.

• With the credit environment improving, we have started shifting allocations from shorter maturities corporate bonds to 2-3 years private assets yielding higher rates in the current market. This would enhance both the gross yield as well as duration of the fund.

• The endeavor of the fund is to maintain attractive carry of the portfolio along with moderate duration so as to benefit in the current interest rate scenario.


11.07 9.60 8.25

13.54

9.02 7.54

Reliance Regular Savings Fund - Debt Crisil Composite Bond Fund Index



Sundaram Select Debt Short Term Asset Plan

Inception: 04 September, 2002 AUM : Rs. 800 Crore Fund Manager: Dwijendra Srivatsava & Sandeep Agarwal

Exit Load: NIL


The fund aims to generate regular returns on the portfolio by investing into government securities and liquid top rated corporate/PSU debt and extremely liquid money market investments. The fund is biased towards the corporate debt space as can be seen from the fact that during December 2013 to November 2014, the average allocation into corporate debentures stood at 65.82%. On the other hand, the allocation into G-Secs has been increased from 0.38% in December 2013 to 12.73% in November 2014. The average maturity of the fund has seen a steady increase from 1.34 years to 3.17 years during December 2013-November 2014.


Outlook Macro-economic parameters have been stabilizing from last 2-3 quarters Inflation has moderated with further trajectory being downwards, stable government at center is showing strong intent for reforms and controlling subsidies & fiscal deficit, current account deficit and currency volatility is under control. Global economy is also slowing and most of the bigger developed economies excluding United States of America, are struggling with slower growth and risk of deflation resulting into quantitative easing. Global commodity prices have dropped significantly which will put further downward pressure on inflation. RBI has acknowledged this situation and started the rate cutting cycle by cutting rate by 25bps 2-3weeks ahead of monetary policy. We believe that RBI will continue the stance and we will see further rate cuts by RBI. Sundaram Select Debt Short Term Fund: Actively managed short term bond fund through a combination of Buy & Hold (Strategic) & view based calls (Tactical) would make the fund an ideal vehicle for investors who aim to benefit from the intermittent volatility & the broad downward trajectory of interest rates. The fund aims to maintain duration in the range of 0.5 to 2.5 years through a balanced mix of Corporate Bonds and Money market apart from tactical allocation to Government securities to realize short term opportunities in the market.


10.09 10.29 9.21

9.26 8.92 7.90

Sundaram Select Debt Short Term Asset Plan CRISIL Liquid Fund Index



UTI Short Term Income Fund

Inception: 23 June, 2003 AUM : Rs. 4021 Crore Fund Manager: Sudhir Agarwal

Exit Load: 0.25% on or before 30 days, NIL after 30 days


The fund’s mandate is to invest into money market securities and high quality debt which is not just less risky but also highly liquid. The average maturity of the portfolio can be up to 4 years. During the 1 year of analysis, the fund has been increasing its exposure into G-Secs while at the same time reducing the surplus parked into Non Convertable Debentures. The fund’s allocation into G-Secs was increased from 5.7% to 39.34%, while the exposure into Non Convertable Debentures was reduced from 75.09% to 28.73% during December 2013 to November 2014. The average maturity of the portfolio during the 1 year ranged between 1.08 years to 4.18 years. As on November 2014, the average maturity stood at 2.82 years.


The shorter end of the yield curve is expected to shift upwards in the near term due to large issuances lined up for the quarter. However with comfortable liquidity medium term view is supportive for short term rates and funds having a combination of income accrual and lower duration like UTI Short Term Income Fund continue to provide a good investment opportunity over the next 6 to 12 months, as a part of the core holding in your Fixed Income portfolio.


