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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 March 20, 2018
ICICI Securities Ltd. | Retail MF Research
Note: Whenever, returns for the scheme are shown in the report, they are for the growth option of the scheme.
Mutual Fund Review
Equity Markets .................................................................................................... 2
Debt Markets ....................................................................................................... 3
MF industry synopsis .......................................................................................... 4
MF Category Analysis ......................................................................................... 5
Equity funds..................................................................................................... 5
Equity diversified funds ...................................................................................... 6
Equity infrastructure funds ................................................................................. 7
Equity banking funds .......................................................................................... 7
Equity FMCG Funds ............................................................................................ 8
Equity Pharma funds ........................................................................................... 8
Equity Technology Funds .................................................................................... 8
Exchange Traded Funds (ETF) ......................................................................... 9
Balanced funds ............................................................................................. 10
Monthly Income Plans (MIP) ........................................................................ 11
Arbitrage Funds ............................................................................................. 11
Debt funds ..................................................................................................... 12
Liquid Funds …………………………………………………………………..13
Income funds .................................................................................................... 14
Gilt Funds……………………………………………………………………...15
Gold: Outlook anchored to Fed movement ....................................................... 16
Model Portfolios ................................................................................................ 17
Equity funds model portfolio ......................................................................... 17
Debt funds model portfolio ............................................................................ 18
Top Picks ........................................................................................................... 19
March 20, 2018
ICICI Securities Ltd. | Retail MF Research
Page 2
Equity Markets
Update
After making new highs in January 2018, Indian equity markets have
been under pressure since then. The BSE Sensex is down around 8%
while midcaps are down around 12% from their highs in January 2018
Indian markets fell in line with global markets as higher rate hike
expectations from the US Fed along with a sharp rise in bond yields
hampered investors sentiments
Concerns over a sharp rise in bond yields and its impact on treasury
income of the banking sector, which is already reeling under NPA
pressure, especially PSU banks, further impacted market sentiments
The recent quarterly results were among the best in terms of overall
performance. Sensex companies (ex-banks) posted a robust Q3FY18
performance partly due to the low base due to demonetisation in the
base quarter i.e. Q3FY17 and adapting of the trading channel to the new
GST regime. Quarterly results are encouraging thereby depicting an
upbeat domestic economic sentiment (also depicted by November-
December 2017 IIP numbers) thereby reinforcing our view of a smart
earnings recovery being under way. At a broader level, for the entire
listed universe, sales & PAT growth was at an encouraging double digits
on a YoY basis at 11.1% & 13.3%, respectively. A critical analysis of the
same depicts growth led by large cap companies vis-à-vis small cap &
midcap domain. It also aids our belief to be cautious while investing in
small & midcap companies and sticking to more quality names that
exhibit capital efficiency and have sustainable growth
Outlook
Overall, we believe the recent correction is an opportunity to enhance
allocation to equity markets as improving fundamentals in terms of GDP
& earnings growth, domestic liquidity and reforms remain. Globally
also, economic growth is improving across regions although to a varied
degree. In an improving global growth environment, equities may
remain a preferred investment destination. However, given the rise in
markets in the last few years, it is better to stagger buying at every
lower level. Midcap funds should be avoided from a lumpsum
perspective with multicap funds forming a larger proportion of the
equity portfolio
Time and again it has been seen that those who invest during market
volatility or market corrections are rewarded. Investors trying to time
the market by redeeming or not investing during volatility or a market
correction, lose out on the benefit of accumulating at lower prices
Volatility is a blessing in disguise for investors and provides them an
opportunity to accumulate at lower levels. Allocation to equities should
be increased during a downtrend to extract benefits from lower prices
This is not to say investments made during volatile times would pay off
immediately. Ultimately equity investments should be made only with a
horizon of at least five years, if not more, in mind. However, if an
opportunity presents itself intermittently to accumulate at lower levels,
taking advantage of it could benefit immensely when combined with a
long holding period
Nifty 50: Markets at all-time highs
7500
8000
8500
9000
9500
10000
10500
11000
11500
12000
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Source: Bloomberg, ICICIdirect.com Research
Secular dip in market indices …
-1.8
-1.9
-1.9
-1.9
-2.4
-2.8
-6
-4
-2
0
2
Sensex
BS
E 1
00
BS
E 2
00
BS
E 5
00
BS
