mutual funds monthly

September, 2010

Mutual Funds MonthlySeptember Outlook

MUTUAL FUNDMUTUAL FUNDMUTUAL FUNDMUTUAL FUNDMUTUAL FUNDRESEARCHRESEARCHRESEARCHRESEARCHRESEARCH

Schemes Watch (Growth Plans)Equity Funds – Short Term: Neutral; Long Term: Positive

DSP BlackRock Small and Midcap Fund - Gr. Reliance Equity Opportunities Fund - Gr. HDFC Equity Fund - Gr. IDFC Premier Equity Fund - Plan A - Gr.Equity Linked Savings Schemes – Positive

HDFC Taxsaver - Growth Reliance Tax Saver Fund - Growth Fidelity Tax Advantage Fund - GrowthBalanced Funds – Equity-oriented – Neutral

HDFC Prudence Fund-Growth DSP BlackRock Balanced Fund - GrowthMonthly Income Plans (MIP) – Neutral

HDFC MIP - LTP - Growth Reliance MIP - GrowthLiquid Funds – Positive

Birla Sun Life Cash Manager - I P - Growth JPMorgan India Liquid Fund - Super IP - Growth Canara Robeco Liquid - Super IP - GrowthDSP BlackRock Liquidity Fund - IP - Growth L&T Liquid Fund - Super IP - Growth

Short-term Floating Rate Funds – NeutralReliance FRF - ST - Growth LIC MF Floating Rate Fund - ST - Growth

Long-term Floating Rate Funds – NeutralBirla Sun Life Floating Rate Fund - LTP - Growth Templeton FRIF - Long Term - Super IP - Growth

Short-term Debt Funds – Cautious to NeutralBirla Sun Life Ultra Short Term Fund - IP - Growth LIC MF Savings Plus Fund - Growth

Long-term Debt Funds – Cautious to NeutralDSP Blackrock Strategic Bond Fund - IP - Growth Birla Sun Life Medium Term Plan - IP - Growth

Long-term Gilt Funds – Cautious to NeutralBirla Sun Life G Sec Fund - LT - Growth SBI Magnum Gilt LTP - Growth

Equity MarketsThe Indian markets seems to be dictated by foreign fund flows in the near to medium term. Foreign Institutional Investors (FIIs) continue to pour money into our equitymarket with their year to date investment crossing $ 10 billion mark.The long term structural story of India based on favorable demographics, domestic consumption, high savings, infrastructure build up and opportunities in off shoringis quite compelling. Recently announced reforms on fuel prices, new draft Direct Taxes code and government's efforts to push GST have aided to positivesentiments.Increase in interest rates may pose a threat to the markets & corporate earnings which are in recovery mode currently.Better monsoons have not only improved sentiments for Indian Equities, but could also help in higher rural demand and lower agriculture commodity prices in thenear to medium term and thus improve demand for products and services.

Debt MarketsThe systemic liquidity is expected to tighten during the month in light of outflows towards advance tax payment. The outflows for advance tax payment of secondquarter are anticipated around Rs 60,000 cr. Consequently, the money market rates would be biased for hardening towards the close.The debt markets are likely to take cues from the tight liquidity condition owing to the continuous borrowing program and any further monetary action in the midquarter monetary policy review due on 16 Sept.G-Sec market movements would be determined by the level of systemic liquidity and outlook for inflation. The liquidity situation could tighten over the comingfortnight as the market gears up for outflows towards advance tax payment.It is expected that interest rates would see an upward bias but at the same time, upsides would remain capped due to further improvements in governmentbalance sheet, drop in inflation on account of base effect and expected pick up in Banks' NDTL growth due to good inflow of overseas liquidity in to our economy.Bond yields across the curve maintained an upward trend. Indian bond markets have been at a major divergence from the trend in rest of the world. While RBImay have to catch up in terms of normalization of policy rates, we expect bond yields to soften in next quarter in view of global environment.Govt. has scored reasonably well on long pending reforms like gas price rationalization, fuel price decontrol, Tax reforms and relaxing of FDI in media andretail, which ensures faster growth that will attract higher investment in sectors like road, power and telecom. We expect growth to remain on track.

2

Mutual Funds – Monthly

ContentsMD / CEO / CIO / Fund House Views 3August Highlights 4Equity Funds 6-8– Annexure: Scheme-wise Returns and Volatility 6– Fund Flows 7– Returns Analysis 7– Portfolio Review 7– Outlook 8

Equity Linked Savings Schemes 9-10– Annexure: Scheme-wise Returns and Volatility 9– Fund Flows 10– Returns Analysis 10– Portfolio Review 10– Outlook 10

Balanced Funds 11-12– Annexure: Equity-oriented Balanced Funds: Scheme-wise Returns and Volatility 11– Fund Flows 12– Returns Analysis 12– Portfolio Review 12– Outlook 12

Liquid Funds 13-16– Annexure: Growth Option – Scheme-wise Returns and Volatility 13– Annexure: Portfolio details as on August 31, 2010 14– Fund Flows 15– Returns Analysis 15– Portfolio Review 15– Outlook 16

Floating rate Funds 17-20– Annexure: Short-term Floaters: Growth Option – Scheme-wise Returns and Volatility 17– Annexure: Long-term Floaters: Growth Option – Scheme-wise Returns and Volatility 17– Annexure: Short-term Floaters: Portfolio details as on August 31, 2010 18– Annexure: Long-term Floaters: Portfolio details as on August 31, 2010 18– Fund Flows 19– Returns Analysis 19– Portfolio Review 20– Outlook 20

Short-term Debt Funds 21-24– Annexure: Growth Option – Scheme-wise Returns and Volatility 21– Annexure: Portfolio details as on August 31, 2010 22– Fund Flows 23– Returns Analysis 23– Portfolio Review 23– Outlook 24

Long-term Debt Funds 25-28– Annexure: Growth Option – Scheme-wise Returns and Volatility 25– Annexure: Portfolio details as on August 31, 2010 26– Fund Flows 27– Returns Analysis 27– Portfolio Review 27– Outlook 28

Long-term Gilt Funds 29-32– Annexure: Growth Option – Scheme-wise Returns and Volatility 29– Annexure: Portfolio details as on August 31, 2010 30– Fund Flows 31– Returns Analysis 31– Portfolio Review 31– Outlook 32

Monthly Income Plans (MIP) 33-35– Annexure: Growth Option – Scheme-wise Returns and Volatility 33– Annexure: Portfolio details as on August 31, 2010 34– Fund Flows 34– Returns Analysis 35– Portfolio Review 35– Outlook 35

Review of August Schemes Watch 36

Institutional Business Group

R. Swaminathan - Senior Vice President & HeadInstitutional Business Group(91-22) [email protected]

Mutual Fund Client Advisory Group / Research

Subrat Udgata - General Manager(91-22) 43221204(0) [email protected]

Sonal Parmar(91-22) [email protected]

Kavita More (MF Operation)(91-22) [email protected]

Snigdha Singh(91-22) [email protected]

Kritika Jhalani(91-22) 43221269(0) [email protected]

Ashutosh Bisen(91-22) 43221195(0) [email protected]

Prithpal Singh(91-11) 32210678(0) [email protected]

P. Viswanadh(0) [email protected]

Production & Database

S. Narasimhan Rao(91-22) [email protected]

IDBI Capital Market Services Ltd.(A wholly owned subsidiary of IDBI Ltd.)

Registered Office:5th Floor, Mafatlal Centre229, Nariman PointMumbai – 400 021Tel.: (91-22) 43221212Fax: (91-22) 22850785Email: [email protected]

Mumbai :

Delhi :

Hyderabad :

3


3

CEO Views – L&T Mutual Fund

Sanjay Sinha, CEO, L&T Mutual Fund, whichwas known as DBS Chola Mutual Fund before itwas acquired by L&T Finance in January 2010.Before joining DBS Cholamandalam AssetManagement in September 2008, Mr. Sinha wasthe Chief Investment Officer at SBI Mutual Fund.He started his career with UTI AMC Pvt. Ltd. andwas with them for over 16 years. He joined SBIFunds Management in 2005. Mr. Sinha is anHonours Graduate in Economics from University

of Delhi and a Post Graduate from IIM Calcutta.

What is your outlook for Rupee, Home Loans and Deposit rates after RBI hasraised benchmark interest rates? Your view on the economy, inflation, dollar,crude ,gold as well as GDP Projections?

Hike in benchmark interest rates would lead to appreciation in rupee in the short term.Home loans and deposits rates would also rise given the general rise in interestrates.

We expect the economy to sustain higher growth rates on the back of strongdomestic consumption, pick up in private investments over a period of time andgradual revival in external trade.

Inflation is bound to be higher in near term mainly on account of supply side concerns,but with monetary actions we expect inflation to subside towards tail end of theFY2011.

Dollar is gaining strength mainly on account of risk aversion across the globe andalso because US economy is relatively better off the Eurozone. We expect the dollarto remain stable going forward.

Crude Oil is expected to be in the range unless some meaningful recovery in growthis seen in the global economy.

Gold has gained its strength on the back of risk aversion and hedge against inflation.But as the growth returns in the global economy with the stability gold as investmentmay lose some relevance.

We expect the Indian GDP to grow at 8-8.5% over next few years on the back ofstrong growth prospects for both manufacturing and services driven by domesticdemand and private investments.

Do you anticipate any moderation in inflation and what is your take oninterest rate movement in the near future?

Inflation in India is largely supply side driven and hence, would remain relativelyhigher. Only catch-up of base effect would lead to the appearance of moderation inheadline numbers. Interest rates are expected to remain firm as economy grows athigher pace and demand for resources rises on the back of demand for privateinvestments.

To what extent do you see bond yields hardening in 2010? How do you seebank lending rates moving in the shorter term?

We expect the bond yields to peak out at 8.25% in the coming periods and remainin the range of 7.75-8.00% over medium term. The bank lending rates would edge upas the busy season starts and demand for loans increases putting pressure ondeposit rates.

What are the reforms with reference to government policies that you anticipatein the immediate future?

Major policy reforms are expected in Mining sector and continuation of reforms in oilsector. Implementation of UID projects, GST and DTC would fuel further reforms.

Do you think the current valuations of the Indian equity market are justified?Do you think the same is poised for further growth from present levels in thenear term?

While sharp uptick in the current month would have stretched the valuations in thenear term, we are not in a bubble zone yet. The sharp move has come after a longperiod of consolidation in narrow range.

Taking a call on near term may be good for traders but would be hazardous forinvestors. We believe that with the nominal GDP growth expected to be ~15% overnext couple of years, one can expect similar returns from equities. Hence, if one isinvesting with the horizon of 2-3 years, he can expect the above stated returns.

Which are the sectors you are bullish and bearish on?

Financial services, Capital Goods and Pharma are the preferred sectors from thepoint of returns. Consumer staples and Power sector would deliver lower returnsfrom investment perspective. On a Contra note, we would like to play the globalrecovery theme and hence, believe that commodities and textiles would deliverhigher returns in medium to long term.

What is the medium-to-long term strategy of your Mutual Fund in India?Your views on the road ahead and any latest Fund Offering that you areproposing now?

Medium to long term strategy of L&T Investment Management is to strive and deliversuperior risk adjusted returns through research based stock selection and active fundmanagement. We would achieve our goal by periodical sector and stock rotationstrategies.

We may shortly launch a fund to capitalise on the opportunities in the natural resourcesand energy space. We are also bullish on the financial services sector and have filedan offer document to launch a fund that would be focussed on this theme.

4


August Highlights

Fund August 3 month 6 monthCategory Returns % Returns % Returns %Liquid 5.35 5.16 4.72STF 5.07 5.08 4.78LTF 5.05 5.09 5.01ST Debt 4.46 4.28 5.28LT Debt 4.32 2.93 5.52LT Gilt 3.19 1.41 5.68MIP 6.18 8.35 7.52Growth 2.18 11.22 13.23B-Eo 1.48 8.57 10.83ELSS 2.07 11.28 13.47Note: All figures are annualised %. Figures for Growth Funds, ELSS Funds andBalanced Funds are absolute %.Source: IDBI Capital Market Services

The benchmark 10-yr yield witnessed an upside biasin August

Source: IDBI Capital Market Services

% p

.a.

Over August, the yield curve realigned higher


% p

.a.

Maturity

Equity Markets

During the month of August, Equity Markets posted marginal losses supported by substantialamount of FII inflow into the system. The BSE Sensex was fell by 0.61% and the broader S&PNifty went down by 0.54%.

Over the month of August, the smaller mid-cap and small-cap indices had rallied. The BSE Mid-cap Index was up by 1.39%, while the BSE Small-cap index went up by 1.12%. From theleading indices BSE Auto, BSE CD and BSE Bankex increased by 4.26%, 5.37%, 3.16% whileBSE Oil & Gas lost by -3.36%.

FIIs gained momentum in August & invested $2513.61 million into domestic equities.

June quarter results were disappointing with aggregate results of 3,000 companies in manufacturingsector, a decline of 6.43% in net profit from last year. Issues concerning the same are highcommodity prices coupled with higher interest rates.

Debt Markets

Commercial paper and Certificate of deposit issuances were on a new high, due to hike inbenchmark prime lending rates and introduction of the new base rate system.

The WPI inflation declined to 8.51% during August, after change in base year to 2004-05.

The Rupee ended the month at 47.07, 90 bps higher than than the previous month's close of47.17.The INR had improved at the end of the month upon net positive FII flows of close to USD1.6 billion. But as the flows reversed and turned negative towards close, the rupee too weakenedin reaction. Widening of the domestic trade deficit has also impacted the movement on rupee. TheINR closed the fortnight at Rs 47.07 levels against the USD.

The corporate bond yields had hardened during the month seeing tightness in liquidity and risein G-Sec yields. However, as the liquidity improved, the bond yields fell slightly from high levels.

The bond yields experienced hardening towards the close of fortnight tracking rise in short termyields, especially considerably high cut-off yield at T-bill auctions. The corporate bond yields atthe short end were also impacted by widening of credit spreads.

Net change in assets over July


Rs C

rore

7.50

7.60

7.70

7.80

7.90

8.00

8.10

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug

10-year 7.80% GOI 2020 y ield in August 2010

33,061

(1,453)(640)

(3,863)(592)

4

1,667 1,767 458 364

(11,000)

(6,000)

(1,000)

4,000

9,000

14,000

19,000

24,000

29,000

34,000

39,000

Liquid STF LTF STDebt LTDebt LTGilt MIP Grow th BEO ELSS

Net Inflow s / Outflow s

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

1 y r 3 y r 5 y r 7 y r 10 y r 15 y r 25 y r 30 y r

31-Aug-10 31-Jul-10

5


5

August 31, ’10 July 31, ’10Yield Yield

364-day t-bill 6.41 6.107.27% 2013 7.13 7.166.49% 2015 7.77 7.507.02% 2016 7.88 7.746.90% 2019 8.08 7.747.80% 2020 7.93 7.807.35% 2024 8.19 8.208.28% 2032 8.37 8.347.50% 2034 8.38 8.256.83% 2039 8.41 8.20

Average maturities


Aver

age

matur

ity in

year

s


Returns depict market trends

% p

.a.

Mutual FundsNet Inflows / Outflows in August 2010

Net Inflows/Outflows Assets under Management

( `̀̀̀̀ Cr) ( `̀̀̀̀ Cr)August ’10 July ’10 August ’10 July ’10

Liquid 33,061 27,934 126,061 93,000Floaters (2,092) 39 18,015 20,107STDebt (3,863) (1,529) 40621 44,484LTDebt (592) (431) 19,829 20,420LTGilt 4 204 2,129 2,125MIP 1,667 1,336 24,058 22,391Growth 1,767 536 137,868 136,101ELSS 364 1,616 22,400 22,037BEO 458 433 9,974 9,516

Total 30,774 30,138 400,955 370,181

Mutual Funds

During the month of August, the total AUM (AAUM) of the Mutual Funds industry increased by`22114.13 At the August end, industry assets stood at ̀ 689542.70 cr, up from ̀ 667428.57cr as at July-end.

The largest Fund House in terms of AAUM for the month of August was Reliance Mutual Fund,with a corpus of ̀ 104511.22cr. This was followed by HDFC Mutual Fund, which was managingassets to the tune of ̀ 90,178.73cr. The third place went to ICICI Prudential Mutual Fund withan AAUM of ̀ 68795.94cr.

Over August, the highest net accretion to AUM was registered by HDFC Mutual Fund, whichgained funds to the tune of `5550.53 cr. The Fund House that witnessed the highest netredemptions amounting to ̀ 3533.79 cr over the previous month was LIC Mutual Fund.

The total AAUM of the schemes tracked by us stood at ̀ 400,955 cr as on August 31st 2010.This is relatively higher than the previous month's AAUM of ̀ 370181 cr (with reference to ouruniverse of schemes).

With reference to the schemes tracked by us, the largest net inflows were witnessed by theLiquid Fund category, which gained AAUM to the tune of `33061 cr during the month. Thehighest net redemptions were from Short Term Debt Funds category, which amounted to`3863 cr.


