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Mutual FundReview
October 20 2009 | Mutual Fund October 20 2009 | Mutual Fund October 20 2009 | Mutual Fund
November 19, 2009 | Mutual Fund Mutual Fund Review
September 19, 2016
ICICI Securities Ltd. | Retail MF Research
Note: Whenever, returns for the scheme are shown in the report, they are for the growth option of the scheme.
Mutual Fund Review
Equity Markets .................................................................................................... 2 Debt Markets ....................................................................................................... 3 MF industry synopsis .......................................................................................... 4 MF Category Analysis ......................................................................................... 5
Equity funds..................................................................................................... 5 Equity diversified funds ...................................................................................... 6 Equity Infrastructure fund................................................................................... 7 Equity Banking Funds ......................................................................................... 7 Equity FMCG ...................................................................................................... 7 Equity pharma funds ........................................................................................... 8 Equity Technology Funds .................................................................................... 8
Exchange Traded Funds (ETF) ......................................................................... 9 Balanced funds ............................................................................................. 10 Monthly Income Plans (MIP) ........................................................................ 11 Arbitrage Funds ............................................................................................. 11 Debt funds ..................................................................................................... 12
Liquid Funds 13 Income funds .................................................................................................... 14 Gilt Funds 15 Gold: Not attractive from an absolute return perspective ................................ 16 Model Portfolios ................................................................................................ 17
Equity funds model portfolio ......................................................................... 17 Debt funds model portfolio ............................................................................ 18
Top Picks ........................................................................................................... 19
ICICI Securities Ltd. | Retail MF Research
Page 2
Equity Markets
Update
Indian benchmark indices have been consolidating after touching all-
time high levels in the first week of August. However, broader markets
continued their upward trajectory as midcaps and small caps continued
to outperform large caps
The market has undergone a round of healthy corrective consolidation
in August 2017. It has displayed resilience in the face of turbulent global
cues and absorbed a range of adverse events like rising geopolitical
tensions and FII outflows
The recent quarter was subdued with Sensex companies reporting a
tepid Q1FY18 primarily depicting the transition period towards GST.
Majority of the companies witnessed muted business activity amid
destocking of channel inventory and emerging clarity on input tax
credits. Going forward, with a smooth transition by domestic
businesses to GST amid greater emphasis over NPA resolution for the
Indian banking system and a pick-up in infra activity, we revise our
Sensex EPS estimates in FY17-19E. We expect robust earnings
recovery for Sensex companies and pencil in a double digit earnings
CAGR of 15.7% in FY17-19E
GDP for Q1FY18 came in at a weak 5.7% vs 6.1% last quarter. The
economy is passing through a period of sluggishness as it faced two
jolts back-to-back, first demonetisation and now GST. Business
sentiments remain robust, however, and output should normalise once
the system stabilises over the next few months
Outlook
Unprecedented inflows into equity markets in domestic mutual funds
and increased equity allocation from EPFO and rising NPS corpus is
proving ample liquidity to the markets and are driving factors behind
the recent rally. The outlook for liquidity remains strong
We reiterate our positive stance and conclude that the current
corrective phase forms part of the larger degree uptrend. Going
forward, we expect the index to conclude the ongoing secondary
consolidation and resume its primary uptrend to challenge its recent
life-time high of 10137 in coming months. Hence, it presents an
incremental opportunity with favourable risk/reward to enter quality
stocks in a staggered manner to ride the next up move within the larger
degree uptrend
Our positive stance on equity continues to backed by expectations of a
pick-up in earnings and continuity of fund flows. Subdued earnings,
over the last four years, have led index valuations to inch up. However,
we believe the impact of one-offs like demonetisation & GST on
corporate earnings will go through in the first half of FY18. From the
second half onwards, earnings growth may accelerate
However, given the sharp rally in recent months, it is better to avoid
lumpsum investment and continue with the staggered buying approach
Nifty 50: Markets continue to hover around highs
7500
8000
8500
9000
9500
10000
10500
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Source: Bloomberg, ICICIdirect.com Research
Broader indices outperform over the last month
7.9
6.1
4.2
3.8
3.5
1.8
0
1
2
3
4
5
6
7
8
9
BS
E S
mall c
ap
BS
E M
idcap
BS
E 5
00
BS
E 2
00
BS
E 1
00
Sensex
Source: Bloomberg
One month returns till September 14, 2017
Metals and Real estate stocks see buying while
Technology stocks lag
10
6
5 5
4
4 4
3
-2-4
-2
0
2
4
6
8
10
12
Metals
Real Estate
CG
Healthcare
Oil n
Gas
FM
CG
Auto
Bankin
g IT
Source: Bloomberg
One month returns till September 14, 2017
Research Analyst
Sachin Jain
Jaimin Desai
ICICI Securities Ltd. | Retail MF Research
Page 3
Debt Markets
Update
Fixed income markets have been in a range during August with yields
across government securities and corporate bonds trading in a narrow
range. Benchmark 10 year G-sec yields hovered around 6.5% while
corporate bonds of three, five years maturity traded at ~7.1%, 7.3%,
respectively
CPI inflation for August jumped to 3.36% YoY from the previous
month’s 2.36% YoY reading. Food inflation contributed heavily to the
rise in headline inflation, growing on a yearly as well as sequential
basis. The headline CPI inflation is averaging ~2.50%, thus far in FY18
and is well within RBI’s projected band of 2.00-3.50% for H1FY18.
