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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 June 19, 2018
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 funds ................................................................................. 7
Equity banking funds .......................................................................................... 7
Equity FMCG Funds ............................................................................................ 8
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 and Gilt funds ............................................................................. 14
Gold: Outlook anchored to Fed movement ....................................................... 15
Model Portfolios ................................................................................................ 16
Equity funds model portfolio ......................................................................... 16
Debt funds model portfolio ............................................................................ 17
Top Picks ........................................................................................................... 18
June 19, 2018
ICICI Securities Ltd. | Retail MF Research
Page 2
Equity Markets
Update
The first half of 2018 has been far more volatile than the previous year.
Market witnessed rotation in sectoral performances. Sectors like metals,
auto, real estate, and oil & gas, which were outperformers in 2017, have
underperformed so far in 2018. Within underperforming sectors, while
the IT sector has outperformed significantly in 2018, pharma continues
to underperform. Similarly, midcap, small cap, which outperformed
significantly in 2017, have underperformed so far in 2018
Inflows into domestic mutual funds continue to remain strong with
inflows through SIP amount during May 2018 at all time high levels of
around | 7300 crore. A sustained increase in SIP inflows is a structural
positive in terms of flows into the equity market
The recently concluded Q4FY18 earnings indicate Sensex companies
(ex-banking space) continued their positive momentum with Q4FY18
the first quarter marked by double digit bottomline growth. It is largely
attributable to robust consumer demand and successful economic
transformation post demonetisation and GST. For Sensex companies
(ex-banks), net sales and net profit, adjusting for one-offs in a couple of
companies was at 15%
At a broader level (listed universe), the earnings seasons was marred by
losses at large public and private sector banks, owing to increased
provisioning following a RBI directive. However, with much of the pain
already recorded and IBC resolutions under way, we expect incremental
slippages to be contained aiding moderate provisions. This, coupled
with improving credit growth, will enable profitability to improve in PSU
and corporate banks over FY19-20E
Outlook
Global factors like a rise in commodity prices, particularly crude oil,
sharp depreciation in emerging market currencies and volatility in
global fixed income markets have impacted the sentiments of global
investors in recent months. Any improvement in these factors would
help reverse market sentiments
Going forward, with the forecast of normal monsoon 2018 and firm
rural demand amid a pick-up in industrial activity (increased sales of
M&HCV, cranes), we expect the Sensex to stage an impressive earnings
recovery, growing in excess of 20% CAGR in FY18-20E
We believe the recent correction particularly in midcap and small caps
offer selective investment opportunity. Structurally, the overall bias
remains positive. We advise investors to utilise the current volatility to
accumulate with a medium to long term investment horizonStructurally,
the overall bias remains positive as the broader consolidation would
make markets healthy by cooling off the overbought situation and
gradually forming a higher base that would set the stage to move
higher
The recent reclassification of funds as per new Sebi guidelines lends
has led to change in the fundamental attributes of many funds.
Investors should carefully evaluate their existing mutual fund holdings
for such changes. However, in general widely recommened funds may
not not have any major change in terms of their long term outlook
despite change in classification.
Nifty 50: The year 2018 has been volatile so far
10000
10500
11000
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Source: Bloomberg
Midcap and smallcaps come off …
0.5
0.4
0.3
0.0
-0.8
-3.5
-8
-6
-4
-2
0
2
Sensex
BS
E 1
00
BS
E 2
00
BS
E 5
00
BS
E M
idcap
BS
E S
mall cap
Source: Bloomberg
One month returns till June 13, 2018
Previously beaten down IT and Healthcare sectors do
well …
5
4
1 1
0
-1
-2
-2
-5
-8
-6
-4
-2
0
2
4
6
IT
Healthcare
FM
CG
Bankin
g
Auto
Oil n G
as
CG
Metals
Real Estate
Source: Bloomberg
One month returns till June 13, 2018
Research Analyst
Sachin Jain
Jaimin Desai
ICICI Securities Ltd. | Retail MF Research
Page 3
Debt Markets
Update
The fixed income markets continue to remain under pressure as the RBI
raised rates for the first time in four years and started the reversal of the
interest rate cycle. RBI, in its monetary policy meeting on June 6 2018,
raised the repo rate by 25 bps to 6.25% with all six MPC members
voting in favour of the hike
RBI seems to be concerned about inflation rising in the second half of
FY19 and has raised its inflation forecast for H2FY19 to 4.7% from 4.4%
earlier with upside risk. H1FY19 inflation forecast remains in its earlier
band and is now at 4.8-4.9%. RBI is concerned about rising core
inflation on the back of rising global commodity prices particularly
crude oil prices and other global financial market developments, which
it believes has imparted persistence into higher CPI for 2018-19.
