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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

November 20, 2017

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 ............................................................................................ 7

Equity Pharma funds ........................................................................................... 8

Equity Technology Funds .................................................................................... 8

Exchange Traded Funds (ETF) ......................................................................... 9

Balanced funds ............................................................................................. 10

Monthly Income Plans (MIP) ........................................................................ 11

Arbitrage Funds ............................................................................................. 11

Debt funds ..................................................................................................... 12

Liquid Funds 13

Income funds .................................................................................................... 14

Gilt Funds 15

Gold: Outlook anchored to geopolitical worries, Fed movement ..................... 16

Model Portfolios ................................................................................................ 17

Equity funds model portfolio ......................................................................... 17

Debt funds model portfolio ............................................................................ 18

Top Picks ........................................................................................................... 19


Page 2

Equity Markets

Update

Indian equity markets continued their uptrend and made new highs.

However, market witnessed some minor profit booking after making

fresh all-time highs in the first week of November 2017

Unlike the previous few quarters, which were marred by earnings

downgrades, corporate earnings, thus far, in Q2FY18 have not belied

expectations and have led consensus EPS for FY18 and FY19 to remain

stable. Retail consumer focused sectors like automobiles, consumer

durables, fast moving consumer goods (FMCG), media & entertainment,

hospitality and retail posted strong double digit sales growth indicating

a revival in consumer demand. Sectors such as cement also reported

better-than-expected volume growth

Incremental macroeconomic indicators have been stable to positive

with India improving its rank in ‘ease of dong business’ to 100 by

jumping 30 places. Core sector growth was stable at 5.2% in

September 2017 while fiscal deficit for H1FY18 was at 91.3% of full-year

target, down from 96% by the end of August 2017. PSU bank

recapitalisation was a major policy boost from the government, which

lifted market sentiments. The government also announced huge

infrastructure spending on roads and housing

The current up move is backed by broad based participation with

sectoral heavyweight Nifty Bank along with beaten down sectors like

telecom, infra and pharma witnessing strong participation. The

persistent outperformance of broader markets also highlights the

positive sentiment across larger section of the market and augurs well

for continuance of the up move, going forward

Mutual funds have been dominant buyers in CY17 as they pumped in

more than 1 lakh core in 2017 till November. Investment by mutual

funds is backed by consistent strong inflows by retail investors. Equity

oriented funds witness ~18300 crore of inflows in 2017 till October

Outlook

The disruption from the implementation of GST and demonetisation

seems to be over now with companies now. The benefit of both these

events is likely to be witnessed in the medium-term, going forward

The recent quarterly results were overall in line with expectations and

indicate that the recovery in earnings, going forward, could be far better

than widely expected

While some profit booking was witnessed in many stocks that had run

up, buying interest was also witnessed at lower levels. The same

indicates strong appetite for quality stocks at every lower level

The Government of India has announced a major recapitalisation plan

for PSU banks entailing a capital infusion of | 211000 crore in the next

two years. The government outlined the thrust being put on

infrastructure development as a matter of policy, with roads, railways,

housing, power and digital infrastructure key focus areas involving

capital expenditure. The same is likely to keep investors interest upbeat

The overall bias remains positive. However, given the sharp rally in

recent months, it is better to avoid lumpsum investment and continue

with the staggered buying approach

Nifty 50: Markets remain near all-time highs

7500

8000

8500

9000

9500

10000

10500

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Source: Bloomberg, ICICIdirect.com Research

Smallcap, midcap indices remain outperformer

1.8

1.7

0.4

-0.1

-0.4

-0.6

-1

0

1

2

BS

E S

mall cap

BS

E M

idcap

Sensex

BS

E 5

00

BS

E 2

00

BS

E 1

00

Source: Bloomberg

One month returns till November 15, 2017

Real estate, capital goods bounce back, healthcare,

metals drag

4

4

3

2

-1

-1

-1

-5

-6-6

-4

-2

0

2

4

6

Real Estate

CG

Bankin

g IT

Oil n G

as

Auto

FM

CG

Healthcare

Metals

Source: Bloomberg

One month returns till November 15, 2017

Research Analyst

Sachin Jain

[email protected]

Jaimin Desai

[email protected]


Page 3

Debt Markets

Update

The Indian fixed income market was under pressure especially longer

dated securities with G-Sec yields moving sharply higher due to

concerns arising over fear of fiscal slippage, rising international crude

oil prices, higher US bond yields and continuing OMO sales by RBI

The yield on 10-year benchmark G-Sec is currently trading above 7.0%.