Assets under Management (as on August 31, 2010)

Liquid31%

STF2%LTF

2%ST Debt10%

LT Debt5%

LT Gilt1%

MIP6%

Growth35%

B-Eo2%

ELSS6%

-24

-16

-8

0

8

16

24

32

Grow

th

ELSS

B - E

o

Liquid

ST F

loate

rs

LT F

loate

rs

ST D

ebt

LT D

ebt

LT G

ilt

MIP

Aug-10 Jul-10

0.07 0.13 0.34 0.75

3.51

6.16

1.670.10 0.15 0.37 0.75

3.28

5.10

1.60

0

2

4

6

8

10

12

Liquid ST

Floaters

LT Floaters ST Debt LT Debt LT Gilt MIP

Aug-10 Jul-10

6

Mutual Funds – MonthlyDiversified Equity Schemes

Diversified Equity Schemes invest in equities September Outlookacross sectors Short Term - Neutral; Long Term - PositiveNo. of schemes studied 167 Aug. Return 2.18%

Aug. AUM* `137,868 cr* For the schmes studied below

Scheme Name August July 3-month 6-month 1-mth over 1-mth overAbsolute Absolute Absolute Absolute 1-yr Rolling 1-yr volatility

Returns (%) Returns (%) Returns (%) Returns (%) Returns (%) of returns

Quartile ISundaram BNP Paribas Media & Entert Opp Fund - Ret 7.61 (3.17) 12.62 10.89 1.95 5.61Birla Sun Life India GenNext Fund - Growth 6.03 4.97 19.28 25.04 2.87 4.03DSP BlackRock Small and Midcap Fund - Growth 5.26 3.98 16.22 23.04 4.02 4.24Fortis Dividend Yield Fund - Growth 5.06 1.50 14.14 20.86 2.96 4.19UTI Opportunities Fund - Growth 5.01 2.84 13.16 12.73 2.10 4.63Taurus Discovery Fund - Growth 4.84 6.68 16.62 18.42 2.77 4.85DSP BlackRock Equity Fund - Growth 4.77 2.77 13.80 17.84 2.75 4.18Kotak Lifestyle Fund - Growth 4.58 5.36 16.50 25.20 2.83 3.57Sundaram BNP Paribas Select Midcap - Growth 4.08 4.41 16.04 17.03 2.95 4.51Escorts High Yield Equity Plan - Growth 4.07 2.70 11.85 22.06 2.69 3.96HDFC Growth Fund - Growth 4.06 2.31 12.96 20.23 2.80 3.55Quartile 2Birla Sun Life Special Situations Fund - Growth 4.03 3.35 13.51 10.82 1.88 5.02IDFC Premier Equity Fund - Plan A - Growth 4.03 7.61 20.02 24.49 3.74 4.28SBI Magnum Global Fund 94 - Growth 3.98 3.90 15.03 18.13 3.15 3.96SBI Magnum Sector Umbrella - Emerging Businesses 3.97 8.36 17.80 23.65 3.87 4.81HDFC Equity Fund - Growth 3.95 4.56 14.98 20.16 3.22 3.92Kotak Midcap Fund - Growth 3.89 5.17 16.35 25.93 3.56 4.25UTI Dividend Yield Fund - Growth 3.87 2.26 11.65 15.97 2.82 3.83Sundaram BNP Paribas Rural India Fund - Growth 3.83 4.71 16.38 17.95 2.59 4.71JM Mid Cap Fund - Growth 3.81 4.09 10.68 12.82 1.80 5.10HSBC Midcap Equity Fund - Growth 3.79 3.54 13.67 13.78 2.84 4.71Quantum Long-Term Equity Fund - Growth 3.73 3.47 13.93 18.22 2.99 3.45Quartile 3PRINCIPAL Dividend Yield Fund - Growth 3.73 3.40 13.01 19.16 2.77 3.31Franklin India Prima Plus - Growth 3.73 3.47 13.64 12.82 2.24 4.16Canara Robeco Emerging Equities - Growth 3.69 4.51 15.37 26.37 3.72 4.77Sahara Power & Natural Resources Fund - Growth 3.68 2.99 13.74 14.50 1.86 4.58ING Dividend Yield Fund - Growth 3.67 3.38 13.22 22.62 3.66 3.88Reliance Equity Opportunities Fund - Growth 3.63 5.04 16.36 23.44 4.03 4.84Fortis Future Leaders Fund - Growth 3.53 4.45 14.90 23.41 3.50 4.15L&T Midcap Fund - Growth 3.51 5.42 15.28 15.87 2.97 4.49Franklin India High Growth Companies Fund - Growth 3.51 4.48 13.72 11.83 2.51 5.06Sundaram BNP Paribas Growth Fund - Growth 3.50 3.89 13.59 13.51 1.89 4.80IDFC Classic Equity Fund - Plan A - Growth 3.40 2.95 11.89 10.89 1.77 4.14Quartile 4Tata Dividend Yield Fund - Growth 3.39 1.10 11.16 18.50 3.05 2.91UTI Top 100 Fund - Growth 3.32 1.80 10.89 8.15 1.52 4.65Kotak Opportunities Fund - Growth 3.31 3.31 12.30 14.56 2.26 4.09JM Emerging Leaders Fund - Growth 3.18 5.93 15.71 13.48 2.70 5.62DSP BlackRock Opportunities Fund - Growth 3.17 3.42 13.10 18.91 2.50 3.74Tata Contra Fund - Growth 3.16 4.09 13.63 13.64 2.43 3.87Tata Select Equity Fund - Appr 3.15 1.49 10.59 12.64 2.55 4.14UTI Master Value Fund - Growth 3.15 2.60 13.43 21.38 3.87 4.76SBI Magnum Midcap Fund - Growth 3.13 5.37 14.52 13.71 2.25 6.10Franklin India Flexi Cap Fund - Growth 3.12 4.45 13.50 13.64 2.38 4.62Principal Emerging Bluechip Fund - Growth 3.11 3.31 12.31 14.88 3.28 4.50Average 2.18 2.99 11.22 13.23 2.23 4.29

Scheme-wise Returns and Volatility

Note: All figures are absolute.Schemes have been divided into quartiles in descending order of August absolute returns.

7


7

August 31, ’10 July 31, ’10

Equity Fund IndicatorsGrowth Option:Point-to-Point Return 2.18 2.991 month over 1 year Rolling Return 2.33 2.50Volatility 4.29 4.60

Equity Market IndicatorsBSE Sensex (0.61) 2.05S&P CNX Nifty (0.54) 2.21Note: All figures are absolute %.Source: IDBI Capital Market Services

Fund Flows

Over the month of August the stock markets showed a Bearish trend. The BSE Sensex was up bynegative 0.61%, while the broader 50-stock S&P Nifty was down by negative 0.54%. BSE Mid-capIndex was up by 1.39%, while the BSE Small-cap index went up by 1.12%.From the leadingindices BSE CD, BSE AUTO and BSE FMCG increased by 5.37%, 4.26%, 3.66% while BSEMetal, BSE Oil and Gas decreased by negative 4.08% and 3.36%.

Over the month, Diversified Equity Funds witnessed net increase in AUM to the tune of ̀ 1767 cr. ason August 31st, 2010, the category AUM stood at `137868.5 cr., accounting for about 34% ofindustry assets (with reference to our universe of schemes).

Top AUM gainers in August 2010 (`̀̀̀̀ Cr)

Net Inflow in August Corpus as on Aug. 31, '10

HDFC Equity Fund - Growth 373.80 7,450.56HDFC Top 200 - Growth 303.96 8,610.71Reliance Equity Opportunities Fund - Growth 209.76 2,529.73UTI Dividend Yield Fund - Growth 158.59 2,522.67Reliance RSF - Equity - Growth 128.90 3,111.97

Top AUM losers in August 2010 (`̀̀̀̀ Cr)Net Outflow in August Corpus as on Aug. 31, '10

Reliance Natural Resources Fund - Growth (126.77) 3,170.11ICICI Prudential Infrastructure Fund - Growth (78.71) 3,753.83Reliance Equity Advantage Fund - Retail - Growth (73.92) 1,293.68Birla Sun Life Special Situations Fund - Growth (59.60) 420.42Reliance Equity Fund - Growth (56.75) 1,844.46

Returns Analysis

During the month of August, Diversified Equity Funds generated an average absolute return of2.18%, less than the return of 2.99% generated in the month of July. The 3 months & 6-monthaverage absolute return were at 11.22% & 13.23% respectively, while the 1-month over 1-yearrolling return average was at 2.23%. The volatility of returns was noted at 4.29.

Portfolio Review

As at the end of August, the highest exposure of Diversified Equity Funds was again to the Bankingsector with an average exposure of 14.63%. This was followed by the Petroleum, Gas andpetrochemical sector with an average allocation of 10.69%. In third and fourth places were Softwareand Consultancy Services with 9.13% exposure and Auto & Auto Ancillaries with 7.07% exposurerespectively. The other important sectors were Pharmaceuticals & Biotechnology, Engineering andCapital Goods, FMCG, Power & Control Equipment Manufacturer, Media and Entertainment,Fertilizers, Pesticides and Agrochemicals.

Net change in assets of Growth Funds

Note: Figure shows fund flows for 167 schemes.Source: IDBI Capital Market Services

Rs C

rore

Assets under management of Growth Funds

Note: Figure shows assets for 167 schemes.Source: IDBI Capital Market Services

Rs C

rore

8992,900

(2,619)

8,720

536

1,767

(6,000)(4,000)(2,000)

02,0004,0006,000

8,00010,00012,000

Mar-10 Apr-10 May -10 Jun-10 Jul-10 Aug-10


126,564 129,464 126,845 135,565 136,101 137,868

020,00040,00060,00080,000

100,000120,000140,000160,000


AUM as at month-end

8


Over August, the BSE Sensex fell by -0.61%...


...While the broader S&P Nifty was down by -0.54%


Over August, net FII inflows stood at $2513.61 mn


$US

mn

Outlook

In August NIFTY declined 0.54% during the month as domestic events dominated the marketsentiment in absence of significant developments in international markets. India remains somewhatinsulated from global economic downturns due to prospects of sustained growth in India's privateconsumption and fixed capital formation.

India continues to witness a surge of foreign portfolio flows, mainly due to its economy's stable andhigh growth characteristics. Thus, in 2010 CYTD India accounted for around 50% of Asian FIIinflows. The June 2010 quarter earnings for Sensex companies were below expectations, decliningby 1% YoY, compared to an expectation of 7% growth.WPI Inflation for August 2010 at 8.51%(Base: 2004-05). The FII's bought $2513.61Mn of Indian equities in August. Thus on the back ofweak global sentiment and positive domestic news markets have been volatile but largely rangebound.

Schemes Watch

DSP BlackRock Small and Midcap Fund - Growth

Reliance Equity Opportunities Fund - Growth

HDFC Equity Fund - Growth

IDFC Premier Equity Fund - Plan A - Growth

Inde

xIn

dex

Top 10 Sector Holdings in August 2010

17,800

17,900

18,000

18,100

18,200

18,300

18,400

18,500

18,600

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug

BSE Sensex in August 2010

5,300

5,350

5,400

5,450

5,500

5,550

5,600

5,650

5,700

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug

S&P CNX Nifty in August

(2,039.89)

2,271.91

3,553.19

4,371.91

2,099.142,513.61

(3,000)

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

5,000

March April May June July August

Net FII Investment

Top 10 Sector Holdings in July 2010

Auto & Auto ancilliaries – 7 %Fert., Pest. & Agrochem. – 4 %

Oil & Gas, Petro. & Refinery – 11%

Banks – 15%Computers - Software & Edu. – 9 %Engg. & Industrial Machinery – 5 %Media and Entertainment – 4 %Others – 29%FMCG – 5 %Power Gen., Trans. & Equip – 5 %

Pharmaceuticals – 6 %

Auto & Auto ancilliaries – 7 %Miscellaneous – 5 %

Oil & Gas, Petro. & Refinery – 10%

Banks – 14%Computers - Software & Edu. – 10%Engg. & Industrial Machinery – 5 %Media and Entertainment – 4 %Others – 29%FMCG – 5 %Power Gen., Trans. & Equip – 4 %

Pharmaceuticals – 7 %

9


9

ELSS – Tax Saving Schemes September OutlookPositive

No. of schemes studied 35 Aug. Return 2.07%Aug. AUM* `22,400 cr

* For the schemes studied below

Growth Option – Scheme-wise Returns and Volatility

Equity Linked Savings Schemes


Scheme Name August July 3-month 6-month 1-mth over 1-mth overAbsolute Absolute Absolute Absolute 1-yr Rolling 1-yr volatility

Returns (%) Returns (%) Returns (%) Returns (%) Returns (%) of returns

Quartile ITaurus Taxshield - Growth 4.42 5.19 16.40 18.06 2.30 4.71Reliance Tax Saver Fund - Growth 4.00 4.08 15.02 19.30 2.84 3.91Quantum Tax Saving Fund - Growth 3.92 3.20 13.84 17.85 2.91 3.42Religare Tax Plan - Growth 3.71 2.23 12.81 17.09 2.77 3.53HDFC Taxsaver - Growth 3.70 3.06 12.85 17.66 3.05 3.70Canara Robeco Equity Taxsaver - Growth 3.53 2.81 11.16 19.78 2.78 3.47Sahara Taxgain - Growth 3.51 3.43 15.22 21.66 2.51 4.31Bharti AXA Tax Advantage Fund - Reg - Growth 3.38 3.27 10.21 7.29 2.12 5.50Edelweiss ELSS Fund - Growth 3.15 3.36 13.90 16.39 2.00 4.37Quartile 2Kotak Taxsaver - Growth 2.96 3.27 11.78 16.30 2.24 4.57L&T Taxsaver Fund - Growth 2.94 2.62 11.48 11.17 1.96 4.78HDFC Long Term Advantage Fund - Growth 2.58 3.31 12.99 16.89 2.60 3.70Franklin India Taxshield - Growth 2.28 3.09 10.96 11.71 2.31 3.73Sundaram BNP Paribas Taxsaver -Growth 2.13 3.37 11.91 10.33 1.65 4.76HSBC Tax Saver Equity Fund - Growth 2.12 2.70 10.60 11.00 2.23 4.25Birla Sun Life Tax Plan - Growth 2.11 3.19 10.81 10.36 1.71 4.64ING Tax Saving Fund - Growth 1.93 2.11 11.60 16.47 2.61 4.26Fortis Tax Advantage Plan - Growth 1.86 1.90 11.95 11.50 1.99 4.49Quartile 3JPMorgan India Tax Advantage Fund - Growth 1.70 3.18 11.66 14.57 2.36 4.18Tata Tax Saving Fund 1.67 1.72 8.58 12.27 1.86 3.66Fidelity Tax Advantage Fund - Growth 1.61 3.62 12.00 18.86 2.95 3.67Baroda Pioneer ELSS 96 1.54 2.97 10.98 9.46 1.62 4.36UTI Equity Tax Savings Plan - Growth 1.34 3.33 10.03 9.51 1.93 4.31Principal Personal Taxsaver 1.30 2.73 10.42 11.76 2.06 4.12LIC Tax Plan - Growth 1.25 1.44 10.17 9.28 1.21 4.75DSP BlackRock Tax Saver Fund - Growth 1.07 3.45 10.36 16.45 2.68 4.03DWS Tax Saving Fund - Growth 1.06 4.93 10.91 10.75 2.24 4.86Quartile 4Birla Sun Life Tax Relief 96 - Growth 1.04 1.94 9.89 11.36 2.24 4.70PRINCIPAL Tax Savings Fund 1.02 2.61 9.01 8.98 1.85 3.78JM Tax Gain Fund - Growth 0.92 1.94 6.97 11.48 2.06 4.75Escorts Tax Plan - Growth 0.90 5.02 10.52 16.36 2.28 4.72IDFC Tax Advantage (ELSS) Fund - Growth 0.62 5.33 11.90 12.59 2.60 4.46Franklin India Index Tax Fund 0.58 2.22 8.98 7.91 1.47 4.70SBI Magnum Tax Gain Scheme 93 - Growth 0.45 0.92 8.20 7.93 1.84 4.26ICICI Prudential Taxplan - Growth 0.24 3.27 8.75 11.15 3.01 3.82Average 2.07 3.05 11.28 13.47 2.25 4.26

10


August 31, ’10 July 31, ’10

ELSS Fund IndicatorsGrowth Option:Point-to-Point Return 2.07 3.051 month over 1 year Rolling Return 2.25 2.52Volatility 4.26 4.56

Equity Market IndicatorsBSE Sensex (0.61) 2.05S&P CNX Nifty (0.54) 2.21Note: All figures are absolute %.Source: IDBI Capital Market Services

Fund Flows

During the month of August, ELSS Funds witnessed net inflow in AUM of ̀ 363.76 cr. The categoryAUM as on August 31st, 2010 stood at ̀ 22,400.65 cr, representative of 6% of industry assets (withreference to our universe of schemes).

