ICIC
I S
ecurit
ies –
Retail R
esearch
Monthly
Report
May 22, 2019
Mutual Fund Review
Equity Market
Update
After trading in a narrow range in April 2019, Indian equity markets turned
extremely volatile in May on expectations of the general election results.
After correcting almost 2000 points on the S&P BSE Sensex in the first half
of May, markets recovered almost all of its gains post exit poll outcome
predicting majority to the incumbent government.
Expectation of a favourable general election outcome in terms of the
incumbent party in government getting a simple majority already seems to
have been discounted by the market. Any disappointment in terms of lower-
than-expected seats for the incumbent party may lead to disappointment
along with some market correction.
Statistically, Indian markets have not outperformed global peers while the
recent rally is indeed just a catch up activity with global peers wherein global
equities gained smartly in January-February with domestic equities catching
up to it in the last three months. It was supported by strong FPI inflows who
were otherwise net sellers in CY18.
Structurally, domestic investors have stayed put in equities with the monthly
SIP run rate continuing to remain above | 8,000 crore. Domestic markets
were also buoyed by the resolution of stressed assets in the banking space
and expectations on corporate earnings witnessing a high double digit
recovery in FY19-21E.
Outlook
Earnings growth, which is key to market performance, is likely to remain
robust over the next two years. The same provides us comfort in remaining
constructive on the markets. We expect the earnings momentum to
continue, going forward. A stable currency amid an increase in crude price,
softening system interest rates (controlled inflation) and resolution of
stressed asset is expected to lead to healthy 20%+ earnings CAGR in FY19-
21E. Earnings growth at the index level may be led by the index heavyweight
banking & NBFC space, which is expected to report earnings CAGR of 36.1%
in FY19-21E. Accordingly, we maintain our positive stance on banking and
diversified funds while being overweight on the banking sector.
The global macro set-up (dovish outlook by Fed, range bound crude) as well
as domestic macroeconomic indicators such as RBI rate cut (possibility of
further rate cuts), driven by benign inflation and stable currency levels, are
key drivers of our positive outlook on markets. With uncertainty around
elections results behind, a majority government is likely to bode well for
equity investment.
Going ahead, underlying macroeconomic growth coupled with corporate
earnings growth momentum is likely to remain a key catalyst for market
movement in the next three to five years. The resilient corporate earnings
growth across most pockets is a positive.
Volatility is expected to remain elevated in the near term as expectations of
a strong and stable government already seem to have been discounted by
the market. Therefore, investors are advised to invest in a systematic and
staggered manner over the next few months. Also, any small correction
should be used as a lumpsum investment opportunity as we do not foresee
any major correction in the near term.
Markets back to all-time highs post exit poll
prediction
Source: Bloomberg
Research Analyst
Sachin Jain
9000
9500
10000
10500
11000
11500
12000
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
ICIC
I S
ecurit
ies –
Retail R
esearch
Monthly
Report
Debt Market
Update
Since the start of calendar year 2019, the Indian debt market has been range
bound. This is particularly true for G-Sec yields that are trading in a narrow
range, at ~7.3-7.4% on a 10 year paper despite a 50 bps rate cut by the RBI
in two tranches, inflation remaining under control and benign global yields.
Higher government borrowing and ongoing liquidity crises is preventing the
favourable fundamentals factors from lowering bond yields.
The credit environment continues to remain weak. NBFCs who raised money
through structures like loan against share or subsidiaries whose parent is
facing liquidity deficit are finding it difficult to roll over their deposits.
Accordingly, they have seen credit being downgraded to default rating. The
mark to market on these investments is leading to specific debt schemes
delivering negative returns.
We have been cautious on the credit environment and evaluating individual
investment in all debt schemes. We are avoiding all companies related to a
corporate house whose individual as well as consolidated debt levels seems
unsustainable basis future business outlook.