The yield on 10-year AAA corporate bonds ended the month at 7.60%

against 7.47% at the end of September 2017. Thus, corporate bond

spreads during the month narrowed to 62 bps against 72 bps in the

previous month

The government announced a | 2.11 lakh crore recapitalisation plan for

public sector banks involving issue of recapitalisation bonds worth

| 1.35 lakh crores and | 0.76 lakh crore through market and budgetary

sources. The exact nature and fiscal impact, if any, of the

recapitalisation bonds would be known over the next few months

CPI inflation for October was at 3.58%, a seven-month high. Inflation

over the last few months has been moving upwards mainly due to

volatile vegetables and other food items. A sharp rise in crude oil prices

has also started to have an adverse impact. A consistent rise above 4%

level (RBI’s medium term target) may have some negative impact on

long bond yields

In its monetary meeting at the start of October, RBI acknowledged that

food prices are likely to remain largely stable but outlined building up of

pricing pressures in fuel (largely from crude oil). It mentioned that

upside risks to the inflation trajectory could arise from fiscal slippages

due to farm loan waivers and state’s implementation of salary and

allowances. Factors like increased likelihood of US Fed rate hike later in

the year and quantitative easing (QE) retreat relatively soon could have

prevented a rate cut or change of policy stance

Almost all industrial commodity prices have risen sharply around 30-

50% over the last few months. Crude oil prices have risen sharply in the

last three months from around US$50 per barrel to above US$60 per

barrel. Although not a major cause of concern, a further rise in

commodity prices may lead inflationary concerns to re-surface

Outlook

Foreign portfolio investors (FPI), after having invested ~US$20 billion

since February 2017, have exhausted their investment limit. Absence of

further investment from FPI is also putting some pressure on G-Sec

yields

Although the overall view on the Indian debt market remains positive,

any sharp rally in G-Sec is not expected. Corporate bonds remain a

preferred investment option in the absence of expectation of any major

significant capital gains in government securities

Short-term accrual debt funds with mix of AAA/AA/A rated papers and

low expense ratio offer a better investment option

G-sec yields break above 7% after 14 months

5.5

5.8

6.0

6.3

6.5

6.8

7.0

7.3

7.5

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Source: Bloomberg

G-sec yield curve: Yields steepen across

maturities

6.14

6.41

6.67

6.74

6.20

6.59

6.887.05

6.0

6.2

6.4

6.6

6.8

7.0

7.2

1yr 3yr 5yr 10yr

Yie

ld (%

)

14-Nov-17 13-Oct-17


AAA corporate bond yield curve steepens across

maturities

6.88

7.19 7.09

7.67

6.99

7.30 7.33

7.90

6.4

6.8

7.2

7.6

8.0

1yr 3yr 5yr 10 yr

Yie

ld (%

)