10.51 10.40 9.35 10.45 9.28

7.94

UTI Short Term Income Fund Crisil Short-Term Bond Fund Index


Recommended Dynamic Bond Fund

Birla Sun Life Dynamic Bond Fund

Inception: 27 September, 2004 AUM : Rs. 10025 Crore Fund Manager: Maneesh Dangi



The fund will dynamically manage the portfolio by actively taking calls on interest rate movements. For this purpose, the fund manager will consider the curve spreads both on the gilt and corporate bond markets. As on November 2014, the fund had 86.82% of the corpus concentrated in G-Secs, which in December 2013 stood at 23.51%. On the other hand, the fund’s exposure into corporate debentures was reduced from 47.63% to 3.59% during December 2013 to November 2014. The modified duration of the fund was gradually increased from 2.3 years in December 2013 to 6.17 years in November 2014.


As on 31st Dec 2014, the modified duration of the scheme stands at 5.12 years and the YTM is 8.30%. The higher portfolio duration has been built chiefly through exposure to Sovereign Bonds which currently accounts for 83% of the portfolio. More than 80% of the portfolio is invested in securities with residual maturity of 5 years and more. Though we continue to stay invested in our portfolio with a bias towards longer duration, given sharp correction in yields over the last 4-5 months, we have tactically pared duration over the last month. Nevertheless, we stay constructive on rates and believe that if Government is able to reinvigorate growth without imparting any inflationary impulses in the economy then rates could decline meaningfully going forward.


13.01 10.29

8.92 10.45 9.28 7.94

Birla Sun Life Dynamic Bond Fund CRISIL Short Term Bond Fund Index



Reliance Dynamic Bond Fund

Inception: 16 November, 2004 AUM : Rs. 4278 Crore Fund Manager: Prashant Pimple



The mandate of the fund has given full flexibility to the fund manager to take an active call on interest rates depending on various parameters of the Indian economy and global markets development. An analysis of the portfolio during December 2013 to November 2014 showed that the average allocation into G-Secs and Non Convertible Debentures stood at 64.70% and 25.29%. The average maturity profile of the fund shows that it has been increased to 14.41 years in November 2014 compared to 9.60 years in December 2013.


• The strategy is to run Core positions which are built in line with our medium to long term view and tactical

positions to capture opportunities in the short term. • Currently, Core position is being maintained through 65% allocation in GSecs & 25% allocation in longer

maturity corporate bonds, while 5% – 20% GSecs is used tactically to capture short term rates movement. • We intend to run high duration between 6 – 9 yrs which would be maintained by running higher GSec

allocation between 60-80%.We are currently running closer to 70% GSecs & 26% corporate bonds. • Out of the total GSecs, 3% is positioned in 5-10 yrs maturity GSecs while rest into longer maturity GSecs. • We have recently switched from shorter maturity GSecs to longer maturity GSecs as and when we got

more comfortable with improving macro scenario, interest rate trajectory & attractive spreads between GSecs. We have added to the longer maturity corporate bond exposure at attractive levels.

• Bond allocation is mainly in 5 year and above segment in private AAA category so as to carry high duration at the same time to earn higher yields from the allocation.


13.11 10.70

8.85

13.54

9.02 7.54

Reliance Dynamic Bond Fund Crisil Composite Bond Fund Index



Tata Dynamic Bond Fund

Inception: 03 September, 2003 AUM : Rs. 396 Crore Fund Manager: Raghupathi Acharya & Akhil Mittal

Exit Load: 0.50% on or before 180 days ,NIL after 180 days


The fund’s mandate is to invest into bonds, debentures, G-Secs and money market instruments. The investment strategy of the fund allows it to dynamically switch the maturity profile from long to short and vice versa in a short period of time. In the 1 year of analysis, the fund manager has been favoring G-Secs as can be seen from the fact the exposure into the same has increased from 40.77% in December 2013 to 66.16% in November 2014. During the same time period the fund had reduced the allocation into Non Convertible Debentures from 33.85% to 28.04%. As far as average maturity goes, it has increased from 4.16 years in December 2013 to 10.75 years in November 2014.