E M
idcap
BS
E S
mall cap
Source: Bloomberg
One month returns till March 15, 2018
IT the sole sector to not be in the red …
3
-2
-2
-3
-3
-3
-4
-5
-7
-10
-8
-6
-4
-2
0
2
4
6
IT
FM
CG
Auto
Oil n G
as
Bankin
g
Real Estate
CG
Healthcare
Metals
Source: Bloomberg
One month returns till March 15, 2018
Research Analyst
Sachin Jain
sachin.jain@icicisecurities.com
Jaimin Desai
jaimin.desai@icicisecurities.com
ICICI Securities Ltd. | Retail MF Research
Page 3
Debt Markets
Update
The fixed income market continued to see selling pressure in February
with yields across segment rising further to the extent of 20-30 bps
The Indian fixed income market remained under pressure especially
longer dated securities with G-sec yields continuing to inch upwards
due to concerns arising from rising inflation, fear of fiscal slippage,
rising international crude oil prices and higher global bond yields
Indian markets have been under severe pressure since August 2017 on
the back of a sharp rise in global commodity prices particularly crude
oil, lower GST collection rising fiscal deficit concerns and the
government announcing additional borrowing. Global markets were
also weak during 2017 as sovereign yields across the globe witnessed a
reversal from historic lows. Lack of buying support from banks and
exhaustion of FPI limit also added to the already weak sentiments. The
10-year G-sec yield has moved up more than 120 bps since August
2017
The corporate bond market during the same period, however, has
remained more resilient with yields across durations in AAA and AA
rated bonds moving up in the range of 60-70 bps during the same
period. The volatility in yield has historically been far lower in corporate
bonds compared to government securities
Inflation has risen sharply since the second half of 2017 with prints for
December 2017 and January 2018 coming in above 5%. CPI inflation is
expected to average around 4.5% for FY19, marginally above RBI’s
median term target of 4.0% but well within the range of 2-6%. Hence,
we believe that although on the margin it has increased, it is still not in
an alarming trajectory to warrant a significant hawkish monetary policy
Outlook
We do not expect a reversal in the interest rate cycle in the near future
and expect the RBI to keep repo rates unchanged at 6.0% at least in the
near term
The recent up move in G-Sec yield with 10 year yield moving to around
7.70% is more of a retracement of bullish positioning as investors
adjust from a declining rate cycle to a prolonged status quo phase in
benchmark rates
Historically, 10-year G-Sec yield spread over repo ranges between 40
bps and 120 bps for most of the period. We believe the current spread
of 170 bps will narrow down once negative sentiments fades. Corporate
bond spreads are also likely to be at historic low levels as investors
search for higher accrual in a stable interest rate environment
The 10-year G-Sec spread of around 170 bps over the repo rate is far
above the long term average spread indicating the market is already
discounting multiple rate hikes by the RBI
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 dip slightly back towards 7.50%
6.0
6.4
6.8
7.2
7.6
8.0
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Yie
ld (%
)
Source: Bloomberg
G-sec yield curve: Yields dip for shorter maturities
6.52
7.15
7.50
7.63
6.60
7.17
7.48
7.57
6.0
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
7.8
1yr 3yr 5yr 10yr
Yie
ld (%
)
15-Mar-18 15-Feb-18
Source: Bloomberg, ICICIdirect.com Research
AAA corporate bond yield curve rises for longer
durations
7.66
7.91
8.05
8.38
7.67
7.47
7.88
8.25
6.4
6.8
7.2
7.6
8.0
8.4
8.8
1yr 3yr 5yr 10 yr
Yie
ld (%
)
15-Mar-18 15-Feb-18
Source: Bloomberg, ICICIdirect.com Research
ICICI Securities Ltd. | Retail MF Research
Page 4
MF industry synopsis
MF industry AUM shrunk ~0.9% in February 2018 to ~| 22.2 lakh crore
of the total MF corpus. Total ~36% was held by income funds, ~44%
by equity and equity-oriented funds and ~17% by money market funds
According to Amfi data, systematic investment plans (SIPs) inflows for
February were at ~| 6400 crore, down from ~| 6600 crore in the
previous month. SIP inflows average ~| 5300 crore per month in FY18
against ~| 3600 crore per month in FY17, a rise of ~47%. The number
of SIP folios has increased from 1.35 crore in March 2017 to 2.05 crore
in February 2018
In 2017, the MF industry recorded net inflow of | 2.44 lakh crore, of
which | 2.42 lakh crore came into equity and equity-oriented funds
Till February 2018, inflows into equity and equity oriented flows in FY18
were averaging ~| 21000 crore per month, more than double that in
FY17. January saw a net inflow of ~| 20700 crore in such funds
Exhibit 1: Monthly inflows into equity-oriented funds average ~| 21,000
in FY18 till February…
1000000
1200000
1400000
1600000
1800000
2000000
2200000
2400000
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Jun-1
7
Jul-17
Aug-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
Total AUM
Source: Amfi
Exhibit 2: AUM of Top 10 AMCs
306,463
302,488
248,546
247,060
216,078
153,067
131,442
104,821
85,416
78,179
50000
100000
150000
200000
250000
300000
350000
400000
ICICI
HD
FC
Aditya
Birla
Reliance
SB
I
UTI
Kotak
Franklin
DS
PB
R
Axis
AUM
Source: ACE MF
Exhibit 3: SBI has highest proportion of equity AUM as percentage of its
AUM
48%
47%
44%
43%
38%
38%
36%
35%
31%
31%
0%
20%
40%
60%
80%
SB
I
Fra
nklin
DS
PB
R
HD
FC
ICIC
I
Axis
UTI
Reliance
Kota
k
Adit
ya B
irla
Equity % Debt% Others%
Source: ACE MF. Data as of January 2018
Exhibit 4: Equity funds witness significant inflows in FY18…
-2000
4000
10000
16000
22000
28000
34000
40000
46000
52000
58000
64000
EQ
UIT
Y
BA
LA
NCED
OTH
ER
ETFs
ELS
S - E
QU
ITY
GO
LD
ETFs
GIL
T
Source: ACE MF. Data as on January 2018
ICICI Securities Ltd. | Retail MF Research
Page 5
MF Category Analysis
Equity funds
Technology funds emerged as the best performing category of
sector funds. This category along with FMCG, infrastructure as well
as banking funds continued to outperform pharma funds by wide
margins. IT funds have staged a comeback over the last six months
but pharma funds dragged once again, returning -6.5% on a one-
year basis
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 funds.
