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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 21, 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 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
Aggressive hybrid funds ................................................................................ 10
Arbitrage Funds ............................................................................................. 11
Debt funds ..................................................................................................... 12
Short term fixed income allocation (less than 1 year) ..................................... 13
Long term fixed income allocation (more than 1 year) .................................... 14
Gold: Outlook anchored to Fed movement ....................................................... 15
Model Portfolios ................................................................................................ 16
Equity funds model portfolio ......................................................................... 16
Debt funds model portfolio ............................................................................ 17
Top Picks ........................................................................................................... 18
September 21, 2018
ICICI Securities Ltd. | Retail MF Research Page 2
Equity Markets
Update
Indian headline equity benchmark indices, after making new highs in
August 2018, witnessed some profit booking during September. Rising
global crude oil prices, a sharp depreciation in currency and rising trade
war concerns weighed on market sentiments
Macroeconomic concerns emerged over the last few months with rising
concerns on fiscal deficit, inflation and rising interest rates. The same
coupled with elevated market levels accentuated the recent broad-
based market fall
The recent market correction has to be viewed as a correction of the
sharp rally in the last year and the overall around 60% rally since
February 2016
Globally, turmoil in the currency market on trade war concerns has been
the epicentre of the recent global volatility. Emerging market currencies
witnessed sharp depreciation against the US dollar. The global currency
crises got aggravated after the Turkish lira’s sharp depreciation due to
sanctions by the US and followed by the debt crises in Argentina. The
sharp falls in the value of the Turkish lira and Argentina's peso led to
fears of contagion effect on other market currencies
The broader market, represented by midcaps and small caps, has
underperformed recently. However, most of the midcap and small cap
funds have done well in containing the market fall
The healthcare or pharma sector outperformed as value buying
emerged at lower levels. The healthcare sector had underperformed
significantly prior to this recent performance. Hence, value had
emerged in the sector. We are positive on the healthcare sector from a
near to medium term perspective
Although inflows into domestic mutual funds have moderated in the
last couple of month, they remain strong. Average monthly inflows into
equity oriented funds, including equity component of balanced funds in
the first four months of FY19, were around | 13800. The similar average
during FY18 was | 21500. The outlook for domestic inflows remains
strong with higher SIP inflows and low penetration. SIP inflows have
seen a consistent rise and were at | 7500 crore in August 2018.
Consistent domestic inflows are expected to prevent any significant
downside and will act as strong support at lower levels as seen in the
last few months where buying interest was seen at lower levels
Outlook
Analysis of the Q1FY19 results that were declared indicate that earnings
recovery, which we were expecting in the current and next financial
year, is on track. So far, Q1FY19 results were largely in line or better
than market expectations. The consumption segment of the market
remains strong with companies in FMCG, consumer durables, paints,
auto, etc, delivering double digit volume growth. Loan growth remains
strong for large retail banks and rural & consumer finance NBFCs. IT
displayed better growth, improving the business sentiment
commentary by the managements
While the recent correction at the broad headline index level looks
marginal, the correction in individual stocks has been far significant and
offers investment opportunity
We believe the recent correction offers a good investment opportunity
for long term investors. Investors should increase allocation to equity
market in a gradual manner through fresh SIPs
Nifty 50: Markets rebound sharply in recent weeks
9000
9500
10000
10500
11000
11500
12000
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-1
8
Source: Bloomberg
Flattish month for markets…
0.9
0.8
0.7
0.7
0.6
-0.4
-3
-2
-1
0
1
2
BS
E 1
00
BS
E 2
00
BS
E M
idcap
BS
E 5
00
Sensex
BS
E S
mall cap
Source: Bloomberg
One month returns till September 14, 2018
Healthcare continues to lead the way among sectors
10.6
8.8
5.5
3.4
0.2
0.1
-1.7
-2.9
-3.3
-7
-5
-3
-1
1
3
5
7
9
11
Healthcare
Metals IT
CG
Auto
Oil n G
as
FM
CG
Real Estate
Bankin
g
8ource: Bloomberg
One month returns till September 14, 2018
Research Analyst
Sachin Jain
Jaimin Desai
ICICI Securities Ltd. | Retail MF Research Page 3
Debt Markets
Update
The Indian fixed income market has come under severe pressure in the
last month with yields rising sharply across market segment. G-Sec and
corporate bond yields have risen 30-40 bps since August 2018
The 10-year benchmark G-Sec yield has touched 8.1%. The three-year
AAA and AA rated corporate bond yields (segments in which majority
of the short-term and credit fund invest) have touched 8.9% and 9.3%,
respectively, the highest since November 2014
Elevated crude oil prices and a sharp depreciation in the Indian
currency have led to increased concerns over fiscal deficit and inflation.