14-Nov-17 13-Oct-17



Page 4

MF industry synopsis

Mutual fund assets have shown remarkable growth over the last three

years, driven by record inflows into equity schemes and strong

performance. Total assets managed by mutual funds touched a fresh

record high of | 21.41 lakh crore in October 2017, up ~4.9% over the

September figure of | 20.40 lakh crore. This represents a ~31.44%

increase YoY and an ~30% increase from December 2016. Of the total

MF corpus, ~40% was held by income funds and ~33% by equity and

ELSS funds

According to AMFI data, systematic investment plans (SIPs) inflows for

October were at ~| 5600 crore, up from ~| 5500 crore previously. SIP

inflows averaged ~ | 3600 crore per month in FY17

In the trailing 12 months, the mutual fund industry saw a net inflow of

| 3.29 lakh crore. Out of the total net inflow, | 1.35 lakh crore came into

equity and ELSS funds, about 42%

Despite volatility in equity markets, inflows in equity mutual funds have

remained steady. October saw a net inflow of ~| 21805 crore in equity

and equity-oriented funds, which is in line with the monthly average

thus far in FY18. This trend reflects the increasing participation of

investors in mutual funds

Exhibit 1: Equity, equity-oriented funds receiving twice as much net

monthly inflows in FY18 as in FY17

1000000

1200000

1400000

1600000

1800000

2000000

2200000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Total AUM

Source: AMFI

Exhibit 2: AUM of Top 10 AMCs

288,827

283,632

244,179

239,601

202,652

153,854

117,419

99,539

85,828

72,567

50000

100000

150000

200000

250000

300000

350000

AUM

Source: ACE MF

Exhibit 3: Fraklin Templeton has highest proportion of equity AUM as

percentage of its AUM, SBI a close second

48%

47%

43%

41%

36%

36%

34%

34%

32%

29%

0%

20%

40%

60%

80%

Equity % Debt% Others%

Source: ACE MF. Data as of October 2017

Exhibit 4: Within retail category, equity funds witness significant inflows

in FY17…

-2000

4000

10000

16000

22000

28000

34000

40000

46000

52000

58000

EQ

UITY

BA

LA

NC

ED

OTH

ER

ETFs

ELS

S -

EQ

UITY

GO

LD

ETFs

GILT

FY16

Source: ACE MF. Data as on March 2017


Page 5

MF Category Analysis

Equity funds

Infrastructure funds emerged as the best performing category of equity

funds for a third consecutive month. This category along with banking

as well as FMCG funds continued to outperform information technology

(IT) and pharma funds by wide margins. Pharma funds were in the red

to the tune of ~5.8%

In terms of market cap-based funds, midcap funds continued their

dominance over large cap funds. Overall, midcap funds were among

the best performing equity fund categories on a one year basis

Structural industrywide problems continue to plague pharma and

technology funds. Pharma stocks delivered a muted performance in

Q2FY18 amid persistent pressure over pricing, compliance issues and a

fear of shrinking growth in the large US market. Challenges to

traditional services, H1B visa issues and US government action fears

persisted on overhangs over technology stocks and consequently,

technology funds

Exhibit 5: Infrastructure funds continue to outperform other categories with pharma funds still

under pressure (returns as on November 15, 2017)

S

35.6

34.8

33.8

29.9

28.6

25.9

19.1

-5.8

13.1 1

7.5

13.6

12.6

12.2

9.3

3.5

1.4

16.8

24.9

14.9

15.0

18.2

15.3

16.9

14.9

-10

-5

0

5

10

15

20

25

30

35

40

Infrastructure Mid cap FMCG Banking Multi cap Large Cap Technology Pharma

Returns (%

)

1 year 3 Year 5 year

Source: Crisil, ICICIdirect.com Research ; Returns over one year are compounded annualised returns

Exhibit 6: Strong inflows continue into equity and ELSS schemes

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-

17

Net In

flow

( |

Cr )

Equity + ELSS

Source: AMFI, ICICIdirect.com Research

Exhibit 7: Robust inflow in equity funds pushes up AUM to cross | 7.0

lakh crore

400000

450000

500000

550000

600000

650000

700000

750000

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-

17

| lakh C

rore

Equity +ELSS



Page 6

Equity diversified funds

Equity diversified funds witnessed robust growth over the last three

years, with AUM within each sub-category rising substantially. In the

last three years in FY14-17, the AUM of large cap funds rose 129%,

multi cap funds AUM rose 105% while midcap funds AUM rose 206%

Over this period, while all three sub-categories have delivered a strong

performance (Exhibit 8), midcap funds have done exceedingly well and

outperformed. This is reflected in the trend of broader indices

outperforming bellwether indices over this time frame. However, large

cap funds have reversed that trend at some points during the past few

months

Multicap funds are relatively more market cap agnostic and hold

positions in a wider range of companies than pure large cap funds or

pure midcap/small cap funds. Multicap funds generally hold around 50-

60% of their portfolio in large cap stocks and 30-40% in midcap stocks.

They have benefited by capturing a part of the midcap rally during this

period and, thus, outperformed pure large cap funds

In the present market scenario, bottom up stock picking across the

market segment is more important than allocation to a particular

segment or sub sector. Multicap funds offer fund managers flexibility to

allocate funds across all market segment and are, therefore, relatively

better placed

Exhibit 8: Robust AUM growth across all equity diversified fund sub-categories from 2014

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

|crs

Large Caps Multi Caps Mid Caps

Source: ACE MF

Recommended funds

Large cap

Birla Sunlife Frontline Equity

ICICI Prudential Focused Bluechip Equity

SBI Bluechip Fund

Multi cap

Franklin India Prima Plus Fund

Kotak Select Focus Fund

Motilal Oswal MOSt Focused Multicap 35 Fund

Midcap

HDFC Mid-Cap Opportunities Fund

Franklin India Smaller Companies Fund

L&T Emerging Businesses Fund

(Refer to www.icicidirect.com for details of the fund)

View

Short term: Positive

Long-term: Positive

http://content.icicidirect.com/newsiteContent/Research/MutualFunds.asp


Page 7

Equity infrastructure funds

The government recently announced its historic road building

programme to construct 83677 km of roads over the next five years at a

total outlay of | 6.92 lakh crore. This also includes the phase 1 of

Bharatmala project, which includes construction of 34800 km of roads

at an investment of | 5.35 lakh crore in the next five years. Government

spending and focused push towards sectors such as roads, railways,

housing and power could lead to greater opportunities to infrastructure

players, apart from the benefit of increased transparency in the system

A number of infrastructure related government schemes and the

introduction of new regulatory measures are expected to help

organised players in the infrastructure space over the medium to long

term, placing infrastructure and ancillary stocks on an attractive footing

Preferred Picks

Aditya Birla SL Infrastructure Fund Refer

www.icicidirect.com for

details of the fund

L&T Infrastructure Fund

Reliance Diversified Power Sector Fund

Equity banking funds

Q2FY18 results provided good news on the asset quality front as most

PSU banks reported lower slippages compared to the previous quarter.