Top AUM gainers in August 2010 (`̀̀̀̀ Cr)Net Inflow in August Corpus as on Aug. 31, '10

HDFC Taxsaver - Growth 95.80 2,742.15Reliance Tax Saver (ELSS) Fund - Growth 59.79 2,335.91Sundaram BNP Paribas Taxsaver - Growth 42.30 1,492.49Birla Sun Life Tax Relief 96 - Growth 36.71 1,511.90ICICI Prudential Taxplan - Growth 18.41 1,241.23


HSBC Tax Saver Equity Fund - Growth (2.26) 279.29Fortis Tax Advantage Plan - Growth (0.96) 60.00ING Tax Saving Fund - Growth (0.51) 43.56Fidelity Tax Advantage Fund - Growth (0.49) 1,231.70LIC Tax Plan - Growth (0.47) 41.71

Returns Analysis

Over the month of August, ELSS Funds registered an average absolute return of 2.07%, lower thanthe July returns of 3.05%.The 3 months & 6-month average absolute return were at 11.28% &13.47% respectively, while the 1-month over 1-year rolling return was noted at 2.25%. The volatilityof returns, as a measure by the standard deviation, clocked in at 4.26.

Portfolio Review

Between July and August, the highest allocation of ELSS Funds was to the Banking sector at15.67%. The Petroleum, Gas and petrochemical products industry stood in second place with9.93% average exposure. This was followed by the Software and Consultancy Services sector withan average allocation of 9.01%, while fourth place was taken by Auto & Auto Ancillaries with 6.72%share of net assets. The other important sectors were Pharmaceuticals & Biotechnology, Engineeringand Capital Goods, FMCG, Power & Control equipment Manufacturer, Steel and Ferrous Metal.

Outlook

Equity-linked savings schemes (ELSS) are said to be good for investors with a investment horizonof more than 3 years. They provide the Fund Manager flexibility to focus on long term value creatingopportunities instead of being unduly concerned over short term redemption pressures. Also bothdrafts of the direct tax code-in August 2009 and June 2010-left out ELSS as one of the instruments,classified as "permitted saving intermediary", that would be allowed to offer tax benefits under section80C. Investment in an ELSS fund leaves the investor with a disposable surplus (amount of taxsaved, ̀ 30,900 for highest tax bracket) which, if re-invested, can add substantially to the wealthcreated.

Schemes WatchHDFC Taxsaver - Growth

Reliance Tax Saver Fund - Growth

Fidelity Tax Advantage Fund - Growth

Net change in assets of ELSS Funds


Rs C

rore

Assets under management of ELSS Funds


Rs C

rore

102490

(541)

833

1,616

364

(1,000)(750)(500)(250)

0250500750

1,0001,2501,5001,7502,000



19,637 20,128 19,587 20,42022,037 22,400

02,5005,0007,500

10,00012,50015,00017,50020,00022,50025,000


AUM as at month-end

11


11

Balanced Funds

Balanced Funds – invest in Debt & Equity September Outlookin 60:40 or 40:60 ratio Equity-oriented Funds: Neutral

Equity-oriented Equity-orientedNo. of schemes studied 20 Aug. Return 1.48%

Aug. AUM* `9,974 cr* For the schemes studied below

Balanced Funds (Equity-oriented): Growth Option – Scheme-wise Returns and VolatilityScheme Name August July 3-month 6-month 1-mth over 1-mth over

Absolute Absolute Absolute Absolute 1-yr Rolling 1-yr volatilityReturns (%) Returns (%) Returns (%) Returns (%) Returns (%) of returns

Quartile IReliance RSF - Balanced - Growth 3.74 3.37 12.04 15.73 2.38 3.08DSP BlackRock Balanced Fund - Growth 3.58 2.03 10.32 13.77 2.14 3.14Canara Robeco Balance - Growth 2.77 2.32 9.14 16.37 2.13 2.95HDFC Prudence Fund - Growth 2.70 3.64 11.11 18.16 3.01 2.68Kotak Balance 2.54 1.32 8.24 9.27 1.60 3.11Quartile 2LIC Balanced - Plan C (Growth) 2.37 2.28 8.98 4.95 0.96 4.20Birla Sun Life 95 - Growth 2.35 3.79 11.19 14.51 2.16 3.02FT India Balanced Fund - Growth 2.11 0.96 7.66 8.59 1.37 2.48HDFC Balanced Fund - Growth 1.25 2.96 9.21 15.49 2.81 2.45Sundaram BNP Paribas Balanced Fund - Growth 1.17 3.13 9.29 9.65 1.74 3.75Quartile 3UTI Balanced Fund - Growth 1.03 1.84 7.60 9.60 1.81 3.36ING Balanced Fund - Growth 1.01 1.43 7.28 8.82 1.44 2.76PRINCIPAL Balanced Fund - Growth 0.94 2.51 7.64 8.43 1.63 3.15Tata Balanced Fund - Growth 0.87 1.74 7.80 10.69 2.15 3.14Escorts Balanced Fund - Growth 0.86 3.39 9.13 12.18 1.99 4.21Quartile 4Baroda Pioneer Balance Fund - Growth 0.81 2.42 7.85 8.15 1.20 3.24SBI Magnum Balanced Fund - Growth 0.76 1.99 7.57 8.43 1.59 3.35ICICI Prudential Balanced - Growth 0.67 2.32 7.36 8.67 1.82 2.86Birla Sun Life Freedom Fund - Growth 0.46 0.87 4.96 2.86 0.48 2.80JM Balanced - Growth (2.30) 2.94 7.08 12.24 1.41 4.04Average 1.48 2.36 8.57 10.83 1.79 3.19


12


August 31, ’10 July 31, ’10

Equity-oriented Balanced FundsGrowth Option:Point-to-Point Return 1.48 2.361 month over 1 year Rolling Return 1.79 1.91Volatility 3.19 3.35

Equity Market IndicatorsBSE Sensex (0.61) 2.05S&P CNX Nifty (0.54) 2.21Note: All figures are asbsolute %.

G-sec Market Indicators1 yr g-sec yield 6.41 6.103 yr g sec yield 7.13 7.165 yr g sec yield 7.77 7.36

Corporate Bond Market Indicators5 yr AAA spreads 69bps 73bpsNote: All figures are annualised %.

Net change in assets of Equity-oriented Balanced Funds

Note: Figure shows fund flows for 20 schemesSource: IDBI Capital Market Services

Rs C

rore

Fund Flows

During August, Equity-oriented Balanced Funds witnessed net investment in AUM to the tune of`457.70 cr. The category AUM as at the end of August stood at ̀ 9,974.19 cr, accounting for 3% ofindustry assets (with reference to our universe of schemes).



HDFC Prudence Fund - Growth 335.89 5,078.31Reliance RSF - Balanced - Growth 68.72 662.43DSP BlackRock Balanced Fund - Growth 27.34 746.99Birla Sun Life 95 - Growth 19.85 340.87UTI Balanced Fund - Growth 8.73 1,095.58

Top AUM losers in Augsut 2010 (`̀̀̀̀ Cr)Net Outflow in August Corpus as on Aug. 31, '10

Birla Sun Life Freedom Fund - Growth (12.18) 113.01FT India Balanced Fund - Growth (1.66) 279.93Sundaram BNP Paribas Balanced Fund - Growth (1.16) 64.50JM Balanced - Growth (0.97) 16.44PRINCIPAL Balanced Fund - Growth (0.61) 28.97

Returns Analysis

During August, Equity-oriented Balanced Funds generated an average absolute return of 1.48%considerably lower than the July return of 2.36%. The 3 months & 6-month average absolute returnwere at 8.57% & 10.83% respectively, while the 1-month over 1-year rolling return noted at 1.79%.The volatility of returns for August was noted at 3.19.

Portfolio Review

At the end of August, the average allocation of Equity-oriented Balanced Funds to equities was stableat around 65% -70% levels. The average allocation to Bonds was down from 14.13% to 10.95%between the two months, while the exposure to the CP / CD segment decreased from 13.58% in Julyto 11.40% in August. The exposure to the overnight markets has increased from 9.71% to 9.84%over the two months.

Outlook

The aim of Balanced Funds is to provide both growth and regular income. Such schemes periodicallydistribute a part of their earning and invest both in equities and fixed income securities in theproportion indicated in their offer documents. This proportion affects the risks and the returns associatedwith the balanced fund - in case equities are allocated a higher proportion, investors would beexposed to risks similar to that of the equity market. These might also be sound investment asretirement solutions.

Schemes WatchEquity-oriented Balanced Funds

HDFC Prudence Fund-Growth

DSP BlackRock Balanced Fund - Growth

AUM of Equity-oriented Balanced Funds

Note: Figure shows assets for 20 schemesSource: IDBI Capital Market Services

Rs C

rore

236

369

123

391433

458

(200)

(100)

0

100

200

300

400

500

600



8,200 8,569 8,692 9,083 9,516 9,974

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,000


AUM as at month-end

13


13

Liquid Funds

Liquid Funds – invest in ultra short-term debt September Outlook/ money market instruments Positive

No. of schemes studied 72 Aug. Return 5.35%Avg Maturity (on August 31) 25 days Aug. AUM* `126,061 cr* For the schemes studied below

Scheme Name August July 3 Month 6 Month Aug. Aug. Aug.Annualised Annualised Annualised Annualised Rolling Volatility Sharpe

Returns (%) Returns (%) Returns (%) Returns (%) Returns (%) Ratio *Quartile IEscorts Liquid Plan - Growth 6.52 5.62 5.84 5.08 6.44 0.45 8.27Quantum Liquid Fund - Growth 6.15 6.02 5.88 5.24 6.16 0.09 38.23Templeton India TMA - Super IP - Growth 5.86 5.52 5.45 4.97 5.86 0.11 29.07Birla Sun Life Cash Manager - I P - Growth 5.84 5.43 5.48 5.10 5.71 0.27 11.09Taurus Liquid Fund - Super IP - Growth 5.80 5.75 0.07 0.77 5.78 0.11 26.91Shinsei Liquid Fund - IP - Growth 5.78 5.70 5.80 5.06 5.81 0.11 27.12JPMorgan India Liquid Fund - Super IP - Growth 5.75 6.03 5.95 5.39 5.72 0.15 19.42JM High Liquidity - Super I P - Growth 5.73 5.69 5.40 4.87 5.74 0.10 29.78JM High Liquidity - I P - Growth 5.72 5.68 5.39 4.86 5.74 0.10 29.17Fidelity Cash Fund - Super IP - Growth 5.72 5.10 5.17 4.79 5.59 0.34 8.41IDFC Ultra Short Term Fund - Growth 5.70 5.39 5.39 4.92 5.88 0.89 3.50Quartile 2Baroda Pioneer Liquid Fund - Growth 5.70 5.81 5.58 5.09 5.71 0.11 26.87Baroda Pioneer Liquid Fund - Inst Plan - Growth 5.70 5.78 5.57 5.08 5.71 0.11 27.48DSP BlackRock Liquidity Fund - IP - Growth 5.69 5.73 5.50 5.02 5.67 0.20 14.52Taurus Liquid Fund - Growth 5.69 5.63 5.48 5.01 5.68 0.11 26.41L&T Liquid Fund - Super IP - Growth 5.65 5.17 5.05 4.46 5.60 0.16 17.77Canara Robeco Liquid - Super IP - Growth 5.60 5.62 5.50 5.08 5.58 0.12 23.72ING Liquid Fund - Super IP - Growth 5.60 5.60 5.48 5.07 5.54 0.16 17.82Sahara Liquid Fund - Fixed Pricing Option - Growth 5.59 5.66 5.59 5.16 5.59 0.02 124.93Sahara Liquid Fund - VP - Growth 5.59 5.66 5.59 5.17 5.59 0.02 127.15Templeton India TMA - IP - Growth 5.56 5.22 5.15 4.66 5.56 0.11 26.29Fidelity Cash Fund - IP - Growth 5.56 4.95 5.02 4.64 5.44 0.33 8.04Quartile 3IDFC Cash Fund - Plan C - Super I P - Growth 5.56 5.61 5.46 5.02 5.56 0.07 43.05L&T Liquid Fund - IP Plus - Growth 5.55 5.07 4.95 4.34 5.49 0.16 17.51Kotak Liquid - Inst Premium Plan - Growth 5.54 5.77 5.56 5.07 5.51 0.10 26.56Birla Sun Life Cash Plus - Insti. Premium Plan - Gr. 5.53 5.51 5.48 5.01 5.53 0.09 31.35Tata Liquid Fund - SHIP - Growth 5.53 5.43 5.39 5.05 5.51 0.13 20.76UTI Liquid Fund - Cash Plan - IP - Growth 5.53 5.53 5.40 4.94 5.52 0.07 37.86Axis Liquid Fund - IP - Growth 5.52 5.74 5.43 4.99 5.55 0.12 24.17SBI Premier Liquid Fund - Super IP - Growth 5.52 5.52 5.45 5.06 5.47 0.14 19.20Sundaram BNP Paribas Money Fund - Super IP - Gr. 5.51 5.03 5.25 4.89 5.44 0.14 18.92Fortis Overnight Fund - IP - Growth 5.51 7.74 6.20 5.63 6.22 2.23 1.55SBI Premier Liquid Fund - IP - Growth 5.50 5.50 5.44 5.04 5.45 0.15 18.63Quartile 4HDFC Liquid Fund - Premium Plan - Growth 5.50 5.43 5.34 4.97 5.47 0.14 19.90Reliance Liquidity Fund - Growth 5.50 5.46 5.39 4.99 5.47 0.04 74.42Religare Liquid Fund - IP - Growth 5.50 5.64 5.45 4.81 5.49 0.06 45.28DWS Insta Cash Plus Fund - Super IP - Growth 5.50 5.70 5.62 5.19 5.49 0.08 32.51Religare Liquid Fund - Super IP - Growth 5.49 5.63 5.45 4.96 5.48 0.06 44.93SBI Magnum Insta Cash - Cash Plan 5.49 5.42 5.41 4.99 5.46 0.07 39.71HDFC Liquid Fund - Premium Plus Plan - Growth 5.49 5.43 5.34 4.96 5.47 0.14 18.76ICICI Prudential Liquid - Super IP - Growth 5.49 5.50 5.42 5.02 5.48 0.09 29.31UTI Money Market - IP - Growth 5.48 5.13 5.13 4.89 5.46 0.05 52.01HDFC Cash Mgmt Fund - Savings Plan - Growth 5.40 5.47 5.30 4.96 5.38 0.13 20.61DWS Insta Cash Plus Fund - IP - Growth 5.39 5.60 5.52 5.09 5.38 0.08 34.02Average 5.35 5.34 5.16 4.72 5.34 0.20 25.07


* Sharpe Ratio = August Rolling Return % - Risk free rateAugust Volatility

Risk free rate = 7 to 14 Days Term Deposit

Note: All figures are annualised.Schemes have been divided into quartiles in descending order of August annualised returns.