Globally, sentiments have been negative for the fixed income market
with a rise in yields across emerging markets. The global currency
crises got aggravated after the Turkish lira’s sharp depreciation due to
sanctions by the US and followed by the debt crises in Argentina. The
sharp falls in the value of Turkey's lira and Argentina's peso led to fears
of contagion effect on other market currencies
Foreign portfolio investors (FPIs) have turned net sellers over the last
few sessions as risk aversion increased on heightened currency and
bond market volatility, especially in emerging markets. In India, FPIs
have again turned net sellers since the later part of August
Outlook
Structurally, interest rates have seen a sharp up move in the last
year on the back of global factors like a rise in crude oil prices,
commodity prices and currency depreciation across emerging
markets. Interest rates offered by AAA-rated corporates have also
seen a sharp up move with yield on three-year AAA rated bonds
rising from 7.1% in September 2017 to 8.8% in September 2018, a
rise of 170 bps in one year. Yield on corporate bonds has moved up
to levels last seen in November 2014
While some concern is legitimate in terms of inflationary concerns,
the sharp up move in interest rates is discounting higher concern
than warranted. RBI expect inflations to remain around 5% by
Q1FY20. Inflation has structurally moved down and is likely to
remain around 5% over the medium term, going forward. With
inflation structurally likely to remain far lower than earlier years,
corporate bond yields are unlikely to remain at 2014 levels
The higher spread between inflation and bond yield is indicating
that the current higher yield offered by good rated companies is a
good investment opportunity
Markets currently seem to be pricing in more than two rate hikes of
25 bps by March 2019 with the change in liquidity stance from
neutral to withdrawal. However, we believe that the worst has
already been discounted and do not expect any significant up move
in G-Secs yields irrespective of rate hike by RBI. We have been
positive on debt markets because of attractive absolute higher
levels of yields across duration. We maintain our positive stance
remaining relatively overweight on corporate bonds and neutral
stance on G-Sec
Accrual/credit funds with predominant exposure in AA (double A)
rated bonds and lower expense ratio are best placed. Investors
should avoid funds with higher single A rated corporate exposure to
reduce credit risk
G-sec yields range boundabove 8%
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
7.8
8.0
8.2
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-1
8
Yie
ld (%
)
Source: Bloomberg
G-sec yield curve
7.40
8.05 7.927.86
7.31
7.73
8.158.10
6.9
7.2
7.5
7.8
8.1
8.4
1yr 3yr 5yr 10yr
Yie
ld (%
)
17-Sep-18 16-Aug-18
Source: Bloomberg
AAA corporate bond yield curve
8.68
9.06 9.03
8.73
8.27
8.56
8.67
9.05
8.0
8.3
8.6
8.9
9.2
1yr 3yr 5yr 10 yr
Yie
ld (%
)
14-Sep-18 16-Aug-18
Source: Bloomberg
ICICI Securities Ltd. | Retail MF Research Page 4
MF industry synopsis
MF industry AUM rose ~9.3% in August to a record ~| 25.20 lakh crore
driven by a positive month for equity markets. Of the total AUM, ~30%
was held by income funds, ~43% by equity and equity-oriented funds,
~24% by liquid funds
During August, equity and equity oriented funds (i.e. equity, arbitrage,
balanced, ELSS, non-gold ETFs) received ~| 9500 crore net inflows,
hurt by higher redemptions in equity segment. In FY19TD, equity and
equity oriented funds have averaged ~| 13150 net inflows per month
against FY18 average of ~| 21000 crore per month
According to Amfi data, SIP inflows for August 2018 were at | 7658
crore. SIP inflows averaged ~| 5600 crore/month in FY18 vs. ~| 3600
crore/month in FY17, a rise of ~52%. The number of SIP folios has
increased from 1.35 crore in March 2017 to 2.38 crore in August 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 average ~| 21500
crore in FY18
1000000
1200000
1400000
1600000
1800000
2000000
2200000
2400000
2600000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Total AUM
Source: AMFI
Exhibit 2: AUM of Top 10 AMCs
319,640
313,872
261,357
259,796
255,919
175,750
137,738
116,184
98,790
92,870
50000
100000
150000
200000
250000
300000
350000
400000
ICICI P
ru
HD
FC
SB
I
Aditya B
irla
Reliance
UTI
Kotak
Franklin
DS
P
Axis
AUM
Source: ACE MF
Exhibit 3: SBI has highest proportion of equity AUM as percentage of its
AUM
51%
45%
45%
42%
40%
38%
38%
37%
37%
33%
0%