However, RBI was comforting on food inflation being lower and with
better farm output on the back of expectation of normal monsoons
With RBI expecting better economic growth with improving capacity
utilisation and credit offtake, growth-inflation dynamics have tilted
towards managing higher inflation risk as investment activity is
expected to remain robust
Consistent FPI outflows, particularly from debt market, depreciating
currency may have also aided the RBI’s rate hike stance
RBI seems to be adopting a cautious stance as they are factoring in
crude oil prices to remain stable at current levels of around US$74 per
barrel and expect a second round effect of HRA and commodity prices
to lead to further rise in inflation. Any moderation in global commodity
prices and domestic currency from current levels may ease some
concerns
Outlook
Indian fixed income market has been under pressure in the last year as
yields are moving up from lows in anticipation of a reversal in rate cycle
A sharp rise in global commodity prices particularly crude oil,
depreciation in currency, rise in yields in global fixed income market
especially US and concerns over fiscal deficit, which led to a rise in
inflation have all contributed to the rise in yields across the segment
The 10-year G-Sec yield, after hitting a low of 6.12% in November 2016,
has been rising consistent since then. It is currently trading around
8.0%
The yield on corporate bonds has also risen tracking movement in G-
Sec yield. Gross YTMs of most accrual or credit funds have risen. Gross
YTMs of a few credit funds with good mix of AAA and AA rated papers
is more than 9.0% and makes them an ideal investment optionThe yield
on corporate bonds have also risen tracking movement in G-sec yield.
Gross YTMs of most accrual or credit funds have risen more than 30
bps last month. Net YTMs of a few credit funds with a good mix of AAA
and AA rated papers is upwards of 8.0% and makes them an ideal
investment option
Historically, 10-year G-Sec yield spread over repo ranges between 50
bps and 150 bps for most of the period. We believe the current spread
of around 200 bps will narrow down once negative sentiments fade.
Corporate bond spreads are also likely to be at historic low levels as
investors search for higher accrual in a stable interest rate environment
Short-term accrual debt funds with mix of AAA/AA/A rated papers and
low expense ratio continue to offer a better investment option
G-sec yields close to 8% mark
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
7.8
8.0
8.2
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Yie
ld (%
)
Source: Bloomberg
G-sec yield curve: Steep in the shorter maturities
6.87
7.80
8.09
7.97
6.83
7.68
7.88 7.82
6.6
6.8
7.0
7.2
7.4
7.6
7.8
8.0
8.2
1yr 3yr 5yr 10yr
Yie
ld (%
)
12-Jun-18 14-May-18
Source: Bloomberg
AAA corporate bond yield curve flattens
8.49
8.65
8.768.82
7.99
8.38
8.538.62
7.8
8.2
8.6
9.0
1yr 3yr 5yr 10 yr
Yie
ld (%
)
12-Jun-18 14-May-18
Source: Bloomberg
ICICI Securities Ltd. | Retail MF Research
Page 4
MF industry synopsis
MF industry AUM dipped ~2.6% in May to ~| 22.6 lakh crore driven by
outflows from liquid and income funds and a disappointing month for
equity markets. Of the total AUM, ~35% was held by income funds,
~44% by equity and equity-oriented funds and ~18% by liquid funds
During May, equity and equity oriented funds (i.e. equity, arbitrage,
balanced, ELSS and non-gold ETFs) received ~|16600 crore net
inflows. Till March 2018, inflows into equity, equity oriented flows in
FY18 were averaging ~| 21000 crore per month, more than double that
in FY17
According to Amfi data, SIP inflows for May 2018 came in at a record
high of ~| 7300 crore. SIP inflows averaged ~| 5600 crore per month in