14


Scheme Name Bonds CP/CD/ FRB Cash/ Fixed AA AAA Sovereign Fund Average(%) MM (%) (%) Call Deposits (%) (%) Size Maturity

(%) (%) ( `̀̀̀̀ Cr) (days)

Escorts Liquid Plan - Growth -- -- -- -- -- -- -- -- 9.77 91Quantum Liquid Fund - Growth -- 62.69 12.22 0.66 -- -- 97.89 -- 24.56 29Templeton India TMA - Super IP - Growth 0.54 82.31 -- 16.60 9.86 0.97 88.63 -- 4,613.39 29Birla Sun Life Cash Manager - I P - Growth -- 83.63 -- 16.37 -- -- 93.93 -- 2,904.81 37Taurus Liquid Fund - Super IP - Growth -- 94.48 -- 0.43 -- -- 68.06 -- 654.19 26Shinsei Liquid Fund - IP - Growth -- 72.90 26.71 (3.04) -- -- 90.33 -- 291.91 9JPMorgan India Liquid Fund - Super IP - Growth -- 80.81 10.89 0.68 -- 2.02 79.33 -- 3,606.16 31JM High Liquidity - Super I P - Growth -- 97.64 -- -- -- -- 61.07 -- 2,748.93 28JM High Liquidity - I P - Growth -- 97.64 -- -- -- -- 61.07 -- 2,748.93 28Fidelity Cash Fund - Super IP - Growth -- 99.64 -- 0.36 -- -- 90.41 -- 402.83 33IDFC Ultra Short Term Fund - Growth -- 100.31 -- (0.31) -- -- 83.67 -- 1,202.80 104Baroda Pioneer Liquid Fund - Growth -- 99.86 -- 0.14 -- -- 86.08 -- 1,830.56 28Baroda Pioneer Liquid Fund - Inst Plan - Growth -- 99.86 -- 0.14 -- -- 86.08 -- 1,830.56 28DSP BlackRock Liquidity Fund - IP - Growth 1.10 94.62 -- 1.65 1.55 1.10 64.63 -- 3,234.65 26Taurus Liquid Fund - Growth -- 94.48 -- 0.43 -- -- 68.06 -- 654.19 26L&T Liquid Fund - Super IP - Growth -- 87.78 -- (4.02) -- -- 77.26 -- 1,195.97 -Canara Robeco Liquid - Super IP - Growth -- 85.97 -- 14.03 13.84 -- 84.22 21.68 2,240.57 26ING Liquid Fund - Super IP - Growth -- 91.02 -- -- -- -- 72.24 -- 389.91 16Sahara Liquid Fund - Fixed Pricing Option - Growth 1.55 93.98 3.11 1.36 -- -- 99.59 -- 483.01 16Sahara Liquid Fund - VP - Growth 1.55 93.98 3.11 1.36 -- -- 99.59 -- 483.01 16Templeton India TMA - IP - Growth 0.54 82.31 -- 16.60 9.86 0.97 88.63 -- 4,613.39 29Fidelity Cash Fund - IP - Growth -- 99.64 -- 0.36 -- -- 90.41 -- 402.83 33IDFC Cash Fund - Plan C - Super I P - Growth -- 94.42 -- 4.32 4.05 1.01 88.26 -- 5,055.57 26L&T Liquid Fund - IP Plus - Growth -- 87.78 -- (4.02) -- -- 77.26 -- 1,195.97 -Kotak Liquid - Inst Premium Plan - Growth 0.06 94.26 -- 3.82 3.35 -- 96.28 -- 6,719.12 33Birla Sun Life Cash Plus - Insti. Premium Plan - Growth -- 71.60 0.48 27.91 -- -- 99.04 0.96 10,254.96 26Tata Liquid Fund - SHIP - Growth -- 60.39 1.16 38.04 -- -- 97.94 -- 4,803.50 23UTI Liquid Fund - Cash Plan - IP - Growth -- 99.63 -- 0.08 -- 0.27 99.73 -- 11,480.27 35Axis Liquid Fund - IP - Growth 12.65 62.35 9.85 15.16 2.73 -- 97.27 -- 1,462.57 26SBI Premier Liquid Fund - Super IP - Growth -- 97.59 -- -- -- -- 62.45 -- 2,315.10 26Sundaram BNP Paribas Money Fund - Super IP - Growth 11.00 61.96 -- 27.04 -- -- 71.01 -- 736.28 26Fortis Overnight Fund - IP - Growth -- 92.04 -- 0.36 -- -- 88.27 -- 981.35 23SBI Premier Liquid Fund - IP - Growth -- 97.59 -- -- -- -- 62.45 -- 2,315.10 26HDFC Liquid Fund - Premium Plan - Growth 0.06 37.15 -- 60.44 -- -- 88.86 0.29 8,728.73 13Reliance Liquidity Fund - Growth 0.14 81.73 0.08 15.70 -- 2.03 93.36 2.46 10,014.13 26Religare Liquid Fund - IP - Growth -- 93.12 -- 6.88 -- -- 89.72 -- 2,321.85 22DWS Insta Cash Plus Fund - Super IP - Growth 1.46 34.12 -- 37.58 5.68 1.86 67.08 1.13 2,201.04 18Religare Liquid Fund - Super IP - Growth -- 93.12 -- 6.88 -- -- 89.72 -- 2,321.85 22SBI Magnum Insta Cash - Cash Plan -- 92.29 -- 2.65 2.65 -- 62.00 1.70 3,769.19 29HDFC Liquid Fund - Premium Plus Plan - Growth 0.06 37.15 -- 60.44 -- -- 88.86 0.29 8,728.73 13ICICI Prudential Liquid - Super IP - Growth 5.03 91.44 -- 3.54 -- 0.23 97.22 2.55 11,825.15 31UTI Money Market - IP - Growth -- 97.10 -- 2.55 -- 0.35 99.65 -- 586.48 23HDFC Cash Mgmt Fund - Savings Plan - Growth 0.17 43.68 -- 53.27 -- -- 92.73 -- 5,980.93 17DWS Insta Cash Plus Fund - IP - Growth 1.46 34.12 -- 37.58 5.68 1.86 67.08 1.13 2,201.04 18ING Liquid Fund - IP - Growth -- 91.02 -- -- -- -- 72.24 -- 389.91 16HSBC Cash Fund - Institutional Plus - Growth -- 67.21 -- 32.79 -- -- 48.10 -- 282.91 17PRINCIPAL Cash Mgmt Fund LO- Inst Prem. Plan - Gr. -- 84.04 1.75 11.32 -- -- 97.11 -- 857.97 22Canara Robeco Liquid - IP - Growth -- 85.97 -- 14.03 13.84 -- 84.22 21.68 2,240.57 26LIC MF Liquid Fund - Growth 60.78 33.80 -- 5.42 -- 9.76 89.79 -- 5,581.79 32IDFC Cash Fund - Plan B - IP - Growth -- 94.42 -- 4.32 4.05 1.01 88.26 -- 5,055.57 26Sundaram BNP Paribas Money Fund - IP - Growth 11.00 61.96 -- 27.04 -- -- 71.01 -- 736.28 26 Average 5.37 84.76 5.34 15.75 8.59 1.44 80.12 17.89 2,991.23 25

Portfolio details as on August 31, 2010

15


15

Fund Flows

During the month of August, the Liquid Funds category witnessed highest net inflow among all thecategories to the tune of ̀ 33061.28 Cr. As at the end of August month, the category AUM stood at`126061.08, accounting for 31.44% of industry assets (with reference to our universe of schemes).



UTI Liquid Fund - Cash Plan - IP - Growth 4,794.86 11,480.27Templeton India TMA - Super IP - Growth 2,977.81 4,613.39Reliance Liquidity Fund - Growth 2,848.16 10,014.13Birla Sun Life Cash Manager - I P - Growth 2,767.85 2,904.81Birla Sun Life Cash Plus - Insti. Premium Plan 2,727.63 10,254.96

Top AUM losers in August 2010 (`̀̀̀̀ Cr)

Net Outflow in August Corpus as on Aug. 31, '10

IDFC Savings Advantage Fund - Growth (923.55) 1,322.94Kotak Liquid - IP - Growth (743.25) 6,719.12L&T Liquid Fund - Super IP - Growth (643.58) 1,195.97DWS Insta Cash Plus Fund - Super IP - Gr. (445.62) 2,201.04SBI Premier Liquid Fund - Super IP - Growth (257.66) 2,315.10

Returns Analysis

Over the month of August, Liquid Funds category registered an average annualized return of5.35%, compared to same with the return of 5.34% generated in the month of July. The 3 months &6-month annualized returns were noticed at 5.16% & 4.72% respectively, while August rollingreturns stood at 5.34%. The volatility of returns during the month was at 0.20. The average SharpeRatio for August noted at 25.07.

Portfolio Review

At the end of August the average allocation of Liquid funds to bonds was 5.37%. The exposure toCP/CD segment was 84.76% lower than the 81.66%, level seen at July end. The average allocationto FRBs was at 5.34% which is lower than the previous month's figure of 8.11%. As at the end ofAugust, the percentage of net assets invested in the overnight markets were 15.75% higher from theallocation of 15.39% seen in July. The exposure of Fixed Deposits increased to 8.59% in August ascompared to last month's exposure of 7.35% .The credit quality of the portfolios in August was fairlyimpressive with over 80.12% of average net assets invested in AAA rated paper, which was a bitlower than the previous month's level of 81.22%. Average maturity witnessed a significant decreasefrom 36 days in July to 25 days in August.

August 31, ’10 July 31, ’10

Liquid Fund IndicatorsGrowth Option:Point-to-Point Return 5.35 5.347-days over 1 month Rolling Return 5.34 5.31Volatility 0.20 0.23

Money Market IndicatorsMibor month Average 4.60-6.00 4.86-6.00Call rate range 5.00-5.15 4.00-5.20Repo-rate range 4.00-5.10 3.75-5.1090-day CP Reference 7.50 7.14Note: All figures are annualised %.

Net change in assets of Liquid Funds


Rs C

rore

Assets under management of Liquid Funds


Rs C

rore

1,730

9,244

(26,959)

5,746

27,93433,061

(40,000)(30,000)(20,000)(10,000)

010,00020,00030,00040,00050,000



77,03186,276

59,317 65,063

93,000

126,061

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000


AUM as at month-end

16


Rating Profile as on 31 August 2010


Asset Allocation as on 31 August 2010



The NSE Mibor moved lower at the end of August

% p

.a.

7 day rolling returns over 1 month for Liquid Funds


% p

.a.

Asset allocation CP / CD FRB Bonds Cash/Call

August 31 84.76 5.34 5.37 15.75

July 31 81.66 8.11 5.38 15.39Note: Figures are as a % of net assetsSource: IDBI Capital Market Services

Rating Profile Sovereign AAA/P1+ AA/P1-

August 31 17.89 80.12 1.44July 31 8.23 81.22 1.87Note: Figures are as a % of net assets.Source: IDBI Capital Market Services

Outlook

MIBOR rates closed the month at 5.13% from 6% at the end of last month. Money market rates rosesharply amidst tight liquidity in the market. The liquidity situation was quite volatile over the month, withpositive LAF deployements at the beginning, which became negative in the midst, finally easing at thecloseure of the month. Banks were also seen borrowing under the repo window. This led to inchingup of the money market rates, however, the liquidity situation reversed and the LAF deploymentswere comfortably seen in the positive zone.

Schemes WatchBirla Sun Life Cash Manager - I P - Growth

JPMorgan India Liquid Fund - Super IP - Growth

Canara Robeco Liquid - Super IP - Growth

DSP BlackRock Liquidity Fund - IP - Growth

L&T Liquid Fund - Super IP - Growth


6-month rolling return for Liquid Funds

% p

.a.

Trend Line

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug

MIBOR in August 2010

4.50

4.75

5.00

5.25

5.50

5.75

6.00

1-Au

g

3-Au

g

5-Au

g

7-Au

g

9-Au

g

11-A

ug

13-A

ug

15-A

ug

17-A

ug

19-A

ug

21-A

ug

23-A

ug

25-A

ug

27-A

ug

29-A

ug

31-A

ug

7-day rolling return ov er 1 month

1.00

2.00

3.00

4.00

5.00

6.00

7.00

1-M

ar

15-M

ar

29-M

ar

12-A

pr

26-A

pr

10-M

ay

24-M

ay

7-Ju

n

21-J

un

5-Ju

l

19-J

ul

2-Au

g

16-A

ug

30-A

ug

7-day rolling return ov er 6 months

Bonds 4%

CP/CD/MM 72%

Cash/Call 13%

FRB 4%

FD7%

AAA81%

AA 1%Sov ereign

18%

17


17

Floating Rate Funds – invest in floating September Outlookrate / money market instruments ST Floating Rate Funds: Neutral

LT Floating Rate Funds: NeutralST Floaters LT Floaters ST Floaters LT Floaters

No. of schemes studied 18 10 Aug. Return 5.07% 5.05%Avg Maturity (on August 31) 46 days 125 days Aug. AUM* `8,631 cr `9,384 cr* For the schemes studied below

Floating Rate Funds


Returns (%) Returns (%) Returns (%) Returns (%) Returns (%) Ratio *Quartile ISBI Magnum Insta Cash Fund - Liquid Floater Plan - Growth 6.59 5.35 5.65 5.23 6.51 1.73 2.17ICICI Prudential FRF - Plan D - Growth 5.56 5.56 5.41 5.16 5.54 0.14 20.55LIC MF Floating Rate Fund - ST - Growth 5.46 5.60 5.49 5.40 5.49 0.31 8.74Reliance FRF - Growth 5.44 5.92 5.85 5.33 5.46 0.61 4.43Canara Robeco FRF - ST - Growth 5.43 4.91 5.31 5.06 5.39 0.48 5.50Quartile 2Birla Sun Life Floating Rate Fund - STP - IP - Growth 5.31 5.36 5.33 5.39 5.28 0.19 13.29Templeton FRIF - Short Term - IP - Growth 5.24 5.19 4.98 4.63 5.24 0.09 27.47L&T Short Term - FRF - Cumulative 5.20 5.13 5.03 4.45 5.19 0.12 20.37UTI Floating Rate Fund - STP - Growth 5.00 4.95 4.97 4.83 4.98 0.12 18.74Tata FRF - ST - IP - Growth 4.99 4.81 4.82 4.38 4.90 0.23 9.29Quartile 3PRINCIPAL Floating Rate Fund - SMP - IP - Growth 4.93 4.83 4.86 4.77 4.93 0.07 31.53ICICI Prudential FRF - Plan C - Growth 4.83 5.20 5.01 4.81 4.81 0.25 8.29ICICI Prudential FRF - Plan B - Growth 4.73 5.13 4.93 4.71 4.71 0.25 7.93JM Floater Fund - S T P - Growth 4.65 5.06 4.98 4.82 4.63 0.33 5.72Quartile 4HSBC FRF - STP - Inst Plus - Growth 4.56 4.98 4.80 3.94 4.57 0.28 6.55SBI Magnum Income - FRP - ST - Growth 4.52 5.21 4.99 5.14 4.43 1.40 1.20HSBC FRF - STP - IP - Growth 4.49 4.89 4.72 3.86 4.49 0.28 6.33Kotak Floater - ST - Growth 4.28 4.24 4.33 4.21 4.16 0.76 1.85Average 5.07 5.13 5.08 4.78 5.04 0.42 11.11

ST Floaters: Growth Option – Scheme-wise Returns and Volatility


Returns (%) Returns (%) Returns (%) Returns (%) Returns (%) Ratio *

Quartile ITempleton FRIF - Long Term - Super IP - Growth 5.87 6.45 5.93 5.66 5.89 0.27 11.83Templeton FRIF - Long Term - IP - Growth 5.47 6.04 5.52 5.25 5.49 0.26 10.57Canara Robeco FRF - LT - Growth 5.43 4.91 5.31 5.06 5.39 0.48 5.50Quartile 2Birla Sun Life Floating Rate Fund - LTP - Growth 5.31 5.47 5.44 5.47 5.30 0.47 5.48HSBC FRF - LTP - IP - Growth 5.10 4.83 4.82 4.77 4.97 0.41 5.46SBI Magnum Income - FRP - LT - Growth 5.07 4.95 5.01 5.04 4.99 0.14 16.41Quartile 3HDFC F R I F - LTF - Growth 4.91 1.53 4.18 4.71 3.54 4.73 0.17Tata FRF - LT - Growth 4.85 4.89 4.84 4.08 4.84 0.36 5.76Quartile 4Escorts Floating Rate Funds - Growth 4.66 5.46 5.22 5.22 4.67 0.40 4.82ICICI Prudential LT FRF - Plan B - Growth 3.85 6.07 4.65 4.88 4.09 2.50 0.54Average 5.05 5.06 5.09 5.01 4.92 1.00 6.65

LT Floaters: Growth Option – Scheme-wise Returns and Volatility


Risk free rate = 1 Year and above





18


Scheme Name Bonds CP / CD / FRB Cash / Fixed Fund Size Average(%) MM (%) (%) Call Deposits (` Cr) Maturity

(%) (%) (days)

Birla Sun Life Floating Rate Fund - STP - IP - Growth -- 60.62 -- 39.38 -- 59.86 11Canara Robeco FRF - Growth -- 99.98 -- 0.02 -- 34.41 29HSBC FRF - STP - Inst Plus - Growth -- 15.12 -- 84.88 -- 39.48 1HSBC FRF - STP - IP - Growth -- 15.12 -- 84.88 -- 39.48 1ICICI Prudential FRF - Plan B - Growth -- 99.11 -- 0.89 -- 599.01 73ICICI Prudential FRF - Plan C - Growth -- 99.11 -- 0.89 -- 599.01 73ICICI Prudential FRF - Plan D - Growth -- 99.11 -- 0.89 -- 599.01 73JM Floater Fund - S T P - Growth -- 100.00 -- -- -- 3.64 1Kotak Floater - ST - Growth -- 92.91 -- 0.59 -- 768.89 51L&T Short Term - FRF - Cumulative -- 48.97 -- 2.22 -- 4.00 -LIC MF Floating Rate Fund - ST - Growth 51.28 50.34 -- (1.62) -- 1,147.20 110PRINCIPAL Floating Rate Fund - SMP - IP - Growth -- 79.58 -- 20.42 -- 35.70 18Reliance FRF - ST - Growth 2.85 66.34 11.63 2.89 -- 4,370.51 157SBI Magnum Income - FRP - ST - Growth -- 69.38 -- 6.60 -- 19.92 77SBI Magnum Insta Cash Fund - Liquid Floater Plan - Growth -- 65.25 -- 28.26 -- 92.40 26Tata FRF - ST - IP - Growth -- 97.50 -- 2.50 -- 55.71 47Templeton FRIF - Short Term - IP - Growth -- 83.08 -- 16.92 12.84 428.49 22UTI Floating Rate Fund - STP - Growth -- 91.42 -- 0.38 -- 971.53 58Average 27.07 74.05 11.63 17.12 12.84 548.24 46

ST Floaters – Portfolio details as on August 31, 2010

LT Floaters – Portfolio details as on August 31, 2010

Scheme Name Bonds CP / CD / FRB Cash / Fixed Fund Size Average(%) MM (%) (%) Call Deposits (` Cr) Maturity

(%) (%) (days)

Birla Sun Life Floating Rate Fund - LTP - Growth -- 96.68 -- 3.32 -- 3,028.50 58Canara Robeco FRF - LT - Growth -- -- -- -- -- -- --Escorts Floating Rate Funds - Growth -- -- -- -- -- 0.1641 (30-Jun-10) 99HDFC F R I F - LTF - Growth 57.33 40.82 -- 1.85 -- 1,498.97 380HSBC FRF - LTP - IP - Growth -- 93.42 -- 6.58 -- 460.50 37ICICI Prudential LT FRF - Plan B - Growth 31.94 67.54 -- 0.53 -- 431.20 266ICICI Prudential LT FRF - Plan C - Growth 31.94 67.54 -- 0.53 -- 431.20 266SBI Magnum Income - FRP - LT - Growth -- 81.52 -- 3.77 -- 5.44 62Tata FRF - LT - Growth -- -- -- -- -- 3.07 1Templeton FRIF - Long Term - IP - Growth -- 75.05 -- 18.39 17.17 1,979.86 40Templeton FRIF - Long Term - Super IP - Growth -- 75.05 -- 18.39 17.17 1,979.86 40Average 40.40 74.70 -- 6.67 17.17 1,090.96 125

19


19

August 31, ’10 July 31, ’10

Short-term Floating Rate FundsGrowth Option:Point-to-Point Return 5.07 5.137-days over 1 month Rolling Return 5.04 5.13Volatility 0.42 0.20

Long-term Floating Rate FundsGrowth Option:Point-to-Point Return 5.05 5.067-days over 1 month Rolling Return 4.92 4.94Volatility 1.00 5.23

Money Market IndicatorsMibor month Average 4.60-6.00 4.86-6.00Call rate range 5.00-5.15 4.00-5.20Repo-rate range 4.00-5.10 3.75-5.1090-day CP Reference 7.50 7.14Note: All figures are annualised %.