Liquidity deficit increased to more than | 70000 crore in April from | 57000
crore in March. Money market rates hardened as a result with the two
months CD levels rising 50 bps while one year CD rates went up 30 bps
approximately. Given the tight liquidity conditions, the RBI announced open
market operations (OMO) auctions of | 25000 crore in May and another
dollar swap auction by US$5 billion to further inject liquidity.
Outlook
Given the benign global yield backdrop and favourable inflation-growth
dynamics, there is room for a further rate cut by the RBI. The RBI is also
increasingly focusing to ensuring liquidity deficit improves through forex
swap programme and OMO auctions. The same is likely to supply durable
liquidity and improve transmission, going ahead. The current lower
government spending is also set to improve post election results.
The growth –inflation dynamic favours more rate cuts from the Reserve Bank
of India. CPI has been below 4% for nine months now while core CPI, which
peaked at ~6-6.25% in October, has now trended down. It is now at around
4.5%. At the same time, almost all high frequency data like auto sales,
consumer sector related volume growth, IIP, tight liquidity in NBFC sector,
all indicate at a slowdown in economic activity. We expect more than one
rate cut from RBI during the current calendar year 2019.
Structurally, we continue to remain positive on the Indian debt market. Good
quality short-term funds and corporate bond fund category are best placed
for long term fixed income allocation. It is better to continue to avoid the
credit risk fund category.
Once the liquidity tightness abates and supply concerns are addressed, we
expect bond yields, both sovereign and corporate bond, to trend lower from
current levels over a period of time.
Short-term debt funds or lower duration funds are better placed over the
next few months. We maintain our cautious stance on credit risk funds or
funds with higher credit risk. The corporate bond fund category is best
placed for long term debt allocation.
G-Sec yield trading around the lower end of its
recent range at 7.3%
Source: Bloomberg
7.0
7.2
7.4
7.6
7.8
8.0
8.2
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Yie
ld (
%)
ICICI Securities | Retail Research 2
ICICI Direct Research
Monthly Report | Mutual Fund Review
Industry Synopsis
The MF industry AUM rose 4.0% in April to ~| 24.8 lakh crore on the back
of inflows into debt funds.
While liquid fund inflows were dominant in the debt fund category, other
category of funds like ultra short term funds, money market funds and
corporate bond funds category also witnessed inflows during April 2019.
In the equity funds category, multicap funds witnessed highest inflows
followed by small cap funds. Aggressive hybrid funds continued to witness
outflows for a fourth consecutive month.
Exhibit 1: HDFC MF retains top spot in terms of total AUM
Source: ACE MF
Exhibit 2: Multicap funds record highest inflows, hybrid funds
continue to witness outflows
Source: AMFI
Exhibit 3: Corporate bond funds witness inflows apart from
short maturity funds. Credit funds witness outflows
Source: AMFI
42%
38%
53%
34%
47%
43%
36% 40%
45%
27%
54%
54%
44%
60%
47% 5
1%
57%
54%
51
%
69%
4%
8%
3% 6
%
6%
5% 7%
6%
4%
4%
347190
330751
297350
250206
225419
157723
153185
125646
99168
78508
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
UTI
Kotak
Franklin
Axis
IDFC
| c
rore
Equity % Debt% Others% AUM
Equity Oriented Category Inflow/(Outflow) during April 2019
Multi Cap Fund 1,873
Aggressive Hybrid Fund (2,121)
Large Cap Fund 48
Balanced Advantage 155
ELSS 459
Mid Cap Fund 491
Sectoral/Thematic Funds 567
Value Fund/Contra Fund 40
Large & Mid Cap Fund (21)
Small Cap Fund 956
Focused Fund 228
Equity Savings (708)
Dividend Yield Fund (32)
Equity Oriented CategoryInflow/(Outflow) during
April 2019
AUM
Liquid Fund 89,778 477,843
Low Duration Fund 4,913 89,822
Ultra Short Duration Fund 11,037 87,145
Short Duration Fund 2,771 80,721
Credit Risk Fund (1,253) 79,644
Corporate Bond Fund 3,874 61,329
Money Market Fund 6,419 59,018
Medium Duration Fund (531) 36,556
Banking and PSU Fund 2,792 35,682
Floater Fund 348 30,058
Dynamic Bond Fund 412 19,861
Overnight Fund 96 11,310
Medium to Long Duration Fund 264 10,128
Gilt Fund (41) 7,546
Long Duration Fund 8 1,130
Gilt Fund with 10 year constant duration 33 548
ICICI Securities | Retail Research 3
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Category Analysis
Equity Funds
Indian markets witnessed a turnaround in performance in the last three
month since February 2019. After remaining subdued since the start of
CY18, markets have regained momentum since March 2019 and are back
near all-time high levels.