Operating earnings of the banking system grew at a healthy rate of

12.2% YoY but higher provisions during the quarter impacted profits. A

key monitorable, going forward, would be the resolution of accounts

referred to NCLT in ensuing quarters

We remain optimistic on the banking sector keeping in mind the

anticipated pick-up in credit offtake. Steady margins and peaking out of

the NPA cycle is expected to further aid profitability

From a long term point of view, the recently announced PSU bank

recapitalisation programme is a structural positive for the sector. The

continued government push on financial inclusion, reduction in the

black economy, enhanced awareness and increased usage of digital or

electronic payments will be positives for the banking industry from an

operating cost perspective

Preferred Picks

ICICI Prudential Banking & Financial Services Refer to


details of the fund

Reliance Banking Fund

UTI Banking Sector Fund

Equity FMCG Funds

Several FMCG companies enjoyed strong volume growth on the back

of restocking by trade channels in Q2FY18. Most companies witnessed

stong pre-festive demand along with healthy rural growth spurred by

good monsoon. Many companies are aggressively focussing on digitial

advertisement to reach larger audiences at a reduced spend.

We maintain our positive outlook on the FMCG sector backed by the

rural consumption revival led by largely normal monsoons and the

government’s focus on increasing farm incomes. We also expect GST

implementation to eventually provide a big boost to FMCG companies,

particularly those present in personal care and household categories

Preferred Picks

ICICI Prudential FMCG Fund Refer


details of the fund

SBI FMCG Fund

View

Short-term: Positive

Long-term: Positive

View


Long-term: Positive

View


Long-term: Positive





Page 8

Equity Pharma funds

Pharmaceutical companies reported a muted Q2FY18 performance as

expected. Q1FY18 was also quite poor for the sector. A challenging

environment in the US outweighed domestic formulations recovery

post GST implementation. Leading players in the US market continue to

be bogged down by price erosion borne out of intense competition and

client consolidation. Pharma, being a largely export-oriented sector,

faces additional pressure from emergence of a stronger rupee

However, despite these apprehensions, in the long term, we remain

optimistic about the sector’s prospects on the back of attractive

valuations and earnings momentum pick-up led by incremental product

launches in the US besides normalising Indian formulations growth

Preferred Picks

Reliance Pharma Fund Refer to

www.icicidirect.com

for details of the fund

SBI Pharma Fund

UTI-Pharma & Healthcare

Equity Technology Funds

Technology companies report muted results as expected, with cross

currency tailwinds helping Tier-I IT companies post 2.8% sequentially

higher dollar revenue growth in Q2FY18. Subdued corporate results

demonstrate the shifting business environment in the technology

sector. Future expectations would be centred around management

guidance. In the short-term, rupee appreciation, increased local hiring

and demand for investments in digital would need monitoring from a

margins perspective

We maintain our neutral stance on the sector as the industry faces

challenges related to US immigration rules and growing protectionism

around the world leading to marginal IT spending by companies. The

industry would continue to witness pricing pressure in its traditional

business, which is currently unable to offset newer revenue streams

from digital areas that enjoys higher margins

Preferred Picks

ICICI Prudential Technology Fund Refer to


details of the fund

DSPBR Technology fund

View

Short-term: Neutral

Long-term: Neutral

View

Short-term: Neutral

Long-term: Positive




Page 9

Exchange Traded Funds (ETF)

In India, three kinds of ETFs are available: Equity index ETFs, liquid

ETFs and gold ETFs

An equity index ETF tracks a particular equity index such as the BSE

Sensex, NSE Nifty, Nifty Junior, etc

An equity index ETF scores higher than index funds on several grounds.

The expense of investing in ETFs is relatively less by 0.50-0.75% in

comparison to an index fund. The expense ratio for equity ETFs is in the

range of 0.05-0.25% while for index funds the expense ratio varies in

the range of 0.50-1.25%. However, brokerage (which varies) is

applicable on ETFs while there are no entry loads now on index funds

Tracking error, which explains extent of deviation of returns from the

underlying index, is usually low in ETFs as it tracks the equity index on

a real time basis whereas it is done only once in a day for index funds

ETFs also provide liquidity as they are traded on stock exchanges and

investors may subscribe or redeem them even on an intra-day basis.

