Alpha edge April 2016

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“Liquef-action”

India Strategy | April 2016

April 2016 3

Liquef-action India Strategy | April, 2016

Foreword

Dear Investor,

Unlike the 2015 fiscal which could be described as a year of optimism and hope starting with formation of a strong government, the 2016 fiscal could be said as the year of realism, an eye opener both locally and globally. Nifty ended the lackluster fiscal down around 9%. This fiscal we saw FII’s which made huge investments in FY15 turning net sellers in equities on the back of global slowdown concerns, continuing weakness in crude oil prices, cooling off in Chinese economy and deflationary forces around the world. Another factor that led to withdrawal of money by FII’s was earnings failing to pick up in the current fiscal. Having said that, March month was a pleasant end to a not so good year for the markets where we saw a comeback of FIIs to the Indian markets post a strong budget.

Globally, the month was dominated by news flow relating to ECB QE & US interest rate decision that led to a global risk on rally with FII money finding its way in to equities worldwide. In the month of March, ECB announced further expansion of its QE scheme, US did a flip flop and again turned dovish in its interest rate hike stance. The central bankers around the world since 2008 crisis have been trying hard to revive the demand, so much so that their efforts over the years has resulted in $7 trillion (Almost one third) of government bonds around the world yielding negative returns which has in turn resulted in banks bleeding due to margin pressures. The issue here is all of this has not truly resulted in the desired effects of increase in demand and inflation, in fact during this period we have only seen a collapse of both along with an ever so persistent bleak global outlook, which makes us think that have Central bankers lost their powers? With already negative yields, what is the ammunition left with the central bankers? It has been observed over the years that monetary policies globally have now become more of a sentiment booster which results in volatility of flows rather than affecting the underlying economy. It is this “Liquef-action” that has resulted in equities being the best performer for the month worldwide and may continue to do so.

Locally, we started the year with good macro numbers including GDP, inflation and CAD projecting a stable economy. Along with sharp fall in the commodities helping to lower input cost it was expected by markets that it will lead to higher margins and eventually it would result in higher earnings growth. So what went wrong?

We start with the factors that raised the expectations. Firstly, the GDP numbers have been one of the best in the emerging economies in FY 2015 -16. However, it has been the change in methodology from earlier cost of production method to value add method that has made the major difference. As we can see that this has not correlated with corporate earnings or for that matter, the IIP numbers. Further as we have highlighted earlier that falling commodity prices wouldn’t lead into improved corporate earnings growth, as it could be a misplaced belief. It was our reading, which is turning out to be true, that the current phase of falling commodity prices were more reflective of a weakening demand than the excess supply, with exception of oil.

However, all is not dark. A few green shoots of demand recovery are evident in the Auto numbers especially Commercial Vehicles. Ditto with cement offtake numbers. Further a good monsoon is expected to revive the rural demand which would provide impetus to earnings recovery aided by an accommodative policy from RBI & reform action from government especially on the GST front could set the ball rolling for the economy.

From here on we expects markets to be volatile with events earnings recovery, global flows dictating the. India may continue to command higher valuations compared to its EM peers unless there is a further delay in earnings recovery. In which case, valuations that fully capture current earnings trend may need to adjust lower.

Warm Regards,

A V Srikanth

April 2016 4

Alpha Edge | “Liquef-action”

Asset Class performance

Asset Class returns for March 2016

Source: Bloomberg

With the support of strong FII flows, recovery in Oil prices and a strong budget, the equity markets had shown a good trend reversal from the previous month. Equity markets have gained 7.62% last month. CNX midcap ended up by 10.33% vs 7.30% down for the previous month. Small cap index too had a good month with 12% gains as compared to -13.28% for the previous month.

Whereas, the long term yields have come down and has resulted in a strong performance of 3.27%. Due to the change of direction in FII flows, investors have surpassed gold and hence it has been laggard with -1.2%.

Though the Sensex and the Nifty ended fiscal 2016 on a weak note with both the benchmark indices dropping 9% each as foreign funds trimmed positions in Indian equities for most of the months during the fiscal except March.

FII Flows for Calendar Year 2016

Source: ACEMF

FII’s reversed their selling spree of recent months on the back of dovish central banks around the world, recovering oil prices and a strong budget.

