MF POINTER

The fiscal budget 2010 brought in many positive surprises and the rally in the market has reflected it since the Budget day. In the last month, the Sensex touched a bottom of 15,790 due to negative global cues and others domestic concern over rising inflation and pre-budget sentiments on stimulus withdrawal. Presently the Sensex is at 17,100 (+8.30% up). Uncertain market conditions and the stretched valuations are the concerns of the Indian equity markets. Realty, FMCG, Bankex, Automobile and Consumer Durables indices were gainers and small-cap & mid-cap outstripped the large-cap during the first 10 days of March 2010.

Not much was expected in the budget on the personal tax front as the Direct Tax Code (DTC) was to be implemented from 1 April, 2011, yet the Finance Minister offered sops for the individual taxpayer. The basic exemption limit has remained same at Rs.1.6 lakh, however, the 10% tax slab is extended upto Rs. 5 lakh. Similarly, the 20% tax slab will now apply on income beyond Rs 5 lakh and upto Rs.8 lakh. The maximum tax rate of 30% will be charged on an income slab of above Rs.8 lakh. Furthermore an additional deduction of Rs.20,000/- has been proposed for investments made in notified long term infrastructure bonds under section 80 CCF. This is in addition to the deduction available under section 80C of Rs.1 lakh. This would result in an additional cashflow of maximum Rs.58,710 in the hands of the taxpayer.

The FIIs inflows have picked up once again. As per reports, they have purchased Indian stocks worth Rs. 10,243 crores in

the first few days of March'10 itself as against Rs.1,216 crores for the entire month of February 2010.

IIP growth accelerated to 16.7% YoY in January, reaffirming the view of a sustainable recovery for the economy. Exports recorded a

11.5% (YoY) growth to USD 14.34 billion in Jan 2010, while imports grew by 35.5% widening the trade deficit to USD 10.36 billion compared

with USD 5.36 billion a year ago.

The country of Fiji is made up of 332 islands.DID

YOU KNOW ?

D D

Y U KN W ?

I

O O

Let insurance BATTLE Medical Expenditure !!

Page 1 of 8March 2010

Issue - 52

March’ 2010

“So many people spend their health gaining wealth, and then have to spend their wealth

to regain their health.” - A.J. Reb Materi

Smart investing starts here

(continued on page 3)

Page 2 of 8March 2010 Smart investing starts here

MF POINTER

Fixed Maturity Plans (FMPs) are back!!

4.20% - 4.55%

üOffers better post tax returns than Bank FDüDouble Indexation* benefit offers almost TAX-FREE returns

7.25%

*Double Indexation benefit can be availed by keeping investment across three financial years. For example, investment on 20 March 2010, for just 13 months is also eligible for double indexation as redemption will come in the year 2012.

Taxation plays very important role while selecting FDs and FMPs…1 year FDs are offering @ 6.00% - 6.50% p.a.

Post tax return of Bank FDs (@30% tax) =

Post-Tax returns of FMPs = Approx. (due to double

indexation benefit and tax returns will remain same).

FMPs Vs Bank FD

Pre-Tax &

pre post

155.80%

105.74 % p.a.

Rs.2,558/-

This is the highest return from Tax saving mutual fund in the last one year, while Sensex posted as on 12th March 2010.

Investment of Rs.1000/- has become in the last 1 year.

Did you know this?

Medical Expenses can severely dent your WALLET…

Health Insurance - Time Scale

Have YOU planned for it?

Start early as premium will be less and can be continued till old age, wherein the actual need may arise. In fact, do not start investments before you have a

mediclaim for your family.

MF POINTER

Page 3 of 8March 2010

On the fiscal consolidation front , the government plans to trim the fiscal deficit from 6.9% of GDP in FY10 to Budget estimate of 5.5% (Rs.3,81,408 cr.) in FY11 to 4.8% & 4.1% by FY12, FY13. GDP growth is estimated to accelerate to 8% and above by FY11 compared with 7.2-7.5% growth this financial year.