20%
40%
60%
80%
SB
I
HD
FC
Franklin
Axis
DS
P
ICICI P
ru
Reliance
UTI
Kotak
Aditya B
irla
Equity % Debt% Others%
Source: ACE MF. Data as of July 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 while previously laggard pharma funds
have also done well in the past couple of months
Pharma funds have also staged a smart recovery over the last few
months after having underperformed prior to that
In terms of market cap-based funds, large cap funds outperformed
multi cap and midcap funds on a one year basis. After a strong run
from mid 2013 to 2016 for midcaps and small caps, large caps had a
good calendar year 2017 and continued their relative dominance on
a YTD basis as well
Exhibit 5: IT funds continue to outperform other categories on one year basis while pharma funds
stage recovery (returns as on September 18, 2018)
S
44.2
15.6
9.5
4.9
4.7
2.9
2.7
2.7 2.2
-0.6
-1.4
-2.3
-6.3
12.7
-0.8
13.9
12.4
11.1
13.3
12.9
11.7
12.3
14.6
11.8
13.4
9.7
17.4
14.9
17.3
18.9
16.8 2
1.8
20.2
18.8
19.4
20.3 2
5.3
28.0
19.5
-20
-10
0
10
20
30
40
50
Technolog
y
Pharm
a
FM
CG
Focused
Large C
ap
Valu
e and C
ontra
Large and M
id C
ap
Multi cap
ELS
S
Bankin
g
Mid c
ap
Sm
all C
ap
Infrastructure
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 plunge post March
0
4000
8000
12000
16000
20000
24000
28000
32000
36000
40000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Net Inflo
w ( | C
r )
Eq+ELSS+ETF+Balanced
Source: AMFI, ICICI Direct Research
Exhibit 7: Equity funds AUM
550000
600000
650000
700000
750000
800000
850000
900000
950000
1000000
1050000
1100000
1150000
1200000
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
Jun-1
8
Jul-18
Aug-1
8
| C
rore
Total Equity AUM
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 were up 112%, multi cap funds
AUM up 123%, midcap funds AUM up 100% with small cap funds
AUM rising 267%(all CAGR)
Over this period, while all sub-categories delivered a strong
performance, midcap and smallcap 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 since January this year
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
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
31491
48001
61435
79876 106275
130530
28310
48754
66020
77448 103803
146986
11580
24045
38657
47799
64084
77129
1746
5956
11201
15598
25889
41119
0
30000
60000
90000
120000
150000
180000
August 1
3
August 1
4
August 1
5
August 1
6
August 1
7
August 1
8
|crs
Large Caps Multi Caps Mid Caps Small Caps
Source: ACE MF
Recommended funds
Large cap
Reliance Large Cap Fund
ICICI Prudential Bluechip Equity Fund
SBI Bluechip Fund
Multi cap
Mirae Asset India Equity Fund
Kotak Standard Multicap Fund
HDFC Equity Fund
Midcap
HDFC Mid-Cap Opportunities Fund
Kotak Emerging Equity Fund
L&T Emerging Businesses Fund
Smallcap
HDFC Small Cap Fund
L&T Emerging Businesses Fund
Reliance 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
Q1FY19E has been a strong quarter for several capital goods
companies with robust order wins across segments. Power T&D EPC
companies are expected to report strong revenue growth. Bearings
companies are likely to report strong double digit topline growth due to
robust production volume growth
On the tendering side, there has been a strong pick-up in the road
sector with road tenders growing 36.4% YoY to | 85,000 crore in
Q1FY19. This strong tendering activity suggests order inflows could
remain robust, going ahead
FY18 saw a strong awarding pace, led by awarding under the
Bharatmala project picking up pace. Given the huge size of the
Bharatmala Pariyojana, the awarding could remain robust, going
forward. The Roads Ministry has set road construction, awarding target
of 16420 km, 20000 km, respectively, for FY19E. This strong awarding
activity could translate into robust awarding opportunities for various
construction players
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 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
Post a surge in slippages in Q4FY18 led by RBI’s February circular, asset
quality concerns seem to have peaked out with a decline in absolute
NPA in Q1FY19. Absolute GNPA of PSU banks witnessed marginal
decline QoQ in absolute terms to | 8.82 lakh crore. Private banks
reported flat growth QoQ and 33.7% YoY increase in GNPA to | 1.28
lakh crore. Industry GNPA ratio was at ~11.7% as on Q1FY19
Credit growth of the industry revived to ~13% YoY to | 86.55 lakh
crore, led by healthy growth in retail segment. Growth of private banks
continued to remain higher at 15-20%, thereby gaining market share.