FII’s bought around 24,201 cr. (highest in around 2 years) in Indian equities in the month of March, which is higher than CY2015 flows. On the contrary DII’s became net sellers after 4 months of continuous buying. DII’s sold 16,891 (Highest in over 3 years).

Flows in Rs cr March

Feb-16 2016

Domestic Institutional Investors (DIIs)

-16,891 10,491

Foreign Institutional Investors (FIIs)

24,201 12,513

Sector Returns for March 2016

Source: Bloomberg

Realty, Bankex and Capital Goods Indices have been

outperformers for March 2016. Healthcare, Consumer

Durables and FMCG have been the laggards during the

same period.

10.75%

3.27%0.61%

-1.20%-5.00%

0.00%

5.00%

10.00%

15.00%

Equity 10 yrTreasuries

Cash Gold

Asset Class Returns For Mar 2016

Equity 10 yr Treasuries Cash Gold

47 3771

-53

83133

-3

128 113 97

18 4-6

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S&P BSE Health Care

S&P BSE Consumer Durables

S&P BSE FMCG

S&P BSE SENSEX

S&P BSE Small-Cap

S&P BSE PSU

S&P BSE TECk Index

S&P BSE Mid-Cap

S&P BSE IT

S&P BSE OIL & GAS Index

S&P BSE METAL Index

S&P BSE Power Index

S&P BSE AUTO Index

S&P BSE Capital Goods

S&P BSE BANKEX

S&P BSE Realty Index

Sector Returns for Mar 2016(%)

April 2016 5


Oil – Rally fizzling out?

Since the beginning of the year Crude oil prices have

rallied almost from under $30 to $40, and this has

happened amid a deteriorating oil supply situation. So

what really started the rally this year? This year the rally

was primarily fueled by speculations that an agreement

of a freeze was in works by few OPEC members to balance

the supply. It was important to note that this was a freeze

at current levels (which were anyways at peak) and not a

cut in production. It is important to understand that a glut

in supply has majorly contributed towards the fall in crude

over last 18 months, hence it is important that we see cut

in production levels before we conclude that Oil has

bottomed out. Another major development in the current

year was Iran, which was back in to the market after

western sanctions on it were lifted in January 2016.

Tehran, which wants to recover market share it lost under

sanctions, has said it will not take part in the production

freeze. So essentially, with Iran returning to the market

and determined to return to pre-sanction production

levels, the market should expect the supply situation to

put pressure on Oil prices. With Iran not in agreement

with the production freeze, it would be difficult that we

see Saudi Arabia cutting its production. Also, higher oil

prices would mean an increase in shale gas production

activity which would led to reining the prices again.

US rate Hike – The flip flop continues

The signals given by Fed these days are about as confusing

as they have ever been. In one of the latest speech which

was also one of the most highly anticipated speech said

that Fed would move cautiously in adjusting the policy

rates due to global risks. Fed started the year with

expectations of 4 rate hikes this year and in March policy

meet the same was reduced to 2. Even before the speech,

various Fed officials mentioned independently that US

economy remains on track for gradual path of interest

rate hikes. This made the market participants believe that

Fed’s tone would be more hawkish, however, Yellen’s

comments about a more cautious approach was well

taken by the markets which led to a fall in USD & gains in

equity markets globally. We believe that considerations

towards the global economy while deciding on the rate

hikes have increased and with a view of subdued growth

world-wide and ever so confusing signals of US economy,

Fed would be extremely cautious of the timing of its next

move. All said, we believe there is a very low probability

of April hike and a slightly higher probability of a June

hike. Given the recent flip flops it is best to see the global

& US economic data in the forthcoming months which

would give a key to when would the next hike happen.

Until then any dovish tone by Fed would be taken

positively and result in higher equity markets and a lower

dollar.