Currently, 10 year Government securities yield has risen sharply to 7.99% hitting its 17 month high. The government borrowing program, hike in fuel prices supported by rise in excise duty on oil product may further push the yield beyond 8%. WPI inflation is at the level of 9.89% and food price inflation has spiked to 17.87%. The central bank is widely expected to raise borrowing rates at its next policy review given that inflation has already

BSE Indices PerformanceAbsolute % CAGR %

Index Name Index 1 3 6 1 3 5 10

Level Month Months Months Year Years Years Years

BSE AUTO 7,573

BSE BANKEX 10,341

BSE Capital Goods 13,784

BSE Consumer 4,144

BSE FMCG 2,795

BSE Health Care 5,061

BSE IT 5,338

BSE METAL 17,272

BSE MIDCAP 6,701

BSE OIL & GAS 9,827

BSE Power 3,050

BSE PSU 9,072

BSE Realty 3,388

BSE SMALLCAP 8,433

BSE TECk 3,295

BSE-100 9,116

BSE-200 2,157

BSE-500 6,789

BSE SENSEX 17,167

S&P CNX Nifty 5,137

As on 12th March 2010

8.75 5.19 25.57 180.96 15.62 21.85 22.88

9.94 2.33 16.04 175.46 16.91 20.03 -

6.05 3.86 147.80 16.36 32.14 34.29

2.66 16.74 22.80 185.28 5.25 21.13 12.75

2.17 11.26 51.63 18.83 20.81 9.35

6.01 2.60 28.69 98.47 13.17 13.19 12.96

6.35 8.94 22.19 157.45 2.19 14.57

10.46 5.19 28.33 278.23 28.46 20.10 29.94

2.94 1.92 13.16 161.30 8.28 15.40 -

0.15 69.00 16.91 24.44 -

2.28 2.95 87.86 16.77 23.34 -

5.80 92.00 17.43 14.53 22.69

0.10 158.74 0.66

1.56 5.82 18.75 193.07 10.09 16.40 -

3.68 4.29 4.53 101.65 13.23

5.76 0.46 7.59 114.64 12.07 19.75 11.13

5.35 0.66 8.71 119.83 12.19 18.51 12.28

5.03 1.11 9.39 123.68 11.74 18.47 12.59

6.28 0.28 5.55 105.74 9.98 20.13 12.45

6.43 0.38 6.37 96.26 11.20 18.96 12.34

-0.68

-1.89

-2.81

-5.23 -3.99

-0.07

-2.35 -2.52

-13.63 -20.22 -14.68 -1.73

-2.59 -2.68

Durables

topped its revised end-March forecast of 8.5%. In such a scenario where interest rate outlook looks uncertain, investors can seek to minimize interest rate risk by investing for a specified fixed investment horizon and can choose Fixed Maturity Plans (FMPs) with double indexation benefit.

This time our endeavor is to put light on the HEALTH INSURANCE, considering the need for every Indian to go for mediclaim insurance, as the cost of medical services is rising at an alarming rate and still more than 85% of the population is uninsured. We hope you find the article interesting.

Happy Investing!!

Juzer Gabajiwala

Smart investing starts here

MF POINTER

Page 4 of 8March 2010 Smart investing starts here

Let insurance BATTLE Medical Expenditure !!

Our endeavor is to make everyone conscious of the health insurance need, as 85% of the Indian population is still under-insured and are unaware of the basic purpose and objective behind the insurance products. We will explore and weigh the pros of health insurance from various perspectives in this article. There are no cons.

Why Health insurance?

1. Uncertain and unexpected nature of medical emergencies: Medical emergencies do not come by knocking at your door, they always come unexpectedly and if we get caught unprepared, they leave us financially as well as physically & mentally drained. The vagaries of an urban life makes us extremely prone to numerous health hazards including increase in accidents; new diseases (H1N1) which require hospitalization and stress related causes. Health Insurance would meet the financial aspect of the cost.

2. Lack of planning for medical expenses: We plan for our children's education; marriage; buying a house; retirement etc. but unfortunately none of us want to plan for the medical expenses which may happen during our old-age. Moreover, we think that we are healthy presently, but forget that with increasing age, we are also prone to a lot of medical challenges. In fact all insurance companies love to insure people who are less than 40 at which time we want to ignore and when we are above 55 we want medical insurance, and at that time no insurance company would want to insure us. This is the IRONY.