This is unavailable in index funds, which are subscribed/redeemed only

on a closing NAV basis

In August 2015, the Labour Ministry decided to invest 5% of

Employees’ Provident Fund Organisation’s (EPFO) incremental corpus

in ETFs. The investment in equities is split between the Nifty ETF (75%)

and Sensex ETFs 25%. EPFO chose two ETF schemes of SBI Mutual

Fund—SBI ETF Nifty and SBI Sensex ETF

In 2016, the EPFO hiked the limit from 5% to 10% of its incremental

corpus of investment in equities, which was further increased to 15% of

its incremental corpus in May 2017. This is a positive move since

retirement savings, which are long term in nature, will be invested in

equities that have the potential to generate higher returns. So far, EPFO

has invested a total of ~| 22,000 crore in exchange traded funds as of

April 2017

Over 400 ETFs are traded globally. ETFs are transparent and cost

efficient. The decision on which ETF to buy should be largely governed

by the decision on getting exposure to that asset class

Exhibit 9: Sensex/Nifty ETFs receiving consistently higher inflows…

940

2830

4349

6748

930

3599

456 584

13651753

1513

19681675

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Net Inflo

w ( | C

r )


Exhibit 10: …leading to consistent increase in AUM

23943

25211

28834

37412

40147

44436

45899

47584

48359

52823

53734

55166

60107

0

10000

20000

30000

40000

50000

60000

70000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

| C

rore

Other ETFs


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...


Page 10

Balanced funds

The balanced funds category continued to receive significant flows,

with the average monthly inflow (net) for 12 months to October 2017

amounting to ~ | 6200 crore

The AUM of balanced funds has witnessed a stellar increase during this

period, more than doubling to | 147460 crore in October 2017 from

| 61107 crore in the year ago period

Over the last two or three years, the balanced space has emerged as

one of the fastest growing equity categories and offers an ideal gateway

for first time retail equity investors. In FY17, balanced funds AUM

growth outpaced all other categories bar non-gold ETFs

Balanced funds are hybrid funds. More than 65% of the overall portfolio

is invested in equities. Hence, as per provisions of the Income Tax Act,

1961, any capital gains over a year become tax free. Also, dividends

declared by funds are tax free in the hands of the investor

In case one separately invests 35% of one’s investible corpus in a debt

fund, the same will be subject to higher taxation. However, if the whole

corpus is invested in balanced funds, 100% shall have lower taxation

applicable as mentioned above. Thus, balanced funds offer the benefit

of equity taxation on debt component

After a sharp rally in equity markets, the funds can be a preferred

investment avenue as the debt proportion serves to protect on

intermediate relief rallies or the downturn while providing minimum

65% participation on further upsides

Exhibit 11: Despite some moderation in the last 2 months, inflow into

balanced funds remain strong

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Net Inflo

w ( | C

r )


Exhibit 12: YoY 141% growth in AUM of balanced funds

61107

62907

64954

71021

77126

84763

93530

102156

109513

121243

128320

134868

147460

13000

33000

53000

73000

93000

113000

133000

153000

173000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

| C

rore

Balanced


Preferred Picks

ICICI Prudential Balanced Fund

HDFC Balanced Fund

Birla Sun Life Balanced 95 Fund

DSP Blackrock Balanced Fund

L&T India Prudence 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


Long-term: Positive



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 tax free.

No capital gains tax will be applicable if they are sold after a year

These funds can be looked upon as an alternative to liquid funds.

However, for these funds, returns totally depend on arbitrage

opportunities available at a particular point of time and investors should

consider reviewing the same before investing. Returns of arbitrage

funds are non-linear and, therefore, unsuitable for investors who want

consistent return across time period

Arbitrage funds should be used as a liquid investment and should not

be a major part of the investor’s portfolio. A range bound market does

not give ample room to create arbitrage positions

Preferred Picks

ICICI Prudential Equity - Arbitrage Fund – Regular

IDFC Arbitrage Fund - (Regular)

Kotak Equity Arbitrage Fund

SBI Arbitrage Opportunities Fund


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




Page 12

Debt funds

Exhibit 13: Category average returns

4.5

3.9

9.2

6.1

4.9

8.5

7.2

6.5

8.3

7.0

6.6

7.9

6.2

6.2 7

.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

6 months 1 year 3year

%

Gilt Funds Income LT Income ST Income UST Liquid

Source: ACE MF, ICICIdirect.com Research

Note : Returns as on November 15, 2017; All returns are compounded annualised

Exhibit 14: G-sec yield curve

6.14

6.41

6.67

6.74

6.20

6.59

6.887.05

6.0

6.2

6.4

6.6

6.8

7.0

7.2

1yr 3yr 5yr 10yr

Yie

ld (%

)

