Which Fund to Buy guide Which Fund To Buy guide … Schemes 66 In existence for > 1 year 66 Corpus >...

Which Fund To Buy guide

Which Fund to Buy guide

Publication Date : 23 December, 2016Validity : Till June 30, 2017Data Source : ACE MFV2 Accord

Fintech Pvt. Ltd.

Bharosa Club is a Registered Investment Advisor with SEBI (RIA # INA100004657).

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Edition : 3 (part 2 of 2)

Disclaimer:1. Mutual Fund Investments are subject to market risks, read all

scheme related documents carefully.2. Past performance does not guarantee future returns.

HOW WE PICKED OUR FUNDS

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Our advice is free of bias, as we don’t gain from recommending one fund over another. In the interest of complete transparency, we openly

share our fund selection process.

No fund house can pay to get a fund picked in our guide

Inputs from all are welcome for continuous improvement of our selection process

We encourage members to customize their portfolios using their own research or research

from other sources

Picks from our previous guides will be picked again, if they’re in the Top 10 in their category and don’t

significantly underperform the higher ranked funds

EQUITY & TAX SAVER PICKS - FRAMEWORK

25Mutual

Fund Houses

Equity FundsTax Saver Funds

In existence for > 1 year

Corpus > Rs. 1,000 cr

Weighted SIP Performance

Top Picks

We recommend investments in Diversified Equity Mutual Funds. We don’t like thematicor sectoral funds because their performance tends to be cyclical. We also don’t like hybridfunds; instead we recommend allocation to debt funds to create an ideal asset allocation.

We like funds with a track record of at least 1 year. That allows meaningful analysis ofperformance.

Funds with a large corpus implies a certain amount of investor confidence. It also allowsa fund manager to adequately diversify his holdings.

We looked at the SIP performance of the shortlisted funds over a 3 year period. Furtherwe assigned weights to different time periods - 10% (6 months), 20% (1 year), 30% (2years), 40% (3 years). This creates a bias for funds which have delivered good returnsover a sustained period of time, and at the same time those which are showing aturnaround.

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Stages of filtration Criteria Used

EQUITY – Large Cap

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Schemes 66

In existence for > 1 year 66

Corpus > Rs. 1000 cr 26

ICICI Pru Top 100 Fund (G)

Birla SL Advantage Fund (G)

HDFC Top 200 Fund (G)

Reliance Growth Fund (G)

DSPBR Equity Fund (G)

ICICI Pru Focused BlueChip Equity Fund(G)

SBI BlueChip Fund-Reg(G)

Franklin India Prima Plus Fund(G)

Birla SL Top 100 Fund(G)

Birla SL Frontline Equity Fund(G)

Top 10 Rank in Weighted SIP performance

PICKED: Top 5

DROPPED: Relatively large gap in performance vis-à-vis top performing funds

EQUITY – Multi Cap

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Schemes 73




L&T India Value Fund(G)

Birla SL Equity Fund(G)

DSPBR Opportunities Fund-(G)

ICICI Pru Dynamic Plan(G)

Motilal Oswal MOSt Focused Multicap 35 Fund-(G)

ICICI Pru Multicap Fund(G)

Kotak Select Focus Fund(G)

Franklin India High Growth Cos Fund(G)

SBI Magnum Multicap Fund-(G)

Mirae Asset India Opportunities Fund-(G)

PICKED: Top 2

PICKED: Previous pick. Relatively small gap in performance vis-à-vis #3 & #4

EQUITY – Mid Cap

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Schemes 42




Mirae Asset Emerging BlueChip-(G)

HDFC Mid-Cap Opportunities Fund(G)

DSPBR Small & Mid Cap Fund-(G)

Sundaram Select Midcap(G)

Kotak Emerging Equity Scheme(G)

Birla SL Midcap Fund(G)

Canara Rob Emerg Equities Fund-(G)

SBI Magnum MidCap Fund-(G)

ICICI Pru Midcap Fund(G)

Franklin India Prima Fund(G)

