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ICIC
I S
ecurit
ies –
Retail R
esearch
Monthly
Report
September 24, 2019
Mutual Fund Review
Equity Market
Update
After having witnessed a sharp correction in the last three months from near
all-time levels at the start of July 2019, equity markets witnessed a dramatic
turnaround in September post the government’s announcement of a cut in
the corporate tax rate.
While the market was under pressure from heightened concerns over new
tariff imposition by the US on China and general global growth slowdown,
the government’s surprise move to reduce corporate taxes substantially has
completely turned around market sentiments.
Foreign investors selling over the last few months was the major reason for
the recent market weakness. FPIs had sold equities worth | 35500 crore
since July 2019. Domestic institutional investors, particularly mutual funds,
have been net buyers of | 35900 crore during the same period. The quantum
of buying by domestic mutual funds has increased in the last few days
indicating their rising confidence in the market post the recent correction. In
general, higher quantum of mutual funds buying indicates emergence of
value in the market.
The government announced a reduction in the corporate tax rate from
~34% to 25.17%. This is a massive trigger for revving up growth and, more
importantly, resurrecting sentiments that were down in the dumps. The
immediate benefit is increased cash flows to Corporate India that will be
either channelised into debt reduction or incremental investments in
increasing capacity. Also, taxing new production facilities (that come up by
2023) at 15% will enable attraction of global capital and spur a beleaguered
investment cycle.
Outlook
Our back of the envelope analysis of Nifty earnings suggests an EPS upgrade
of 6% each for FY20E and FY21E due to the recent reduction in corporate
tax. We now expect Nifty EPS to grow at 20.3% CAGR in FY19-21E vs. 16.9%
earlier. However, from a granular perspective, sectors like banking, FMCG
are expected to grow at a CAGR of 48.2% and 18%, respectively vs. earlier
CAGR of 42.2% and 12.2%. On the flip side, sectors like IT and pharma are
not expected to see any upgrades on account of existing lower tax rates,
making the Nifty EPS upgrade optically look to be in single digits.
Investors who continued their SIP during the recent volatile markets have
benefited the most after markets rebounded. It has repeatedly been
witnessed that investors who simply continue their SIPs without looking at
the market and getting swayed by sharp short-term market corrections
benefit the most.
Warren Buffet’s famous quote that it is wise to be “Fearful when others are
greedy and greedy when others are fearful” is an apt advice for investors in
a market when cyclical uncertainty and volatility is clouding the long term
growth potential of an economy. We believe that volatility essentially opens
up an opportunity to build a good long term portfolio.
We believe that recently revived market sentiment along with significant
underperformance offer an investment opportunity in midcap/small cap
funds or multicap funds. Investors may consider putting lumpsum amount
at current levels.
Markets witness sharp rebound after being in
declining trend in last two months
Source: Bloomberg
Research Analyst
Sachin Jain
9000
9500
10000
10500
11000
11500
12000
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
ICICI Securities | Retail Research 2
ICICI Direct Research
Monthly Report | Mutual Fund Review
Industry Synopsis
The MF industry AUM rose 3.8% in August 2019 to ~| 25.5 lakh crore from
24.5 lakh crore in July 20119 on the back of inflows into liquid funds.
Apart from liquid funds, ultra short term funds, money market funds short
term funds, corporate bond fund and banking and PSU debt fund category
continue to receive inflows during August. Risk-off sentiment continues with
investors prefer safety over returns resulting in categories like banking and
PSU debt fund receiving consistent inflows over the last few months with
the corpus crossing | 50000 crore in August 2019.
In the equity funds category, large cap funds are witnessing higher inflows
in the last two months as investors remain concerned on continued
underperformance of midcap/small cap funds. Multicap funds saw a sharp
rise in inflows in August to just | 1581 crore from | 327 crore in July 2019.
Aggressive hybrid funds after witnessing inflows of | 674 crore in July for
the first time after six months witnessed outflows to the tune of | 879 crore.