Barring major negative surprises in the core print and with continued
support from cereals (base effect and higher production) and pulses
(good harvest), the target is likely to be comfortably met
Globally, concerns over a rise in sovereign yields have subsided with
inflation panning out lower-than-expected. US 10 year G-sec yield has
drifted down slowly by more than 20 bps to 2.1% from 2.3%. Subdued
global sovereign yields along with a stable currency are attracting
foreign inflows into the Indian market
FIIs have already exhausted their debt investment limit in both
government securities and corporate bonds indicating their positive
stance on bond yields
Outlook
RBI is expected to maintain status quo on benchmark policy rates in its
October 2017 policy meeting. The central bank is likely to wait to see
the impact of GST and impact of erratic monsoons on food grain
production. Although RBI’s medium term target is likely to be achieved,
market participants are likely to take cues from its guidance and outlook
The India debt market is almost at the end of the interest rate cycle,
which started in January 2015 with repo rate at 8%. RBI has since then
cut benchmark rates by 200 bps. The 10 year G-sec has corrected from
9.1% in April 2014 to 6.45% currently. Therefore, room for further
downside remains narrow
System liquidity continues to remain in surplus leading to persistent
lower yields at the shorter end of the yield curve. With bank credit
growth remaining subdued, we expect rates to remain low in near term
G-sec funds or duration funds should be avoided. Credit opportunities
funds with stable asset quality offer the best investment opportunity in
the current market environment
G-sec yields rise marginally in days following
August CPI reading
5.5
6.0
6.5
7.0
7.5
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Source: Bloomberg
G-sec yield curve: Yields steepen for long maturity
6.24
6.34
6.506.52
6.25
6.34
6.52
6.56
6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
1yr 3yr 5yr 10yr
Yie
ld (%
)
12-Sep-17 14-Aug-17
Source: Bloomberg, ICICIdirect.com Research
AAA corporate bond yield curve steepens across
most maturities
6.81
7.11
7.30
7.60
6.97
7.13
7.33
7.63
6.4
6.8
7.2
7.6
8.0
1yr 3yr 5yr 10 yr
Yie
ld (%
)
12-Sep-17 14-Aug-17
Source: Bloomberg, ICICIdirect.com Research
ICICI Securities Ltd. | Retail MF Research
Page 4
MF industry synopsis
Record inflows into mutual funds in the last three years have led to a
robust increase in overall assets managed by them. Total assets
managed by mutual funds touched a record high of | 20.59 lakh crore in
August 2017, up ~3.12% from July 2017 level of | 19.97 lakh crore. This
represented a ~31.74% increase YoY and an ~17.4% increase from
March 2017. Of the total MF corpus, ~42% was held by income funds
and ~31% by equity and ELSS funds
According to Amfi data, inflows through systematic investment plans
(SIPs) for August were at ~| 5200 crore, up from ~| 4950 crore in the
previous month. SIP inflows averaged ~ | 3600 crore/month in FY17
In the trailing 12 months, the mutual fund industry saw a net inflow of
| 3.07 lakh crore. Out of the total net inflow, | 99441 crore came into
equity and ELSS funds, about 32%
Despite volatility in equity markets, inflows in equity mutual funds have
remained steady. August saw a net inflow of ~| 28023 crore in equity
and equity-oriented funds, which is a multi-year high. This trend reflects
the increasing participation of investors in mutual funds and using
correction as an opportunity to deploy capital
Exhibit 1: Boosted by strong inflows into income and equity schemes,
August saw |61701 crore net inflow
1000000
1200000
1400000
1600000
1800000
2000000
2200000
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Total AUM
Source: AMFI
Exhibit 2: AUM of Top 10 AMCs
283,523
271,258
235,664
229,233
189,766
154,620
111,758
96,008
80,526
73,691
50000
100000
150000
200000
250000
300000
350000
AUM
Source: ACE MF
Exhibit 3: Fraklin Templeton has highest proportion of equity AUM as
percentage of its AUM
48%
45%
40%
40%
34%
32%
31%
31%
28%
27%
0%
20%
40%
60%
80%
Equity % Debt% Others%
Source: ACE MF. Data as on August 2017
Exhibit 4: Within retail category, equity funds witness significant inflows
in FY17…
-2000
4000
10000
16000
22000
28000
34000
40000
46000
52000
58000
EQ
UITY
BA
LA
NC
ED
OTH
ER
ETFs
ELS
S -
EQ
UITY
GO
LD
ETFs
GILT
FY16
Source: ACE MF. Data as on March 2017
ICICI Securities Ltd. | Retail MF Research
Page 5
MF Category Analysis
Equity funds
Banking funds slipped slightly among sectoral/thematic funds as
infrastructure funds emerged as the best performing category of equity
funds. These categories as well as FMCG funds continued to
outperform information technology (IT) and pharma funds by wide
margins. Pharma funds were in the red to the tune of ~13%
In terms of market cap-based funds, midcap funds continued their
dominance over large cap funds. Overall, midcap funds were among
the best performing equity fund categories on a one year basis
Structural industry-wide problems continue to plague pharma and
technology funds. Pharma stocks delivered a severely disappointing
Q1FY18 amid persistent pressure over pricing, compliance issues and a
fear of shrinking growth in the large US market. H1B visa issues and US
government action fears persisted on overhangs over technology
stocks and consequently, technology funds
Exhibit 5: Banking funds outperform other categories while technology, pharma funds continue to
be under pressure (returns as on September 15, 2017)
S
26.5
24.0
22.8
18.9
17.4
17.0
4.8
-13.1
13.3
14.6
17.9
13.0
14.6
10.9
3.1
2.6
17.3
16.8
26.0
18.8
15.7
16.0
9.6
14.9
-20
-15
-10
-5
0
5
10
15
20
25
30
Infrastructure Banking Mid cap Multi cap FMCG Large Cap Technology Pharma
Returns (%
)
1 year 3 Year 5 year
Source: Crisil, ICICIdirect.com Research ; Returns over one year are compounded annualised returns
Exhibit 6: Strong flows continue into equity and ELSS schemes
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
22000
Aug-1
6
Sep-1
6
Oct-
16
Nov-1
6
Dec-1
6
Jan-1
7
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Jun-1
7
Jul-17
Aug-1
7
Net In
flow
( |
Cr )
Equity + ELSS
Source: AMFI, ICICIdirect.com Research
Exhibit 7: Robust inflow in equity funds pushes up AUM to record high of
| 6.4 lakh crore
350000
400000
450000
500000
550000
600000
650000
700000
Aug-1
6
Sep-1
6
Oct-
16
Nov-1
6
Dec-1
6
Jan-1
7
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Jun-1
7
Jul-17
Aug-1
7
| lakh C
rore
Equity +ELSS
Source: AMFI, ICICIdirect.com Research
Reshuffling of portfolio was seen post Union Budget with
beaten down sectors rallying sharply outperforming
defensive sectors
ICICI Securities Ltd. | Retail MF Research
Page 6
Equity diversified funds
Equity diversified funds have witnessed robust growth over the last
three years, with AUM within each sub-category rising substantially. In
the last three years in FY14-17, the AUM of large cap funds rose 138%,
multi cap funds AUM rose 109% and mid cap funds AUM rose 235%
Over this period, while all three sub-categories have delivered a strong
performance (Exhibit 8), midcap funds have done exceedingly well and
outperformed. This is reflected in the trend of broader indices
outperforming bellwether indices over this time frame. However, large
cap funds have reversed that trend at some points during the past few
months
Multicap funds are relatively more market cap agnostic and hold
positions in a wider range of companies than pure large cap funds or
pure midcap/small cap funds. Multicap funds generally hold around 50-
60% of their portfolio in large cap stocks and 30-40% in midcap stocks.