Mario Draghi’s bazooka…markets cheer but give up

gains later

The European Central Bank has surprised financial

markets by cutting interest rates in the Eurozone to zero,

expanding its money printing programme from 60 billion

euros to 80 billion euros and reducing a key deposit rate

further into negative territory as it seeks to revive the

economy and fend off deflation. This announcement

surprised markets which was followed by gains in equity

markets across Europe and EURO falling. However, even

though Draghi implied rates would remain low, he did also

mention he does not see rates going further below which

was taken negatively by markets and then was followed

by retracement of all the gains. But the latest moves come

amid growing skepticism on financial markets that central

banks have enough ammunition left to bolster growth and

stop falling prices becoming entrenched.

Are central banks losing their power?

Institutions which managed to drag the world out of one

of the worst financial crisis are slowly seeing their power

waning. Since 2008, global central banks have cut interest

rates 637 times, they have injected $12.3 trillion into the

global financial system through various quantitative

easing programs. But despite these unprecedented

measures, the global economy is still deeply struggling

with most of the developed nations facing deflation. In a

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Crude oil

April 2016 6


-2.0%

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6.0%

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Euro QE Vs Inflation

Euro area inflation ECB benchmark rates

desperate attempt to spur economic activity, central

banks in Europe and in Japan are playing around with

negative interest rates, and so far, they seem to only have

had a limited effect. In fact, around one third of the bonds

issued in the world now yields negative return. With such

low or negative rates it is obvious that the central banks

are rapidly running out of ammunition, as you can only go

in to the negative territory to an extent before it creates

more havoc in the banking system (For eg. European

banks). So much so that people have started discussing a

term called ‘Helicopter money’ which basically means

that Central banks would create money out of thin air and

would just give it to national governments or ordinary

citizens in order to induce them to spend and revive the

economy, a farfetched thought though. All this just to

show how much of panic now surrounds them as they try

to stabilize the ship.

As central banks power seems to fade world is now

scrambling to find what now? We believe it is wise to not

go for further rate cuts or easing unless we see benefits

of previous easing resulting in increased demand as it has

been seen with the recent oil crash that consumers are

not ready to spend any free windfalls and are actually

paying down debts or saving for a rainy day. This easing

has resulted in huge increase in debt levels across the

globe and has dented the bank margins to a great extent.

Few people are now talking about governments acting

through fiscal measures to support shaky global recovery.

Fiscal policy has been largely dormant in the wake of the

crisis as countries have concentrated on bringing down

debt and deficits levels, binding themselves to stringent

spending rules in the process.

We believe that any further easing would result in more

of a sentimental impact on the markets rather than

impacting economy, which may lead to free money

finding its way in to risky assets like equities making them

more expensive given the lack of growth in earnings.

Indian Economy

Jan IIP disappoints, greenshoots in core industries

growth

India's IIP contracted 1.5% in January compared to

contraction of 1.2% in the previous month following

sharp decline in production of capital goods and

consumables. In January mining and electricity

sectors grew 1.2% and 6.6% respectively suggesting

that the growth momentum remains vulnerable and

volatile. The slowdown is led by manufacturing,

which contracted 3% YoY. The drop in manufacturing

was caused by capital goods — decline of 20.4% vs.

+12.4% YoY and -19% sequentially. Electricity grew

6.6% vs. 3.3% YoY and 3.2% sequentially. Likewise,

mining activity grew 1.2% vs. -1.8%YoY and 2.7%

sequentially, signifying a presence of favourable

base. Going ahead, the allocations for roads, rails and

power sectors in the Union Budget should provide a

fillip to industrial production going forward. One of

the key parameters affecting IIP is decline in exports

and weakening rural consumption.

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US QE vs Inflation

Fed Rate Inflation

April 2016 7


2.3

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Growth rates Core sector %

Even though IIP has disappointed the latest core

industry data was a bit encouraging which grew at

5.7 % in February due to sharp pick-up in natural gas,

refinery products, fertiliser, cement and electricity

generation. The eight sectors - coal, crude oil, natural

gas, refinery products, fertilisers, steel, cement and

electricity - comprising nearly 38% of India’s total

industrial production, had grown at 2.3 per cent in

February last year. It is the highest growth since

November 2014, when these sectors had witnessed

a growth of 6.7 per cent. Even though we haven’t

seen much one to one correlation in Core industry

data and IIP numbers, this jump in core industry

growth data looks encouraging and could mean a

slightly higher IIP data for February 2016.