Exhibit 1: Total AUM, break-up of major AMCs
Source: ACE MF. Data as on August
Exhibit 2: Large cap category continues to witness higher
inflows during August 2019
Source: AMFI
Exhibit 3: Risk aversion continues in debt funds with outflow
continuing from credit risk funds category
Source: AMFI
38%
36%
50%
31%
49%
35%
45%
37
%
45
%
24%
57%
56%
44%
60%
42%
56%
49% 52%
47%
69%
5% 7
%
6%
9%
9%
10%
6%
11%
8%
7%
374681
349290
321933
251597
195752 1
69703
148713
125390
105022
96
86
6
0
50000
100000
150000
200000
250000
300000
350000
400000
0%
20%
40%
60%
80%
HD
FC
ICIC
I
SB
I
Adit
ya B
irla
Reliance
Kotak
UTI
Franklin
Axis
IDFC
| c
rore
Equity % Debt% Others% AUM
Equity Oriented Category Inflow/(Outflow) during August 2019
Large Cap Fund 2,583
Multi Cap Fund 1,581
Small Cap Fund 1,307
Mid Cap Fund 1,068
ELSS 827
Focused Fund 795
Large & Mid Cap Fund 562
Value Fund/Contra Fund 250
Sectoral/Thematic Funds 214
Dividend Yield Fund (36)
Aggressive Hybrid Fund (879)
Debt Oriented Category Inflow/(Outflow) during August 2019
Liquid Fund 79,428
Money Market Fund 3,765
Corporate Bond Fund 3,578
Ultra Short Duration Fund 2,829
Banking and PSU Fund 2,769
Short Duration Fund 994
Low Duration Fund 794
Gilt Fund 307
Gilt Fund with 10 year constant duration 40
Floater Fund 40
Long Duration Fund 11
Medium to Long Duration Fund (28)
Dynamic Bond Fund (67)
Overnight Fund (503)
Medium Duration Fund (561)
Credit Risk Fund (2,270)
Credit risk funds and medium duration funds
continue to witness outflows amid rising risk
aversion as investors shied away from taking any
credit risk. In the last five months, AUM of credit risk
fund category has reduced from | 79600 crore in
April 2019 to | 68400 crore
ICICI Securities | Retail Research 3
ICICI Direct Research
Monthly Report | Mutual Fund Review
Category Analysis
Equity Funds
Indian markets witnessed a sharp correction in the last two to three months.
Overall markets have been in a downtrend since January 2018 resulting in
even three year, five year returns in low single digits.
The banking sector has given up almost all the gains that it witnessed around
election result outcome. However, despite the recent underperformance, it
is the only major sector in the positive return territory over last year. IT funds
have weathered the recent market fall and are actually the best performing
category since January 2018.
Midcap/small cap continued to underperform as investors shied away from
and waited for growth visibility in the midst of weak high frequency data like
weak auto sales, low IIP, PMI numbers and overall low GDP data.
Exhibit 4: Small cap/midcap continue to underperform. Pharma funds only category that delivered positive returns in last two
months. IT/banking remain better performers over medium to long term
Source: CRISIL. Category average annualised returns as on Aug 19, 2019
Exhibit 5: Large cap oriented funds become largest category in August
Source: AMFI. AUM as on July 2019
0.7
-0.6
-3.2
-4.8
-5.9 -6.4
-7.7
-7.9
-9.5
-9.7
-11
.8
-13.6
8.5
14.2
5.8
5.9
5.5
5.1
5.4
2.9 3.4 4.1
-4.6
2.2
10.6
8.8
6.9 7.6 8.1
7.1
7.4
4.5
7.7
7.2
1.3
7.6
-20
-15
-10
-5
0
5
10
15
20
Bankin
g
Technolo
gy
Large C
ap
Focused
Large &
Mid
cap
Mult
i cap
ELS
S
Infr
astructure
Mid
cap
Valu
e/C
ontra
Pharm
a
Sm
all C
ap
Returns (
%)
1 year 3 Year 5 year
Equity Oriented Category AUM
Large Cap Fund 136,378
Balanced Hybrid Fund/Aggressive Hybrid Fund 136,279
Multi Cap Fund 135,832
Dynamic Asset Allocation/Balanced Advantage 91,318
ELSS 88,334
Mid Cap Fund 73,618
Arbitrage Fund 68,541
Sectoral/Thematic Funds 59,239
Value Fund/Contra Fund 53,927
Large & Mid Cap Fund 50,257
Small Cap Fund 43,052
Focused Fund 39,699
Equity Savings 16,261
Conservative Hybrid Fund 14,056
Multi Asset Allocation 12,256
Dividend Yield Fund 4,382
Low single digit return over a medium term indicates
that market is trading at far more reasonable
valuation levels. The lower than average historical
returns along with recent measures announced by
the government on corporate tax reduction offers
good investment opportunity at current levels
ICICI Securities | Retail Research 4
ICICI Direct Research
Monthly Report | Mutual Fund Review
Equity Diversified funds
Inflows into large cap funds have seen a consistent rise in the last three
months as incrementally investors prefer lower volatility funds amid weak
market sentiments.