Pharma stocks delivered a muted performance in Q3FY18 amid
persistent pressure over pricing, compliance issues and a fear of
shrinking growth in the large US market.
Exhibit 5: IT funds outperform other categories on one year basis while pharma funds continue to
be under pressure (returns as on March 16, 2018)
S
27.3
24.0
19.2
16.4
13.8
11.5
9.2
-6.5
6.7
13.6
13.7
10.2
9.7
7.2 8.5
-2.7
17.1
17.1
25.7
17.5
17.9
14.6
12.7
14.6
-10
-5
0
5
10
15
20
25
30
Technology FMCG Mid cap Infrastructure Multi cap Large Cap Banking 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, ELSS schemes
0
4000
8000
12000
16000
20000
24000
28000
32000
36000
40000
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Net Inflo
w ( | C
r )
Equity + ELSS + ETF
Source: Amfi, ICICIdirect.com Research
Exhibit 7: Robust inflow in equity funds push up AUM to cross | 8.5 lakh
crore
350000
400000
450000
500000
550000
600000
650000
700000
750000
800000
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Jun-1
7
Jul-17
Aug-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
| lakh C
rore
Equity +ELSS
Source: Amfi, ICICIdirect.com Research
ICICI Securities Ltd. | Retail MF Research
Page 6
Equity diversified funds
Equity diversified funds witnessed robust growth in the last three
years, with AUM within each sub-category rising substantially. In
the last three years in FY14-17, AUM of large cap funds rose 107%,
multi cap funds AUM rose 90% while midcap funds AUM rose
138%
Over this period, while all three sub-categories 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: Blistering AUM growth across all equity diversified fund sub-categories from 2014
41137
41846
73697
73765
105191
152187
65585
64809
121798
113477 165314
231665
13214
13855
40337
41353
68009
95986
0
30000
60000
90000
120000
150000
180000
210000
240000
270000
300000
Feb 1
3
Feb 1
4
Feb 1
5
Feb 1
6
Feb 1
7
Feb 1
8
|crs
Large Caps Multi Caps Mid Caps
Source: ACE MF
Recommended funds
Large cap
Aditya Birla Sunlife Frontline Equity
ICICI Prudential Focused Bluechip Equity
SBI Bluechip Fund
Multi cap
L&T India Value 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
ICICI Securities Ltd. | Retail MF Research
Page 7
Equity infrastructure funds
Several building materials companies posted a decent performance
across categories on the back of a favourable base effect as Q3FY17
was impacted by demonetisation. Plywood companies, in particular,
recorded a relatively stronger set of numbers
Construction companies had a relatively weaker quarter due to GST
related transition related issues. However, several companies expect a
pick-up in execution in FY19 because of a strong order book and
anticipated improvement in working capital cycle and debt reduction
The demand scenario in real estate continues to remain subdued in
Q3FY18. Going forward, over the long term, with RERA implementation,
a consolidation in the industry is expected which would ultimately
benefit organised players
In its recent Budget 2019 announcements, allocation to roads, highways
and transport increased 16.3% YoY while that to urban development
increased 11.2% YoY. Railways received a bumper push, with
budgetary allocation increasing 32.7% YoY. Consequently, allocation
towards key development related schemes increased 14.1% YoY. 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
Infrastructure funds focusing on specific companies capitalising on
growth potential in the sector are offering a good investment option to
investors. Aggressive investors may consider investing in the
recommended infrastructure funds as a part of their thematic allocation
Preferred Picks
L&T Infrastructure Fund Referwww.icicidirect.com
for details of the fund Reliance Diversified Power Sector Fund
Equity banking funds
The magnitude of the fraud unearthed recently and regulatory actions
thereof along with the new framework on resolution of stressed asset
could lead to incremental slippages in the near term. Therefore, credit
cost in the near term could remain elevated, especially for corporate
centric banks. Erosion in net worth and deterioration in capacity is
expected to raise capital and could impact future growth. Overall,
heightened regulatory scrutiny and focus on strengthening operational