Trade deficit narrows, exports shirnk

Continuing their downtrend for the 15th consecutive

month, India's merchandise exports declined by 5.66

percent to $ 20.738 billion in February 2016 from $

21.983 billion during the same month of the previous

year. Imports fell 5.03 percent from USD 28.71 billion

to USD 27.28 billion. Within imports, oil imports

stood at USD 4.77 billion (down from USD 5.03 billion

MoM) while non-oil imports stood at USD 22.51

billion (versus USD 23.69 billion). While the fall in

imports provides comfort on the current account, a

bigger fall in exports presents a worrying picture of

the state of the global economy. Fall in exports was

in tandem with other major world economies. The

growth in exports has fallen for the United States

(10.35%), European Union (7.62%) and China (1.67%)

for December 2015 over the corresponding period

previous year as per WTO statistics.

Recovery in CV numbers – CV makers post double

digit growth in March 2016

Domestic sales of commercial vehicle makers grew

substantially in March 2016 as compared to vehicles sold

in March 2015. Ashok Leyland, Tata Motors, Eicher

Motors and Mahindra reported growth in the range of 20

to 44 percent.

In the M&HCV segment, Ashok Leyland saw a 32% yoy

growth, M&M saw a robust 86.2% yoy growth, Eicher

Motors volumes doubled on yoy basis and Tata Motors

reported 24.6% yoy growth. Fundamental factors such as

lower fuel prices, recovery in infrastructure investments,

expectations of recovery in industrial activity and lower

interest costs continued to provide support to the growth

for the M&HCV segment in March 2016. In the LCV

segment, Tata Motors, Eicher Motors, M&M and Ashok

Leyland saw a growth of 15.1% yoy, 47.5% yoy, 21.4% yoy

and 27% yoy respectively. After a sustained downtrend,

LCVs sales have picked up since last few months and are

showing signs of bottoming out. Commercial vehicle

numbers generally used as a proxy to gauge early signs of

recovery in the economy as higher growth numbers

indicate increased activity in the economy.

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Exports Imports Trade balance

April 2016 8


Equity – On sticky grounds

The Sensex and the Nifty ended fiscal 2016 on a

weak note with both the benchmark indices

dropping 9% each as foreign funds trimmed

positions in Indian equities for most of the months

during the fiscal except March. March saw the best

month of FY16 with Nifty gaining 11% backed by

strong FII flows, recovery in Oil prices and a strong

budget. CNX midcap ended up by 10.33% vs 7.30%

down for the previous month. Small cap index too

had a good month with 12% gains as compared to -

13.28% for the previous month.

Outlook

The Budget 2016-17 inspired the markets to bottom out

and saw frontline indices rally by over 10 per cent nearly

recouping all of the losses of the month of February and

little of January. Action was broad- based and driven by

fresh buying interest from FIIs. With the budget now

behind us we believe in the near term from a domestic

stand point, markets would be watching out for numbers

for Q4 FY16 earnings to get any sense of revival. Another

major domestic factor for the next quarter would be

monsoons. A strong monsoon will help revive the rural

consumption which has been one of the major

contributor towards earnings declining in the recent

quarters.

As we can see lately the performance of Indian markets

have been aligned with the FII flows and we expect the

trend to continue until sometime. So what domestic

factors would attract more FII flows in the short term?

An earnings revival, strong reforms like the GST bill,

strong monsoon season etc.

Yes, India is one of the best performing EM’s currently,

which also can be seen in the near to all time high

valuations as compared to its peers. However given the

precarious global environment and volatility, the flows

may be affected too. We live in a globalized world and

anything affects global growth will also have a bearing

on the flows as investors seek safe havens during testing

times. US interest rate decision would also be a key in

determining the extent of flows received by Indian

markets.

From valuation stand point given the fact that we are

looking at a first year of negative growth in a financial

year since 2009 we believe we are more on the

expensive side. Currently we are above long term

averages and the lack of clarity in the earnings along

with precarious global growth environment could lead to

moderation in valuations and with low growth in

earnings it would mean a price correction.