14-Nov-17 13-Oct-17


Exhibit 15: Corporate bond curve

6.88

7.19 7.09

7.67

6.99

7.30 7.33

7.90

6.4

6.8

7.2

7.6

8.0

1yr 3yr 5yr 10 yr

Yie

ld (%

)

14-Nov-17 13-Oct-17


Benchmark 10 year G-Sec has witnessed yields

softening by ~20 bps since the end of April

Interest rates moved up on the longer end of the G-Sec and

corporate bond category


Page 13

Liquid Funds

Yields on money market instruments viz. less than one year CDs and

CPs in which liquid fund predominantly invest, remain stable at lower

levels due to ample liquidity

In an uncertain environment, liquid funds remain well placed to park

money with low volatility

For less than a year, individuals in the higher tax bracket should opt for

dividend option as the dividend distribution tax @ 28.325% is

marginally lower. Also, though the tax arbitrage has reduced, they still

earn better pre-tax returns over bank savings (3-4%) and current

accounts (0-3%)

Changes in taxation rules announced in Union Budget 2014 are also

applicable to liquid funds, as post tax returns in less than a three-year

period get reduced for individuals in the higher tax bracket (30% tax

slab) and for corporate

Exhibit 16: Call rates below repo rate

5

5.4

5.8

6.2

6.6

7

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

%

Call rate


Exhibit 17: CP/CD yields

5.0

5.5

6.0

6.5

7.0

7.5

8.0

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

%3M CD 3M CP


Exhibit 18: Flows into liquid funds remain volatile on institutional activity

-34,813

1,350

26,943

10,541

8,227

-15,147

99,403

-64,692 -12,739

-19,511

21,352

4,833

-13,261

-200,000

-160,000

-120,000

-80,000

-40,000

0

40,000

80,000

120,000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Net Inflo

w ( | C

r )


Exhibit 19: AUM remains healthy

402671

405662

384350

354642

386403

399775

415087

428212

450533

467418

468022

484802

468668

300000

400000

500000

600000

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

| la

kh C

rore

Money Market


Preferred Picks

HDFC Cash Management Fund - Savings Plan

SBI Magnum InstaCash

Reliance Liquid Fund - Treasury Plan


View

Neutral



Page 14

Income funds

A two year high in crude oil prices, higher inflation data, large quantum

of bond sales by RBI, uncertainty surrounding the nature of bank

recapitalisation bonds and fears of fiscal slippage helped drive

benchmark 10 year G-Sec yield above the 7% mark for the first time in

14 months in early November. October’s pick up in CPI inflation to a

seven month high of 3.58% followed consecutively higher inflation

readings in July (2.36% YoY) and August (3.28% YoY) than the series-

low June headline CPI print of 1.54%. The October MPC policy

document outlined aspects such as rebound in core & fuel inflation and

the possibility of fiscal slippages as some factors influencing its decision

to maintain status quo on rates. Food prices rose in October on the

back of spike in vegetables and milk while the percolation effects of

HRA implementation for government employees and crude-led spurts

in the fuel basket were also apparent. Core inflation remained sticky.

Further, persistent stickiness could lead the RBI to maintain a prolonged

pause on rates. The RBI revised upwards its inflation projection for

H2FY18 to 4.2-4.6% from 3.5-4.5%

Dynamic bond funds or short-term funds with some dynamic allocation

to G-Sec should be preferred over pure G-Sec funds or long-term

duration funds

Short-term debt funds remain a stable performing category, especially

in the current volatile environment. Credit funds with reasonable credit

quality should be preferred over an aggressive credit fund

Exhibit 20: Income funds see significant inflow in October

52,1

25

18,3

06

-33,1

82

28,5

88

10,8

64

-56,2

47

34,6

47

5,1

24

-20,6

85

60,0

84

8,3

90

-50,0

90

40,8

45

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

80,000

Oct-

16

Dec-1

6

Feb-1

7

Apr-

17

Jun-1

7

Aug-1

7

Oct-

17

Net In

flow

s

(| .

Cr)