Tata Dynamic Bond Fund is a bond fund with mandate to actively manage duration to capture tactical calls on interest rates, yield curve shifts and spread compression opportunities. Depending upon tactical views on interest rates, the Fund’s average portfolio maturity may range from short to long duration. We have increased the duration in the Fund with a view to capture potential capital appreciation opportunities on account of rate cut expectations. More than 95% of the portfolio is allocated to more than 7yrs segment. The Scheme may seek to maintain a higher duration to benefit from potential capital appreciation opportunities in a falling interest rate scenario while utilizing its flexible mandate to manage the interest rate risk as well.



12.40 10.18

8.30

Tata Dynamic Bond Fund

*Benchmark: I-Sec Composite Index



UTI Dynamic Bond Fund

Inception: 16 June, 2010 AUM : Rs. 440 Crore Fund Manager: Amandeep Chopra



The fund will be actively managed in accordance with the fund manager’s call on the interest rate movements. While interest rates are rising this fund will be managed like a cash fund. whereas it can take the form of an income fund when interest rates are on a downward trajectory. As far as the instruments in the portfolio are concerned, the fund’s allocation into G-Secs had increased from 4.14% in December 2013 to 68.87% in May 2014 and finally reduced to 35.19% in November 2014.The fund’s exposure into Non Convertible Debentures which stood at 88.85% in December 2013 was gradually reduced to 22.91% in November 2014. The average maturity of the portfolio increased from 3.73 years to 5.21 years during December 2013 to November 2014.


UTI Dynamic Bond Fund continues to be an all weather fund and remains a good bet for the investors at this point in time as it actively manages the duration to take advantage of movement across the yield curve. Investors should look at increasing exposure towards this fund over the next 6 to 12 months.

1 Year 3 Years

13.11 10.90

13.54

9.02

UTI Dynamic Bond Fund Crisil Composite Bond Fund Index


Recommended Income Fund

Canara Robeco Income Fund

Inception: 19 September, 2002 AUM : Rs. 156 Crore Fund Manager: Avnish Jain



The fund will invest into debt and money market instruments of different maturities and risk profiles and a portion of the funds will also be allocated into rated and un-rated corporate bonds and debentures. An analysis of the portfolio shows that the fund has been increasing allocation into G-Secs from 59.95% in December 2013 to 69.32% in November 2014. During the same time period, the fund’s exposure into corporate debentures increased from 28.77% in December 2013 to 61.35% in May 2014 and finally as on November 2014 stood at 20.21%. The average maturity of the fund has increased from 5.89 years to 12.14 years during the 1 year period (December 2013 to November 2014).


Canara Robeco Income’s portfolio constitutes of corporate bonds and government securities. The scheme aims to earn accrual interest income through investment in corporate bonds while generating alpha through g-sec exposure. The fund maintains a judicious mix of various credits to maintain a balance between return, liquidity and safety. Typically the fund has exposure to high quality credit papers. The outlook for long duration continues to be positive in short to medium term. With inflation falling below RBI’s target, rate easing cycle has already commenced with 25bps rate cut in January 2015. RBI is expected to continue with its softer monetary policy stance in wake of subdued inflation expectations, weak global commodity prices especially crude oil and weak global growth. All these factors are positive for bond markets and Income funds, in particular. The fund actively manages allocation between corporate bond and g-sec based on spread movement within these two asset classes.


12.10 9.42

7.92

13.54

9.02 7.54

Canara Robeco Income Fund CRISIL Composite Bond Fund Index



Franklin India Income Builder Account

Inception: 23 June, 1997 AUM : Rs. 1578 Crore Fund Manager: Santosh Kamath & Sumit Gupta



The fund intends to actively manage the portfolio by investing into high quality fixed income instruments. A perusal of the portfolio shows that the fund is heavily skewed towards corporate debentures as the average allocation into this instrument stands at 59.13% during the 1 year analysis period (December 2013 to November 2014). As on November 2014, the fund had 73.41% of the corpus allocated into corporate debentures. On the other hand, the fund’s exposure into G-Secs increased from 3.23% in December 2013 to 61.21% in August 2014 and as on November 2014 stands at 14.50%. As far as average maturity is concerned; the fund had increased the same from 2.63 years in December 2013 to 10.93 years in August 2014 but finally reduced it to 4.63 years by November 2014.