Sector rotation is being seen with banking, infrastructure funds significantly
outperforming in the recent uptrend while the IT sector, which the best
performing sector since January 2018, underperformed significantly.
We have been recommending banking funds since the start of CY19 as we
believe that underperformance coupled with improved earnings growth
outlook over the next two years make it well positioned to deliver a superior
performance.
Exhibit 4: IT remains best performing category over last year but shift in sector performance seen since February 2019 as
banking, infra outperform in recent rally
Source: CRISIL. Category average annualised returns as on May 20, 2019
Exhibit 5: Equity market witnesses sharp reduction in inflows
in equity oriented funds
Source: ACE MF
Exhibit 6: Multicap funds have highest AUM within all
category of funds
Source: ACE MF
12.3
9.3
7.2
4.1
2.1
1.0
0.8
-0.5
-1.5
-5.6
-6.3
20.3
11.9
13.3
13.8
-2.0
13.1
12
.8
13.2
13.0
11.6
10.5
10.3
14.6
13.7
11.3 13.1
8.3
13.5
12
.3
12.9
13.1
9.4
14.1
15.3
-10
-5
0
5
10
15
20
25
30
Bankin
g
Technolo
gy
Large C
ap
Focused
Pharm
a
Large &
Mid
cap
Mult
i cap
ELS
S
Valu
e/C
ontra
Infr
astructure
Mid
cap
Sm
all C
ap
Returns (
%)
1 year 3 Year 5 year
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
May-15
Nov-15
May-16
Nov-16
May-17
Nov-17
May-18
Nov-18
May-19
Net In
flo
w ( |
C
r )
Equity + ELSS + Balance
Equity Oriented Category AUM
Multi Cap Fund 152,056
Aggressive Hybrid Fund 146,292
Large Cap Fund 126,596
Balanced Advantage 92,833
ELSS 92,044
Mid Cap Fund 75,058
Sectoral/Thematic Funds 62,082
Value Fund/Contra Fund 58,196
Large & Mid Cap Fund 51,427
Small Cap Fund 43,872
Focused Fund 37,393
Equity Savings 18,749
Dividend Yield Fund 4,826
ICICI Securities | Retail Research 4
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Equity Diversified funds
Midcap and small caps corrected significantly since the start of calendar year
2018, offering an investment opportunity in select stocks. However, many
midcaps 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 7: Multicap oriented funds remain largest category in terms of AUM
Source: ACE MF
Banking funds – In focus
The banking sector is poised to benefit from multiple tailwinds in the form
of a revival in credit growth, softness in bond yields and clarity over the PCA
framework. Also, earnings growth over the next two years for the banking
sector is largely to be significantly higher at around 36%. The same is likely
to drive the sector performance.
We believe the banking sector may outperform and lead the next market
rally, particularly with expectation of a stable government returning post
general elections. Investors may invest in banking funds as part of their
thematic allocation with an investment horizon of more than two to three
years.
Expectations of a recovery in profit for large corporate banks, led by
moderation in provision resulted in the recent rally in large private banks
and public sector banks.
In our opinion, as challenges surrounding growth and asset quality have
receded, we expect large banks to continue to benefit disproportionately on
growth and thereby operating profit.