Assets under management of ST Floaters


Rs C

rore

Assets under management of LT Floaters


Rs C

rore

Fund Flows

During August, Short Term Floaters registered net outflow in AUM to the tune of ̀ 1452.67 cr, whileLong Term Floaters witnessed net outflows amounting to ̀ 639.80 cr. Their category AUMs stood at`8630.74 cr and `9384.33 cr respectively. While Short Term Floaters were representative of2.15% of industry assets, their Long Term counterparts accounted for a 2.34% of industry assets(with reference to our universe of schemes).

Short-term Floating Rate Funds: Top AUM gainers in August 2010 (`̀̀̀̀ Cr)Net Inflow in August Corpus as on Aug. 31, '10

Kotak Floater - ST - Growth 692.25 768.89Reliance FRF - ST - Growth 393.77 4,370.51Templeton FRIF - Short Term - IP - Growth 25.54 428.49SBI Magnum Insta Cash Fund-Liquid Floater Plan 18.09 92.40L&T Short Term - FRF - Cumulative 0.41 4.00

Short-term Floating Rate Funds: Top AUM losers in August 2010 (`̀̀̀̀ Cr)Net Outflow in August Corpus as on Aug. 31, '10

UTI Floating Rate Fund - STP - Growth (1,172.28) 971.53LIC MF Floating Rate Fund - ST - Growth (951.61) 1,147.20ICICI Prudential FRF - Plan B - Growth (420.50) 599.01Birla Sun Life Floating Rate Fund - STP - IP - Gr. (13.96) 59.86PRINCIPAL Floating Rate Fund - SMP - IP - Gr. (11.68) 35.70

Long-term Floating Rate Funds: Top AUM gainers in August 2010 (`̀̀̀̀ Cr)Net Inflow in August Corpus as on Aug. 31, '10

HDFC F R I F - LTF - Growth 0.49 1,498.97Escorts Floating Rate Funds - Growth 0.01 0.18SBI Magnum Income - FRP - LT - Growth (0.11) 5.44Tata FRF - LT - Growth (0.36) 3.07

Long-term Floating Rate Funds: Top AUM losers in August 2010 (`̀̀̀̀ Cr)Net Outflow in August Corpus as on Aug. 31, '10

Birla Sun Life Floating Rate Fund - LTP - Gr. (1,340.51) 3,028.50ICICI Prudential LT FRF - Plan B - Growth (1,139.10) 431.20Templeton FRIF - Long Term - Super IP - Gr. (101.55) 1,979.86HSBC FRF - LTP - IP - Growth (35.27) 460.50

Returns Analysis

During August, the Short Term Floaters category generated an average annualized return of5.07%, somewhat lower than the July return of 5.13%. The 3-month annualized returns averagedat 5.08% & 6-month annualized returns averaged at 4.78%, while August rolling returns were seenat 5.04%. The volatility of returns, as measured by the Standard Deviation, stood at 0.42, and theSharpe Ratio for the category averaged at 11.11.

The Long Term Floaters category generated returns of 5.05% in August. This return was nearlyequal to the July returns of 5.06%. The 3-months & 6-month annualized returns clocked in at 5.09%& 5.01% respectively, while August rolling returns were at 4.92%. The volatility of returns averagedat 1, and the Sharpe Ratio for the category was measured at a positive 6.65.

12,42214,288

15,942

11,18510,083

8,631

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000


AUM as at month-end

6,725

7,976

5,454

8,88310,024

9,384

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,000


AUM as at month-end

20


ST Floaters: Asset Allocation as on 31 August 2010


LT Floaters: Asset Allocation as on 31 August 2010


Portfolio Review

Between the months of July and August, the average exposure of Short Term Floaters funds tobonds stood at 27.07%, lower than the exposure of 29.92% seen at the end of July. The averageexposure to the CP / CD segment decreased from 74.64% in July to 74.05% in August. Theaverage percentage of net assets invested in FRBs decreased from 12.76% in July to 11.63% inAugust. The average allocation to the overnight markets increased from 16.22% in July to 17.12%in August. The average maturity of the portfolios decreased from 56 days to 46 days between the twomonths.

In case of Long Term Floaters, the average exposure to Bonds was 40.40% for the month of August.The average share of nets assets invested in the CP / CD segment was 74.70%. The share of cash/call market was seen at 6.67%. The average maturity of the portfolios decreased from 134 to 125days between the two months.

Outlook

This month investors have been cautious towards short term as well as long term floaters and thuswe see outflow in both the segments. Investors are looking forward towards the First Quarter Reviewof Monetary Policy by RBI on 16th September when the interest rates might increase. To counter arise in interest rate, the floating rate fund is an attractive option.

Schemes Watch

Short-term Floaters

Reliance FRF - ST - Growth

LIC MF Floating Rate Fund - ST - Growth

Long-term FloatersBirla Sun Life Floating Rate Fund - LTP - Growth

Templeton FRIF - Long Term - Super IP - Growth


7-day rolling returns over 1 month for ST Floaters

% p

.a.

7-day rolling return over 6 months for ST Floaters


% p

.a.


7-day rolling returns of LT Floater Funds

% p

.a.

Trend Line

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

1-Au

g

3-Au

g

5-Au

g

7-Au

g

9-Au

g

11-A

ug

13-A

ug

15-A

ug

17-A

ug

19-A

ug

21-A

ug

23-A

ug

25-A

ug

27-A

ug

29-A

ug

31-A

ug


1.00

2.00

3.00

4.00

5.00

6.00

7.00

1-M

ar

15-M

ar

29-M

ar

12-A

pr

26-A

pr

10-M

ay

24-M

ay

7-Ju

n

21-J

un

5-Ju

l

19-J

ul

2-Au

g

16-A

ug

30-A

ug


(2.00)

0.00

2.00

4.00

6.00

8.00

10.00

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug


Bonds 19%

CP/CD/MM 52%

Cash/Call 12%

FD9%

FRB 8%

Bonds 29%

CP/CD/MM 54%

FD12%

FRB 0%Cash/Call

5%

21


21

Short-term debt funds – invest in short-term September OutlookG-secs, bonds, other paper Cautious to NeutralNo. of schemes studied 28 Aug. Return 4.46%Avg Maturity (on August 31) 0.75yrs Aug. AUM* `40,621 cr* For the schemes studied below

Short-term Debt Funds







Quartile I

UTI Short Term Income Fund - IP - Growth 8.14 1.86 5.30 5.59 6.50 7.70 0.49

JM Short Term Fund - IP - Growth 6.80 4.82 5.57 6.55 6.66 1.34 2.93

Sahara Short Term Bond Fund - Growth 6.40 6.44 5.95 5.29 6.39 0.03 138.27

Birla Sun Life Short Term Opportunities Fund - IP - Gr. 6.15 6.06 6.06 5.80 6.42 2.53 1.45

DSP BlackRock Short Term Fund - Growth 5.77 5.68 5.55 5.34 5.83 1.66 1.85

Birla Sun Life Ultra Short Term Fund - IP - Growth 5.75 5.52 5.57 5.45 5.69 0.23 12.71

LIC MF Savings Plus Fund - Growth 5.49 5.43 5.35 5.33 5.51 0.37 7.52

Quartile 2

Religare Credit Opportunities Fund - IP - Growth 5.39 5.34 5.38 5.29 5.33 0.76 3.38

Templeton India STIP - IP - Growth 5.38 2.31 4.65 6.60 4.52 3.59 0.49

AIG Short Term Fund - IP - Growth 5.28 (1.65) 3.26 5.08 3.15 5.53 0.07

Sundaram BNP Paribas Flexible Fund - STIP - Gr. 5.00 (0.77) 2.79 4.56 3.91 2.99 0.39

Religare Short Term Plan - IP - Growth 4.91 4.86 4.85 5.08 5.03 0.92 2.47

Fortis Short Term Income Fund - IP - Growth 4.84 5.39 5.18 5.18 4.84 0.97 2.16

PRINCIPAL Income Fund - STP - I P - Growth 4.78 2.97 4.50 5.69 4.09 2.17 0.62

Quartile 3

HDFC HIF - S T P - Growth 4.33 0.84 3.58 6.15 3.48 4.02 0.18

Bharti AXA Short Term Income Fund - IP - Growth 4.30 5.88 5.47 4.98 4.27 1.34 1.13

DWS Short Maturity Fund - IP - Growth 3.96 3.32 4.46 6.52 3.92 3.03 0.39

HDFC Short Term Plan - Growth 3.95 2.52 3.84 5.74 3.07 2.78 0.12

Canara Robeco Short Term Fund - IP - Growth 3.87 1.99 3.93 5.27 3.16 3.93 0.10

Reliance Short Term Fund - Growth 3.49 1.56 3.28 5.42 2.36 3.99 (0.10)

ICICI Prudential STIP- Growth 3.47 (0.35) 3.06 5.50 2.42 4.25 (0.08)

Quartile 4

Sundaram BNP Paribas Select Debt - S T A P - Appr. 3.43 3.87 3.73 3.12 3.45 0.86 0.81

ING Short Term Income Fund - Growth 3.38 3.98 4.25 5.13 3.24 3.22 0.15

Kotak Bond Short Term Plan - Growth 2.49 (0.04) 2.03 5.35 1.59 4.86 (0.24)

IDFC SSIF - Short Term - Plan C - Super IP - Gth 2.27 (2.67) 1.17 3.96 1.49 4.56 (0.28)

SBI SHDF - Short Term - Ret - Growth 0.99 4.61 3.61 4.40 0.85 3.41 (0.56)

Tata Short Term Bond Fund - Growth 0.41 3.03 3.12 4.11 (0.52) 9.48 (0.34)

Average 4.46 3.07 4.28 5.28 3.95 2.98 6.52

22


Scheme Name G-Sec Bonds CP/CD FRB Cash/ Fixed AA AAA Sovereign Fund Average(%) MM (%) (%) Call Deposits (%) (%) Size Maturity

(%) (%) (` Cr) (years)

AIG Short Term Fund - IP - Growth -- -- 66.56 -- 0.16 -- -- 91.37 8.63 59.40 1.13

Bharti AXA Short Term Income Fund - IP - Growth -- -- 99.92 -- 0.08 -- -- 81.24 -- 81.33 0.20

Birla Sun Life Short Term Opportunities Fund - IP -- -- -- -- -- -- -- -- -- 4180.93 0.35

Birla Sun Life Ultra Short Term Fund - IP - Growth -- -- 55.99 15.87 27.95 -- -- 100.00 -- 3099.45 0.15

Canara Robeco Short Term Fund - IP - Growth -- 47.62 51.75 -- 0.62 -- 8.83 82.52 -- 241.75 1.26

DSP BlackRock Short Term Fund - Growth -- 9.91 89.66 -- 0.43 -- -- 89.70 -- 639.17 0.30

DWS Short Maturity Fund - IP - Growth -- 19.43 13.54 -- 5.34 -- 35.37 59.57 1.56 320.61 1.01

Fortis Short Term Income Fund - IP - Growth -- -- 65.24 -- 0.35 -- 6.70 88.82 -- 302.25 0.39

HDFC HIF - S T P - Growth -- 66.27 21.44 -- 5.02 -- 28.33 71.67 -- 3378.58 1.33

HDFC Short Term Plan - Growth -- 49.71 45.19 -- 1.64 -- 17.15 82.34 -- 1899.25 0.82

HSBC Income Fund - S T P - I P - Growth -- -- 98.43 -- 1.57 -- -- 88.78 -- 157.96 0.44

HSBC Income Fund - S T P - Inst Plus - Growth -- -- -- -- -- -- -- -- -- 176.82 0.64

ICICI Prudential STIP- Growth -- 74.99 19.69 -- 2.76 -- 30.18 67.25 2.56 1802.51 1.23

IDFC SSIF - Short Term - Plan C - Super IP - Gth -- -- 52.87 -- 12.05 -- 20.13 79.87 -- 425.32 1.15

ING Short Term Income Fund - Growth -- -- 69.57 -- -- -- 7.56 91.10 -- 78.33 0.77

JM Short Term Fund - IP - Growth -- -- 79.20 9.19 -- -- 10.32 57.68 29.05 47.82 0.26

Kotak Bond Short Term Plan - Growth -- 1.00 19.85 -- 4.12 -- 50.79 48.96 0.25 1005.52 1.40

LIC MF Savings Plus Fund - Growth -- 9.64 94.92 -- -4.56 -- 37.54 61.78 -- 3657.95 0.44

Mirae Asset Short Term Bond Fund - IP - Growth -- -- -- -- -- -- -- -- -- 1.40 0.00

PRINCIPAL Income Fund - STP - I P - Growth -- 9.81 39.93 -- -1.38 -- 39.62 56.42 3.96 123.76 0.77

Reliance Short Term Fund - Growth -- 8.80 55.11 1.66 1.54 -- 10.15 74.05 11.82 4550.33 1.79

Religare Credit Opportunities Fund - IP - Growth -- 8.04 52.23 -- 1.54 -- 20.18 77.20 -- 2128.45 0.52

Religare Short Term Plan - IP - Growth -- 37.48 29.46 -- 2.58 -- 35.40 57.67 -- 401.53 1.23

Sahara Short Term Bond Fund - Growth -- 12.89 85.24 -- 1.87 -- -- 100.00 -- 15.52 0.04

SBI SHDF - Short Term - Ret - Growth -- -- 94.96 -- 1.74 -- -- 98.37 -- 855.80 0.62

Sundaram BNP Paribas Flexible Fund - STIP - Gr. -- 12.86 84.56 -- 2.58 -- 6.51 92.13 -- 792.89 0.50

Sundaram BNP Paribas Select Debt-S T A P-Appr. -- -- -- -- 100.00 -- -- 22.56 -- 0.08 0.00

Tata Short Term Bond Fund - Growth -- -- 72.20 -- 2.60 -- -- 100.00 -- 42.73 0.78

Templeton India STIP - IP - Growth -- 6.82 29.07 -- 2.18 -- 20.62 63.68 -- 7222.52 1.33

UTI Short Term Income Fund - IP - Growth -- -- 64.06 -- 1.39 -- 20.38 72.47 -- 851.47 1.55

Average -- 25.02 59.64 8.90 6.97 -- 22.54 76.19 8.26 1,284.71 0.75


23


23

Fund FlowsOver the month of August, Short Term Debt Funds witnessed net redemptions. The category AUMdecreased by ̀ 3863.03 cr and the category AUM stood at ̀ 40621.2 cr. This accounted for about10% of industry assets (with reference to our universe of schemes).