FY18 against ~| 3600 crore per month in FY17, a rise of ~52%. The
number of SIP folios has increased from 1.35 crore in March 2017 to
2.15 crore in April 2018
In 2017, the MF industry recorded net inflow of | 2.44 lakh crore, of
which | 2.42 lakh crore came into equity and equity-oriented funds
Exhibit 1: Monthly inflows into equity-oriented funds averaged ~| 21500
crore in FY18
1000000
1200000
1400000
1600000
1800000
2000000
2200000
2400000
May-1
7
Jun-1
7
Jul-17
Aug-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
Mar-
18
Apr-
18
May-1
8
Total AUM
Source: Amfi
Exhibit 2: AUM of Top 10 AMCs
308,263
304,136
246,968
238,418
237,235
152,742
129,813
107,325
89,768
79,650
50000
100000
150000
200000
250000
300000
350000
400000
ICICI
HD
FC
Aditya
Birla
Reliance
SB
I
UTI
Kotak
Franklin
DS
P
Axis
AUM
Source: ACE MF
Exhibit 3: SBI has highest proportion of equity AUM as percentage of its
AUM
50%
47%
43%
43%
41%
39%
37%
37%
34%
33%
0%
20%
40%
60%
80%
SB
I
Fra
nklin
DS
P
HD
FC
Axis
UTI
ICIC
I
Reliance
Kota
k
Adit
ya B
irla
Equity % Debt% Others%
Source: ACE MF. Data as of May 2018
Exhibit 4: Equity funds witness significant inflows in FY18…
-10000
10000
30000
50000
70000
90000
110000
130000
150000
170000
EQ
UIT
Y
BA
LA
NCED
OTH
ER
ETFs
ELS
S -
EQ
UIT
Y
GO
LD
ETFs
GIL
T
|cro
re
Source: ACE MF. Data as of March 2018
ICICI Securities Ltd. | Retail MF Research
Page 5
MF Category Analysis
Equity funds
Technology funds remained the best performing category of sector
funds. This category, along with FMCG continued to outperform
pharma funds by wide margins. IT funds have staged a comeback
over the last six months but pharma funds dragged once again,
returning -0.9% on a one-year basis
In terms of market cap-based funds, large cap funds outperformed
multi cap and mid cap funds on a one year basis. After a strong run
from mid 2013 to 2016 for mid caps and small caps, large caps had
a good calendar year 2017 and have continued their relative
dominance on a YTD basis as well.
Structural industrywide problems continued to plague pharma
funds. Pharma stocks remain under pressure due to erosion of
pricing power in the US, which is one of the largest markets for
most Indian companies. The growth trajectory for US-focused
companies has shifted lower, resulting in lower valuation multiples
than those commanded previously
Exhibit 5: IT funds continue to outperform other categories on one year basis while pharma funds
continue to be under pressure (returns as on June 13, 2018)
S
38.2
15.8
9.5
8.9
8.6
6.2
5.8
-0.9
12.7 17.1
10.9
12.7
15.6
13.2
11.7
-1.2
21.1
16.0
16.4
19.3
26.6
15.0 19.0
12.7
-5
0
5
10
15
20
25
30
35
40
45
Technology FMCG Large Cap Multi cap Mid cap Banking Infrastructure Pharma
Returns (%
)
1 year 3 Year 5 year
Source: Crisil, ICICI Direct Research ; Returns over one year are compounded annualised returns
Exhibit 6: Inflows into equity funds substantial, but off FY18 highs
0
4000
8000
12000
16000
20000
24000
28000
32000
36000
40000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Net Inflo
w ( | C
r )
Equity + ELSS + ETF
Source: Amfi, ICICI Direct Research
Exhibit 7: Robust inflow in equity funds push up AUM
350000
400000
450000
500000
550000
600000
650000
700000
750000
800000
850000
900000
May-1
7
Jun-1
7
Jul-17
Aug-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
Mar-
18
Apr-
18
May-1
8
| lakh C
rore
Equity +ELSS
Source: Amfi, ICICI Direct Research
ICICI Securities Ltd. | Retail MF Research
Page 6
Equity diversified funds
Equity diversified funds witnessed robust growth in the last three
years, with AUM within each sub-category rising substantially. In
FY14-17, AUM of large cap funds rose 97%, multi cap funds AUM