We still feel Indian economy is better poised for a

growth in the long term given the structural shifts

currently happening and a pro-reform government

focused on long term drivers of growth. In the shorter

term however, the price performance of the market

would be determined primarily by earnings and global

liquidity which in turn would affect FII flows. Having said

that, we do feel FY17 would be a great year to build an

equity portfolio from a longer term perspective as we

see more consolidation.

Valuations moderating

Debt

India Consumer Inflation cools off from highs

January’s Consumer Price Index (CPI) came in at 5.7% in

contrast to 5.6% in December as food inflation soared to

an 11-month high. Core CPI eased marginally to 5.4%

from 5.5%. Wholesale Price Index (WPI) shrunk for the

15th consecutive month as it came in at -0.9% in contrast

to -0.73% in the previous month due to food inflation.

Inflation surprised on the downside in February as food

prices, particularly vegetables corrected. The trajectory

of food inflation from here depends squarely on weather

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NIfty PE

Nifty PE Average +1 Stdev

+2 Stdev -1 Stdev -2 Stdev

April 2016 9


conditions improving through the summer months, given

low water storage levels in reservoirs. On the positive

side, international weather offices expect El Nino

conditions to recede, which in turn could improve

monsoon rains. Meanwhile, Core inflation remained high

at 4.9% indicating price pressures in services like health

and education. A similar trend was also observed in WPI,

where inflation in primary articles fell but core prices

(non-food manufacturing) remained unchanged.

RBI cuts Repo by 25 bps, rates lowest since 2011

With continuing fiscal discipline through recent

Union budget and inflationary expectation in a

comfortable range markets already formed a base

for a logical cut of 25 bps points cut by RBI, and the

governor did oblige. Unlike previous times where

the RBI has unexpectedly cut rates this time around

RBI and markets were on the same page. In its first

bi-monthly policy of FY17 RBI reduced policy repo

rate by 25 bps from 6.75% to 6.5%. It has also

reduced the minimum requirement of daily CRR

from 95% to 90%.

The main highlight of this policy is not the rate cut

announced by RBI but the liquidity measures

announced by the RBI signaling a fundamental

change in the approach. Since 2010, RBI has kept

the banking system liquidity in deficit but now it

wants to bring the deficit to neutral. It has also

announced the narrowing of policy rate corridor

from 100 bps to 50 bps. All in all, RBI has cut rates

by 125 bps until now with only 60-70 bps being

transferred to the end consumer. This move has

mainly been aimed to improve the transmission of

the rate cut to end consumer, to encourage banks

to give out more credit even if deposit growth is

subdued which will now be under pressure to

transmit the rate cut to the end consumer.

Outlook

We mentioned in our last report that by maintaining

fiscal discipline in the FY16-17 union budget the

government had in effect put the ball In RBI’s court

to act further and the RBI governor did act, he acted

smartly by further putting the ball in banks courts

and putting pressure on them to cut interest rates

for the end consumer which would help revive

demand in the economy.

Having said that we believe that we have seen most

of the rate cuts by RBI in the current cycle and there

may not be much room left for FY17. RBI’s target of

5% inflation by march 2017 means it does not have

much room left in terms of its target real return of

1.5%-2% that it intends to keep, unless we see the

inflation undershooting the RBI target by a big

margin. The risks that we believe to the inflation

target could be a bad monsoon, stronger

consumption demand due to 7th pay commission

and OROP and on the other side we have fading

impact of lower commodity prices which was the

main catalyst for bringing down inflation. We

believe there is not much room for the yields on the

longer end of the curve and believe that there is

merit in investing in dynamic bond funds.

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Inflation

CPI WPI

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-…Repo vs Real return

Repo Rate CPI Inflation + Real return target

April 2016 10


Citadelle Growth Opportunities Portfolio

Company Name 3 yr Avg ROE PAT 3yr CAGR Dividend Yield(%)