system is expected to impact balance sheet growth keeping return
ratios subdued
However, in the long term, we remain optimistic on the banking sector
keeping in mind the anticipated pick-up in credit offtake. Steady
margins and peaking out of the NPA cycle are expected to further aid
profitability. From a long term point of view, the PSU bank
recapitalisation programme is a structural positive. The continued
government push on financial inclusion, enhanced awareness and
increased usage of digital or electronic payments will be positives for
the banking industry from an operating cost perspective
Preferred Picks
ICICI Prudential Banking & Financial Services Refer to
www.icicidirect.com for
details of the fund
Reliance Banking Fund
UTI Banking Sector Fund
View
Short-term: Positive
Long-term: Positive
View
Short-term: Neutral
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 8
Equity FMCG Funds
FMCG companies witnessed strong growth in the December quarter led
by robust volume growth on account of the low base of the
corresponding quarter impacted by demonetisation. The previous two
quarters were impacted by GST related trade disruption mainly due to
large wholesale network de-stocking and difficulty in coping up with the
new indirect tax regime
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
Equity Pharma funds
The challening environment faced by the US generic space
continued to impact pharma sector growth in Q3FY18. Domestic
formulations growth was also impacted by a slower-than-
anticipated recovery post GST implementation. On the EBITDA
front, an improvement in domestic margins, cost rationalisation and
curbs in R&D spending helped restrict a fall in margins
We have a neutral view on the sector. The US front continues to
face intense competition owing to client consolidation and faster
approval of products. Revenues, margins and profitability could
remain subdued in the near to medium term leading to a cautious
undercurrent for the sector
Preferred Picks
Reliance Pharma Fund Refer to
www.icicidirect.com
for details of the fund
SBI Pharma Fund
UTI-Pharma & Healthcare
Equity Technology Funds
Q3FY18 saw Tier-1 IT companies report muted constant currency
growth as expected since it is a seasonally weak period. Geography
wise, Europe led growth for these companies amid the slowdown in
the US market. BFSI segment (ex-insurance) continued to be under
pressure while energy saw good growth and retail probably
exhibited early signs of recovery. Management guidance for these
companies was hopeful of a better FY19 compared to FY18
We maintain our neutral stance on the sector as the industry faces
challenges related to US immigration rules and growing
protectionism around the world. The industry would continue to
witness pricing pressure in its traditional business, which is
currently unable to offset newer revenue streams from digital areas
that enjoys higher margins
Preferred Picks
ICICI Prudential Technology Fund Refer to
www.icicidirect.com for
details of the fund
Preferred Picks
ICICI Prudential FMCG Fund Referwww.icicidirect.com
for details of the fund SBI FMCG Fund
View
Short-term: Neutral
Long-term: Neutral
View
Short-term: Neutral
Long-term: Neutral
View
Short-term: Positive
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 9
Exchange Traded Funds (ETF)
In India, three kinds of ETFs are available: Equity index ETFs, liquid
ETFs and gold ETFs
An equity index ETF tracks a particular equity index such as the BSE
Sensex, NSE Nifty, Nifty Junior, etc
An equity index ETF scores higher than index funds on several
grounds. The expense of investing in ETFs is relatively less by 0.50-
0.75% in comparison to an index fund. The expense ratio for equity
ETFs is in the range of 0.05-0.25% while for index funds the expense
ratio varies in the range of 0.50-1.25%. However, brokerage (which
varies) is applicable on ETFs while there are no entry loads now on
index funds
Tracking error, which explains extent of deviation of returns from the
underlying index, is usually low in ETFs as it tracks the equity index on
a real time basis whereas it is done only once in a day for index funds
ETFs also provide liquidity as they are traded on stock exchanges and
investors may subscribe or redeem them even on an intra-day basis.