It is a long bond fund – focused on Corporate / PSU bonds. The fund is actively managed in terms of duration and securities. It is one of the oldest long bond funds in the country with a track record of 17 years. Outlook: 2015 has started on a good note with the central bank shifting its monetary policy stance, and cutting rates. The RBI has said that further easing would depend on data that confirms continuing disinflationary pressures and high-quality fiscal consolidation. We expect the RBI to further ease policy rates over the next year or so, provided inflation remains under control, and any other major exigency does not occur. Therefore duration strategies continue to be favourably placed for 2015, with interest rates poised to come down further.


12.47 11.17 9.20

13.54

9.02 7.54

Franklin India Income Builder Account

Crisil Composite Bond Fund Index



ICICI Prudential Long Term Plan

Inception: 28 March, 2002 AUM : Rs. 144 Crore Fund Manager: Manish Banthia

Exit Load: 1.00% on or before 3 years ,NIL after 3 years


The fund’s mandate is to invest into debt and money market instruments of varying maturities with a view to maximize income while maintaining a balance between yield, safety and liquidity. During the 1 year analysis period (December 2013 to November 2014), the fund started taking an exposure into G-Secs in April 2014 to the tune of 87.68% and as on November 2014, the allocation stood at 92.97%. The average maturity of the fund saw a significant increase from 0.18 years to 12.05 years during December 2013 to November 2014.


The Fund intends to generate potential capital appreciation by following model based dynamic duration management that will enable the fund manager to systematically manage interest rate risk. • The Fund based on the Current Account (CA) model will aim to maintain high duration when interest rates

are high, and maintain low duration when interest rates are low. This will help in capturing interest rate cycles from both sides over a longer period of time.

• Investors who wish to benefit from changing interest rate cycles with controlled interest rate risk may consider investing in this fund.

Why Now? The CA index is moving towards positive territory that indicates an opportunity in duration space. Other macro-economic variables are also showing signs of improvement and pronounce a strong case for investing in higher duration funds. • The fund is currently running a duration of 7.26 years with an aim to capture this opportunity and generate

potential capital appreciation from falling interest rates.

1 Year 3 Years

17.87

12.33 13.54

9.02

ICICI Prudential Long Term Plan Crisil Composite Bond Fund Index



UTI Bond Fund

Inception: 04 May, 1998 AUM : Rs. 2442 Crore Fund Manager: Amandeep Chopra

Exit Load: NIL


The fund actively manages duration by investing into medium to long term corporate bonds and G-Secs. In addition to this, the fund manager is also given the flexibility to invest at the shorter end of the curve if conditions are not conducive for long or medium duration papers. The fund manager seems to be taking active calls in G-Secs as the allocation into this instrument has increased from 65.51% in December 2013 to 80.26% in November 2014. On the other hand, during December 2013 to November 2014, the non convertible debentures allocation decreased from 27.01% to 17.08%. The average maturity of the fund stood at 11.58 years in November 2014 vis-à-vis 10.11 years in December 2013.


Investors should also look at increasing their exposure in long term duration funds like UTI Bond Fund as reversal in interest rate cycle provides an opportunity over the medium term. Investors should look at this fund with an investment horizon to 12 to 24 month to capture the entire reversal in interest rates.


13.26

9.74 8.66

13.54

9.02 7.54

UTI Bond Fund



Recommended GILT - Long Term Fund

IDFC Government Securities Fund – Investment Plan

Inception: 09 March, 2002 AUM : Rs. 532 Crore Fund Manager: Suyash Choudhary

Exit Load: NIL


The fund’s mandate is to invest into government securities which will provide stable returns over a long period of time. A perusal of the portfolio shows that the fund’s exposure into G-Secs which stood at 96.2% in December 2013 went to as low as 30.80% in March 2014 and finally as on November 2014, was at 98.57%. The average maturity of the fund increased from 10.7 years to 17.09 years during December 2013 to November 2014.