They have benefited by capturing a part of the midcap rally during this
period and, thus, outperformed pure large cap funds
In the present market scenario, bottom up stock picking across the
market segment is more important than allocation to a particular
segment or sub sector. Multicap funds offer fund managers flexibility to
allocate funds across all market segment and are, therefore, relatively
better placed
Exhibit 8: Robust AUM growth across all equity diversified fund sub-categories from 2014
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
|crs
Large Caps Multi Caps Mid Caps
Source: ACE MF
Recommended funds
Large cap
Birla Sunlife Frontline Equity
ICICI Prudential Focused Bluechip Equity
SBI Bluechip Fund
Multi cap
Franklin India Prima Plus Fund
Kotak Select Focus Fund
Midcap
HDFC Mid-Cap Opportunities Fund
Franklin India Smaller Companies Fund
(Refer to www.icicidirect.com for details of the fund)
View
Short term: Positive
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 7
Equity Infrastructure Funds
Government spending and focused push towards sectors such as
roads, railways, housing and power could lead to greater opportunities
to infrastructure players, apart from the benefit of increased
transparency in the system
A number of infrastructure related government schemes and the
introduction of new regulatory measures are expected to help
organised players in the infrastructure space over the medium to long
term, placing infrastructure and ancillary stocks on an attractive footing
Preferred Picks
Aditya Birla SL Infrastructure Fund Refer
www.icicidirect.com for
details of the fund
L&T Infrastructure Fund
Reliance Diversified Power Sector Fund
Equity Banking Funds
Q1FY18 results showed that operating earnings increased decently.
However, there was no respite from asset quality concerns especially
for PSU banks. Of late, enhanced credit quality concerns and related
haircuts and credit costs apart from slower credit growth have put the
sector under some stress. However, increase in gross NPA of private
sector banks in absolute terms was lower than previous quarters, giving
some respite with further support expected from treasury gains and
sale of non-core assets
We remain optimistic on the banking sector keeping in mind the
anticipated pick-up in credit offtake. Steady margins and peaking out of
the NPA cycle is expected to further aid profitability
From a long term point of view, the continued government push on
financial inclusion is structurally positive for the financial industry.
Demonetisation-led reduction in the black economy, enhanced
awareness and increased usage of digital or electronic payments will be
positives for the banking industry from an operating cost perspective
Preferred Picks
ICICI Prudential Banking & Financial Services Refer to
www.icicidirect.com for
details of the fund
Reliance Banking Fund
UTI Banking Sector Fund
Equity FMCG Funds
Several companies from the consumer-oriented and FMCG space
witnessed GST led destocking impact in Q1FY18. This came on the
back of an improvement due to receding demonetisation-led disruption.
Many companies had reported decent earnings growth with an
improvement in margins and sequential improvement in volume growth
in Q4FY17
We maintain our positive outlook on the FMCG sector backed by the
rural consumption revival led by largely normal monsoons and the
government’s focus on increasing farm incomes. We also expect GST
implementation to eventually provide a big boost to FMCG companies,
particularly those present in personal care and household categories
Preferred Picks
ICICI Prudential FMCG Fund Refer
www.icicidirect.com for
details of the fund
SBI FMCG Fund
View
Short-term: Positive
Long-term: Positive
View
Short-term: Positive
Long-term: Positive
View
Short-term: Positive
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 8
Equity Pharma funds
Q1FY18 was quite poor for pharmaceutical companies on the back of
concerns such as destocking necessitated by GST implementation,
higher-than-expected price pressure in the US generic space, high base
effect and rupee appreciation. Leading players in the US market
continue to face threats from price erosion borne out of intense
competition and client consolidation. Besides, other issues in the US
like pricing probe by the Department of Justice, adapting to the bidding
process and imposition of border tax on imported drugs are other near
term overhangs. An additional headwind for the sector has emerged in
the form of channel disturbances due to GST implementation. Pharma
being a largely export-oriented sector, faces additional pressure from
emergence of a stronger rupee
However, despite these apprehensions, in the long term, we remain
optimistic about the sector’s prospects on the back of attractive
valuations and earnings momentum pick-up led by incremental product
launches in the US besides normalising Indian formulations growth
Preferred Picks
Reliance Pharma Fund Refer to
www.icicidirect.com
for details of the fund
SBI Pharma Fund
UTI-Pharma & Healthcare
Equity Technology Funds
Technology companies report muted results as expected. Subdued
corporate results demonstrate the pain in the technology sector. Future
expectations would be centred around management guidance. In the
short-term, persistent rupee strength, wage hikes and visa costs would
continue to weigh on the sector
We maintain our neutral stance on the sector as the industry faces
challenges related to US immigration rules and growing protectionism
around the world leading to marginal IT spending by companies. The
industry would continue to witness pricing pressure in its traditional
business, which is currently unable to offset newer revenue streams
from digital areas that enjoys higher margins
Preferred Picks
ICICI Prudential Technology Fund Refer to
www.icicidirect.com for
details of the fund
DSPBR Technology fund
View
Short-term: Neutral
Long-term: Neutral
View
Short-term: Neutral
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 9
Exchange Traded Funds (ETF)
In India, three kinds of ETFs are available: Equity index ETFs, liquid
ETFs and gold ETFs
An equity index ETF tracks a particular equity index such as the BSE
Sensex, NSE Nifty, Nifty Junior, etc
An equity index ETF scores higher than index funds on several grounds.