This is unavailable in index funds, which are subscribed/redeemed only
on a closing NAV basis
In August 2015, the Labour Ministry decided to invest 5% of
Employees’ Provident Fund Organisation’s (EPFO) incremental corpus
in ETFs. The investment in equities is split between the Nifty ETF (75%)
and Sensex ETFs 25%. EPFO chose two ETF schemes of SBI Mutual
Fund — SBI ETF Nifty and SBI Sensex ETF
In 2016, EPFO hiked the limit from 5% to 10% of its incremental
corpus of investment in equities, which was further increased to 15% of
its incremental corpus in May 2017. This is a positive move since
retirement savings, which are long term in nature, will be invested in
equities that have the potential to generate higher returns. So far, EPFO
has invested a total of ~| 22,000 crore in exchange traded funds as of
April 2017
Over 400 ETFs are traded globally. ETFs are transparent and cost
efficient. The decision on which ETF to buy should be largely governed
by the decision on getting exposure to that asset class
Exhibit 9: ETFs record inflows in February after two months of outflows
930
3599
456 5841365 1753 1513
1968 1675
12447
-1604-2234
953
-4000
-2000
0
2000
4000
6000
8000
10000
12000
14000
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Net Inflo
w ( | C
r )
Source: Amfi, ICICIdirect.com Research
Exhibit 10: ETF AUMs remain strong
40147
44436
45899
47584
48359
52823
53734
55166
60107
70041
70353
72879
69848
0
10000
20000
30000
40000
50000
60000
70000
80000
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
| C
rore
Other ETFs
Source: Amfi, ICICIdirect.com Research
Traded volumes should be the major criterion that is used
while deciding on investment in ETFs. Higher volumes
ensure lower spread and better pricing to investors...
Tracking error, though it should be considered, is not the
deciding factor as variation among funds is not huge...
..traded volume should be the major criteria to be
considered while deciding on investment in ETFs.
Higher volumes ensure lower spread and better
pricing to investors...
..tracking error though should be considered but is
not the deciding factors as variation among funds
is not huge...
ICICI Securities Ltd. | Retail MF Research
Page 10
Balanced funds
The balanced funds category continued to receive significant flows,
with average net monthly inflow in 2017 of ~ | 7000 crore
AUM of balanced funds witnessed a stellar increase during this
period, more than doubling to | 174468 crore in February 2018 from
| 77126 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 are taxed at
10%. Also, dividends declared by funds are taxed at 10%
In case one separately invests 35% of one’s investible corpus in a
debt fund, the same will be subject to higher taxation. However, if
the whole corpus is invested in balanced funds, 100% shall have
lower taxation applicable as mentioned above. Thus, balanced
funds offer the benefit of equity taxation on debt component
After a sharp rally in equity markets, the funds can be a preferred
investment avenue as the debt proportion serves to protect on
intermediate relief rallies or the downturn while providing minimum
65% participation on further upsides
Exhibit 11: Inflows into balanced funds slow in February
4,562
5,952
7,136
7,663
7,458
7,864
8,783
8,141
5,897
7,614
9,756
7,665
5,026
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Net Inflo
w ( | C
r )
Source: Amfi, ICICIdirect.com Research
Exhibit 12: YoY 126% growth in AUM of balanced funds 77126
84763
93530
102156
109513
121243
128320
134868
147460
155105
167385
176087
174468
13000
33000
53000
73000
93000
113000
133000
153000
173000
193000
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
| C
rore
Balanced
Source: Amfi, ICICIdirect.com Research
Preferred Picks
ICICI Prudential Balanced Fund
HDFC Balanced Fund
Birla Sun Life Balanced 95 Fund
DSP Blackrock Balanced Fund
L&T India Prudence Fund
(Refer to www.icicidirect.com for details of the fund)
Investors with a limited investible surplus and a lower risk
appetite but with a willingness to invest in equities can
look to invest in these funds
View
Short-term: Positive
Long-term: Positive
ICICI Securities Ltd. | Retail MF Research
Page 11
Monthly Income Plans (MIP)
An MIP offers investors the option to invest in debt with some
participation in equity, ~10-25% of the portfolio. They are suitable
for investors who seek higher returns from a debt portfolio and are
comfortable taking nominal risk. The debt corpus of the portfolio
provides regular income while the equity portion of the fund
provides alpha. However, returns can also get eroded by a fall in
equities
MIPs can be classified into aggressive MIP and conservative MIP
based on its equity allocation. Risk averse investors should invest in
MIPs with lower equity allocation to avoid capital erosion
The change in taxation announced in the Union Budget 2014, shall
be applicable to MIP funds (refer debt funds section for details)
Preferred Picks
Aditya Birla Sun Life MIP II - Wealth 25 Plan
ICICI Prudential MIP 25
SBI Magnum MIP Fund
SBI Magnum MIP Floater Fund
(Refer www.icicidirect.com for details of the fund)
Arbitrage Funds
Arbitrage funds seek to exploit market inefficiencies that get
manifested as mispricing in the cash (stock) and derivative markets
Availability of arbitrage positions depends very much on the market
scenario. A directional movement in the broader index attracts
speculators in the market while cost of funding makes futures
positions biased
Arbitrage funds are classified as equity funds as they invest into
equity share and equity derivative instruments. Since these are
classified as equity funds for taxation, dividends declared by the
funds are taxed at 10%. Capital gains tax will be applicable at 10% if
they are sold after a year
These funds can be looked upon as an alternative to liquid funds.