Top AUM gainers in August 2010 (`̀̀̀̀ Cr)Net Inflow in August Corpus as on Aug. 31, '10

Birla Sun Life Short Term Opportunities Fund-IP 2,258.00 6,438.93Sundaram BNP Paribas Flexible Fund - STIP 410.94 792.89Religare Credit Opportunities Fund - IP - Growth 222.46 2,128.45UTI Short Term Income Fund - IP - Growth 186.64 851.47SBI SHDF - Short Term - Ret - Growth 75.07 855.80


Birla Sun Life Ultra Short Term Fund - IP - Gr. (2,701.32) 3,099.45LIC MF Savings Plus Fund - Growth (1,502.27) 3,657.95Religare Short Term Plan - IP - Growth (551.31) 401.53HDFC Short Term Plan - Growth (499.22) 1,899.25Fortis Short Term Income Fund - IP - Growth (469.18) 302.25

Returns Analysis

During August, the Short Term Debt Funds category generated an average annualized return of4.46%, higher than the July return of 3.07%. The 3-month & 6-month annualized return was stoodat 4.28% & 5.28% respectively, while August rolling returns noted at 3.95%. During the month thevolatility of returns, as reflected by the Standard Deviation, averaged at 2.98%, and the averageSharpe Ratio for the month noted at 6.52.

Portfolio Review

As at the end of August, Short Term Debt Funds had an average allocation of around 25.02% toBonds, considerably lower than the 26.69% allocation seen at the end of July. The percentage of netassets invested in the CP/CD segment decreased from 60.75% in July to 59.64% in August. Thecategory average exposure to FRBs, at 8.90%, was higher than the previous month's figure of7.61%. The average allocation to cash/call market was 6.97% for the month of August higher thanthe July exposure of 6.09%. The average credit quality of the portfolios remained more or less stablewith around 70%-80% investments in AAA rated papers between the two months. The averagematurity of the portfolios noted 0.75 for the month of August.

August 31, ’10 July 31, ’10

Short-term Debt Fund IndicatorsGrowth Option:Point- to-Point Return 4.46 3.077-days over 1 month Rolling Return 3.95 3.57Volatility 2.98 1.78

Money Market IndicatorsMibor month Average 4.60-6.00 4.86-6.00Call rate range 5.00-5.15 4.00-5.20Repo-rate range 4.00-5.10 3.75-5.1090-day CP Reference 7.50 7.14

G-sec Market Indicators1 yr g-sec yield 6.41 6.103 yr g sec yield 7.13 7.16

Corporate Bond Market Indicators1 yr AAA spreads 129bps 103bps3 yr AAA spreads 85bps 63bpsNote: All figures are annualised %.Source: IDBI Capital Market Services

Net change in assets of ST Debt Funds


Rs C

rore

Assets under management of ST Debt Funds


Rs C

rore

(5,935)

10,644

7,293

(5,629)

(1,529)(3,863)

(10,000)(8,000)(6,000)(4,000)(2,000)

02,0004,0006,0008,000

10,00012,00014,000



33,705

44,34951,642

46,013 44,48440,621

10,000

20,000

30,000

40,000

50,000

60,000


AUM as at month-end

24




Asset allocation CP/CD Bonds Cash/Call

August 31 59.64 25.02 6.97July 31 60.75 26.69 6.09Note: Figures are as a % of net assetsSource: IDBI Capital Market Services

Rating Profile Sovereign AAA/P1+/Call AA/P1-

August 31 8.26 76.19 22.54July 31 2.07 78.94 18.99Note: Figures are as a % of net assetsSource: IDBI Capital Market Services

Outlook

Over August the benchmark 3Y AAA yield closed at 7.13% and the benchmark 5Y AAA yield closedat 7.77% at the end of the month. The liquidity in the system dried up with much volatility in the shorterterm, while the longer end of the yield curve was flat. Investors can take a cautious stand over theshort term.

Schemes Watch

Birla Sun Life Ultra Short Term Fund - IP - Growth

LIC MF Savings Plus Fund - Growth

7-day rolling returns over 1 month


% p

.a.


7-day rolling return over 6-months for ST Debt Funds

% p

.a.



Trend Line

(10.00)

(5.00)

0.00

5.00

10.00

15.00

20.00

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug


(30.00)

(20.00)

(10.00)

0.00

10.00

20.00

30.00

40.00

50.00

2-M

ar

16-M

ar

30-M

ar

13-A

pr

27-A

pr

11-M

ay

25-M

ay

8-Ju

n

22-J

un

6-Ju

l

20-J

ul

3-Au

g

17-A

ug

31-A

ug


Bonds 25%

Cash/Call 7%

CP/CD/MM 59%

G-Sec 0%FRB

9%FD0%

AA 21%

AAA 71%

Sov ereign8%

25


25

Long-term debt funds – invest September Outlookin long term g-secs and bonds Cautious to NeutralNo. of schemes studied 50 Aug. Return 4.32%Avg Maturity (on August 31) 3.51yrs Aug. AUM* `19,829 cr* For the schemes studied below

Long-term Debt Funds


Returns (%) Returns (%) Returns (%) Returns (%) Returns (%) Ratio *Quartile ISBI Magnum Income - Growth 10.03 (8.47) 2.82 6.07 4.95 11.75 (0.09)L&T Triple Ace - Reg - Growth 9.29 (5.48) 2.19 2.99 6.08 10.71 0.01SBI Dynamic Bond Fund - Growth 8.22 11.57 8.26 8.49 6.56 5.96 0.09LIC Bond Fund - Growth 7.94 0.06 4.96 6.89 10.01 15.21 0.26Baroda Pioneer Income Fund - Growth 7.25 8.99 7.35 7.29 5.90 4.12 (0.02)Fortis Bond Fund - Regular - Growth 7.19 3.59 6.04 6.23 7.61 5.18 0.31IDFC SSIF - Invt Plan - Plan C - Super IP - Growth 7.16 (7.28) 1.32 6.20 1.93 19.59 (0.21)HSBC Flexi Debt Fund - IP - Growth 6.25 (1.87) 2.10 4.93 3.77 8.31 (0.27)Taurus Short Term Income Fund - Growth 6.21 6.35 6.19 5.70 6.18 0.12 1.44IDFC SSIF - Invt. Plan - Plan A - Growth 6.19 (7.49) 0.76 5.65 0.95 19.37 (0.26)PRINCIPAL Income Fund - I P - Growth 6.19 (1.03) 3.44 7.17 5.29 10.36 (0.07)HDFC Income Fund - Growth 6.17 (1.64) 2.82 7.38 2.11 15.29 (0.25)Birla Sun Life Medium Term Plan - IP - Growth 6.06 3.32 5.23 5.62 5.27 3.69 (0.20)Quartile 2Escorts Income Plan- Growth 5.86 (1.39) 3.87 7.02 3.20 6.42 (0.44)Sahara Classic Fund - Growth 5.45 5.53 5.38 5.11 5.45 0.09 (6.07)HDFC HIF - Growth 5.32 (2.61) 2.24 6.89 0.95 14.22 (0.36)Sahara Income Fund - Growth 5.17 5.18 4.99 4.80 5.16 0.02 (53.30)JM Income - Growth 5.07 2.30 3.20 6.24 6.00 3.98 (0.00)Sundaram BNP Paribas Bond Saver - I P - Growth 5.00 10.05 17.40 13.28 11.08 12.01 0.42Tata Income Plus Fund - Plan A - Growth 4.77 5.10 4.94 4.16 4.78 0.34 (3.64)Tata Income Plus Fund - Plan B - Growth 4.76 5.10 4.94 4.16 4.77 0.34 (3.65)Birla Sun Life Dynamic Bond Fund - Ret - Growth 4.69 0.65 3.86 5.89 4.17 4.11 (0.44)Sundaram BNP Paribas Bond Saver - Growth 4.68 9.29 6.55 7.34 10.79 12.61 0.38DSP BlackRock Strategic Bond Fund - IP - Growth 4.57 5.20 4.86 4.58 4.45 1.14 (1.35)Tata Dynamic Bond Fund - Option A - Growth 4.42 4.82 4.64 3.86 4.43 0.32 (4.90)Tata Dynamic Bond Fund - Option B - Growth 4.42 4.82 4.64 3.86 4.43 0.32 (4.90)Quartile 3Fortis Flexi Debt Fund - Growth 4.25 (4.14) 1.30 4.15 0.04 15.54 (0.38)Canara Robeco Dynamic Bond Fund - Insti. - Growth 4.07 (8.05) 1.24 5.04 0.22 14.78 (0.39)Reliance RSF - Debt - Growth 4.07 1.53 3.66 5.60 3.39 3.09 (0.84)IDFC SSIF - MTP - Plan A - Growth 3.96 (1.35) 3.06 7.84 1.95 7.11 (0.57)Birla Sun Life Income Fund - Growth 3.91 2.08 3.45 5.39 3.22 3.92 (0.71)ICICI Prudential L T P - Regular - Cumulative 3.86 (5.24) 1.62 4.97 2.19 7.36 (0.52)Morgan Stanley Short Term Bond Fund - IP Plus 3.84 4.35 4.48 5.05 3.63 1.10 (2.16)ICICI Prudential Income Opportunities Fund - IP 3.78 1.53 3.46 4.91 3.77 7.06 (0.32)UTI Bond Fund - Growth 3.76 (2.89) 1.60 6.52 0.91 9.36 (0.54)DWS Money Plus Advantage Fund - IP - Growth 3.74 (6.07) 0.70 5.97 5.65 14.63 (0.02)Canara Robeco Income Scheme - Growth 3.48 (4.72) 1.09 6.22 0.28 11.21 (0.51)IDFC D B F - Plan B - IP - Growth (Re-Launched) 3.41 (9.32) (1.87) 4.53 (1.42) 25.47 (0.29)Quartile 4ING Income Fund - IP - Growth 3.26 0.04 2.18 5.80 3.14 7.99 (0.36)DWS Premier Bond Fund - IP - Growth (Re-Launched) 3.06 (4.89) 0.50 6.76 2.51 24.63 (0.14)ICICI Prudential Income Fund - I P - Growth 2.54 (1.56) 1.74 4.64 0.71 8.83 (0.60)Reliance Income Fund - Retail - G P - Growth 2.32 (4.68) (0.19) 4.21 (1.58) 13.28 (0.57)Sundaram BNP Paribas Income Plus- Growth 2.31 2.76 2.58 1.89 2.34 0.17 (21.42)Templeton India IBA - Plan A - Growth 2.31 (4.86) 0.49 4.46 0.24 6.65 (0.87)Templeton India Income Fund - Growth 1.60 (6.11) (0.88) 2.90 (1.83) 10.39 (0.75)Birla Sun Life Income Plus - Growth 1.10 (2.22) 0.04 3.61 (0.06) 4.83 (1.25)Tata Income Fund - Growth (0.07) (4.25) (1.84) 4.11 (2.20) 12.08 (0.68)Fidelity Flexi Bond Fund - Ret - Growth (0.92) (4.18) (1.01) 1.67 (3.00) 10.52 (0.86)DSP BlackRock Bond Fund - Retail Plan - Growth (1.38) (2.38) (0.61) 6.00 (3.75) 10.41 (0.94)Kotak Bond Regular Plan - Growth (4.35) (6.10) (5.28) 5.97 (7.13) 10.52 (1.25)Average 4.32 (0.32) 2.93 5.52 2.99 8.53 (2.29)





26


Scheme Name G-Sec Bonds CP / CD Cash / AA AAA Sovereign Fund Size Average(%) (%) MM (%) Call (%) (%) (` Cr) Maturity

(%) (years)

Baroda Pioneer Income Fund - Growth -- -- 88.50 11.50 -- 11.50 -- 0.14 0.00Birla Sun Life Dynamic Bond Fund - Ret - Growth -- 9.30 32.12 8.65 18.23 78.43 3.34 7,340.61 1.20Birla Sun Life Income Fund - Growth -- 10.12 30.28 13.19 -- 82.37 11.78 596.45 2.53Birla Sun Life Income Plus - Growth -- 6.89 12.72 13.49 0.79 43.86 55.35 542.38 7.15Birla Sun Life Medium Term Plan - IP - Growth -- -- 78.55 5.02 4.01 95.99 -- 1,304.31 0.51Canara Robeco Dynamic Bond Fund - Institutional - Growth -- 19.76 48.99 (18.18) -- 25.72 51.51 20.19 6.37Canara Robeco Income Scheme - Growth -- 32.72 25.50 0.38 6.08 45.52 41.40 218.90 9.39DSP BlackRock Bond Fund - Retail Plan - Growth -- 31.37 6.43 2.50 -- 43.90 52.63 100.32 9.07DSP BlackRock Strategic Bond Fund - IP - Growth -- -- 98.18 0.05 -- 94.68 1.77 832.77 0.30DWS Money Plus Advantage Fund - IP - Growth -- 7.94 23.21 6.35 37.17 49.94 -- 299.07 0.75DWS Premier Bond Fund - IP - Growth (Re-Launched) -- 13.25 -- 21.42 10.28 36.32 51.81 23.38 5.96Escorts Income Plan- Growth -- -- -- -- -- -- -- 4.21 4.65Fidelity Flexi Bond Fund - Ret - Growth -- -- 61.11 (0.05) 19.62 26.75 19.32 76.93 2.30Fortis Bond Fund - Regular - Growth -- -- 11.65 2.69 26.82 60.29 -- 73.68 1.36Fortis Flexi Debt Fund - Growth -- -- 28.60 (3.17) 25.71 60.52 5.09 283.96 3.75HDFC HIF - Growth -- 26.69 5.81 8.92 -- 41.42 58.58 168.23 7.95HDFC Income Fund - Growth -- 29.26 -- 16.68 -- 45.94 54.06 451.29 9.53HSBC Flexi Debt Fund - IP - Growth -- -- 50.33 22.31 -- 56.07 20.73 90.60 2.71ICICI Prudential Income Fund - I P - Growth -- 61.35 22.71 1.51 20.79 64.79 14.43 607.17 3.69ICICI Prudential Income Opportunities Fund - IP - Growth -- 46.39 41.15 2.21 24.19 65.57 10.24 243.63 2.54ICICI Prudential L T P - Regular - Cumulative -- 94.14 1.62 4.24 30.59 69.41 -- 172.04 1.85IDFC D B F - Plan B - IP - Growth (Re-Launched) -- -- 3.76 6.70 -- 6.70 93.30 80.12 8.67IDFC SSIF - Invt Plan - Plan C - Super IP - Growth -- -- -- 8.61 -- 46.60 53.40 166.20 8.35IDFC SSIF - Invt. Plan - Plan A - Growth -- -- -- 8.61 -- 46.60 53.40 166.20 8.35IDFC SSIF - MTP - Plan A - Growth -- -- 59.10 1.55 7.75 78.12 14.13 460.82 2.38ING Income Fund - IP - Growth -- -- 41.97 -- 14.83 27.03 33.93 26.60 4.54JM Income - Growth -- -- 78.02 -- 21.98 28.35 -- 12.90 0.82JPMorgan India Active Bond Fund - IP - Growth -- -- -- -- -- -- -- 25.80 0.18Kotak Bond Regular Plan - Growth -- -- 8.12 12.45 48.17 23.76 28.07 125.88 3.51L&T Triple Ace - Reg - Growth -- -- 3.85 4.52 -- 52.47 34.44 5.47 -LIC Bond Fund - Growth -- 92.28 -- 7.72 41.70 58.30 -- 87.93 3.19Morgan Stanley Short Term Bond Fund - IP Plus - Growth -- 6.32 86.86 6.82 -- 100.00 -- 78.81 0.28PRINCIPAL Income Fund - I P - Growth -- 11.99 11.95 10.82 31.66 34.75 33.59 41.42 4.89Reliance Income Fund - Retail - G P - Growth -- -- 12.34 4.84 -- 26.56 73.44 317.59 9.94Reliance RSF - Debt - Growth -- 15.99 26.53 3.52 60.53 29.37 -- 3,388.88 1.60Sahara Classic Fund - Growth -- -- 64.33 35.67 -- 100.00 -- 0.37 0.03Sahara Income Fund - Growth -- 0.32 99.55 0.13 -- 85.35 -- 156.44 0.04SBI Dynamic Bond Fund - Growth -- -- 9.76 13.01 -- 13.01 77.23 9.52 3.79SBI Magnum Income - Growth -- -- -- 11.18 17.34 38.25 44.41 55.21 3.17Sundaram BNP Paribas Bond Saver - Growth -- 68.65 -- 14.17 33.80 37.72 17.18 29.58 5.12Sundaram BNP Paribas Bond Saver - I P - Growth -- 68.65 -- 14.17 33.80 37.72 17.18 29.58 5.12Sundaram BNP Paribas Flexible Fund - Flexible Income - IP -- -- -- -- -- -- -- 4.38 0.00Sundaram BNP Paribas Income Plus- Growth -- -- -- 100.00 -- 14.95 -- 0.74 0.00Tata Dynamic Bond Fund - Option A - Growth -- -- -- -- -- -- -- 1.01 0.00Tata Dynamic Bond Fund - Option B - Growth -- -- -- -- -- -- -- 1.01 0.00Tata Income Fund - Growth -- -- 34.56 12.10 -- 72.66 27.34 36.60 5.02Tata Income Plus Fund - Plan A - Growth -- -- -- -- -- -- -- 2.61 0.00Tata Income Plus Fund - Plan B - Growth -- -- -- -- -- -- -- 2.61 0.00Taurus Short Term Income Fund - Growth -- -- 83.75 0.44 11.84 88.16 -- 272.61 7.79Templeton India IBA - Plan A - Growth -- 51.52 2.41 2.95 23.80 76.20 -- 80.02 1.55Templeton India Income Fund - Growth -- 26.78 12.46 1.24 -- 51.71 48.29 616.34 5.88UTI Bond Fund - Growth -- 0.65 10.78 14.59 7.08 62.92 23.87 328.83 4.59Average -- 31.84 36.60 9.66 23.14 51.92 36.30 385.81 3.51


27


27

Fund Flows

Over the month of August, Long Term Debt Funds category registered net outflow in AUM to the tuneof ̀ 591.59 cr and the category AUM stood at ̀ 19828.55 cr as at the end of August. This accountedfor 4.95% of industry assets (with reference to our universe of schemes).