With a decline in slippages and interest recovery from resolved
accounts, NII growth revived 28.2% YoY, not seen in the last several
quarters. PSU banks saw 37.8% YoY growth in NII. However, rise in G-
sec yields impacted non-interest income, especially for 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 recorded robust growth in the June quarter primarily
led by double digit volume growth in several companies. The select
pack of companies continued to invest aggressively in advertisement
and promotions to augment growth, helping the revenue base to grow
in low double digits. Rural consumption outpaced urban growth in the
June quarter as FMCG companies focused on increasing their direct
distribution network in rural areas
Although our outlook remains positive on the sector, given the
valuation premium commanded by the consumption space, investors
would be better off adopting an SIP approach in FMCG funds
Equity Pharma funds
The pharma results were a mixed bag as Indian formulation growth
was strong on expected lines but US growth was below
expectatiosn. On the margins front, the results were mixed as
favourable currency benefits were mitigated by Chinese sourcing
pressure and APIs that are pegged with crude prices. On the
geographical front, the challenging environment in the US generic
pricing space continued to impact overall US growth
Our view on the sector has turned positive. The sharp correction in
most stocks was higher than the earnings downgrades, thus
effectively pulling down PE ratios below their historic averages. This
has effectively created a favourable risk-reward situation in some
stocks
Preferred Picks
Reliance Pharma Fund
UTI Healthcare Fund
Refer to
www.icicidirect.com
for details of the fund
Equity Technology Funds
The Q1FY19 performance and management commentaries by IT
companies indicate signs of an improving demand environment (led
by higher spend in BFSI, increase in digital pie and healthy deal
wins). Companies tend to pace up their digital contribution to keep
in line with the changing IT landscape. Now it forms ~25-28% of
overall revenues (vs. 19-24% in Q1FY18) with strong double digit
growth. From a deal signing perspective, Q1FY19 proved to be a
good quarter as Tier-I IT companies have good deal signings and
healthy order bookings. On the revenue front, Tier-I IT companies
witnessed an average growth of 2.3% QoQ in constant currency
(CC) terms in a seasonally strong quarter
Our view on the sector has turned positive owing to strong growth
in the digital vertica, an improving deal pipeline, a revival in the
BFSI vertical in North America, scope for margin expansion and
support from cross currency tailwinds
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: 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 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
15131968 1675
12447
-1604-2234
953
5082
305
2694
8313
-3982
1785
-5000
0
5000
10000
15000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Net Inflo
w ( | C
r )
OTHER ETFs
Source: AMFI, ICICI Direct Research
Exhibit 10: ETF AUMs remain strong
53734
55166
60107
70041
70353
72879
69848
72888
77501
81272
88122
89765
94406
40000
50000
60000
70000
80000
90000
100000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-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
Aggressive hybrid funds
Inflows into balanced funds have slowed considerably in this
financial year. Average net monthly inflow in 2017 of ~ | 7000 crore
dropped to | 3500 crore in April, ~| 2700 crore in May, ~| 1500
crore in June and ~| 300 crore in July, before recovering slightly to
~| 2600 crore in August. Imposition of dividend distribution tax
(DDT) on equity mutual funds and re-introduction of LTCG tax
seems to have dealt 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
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 FY19
8,783
8,141
5,897
7,614
9,756
7,665
5,026
6,754
3,500
2,666
1,482
287
2,630
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Net Inflo
w ( | C
r )
BALANCED
Source: AMFI, ICICI Direct Research
Exhibit 12: YoY 46% growth in AUM of balanced funds
128320
134868
147460
155105
167385
176087
174468
172151
181306
177995
174737
180647
187924
93000
113000
133000
153000
173000
193000
213000
233000