3. Rising Medical Costs: Medical costs are rising at 15-20% y-o-y. For example, a by-pass surgery which was costing Rs.2 lakh in 2005, now costs Rs.5 lakh minimum; a 20% compounded annualized growth. At this rate in the next 5 years the costs will be around Rs.10-12 lakh. 90% of hospitalisation expenses are paid out of pocket by breaking savings, borrowings or sale of assets. Why get into all such last minute hassles? Why not our loved ones get treated at the best hospital immediately when needed and we stand by them to support and not run helter-skelter to arrange for funding the bill?

4. Changing disease profiles: Sedentary lifestyle and hectic work schedule are causing disorders and the diseases which were common in old age to now being witnessed in the younger age. Blood pressure, arthritis, cardiac and diabetes are some glaring examples. We are sure you have been reading enough in the newspapers on how many people are suffering heart attacks and this does not require much detailing.

MF POINTER

Page 5 of 8March 2010 Smart investing starts here

Randhir (salary Rs. 80,000 p.m.) & Sameer (salary Rs. 25,000 p.m.) have a passion to eat out once a week. Randhir would go to a fancy restaurant but Sameer would go to a slightly reasonable place based on his affordability.

However, when it comes to a medical emergency, we want the best treatment for our near

and dear ones irrespective of the level of income. In the above example, both Randhir and

Sameer would go to the best hospital for treatment of their near & dear ones.

When it comes to medical costs of our FAMILY, there is NO COMPROMISE!!

Cost-Benefit Analysis –

üBy paying a premium of Rs.11,900 p.a., you can get an insurance cover of Rs.10 lakh.

üEffective cost of Mediclaim* - Rs.8,223

üPremium as a %age of sum insured - Just 0.82%.

üIf you pay premium till the age 70, you will pay Rs.6,60,100 and effectively Rs.

5,25,850 (post tax saving).

üMultiple claims of Rs. 10 lakh are possible during the span of 30 yrs.

üEven if we consider ONLY ONE claim of Rs. 10 lakh, we are better off. Isn't it?

* Tax Saving is assumed at highest tax slab i.e. 30.90%. Tax deduction u/s 80 D is upto Rs. 15,000 premium.The illustration is based on Bajaj Allianz - Health Guard (This example is for a 41 year old man)

Points to Ponder:

üHeart attacks are now caused at the age of 35 years. Even diabetes & other stress

related diseases are on the increase.

üWhy not let an Insurance Company pay for it? You can use your money for other purposes.

üShould Mediclaim NOT be a part of your monthly expense & a necessity?

üCost of Medial Insurance is LESS THAN Rs.800 per month

üWhen you need it, the Insurance Company may not want to insure you.

üCompany mediclaim may not be sufficient and does not cover once you leave or retire.

üChildren are also prone to many illnesses and accidents.

üYou need to plan as early as possible for medical expenses which you could incur in the

late 50s or 60s. As you grow old, the possibility of diseases to occur increases, which

may get excluded from your cover under the 'pre-existing' disease clause.

Always remember; never look for cheap mediclaim policy. If needed pay extra, but get the

best mediclaim policy having good claim settlement ratio, otherwise it is sheer waste of

money. Sometimes cheap may not be the best.

Let insurance BATTLE the expenditure of medical treatment!!

Health Insurance is cheap BUY IT !!

ü

Mr. Randhir Mr. Sameer

Would you like to COMPROMISE?

Let us understand this with an example of 2 individuals with different earnings.