The policy review in early February held very little new information for medium term investors. The key to forecast how many more rate cuts still rests with forecasting CPI inflation and the real rate target that RBI wants to set over inflation. There is some additional clarity on the latter; the Governor has further narrowed his real rate ‘target’ band to 1.5 – 2% from 1.5 – 2.5% earlier, as was said matter-of-factly in the post policy media interactions. On the former, the RBI is choosing to be cautious thus far and rightly so given that it is the policy maker and not a trader. Notwithstanding that, and assuming that dynamics of the new CPI series (the base year is slated to be updated with accompanying weight and basket modifications) are not very different from the old one, we believe there is a good chance of average CPI falling towards 5% in the year ahead. If this happens, then the central bank’s framework will allow for meaningful cuts in the future. In the very near term, market seems to be building in some uncertainty premium as the ‘front loaded’ rate cut expectations of some quarters seem to have been put to rest for now. Subject to a friendly budget (our most likely scenario) we would expect RBI to move again either in March or at the April policy. Post that it may reserve further judgment till it assesses buildup of CPI in the April – June quarter. Bond investors with medium term views should do well so long as the structural theme remains intact; as seems the case till now.



13.59 11.58 9.05

IDFC G-Sec Fund Investment Plan

*Benchmark: I-Sec Composite Index


Recommended GILT - Long Term Fund

SBI Magnum Gilt Fund - Long term

Inception: 30 December, 2000 AUM : Rs. 330 Crore Fund Manager: Dinesh Ahuja



The fund will invest into government securities issued by the Central Government/State Government. To meet the liquidity requirements, the fund manager can also invest into term/notice money market, repos and reverse repos. During the 1 year of analysis (December 2013 to November 2014), the fund’s average exposure into G-Secs has been to the tune of 84.88%. As for the average maturity of the fund, it has increased from 9.08 years in December 2013 to 19.96 years in November 2014.


The RBI on January 15th reduced the repo rate by 25 bps to 7.75%. This was as per the guidance given in the December policy that if the disinflationary process continues there could be scope for rate reduction even outside the monetary policy review. The December inflation printing at 5%, much below expectations and below the RBI target of 6% for January 2016, provided room for RBI to reduce rates. Further scope for reducing rates would depend on the continuation of the disinflationary process and encouraging Fiscal Developments. We believe there would be further scope for reduction in policy rates on account of the following: Inflation Outlook: Retail Inflation has been surprising positively below expectation over the last couple of months. Lower trend in global commodity prices, Governments continuous focus on containing price pressures by diverting spending from subsidies to productive uses and lower rural wage growth provides comfort on the future path of Inflation. Also, sustained global disinflation momentum and weaker domestic demand provides room for RBI to ease policy rates further. Fiscal Situation: The Central Government Fiscal deficit has been narrowed from 7.5% of GDP in FY09 to 4.5% in FY14. The government seems committed towards the process of fiscal consolidation. Rationalising of diesel prices and the easing of global commodity prices particularly crude, would help the government in this process. We believe that the FY16 fiscal deficit could be in the 3.6% - 3.8% of GDP but also believe that this could be achievable with realistic assumptions on the revenue and expenditure front. In our view the quality of the budget would be keenly watched by the RBI rather than the deficit number alone. The governments focus on rationalising the expenditure towards more productive purpose and increasing capacities would provide scope for further rate easing. Keeping in mind improving fiscal situation and current narrow spreads for AAA rated corporate bonds the GILT curve looks more attractive at this juncture.