253000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
| C
rore
Balanced
Source: AMFI, ICICI Direct Research
Preferred Picks
ICICI Prudential Equity & Debt Fund
HDFC Hybrid Equity Fund
DSP Blackrock Equity & Bond 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
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 very much depends 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: Neutral
ICICI Securities Ltd. | Retail MF Research Page 12
Debt funds
Exhibit 13: Category average returns
6.8
6.9
6.1
6.2
4.0 4.4
3.8
3.6
3.0
0.8
2.5
6.7
6.7
6.2
6.2
4.5
4.3
3.6
3.3
1.1
-0.8
-1.1
7.02
7.21
7.26
7.36
7.70
6.82
7.36
6.74
6.50
5.56
6.15
-2
0
2
4
6
8
10
12
Liq
uid
Money M
arket
Ultra Short Term
Low
D
uratio
n
Credit R
isk
Short T
erm
Medium
D
uratio
n
Corporate B
ond
Dynam
ic B
ond
Long Term
Gilt
Returns (%
)
6 months 1 year 3year
Source: Crisil, ICICI Direct Research
Note : Returns as on September 18, 2018; All returns are compounded annualised
Exhibit 14: G-sec yield curve
7.40
8.05 7.927.86
7.31
7.73
8.158.10
6.9
7.2
7.5
7.8
8.1
8.4
1yr 3yr 5yr 10yr
Yie
ld (%
)
17-Sep-18 16-Aug-18
Source: Bloomberg
Exhibit 15: Corporate bond curve
8.68
9.06 9.03
8.73
8.27
8.56
8.67
9.05
8.0
8.3
8.6
8.9
9.2
1yr 3yr 5yr 10 yr
Yie
ld (%
)
14-Sep-18 16-Aug-18
Source: Bloomberg
Benchmark 10 year G sec yield near the 7.8% mark
ICICI Securities Ltd. | Retail MF Research Page 13
Short term fixed income allocation (less than 1 year)
Investment into debt funds for short term investment horizon of less
than a year can be considered in the following categories:
a. Overnight funds – invest in securities having maturity of a day
b. Liquid funds – invest in securities having maturity up to 91 days
c. Ultra short funds – invest in securities having maturity between
three and six months
d. Low duration funds – invest in securities having maturity
between six and 12 months
e. Money market funds – invest in money market securities having
maturity up to a year
Among these categories, we believe that ultra short term funds and
low duration funds categories offer a relatively better investment
opportunity
Ultra short-term bond funds and low duration funds are an ideal
option to park money temporarily compared to overnight or liquid
fund categories. They offer higher return potential by investing a
higher proportion in a mix of corporate bonds and commercial
papers compared to overnight/liquid funds. At the same time, most
funds in these categories do not have exit load restrictions, thereby
making them liquid from an investors’s perspective
Money market funds are also a worthwhile option from liquidity and
credit quality perspective, particularly for conservative investors.
However, the return potential may be lower compared to ultra
short/low duration categories
Exhibit 16: Call rates below repo rate
5.6
5.8
6
6.2
6.4
6.6
6.8
7
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-1
8
%
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
Sep-1
6
Dec-16
Mar-17
Jun-17
Sep-1
7
Dec-17
Mar-18
Jun-18
Sep-1
8
%
3M CP 3M CD
Source: Bloomberg, ICICI Direct Research
Preferred Picks
Ultra Short Term
Aditya Birla SL Savings Fund
Franklin India Ultra Short Term Bond Fund
L&T Ultra Short Term Fund
Low Duration
L&T Low Duration Fund
Kotak Low Duration Fund
ICICI Pru Savings Fund
(Refer to www.icicidirect.com for details of the fund)
Positive View
Ultra-short term
Low Duration
Short term Commercial Paper (CP) and Corporate
Deposit (CD) rates have risen sharply in past few months
thereby offering a good opportunity in these segments
ICICI Securities Ltd. | Retail MF Research Page 14
Long term fixed income allocation (more than 1 year)
Investment into debt funds for long term investment horizon of
more than a year can be considered in following categories:
i. Short duration funds – invest in securities having duration
between one and three years
ii. Medium duration funds – invest in securities having duration
between one and four years
iii. Medium to long/long duration funds – invest in securities
having duration between four and seven years/more than
seven years, respectively. Funds in theses categories invest in
a mix of corporate debt and G-secs
iv. Dynamic bond funds - invest across duration
v. Corporate bond funds – invest in highest rated instruments