We believe the banking sector will outperform and continue to lead the
market rally over the next few quarters. Investors may invest in banking
funds as part of their thematic allocation with an investment horizon of more
than two to three years.
261679
126596
75058
43872
0
50000
100000
150000
200000
250000
300000
Multi Caps (Multicap + Large & Midcap
+ Value/Contra)
Large Caps Mid Caps Small Caps
Recommended Funds
ICICI Pru Banking & Fin Services Fund
Reliance Banking Fund
ICICI Securities | Retail Research 5
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Monthly Report | Mutual Fund Review
Exchange Traded Funds (ETFs)
Exhibit 8: ETF AUM rises significantly in last few years on
back of institutional money from EPFO into Sensex/Nifty ETF
Source: AMFI
Exhibit 9: April sees outflows as tactical CPSE investors who
invested in March booked profits in April
Source: AMFI
Exhibit 10: There are around 15 categories of ETFs available
Source: ACE MF
60000
80000
100000
120000
140000
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
| C
rore
Equity ETFs
305
2694
8313
-3982
178524092820
1634
10878
721
5234
10540
-4241
-10000
-5000
0
5000
10000
15000
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-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
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Hybrid funds
Inflows into aggressive hybrid funds have shown a consistent decline over
the last few months. April 2019 witnessed a fourth consecutive outflow at
~| 2121 crore. Volatile equity markets resulting in negative returns for the
category while imposition of dividend distribution tax (DDT) on equity
mutual funds in the last Budget have dampened investor sentiments
considerably in balanced funds.
For the first time, Amfi has given category wise flows and AUM data. While
Aggressive hybrid funds (erstwhile balanced funds) continue to be largest
category, dynamic asset allocation funds have also grown significantly in the
last few years.
Most hybrid funds witnessed outflows during April as investors earlier got
attracted due to higher returns as equity markets did well leading most
hybrid funds returning good returns. However, as equity markets have
started doing well, hybrid funds are likely to attract inflows again.
Exhibit 11: Aggressive hybrid funds see outflows for fourth
consecutive month
Source: AMFI
Exhibit 12: Almost all hybrid funds category witness outflows
in April
Source: AMFI
Debt Funds
Exhibit 13: Fall in G-sec yields lead to duration/gilt funds outperforming in last six month. Credit funds average shift lower due
to negative return in few funds
Source: CRISIL. Category average annualised returns as on May 20, 2019
-4000
-2000
0
2000
4000
6000
8000
10000
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Net Inflow
( |
Cr )
Balanced
Hybrid Category
Inflow/(Outflo
w) during
April 2019
AUM
Balanced Hybrid Fund/Aggressive Hybrid Fund(2,121) 146,292
Dynamic Asset Allocation/Balanced Advantage155 92,833
Arbitrage Fund 1,529 50,495
Equity Savings (708) 18,749
Conservative Hybrid Fund (239) 15,228
Multi Asset Allocation (230) 12,610
14.9
11.5
9.2
8.9
8.8
8.6
8.2
8.0
7.0
6.9
6.4 6.0
5.2
10.6
9.6
7.7
7.6
7.7
7.5
7.5 7.8
6.9
6.4
6.2
6.1
5.0
8.2
7.4
7.0
6.4 6.9
7.0
7.1 7.4
6.8
6.8 7.0
6.1 6
.7
0
2
4
6
8
10
12
14
16
18
Long D
uratio
n
Gilt F
unds
Corporate B
ond
Mediu
m t
o L
ong
Duratio
n
Dynam
ic B
ond
Short D
uratio
n
Money M
arket
Low
Duratio
n
Liq
uid
Ult
ra S
hort D
uratio
n
Mediu
m D
uratio
n
Overnig
ht
Credit
Ris
k
Returns (
%)
6 months 1 year 3year
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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 an ideal option to
park money temporarily compared to overnight or liquid fund categories.