The expense of investing in ETFs is relatively less by 0.50-0.75% in
comparison to an index fund. The expense ratio for equity ETFs is in the
range of 0.05-0.25% while for index funds the expense ratio varies in
the range of 0.50-1.25%. However, brokerage (which varies) is
applicable on ETFs while there are no entry loads now on index funds
Tracking error, which explains extent of deviation of returns from the
underlying index, is usually low in ETFs as it tracks the equity index on
a real time basis whereas it is done only once in a day for index funds
ETFs also provide liquidity as they are traded on stock exchanges and
investors may subscribe or redeem them even on an intra-day basis.
This is unavailable in index funds, which are subscribed/redeemed only
on a closing NAV basis
In August 2015, the Labour Ministry decided to invest 5% of
Employees’ Provident Fund Organisation’s (EPFO) incremental corpus
in ETFs. The investment in equities is split between the Nifty ETF (75%)
and Sensex ETFs 25%. EPFO chose two ETF schemes of SBI Mutual
Fund—SBI ETF Nifty and SBI Sensex ETF
In 2016 the EPFO hiked the limit from 5% to 10% of its incremental
corpus of investment in equities, which was further increased to 15% of
its incremental corpus in May 2017. This is a positive move since
retirement savings, which are long term in nature, will be invested in
equities that have the potential to generate higher returns. So far, EPFO
has invested a total of ~| 22,000 crore in exchange traded funds as of
April 2017
Over 400 ETFs are traded globally. ETFs are transparent and cost
efficient. The decision on which ETF to buy should be largely governed
by the decision on getting exposure to that asset class
Exhibit 9: Sensex/Nifty ETFs receiving consistently higher inflows…
13851190
1866
71
7661009
387
892
1533
940
2830
4349
6748
930
3599
456584
13651753
1513
-1000
0
1000
2000
3000
4000
5000
6000
7000
8000
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Net Inflo
w ( |
Cr )
Source: AMFI, ICICIdirect.com Research
Exhibit 10: …leading to consistent increase in AUM
21698
22740
23943
25211
28834
37412
40147
44436
45899
47584
48359
52823
53734
0
10000
20000
30000
40000
50000
60000
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
| C
rore
Other ETFs
Source: AMFI, ICICIdirect.com Research
Traded volumes should be the major criterion that is used
while deciding on investment in ETFs. Higher volumes
ensure lower spread and better pricing to investors...
Tracking error, though it should be considered, is not the
deciding factor as variation among funds is not huge...
..traded volume should be the major criteria to be
considered while deciding on investment in ETFs.
Higher volumes ensure lower spread and better
pricing to investors...
..tracking error though should be considered but is
not the deciding factors as variation among funds
is not huge...
ICICI Securities Ltd. | Retail MF Research
Page 10
Balanced funds
Balanced funds category continued to receive significant flows, with the
average monthly inflow (net) for 12 months to August 2017 amounting
to ~ | 5600 crore
The AUM of balanced funds has witnessed a stellar increase during this
period, more than doubling to | 128320 crore in August 2017 from
| 53881 crore in the year ago period
Over the last two or three years, the balanced space has emerged as
one of the fastest growing equity categories and offers an ideal gateway
for first time retail equity investors. In FY17, balanced funds AUM
growth outpaced all other categories bar non-gold ETFs
Balanced funds are hybrid funds. More than 65% of the overall portfolio
is invested in equities. Hence, as per provisions of the Income Tax Act,
1961, any capital gains over a year become tax free. Also, dividends
declared by funds are tax free in the hands of the investor
In case one separately invests 35% of one’s investible corpus in a debt
fund, the same will be subject to higher taxation. However, if the whole
corpus is invested in balanced funds, 100% shall have lower taxation
applicable as mentioned above. Thus, balanced funds offer the benefit
of equity taxation on debt component
After a sharp rally in equity markets, the funds can be a preferred
investment avenue as the debt proportion serves to protect on
intermediate relief rallies or the downturn while providing minimum
65% participation on further upsides
Exhibit 11: Strong inflow into balanced funds
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Aug-15
Oct-15
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Net Inflo
w ( |
Cr )
Source: AMFI, ICICIdirect.com Research
Exhibit 12: YoY 138% growth in AUM of balanced funds
53881
56816
61107
62907
64954
71021
77126
84763
93530
102156
109513
121243
128320
13000
33000
53000
73000
93000
113000
133000
153000
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
| C
rore
Balanced
Source: AMFI, ICICIdirect.com Research
Preferred Picks
ICICI Prudential Balanced Fund
HDFC Balanced Fund
Birla Sun Life Balanced 95 Fund
DSP Blackrock Balanced Fund
L&T India Prudence Fund
(Refer to www.icicidirect.com for details of the fund)
Investors with a limited investible surplus and a lower risk
appetite but with a willingness to invest in equities can
look to invest in these funds
View
Short-term: Positive
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 11
Monthly Income Plans (MIP)
An MIP offers investors an option to invest in debt with some
participation in equity, ~10-25% of the portfolio. They are suitable for
investors who seek higher returns from a debt portfolio and are
comfortable taking nominal risk. The debt corpus of the portfolio
provides regular income while the equity portion of the fund provides
alpha. However, returns can also get eroded by a fall in equities
MIPs can be classified into aggressive MIP and conservative MIP based
on its equity allocation. Risk averse investors should invest in MIPs with
lower equity allocation to avoid capital erosion
The change in taxation announced in the Union Budget 2014, shall be
applicable to MIP funds (refer to debt funds section for details)
Preferred Picks
Aditya Birla Sun Life MIP II - Wealth 25 Plan
ICICI Prudential MIP 25
SBI Magnum MIP Fund
SBI Magnum MIP Floater Fund
(Refer www.icicidirect.com for details of the fund)
Arbitrage Funds
Arbitrage funds seek to exploit market inefficiencies that get manifested
as mispricing in the cash (stock) and derivative markets
Availability of arbitrage positions depends very much on the market
scenario. A directional movement in the broader index attracts
speculators in the market while cost of funding makes futures positions
biased
Arbitrage funds are classified as equity funds as they invest into equity
share and equity derivative instruments. Since these are classified as
equity funds for taxation, dividends declared by the funds are tax free.