Exhibit 21: AUM remains stable on consistent inflows

698418

754662

784305

748071

783778

794679

743783

780797

792734

778266

845484

858188

809965

400000

500000

600000

700000

800000

900000

Oct-

16

Nov-1

6

Dec-1

6

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct-

17

| C

rore

Income


Recommended funds

Ultra Short Term Funds

Birla Sun Life Savings Fund

ICICI Prudential Flexible income

Short Term Funds

Birla Sunlife short term fund

HDFC Short Term Fund

ICICI Pru Short Term Plan

Short Term Funds – Credit opportunities

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


View

Ultra-short term: Neutral


Long-term: Neutral



Page 15

Gilt Funds

Yield on the benchmark 10 year government bond hardened

appreciably in late October and early November owing to a variety of

reasons. Softer than expected inflation prints in April, May and June

combined with strong institutional flows into debt markets combined to

push down benchmark 10 year G-sec yield by ~45-50 points in the

period from May-July. The markets were not enthused by the widely

expected rate cut in August and the lower-than-expected dovish RBI

commenatry in October. A significant rebound in July-October CPI

readings was followed by a rise in yields by ~25 bps from ~6.50%

(end-June) to 7.02% (November 15). The yield is up ~52 bps YTD. It

previously briefly briefly tested the 7%% in April without breaching it

RBI held status quo on policy rates and maintained neutral stance in its

October 4 policy meet. October’s pick-up in CPI inflation to a seven

month high of 3.58% followed consecutively higher inflation readings in

July (2.36% YoY) and August (3.28% YoY). The October MPC policy

document outlined aspects such as rebound in core & fuel inflation and

the possibility of fiscal slippages as some factors influencing its decision

to maintain status quo on rates. Food prices rose in October on the

back of spike in vegetables and milk while the percolation effects of

HRA implementation for government employees and crude-led spurts

in the fuel basket were also apparent. Core inflation rose remained

sticky. Further persistent stickiness could lead the RBI to maintain a

prolonged pause on rates. The RBI revised upwards its inflation

projection for H2FY18 to 4.2-4.6% from 3.5-4.5%

Given how inflation seems to be edging higher post June driven by

higher fuel prices, GST, HRA implementation, unfavourable base effect

in vegetable prices, and increasing likelihood of a third 2017 rate hike by

the Fed in December, there appears quite limited scope for yields to

soften. Allocation to pure G-Sec or duration funds should be avoided

given their historical outperformance and G-sec yield trading at the

lower end of its historical range. Historically, it has been observed that

years of good returns in G-sec are followed by lower returns

Exhibit 22: Historical trend in return from G-Sec indicates, going forward, returns likely to be lower

-15

-10

-5

0

5

10

15

20

25

30

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017 YTD

Crisil 10 Yr Gilt Index

%

Source: ACE MF

Preferred Picks

Aditya Birla Sun Life Gilt Plus – PF Plan

ICICI Pru LT Gilt Fund – PF Option


Allocation to pure G-Sec or duration funds should be

avoided given their historical outperformance and G-sec

yield trading at the lower end of its historical range. Crisil

10 year Gilt index has delivered 38% return in the last

three years. It is likely the return will be significantly

lower, going forward

View

Short-term: Neutral

Long-term: Neutral



Page 16

Gold: Outlook anchored to Fed movement

Global prices were rangebound in October. Starting from a base of

~US$1271 per ounce, prices gained smartly towards ~US$1304 per

ounce (October 13) before a sharp decline, ending the month with no

price gains. The metal has remained within a narrow range thereafter in

the first two weeks of November (~US$1271 per ounce on November

15). This represents a ~3.0% YTD return

Rupee depreciation over late October-early November has helped

deliver better price gains in Indian gold prices compared to global

prices for the first time in 2017. Domestic rise amounted to ~6.2% YTD

as of November 15

De-escalation of geopolitical tensions after early September have led to

cooling off of investment demand in gold. Earlier, the safe haven status

of the yellow metal had sparked buying interest as concerns

surrounding North Korea escalated in August. With all quiet on this

front, gold direction would continue to draw upon expectations for the

US Fed’s interest rate trajectory

There are strong expectations surrounding a Fed rate hike in December.

The Fed had last hiked rates twice thus far in 2017. Persistent

undershooting of inflation prints from the targeted level could impact

this stated trajectory. The US Fed meeting is scheduled to take place on

December 13.

Fresh strength in gold prices till mid October was caused by weaker

than expected US inflation data, which cast some doubts on the Fed’s

interest hike trajectory. Further, geoplotical worries from Iraq also lent

support during this time.

US bond yields hardened in the latter half of October towards the 2.4%

mark. Higher yield on bonds could impact demand for gold, which is a

non interest bearing investment. Additionally, the US Dollar Index

rallied to three month highs in October, impacting prices of the dollar

denominated yellow metal

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 23: Gold prices range bound in October

1100

1200

1300

1400

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Price ($/ounce)


Exhibit 24: Indian price rise outpaces global gold price rise on YTD basis

26000

28000

30000

32000

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-1

7

Oct-17

Nov-17

Price (|/10 grams)



Page 17

Model Portfolios

Equity funds model portfolio

Investors who are wary of investing directly into equities can still get

returns almost as good as equity markets through the mutual fund route.

We have designed three mutual fund model portfolios, namely,

conservative, moderate and aggressive mutual fund portfolios. These

portfolios have been designed keeping in mind various key parameters like

investment horizon, investment objective, scheme ratings, and fund

management.