16.71 11.80

8.53

SBI Magnum Gilt Fund - Long term

*Benchmark: I-Sec Li-BEX Index


Recommended Corporate Bond Fund

SBI Corporate Bond Fund

Inception: 19 July, 2004 AUM : Rs. 144 Crore Fund Manager: Dinesh Ahuja

Exit Load: 3.00% on or before 1 year ,1.50% after 1 year but on or before 2 years ,0.75% after 2 years but on or before 3 years ,NIL after 3 years


The fund’s mandate is to invest into corporate debt securities which are either liquid or of varying maturities. A small portion of the corpus will also be invested into money market instruments to meet the normal redemption requirements. An analysis of the portfolio shows that the fund had consistently increased the allocation into certificate of deposits from 8.64% in February 2014 to 99.43% in July 2014, after which it was gradually reduced to nil by October 2014. The fund underwent a complete change in August 2014 when it was decided to allocate the maximum corpus into corporate debentures. The fund started taking an exposure into this instrument in August 2014 to the tune of 39.31% and as on November 2014 stands at 87.84%. Accordingly, the average maturity of the portfolio has also increased from 0.09 years in December 2013 to 3.59 years in November 2014.


Philosophy Investment in various NCDs is based on fundamental tenants of capacity, covenant, collateral and character. Emphasis being on optimal risk adjusted return. Fund Manager adopts a passive duration strategy relying upon credit spread to generate superior returns. Architecture The steady state portfolio shall contain 40-60% in a core illiquid portfolio mostly centered around AA & A rated NCDs. The balance of the portfolio shall be in higher rated securities to keep a constant maturity and provide liquidity to the portfolio. The fund is ideal for investors over a 2-3 year investment horizon.


10.61 10.21 9.02

13.54

9.02 7.54

SBI Corporate Bond Fund



Recommended Hybrid Mutual Funds


Recommended Balanced Fund

HDFC Balanced Fund

Inception: 11 September, 2000 AUM : Rs. 2813 Crore Fund Manager: Chirag Setalvad



This fund is positioned as a lower risk alternative to equities, with flexibility given to the fund manager to shift allocations between asset classes whenever there is a change in the view on a particular asset class. As far as equities are concerned, the fund will try to identify businesses with superior growth prospects and good management at a reasonable price. As for fixed income, the fund manager can invest into the entire range of debt and money market instruments. The asset allocation of this fund during December 2012 to November 2014 shows that the average allocation into equities and debt stood at 70% and 30% respectively. During December 2013 to November 2014, the funds average allocation into large caps, mid caps and small caps were 33%, 32% and 5% respectively. The fund has been strictly following a buy and hold strategy as can be seen from the fact that out of the 49 stocks held in November 2014, 43 have been consistently held for the 24 months under analysis. As for fixed income, the fund’s exposure into G-Secs have been increased from 7.21% to 18.67%, while non convertible debentures have seen a reduction in its allocation from 16.73% to 7.29% during December 2012 to November 2014.


Balanced fund provides investors the convenience of asset allocation. It saves the individual from constantly rebalancing his/her portfolio with automatic reallocation happening to maintain the equity and debt allocation. Additionally these funds are tax efficient and have lower fund costs. The Fund has a proven track record of over 14 years. A multi cap approach to equity investing and an actively managed debt portfolio gives you an ideal investment option to take advantage of both markets simultaneously. Coupled with this the fund has had an uninterrupted dividend record since FY 2005-06. The fund gives investor the growth of equity and stability of debt. As on 31st Jan 2015, the corpus is 3284.21 Crs with equity exposure 71 % and rest 29 % in debt. The fund has consistently beaten the benchmark over last 3 years.


55.90

25.12 19.40

29.75

17.07

10.30

HDFC Balanced Fund

CRISIL Balanced Fund Index



ICICI Prudential Balanced Fund

Inception: 03 November, 1999 AUM : Rs. 1352 Crore Fund Manager: Yogesh Bhatt & Manish Banthia



The fund aims to generate long term capital appreciation and current income by investing into equity and fixed income instruments. As far as the equity segment is concerned, the fund manager will use a bottom up approach to select stocks and the fund will have less exposure to mid and small cap stocks. An analysis of the asset allocation over the 24 months’ time frame (December 2012 to November 2014) shows that the average allocation into equities and debt was to the tune of 68% and 33% respectively. The market capitalization trends for December 2013 to November 2014 reveal that the fund had an average allocation of 49%, 16% and 3% into large caps, mid caps and small caps respectively. As on November 2014, the stock count of the fund was 48. Out of these 48 stocks, 14 have been a part of the portfolio during the entire 24 months of analysis. During the course of 24 months, the fund had been increasing the exposure into G-Secs from 11.21% in December 2012 to 21.69% in November 2014. On the other hand, the exposure into non convertible debentures was reduced to 2.79% in November 2014 from 17.47% in January 2012.