Star Rating

Ahluwalia Contracts (India) Ltd. 1.04 133.11 0.00

AIA Engineering Ltd. 19.71 33.44 0.64

Ajanta Pharma Ltd. 41.05 58.81 0.49

Aurobindo Pharma Ltd. 27.95 236.96 0.37

Avanti Feeds Ltd. 41.93 60.69 1.79

Bajaj Corp Ltd. 33.50 12.86 2.50

Bajaj Finance Ltd. 20.11 30.20 0.44

Bajaj Finserv Ltd. 27.26 8.42 0.13

Bosch Ltd. 17.71 6.01 0.33

Cadila Healthcare Ltd. 27.33 20.28 0.69

Caplin Point Laboratories Ltd. 49.84 72.28 0.54

CCL Products (India) Ltd. 21.00 37.34 0.84

Cholamandalam Investment & Finance Company Ltd. 17.88 37.96 0.60

DB Corp Ltd. 25.60 16.06 2.09

Gillette India Ltd. 14.84 27.78 0.33

Gujarat Pipavav Port Ltd. 15.43 89.17 0.00

Gulf Oil Lubricants India Ltd. 24.48 356.17 1.08

Himachal Futuristic Communications Ltd. 88.88 179.95 0.00

Honeywell Automation India Ltd. 12.70 2.15 0.15

JM Financial Ltd. 11.29 43.00 2.81

Kitex Garments Ltd. 36.80 53.67 0.23

KRBL Ltd. 23.73 63.85 1.02

Lupin Ltd. 30.37 40.13 0.37

Marksans Pharma Ltd. 39.39 117.64 0.19

Navneet Education Ltd. 26.35 18.83 2.22

Procter & Gamble Hygiene & Health Care Ltd. 30.49 24.03 0.45

Skipper Ltd. 19.20 107.95 0.85

Sonata Software Ltd. 15.69 204.12 3.93

Tata Elxsi Ltd. 28.13 38.09 0.95

Vinati Organics Ltd. 31.48 28.29 0.67

Note: Post changes in portfolio from 8th Jan ’16, portfolio construct has become more diversified, hence we have changed the benchmark to Nifty 500 from Nifty 50.

90%

10%

Citadelle Growth Opportunities Portfolio Current Asset Allocation

Equity Cash

91.80

82.6380859095

100105110115120

Dec

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Citadelle Growth Opportunities Portfolio Performance

Citadelle Growth Opportunities Portfolio NAV Benchmark*

100.78

91.45

80859095

100105110115120

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5

May

-15

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

Dec

-15

Jan

-16

Feb

-16

Mar

-16

Citadelle Growth Opportunities Portfolio Performance

Citadelle Growth Opportunities Portfolio NAV Benchmark*

April 2016 11


Model Portfolio: Conservative

Conservative Market Cap wise (%)

Asset Class Sub-Asset Class Mutual Fund Schemes

Strategic

Tactical

Large cap Mid &

Small cap

Others

Equity - - PMS - - Large Cap - - ICICI Pru Focused BlueChip Eq Fund - - 82.4 9.4 8.2

Birla SL Frontline Equity Fund

- - 88.9 3.0 8.1

Mid & Small Cap - - BNP Paribas Mid Cap Fund - - 28.2 66.7 5.1

Edelweiss Emerging Leaders Fund - - 15.8 77.8 6.4

Mirae Asset Emerging BlueChip - - 30.3 65.7 4.0

Multi Cap - - MOSt Focused Multicap 35 Fund - - 87.8 12.1 0.0

Birla SL Pure Value Fund - - 17.4 76.0 6.6

Franklin India High Growth Cos Fund - - 57.3 24.9 17.8

Thematic / Sectoral Funds - - Equity Hybrid Funds - - Average

Maturity Years

Mod

Duration Years

YTM

(%)

Debt 90.0% 90.0% Short Term 30.0% 30.0% Axis Short Term Fund 10.0% 10.0% 2.7 2.0 8.0

Franklin India ST Income Plan 10.0% 10.0% 2.5 2.3 10.5

HDFC STP 10.0% 10.0% 2.2 1.8 9.8

Dynamic Bond Funds 30.0% 30.0% IDFC Dynamic Bond Fund-Reg 10.0% 10.0% 15.9 8.7 7.8