Exhibit 25: Equity model portfolio

Particulars Aggressive Moderate Conservative

Review Interval Monthly Monthly Quarterly

Risk Return High Risk- High

Return

Medium Risk -

Medium Return

Low Risk - Low

Return

Funds Allocation % Allocation

Franklin India Prima Plus 20 20 20

Birla Sunlife Frontline Equity - 20 20

ICICI Prudential Dynamic Plan - - 20

SBI Bluechip Fund 20 20 20

Kotak Select Focus Fund 20 20 -

HDFC Midcap Opportunities 20 10 -

Franklin India High Growth Companies Fund 20 - -

Birla SL Dynamic Bond Fund - 10 20

Total 100 100 100

Source: ICICIdirect.com Research

Exhibit 26: Model portfolio performance: One year performance (as on October 31, 2017)

18.7%

15.9%15.5%

21.6%

10%

12%

14%

16%

18%

20%

22%

Aggressive Moderate Conservative BSE 100

%

Aggressive Moderate Conservative BSE 100

Source: Crisil Fund Analyser, ICICIdirect.com Research


Page 18

Debt funds model portfolio

We have designed three different mutual fund model portfolios for different

investment duration viz. less than six months, six months to one year and

above one year. These portfolios have been designed keeping in mind

various key parameters like investment horizon, interest rate scenarios,

credit quality of the portfolio and fund management, etc.

Exhibit 27: Debt funds model portfolio

Particulars

0 – 6 months 6months - 1 Year Above 1 Year

Objective Liquidity

Liquidity with

moderate return Above FD

Review Interval Monthly Monthly Quarterly

Risk Return

Very Low Risk -

Nominal Return

Medium Risk -

Medium Return

Low Risk - High

Return

Funds Allocation

Ultra Short term Funds

Birla SL Savings Fund 20

ICICI Pru Flexible Income Plan 20

Short Term Debt Funds

Axis Regular Savings Fund 20

Birla Sunlife Short Term Fund 20 20

Birla Sunlife Short Term Opportunites Fund 20 20

Reliance Regular Savings Fund 20

HDFC Short Term Opportunities Fund 20 20

ICICI Prudential Regular Savings 20

ICICI Prudential Short Term Fund 20

IDFC SSI Short Term 20

UTI Short Term Income Fund 20

HDFC Corporate Debt opportunities fund 20

Total 100 100 100

Time Horizon

% Allocation

Source: ICICIdirect.com Research

Exhibit 32: Model portfolio performance: One year performance (as on October 31, 2017)

7.40

7.90

7.70

7.10

7.50

7.10

6.6

6.8

7.0

7.2

7.4

7.6

7.8

8.0

0-6 Months 6Months - 1Year Above 1yr

%

Portfolio Index

Source: Crisil Fund Analyser, ICICIdirect.com Research

*Index: 0-6 month’s portfolio – Crisil Liquid Fund Index; 6 months-1 year – Blended Index with 50% weight to Crisil

Liquid Index, 50% weight to Crisil Short Term Index; Above 1 year: Crisil Short Term Index


Page 19

Top Picks

Exhibit 33: Category wise top picks

Largecaps Birla Sun life Frontline Equity Fund

ICICI Pru Focused Bluechip Fund

SBI Bluechip Fund

Midcaps HDFC Midcap Opportunities Fund

Franklin India Smaller Companies Fund

L&T Emerging Businesses Fund

Multicaps Franklin India Prima Plus Fund

Kotak Select Focus Fund

Motilal Oswal MOSt Focussed Multicap 35 Fund

ELSS Axis Long Term Equity Fund

Reliance Tax Saver Fund

Franklin India Taxshield

Balanced HDFC Balanced Fund

ICICI Pru Balanced Fund

Birla Sun Life Balanced 95 Fund

DSP Blackrock Balanced Fund

L&T India Prudence Fund

Liquid HDFC Cash Mgmnt Saving Plan

ICICI Pru Liquid Plan

Reliance Liquid Treasury Plan

Ultra Short term Birla Sunlife Savings Fund

ICICI Pru Flexible Income Plan

UTI Treasury Advantage Fund-Inst

Short term Birla SL Short term Fund

HDFC Medium Term opportunities Fund

Kotak Banking and PSU Debt Fund

Credit Opportunities Axis Regular Savings Fund

Birla Sun Life Medium Term Plan

L&T Short Term Income Fund

Income Funds ICICI Pru Income Fund

Birla SL Income Plus - Regular Plan

Equity Funds & Equity-oriented Funds

Debt Funds




Page 20

Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk,

ICICI Securities Limited,

1st

Floor, Akruti Trade Centre,

Road No. 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]

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

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, 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

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