PICKED: #2,#3,#4

DROPPED. Relatively large gap in performance vis-à-vis top performing funds

NOT PICKED: Mirae funds not available on Bharosa platform

EQUITY – Small Cap

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Schemes 5




DSPBR Micro-Cap Fund-(G)

Reliance Small Cap Fund(G)

Franklin India Smaller Cos Fund(G)

PICKED: Top 2

EQUITY – Tax Saver

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Schemes 44




DSPBR Tax Saver Fund-(G)

HDFC TaxSaver(G)

HDFC Long Term Adv Fund(G)

L&T Tax Advt Fund-(G)

Reliance Tax Saver Fund(G)

Sundaram Tax Saver(G)

ICICI Pru LT Equity Fund (G)

Franklin India Taxshield(G)

Birla SL Tax Relief '96(G)

SBI Magnum TaxGain'93-(G)

PICKED: Top 3

DROPPED. Relatively large gap in performance vis-à-vis top performing funds

DEBT - Framework

Ultra Short Term & Liquid FundsShort Term Debt Funds



WeightedPerformance

Top Picks

For shorter duration, we recommend investments in Ultra Short Term & Liquid Funds asthey have lesser sensitivity to interest rate fluctuations. As a result, returns are morepredictable. For a 2-3 year horizon we recommend Short Term Debt Funds



We looked at the performance of the shortlisted funds over a 3 year period. Further weassigned weights to different time periods - 10% (6 months), 20% (1 year), 30% (2years), 40% (3 years). This creates a bias for funds which have delivered good returnsover a sustained period of time, and at the same time those which are showing aturnaround.

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25Mutual

Fund Houses

In Ultra Short Term Debt, we look at Funds which are Moderately Low or Low risk

DEBT – Ultra Short Term

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Schemes 100



Top 10 Rank in Weighted performance

ICICI Pru Ultra Short Term Plan(G)

Birla SL Savings Fund(G)

ICICI Pru Flexible Income Plan(G)

Reliance Medium Term(G)

IDFC Ultra Short Term Fund-(G)

ICICI Pru Savings Fund(G)

SBI Treasury Advantage Fund-(G)

Reliance Money Manager Fund(G)

SBI Ultra Short Term Debt Fund(G)

Kotak Treasury Advantage Fund(G)

NOT PICKED: Modified duration of over 1 year, makes scheme susceptible to volatility

PICKED: #2

PICKED: previous pick

PICKED: previous pick, instant redemption available

DROPPED: Relatively large gap in performance vis-à-vis top performing funds

DEBT – Short Term

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Schemes 48




Birla SL Dynamic Bond Fund-Ret(G)

Birla SL Treasury Optimizer Plan(G)

Birla SL ST Opportunities Fund(G)

ICICI Pru Short Term Plan(G)

Birla SL Short Term Fund(G)

UTI ST Income Fund(G)

Reliance STF(G)

SBI Short Term Debt Fund(G)

Axis Short Term Fund(G)

HDFC Short Term Opportunities Fund(G)

PICKED: #2, #3, #4, #5

NOT PICKED: Dynamic Bond funds tend to be very volatile, hence we don’t recommend them

ARBITRAGE - Framework

Arbitrage Fund Universe



WeightedPerformance

Top Picks

We recommend investments in Ultra Short Term & Liquid Funds as they have lessersensitivity to interest rate fluctuations. As a result, returns are more predictable. Longerduration debt funds tend to be more volatile to interest rate changes.



We looked at the performance of the shortlisted funds over a 3 year period. Further weassigned weights to different time periods - 30% (6 months), 40% (1 year), 20% (2years), 10% (3 years). As arbitrage funds are typically help for short durations, the biaswas for the near term results.

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25Mutual

Fund Houses

Arbitrage

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Schemes 19




JM Arbitrage Adv Fund(G)

ICICI Pru Equity-Arbitrage Fund(G)

HDFC Arbitrage-WP(G)

Kotak Equity Arbitrage Scheme(G)

Reliance Arbitrage Advantage Fund(G)

Birla SL Enhanced Arbitrage Fund(G)

UTI SPrEAD(G)

IDFC Arbitrage Fund(G)

PICKED: #2, #3

NOT PICKED: JM Funds not available on Bharosa platform

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