SBI Dynamic Bond 10.0% 10.0% 17.5 8.5 7.8

UTI Dynamic Bond Fund-Reg 10.0% 10.0% 14.8 7.2 8.1

Income Funds 30.0% 30.0% DWS Premier Bond Fund 10.0% 10.0% 1.8 1.5 8.0

HDFC Income Fund 10.0% 10.0% 16.4 8.1 8.0

UTI Bond Fund 10.0% 10.0% 16.3 7.9 8.2

Gilt - - Debt Hybrid Funds - -

Cash 5.0% 5.0% Liquid Funds - - Ultra Short Term 5.0% 5.0%

Gold 5.0% 5.0% Gold 5.0% 5.0% Total 100.0% 100.0%

0.0%

90.0%

5.0%5.0%

Strategic Portfolio

Equity Debt Cash Gold

0.0%

90.0%

5.0%5.0%

Tactical Portfolio


90

95

100

105

110

115

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5M

ay-1

5Ju

n-1

5Ju

l-1

5A

ug-

15

Sep

-15

Oct

-15

No

v-1

5D

ec-1

5Ja

n-1

6Fe

b-1

6M

ar-1

6

Conservative UCI Index

April 2016 12


Model Portfolio: Moderately Conservative

Mod Conservative Market Cap wise (%)


Strategic

Tactical

Large cap Mid &

Small cap

Others

Equity 25.0% 25.0% PMS - - Large Cap 25.0% 25.0% ICICI Pru Focused BlueChip Eq Fund 12.5% 12.5% 82.4 9.4 8.2


12.5% 12.5% 88.9 3.0 8.1

Mid & Small Cap - - BNP Paribas Mid Cap Fund - - 28.2 66.7 5.1


Mirae Asset Emerging BlueChip - - 30.3 65.7 4.0




Thematic / Sectoral Funds - - Equity Hybrid Funds - - Average

Maturity Years

Mod

Duration Years

YTM

(%)



HDFC STP 10.0% 10.0% 2.2 1.8 9.8


SBI Dynamic Bond 10.0% 10.0% 17.5 8.5 7.8


Income Funds 5.0% 5.0% DWS Premier Bond Fund - - 1.8 1.5 8.0

HDFC Income Fund - - 16.4 8.1 8.0

UTI Bond Fund 5.0% 5.0% 16.3 7.9 8.2

Gilt - - Debt Hybrid Funds - -

Cash 5.0% 5.0% Liquid Funds - - Ultra Short Term 5.0% 5.0%

Gold 5.0% 2.5% Gold 5.0% 2.5% Total 100.0% 100.0%

80

100

120

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5M

ay-1

5Ju

n-1

5Ju

l-1

5A

ug-

15

Sep

-15

Oct

-15

No

v-1

5D

ec-1

5Ja

n-1

6Fe

b-1

6M

ar-1

6

Mod Conservative

25.0%

65.0%

5.0%5.0%

Strategic Portfolio


25.0%

65.0%

5.0%5.0%

Tactical Portfolio


95

100

105

110

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5M

ay-1

5Ju

n-1

5Ju

l-1

5A

ug-

15

Sep

-15

Oct

-15

No

v-1

5D

ec-1

5Ja

n-1

6Fe

b-1

6M

ar-1

6

Mod Conservative UCI Index

April 2016 13


Model Portfolio: Balanced

Balanced Market Cap wise (%)


Strategic

Tactical

Large cap Mid & Small cap

Others



15.0% 15.0% 88.9 3.0 8.1

Mid & Small Cap 15.0% 10.0% BNP Paribas Mid Cap Fund 7.5% 5.0% 28.2 66.7 5.1


Mirae Asset Emerging BlueChip 7.5% 5.0% 30.3 65.7 4.0




Thematic / Sectoral Funds - - Equity Hybrid Funds - 5.0% Edelweiss Absolute Return Fund 5.0%

%

Average Maturity Years

Mod Duration Years

YTM (%)