MF POINTER

Page 6 of 8March 2010 Smart investing starts here

HDFC Equity Fund

NAV Growth (G) Rs.230.48 (10/03/10) Month Rs. Crs

NAV – Dividend (D) Rs.46.27 (10/03/10) Feb, 2010 5,632

52-Week High (G) Rs.236.92 (18/01/10) Jan, 2010 5,400

52-Week Low (G) Rs.91.42 (12/03/09) Dec, 2009 5,396

Inception Date January 1995 Nov, 2009 5,185

Fund type Diversified Equity Statistics#

Minimum Investment Rs.5,000 (For Lumpsum) Std. Deviation 22.63%

Rs.500 (For SIP) Beta 1.007

Fund Manager Mr. Prashant Jain Sharpe Ratio 0.27

Benchmark S&P CNX 500 R – Squared 0.97

Entry Load Nil Portfolio T/O 90.83%

Exit Load 1% for redemption within 1 yearExpense Ratio 1.83%

# Basis for Ratio Calculation: 3 year quarterly data; Risk free return: 5%

–

Highlights:

BUYAUM Trend

Return Performance as on 10 March 2010

Holding Period Fund (%) Benchmark (%) Nifty (%)

6 Months

1 Year

3 Years

Since Inception

17.32 8.45 6.16

152.65 116.27 98.83

18.60 11.75 11.23

22.88 N.A. 10.19*Return upto 1 year are absolute & more than 1 year are compounded annualised.

Scheme Analysis: Performance: This is one of the best performing funds from the HDFC Mutual Fund's stable. It has generated 152% absolute return in the last one year and 23% compounded annualized return since inception, against 10% of Nifty.Focus: This fund is overweight on Banking, Pharma and Information Technology sector with almost 97% exposure to equity across 61 companies and 33 sectors with a largecap bias.Portfolio Churning: In the last 6 months portfolio has entered into 13 new stocks and completely exited from 7 stocks. Fund Manager completely exited from the Telecommunication sector in September,09 itself and increased holding in Gas Transmission and Oil exploration sector. The 48 stocks which were in the portfolio in the last 6 months, contributed Rs. 589 crores headed by Titan Industries Ltd. (atleast Rs. 55 crores), followed by Bank Of Baroda Ltd (atleast Rs. 54 crores) and ICICI Bank Ltd. (atleast Rs. 42 crores). In the last 6 months, 7 stocks eroded the value of the portfolio to the tune of atleast Rs. 74 crores, the biggest value destroyer being the Punj Lloyd Ltd. (atleast Rs. 51 crores), followed by ONGC Ltd. (atleast Rs. 13 crores) and NTPC Ltd. (atleast Rs. 4 crores). AUM of the fund has increased by Rs.1,151 crores (25.7%) in last 6 months, owing to appreciation in the market value which added Rs.705 crores (15.7%) and an inflow of funds pumped in Rs.446 crores (10%).Recommendation: This fund is a consistent performer with a lucrative track record. Excellent stocks picking skills along with far better risk adjusted performance shows the caliber of the Fund Manager. We recommend this fund to be invested through SIP mode with a long term horizon.Fund Manager: Mr. Prashant Jain is a B. Tech. from IIT, Kanpur, PGDM from IIM, Bangalore and CFA from AIMR, USA. Prior to joining HDFC AMC, has worked with Zurich AMC from July 1993 to June 19, 2003 as Chief Investment Officer.

Domestic Equities

96%

Cash & Cash

Equivalent 4%

Asset Allocation

MF POINTER

Page 7 of 8March 2010 Smart investing starts here

Top 5 Companies Holding Top 5 Sectors Holding

State Bank Of India Ltd 7.01% Bank - Public 11.78%

ICICI Bank Ltd. 6.50% Pharmaceuticals & Drugs 10.22%

ONGC Ltd. 5.95% Bank - Private 9.43%

Bank Of Baroda Ltd 3.73% Engineering - Construction 7.36%

Titan Industries Ltd. 3.34% Oil Exploration 7.12%

Total 26.53% Total 45.91%

Total No. of Companies 61 Total No. of Sectors 33

Systematic Investment Plan (SIP) Performance

SIP of Rs. 10,000 p.m.

Investment Years 3 yrs 5 yrs 10 yrs

Total Investment (Rs.)

Present Value of the Fund (Rs.)

Present Value of Benchmark (Rs.)

3.60 lacs 6.00 lacs 12.00 lacs

5.22 lacs 10.49 lacs 65.26 lacs

4.52 lacs 8.64 lacs 36.01 lacs

If you had invested Rs.10,000 per month for 10 yrs in HDFC Equity Fund, your investment of

would be worth against benchmark which would be worth

Rs.36.01 lacs.