rose 117% while midcap funds AUM rose 135%
Over this period, while all three sub-categories delivered a strong
performance, midcap funds have done exceedingly well and
outperformed. This reflects in the trend of broader indices
outperforming bellwether indices in this time frame. However, large
cap funds have reversed that trend at 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 in this period and, thus, outperformed 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 segments and are,
therefore, relatively better placed
Exhibit 8: Blistering AUM growth across all equity diversified fund sub-categories from 2014
34774
41624
60789
72492
96942
119984
41943
52465
83325
90347 126917
181174
15564
22204
47831
54651
84769
112488
0
30000
60000
90000
120000
150000
180000
210000
240000
May 13
May 14
May 15
May 16
May 17
May 18
|crs
Large Caps Multi Caps Mid Caps
Source: ACE MF
Recommended funds
Large cap
Reliance Large Cap Fund
ICICI Prudential Bluechip Equity Fund
SBI Bluechip Fund
Multi cap
L&T India Value Fund
Aditya Birla SL Equity Advantage Fund
Kotak Standard Multicap Fund
Motilal Oswal Multicap 35 Fund
IDFC Classic Equity Fund
Midcap
HDFC Mid-Cap Opportunities Fund
Franklin India Smaller Companies Fund
L&T Emerging Businesses Fund
Reliance Small Cap Fund
HDFC Small Cap 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
Q4FY18 saw buoyant order inflow momentum among several
infrastructure companies, however financial results for the period were
mixed. Several road companies benefited from strong awarding by
NHAI and Ministry of Roads, with execution also picking up pace.
A gradual improvement in the real estate sector has been witnessed in
Q4FY18. Furthermore, new launches are expected to pick-up from
FY19E onwards with several companies planning new project launches
On the other hand, building materials companies posted weak
performance due to moderate volume growth, softer realisations and
crimping margins.
Cement demand has been witnessing a gradual improvement mainly
led by increased government spending in insfrastructure activities. This
is supported by the fact that project tendering has increased 29.5% YoY
to | 2.2 lakh crore in January-February 2018 vs. 8.6% YoY last year.
Within overall project tendering, road tendering has seen a strong pick-
up, growing at 62% YoY to 1.4 lakh crore in January-February 2018.
Infrastructure funds focusing on specific companies capitalising on
growth potential in the sector are offering a good investment option to
investors. Aggressive investors may consider investing in the
recommended infrastructure funds as a part of their thematic allocation
Preferred Picks
L&T Infrastructure Fund Refer www.icicidirect.com
for details of the fund Reliance Diversified Power Sector Fund
Equity banking funds
Q4FY18 has been one of the worst quarters for banking industry in
terms of asset quality led by frauds, new NPA framework introduced by
RBI (discarding past restructuring formats), NPA divergences & absence
of any resolution in large NCLT cases referred earlier.
Absolute GNPA of private banks increased at a faster rate than PSU
banks but overall absolute GNPA amount is still far higher for the state
run banks. GNPA ratio of the industry is ~11.8% as on FY18. Corporate
based private banks witnessed heightened NPA pressure along with
most of the PSU banks.
Rise in slippages led to large interest reversals which impacted sector
NII growth which stood at 1.3% YoY, despite healthy credit growth.
Provisions in Q4 almost doubled QoQ to | 148276 crore. This was led
by PSU banks. Private banks continue to report relatively healthy set of
numbers owing to their retail orientation. They continue to grab market
share from PSU banks.