HDFC STP 10.0% 10.0% 2.2 1.8 9.8


SBI Dynamic Bond - - 17.5 8.5 7.8


Income Funds - - DWS Premier Bond Fund - - 1.8 1.5 8.0


UTI Bond Fund - - 16.3 7.9 8.2

Gilt - - Debt Hybrid Funds - - DSPBR Dynamic Asset Allocation Fund - - - - -

Cash - - Liquid Funds - - Ultra Short Term - -

Gold 10.0% 10.0% Gold 100.0% 100.0%

45.0%

45.0%

0.0%

10.0%

Strategic Portfolio


45.0%50.0%

0.0%

5.0%

Tactical Portfolio


45.0%

45.0%

0.0%10.0%

Tactical Portfolio


949698

100102104106108

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5M

ay-1

5Ju

n-1

5Ju

l-1

5A

ug-

15

Sep

-15

Oct

-15

No

v-1

5D

ec-1

5Ja

n-1

6Fe

b-1

6M

ar-1

6

Balanced UCI Index

April 2016 14


Model Portfolio: Moderately Aggressive

Mod Aggressive Market Cap wise (%)


Strategic

Tactical


Others



15.0% 15.0% 88.9 3.0 8.1


Edelweiss Emerging Leaders Fund 10.0% 6.0% 15.8 77.8 6.4


Multi Cap 10.0% 10.0% MOSt Focused Multicap 35 Fund 10.0% 10.0% 87.8 12.1 0.0



Thematic / Sectoral Funds - - Equity Hybrid Funds - 12.0% Edelweiss Absolute Return Fund 12.0% Average

Maturity Years

Mod Duration Years

YTM (%)



HDFC STP - - 2.2 1.8 9.8

Dynamic Bond Funds - - IDFC Dynamic Bond Fund-Reg - - 15.9 8.7 7.8


UTI Dynamic Bond Fund-Reg - - 14.8 7.2 8.1



UTI Bond Fund - - 16.3 7.9 8.2


Cash - -

Liquid Funds - - Ultra Short Term - -

Gold 10.0% 10.0%

Gold 10.0% 10.0% Total 100.0% 100.0%

70.0%

20.0%

0.0%10.0%

Strategic Portfolio


70.0%

25.0%

0.0%5.0%

Tactical Portfolio


70.0%

20.0%

0.0%10.0%

Tactical Portfolio


80

90

100

110

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5M

ay-1

5Ju

n-1

5Ju

l-1

5A

ug-

15

Sep

-15

Oct

-15

No

v-1

5D

ec-1

5Ja

n-1

6Fe

b-1

6M

ar-1

6

Mod Aggressive UCI Index

April 2016 15


Model Portfolio: Aggressive

Aggressive Market Cap wise (%)


Strategic

Tactical


Others



15.0% 15.0% 88.9 3.0 8.1


Edelweiss Emerging Leaders Fund 10.0% 6.6% 15.8 77.8 6.4


Multi Cap 30.0% 30.0% MOSt Focused Multicap 35 Fund 10.0% 10.0% 87.8 12.1 0.0

Birla SL Pure Value Fund 10.0% 10.0% 17.4 76.0 6.6

Franklin India High Growth Cos Fund 10.0% 10.0% 57.3 24.9 17.8

Thematic / Sectoral Funds - - Equity Hybrid Funds - 10.0% Edelweiss Absolute Return Fund 10.0% Average

Maturity Years

Mod

Duration Years

YTM

(%)

Debt - - Short Term - - Axis Short Term Fund - - 2.7 2.0 8.0

Franklin India ST Income Plan - - 2.5 2.3 10.5

HDFC STP - - 2.2 1.8 9.8

Dynamic Bond Funds - - IDFC Dynamic Bond Fund-Reg - - 15.9 8.7 7.8


UTI Dynamic Bond Fund-Reg - - 14.8 7.2 8.1



UTI Bond Fund - - 16.3 7.9 8.2


Cash - - Liquid Funds - - Ultra Short Term - -

Gold 10.0% 10.0% Gold 10.0% 10.0% Total 100.0% 100.0%

90.0%

0.0%0.0%10.0%

Strategic Portfolio


90.0%

0.0%0.0%

10.0%Tactical Portfolio


80.00

90.00

100.00

110.00

120.00

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5M

ay-1

5Ju

n-1

5Ju

l-1

5A

ug-

15

Sep

-15

Oct

-15

No

v-1

5D

ec-1

5Ja

n-1

6Fe

b-1

6M

ar-1

6

Aggressive Nifty

April 2016 16


Thank you for your time!

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Economy & Finance

Alpha edge April 2016