Birla Sun Life Medium Term Plan - IP - Growth 504.39 1,304.31Templeton India Income Fund - Growth 99.05 616.34IDFC SSIF - MTP - Plan A - Growth 89.06 460.82Taurus Short Term Income Fund - Growth 84.47 272.61IDFC SSIF - Invt Plan - Plan C - Super IP - Gr. 53.70 166.20



Birla Sun Life Dynamic Bond Fund - Ret - Gr. (1,071.97) 7,340.61DWS Money Plus Advantage Fund - IP - Gr. (100.47) 299.07DSP BlackRock Strategic Bond Fund - IP - Gr. (51.07) 832.77Birla Sun Life Income Plus - Growth (48.50) 542.38Fortis Flexi Debt Fund - Growth (47.61) 283.96

Returns Analysis

Over the month of August, Long Term Debt Funds registered average annualized returns of negative4.32%, much higher than the returns of negative 0.32% generated in the month of July. The 3-month& 6-month annualized returns stood at an average of 2.93% & 5.52% respectively. The rollingreturns for August were noted at 2.99%. The volatility of returns during the month stood at 8.53, andthe average Sharpe Ratio stood at negative 3.50.

Portfolio Review

Between the months of July and August the average exposure to Bonds increased slightly fromaround 29.83% to 31.84%. The percentage of average net assets invested in the CP/CD segmentdecreased from 38.57% to 36.60% as at the end of August. The average exposure to the overnightmarkets increased from 9.39% to 9.66% between the two months. The average credit quality of theportfolios remained more or less stable with around 51.92% investment in AAA rated paper inAugust. The average maturity of the portfolios increased from 3.28 to 3.51 years between the twomonths.

August 31, ’10 July 31, ’10

Long-term Debt Fund IndicatorsGrowth Option:Point-to-Point Return 4.32 -0.327-days over 1 month Rolling Return 2.99 1.31Volatility 8.53 5.24

Money Market IndicatorsMibor month Average 4.60-6.00 4.86-6.00Call rate range 5.00-5.15 4.00-5.20Repo-rate range 4.00-5.10 3.75-5.1090-day CP Reference 7.50 7.14

G-sec Market Indicators10 yr g sec yield 7.93 7.80

Corporate Bond Market Indicators5 yr AAA spreads 69bps 73bps10yr AAA spreads 60bps 83bpsNote: All figures are annualised %.Source: IDBI Capital Market Services

Net change in assets of LT Debt Funds


Rs C

rore

Assets under management of LT Debt Funds


Rs C

rore

(198)

848

1,644

714

(431)(592)

(1,500)(1,000)

(500)0

5001,0001,5002,0002,500



17,645 18,49420,138 20,851 20,420 19,829

02,5005,0007,500

10,00012,50015,00017,50020,00022,50025,000


AUM as at month-end

28






Asset allocation G-Sec Bonds Cash/Call

August 31 0.00 31.84 9.66July 31 0.00 29.83 9.39Note: All figures are as a % of net assets


Rating Profile Sovereign AAA/P1+/Call AA/P1-

August 31 36.30 51.92 23.14July 31 33.98 57.17 20.61Note: Figures are as a % of net assets


OutlookThe corporate bond yields hardened seeing tightness in money market on grounds of tightness inliquidity. The Benchmark 10Y AAA bond yield closed at 7.93% while benchmark 5Y AAA yield closedat 7.77%. The corporate bond yields are expected to track movement in G sec which may beinfluenced by RBI's actions in its Policy review. The WPI inflation for the month of August was seen at8.51%. Based on the different factors our outlook on Long-term debt funds is still cautious.

Schemes Watch

DSP Blackrock Strategic Bond Fund - IP - Growth

Birla Sun Life Medium Term Plan - IP - Growth1-month rolling return over 6-months for LT Debt funds


% p

.a.

7-day rolling returns over 1 month


The 5-yr AAA yield fell by just 1 bps over the monthof August


% p

.a.

% p

.a.

Trend Line

7.30

7.60

7.90

8.20

8.50

8.80

9.10

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug

5-y ear AAA y ield in August 2010

(60.00)(45.00)

(30.00)(15.00)

0.0015.00

30.0045.00

60.00

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug


(80.00)

(60.00)

(40.00)

(20.00)

0.00

20.00

40.00

60.00

80.00

2-M

ar

16-M

ar

30-M

ar

13-A

pr

27-A

pr

11-M

ay

25-M

ay

8-Ju

n

22-J

un

6-Ju

l

20-J

ul

3-Au

g

17-A

ug

31-A

ug

1-month rolling return ov er 6 months

G-Sec 0%

CP/CD/MM 47%

Cash/Call 12% Bonds

41%

AA 21%

AAA 46%

Sov ereign 33%

2929


29

Long-term Gilt Funds

Long-term gilt funds – September Outlookinvest in long-term G-secs Cautious to Neutral

No. of schemes studied 27 Aug. Return 3.61%Avg Maturity (on August 31) 6.16yrs Aug. AUM* `2,129 cr* For the schemes studied below



Quartile IL&T Gilt Investment - Growth 11.28 (3.92) 2.61 (0.15) 6.87 15.25 0.27HSBC Gilt Fund - Growth 10.92 0.40 5.01 6.15 8.92 11.58 0.53SBI Magnum Gilt LTP - Growth 10.34 (5.34) 3.63 6.72 4.15 14.14 0.10ICICI Prudential GFIP - Growth 9.22 (4.49) 4.23 5.88 7.82 17.51 0.29Baroda Pioneer Gilt Fund - Growth 8.46 7.94 7.32 28.01 6.72 5.43 0.73Escorts Gilt Plan - Growth 8.08 (12.27) 1.88 8.11 (1.07) 21.73 (0.18)Birla Sun Life G Sec Fund - LT - Growth 5.82 (0.73) 2.86 12.74 6.56 5.68 0.67Quartile 2HDFC Gilt Fund - L T P - Growth 5.25 (7.50) 0.71 6.10 (0.02) 19.28 (0.14)Sahara Gilt Fund - Growth 4.66 5.03 4.88 3.95 4.68 0.34 5.72IDFC G Sec Fund - Invt. Plan - Plan B - IP - Growth 4.22 (13.49) (1.98) 4.77 (3.22) 28.47 (0.21)IDFC G Sec Fund - Investment - Plan A - Growth 3.72 (13.99) (2.48) 4.25 (3.71) 28.46 (0.23)Birla Sun Life GPRP - Growth 3.19 (7.72) (2.08) 1.69 (0.80) 10.78 (0.33)PRINCIPAL G Sec - Investment - Growth 3.14 (6.66) (0.35) 4.43 0.35 14.29 (0.17)UTI Gilt Advantage Fund - L T P - Growth 2.76 (2.81) (1.08) 4.17 1.23 12.55 (0.12)Quartile 3Taurus Gilt Fund - Growth 2.55 2.95 1.83 1.81 2.53 0.33 (0.68)Tata Gilt High Investment Fund - Growth 2.51 (6.64) (0.54) 4.35 (2.99) 13.69 (0.42)Tata Gilt Securities Fund - Growth 2.51 (6.64) (0.54) 4.36 (2.99) 13.69 (0.42)Canara Robeco Gilt PGS - Growth 2.34 (9.32) (0.78) 4.82 (1.37) 13.89 (0.30)Reliance G Sec Fund - IP - Growth 2.00 (8.64) (2.89) 2.26 (2.74) 18.90 (0.29)LIC G Sec Fund - Growth 1.05 1.19 1.39 1.57 1.09 8.54 (0.20)JM G Sec Regular Plan - Growth 0.61 (5.03) (2.90) 4.69 3.94 11.72 0.10Quartile 4Sundaram BNP Paribas Gilt Fund - Growth 0.56 (1.11) 0.62 3.71 (5.02) 21.55 (0.36)DSP BlackRock Government Securities Fund - Gr. 0.43 (7.19) (1.01) 6.02 (3.41) 14.31 (0.43)Templeton India GSF - LTP - Growth (0.20) (10.58) (4.54) 0.64 (6.25) 19.03 (0.47)Templeton India GSF - Composite Plan - Growth (0.28) (9.51) (4.19) 0.60 (6.27) 18.62 (0.48)UTI G-Sec Fund - Growth (2.83) (2.06) (3.06) (0.03) (5.07) 14.94 (0.52)Kotak Gilt - Investment Regular Plan - Growth (4.86) (8.66) (5.42) 4.74 (9.07) 15.75 (0.75)Average 3.61 5.07 0.12 5.05 0.03 14.46 0.06





30


Scheme Name Cash / CP/CD/ 1 To 5 5 To 9 9 To 15 15 To 20 > 20 Fund Size AverageCall MM Years Years Years Years Years (Rs Cr) Maturity

(%) (%) (%) (%) (%) (%) (%) (years)

Baroda Pioneer Gilt Fund - Growth 9.97 90.03 - - - - - 0.13 0.00

Birla Sun Life G Sec Fund - LT - Growth 33.94 5.04 - - 52.67 8.36 - 256.93 7.77

Birla Sun Life GPRP - Growth 35.30 -- - - 42.03 5.91 - 80.23 6.33

Canara Robeco Gilt PGS - Growth 18.03 16.27 6.21 - 46.90 - 12.59 39.47 1.02

DSP BlackRock Government Securities Fund - Growth 2.41 8.10 11.00 - 58.97 9.75 9.75 101.72 11.35

Escorts Gilt Plan - Growth -- -- - - - - - 0.15 12.12

HDFC Gilt Fund - L T P - Growth 7.44 -- 34.98 - 33.83 18.16 5.59 35.50 9.56

HSBC Gilt Fund - Growth 46.26 16.92 - - 31.55 5.27 - 0.94 4.06

ICICI Prudential GFIP - Growth 4.97 11.66 32.43 - 48.49 - - 194.36 6.31

IDFC G Sec Fund - Investment - Plan A - Growth 4.84 -- - - 95.16 - - 8.85 9.21

IDFC G Sec Fund - Invt. Plan - Plan B - IP - Growth 4.84 -- - - 95.16 - - 8.85 9.21

JM G Sec Regular Plan - Growth -- 100.00 - - - - - 26.43 0.10

Kotak Gilt - Investment Regular Plan - Growth 16.04 10.97 6.21 - 64.38 0.57 - 54.72 6.54

L&T Gilt Investment - Growth 3.14 4.86 26.09 - 65.91 - - 1.50 -

LIC G Sec Fund - Growth 100.00 -- - - - - - 110.39 0.00

PRINCIPAL G Sec - Investment - Growth 24.38 -- 17.81 14.82 29.17 13.82 - 165.18 7.00

Reliance G Sec Fund - IP - Growth 4.60 -- 16.89 15.33 47.49 7.81 7.83 63.53 11.08

Religare Gilt Fund - Long Duration Plan - Reg - Gr 54.84 -- - - 45.16 - - 11.17 6.14

Sahara Gilt Fund - Growth 100.00 -- - - - - - 0.09 0.00

SBI Magnum Gilt LTP - Growth 8.61 -- - - - - - 206.60 4.38

Sundaram BNP Paribas Gilt Fund - Growth 32.04 -- - - 67.96 - - 0.29 6.57

Tata Gilt High Investment Fund - Growth -- -- - - - - - 77.18 --

Tata Gilt Securities Fund - Growth 3.84 15.36 8.23 - 32.96 39.62 - 187.80 10.75

Taurus Gilt Fund - Growth (1.37) 101.37 - - - - - 0.01 --

Templeton India GSF - Composite Plan - Growth 5.16 -- - 21.93 72.91 - - 109.42 9.02

Templeton India GSF - LTP - Growth 5.12 -- - 15.32 79.57 - - 62.66 9.33

UTI Gilt Advantage Fund - L T P - Growth 15.91 16.00 2.45 3.25 62.39 - - 153.92 5.38

UTI G-Sec Fund - Growth 13.96 9.19 0.11 7.47 69.27 - - 257.33 6.89

Average 22.17 31.21 5.80 2.79 40.78 3.90 1.28 79.12 6.16


3131


31

August 31, ’10 July 31, ’10

Long-term Gilt Fund IndicatorsGrowth Option:Point-to-Point Return 3.61 -5.077-days over 1 month Rolling Return 0.03 -1.52Volatility 14.46 7.76

G-sec Market Indicators5 yr g sec yields 7.77 7.5010 yr g sec yield 7.93 7.8015 yr g sec yield 8.19 8.20Note: All figures are annualised %.Source: IDBI Capital Market Services

Fund Flows

Long Term Gilt Funds category witnessed net investment in AUM to the tune of ̀ 3.73 cr, during themonth of August. The category AUM stood at ̀ 2129.18 cr. as at the end of the month. This accountedfor merely 0.53% of industry assets (with reference to our universe of schemes).



Birla Sun Life G Sec Fund - LT - Growth 62.92 256.93DSP BlackRock Government Securities Fund - Gr. 15.03 101.72PRINCIPAL G Sec - Investment - Growth 11.46 165.18Reliance G Sec Fund - IP - Growth 5.79 63.53ICICI Prudential GFIP - Growth 4.96 194.36



Tata Gilt Securities Fund - Growth (7.60) 187.80UTI Gilt Advantage Fund - L T P - Growth (6.87) 153.92LIC G Sec Fund - Growth (4.94) 110.39Canara Robeco Gilt PGS - Growth (1.97) 39.47Templeton India GSF - LTP - Growth (1.71) 62.66

Returns Analysis

During the month of August, Long Term Gilt Funds generated an average annualized return of3.61% considerably higher than the July returns of negative -5.07%. The 3-month & 6-monthaverage annualized returns were noted at 0.12% & 5.05% respectively, while rolling returns for themonth of August were stood at 0.03%. The volatility of returns was registered at 14.46, and theaverage Sharpe Ratio for the category was seen at a positive 0.06.

Portfolio Review

Long Term Gilt Funds had an exposure of 22.17% in overnight markets in the month of August, lowerthan the level of around 24.85% seen at the end of July. The allocation to the CP/CD segmentdecreased from 35.54% to 31.21% between the two months. In August, the highest allocation wasto the 9-15 years segment at around 40.78%, while the second most preferred category comprisedsecurities of 1-5 years maturity and accounted for 5.80% of average net assets. The averagematurity increased from 5.10 years as at the end of July to 6.16 years as at the end of August.

Net change in assets of LT Gilt Funds


Rs C

rore

Assets under management of LT Gilt Funds


Rs C

rore

7 (4) 20

(69)

204

4

(200)

(100)

0

100

200

300



1,974 1,970 1,990 1,9212,125 2,129

0

500

1,000

1,500

2,000

2,500

3,000


AUM as at month-end

32


Maturity Profile as on 31 August 2010


G-sec maturity 5-9 years 9-15 years 15-20 years >20 yearsprofile

August 31 2.79 40.78 3.90 1.28July 31 2.76 29.69 4.07 1.41Note: All figures are as a % of net assets


Outlook

The sentiments in the government securities Market remained bearish with huge volatility in shortterm yields over the month of August. The benchmark 10Y paper 7.80% GOI 2020 closed at a yieldof 7.93% while 5Y benchmark paper 6.49% 2015 closed at a yield of 7.77%. In the ultimateanalysis, we advise caution on the G-secs market too.

Schemes Watch

Birla Sun Life G Sec Fund - LT - Growth

SBI Magnum Gilt LTP - Growth

7-day rolling returns over 1-month


% p

.a.

1-month rolling return over 6-months


% p

.a.