Equity levels in the portfolio are determined using an in-house Price to Book Value (P/BV) model in which current market levels are compared to the fair value range to determine under or over valuation of the market. A lower price to book value than the fair value range triggers an increase in equity levels and vice versa. The rebalancing of equity portion takes place on a weekly basis. The Scheme also invests in fixed income securities, which offer reasonable accrual with credit rating AA and above and tactical allocation to longer maturity papers. We are overweight on Industrial Products and Capital Goods as the sector can be an early beneficiary of pickup in economic activity. We are underweight on Software as the sector is trading with premium valuations against its historic averages.


49.68

26.03

18.05

29.75

17.07

10.30

ICICI Prudential Balanced Fund

Crisil Balanced Fund Index



Tata Balanced Fund

Inception: 08 October, 1995 AUM : Rs. 1533 Crore Fund Manager: Raghupathi Acharya & Atul Bhole

Exit Load: 1.00% on or before 540 days, NIL after 540 days


The fund will invest into equity and debt and money market instruments. Under normal circumstances, the exposure into equities would be in the range of 65% to 75% while exposure into debt and money market instruments would be in the range of 25% to 35%. The funds asset allocation trends during December 2012 to November 2014 show the average allocation into equities and debt to be at 74% and 26% respectively. A perusal of the market capitalization trends reveal that the funds average allocation into large caps, mid caps and small caps was to the tune of 48%, 23% and 3% respectively during December 2013 to November 2014. The fund held 62 stocks in November 2014, out of which 11 have been in the portfolio for the entire 24 months (December 2012 to November 2014) of the study. The fund had a 16.99% allocation into G-Secs in November 2014 vis-a-vis 14.3% in December 2012. On the other hand, the fund had been reducing the allocation into non convertible debentures from 10.84% in December 2012 to 4.64% in November 2014.


Tata Balanced Fund invests in combination of equity and debt investments which seek to optimize the returns on the portfolio with lower volatility. The scheme actively manages the proportion of the equity and debt investments depending upon the market conditions and outlook. The Fund is currently focused on domestic cyclical, reform oriented and consumer discretionary sectors like Auto & Auto ancillaries, NBFC’s, Private Banks etc. As the valuations have reached slightly above fair levels the Scheme would prefer to invest with Margin of Safety in view and still have the flexibility to invest in stocks which have high growth potential though currently available at above fair valuation levels.


53.66

26.13

16.56

29.75

17.07

10.30

Tata Balanced Fund

CRISIL Balanced Fund Index


Recommended Monthly Income Plan

Canara Robeco Monthly Income Plan

Inception: 24 April, 1988 AUM : Rs. 258 Crore Fund Manager: Ravi Gopalakrishnan & Avnish Jain



As per the investment strategy, the fund will be invested into debt and money market securities of different maturities and risk profiles. In addition to this, the fund will also invest in equities including overseas equities markets such as ADRs/GDRs. The asset allocation of this fund over a period of 24 months (December 2012 to November 2014) showed that on an average 73% of the portfolio was concentrated in debt while equities allocation was to the tune of 23%. During the 2 years of analysis, the funds average exposure into corporate debt was 34%. On the other hand, the fund started allocating a portion of the corpus into G-Secs in September 2013 and as of November 2014, the exposure into the same stood at 18.52%. As for the equities segment, the fund held 51 stocks in November 2014,out of which 17 have been a part of the portfolio for 24 months. An analysis of the market capitalization trends during December 2013 to November 2014 shows that the average allocation into large caps, mid caps and small caps stands at 18%,5% and 1% respectively.


