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ICIC

I S

ecurit

ies –

Retail R

esearch

Monthly

Report

August 23, 2019

Mutual Fund Review

Equity Market

Update

After seeing a sharp pullback post the general election outcome, Indian

equity markets traded in a narrow range in June but saw a sharp correction

from its all-time highs in July.

The broader market, as reflected by midcaps and small caps, continues to

underperform and has fallen significantly from its highs in January 2018.

Many midcap and small cap stocks offer a good buying opportunity.

Concerns over taxation on foreign investors, growth slowdown and global

market volatility surrounding the trade war between the US and China have

turned foreign investors cautious. However, domestic institutional investors,

particularly mutual funds, have been net buyers in the current fall indicating

a value buying opportunity.

Foreign investors have sold equities worth more than | 23000 crore since

July 2019. Domestic institutional investors, particularly mutual funds, have

been net buyers of | 27000 crore during the same period. The quantum of

buying by domestic mutual funds has increased in last few days indicating

their rising confidence in the market post recent correction. In general,

higher quantum of mutual funds buying indicates emergence of value in the

market.

Outlook

With a deep price correction across the board, 2019 does allow investors to

have a re-look at quality companies with capital efficient businesses and

consistent cash flow generation, which can provide strong returns over a

long term. Times like this should be utilised to accumulate such stocks

through SIP to build up a long term equity portfolio for wealth creation.

Warren Buffet’s famous quote that it is wise to be “Fearful when others are

greedy and greedy when others are fearful” is an apt advice for investors in

a market as such when cyclical uncertainty and volatility is clouding long

term growth potential of an economy. We believe that volatility essentially

opens up an opportunity to build a good long term portfolio. We continue

to advise investors to stick to quality names, which have capital efficient

business model with sustainable growth prospects to steer through the

market volatility.

Given that global growth concerns and renewed tariff war fears are the major

sentiment spoiler for the equity market globally, the government can do little

to tackle the issues, which do not pertain to the domestic economy. Having

said that, we expect the government to continue its growth push focus

through investments as announced in the Union Budget, which, in our view,

should revive the capex cycle, going ahead.

We strongly advise investors to continue their SIPs in equity funds. As long

term investors, SIPs work best as a person can accumulate more at lower

prices. Therefore, the lower one’s SIP returns in the near term, it indicates

that one is accumulating at lower levels. Historically, it has been observed

that lower the historical, the better it is to invest. Negative SIP returns during

a short to medium term is a blessing in disguise for investors. If possible,

one should increase the amount or number of SIP when negative returns are

higher because when the market recovers, the return on accumulated

corpus would be higher and one would end up accumulating higher corpus.

Markets witness sharp correction in last two

months

Source: Bloomberg

Research Analyst

Sachin Jain

[email protected]

9000

9500

10000

10500

11000

11500

12000

Aug-18

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Aug-19

ICICI Securities | Retail Research 2

ICICI Direct Research

Monthly Report | Mutual Fund Review

Industry Synopsis

The MF industry AUM rose marginally by around 1.2% in July 2019 to

~| 24.53 lakh crore from 24.25 lakh crore in June 20119 on the back of

outflows from liquid funds.

Almost all category of debt funds witness inflows particularly liquid funds,

overnight funds, banking & PSU bond funds as investors prefer short

maturity funds particularly institutional investors.

Credit risk funds and medium duration funds continue to witness outflows

for a fourth consecutive month amid rising risk aversion as investors shied

away from taking any credit risk.

In the equity funds category, large cap funds are witnessing higher inflows

in the last two months as investors remained concerned over continued

underperformance of midcap/small cap funds. Multicap funds saw a sharp

drop in inflows in July to just | 327 crore from | 1835 crore in June 2019.

Aggressive hybrid funds witnessed inflows of | 674 crore for the first time

after six months of consecutive outflows.