Trend Line

(100.00)(75.00)(50.00)(25.00)

0.0025.0050.0075.00

100.00

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug


(60.00)

(40.00)

(20.00)

0.00

20.00

40.00

60.00

80.00

5-M

ar

19-M

ar

2-Ap

r

16-A

pr

30-A

pr

14-M

ay

28-M

ay

11-J

un

25-J

un

9-Ju

l

23-J

ul

6-Au

g

20-A

ug

1-month rolling return ov er 6 months

1-5 Years 11% 5-9 Years

5%

9-15 Years 75%

15-20 Years 7%

> 20 Years 2%

3333


33

MIP-invest predominantly in debt instruments September Outlookand 10%-20% in equity NeutralNo. of schemes studied 37 Aug. Return 6.18%Avg Maturity (on August 31) 1.67yrs Aug. AUM* `24,058 cr* For the schemes studied below

Monthly Income Plans (MIP)


Returns (%) Returns (%) Returns (%) Returns (%) Returns (%) Ratio *Quartile IHDFC MIP - LTP - Growth 15.84 10.92 16.44 14.53 17.37 17.16 0.85SBI Magnum MIP - Growth 12.82 9.02 12.08 11.29 14.37 13.36 0.87Reliance MIP - Growth 12.38 8.93 13.61 11.90 12.07 11.58 0.81Birla Sun Life MIP - Wealth 25 - Growth 10.21 11.49 14.53 9.91 11.49 24.23 0.36HSBC MIP - Savings Plan - Growth 10.00 11.19 13.17 8.60 8.85 16.57 0.37Birla Sun Life Monthly Income - Growth 9.94 9.62 11.72 9.19 9.46 12.26 0.55Bharti AXA Regular Return Fund - Reg - Growth 9.45 (5.08) 4.39 2.16 9.63 16.17 0.43Canara Robeco Monthly Income Plan - Growth 9.23 6.70 9.48 11.35 9.64 11.14 0.62Kotak Income Plus - Growth 8.84 3.93 11.07 9.15 8.51 14.29 0.40UTI - MIS - Advantage Fund - Growth 7.91 4.86 11.30 8.05 6.78 14.15 0.28Quartile 2SBI Magnum MIP - Floater - Growth 7.89 29.10 16.81 12.32 16.54 26.19 0.53Birla Sun Life MIP - Savings 5 - Growth 7.78 4.53 7.78 6.53 7.02 8.40 0.51HDFC MIP - STP - Growth 7.71 7.56 10.03 8.96 8.47 8.55 0.67HDFC Multiple Yield Fund - Growth 7.53 12.11 11.26 10.70 11.36 19.02 0.45Birla Sun Life MIP - Growth 7.38 10.77 10.87 9.27 8.17 12.52 0.43HSBC MIP - Regular Plan - Growth 7.34 5.90 8.06 6.36 5.66 11.04 0.26Sundaram BNP Paribas MIP - Moderate - Growth 6.85 5.39 8.88 6.97 5.71 6.16 0.48UTI Monthly Income Scheme - Growth 6.42 2.73 7.86 7.59 4.67 10.07 0.19Tata MIP Plus - Growth 5.39 2.03 10.75 11.26 4.39 20.10 0.08Quartile 3FT India MIP - Plan A - Growth 5.21 1.14 6.40 6.51 3.23 10.13 0.05FT India MIP - Plan B - Growth 5.21 1.14 6.40 6.51 3.23 10.13 0.05DWS Twin Advantage Fund - Growth 5.21 (3.85) 5.02 8.94 8.88 22.25 0.28PRINCIPAL M I P - Growth 5.08 1.77 6.25 5.78 4.17 8.71 0.16L&T Monthly Income Plan - Growth 4.91 4.04 6.71 6.05 4.28 9.39 0.16Tata Monthly Income Fund - Growth 4.62 (3.64) 3.82 4.47 1.74 15.22 (0.07)PRINCIPAL M I P Plus - Growth 4.61 3.65 8.29 6.37 4.31 11.00 0.14LIC MF Floater - MIP - Growth 4.15 10.66 10.17 9.30 5.45 19.33 0.14ICICI Prudential MIP 25 - Growth 3.21 7.78 10.10 9.59 3.57 16.18 0.05Quartile 4DSP BlackRock Savings Manager Fund - Aggres. - Gr. 2.89 (8.24) 1.48 2.81 1.16 11.81 (0.13)JM MIP - Growth 2.26 4.12 5.79 5.94 3.59 19.26 0.04ICICI Prudential MIP - Cumulative 1.85 6.81 7.00 7.66 1.35 9.18 (0.15)ING MIP Fund - Growth 1.34 7.26 8.04 3.33 1.35 8.79 (0.16)DSP BlackRock Savings Manager Fund - Moderate - Gr. 0.59 (5.81) 0.27 2.65 (1.42) 7.97 (0.52)DSP BlackRock Savings Manager Fund - Conser. - Gr. 0.41 (3.48) 0.76 4.29 (1.15) 6.31 (0.62)Baroda Pioneer MIP Fund - Growth 0.40 10.43 7.14 5.43 1.88 10.47 (0.08)LIC MIP - Cumulative (0.51) 7.43 8.10 7.50 0.45 11.82 (0.20)Fortis MIP - Growth (24.81) 0.41 (3.02) (0.96) (28.22) 58.11 (0.53)Average 6.18 5.23 8.35 7.52 5.35 14.57 0.21





34


Net change in assets of MIP schemes


Rs C

rore

Assets under management of Monthly Income Plans


Rs C

rore

Scheme Name Equity G-Sec Bonds CP/CD/ Cash/ Fund Size Debt Avg.(%) (%) (%) MM Call (Rs Cr) Maturity

(%) (%) (years)Baroda Pioneer MIP Fund - Growth 12.92 -- -- 85.60 1.48 3.70 0.06Bharti AXA Regular Return Fund - Reg - Growth 15.37 -- -- 79.52 5.11 14.89 0.20Birla Sun Life MIP - Growth 13.05 -- 8.51 43.84 11.52 266.42 1.10Birla Sun Life MIP - Savings 5 - Growth 6.81 -- 9.11 52.97 14.42 1,553.20 1.02Birla Sun Life MIP - Wealth 25 - Growth 24.13 -- 1.64 38.93 17.91 375.07 1.62Birla Sun Life Monthly Income - Growth 13.54 -- 0.45 51.88 6.87 599.04 0.91Canara Robeco Monthly Income Plan - Growth 18.34 -- 13.33 60.41 7.68 302.57 0.96DSP BlackRock Savings Manager Fund - Aggressive - Gr. 20.70 -- 6.39 26.37 8.47 156.82 1.98DSP BlackRock Savings Manager Fund - Conservative - Gr. 6.73 -- -- 74.59 18.66 23.62 0.41DSP BlackRock Savings Manager Fund - Moderate - Gr. 14.19 -- 17.57 27.81 8.58 141.22 2.04DWS Twin Advantage Fund - Growth 18.58 -- 13.63 -- 11.15 178.02 0.93Fortis MIP - Growth 10.76 -- -- 11.79 2.96 28.45 1.12FT India MIP - Plan A - Growth 14.71 -- 28.74 5.12 4.11 468.46 3.05FT India MIP - Plan B - Growth 14.71 -- 28.74 5.12 4.11 468.46 3.05HDFC MIP - LTP - Growth 23.22 -- 43.21 19.05 8.75 8,358.74 2.19HDFC MIP - STP - Growth 11.98 -- 60.97 17.47 4.39 701.67 1.60HDFC Multiple Yield Fund - Growth 19.39 -- 25.26 53.81 1.54 42.75 0.37HSBC MIP - Regular Plan - Growth 15.17 -- 2.39 38.93 11.17 244.05 3.50HSBC MIP - Savings Plan - Growth 21.62 -- 1.72 30.57 18.45 508.19 3.08ICICI Prudential MIP - Cumulative 14.69 -- 40.47 29.43 11.43 630.70 1.48ICICI Prudential MIP 25 - Growth 21.66 -- 36.85 23.64 9.22 566.38 1.57ING MIP Fund - Growth 13.13 -- -- 86.87 -- 4.21 0.44JM MIP - Growth 12.96 -- -- 43.80 -- 8.42 0.90Kotak Income Plus - Growth 17.70 -- 1.98 47.52 2.81 153.96 0.90L&T Monthly Income Plan - Growth 16.96 -- -- 57.81 0.50 123.40 -LIC MF Floater - MIP - Growth 14.63 -- 57.97 -- 24.82 153.39 1.25LIC MIP - Cumulative 18.99 -- 71.13 -- 6.62 147.89 2.58PRINCIPAL M I P - Growth 11.33 -- 3.36 28.94 1.72 153.96 2.57PRINCIPAL M I P Plus - Growth 16.62 -- 3.14 25.55 4.59 177.14 3.09Reliance MIP - Growth 17.05 -- 3.12 34.08 1.27 6,616.77 2.48SBI Magnum MIP - Floater - Growth 14.69 -- -- -- 63.96 9.34 0.08SBI Magnum MIP - Growth 13.09 -- -- 25.01 9.13 329.95 2.30Sundaram BNP Paribas MIP - Moderate - Growth -- -- 53.03 31.66 4.74 59.66 0.78Tata MIP Plus - Growth 18.92 -- -- 28.87 13.24 135.92 3.79Tata Monthly Income Fund - Growth 9.87 -- -- 20.57 22.14 46.89 4.56Templeton MIP - Growth -- -- -- -- -- 93.15 1.69UTI - MIS - Advantage Fund - Growth 21.51 -- -- 17.23 10.82 773.47 1.93UTI Monthly Income Scheme - Growth 13.91 -- 2.99 16.50 8.94 312.76 2.07Average 15.66 -- 21.43 37.61 10.38 656.12 1.67


Fund FlowsDuring the month of August, MIP schemes witnessed net accumulation to AUM to the tune of ̀ 1667.40cr, taking the category AUM to ̀ 24058.32 cr as at the end of August. This accounted for about 6%of industry assets (with reference to our universe of schemes).



HDFC MIP - LTP - Growth 747.09 8,358.74Reliance MIP - Growth 698.91 6,616.77ICICI Prudential MIP 25 - Growth 142.89 566.38L&T Monthly Income Plan - Growth 70.68 123.40HSBC MIP - Savings Plan - Growth 54.20 508.19


Birla Sun Life MIP - Savings 5 - Growth (131.03) 1,553.20DWS Twin Advantage Fund - Growth (49.08) 178.02HSBC MIP - Regular Plan - Growth (17.07) 244.05DSP BlackRock Savings Manager Fund - Moder. (6.31) 141.22DSP BlackRock Savings Manager Fund - Aggr. (6.21) 156.82

1,559

1,977

1,032 1,0981,336

1,667

0300600900

1,2001,5001,8002,1002,4002,700



16,94818,925

19,95721,055

22,39124,058

4,0006,0008,000

10,00012,00014,00016,00018,00020,00022,00024,00026,00028,000

Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10

AUM as at month-end

3535


35

7 day rolling returns over 1 month for MIP schemes


% p

.a.



August 31, ’10 July 31, ’10

MIP IndicatorsGrowth Option:Point-to-Point Return 6.18 5.237-days over 1 month Rolling Return 5.35 6.66Volatility 14.57 11.45G-sec Market Indicators 1 yr g-sec yield 6.41 6.10 3 yr g sec yield 7.13 7.16 5 yr g sec yield 7.77 7.36

Corporate Bond Market Indicators5 yr AAA spreads 69bps 73bps

Equity Market IndicatorsBSE Sensex (0.61) 2.05S&P CNX Nifty (0.54) 2.21Note: All figures are annualised %. Equity market indicators are absolute %.Source: IDBI Capital Market Services

Assets under management of Hybrid schemes


Returns Analysis

Over the month of August, MIP schemes generated average annualized returns of 6.18%, muchhigher than the level of 5.23% seen in the month of July. The 3-month & 6-month annualized returnsaveraged were seen at 8.35% & 7.52%, while the rolling returns for the month of August were notedto be 5.35%. The volatility of returns was at 14.57, and the average Sharpe Ratio for the monthstood at 0.21.

Portfolio Review

As at the end of August, MIP schemes had an average exposure of around 15.66% to equities. Theaverage exposure to Bonds was at 21.43%, in August. The percentage of average net assetsinvested in the CP/CD segment increased from 36.10% in July to 37.61% in August. The exposureto overnight markets of MIP schemes was at 10.38% for August. The average maturity of theportfolios increased from 1.60 in July to 1.67 in August.

Asset Equity G-Sec Bonds Cash/Call allocation

August 31 15.66 -- 21.43 10.38July 31 15.44 -- 20.94 11.33Note: All figures are as a % of net assets


Outlook

During the turbulent times, the one type of mutual funds that is Monthly Income Plans (MIPs) comesinto the minds of many investors as they not only promise regular returns to investors, but also givean incentive of earning higher returns, subject to the performance of equities. It get returns eithermonthly, quarterly, half-yearly or yearly, depending on the option chosen. Since the basic objectiveof MIP is to give regular income, the firm invests the major chunk of funds (at least 80%) into fixedincome securities like commercial papers, (CPs), government securities, corporate bonds, and thelike, while the remainder is invested into equities. Most of the firms invest 5%-20% into equities toobtain higher returns. The returns in MIPs are given in the form of dividends. The blend of debt andequity components (generally 80:20) manages to give regular returns.

Schemes Watch

HDFC MIP - LTP - Growth

Reliance MIP - Growth

(140.00)

(105.00)

(70.00)

(35.00)

0.00

35.00

70.00

105.00

140.00

2-Au

g

4-Au

g

6-Au

g

8-Au

g

10-A

ug

12-A

ug

14-A

ug

16-A

ug

18-A

ug

20-A

ug

22-A

ug

24-A

ug

26-A

ug

28-A

ug

30-A

ug


Equity18%

G-Sec0%

Bonds25%CP/CD/MM

45%

Cash/Call12%

21,055

9,083 9,516 9,974

22,39124,058

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,00022,00024,00026,00028,000

Jun-10 Jul-10 Aug-10

MIP B-Eo

36


Review of August Schemes Watch (Growth Plans)

Fund Category Last month’s Outcome Last month’s OutcomeOutlook Schemes Watch

August returns (%) August returns (%)

Liquid Positive 5.35 Fortis Overnight Fund - IP - Growth 5.51JPMorgan India Liquid Fund - Super IP - Growth 5.75Baroda Pioneer Liquid Fund - Inst Plan - Growth 5.70Axis Liquid Fund - IP - Growth 5.52

ST Floaters Neutral 5.07 LIC MF Floating Rate Fund - ST - Growth 5.46UTI Floating Rate Fund - STP - Growth 5.00

LT Floaters Neutral 5.05 Templeton FRIF - Long Term - Super IP - Growth 5.87Birla Sun Life Floating Rate Fund - LTP - Growth 5.31

ST Debt Cautious to Neutral 4.46 Birla Sun Life Short Term Opportunities Fund - IP - Growth 6.15Religare Credit Opportunities Fund - IP - Growth 5.39

LT Debt Cautious to Neutral 4.32 Taurus Short Term Income Fund - Growth 6.21Birla Sun Life Medium Term Plan - IP - Growth 6.06

LT Gilt Cautious to Neutral 3.19 Birla Sun Life G Sec Fund - LT - Growth 5.82ICICI Prudential GFIP - Growth 9.22

MIP Neutral 6.18 HDFC MIP - LTP - Growth 15.84Reliance MIP - Growth 12.38

Diversified Equity ST - Neutral; 2.18 UTI Master Value Fund - Growth 3.15LT - Positive Reliance Equity Opportunities Fund - Growth 3.63

HDFC Equity Fund - Growth 3.95ELSS Neutral 2.07 HDFC Taxsaver - Growth 3.70

DSP BlackRock Tax Saver Fund - Growth 1.07Reliance Tax Saver (ELSS) Fund - Growth 4.00

Balanced Funds - Eo Neutral 1.48 HDFC Prudence Fund - Growth 2.70Reliance RSF - Balanced - Growth 3.74

Note: All figures are annualised %. Figures for Growth Funds, ELSS Funds and Balanced Funds are absolute %.

DISCLAIMERThis document has been prepared by IDBI Capital Market Services Ltd. (IDBI Capital) and is meant for the recipient for use as intended and not for circulation. This document should notbe reported or copied or made available to others. The information contained herein is from the public domain or sources otherwise generally believed to be reliable. While reasonablecare and effort has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of researchit cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. The price and value of the investments referred to in this report may goup or down. Past performance is neither a guide/indicator nor a guarantee for future performance. IDBI Capital, its directors and employees, will not in any way be responsible for thecontents of this report. This is not an offer to sell or a solicitation to buy any securities. The securities discussed in this report may not be suitable for all investors. Investors must maketheir own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. IDBI Capital, its directors or employees, mayfrom time to time, have positions in, or options on, and buy and sell securities referred to herein. IDBI Capital, during the normal course of business, from time to time, may solicit fromor perform investment banking, distribution, broking or other services for any company mentioned in this document.

RISK FACTORSMutual Funds and all securities investments are subject to market risks and there is no assurance or guarantee that the Fund's objectives will be achieved. As with any investment insecurities, the NAVs of the units issued under the schemes can go up or down depending upon the factors and forces affecting the securities market. Past performance of the sponsor/ Mutual Fund does not guarantee the future performance of the schemes of the Mutual Fund. The names of the schemes do not in any manner indicate either the quality of the schemes,its future prospects or its returns. The NAV of the schemes may be affected by settlement periods and transfer procedures. Trading volumes may restrict the liquidity of the scheme'sinvestments. Before investing, please read the Offer Document for details and risk factors.

Notes: Information on Entry to / Exit from stocks of companies and Top Ten company holdings for each Diversified Equity scheme will be available on request by e-mail.

mutual funds monthly

Documents