However, in the long term, 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 are expected to further aid
profitability. From a long term point of view, the PSU bank
recapitalisation programme is a structural positive. The continued
government push on financial inclusion, 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
www.icicidirect.com for
details of the fund
Reliance Banking Fund
UTI Banking Sector Fund
View
Short-term: Positive
Long-term: Positive
View
Short-term: Neutral
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 8
Equity FMCG Funds
FMCG companies witnessed a strong growth in March quarter led by
robust volume growth coupled with stabilising trade channel.
Aggressive advertisement and promotions also aided growth. After
several quarters of stress in the aftermath of demonetisation and the
rollout of GST, the consumer goods sector seems to be back on the
growth track led by a pick-up in rural consumption. Majority of the
companies reported strong double digit growth in EBITDA led by
favourable base, soft raw material prices and premiumisation.
Although our outlook remains positive on the sector, given the
valuation premium commanded by the consumption space, investors
would be better off adopting a SIP approach in FMCG funds
Equity Pharma funds
Aided by a low base of Q4FY17, several companies reported strong
double digit profitability growth. Revenues also grew in high single
digit. On a geographical front, the challenging environment in the
US generic space continued to impact the overall US growth.
However, excluding US and Brazil (country specific issues) most of
the other geographies have reported strong growth on the back of
new launches and favourable currency movement. Domestic
formulations also grew double digit.
We have a neutral view on the sector. The US front continues to
face intense competition owing to client consolidation and faster
approval of products. Revenues, margins and profitability could
remain subdued in the near to medium term
Preferred Picks
Reliance Pharma Fund Refer to
www.icicidirect.com
for details of the fund
SBI Pharma Fund
UTI-Pharma & Healthcare
Equity Technology Funds
Tier-I IT companies witnessed muted constant currency growth in
Q4FY18 while cross currency provided some strength to dollar
revenue growth sequentially
Europe continued to lead the growth from last 3-4 quarters
outpacing US. Among verticals, growth in BFSI (Banking & Financial
Services) is yet to see the pick up while energy and manufacturing
saw good growth in the quarter. With movement of IT landscape
more towards digital & emerging technologies, digital forms ~22-
30% of overall revenues with healthy double digit growth.
We maintain our neutral stance on the sector as the industry faces
challenges related to US immigration rules and growing
protectionism around the world. 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
Preferred Picks
ICICI Prudential FMCG Fund Referwww.icicidirect.com
for details of the fund SBI Consumption Opportunities Fund
View
Short-term: Neutral
Long-term: Neutral
View
Short-term: Neutral
Long-term: Neutral
View
Short-term: Positive
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, 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: ETFs inflows intact
5841365 1753 1513
1968 1675
12447
-1604-2234
953
5082
305
2694
-4000
-2000
0
2000
4000
6000
8000
10000
12000
14000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Net Inflo
w ( | C
r )
Non Gold ETFs
Source: Amfi, ICICI Direct Research
Exhibit 10: ETF AUMs remain strong
47584
48359
52823
53734
55166
60107
70041
70353
72879
69848
72888
77501
81272
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
| C
rore
Other ETFs
Source: Amfi, ICICI Direct 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
Inflows into balanced funds have slowed considerably since the
turn of the financial year. Average net monthly inflow in 2017 of ~ |
7000 crore dropped to | 3500 crore in April, before slowing again to
~|2700 crore in May. Imposition of dividend distribution tax (DDT)
on equity mutual funds and re-introduction of LTCG tax seems to
have dealth a double whammy to investor preference for balanced
funds. With bond yields remaining elevated and equity markets also
consolidating over the last few months, performance of balanced
funds has dipped recently.