Rs.12.00 lacs Rs. 65.26 lacs

Quarterly Return Performance (in %)

Financial Year Q1 Q2 Q3 Q4

2009-2010 -

2008-2009

2007-2008

2006-2007

2005-2006

58.81 22.53 9.06

1.78

15.93 10.6 22.14

17.56 8.65

10.37 26.15 15.00 18.82

-13.64 -22.88 -3.14

-25.76

-10.48 -1.91

-300%0%

300%600%900%

1200%1500%1800%2100%

NAV (Rs) S&P CNX 500 Nifty

Fund Performance Vis-a-vis Benchmark & Nifty

Market Cap Allocation

7%13%

80%

Large Mid Small

Page 8 of 8

Corporate Office Address : Website :

A1, Kailash Industrial Complex, Park Site, Off LBS Marg, Vikhroli West, Mumbai - 400 079. Tel: +91-22-6754 7000 • E mail : mutualfunds@ventura1.com • www.ventura1.com

March 2010

This document is solely for private circulation only. Mutual funds like securities investments are subject to market risks and other risks. Investors are advised to read the offer document before investing.

Smart investing starts here

MF POINTER

Recommended Investment Plans

Scheme Name Corpus NAV (Rs.) Annualised %

(Rs. Crs) Gr Div 1 mth 3 mths 6 mths 1 yr

Short Term Fund

Birla SL Dynamic Bond Fund 6,707 15.4 10.4

HDFC STP Fund 2,519 17.9 10.4

Templeton India ST Income Fund 5,217 1,838.9 1,117.1

Liquid Funds

LICMF FRF-STP Fund 4,616 15.1 10.2

Birla SL FRF-LT Fund 783 15.7 10.0

7.9 6.4 6.9 8.4

6.9 5.6 7.3 8.0

6.2 6.0 8.5 11.0

4.9 5.0 5.2 5.7

6.9 6.8 7.9 8.0

BUY

Corpus NAV (Rs.) Absolute % CAGR %

(Rs. Crs)

Sector Funds

Reliance Banking Fund 975 77.1 30.8

Reliance Diver Power Sector Fund 5,453 77.8 48.4

Diversified Fund

Birla SL Dividend Yield Plus Fund 349 70.5 13.2

Birla SL Frontline Equity Fund 1,796 79.2 21.4

Birla SL Midcap Fund 1,406 103.3 24.2

HDFC Equity Fund 5,632 232.2 46.6

HDFC Top 200 Fund 6,485 179.9 42.5

ICICI Pru Discovery Fund 779 42.0 19.2

IDFC Premier Equity Fund 1,357 27.4 24.5

Reliance Growth Fund 6,838 433.0 55.5

Reliance Reg Savings-Equity Fund 2,259 28.3 22.0

Sundaram BNPP S.M.I.L.E Fund 584 30.5 14.8

Sundaram BNPP Select 1,917 133.8 16.7

Tax Saving Plans (ELSS)

Fidelity Tax Advt Fund 1,095 18.5 16.6

HDFC TaxSaver Fund 2,202 201.6 56.6

ICICI Pru Tax Plan Fund 1,044 124.5 18.6

SENSEX 17,167

Nifty 5,137

NAV as on 12 March 2010

Scheme Name Gr Div 6 mths 1 yr 3 yrs 5 yrs

Midcap Fund

14.7 150.8 30.5 23.2

9.6 114.4 32.5 38.7

15.4 113.5 21.8 18.7

12.2 114.6 18.4 25.7

17.4 170.7 20.7 25.1

17.7 148.6 18.5 26.7

11.5 124.2 20.9 26.7

19.5 183.9 20.6 24.4

22.3 141.3 28.7 -

15.4 134.0 19.6 28.2

15.9 145.1 25.5 -

9.9 163.1 22.0 23.9

17.4 174.3 16.5 27.9

15.3 111.5 15.9 -

17.7 136.7 15.5 23.7

20.4 155.8 15.2 20.2

5.5 105.7 10.0 20.1

6.4 96.3 11.2 19.0