No capital gains tax will be applicable if they are sold after a year
These funds can be looked upon as an alternative to liquid funds.
However, for these funds, returns totally depend on arbitrage
opportunities available at a particular point of time and investors should
consider reviewing the same before investing. Returns of arbitrage
funds are non-linear and, therefore, unsuitable for investors who want
consistent return across time period
Arbitrage funds should be used as a liquid investment and should not
be a major part of the investor’s portfolio. A range bound market does
not give ample room to create arbitrage positions
Preferred Picks
ICICI Prudential Equity - Arbitrage Fund – Regular
IDFC Arbitrage Fund - (Regular)
Kotak Equity Arbitrage Fund
SBI Arbitrage Opportunities Fund
(Refer to www.icicidirect.com for details of the fund)
View
Short-term: Neutral
Long-term: Positive
View
Short-term: Neutral
Long-term: Neutral
MIP should be a preferred debt investment for funds that
need to be parked for over two years
ICICI Securities Ltd. | Retail MF Research
Page 12
Debt funds
Exhibit 13: Category average returns
3.1
10.5
8.4
8.8
7.8 8
.8
10.1
7.8
9.8
7.6
7.3
8.1
6.3
6.3
7.4
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
6 months 1 year 3year
%
Gilt Funds Income LT Income ST Income UST Liquid
Source: ACE MF, ICICIdirect.com Research
Note : Returns as on September 15, 2017; All returns are compounded annualised
Exhibit 14: G-sec yield curve
6.24
6.34
6.506.52
6.25
6.34
6.52
6.56
6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
1yr 3yr 5yr 10yr
Yie
ld (%
)
12-Sep-17 14-Aug-17
Source: Bloomberg, ICICIdirect.com Research
Exhibit 15: Corporate bond curve
6.81
7.11
7.30
7.60
6.97
7.13
7.33
7.63
6.4
6.8
7.2
7.6
8.0
1yr 3yr 5yr 10 yr
Yie
ld (%
)
12-Sep-17 14-Aug-17
Source: Bloomberg, ICICIdirect.com Research
Benchmark 10 year G-Sec has witnessed yields
softening by ~45-50 bps since the end of April
Interest rates moved up across G-Sec and corporate bond
category
ICICI Securities Ltd. | Retail MF Research
Page 13
Liquid Funds
Yields on money market instruments viz. less than one year CDs and
CPs in which liquid fund predominantly invest, remain stable at lower
levels due to ample liquidity
In an uncertain environment, liquid funds remain well placed to park
money with low volatility
For less than a year, individuals in the higher tax bracket should opt for
dividend option as the dividend distribution tax @ 28.325% is
marginally lower. Also, though the tax arbitrage has reduced, they still
earn better pre-tax returns over bank savings (3-4%) and current
accounts (0-3%)
Changes in taxation rules announced in Union Budget 2014 are also
applicable to liquid funds, as post tax returns in less than a three-year
period get reduced for individuals in the higher tax bracket (30% tax
slab) and for corporate
Exhibit 16: Call rates below repo rate
5
5.4
5.8
6.2
6.6
7
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
%
Call rate
Source: Bloomberg, ICICIdirect.com Research
Exhibit 17: CP/CD yields
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
%3M CD 3M CP
Source: Bloomberg, ICICIdirect.com Research
Exhibit 18: Flows into liquid funds remain volatile on institutional activity
-13182
19630
-34,813
1,350
26,943
10,541
8,227
-15,147
99,403
-64,692
-12,739
-19,511
21,352
-200,000
-160,000
-120,000
-80,000
-40,000
0
40,000
80,000
120,000
160,000
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Net Inflo
w ( |
Cr )
Source: AMFI, ICICIdirect.com Research
Exhibit 19: AUM remains healthy
467418
468022
484802
468668
469675
496696
520020
543541
568770
583557
591377
629456
643926
300000
400000
500000
600000
700000
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
| lakh C
rore
Money Market
Source: AMFI, ICICIdirect.com Research
Preferred Picks
HDFC Cash Management Fund - Savings Plan
SBI Magnum InstaCash
Reliance Liquid Fund - Treasury Plan
(Refer to www.icicidirect.com for details of the fund)
View
Neutral
ICICI Securities Ltd. | Retail MF Research
Page 14
Income funds
RBI eased policy rates by 25 bps while maintaining neutral stance in its
August 2 policy meet. This followed three consecutive months of lower
than anticipated inflation readings, seemingly bottoming out at 1.54%
headline CPI in June. Policy meeting minutes released later were
somewhat hawkish with regards to future inflation path, highlighting
aspects such as farm loan waiver linked fiscal indiscipline risk, firming
household inflation expectations, rising vegetable prices and receding
base effect as upside risks. Further CPI readings in July (2.36%YoY) and
August (3.36% YoY) displayed a rebound from June levels led by rise in
food prices and percolation effects of GST and HRA implementation for
government employees. Core inflation rise during this time could
provide cause for the RBI to maintain status quo on interest rates at its
October meeting. The RBI has projected inflation to range from 2.0-
3.5% for H1FY18 and from 3.5-4.5% for H2FY18. The benchmark 10
year G-sec yield witnessed some pressure over the last six weeks,
climbing by ~15 bps from end-July levels to ~6.59% (September 14)
Dynamic bond funds or short-term funds with some dynamic allocation
to G-Sec should be preferred over pure G-Sec funds or long-term
duration funds
Short-term debt funds remain a stable performing category, especially
in the current volatile environment. Credit funds with reasonable credit