AUM of balanced funds witnessed a stellar increase during this
period, more than doubling to | 177995 crore in May 2018 from
| 102156 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 will be taxed at
10%. Also, dividends declared by funds are taxed at 10%
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: Inflows into balanced funds fall sharply in April and May
7,663
7,458
7,864
8,783
8,141
5,897
7,614
9,756
7,665
5,026
6,754
3,500
2,666
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Net Inflo
w ( | C
r )
Balanced Funds
Source: Amfi, ICICI Direct Research
Exhibit 12: YoY 74% growth in AUM of balanced funds
102156
109513
121243
128320
134868
147460
155105
167385
176087
174468
172151
181306
177995
13000
33000
53000
73000
93000
113000
133000
153000
173000
193000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
| C
rore
Balanced
Source: Amfi, ICICI Direct Research
Preferred Picks
ICICI Prudential Balanced Fund
HDFC Balanced Fund
DSP Blackrock Balanced Fund
Reliance Equity Hybrid 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 the 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 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 taxed at 10%. Capital gains tax will be applicable at 10% 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
IDFC Arbitrage Fund
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
6.6
6.5 6
.9
5.4 5.9
7.3
3.3
4.3
7.4
0.2
1.3
7.1
-0.9
-0.8
7.4
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
6 months 1 year 3year%
Liquid Ultra Short Term Short Term Long Term Gilt
Source: Crisil, ICICI Direct Research
Note : Returns as on June 13, 2018; All returns are compounded annualised
Exhibit 14: G-sec yield curve
6.87
7.80
8.09
7.97
6.83
7.68
7.88 7.82
6.6
6.8
7.0
7.2
7.4
7.6
7.8
8.0
8.2
1yr 3yr 5yr 10yr
Yie
ld (%
)
12-Jun-18 14-May-18
Source: Bloomberg
Exhibit 15: Corporate bond curve
8.49
8.65
8.768.82
7.99
8.38
8.538.62
7.8
8.2
8.6
9.0
1yr 3yr 5yr 10 yr
Yie
ld (%
)
12-Jun-18 14-May-18
Source: Bloomberg
Benchmark 10 year G sec yield is near the 8% mark
Interest rates rose sharply across longer durations for G-Sec
while the rise was larger in quantum for shorter durations in
corporate bonds
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, have spiked
sharply over the last three months in the face of reducing 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)
Exhibit 16: Call rates below repo rate
5.6
5.8
6
6.2
6.4
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
%
Call rate
Source: Bloomberg, ICICI Direct Research
Exhibit 17: Short term CP/CD yields
5.0
5.5
6.0
6.5
7.0
7.5
8.0
May-16
Aug-16
Nov-16
Feb-17
May-17
Aug-17
Nov-17
Feb-18
May-18
%
3M CD 3M CP
Source: Bloomberg, ICICI Direct Research
Exhibit 18: Flows into liquid funds remain volatile on institutional activity
-64,692
-12,739
-19,511
21,352
4,833
-13,261
77,408
-127,597
96,552
1,223
-54,979
116,486
-46,724
-300,000
-260,000
-220,000
-180,000
-140,000
-100,000
-60,000
-20,000
20,000
60,000
100,000
140,000
180,000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Net Inflo
w ( | C
r )
Liquid/Money Market Funds
Source: Amfi, ICICI Direct Research
Exhibit 19: AUM remains healthy
428212
450533
467418
468022
484802
468668
469675
496696
520020
543541
568770
583557
591377
300000
400000
500000
600000
700000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
| la
kh C
rore
Money Market
Source: Amfi, ICICI Direct 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 and Gilt funds
Bond markets have been highly volatile over the past few months.
The 10 year yield has remained under pressure owing to demand-
supply mismatch, rise in crude prices, fears of fiscal slippage and
rising inflation. Bond market sentiment has soured because of a
confluence of these factors, with the result that the yield on the
benchmark 7.17% 2028 10 year bond is hovering around the 8%
mark. Sentiments have been weak despite announcement of several
measures for easing FPI investments in Indian bond markets.
Acting pre-emptively, the RBI raised benchmark rates for the first
time in four years at its June policy meeting, citing rebound in
inflation and narrowing output gap. The US Fed delivered a second
rate hike for 2018 at its June meeting and outlined 2 further hikes
for the rest of the year, a hawkish departure from the earlier path.
May CPI printed 4.87% YoY due to elevated core CPI of 6.22% YoY.
Short-term 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 flows
5,1
24
-20,6
85
60,0
84
8,3
90
-50,0
90
40,8
45
9,3
74
-60,1
51
-9,8
71
-9,7
99
-13,7
19 5,2
20
-20,4
07
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
May-1
7
Jun-1
7
Jul-17
Aug-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
Mar-
18
Apr-
18
May-1
8
Net In
flow
s
(| .