Midcap and small cap put together continue to witness stable inflows with
small cap witness higher inflows during August.
Midcaps and small caps corrected significantly since the start of CY18,
offering an investment opportunity in select stocks. However, many midcap
and small cap stocks had significantly outperformed prior to the recent
correction. In general, many midcap/small cap stocks are offering a good
investment opportunity, particularly in a stable government environment.
Investors may consider investing lumpsum amount in midcap/small cap
funds from a long term perspective.
Multicap funds offer fund managers flexibility to allocate funds across all
market segments. Therefore, they are relatively better placed from a long
term perspective. Multicap funds should form the major portion of an
investor’s equity allocation.
Exhibit 6: Monthly flows: Incrementally, large cap funds witnessing higher inflows while inflows into mid/small cap remain
stable
Source: AMFI
Pharma funds – In focus
The Indian healthcare sector has been among the worst performing sectors
in the last three to five years. US related pricing pressure and compliance
issues led to lower realisations. This was compounded by heavy capital
expenditure in 2010-15. These factors impacted the profitability and return
ratios of most companies operating in the sector, particularly US focused
companies. The earnings trajectory, which was in the range of 20-25% in
2010-15, was around 8-10% in the last two to three years.
However, in the last few quarters, companies have been focusing more on
specific products with focus on profitability through rationalisation of
expenditure (like lower R&D spends) and ensuring better capacity utilisation
and return ratios. On the back of these factors, we expect the earnings of the
sector, in general, to grow at a CAGR of 15-20% in the next two to three
years.
The fund managers, over the years, have also inducted other healthcare
related services like hospitals, diagnostic chains, general as well as life
insurance, etc, in their healthcare funds making these themes more
diversified and structural.
Accordingly, we believe that pharma sector funds offer relatively better
investment opportunity in the current market environment. Aggressive
investors may consider allocating some portion of their thematic allocation
into pharma funds
-
500
1,000
1,500
2,000
2,500
3,000
Large C
ap F
und
Focused F
und
Mid
Cap F
und
Sm
all C
ap F
und
ELS
S
Large &
Mid
Cap
Fund
Multi C
ap F
und
Sectoral/Them
ati
c F
unds
Aug-19 Jul-19 Jun-19
Recommended Funds
Reliance Pharma Fund
ICICI Prudential Pharma Healthcare and Diagnostics
(P.H.D) Fund
UTI Healthcare Fund
ICICI Securities | Retail Research 5
ICICI Direct Research
Monthly Report | Mutual Fund Review
Exchange traded funds (ETFs)
Exhibit 7: ETF AUM declines marginally after rising to all-time
highs
Source: AMFI
Exhibit 8: ETFs witness outflows in August after record
inflows in July
Source: AMFI
Exhibit 9: Around 15 categories of ETFs available
Source: ACE MF
50000
70000
90000
110000
130000
150000
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
| C
rore
Equity ETFs
178524092820
1634
10878
721
5234
10540
-4241
2432
5383
12353
-1718
-10000
-5000
0
5000
10000
15000
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Net Inflow
( |
Cr )
Equity ETFs
Nos. Types of ETFs Name of ETF
I Largecap oriented ETFs
1 Nifty 50 ETF Most AMCs
2 Sensex ETF Most AMCs
3 BSE 100 ETF SBI-ETF BSE 100
4 Nifty 100 ETF ICICI Pru Nifty 100 ETF
LIC MF ETF-Nifty 100
Reliance ETF Nifty 100
5 Nifty 100 Quality 30 ETF Edelweiss ETF - Nifty 100 Quality 30