They offer higher return potential by investing a higher proportion in a mix
of corporate bonds and commercial papers compared to overnight/liquid
funds. At the same time, most funds in these categories do not have exit
load restrictions, thereby making them liquid from an investors’ 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 14: Ultra short/low duration for short-term and 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
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Gold: Consolidation to continue… avoid for absolute return
Global gold prices have been trading in a range since the start of CY19. After
having rallied briefly during December 2018 and January/February 2019,
global prices have been extremely range bound.
Gold prices have been trading range bound despite news flows surrounding
US-China trade war, geopolitical tension surrounding Middle East region
particularly Iran’s US sanction and rising global capital market volatility.
One of the major factors viz. US Federal Reserve interest rate trajectory, also
seems to be benign now compared to earlier expectation of rising rate
environment. The same should have supported higher gold prices as
interest rates have inverse correlation with gold prices.
The risk on trade globally since the later part of February with equity markets
rising and bond yields rising, led investors to shy away from safe haven gold.
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.
Historically, the performance of gold is not structural. Generally, it performs
in specific short periods of time, especially during capital market meltdown
or global recession or geopolitical tension, etc. Therefore, it may not be an
ideal long term asset class.
After having rallied sharply from US$100 in 1976 to US$850 in 1980, gold
prices corrected sharply and then underwent a long consolidation phase of
20 years. From a longer term perspective, global gold prices have been
trading in a broad range between US$1100 and US$1400 in the last five
years.
Exhibit 15: Historical gold price performance extremely not linear
Source: Bloomberg
100
500
900
1300
1700
May-74
May-78
May-82
May-86
May-90
May-94
May-98
May-02
May-06
May-10
May-14
May-18
Global prices ($/ounce)
20 year long Consolidation
Consolidation underway
since last 5 years
Gold prices in the near term may find support due to
concerns on trade war and higher volatility in capital
markets. The medium term outlook, however,
remains benign given the rising global interest rate
trajectory and reducing monetary stimulus
ICICI Securities | Retail Research 9
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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 April 30, 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
16.5%
15.2% 15.0%14.3%
0.0%
5.0%
10.0%
15.0%
20.0%
Aggressive Moderate Conservative BSE 100 TRI
%
Aggressive Moderate Conservative BSE 100 TRI
What’s in... What’s Out
ICICI Pru Midcap Fund L&T Midcap Fund
IDFC Core Equity Fund ICICI Pru Bluechip Fund
Moderate
HDFC Equity Fund ICICI Pru Bluechip Fund
ICICI Pru Midcap Fund L&T Midcap Fund
Aggressive
Conservative
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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 April 30, 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
8.0% 7.9%8.1%
7.6%7.8%
7.9%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
0-6 Months 6Months - 1Year Above 1yr
%
Portfolio Index
ICICI Securities | Retail Research 11
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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
Overnight / Liquid / Ultra Short Term Kotak Savings Fund
L&T Ultra Short Term Fund
SBI Magnum Ultra Short Duration Fund
Low Duration / Money Market ICICI Prudential Savings Fund
IDFC Low Duration Fund
Axis Treasury Advantage Fund
Short Term HDFC Short Term Debt Fund
IDFC Bond Fund - Short Term
L&T Short Term Bond Fund
Medium Term HDFC Medium Term Debt Fund
IDFC Bond Fund - Medium Term Plan
SBI Magnum Medium Duration Fund
Medium to Long Term / Long Term Aditya Birla SL Income Fund
ICICI Pru Bond Fund
Reliance Income Fund
Dynamic Bond Fund ICICI Pru All Seasons Bond Fund
IDFC Dynamic Bond Fund
Kotak Dynamic Bond Fund
Corporate Bond Aditya Birla SL Corporate Bond Fund
HDFC Corporate Bond Fund
IDFC Corporate Bond Fund
Credit Risk Axis Credit Risk Fund
IDFC Credit Risk Fund
SBI Credit Risk Fund
Gilt IDFC G-Sec Fund - Investment Plan
Reliance Gilt Securities Fund
UTI Gilt Fund
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
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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
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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.
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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
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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.
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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.