Canara Robeco Monthly Income Plan allocates significantly (75%) to debt securities and money market instrument, while small (25%) allocation is made to equities. The fund aims to generate high accrual income from its fixed income allocation. The scheme endeavours to invest in high quality debt instrument. We believe that with the interest rates coming down, alpha generating opportunities through duration play can be exploited to the benefit of investors. Thus we have increased the duration of the debt component in the portfolio. The equity portion invests in companies which directly or indirectly participate in the India growth story. The scheme allocates majority of its portfolio to large cap companies with endeavour to generate capital appreciation and bring stability to the scheme.


21.14

12.58 10.26

17.16

10.92 8.28

Canara Robeco Monthly Income Plan

Crisil MIP Blended Index


Recommended Monthly Income Plan

DISCLAIMER: THIS REPORT IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION FOR THE SUBSCRIPTION, PURCHASE OR SALE OF ANY MUTUAL FUND. ANY ADVICE HEREIN IS MADE ON A GENERAL BASIS AND DOES NOT TAKE INTO ACCOUNT THE SPECIFIC INVESTMENT OBJECTIVE OF THE SPECIFIC PERSON OR GROUP OF PERSONS. PAST PERFORMANCE AND ANY FORECAST IS NOT NECESSARILY INDICATIVE OF THE FUTURE OR LIKE PERFORMANCE OF THE MUTUAL FUND. THE VALUE OF UNITS AND THE INCOME FROM THEM MAY FALL AS WELL AS RISE. OPINIONS EXPRESSED HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE. MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

ICICI Prudential MIP 25

Inception: 30 March, 2004 AUM : Rs. 981 Crore Fund Manager: Manish Banthia & Venkatesh Sanjeevi

Exit Load: 1.00% on or before 3 years ,NIL after 3 years


The fund will invest into debt and money market instruments, while a portion of the surplus will be allocated into equities. As for fixed income, the fund manager will scout for securities which offer superior levels of yields at lower levels of risks. Over a period of 24 months, the funds average allocation into debt and equities was to the tune of 73% and 22% respectively. The portfolio on the fixed income side is highly skewed towards G-Secs as can be seen from the fact that the allocation into the same increased from 3.47% in December 2012 to 57.43% in November 2014. At the same time, the fund has reduced the exposure into non convertible debentures to 18.57% in November 2014 from 55.08% in March 2013. As far as the equities portion is concerned, the total stock count in the portfolio was 33 in November 2014. Out of these 33 stocks, 7 have been held continuously for 24 months. The fund’s average allocation into large caps, mid caps and small caps stood at 16%, 6% and 1% respectively during December 2013 to November 2014.


Debt: The scheme will predominantly invest in a mix of G-Sec and Corporate Bonds with focus on earning reasonable accrual and generating potential capital appreciation. The scheme will be actively managed with an aim to keep the duration within 1 - 5 years range based on the underlying interest rate view. Under exceptional conditions it may go beyond 5 years and below 1 year. The scheme will follow total return approach. Equity: The scheme will keep the equity allocation in the range of 15% to 25%. Under exceptional circumstances, it may go upto 30%. Equity levels in the portfolio are determined using an in-house Price to Book Value (P/BV) model in which current market levels are compared to the fair value range to determine under or over valuation of the market. A lower price to book value than the fair value range triggers an increase in equity levels and vice versa. Overall we are optimistic about the economy considering most macro-economic factors have already improved or are seeing signs of recovery. We remain positive on equities with a 3 year view and recommend investors to consider equities for long term. The environment is also conducive for lower interest rates, the rate cut cycle may be spread over a longer period. ICICI Prudential MIP 5 can be a good investment avenue under such scenario.


22.44

13.98

10.22

17.16

10.92 8.28

ICICI Prudential MIP 25

Crisil MIP Blended Index

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