6 Nifty Low Vol 30 ETF ICICI Pru Nifty Low Vol 30 ETF
7 Nifty Next 50 ETF Aditya Birla SL Nifty Next 50 ETF
ICICI Pru Nifty Next 50 ETF
SBI-ETF Nifty Next 50
UTI-Nifty Next 50 ETF
8 Sensex Next 50 ETF SBI-ETF Sensex Next 50
UTI S&P BSE Sensex Next 50 ETF
9 NV 20 ETF ICICI Pru NV20 ETF
Kotak NV 20 ETF
Reliance ETF NV20
II Midcap Oriented ETFs
10 Midcap 100 ETF Motilal Oswal Midcap 100 ETF
11 Nifty Midcap 150 Reliance ETF Nifty Midcap 150
12 Midcap Select ETF ICICI Prudential Midcap Select ETF
III ETF in Multicap segment
13 S&P BSE 500 ETF ICICI Pru S&P BSE 500 ETF
IV ETFs based on sectors/Themes
14 Banking ETF Edelweiss ETF - Nifty Bank
Kotak Banking ETF
SBI-ETF Nifty Bank
15 PSU Bank ETF Kotak PSU Bank ETF
Reliance ETF PSU Bank BeES
ETFs, as a category, are gaining popularity. Apart
from Sensex or Nifty ETFs, many other equity
oriented ETFs are now available tracking various
indices across market cap and sectors
ICICI Securities | Retail Research 6
ICICI Direct Research
Monthly Report | Mutual Fund Review
Hybrid funds
In general, hybrid funds witness inflows in most of their categories as volatile
equity markets compelled investors to invest in relatively stable funds.
Hybrid funds viz. conservative hybrid, aggressive hybrid, dynamic asset
allocation, multi asset allocation and equity savings category witness inflow
of | 1580 crore in July 2019 compared to outflow of | 2300 crore in June
2019.
Aggressive hybrid funds witnessed inflows of | 674 crore for the first time
after six months of consecutive outflows. Inflows into aggressive hybrid
funds was after the category had witnessed ~| 12500 crore of outflow from
January 2019 to June 2019. Aggressive hybrid funds category has become
the largest equity oriented category at | 1.39 lakh crore overtaking
multicap/large cap funds category, which both are at similar levels of | 1.36
lakh crore.
Exhibit 10: Flows into aggressive hybrid funds again turn
negative in August
Source: AMFI
Exhibit 11: Major hybrid categories see outflows in August
Source: AMFI
Debt Funds
Exhibit 12: Sharp fall in G-sec yields lead to duration/gilt funds outperforming significantly in last year. Credit funds average
return turns negative due to negative returns in few funds
Source: CRISIL. Category average annualised returns as on June 19, 2019
-4000
-2000
0
2000
4000
6000
8000
10000
Aug-17
Nov-17
Feb-18
May-18
Aug-18
Nov-18
Feb-19
May-19
Aug-19
Net Inflow
( |
Cr )
Aggressive Hybrid
Hybrid Category
Inflow/(Outflow)
during August
2019
AUM
Conservative Hybrid Fund (219) 14,056
Balanced Hybrid Fund/Aggressive Hybrid Fund (879) 136,279
Dynamic Asset Allocation/Balanced Advantage 857 91,318
Multi Asset Allocation 93 12,256
Arbitrage Fund 5,703 68,541
Equity Savings (607) 16,261
16.3
10.7
8.1
10.2
9.4
6.4
5.6
3.8
0.2
3.1
-4.6
-2.0
3.3
15.4
10.8
7.8
10.7
10.1
6.8
5.9
4.9
4.3
6.5
0.8
3.2
5.9
8.4
7.2 7.6
7.1
5.9 6.3 6.7
5.8
5.8
5.3
5.4
4.1
5.5 6.0
-7
-2
3
8
13
18
Long D
uratio
n
Gilt F
unds
Bankin
g a
nd P
SU
Money M
arket
Mediu
m t
o L
ong D
uratio
n
Dynam
ic B
ond
Liq
uid
Overnig
ht
Ultra S
hort D
uratio
n
Short D
uratio
n
Corporate B
ond
Credit
Ris
k
Low
Duratio
n
Mediu
m D
uratio
n
Returns (
%)
6 months 1 year 3year
ICICI Securities | Retail Research 7
ICICI Direct Research
Monthly Report | Mutual Fund Review
Short-term debt allocation (investment horizon of less than a
year)
We believe ultra-short term funds and low duration fund categories offer a
relatively better investment opportunity.
Ultra short-term bond funds and low duration funds are ideal options 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’ perspective.