However, for these funds, returns totally depend on arbitrage
opportunities available at a particular point of time and investors
should consider reviewing the same before investing. Returns of
arbitrage funds are non-linear and, therefore, unsuitable for
investors who want consistent return across time period
Arbitrage funds should be used as a liquid investment and should
not be a major part of the investor’s portfolio. A range bound
market does not give ample room to create arbitrage positions
Preferred Picks
ICICI Prudential Equity - Arbitrage Fund – Regular
IDFC Arbitrage Fund - (Regular)
Kotak Equity Arbitrage Fund
SBI Arbitrage Opportunities Fund
(Refer to www.icicidirect.com for details of the fund)
View
Short-term: Neutral
Long-term: Positive
View
Short-term: Neutral
Long-term: Neutral
MIP should be a preferred debt investment for funds that
need to be parked for over two years
ICICI Securities Ltd. | Retail MF Research
Page 12
Debt funds
Exhibit 13: Category average returns
5.5 6
.6
7.6
3.9
6.4
7.6
6.2
6.4 7.0
0.0
5.0
6.9
-3.7
3.3
7.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
6 months 1 year 3year
%Income Ultra Short Term Income Short Term Liquid Income Long Term Gilt
Source: Crisil, ICICIdirect.com Research
Note : Returns as on March 16, 2018; All returns are compounded annualised
Exhibit 14: G-sec yield curve
6.52
7.15
7.50
7.63
6.60
7.17
7.48
7.57
6.0
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
7.8
1yr 3yr 5yr 10yr
Yie
ld (%
)
15-Mar-18 15-Feb-18
Source: Bloomberg, ICICIdirect.com Research
Exhibit 15: Corporate bond curve
7.66
7.91
8.05
8.38
7.67
7.47
7.88
8.25
6.4
6.8
7.2
7.6
8.0
8.4
8.8
1yr 3yr 5yr 10 yr
Yie
ld (%
)15-Mar-18 15-Feb-18
Source: Bloomberg, ICICIdirect.com Research
Benchmark 10 year G-Sec has witnessed yields
coming off its highs in March
Interest rates moved up for longer durations across G-Sec
and corporate bond categories
ICICI Securities Ltd. | Retail MF Research
Page 13
Liquid Funds
Yields on money market instruments viz. less than one year CDs
and CPs in which liquid fund predominantly invest, have spiked
over the last three months in the face of reducing liquidity
In an uncertain environment, liquid funds remain well placed to park
money with low volatility
For less than a year, individuals in the higher tax bracket should opt
for dividend option as the dividend distribution tax @ 28.325% is
marginally lower. Also, though the tax arbitrage has reduced, they
still earn better pre-tax returns over bank savings (3-4%) and
current accounts (0-3%)
Changes in taxation rules announced in Union Budget 2014 are also
applicable to liquid funds, as post tax returns in less than a three-
year period get reduced for individuals in the higher tax bracket
(30% tax slab)
Exhibit 16: Call rates below repo rate
5.6
5.8
6
6.2
6.4
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
%
Call rate
Source: Bloomberg, ICICIdirect.com Research
Exhibit 17: Short term CP/CD yields spike
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
%
3M CD 3M CP
Source: Bloomberg, ICICIdirect.com Research
Exhibit 18: Flows into liquid funds remain volatile on institutional activity
8,227
-15,147
99,403
-64,692
-12,739
-19,511
21,352
4,833
-13,261
77,408
-127,597
96,552
1,223
-300,000
-260,000
-220,000
-180,000
-140,000
-100,000
-60,000
-20,000
20,000
60,000
100,000
140,000
180,000
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Net Inflo
w ( | C
r )
Source: Amfi, ICICIdirect.com Research
Exhibit 19: AUM remains healthy
386403
399775
415087
428212
450533
467418
468022
484802
468668
469675
496696
520020
543541
300000
400000
500000
600000
700000
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
| la
kh C
rore
Money Market
Source: Amfi, ICICIdirect.com Research
Preferred Picks
HDFC Cash Management Fund - Savings Plan
SBI Magnum InstaCash
Reliance Liquid Fund - Treasury Plan
(Refer to www.icicidirect.com for details of the fund)
View
Neutral
ICICI Securities Ltd. | Retail MF Research
Page 14
Income funds
Benchmark G-Sec yields continued to be under pressure owing to
demand-supply mismatch concerns and fears of fiscal slippage over
lower tax collection concerns. Bond markets continue to remain hit
by weak sentiments owing to a confluence of these factors.