quality should be preferred over an aggressive credit fund
Exhibit 20: Income funds witness significant outflow in June
12,6
71
-26,7
17 2
2,8
75
2,4
74
-25,8
75
15,0
14
-925
-14,0
48
31,4
48
5,6
88
1,6
97
43,9
13
28,4
57
-11,0
24
52,1
25
18,3
06
-33,1
82
28,5
88
10,8
64
-56,2
47
34,6
47
5,1
24
-20,6
85
60,0
84
8,3
90
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
Aug-1
5
Nov-1
5
Feb-1
6
May-1
6
Aug-1
6
Nov-1
6
Feb-1
7
May-1
7
Aug-1
7
Net In
flow
s
(| .C
r)
Source: AMFI, ICICIdirect.com Research
Exhibit 21: AUM remains stable on consistent inflows 704240
698418
754662
784305
748071
783778
794679
743783
780797
792734
778266
845484
858188
400000
500000
600000
700000
800000
900000
Aug-1
6
Sep-1
6
Oct-
16
Nov-1
6
Dec-1
6
Jan-1
7
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Jun-1
7
Jul-17
Aug-1
7
| C
rore
Income
Source: AMFI, ICICIdirect.com Research
Recommended funds
Ultra Short Term Funds
Birla Sun Life Savings Fund
ICICI Prudential Flexible income
Short Term Funds
Birla Sunlife short term fund
HDFC Short Term Fund
ICICI Pru Short Term Plan
Short Term Funds – Credit opportunities
Birla Sunlife Short Term opportunities term
HDFC Corporate debt opportunities
ICICI Prudential Regular Savings
Long term/Dynamic
Birla Sunlife income plus
ICICI Prudential Dynamic Bond Fund
IDFC dynamic bond fund
(Refer www.icicidirect.com for details of the fund)
View
Ultra-short term: Neutral
Short-term: Positive
Long-term: Neutral
ICICI Securities Ltd. | Retail MF Research
Page 15
Gilt Funds
Yield on the benchmark 10 year government bond had hardened
appreciably post the shift in RBI’s monetary policy stance from
‘accommodative to ‘neutral’. Softer than expected inflation prints in
April, May and June combined with strong institutional flows into debt
markets combined to push down benchmark 10 year G-sec yield by
~45-50 points in the period from May-July. However, the markets were
not overly enthused by August rate cut as it was widely expected. A
significant rebound in July and August CPI readings was followed by
rise in yields by ~15 bps to 6.6%. The yield at 6.53% currently is up ~9
bps YTD. It briefly tested 6.95% at end-April
RBI eased policy rates by 25 bps while maintaining neutral stance in its
August 2 policy meet. This followed three consecutive months of lower
than anticipated inflation readings, seemingly bottoming out at 1.54%
headline CPI in June. Policy meeting minutes released later were
somewhat hawkish with regards to future inflation path, highlighting
aspects such as farm loan waiver linked fiscal indiscipline risk, firming
household inflation expectations, rising vegetable prices and receding
base effect as upside risks. Further CPI readings in July (2.36%YoY) and
August (3.36% YoY) displayed a rebound from June levels led by rise in
food prices and percolation effects of GST and HRA implementation for
government employees. Core inflation rise during this time could
provide cause for the RBI to maintain status quo on interest rates at its
October meeting. The RBI has projected inflation to range from 2.0-
3.5% for H1FY18 and from 3.5-4.5% for H2FY18.
Allocation to pure G-Sec or duration funds should be avoided given
their historical outperformance and G-Sec yield trading at the lower end
of its historical range
Historically, it has been observed that years of good returns in G-sec
are followed by lower returns
Exhibit 22: Historical trend in return from G-Sec indicates, going forward, returns likely to be lower
-15
-10
-5
0
5
10
15
20
25
30
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 Y
TD
Crisil 10 Yr Gilt Index returns (calendar year)
%
Source: ACE MF
Preferred Picks
Aditya Birla Sun Life Gilt Plus – PF Plan
ICICI Pru LT Gilt Fund – PF Option
(Refer to www.icicidirect.com for details of the fund)
Allocation to pure G-Sec or duration funds should be
avoided given their historical outperformance and G-sec
yield trading at the lower end of its historical range. Crisil
10 year Gilt index has delivered 38% return in the last
three years. It is likely the return will be significantly
lower, going forward
View
Short-term: Neutral
Long-term: Neutral
ICICI Securities Ltd. | Retail MF Research
Page 16
Gold: Under the spotlight due to geopolitical worries
Global prices had a positive run in August. Starting from a base of
~US$1268 per ounce, they broke out towards US$1300 per ounce
towards the end of August and ended the month sharply higher at
~US$1321 per ounce, a 2017 high. The metal gained further in early
September, touching ~US$1349 per ounce on September 7 before
consolidating towards ~US$1321 per ounce on September 15. This
represents a ~14.6% YTD return
The strong rupee appreciation during this period of ~5.7% has
prevented similar gains in Indian gold prices. Domestic rise has been
limited to just ~7.7% YTD as of September 14
Investor interest in the metal spiked during August amid rising
geopolitical tensions surrounding North Korea and the US. Safe haven
buying combined with weakness in the US Dollar Index lent support to
gold prices
Gold has historically been looked at as a relatively risk-free asset. Its
price movement both in India and globally, is impacted by any actual or
perceived risk build-up on economic, political or natural fronts. The US
Dollar Index slid for most of August and further still in September,
touching a low of 91.12 on September 14. Dollar softness leads to a rise
in gold prices as the metal is denominated in that currency.