Money market funds are also a worthwhile option from a liquidity and credit
quality perspective, particularly for conservative investors. However, the
return potential may be lower compared to ultra-short/low duration
categories.
Long term debt allocation (investment horizon of more than a
year)
We believe medium duration funds and credit risk funds categories offer a
relatively better investment opportunity based on risk profile of investors.
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.
We are cautious on credit risk funds as a category, especially in the current
weak credit environment. Credit risk fund category is only suitable for
aggressive investors who want to invest for long term (more than three
years).
Categorisation of debt funds
Exhibit 13: Ultra short/low duration for short-term, corporate bond for long term
should in general be preferred category
Category Comment
Investment Horizon: Less than one year
Overnight funds Maturity up to 1 day
Liquid funds Maturity up to 91 days
Ultra short funds Maturity between 3-6 months
Low duration funds Maturity between 6-12 months
Money market funds Money market securities with maturity up to 1 year
Investment Horizon: More than one year
Short duration Maturity between 1-3 years
Medium duration Maturity between 1-4 years
Medium to long duration Maturity between 4-7 years
Long duration Maturity of more than 7 years
Dynamic bond funds Across duration
Corporate bond funds High rated instruments (AA+ and AAA)
Credit risk funds Below high rated instruments (below AA+)
Gilt funds G-Secs across maturity
Source: ICICI Direct Research
Ultra short term funds and low duration funds with
optimal mix of credit quality are better options to
invest for investment horizon of less than a year
Credit funds should be avoided in a current weak
credit environment. Corporate bond fund category is
best suited for long term debt allocation
ICICI Securities | Retail Research 8
ICICI Direct Research
Monthly Report | Mutual Fund Review
Gold: Lower rates, geopolitical tension, volatile capital market
support near term outlook
After trading in a narrow range since the start of calendar year 2019, global
gold prices rose sharply crossing US$1500 per ounce while Indian prices
crossed | 38000 per 10 gram.
Sustained demand for safe haven as the US-China trade war aggravates,
global growth slowing signs of slowdown and central banks around the
world ease monetary policy. Investment demand through higher inflows into
global gold ETFs and central bank purchases boosted demand.
The recent sharp rally was boosted by the Trump administration that
threatened fresh tariffs against Chinese goods. The Yuan was allowed to sink
and the US branded China a currency manipulator. The stand-off has
boosted the odds of more easing from the Federal Reserve.
One of the major factors viz. US Federal Reserve interest rate trajectory, is
moving down with more rate cuts expected apart from the recent cut. The
same provides structural support for higher gold prices as interest rates
have inverse correlation with gold prices.
Many central bankers have bought gold in the last few months including the
Reserve Bank of India. Investor demand in global gold ETF is also witnessing
some interest with the holding increasing.
Exhibit 14: Global gold prices
Source: Bloomberg
Exhibit 15: Indian gold prices
Source: Bloomberg
1000
1100
1200
1300
1400
1500
1600
1700
1800
Aug-12
Aug-13
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
Global prices ($/ounce)
29000
31000
33000
35000
37000
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Price (|/10 grams)
Gold prices in near term may find support due to
concerns on trade war and higher volatility in capital
markets
ICICI Securities | Retail Research 9
ICICI Direct Research
Monthly Report | Mutual Fund Review
Model Portfolio: Equity
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, viz. 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 16: Equity Model Portfolio
Source: ICICI Direct Research
Exhibit 17: Model portfolio performance
Source: ACE MF. Since inception (May 2009) CAGR return as on August 31, 2019
Particulars Aggressive Moderate Conservative
Risk ReturnHigh Risk- High
Return
Medium Risk -
Medium Return
Low Risk - Low
Return
Funds Allocation
Mirae Asset Largecap Fund 20 20 20
HDFC Equity Fund - 20 20