However headline inflation for February (4.44% YoY) provided
some relief, rising rising slower when compared to December and
January prints. The January reading was also below RBI’s revised
projection of 5.1% CPI for Q4FY18. Earlier, the February MPC policy
turned out to be a non-event for the bond markets. RBI highlighted
various concerns over inflation like HRA impact, elevated global
commodity prices on improving global growth, rise in MSP and rise
in customs duty in Budget but maintained status quo on rates. Food
prices moderated in February on the back of easing in vegetables,
sugar and eggs while the percolation effects of HRA implementation
for government employees caused a sequential spike in core CPI
reading.
Short-term funds or short-term funds with some dynamic allocation
to G-sec should be preferred over pure G-Sec funds or long-term
duration funds. Short-term debt funds remain a stable performing
category, especially in the current volatile environment. Credit
funds with reasonable credit quality should be preferred over an
aggressive credit fund
Exhibit 20: Income funds inflows
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
9,3
74
-60,1
51
-9,8
71
-9,7
99
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
Feb-1
7
Apr-
17
Jun-1
7
Aug-1
7
Oct-
17
Dec-1
7
Feb-1
8
Net In
flow
s
(| .
Cr)
Source: Amfi, ICICIdirect.com Research
Exhibit 21: AUM remains stable on consistent inflows
783778
794679
743783
780797
792734
778266
845484
858188
809965
855478
867736
808252
801405
400000
500000
600000
700000
800000
900000
Feb-1
7
Mar-
17
Apr-
17
May-1
7
Jun-1
7
Jul-17
Aug-1
7
Sep-1
7
Oct-
17
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
| C
rore
Income
Source: Amfi, ICICIdirect.com Research
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
(Refer www.icicidirect.com for details of the fund)
View
Ultra-short term: Neutral
Short-term: Positive
Long-term: Neutral
ICICI Securities Ltd. | Retail MF Research
Page 15
Gilt Funds
Benchmark 10-year government bond yields remained elevated
above 7.6% throughout February till mid March (new series). Soft
inflation combined with strong institutional flows into debt markets
helped push down benchmark 10-year G-sec yield by ~45-50 points
in May-July 2017. The markets were not enthused by the widely
expected rate cut in August and lower-than-expected dovish RBI
commentary in October. A significant rebound in July-January CPI
readings was followed by a rise in yields by ~110 bps from ~6.50%
(September) to 7.63% (March 15)
RBI held status quo on policy rates and maintained a neutral stance
in its February 7 policy meet as expected. Headline CPI for February
at 4.44% YoY grew far slower than December and January prints of
~5.1%. The February MPC policy turned out to be a non-event for
the bond markets. RBI highlighted various concerns over inflation
like HRA impact, elevated global commodity prices on improving
global growth, rise in MSP and rise in customs duty in Budget but
maintained status quo on rates. Food prices continued to moderate
in February on the back of easing in vegetables, sugar and eggs
while the percolation effects of HRA implementation for
government employees caused a sequential spike in core CPI
reading
Pressure continued to remain on bond yields in the midst of various
factors such as concerns over demand-supply mismatch of G-secs,
steadily high crude oil prices and elevated international bond yields.
Allocation to pure G-sec or duration funds should be avoided given
their historical outperformance and G-sec yields trading at the lower
end of their 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
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
(Refer to www.icicidirect.com for details of the fund)
Allocation to pure G-Sec or duration funds should be
avoided given their historical outperformance and G-sec
yield trading at the lower end of its historical range. Crisil
10-year Gilt index has delivered 38% return in the last
three years. It is likely the return will be significantly
decline, going forward
View
Short-term: Neutral
Long-term: Neutral
ICICI Securities Ltd. | Retail MF Research
Page 16
Gold: Outlook anchored to Fed movement
Global gold prices moved within a narrow range in February.
Starting from a base of ~US$1345 per ounce, prices remained
around that level till February 19 before declining towards
~US$1320 per ounce towards the end of the month and staying
thereabouts till mid March. Domestic gold prices fared slightly
better, aided by a depreciation of the rupee against the US dollar
Federal Reserve’s movement on US interest rates has driven the
gold price outlook in the absence of major concerns on the
geopolitical front. The Fed refrained from raising interest rates in
January. There were three hikes pencilled in for 2018 at the
beginning of the year. However strong corporate earnings growth,
low unemployment levels and higher workers’ wages growth had
spiked fears that rebound in inflation would lead to an increase in
the pace of outlined hikes. While the key inflation measure remains
below the targeted mark of 2%, it has firmed up from earlier levels.