Cr)
Income Funds
Source: Amfi, ICICI Direct Research
Exhibit 21: AUM remains stable on consistent inflows
780797
792734
778266
845484
858188
809965
855478
867736
808252
801405
791494
785553
790016
400000
500000
600000
700000
800000
900000
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
| C
rore
Income
Source: Amfi, ICICI Direct Research
Recommended funds
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
decline, going forward
Ultra Short Term Funds
Aditya Birla Sun Life Savings Fund
ICICI Prudential Flexible income
Short Term Funds
Aditya Birla Sunlife short term fund
HDFC Short Term Fund
ICICI Pru Short Term Plan
Short Term Funds – Credit opportunities
Axis Regular Savings Fund
Aditya Birla Sunlife Medium Term Plan
L&T Short Term Fund
Long term/Dynamic
Birla Sunlife income plus
ICICI Prudential Dynamic Bond Fund
IDFC Dynamic Bond Fund
Gilt
ICICI Pru LT Gilt Fund – PF Option
Aditya Birla Sun Life Gilt Plus – PF Plan
(Refer www.icicidirect.com for details of the fund)
View
Ultra-short term Income: Neutral
Short-term Income : Positive
Long-term Income: Neutral
Short-term Gilt : Neutral
Long –term Gilt : Neutral
ICICI Securities Ltd. | Retail MF Research
Page 15
Gold: Outlook anchored to Fed movement
Gold prices continued their recent trend of trading within a narrow
range. Global prices dipped below US$1300 per ounce in the
second half of May.
Indian prices tracked the dip in global prices, ending May at
| 31000 despite recent Indian rupee weakness against the US dollar
Geopolitical tensions between US and North Korea seem to have
abated in recent weeks. Gold prices would take cues from meetings
between the US-North Korea leadership and the Federal Reserve’s
policy meet
The Fed raised rates thrice in 2017, and twice thus far in 2018, witht
the second of those coming at its June meeting. While a total of
three hikes were earlier being expected for the year, Fed made a
hawkish departure to that path and guided for two more hikes in
2018. Thus, structurally, a rate hike programme by the US Federal
Reserve this year and in following years along with other central
banks like the European Central Bank and the Bank of Japan scaling
back stimulus may prevent any sustained medium term rally in gold
price
The US dollar has strengthened against a basket of major
currencies, reflecting in the Dollar Index rising from an average of
89.4 in April to 92.4 in May. Dollar strength is negative for gold
since the metal is priced in that currency
Gold has historically been looked at as a relatively risk-free asset. Its
price movement both in India and globally is impacted by any
actual or perceived risk build-up on economic, political or natural
fronts
Exhibit 22: Global prices dip in May
1100
1200
1300
1400
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Price ($/ounce)
Source: Bloomberg
Exhibit 23: Indian prices on stronger footing compared to global prices
26000
28000
30000
32000
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Price (|/10…
Source: Bloomberg
ICICI Securities Ltd. | Retail MF Research
Page 16
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 24: 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
L&T India Value Fund 20 - -
Aditya Birla SL Equity Advantage Fund - 20 20
Franklin India Smaller Companies Fund 20 20 -
SBI Bluechip Fund - - 20
Kotak Standard Multicap Fund 20 20 -
HDFC Midcap Opportunities Fund 20 20 -
Reliance Small Cap Fund 20 - -
Motilal Oswal Multicap 35 Fund - 20 20
ICICI Prudential Bluechip Fund - - 20
Reliance Large Cap Fund - - 20
Total 100 100 100
Source: ICICI Direct Research