Principal Emerging Bluechip Fund - 20 20
ICICI Prudential Midcap Fund 20 20 -
HDFC Smallcap Fund 20 20 -
Franklin India Focused Equity Fund 20 - -
L&T India Value Fund 20 - -
Reliance Largecap Fund - 20
IDFC Core Equity Fund - - 20
Total 100 100 100
% Allocation
14.9%
13.7% 13.6%
13.2%
10.0%
12.0%
14.0%
16.0%
Aggressive Moderate Conservative BSE 100 TRI
%
Aggressive Moderate Conservative BSE 100 TRI
ICICI Securities | Retail Research 10
ICICI Direct Research
Monthly Report | Mutual Fund Review
Model Portfolio: Debt
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, viz. 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 18: Equity Model Portfolio
Source: ICICI Direct Research
Exhibit 19: Model portfolio performance
Source: ACE MF. Since inception (May 2009) CAGR return as on August 31, 2019
Note: 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
Objective LiquidityLiquidity with
moderate return
Above FD
Funds Allocation
SBI Mag Ultra Short Duration 20 20
ICICI Pru Savings Plan 20
Kotak Savings Fund 20
HDFC Medium Term Fund 20 20
IDFC Low Duration Fund 20 20 20
IDFC Corporate Bond Fund 20 20
L&T Ultra Short Term Fund 20 20
HDFC Corporate Bond Fund 20
Aditya Birla SL Corporate Bond Fund 20
Total 100 100 100
% Allocation
8.1% 8.1%
8.4%
7.5%
7.9%
8.3%
5.0%
6.0%
7.0%
8.0%
9.0%
0-6 Months 6Months - 1Year Above 1yr
%
Portfolio Index
ICICI Securities | Retail Research 11
ICICI Direct Research
Monthly Report | Mutual Fund Review
Mutual Fund Recommendation
Exhibit 20: Equity Oriented Funds
Source: ICICI Direct Research
Exhibit 21: Debt Funds
Source: ICICI Direct Research
Largecaps IDFC Large Cap Fund
Mirae Asset Largecap Fund
Reliance Large Cap Fund
Large and Midcaps IDFC Core Equity Fund
Principal Emerging Bluechip Fund
SBI Large and Midcap Fund
Multicaps HDFC Equity Fund
L&T India Equity Fund
UTI Equity Fund
Midcaps ICICI Prudential Midcap Fund
Kotak Emerging Equity Fund
L&T Midcap Fund
Smallcaps HDFC Small Cap Fund
L&T Emerging Businesses Fund
Reliance Small Cap Fund
Focused Franklin India Focused Equity Fund
ICICI Pru 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
Mirae Asset Hybrid Equity Fund
Category wise top picks
Category Fund Category Comment
Overnight / Liquid / Ultra Short Term Kotak Savings Fund Volatility - low
L&T Ultra Short Term Fund Investment horizon - 0-6m
SBI Magnum Ultra Short Duration Fund
Low Duration / Money Market ICICI Prudential Savings Fund Volatility - low
IDFC Low Duration Fund Investment horizon - 0-12m
SBI Low Duration Fund UTI Treasury Advantage Fund
Short Term HDFC Short Term Debt Fund Volatility - low
IDFC Bond Fund - Short Term Investment horizon - more than 1 year
L&T Short Term Bond Fund Credit risk - low
Medium Term HDFC Medium Term Debt Fund Volatility - medium
IDFC Bond Fund - Medium Term Plan Investment horizon - more than 1 year
SBI Magnum Medium Duration 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 Income Fund Credit risk - low
Dynamic Bond Fund ICICI Pru All Seasons Bond Fund Volatility - high
IDFC Dynamic Bond Fund Investment horizon - more than 1 year
Kotak Dynamic Bond Fund Credit risk - medium
Corporate Bond Aditya Birla SL Corporate Bond Fund Volatility - low
HDFC Corporate Bond Fund Investment horizon - more than 1 year
IDFC Corporate Bond Fund Credit risk - low
Credit Risk Axis Credit Risk Fund Volatility - medium
IDFC Credit Risk Fund Investment horizon - more than 1 year
SBI Credit Risk Fund Credit risk - high
Gilt IDFC G-Sec Fund - Investment Plan Volatility - high
Reliance Gilt Securities Fund Investment horizon - more than 1 year
UTI Gilt Fund Credit risk - low
Category wise top picks
ICICI Securities | Retail Research 12
ICICI Direct Research
Monthly Report | Mutual Fund Review
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, Research Analyst, author and the name 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 Registration. No.: ARN-0845. Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India. ICICI
Securities Limited is a Sebi registered Research Analyst having registration no. INH000000990. ICICI Securities Limited Sebi Registration is INZ000183631 for stock broker. ICICI Securities is a 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, 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.
It is confirmed that Sachin Jain, 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..