As a result, US bond yields hardened appreciably in recent months
US bond yields remained elevated in February ending the month at
2.86%. The 10-year yield had previously jumped by ~13% during
January. Rising US bond yields are sentimentally negative for gold
as it represents a higher opportunity cost of holding the metal,
which bears no interest
Weakness in the US dollar continues to provide support to gold
prices as the metal is denominated in that currency
Gold has historically been looked at as a relatively risk-free asset. Its
price movement both in India and globally, is impacted by any
actual or perceived risk build-up on economic, political or natural
fronts
Exhibit 23: Gold prices flat in February
1100
1200
1300
1400
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Price ($/ounce)
Source: Bloomberg, ICICIdirect.com Research
Exhibit 24: Indian prices slightly better on FY18 till date basis
26000
28000
30000
32000
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-1
7
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Price (|/10 grams)
Source: Bloomberg, ICICIdirect.com Research
ICICI Securities Ltd. | Retail MF Research
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
L&T India Value 20 - -
Aditya Birla Sunlife Frontline Equity - 20 20
Franklin India Smaller Companies Fund 20 20 -
SBI Bluechip Fund - - 20
Kotak Select Focus Fund 20 20 -
HDFC Midcap Opportunities Fund 20 20 -
Franklin India High Growth Companies Fund 20 - -
Motilal Oswal MOSt Focused Multicap 35 Fund - 20 20
ICICI Prudential Focused Bluechip Fund - - 20
Reliance Top 200 Fund - - 20
Total 100 100 100
Source: ICICIdirect.com Research
Exhibit 26: Model portfolio performance since inception
19.2%
17.3%
16.2%
13.3%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
Aggressive Moderate Conservative BSE 100
%
Aggressive Moderate Conservative BSE 100
Source: Crisil Fund Analyser, ICICIdirect.com Research; CAGR performance as on 28 Feb 2018
ICICI Securities Ltd. | Retail MF 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
Aditya Birla SL Savings Fund 20
ICICI Pru Flexible Income Plan 20
Short Term Debt Funds
Axis Regular Savings Fund 20 20
Aditya Birla Sunlife Short Term Fund 20 20
Aditya Birla Sunlife Short Term Opportunites Fund 20 20
HDFC Short Term Opportunities Fund 20 20
ICICI Prudential Regular Savings 20
IDFC SSI Short Term 20
HDFC Corporate Debt opportunities fund 20
L&T Short Term Income Fund 20 20
Total 100 100 100
Time Horizon
% Allocation
Source: ICICIdirect.com Research
Exhibit 32: Model portfolio performance since inception
8.1% 8.2%8.5%
7.5%7.8%
8.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
0-6 Months 6Months - 1Year Above 1yr
%
Portfolio Index
Source: Crisil Fund Analyser, ICICIdirect.com Research; CAGR performance as on 28 Feb 2018
*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
ICICI Securities Ltd. | Retail MF Research
Page 19
Top Picks
Exhibit 33: Category wise top picks
Largecaps Aditya Birla Sun life Frontline Equity Fund
ICICI Pru Focused Bluechip Fund
Kotak Select Focus Fund
SBI Bluechip Fund
Midcaps HDFC Midcap Opportunities Fund
Franklin India Smaller Companies Fund
L&T Emerging Businesses Fund
Reliance Small Cap Fund
Multicaps DSP Blackrock Opportunities Fund
Franklin India High Growth Companies Fund
L&T India Value Fund
Motilal Oswal MOSt Focussed Multicap 35 Fund
ELSS Aditya Birla Tax Relief 96 Fund
DSP Blackrock Tax Saver Fund
L&T Tax Advantage Fund
Reliance Tax Saver Fund
Balanced HDFC Balanced Fund
ICICI Pru Balanced Fund
Aditya 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 Aditya Birla Sunlife Savings Fund
ICICI Pru Flexible Income Plan
UTI Treasury Advantage Fund-Inst
Short term Aditya Birla SL Short term Fund
HDFC Medium Term opportunities Fund
Kotak Banking and PSU Debt Fund
Credit Opportunities Axis Regular Savings Fund
Aditya Birla Sun Life Medium Term Plan
L&T Short Term Income Fund
Income Funds ICICI Pru Income Fund
Aditya Birla SL Income Plus - Regular Plan
IDFC Dynamic Bond Fund
MIP Aggressive Aditya Birla SL MIP II - Wealth 25 plan
ICICI Pru MIP 25
Equity Funds & Equity-oriented Funds
Debt Funds & Debt-oriented Funds
(Refer www.icicidirect.com for details of the fund)
ICICI Securities Ltd. | Retail MF Research
Page 20
Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st
Floor, Akruti Trade Centre,
Road No. 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com
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 themselves of and to observe such restriction.
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