Exhibit 25: Model portfolio performance since inception
18.3%
16.7%15.8%
13.1%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
Aggressive Moderate Conservative BSE 100
%
Aggressive Moderate Conservative BSE 100
Source: Crisil Fund Analyser, ICICI Direct Research; CAGR performance as on 31 May 2018
What’s In
Aggressive
Reliance Small Cap Fund
Moderate
Aditya Birla SL Equity Advantage Fund
Conservative
Aditya Birla SL Equity Advantage Fund
What’s Out
Aggressive
Franklin India High Growth Companies Fund
Moderate
Aditya Birla SL Frontline Equity Fund
Conservative
Aditya Birla SL Frontline Equity Fund
ICICI Securities Ltd. | Retail MF Research
Page 17
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 26: 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
Funds Allocation
Ultra Short term Funds
Aditya Birla SL Savings Fund 20 20
ICICI Pru Savings Plan 20
Franklin India Ultra Short Bond Fund 20
Short Term Debt Funds
Axis Strategic Bond Fund 20 20
Aditya Birla Sunlife Corporate Bond Fund 20 20
Aditya Birla SL Medium Term Fund 20
HDFC Short Term Debt Fund 20 20
ICICI Prudential Regular Savings 20
UTI Medium Term Fund 20
L&T Low Duration Fund 20 20
Total 100 100 100
Time Horizon
% Allocation
Source: ICICI Direct Research
Exhibit 32: Model portfolio performance since inception
8.5% 8.6%8.9%
8.1%8.3%
8.4%
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, ICICI Direct Research; CAGR performance as on 31 May 2018
*Index: 0-6 month’s portfolio – Crisil Liquid Fund Index; six months-one year – Blended Index with 50% weight to
Crisil Liquid Index, 50% weight to Crisil Short Term Index; Above 1 year: Crisil Short Term Index
What’s In
0 – 6 months
Franklin India Ultra Short Bond Fund
6 months – 1 year
Aditya Birla SL Savings Fund
Above 1 year
Aditya Birla SL Medium Term Fund
UTI Medium Term Fund
What’s Out
0 – 6 months
IDFC SSI Short Term Fund
6 months – 1 year
Aditya Birla SL Short Term Opportunities Fund
Above 1 year
HDFC Corporate Debt Opportunities Fund
Aditya Birla SL Short Term Opportunities Fund
ICICI Securities Ltd. | Retail MF Research
Page 18
Top Picks
Exhibit 33: Category wise top picks
Largecaps ICICI Pru Focused Bluechip Fund
Kotak Standard Multicap Fund
SBI Bluechip Fund
Reliance Large Cap Fund
HDFC Equity Fund
Midcaps HDFC Midcap Opportunities Fund
Franklin India Smaller Companies Fund
L&T Emerging Businesses Fund
Reliance Small Cap Fund
HDFC Small Cap Fund
Multicaps DSP Blackrock Equity Opportunities Fund
IDFC Classic Equity Fund
L&T India Value Fund
Motilal Oswal Multicap 35 Fund
Aditya Birla Sun Life Advantage Fund
ELSS Aditya Birla Tax Relief 96 Fund
DSP Blackrock Tax Saver Fund
IDFC Tax Advantage Fund
Reliance Tax Saver Fund
Balanced HDFC Balanced Fund
ICICI Pru Balanced Fund
Reliance Equity Hybrid Fund
DSP Equity and Bond Fund
Liquid HDFC Money Market Fund
ICICI Pru Liquid Fund
Reliance Liquid Fund
Ultra Short term Aditya Birla SL Savings Fund
ICICI Pru Savings Fund
IDFC Ultra Short Term Fund
Short term Aditya Birla SL Corporate Bond Fund
HDFC Corporate Bond Fund
L&T Low Duration Fund
Credit Opportunities Axis Strategic Bond Fund
Aditya Birla Sun Life Medium Term Plan
UTI Medium Term Fund
Income Funds ICICI Pru Long Term Bond Fund
Aditya Birla SL Income Plus - Regular Plan
IDFC Dynamic Bond Fund
MIP Aggressive Aditya Birla SL MIP II - Wealth 25 plan
ICICI Pru MIP 25
Equity Funds & Equity-oriented Funds
Debt Funds & Debt-oriented Funds
(Refer www.icicidirect.com for details of the fund)
ICICI Securities Ltd. | Retail MF Research
Page 19
Pankaj Pandey Head – Research [email protected]
ICICI Direct 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.