Marginal easing in geopolitical tensions seem to have capped the
downside for gold prices. However, any deterioration in international
equations could spark further strength
The Fed last hiked rates in June and held fire in July, with the outcome
of the next meeting on September 20 being the immediate event to
watch with regards to gold price direction. The pace of further hikes
could be gradual in the face of consistent below expectation readings of
US inflation data.
The medium-term outlook would remain largely anchored to
developments on the Fed front. The markets are discounting the three
expected rate hikes in 2017. Any deviation from this path, whether on
the back of difficulty in achieving US medium term inflation target or
otherwise, could affect prices
Exhibit 23: Gold prices rally sharply on global geopolitical concerns
1100
1200
1300
1400
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Price ($/ounce)
Source: Bloomberg, ICICIdirect.com Research
Exhibit 24: Indian prices rise relatively less due to currency appreciation
26000
28000
30000
32000
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Price (|/10 grams)
Source: Bloomberg, ICICIdirect.com Research
ICICI Securities Ltd. | Retail MF Research
Page 17
Model Portfolios
Equity funds model portfolio
Investors who are wary of investing directly into equities can still get
returns almost as good as equity markets through the mutual fund route.
We have designed three mutual fund model portfolios, namely,
conservative, moderate and aggressive mutual fund portfolios. These
portfolios have been designed keeping in mind various key parameters like
investment horizon, investment objective, scheme ratings, and fund
management.
Exhibit 25: Equity model portfolio
Particulars Aggressive Moderate Conservative
Review Interval Monthly Monthly Quarterly
Risk Return High Risk- High
Return
Medium Risk -
Medium Return
Low Risk - Low
Return
Funds Allocation % Allocation
Franklin India Prima Plus 20 20 20
Birla Sunlife Frontline Equity - 20 20
ICICI Prudential Dynamic Plan - - 20
SBI Bluechip Fund 20 20 20
Kotak Select Focus Fund 20 20 -
HDFC Midcap Opportunities 20 10 -
Franklin India High Growth Companies Fund 20 - -
Birla SL Dynamic Bond Fund - 10 20
Total 100 100 100
Source: ICICIdirect.com Research
Exhibit 26: Model portfolio performance: One year performance (as on Augsut 31, 2017)
15.0%
14.0%
12.6%
15.3%
10%
11%
12%
13%
14%
15%
16%
Aggressive Moderate Conservative BSE 100
%
Aggressive Moderate Conservative BSE 100
Source: Crisil Fund Analyser, ICICIdirect.com Research
ICICI Securities Ltd. | Retail MF Research
Page 18
Debt funds model portfolio
We have designed three different mutual fund model portfolios for different
investment duration viz. less than six months, six months to one year and
above one year. These portfolios have been designed keeping in mind
various key parameters like investment horizon, interest rate scenarios,
credit quality of the portfolio and fund management, etc.
Exhibit 27: Debt funds model portfolio
Particulars
0 – 6 months 6months - 1 Year Above 1 Year
Objective Liquidity
Liquidity with
moderate return Above FD
Review Interval Monthly Monthly Quarterly
Risk Return
Very Low Risk -
Nominal Return
Medium Risk -
Medium Return
Low Risk - High
Return
Funds Allocation
Ultra Short term Funds
Birla SL Savings Fund 20
ICICI Pru Flexible Income Plan 20
Short Term Debt Funds
Axis Regular Savings Fund 20
Birla Sunlife Short Term Fund 20 20
Birla Sunlife Short Term Opportunites Fund 20 20
Reliance Regular Savings Fund 20
HDFC Short Term Opportunities Fund 20 20
ICICI Prudential Regular Savings 20
ICICI Prudential Short Term Fund 20
IDFC SSI Short Term 20
UTI Short Term Income Fund 20
HDFC Corporate Debt opportunities fund 20
Total 100 100 100
Time Horizon
% Allocation
Source: ICICIdirect.com Research
Exhibit 32: Model portfolio performance: One year performance (as on August 31, 2017)
8.10
8.90 8.80
7.20
8.40
9.00
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0-6 Months 6Months - 1Year Above 1yr
%
Portfolio Index
Source: Crisil Fund Analyser, ICICIdirect.com Research
*Index: 0-6 month’s portfolio – Crisil Liquid Fund Index; 6 months-1 year – Blended Index with 50% weight to Crisil
Liquid Index, 50% weight to Crisil Short Term Index; Above 1 year: Crisil Short Term Index
ICICI Securities Ltd. | Retail MF Research
Page 19
Top Picks
Exhibit 33: Category wise top picks
Largecaps Birla Sun life Frontline Equity Fund
ICICI Pru Focused Bluechip Fund
SBI Bluechip Fund
Midcaps HDFC Midcap Opportunities Fund
Franklin India Smaller Companies Fund
Multicaps Franklin India Prima Plus Fund
Kotak Select Focus Fund
ELSS Axis Long Term Equity Fund
ICICI Pru Tax Plan
Reliance Tax Saver Fund
Franklin India Taxshield
Balanced HDFC Balanced Fund
ICICI Pru Balanced Fund
Birla Sun Life Balanced 95 Fund
DSP Blackrock Balanced Fund
L&T India Prudence Fund
Liquid HDFC Cash Mgmnt Saving Plan
ICICI Pru Liquid Plan
Reliance Liquid Treasury Plan
Ultra Short term Birla Sunlife Savings Fund
ICICI Pru Flexible Income Plan
UTI Treasury Advantage Fund-Inst
Short term Birla SL Short term Fund
HDFC Medium Term opportunities Fund
Kotak Banking and PSU Debt Fund
Credit Opportunities Axis Regular Savings Fund
Birla Sun Life Medium Term Plan
L&T Short Term Income Fund
Income Funds ICICI Pru Income Fund
Birla SL Income Plus - Regular Plan
IDFC Dynamic Bond Fund
Equity Funds & Equity-oriented Funds
Debt Funds
(Refer www.icicidirect.com for details of the fund)
ICICI Securities Ltd. | Retail MF Research
Page 20
Pankaj Pandey Head – Research [email protected]
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st
Floor, Akruti Trade Centre,
Road No. 7, MIDC,
Andheri (East)
Mumbai – 400 093
Disclaimer
ANALYST CERTIFICATION
We, Sachin Jain, CA, and Jaimin Desai, CA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect
our views about the subject issuer(s) or Funds. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.