(AA+ and AAA)
vi. Credit risk funds – invest in below highest rated instruments
(below AA+)
vii. Gilt funds – invest in G-secs across maturity
Among these categories, we believe medium duration funds and
credit risk funds categories offer relatively better investment
opportunity. Short term funds are also a worthwhile option for
conservative investors. However, the return potential may be lower
compared to medium duration and credit risk categories due to
higher credit quality
In the medium duration category, many funds offer an optimum mix
of credit quality along with higher return potential. Credit quality in
this category is lower than short duration funds but higher than
credit risk category
Credit risk funds are more suitable for aggressive investors as they
fall within higher risk-higher return potential. However, few funds
are offering optimal mix of credit risk for reasonable return potential
and can be considered from a long term point of view
Exhibit 18: Income funds flows
8,390
-50,090
40,845
9,374
-60,151
-9,871
-9,799
-13,719 5
,220
-20,407
-23,119
-7,950
-6,520
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Net Inflo
ws
(| .C
r)
INCOME
Source: AMFI, ICICI Direct Research
Exhibit 19: AUM remains stable on consistent inflows
845484
858188
809965
855478
867736
808252
801405
791494
785553
790016
784822
760715
759479
600000
700000
800000
900000
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-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
Medium Term Funds
Axis Strategic Bond Fund
DSP Bond Fund
UTI Medium Term Fund
Credit Risk Funds
Franklin India Credit Risk Fund
Aditya Birla SL Credit Risk Fund
Reliance Credit Risk Fund
(Refer www.icicidirect.com for details of the fund)
Positive View
Medium Duration
Credit Risk
ICICI Securities Ltd. | Retail MF Research Page 15
Gold: Outlook anchored to Fed movement
Gold endured a flat month within the range of ~US$1175-1215 per
ounce. Starting August at US$1224 per ounce, prices briefly dipped
as low as US$1175 per ounce before recovering a bit to end August
at US$1200 per ounce and have remained around that level
thereafter. Thus, global prices are ~8% lower than in YTD terms
On the other hand, Indian prices, having remained largely flat at
~| 29900-30000 per 10 gram during August, have steadily risen
during the first two weeks of September, touching ~| 30600 per 10
gram on September 17
Geopolitical fears have resurfaced in recent months. Gold could
provide a safe haven in the short-term in the event of a risk off
environment. Worries surrounding tensions between US-Iran and
US-China could lend support to the yellow metal
The Fed held rates steady at its August meeting as expected.
Earlier, the Fed had raised rates thrice in 2017 and twice in 2018.
Structurally, a rate hike programme by the US Federal Reserve this
year and in following years along with other central banks like the
European Central Bank and the Bank of Japan scaling back stimulus
may prevent any sustained medium term rally in gold price
The US dollar continued to remain strong against a basket of major
currencies. The Dollar Index rose from an average of 94.3 in June to
94.6 in July and 95.4 in August. Dollar strength is negative for gold
since the metal is priced in that currency
Exhibit 20: Gold: Globally loses sheen
1100
1150
1200
1250
1300
1350
1400
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-1
8
Price ($/ounce)
Source: Bloomberg
Exhibit 21: Indian prices on stronger footing compared to global prices
28000
29000
30000
31000
32000
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-1
8
Price (|/10 grams)
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 22: 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 % Allocation % Allocation
Franklin India Focused Equity Fund 20 - -
Principal Emerging Bluechip Fund - 20 20
HDFC Smallcap Fund 20 20 -
SBI Bluechip Fund - - 20
Kotak Standard Multicap Fund 20 20 -
HDFC Midcap Opportunities Fund 20 20 -
L&T Midcap Fund 20 - -
Mirae Asset India Equity Fund - 20 20
ICICI Prudential Bluechip Fund - - 20
Reliance Large Cap Fund - - 20
Total 100 100 100
Source: ICICI Direct Research
Exhibit 23: Model portfolio performance since inception
18.3%
17.0%16.4%
15.4%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