Terms & conditions and other disclosures:
ICICI Securities Limited (ICICI Securities) AMFI Regn. No.: ARN-0845. ICICI Securities Limited is a SEBI registered Research Analyst with SEBI Registration Number – INH000000990.Registered office of I-
Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate,Mumbai - 400020, India. ICICI Securities is a full-service, integrated investment banking and is, inter alia, engaged in the
business of stock broking and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries
engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, distribution of financial products etc. (“associates”), the details in
respect of which are available on www.icicibank.com.
ICICI Securities is one of the leading distributors of Mutual Funds and participate in distribution of Mutual Fund Schemes of almost all AMCs in India.
The selection of the Mutual Funds for the purpose of including in the indicative portfolio does not in any way constitute any recommendation by ICICI Securities Limited (hereinafter referred to as ICICI
Securities) with respect to the prospects or performance of these Mutual Funds. The investor has the discretion to buy all or any of the Mutual Fund units forming part of any of the indicative portfolios
on icicidirect.com. Before placing an order to buy the funds forming part of the indicative portfolio, the investor has the discretion to deselect any of the units, which he does not wish to buy. Nothing in
the indicative portfolio constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to the investor's specific circumstances.
The details included in the indicative portfolio are based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its
accuracy or completeness guaranteed. The funds included in the indicative portfolio may not be suitable for all investors, who must make their own investment decisions, based on their own
investment objectives, financial positions and needs.
This may not be taken in substitution for the exercise of independent judgement by any investor. The investor should independently evaluate the investment risks. ICICI Securities and affiliates accept
no liabilities for any loss or damage of any kind arising out of the use of this indicative portfolio.
Past performance is not necessarily a guide to future performance. Actual results may differ materially from those set forth in projections. ICICI Securities may be holding all or any of the units included
in the indicative portfolio from time to time as part of our treasury management. ICICI Securities Limited is not providing the service of Portfolio Management Services (Discretionary or Non
Discretionary) to its clients.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Kindly note that such research recommended funds in indicative portfolio are not based on individual risk profile of each customer unless a customer has opted for a paid Investment Advisory Service
offered by I-Sec.
Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
The information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any
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thereon. This mail/report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where
such distribution, publication, availability or use would be contrary to law, regulation or which would subject I-Sec and affiliates to any registration or licensing requirement within such jurisdiction.
ICICI Securities and/or its associates receive compensation/ commission for distribution of Mutual Funds from various Asset Management Companies (AMCs). ICICI Securities host the details of the
commission rates earned by ICICI Securities from Mutual Fund houses on our website www.icicidirect.com. Hence, ICICI Securities or its associates may have received compensation from AMCs
whose funds are mentioned in the report during the period preceding twelve months from the date of this report for distribution of Mutual Funds or for providing marketing advertising support to these
AMCs. ICICI Securities also provides stock broking services to institutional clients including AMCs. Hence, ICICI Securities may have received brokerage for security transactions done by any of the
above AMCs during the period preceding twelve months from the date of this report.
ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive
any compensation or other benefits from the AMCs whose funds are mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities
nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report.
It is confirmed that Sachin Jain, CA, and Jaimin Desai, CA, Research Analysts of this report have not received any compensation from the Mutual Funds house whose funds are mentioned in the report
in the preceding twelve months.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
ICICI Securities or is associates may be holding all or any of the units included in the indicative portfolio from time to time as part of our treasury management. Hence, ICICI Securities or its associates
may own 1% or more of the units of the Mutual Funds mentioned in the report as of the last day of the month preceding the publication of the research report.
Research Analysts or their relatives of this report do not own 1% or more of the units of the Mutual Funds mentioned in the report as of the last day of the month preceding the publication of the
research report.
Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies/ AMCs including the AMCs
whose funds are mentioned in this report or may have invested in the funds mentioned in this report .
ICICI Securities also distributes Mutual Fund Schemes of ICICI Prudential Asset Management Company which is an ICICI Group Company, scheme details of which might also be appearing in the report
above. However, the transactions are executed at Client's sole discretion and Clients make their own investment decisions, based on their own investment objectives, financial positions and needs..
It is confirmed that Sachin Jain, Research Analysts do not serve as an officer, director or employee of the AMCs whose funds mentioned in the report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies/funds mentioned in the report.
We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Research Analysis activities.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such
distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction.
The funds
described herein may or may not be eligible for subscription in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform
themselves of and to observe such restriction.