Aggressive Moderate Conservative BSE 100 TRI
%
Aggressive Moderate Conservative BSE 100 TRI
Source: Crisil Fund Analyser, ICICI Direct Research; CAGR performance as on 31 August 2018
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 24: Debt funds model portfolio
Objective Liquidity
Liquidity with
moderate return Above FD
Review Interval Monthly Monthly Quarterly
Funds Allocation
Aditya Birla SL Savings Fund 20 20
ICICI Pru Savings Plan 20
Franklin India Ultra Short Bond Fund 20
DSP Bond Fund 20 20
Kotak Low Duration Fund 20 20
Franklin India Corporate Debt Fund 20
L&T Ultra Short Term Fund 20 20
Aditya Birla Sun Life Credit Risk Fund 20
UTI Medium Term Fund 20
L&T Low Duration Fund 20 20
Total 100 100 100
% Allocation
Source: ICICI Direct Research
Exhibit 32: Model portfolio performance since inception
8.1% 8.2%8.4%
7.7% 7.9% 8.0%
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, ICICI Direct Research; CAGR performance as on 31 August 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 Bond Fund Index; Above 1 year: Crisil Short Term Bond Fund
Index
ICICI Securities Ltd. | Retail MF Research Page 18
Top Picks
Exhibit 33: Category wise top picks
Largecaps ICICI Pru Focused Bluechip Fund
SBI Bluechip Fund
Reliance Large Cap Fund
Large and Midcaps DSP Blackrock Equity Opportunities Fund
IDFC Core Equity Fund
Principal Emerging Bluechip Fund
Multicaps HDFC Equity Fund
Kotak Standard Multicap Fund
Mirae Asset India Equity Fund
Midcaps HDFC Midcap Opportunities Fund
Kotak Emerging Equity Fund
L&T Midcap Fund
Smallcaps L&T Emerging Businesses Fund
Reliance Small Cap Fund
HDFC Small Cap Fund
Focused ICICI Pru Focused Equity Fund
Franklin India Focused Equity Fund
Reliance Focused Equity Fund
ELSS Aditya Birla Tax Relief 96 Fund
DSP Blackrock Tax Saver Fund
IDFC Tax Advantage Fund
Aggressive Hybrid HDFC Hybrid Equity Fund
ICICI Pru Equity & Debt Fund
DSP Equity and Bond Fund
Equity Funds & Equity-oriented Funds
Category Fund Category Comment
Overnight / Liquid / Ultra Short Term Aditya Birla SL Savings Fund Volatility - low
Franklin India Ultra Short Bond Fund Investment horizon - 0-6m
L&T Ultra Short Term Fund
Low Duration / Money Market L&T Low Duration Fund Volatility - low
Kotak Low Duration Fund Investment horizon - 0-12m
ICICI Pru Savings Fund
Short Term HDFC Short Term Debt Fund Volatility - low
Aditya Birla SL Short Term Opportunities Fund Investment horizon - more than 1 year
L&T Short Term Bond Fund Credit risk - low
Medium Term UTI Medium Term Fund Volatility - medium
Axis Strategic Bond Fund Investment horizon - more than 1 year
DSP Bond Fund Credit risk - medium
Medium to Long Term / Long Term Aditya Birla SL Income Fund Volatility - high
ICICI Pru Bond Fund Investment horizon - more than 1 year
Reliance Nivesh Lakshya Fund Credit risk - low
Dynamic Bond Fund Aditya Birla SL Dynamic Bond Fund Volatility - high
UTI Dynamic Bond Fund Investment horizon - more than 1 year
IDFC Dynamic Bond Fund Credit risk - medium
Corporate Bond Franklin India Corporate Debt Fund Volatility - low
HDFC Corporate Bond Fund Investment horizon - more than 1 year
Aditya Birla SL Corporate Bond Fund Credit risk - low
Credit Risk Franklin India Credit Risk Fund Volatility - medium
Aditya Birla SL Credit Risk Fund Investment horizon - more than 1 year
Reliance Credit Risk Fund Credit risk - high
Gilt IDFC G-Sec Fund - Investment Plan Volatility - high
Aditya Birla SL G-Sec Fund Investment horizon - more than 1 year
ICICI Pru Gilt Fund Credit risk - low
Debt 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. ICICI Securities
Limited Sebi Single Registration is INZ000183631 for stock broker. 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
other person or to the media or reproduced in any form, without prior written consent of ICICI Securities Limited. The contents of this mail are solely for informational purpose and may not be used or
considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. While due care has been taken in
preparing this mail, I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any inaccurate, delayed or incomplete information nor for any actions taken in reliance
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 and Jaimin Desai, 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.