Exhibit 1: Total AUM and break-up of major AMCs

Source: ACE MF

Exhibit 2: Large cap category witness higher inflows during

July 2019

Source: AMFI

Exhibit 3: Risk aversion continues in debt funds with outflow

continuing from credit risk funds category

Source: AMFI

39%

36%

50%

31%

50%

35%

43%

37%

45%

25%

56%

57%

44%

60%

44%

56%

50% 54%

47%

70

%

5% 6%

6% 9

%

6%

9%

7% 9%

8%

5%

366151

344164

312939

254109

207503

163524

155632

125194

102081

89422

0

50000

100000

150000

200000

250000

300000

350000

400000

0%

20%

40%

60%

80%

HD

FC

ICIC

I

SB

I

Adit

ya B

irla

Reliance

Kotak

UTI

Franklin

Axis

IDFC

| c

rore

Equity % Debt% Others% AUM

Equity Oriented Category Inflow/(Outflow) during July 2019

Large Cap Fund 1,915

Focused Fund 1,873

Mid Cap Fund 1,394

Small Cap Fund 835

ELSS 737

Large & Mid Cap Fund 697

Balanced Hybrid Fund/Aggressive Hybrid Fund 674

Multi Cap Fund 327

Sectoral/Thematic Funds 321

Value Fund/Contra Fund 39

Dividend Yield Fund (25)

Debt Oriented Category Inflow/(Outflow) during July 2019

Liquid Fund 45,441

Overnight Fund 6,021

Banking and PSU Fund 5,914

Money Market Fund 5,063

Corporate Bond Fund 2,573

Ultra Short Duration Fund 601

Short Duration Fund 586

Floater Fund 381

Gilt Fund with 10 year constant duration 80

Long Duration Fund 59

Medium to Long Duration Fund (60)

Gilt Fund (120)

Dynamic Bond Fund (122)

Low Duration Fund (223)

Medium Duration Fund (937)

Credit Risk Fund (3,411)




Category Analysis

Equity Funds

Indian markets witnessed a sharp correction in the last two months. The

banking sector has given up almost all the gains that it witnessed around

election result outcome. However, despite recent underperformance, it

remains one of the better performing categories in the last year.

IT and pharma funds have been able to protect themselves from the recent

fall with almost 0% return compared to 10-12% negative return in banking

or infra funds.

Midcap/small cap continued to underperform as investors shied away and

waited for growth visibility in the midst of weak high frequency data like

weak auto sales, low IIP, PMI numbers and overall low GDP data.

Large caps, however, continue to outperform as investors adopt a cautious

investment approach by remaining invested in quality performing stocks.

Exhibit 4: Small cap/midcap continue to underperform. Pharma funds only category that delivered positive returns in last two

months. IT/banking remain better performers over medium to long term

Source: CRISIL. Category average annualised returns as on Aug 19, 2019

Exhibit 5: Aggressive hybrid fund category emerges as largest category in July

Source: AMFI. AUM as on July 2019

-0.3

-2.2

-4.5

-6.4

-7.7

-8.5

-9.4

-9.6 -9.6

-11.2

-12.8

-17.2

12.4

10.3

6.8

7.0

6.3

6.0

3.4

-4.6

6.3

4.9

3.3

2.4

9.9

12.2

8.1 9.0 9.5

8.4

5.6

2.8

8.8

8.6 9.4

9.2

-20

-15

-10

-5

0

5

10

15

20

Technolo

gy

Bankin

g

Large C

ap

Focused

Large &

Mid

cap

Mult

i cap

Infr

astructure

Pharm

a

ELS

S

Valu

e/C

ontra

Mid

cap

Sm

all C

ap

Returns (

%)

1 year 3 Year 5 year

Equity Oriented Category AUM

Balanced Hybrid Fund/Aggressive Hybrid Fund 139,061

Large Cap Fund 135,998

Multi Cap Fund 135,927

Dynamic Asset Allocation/Balanced Advantage 92,154

ELSS 88,692

Mid Cap Fund 72,956

Arbitrage Fund 63,043

Sectoral/Thematic Funds 59,671

Value Fund/Contra Fund 54,586

Large & Mid Cap Fund 50,072

Small Cap Fund 42,342

Focused Fund 39,570

Equity Savings 17,013

Conservative Hybrid Fund 14,295

Multi Asset Allocation 12,353

Dividend Yield Fund 4,413




Equity Diversified funds

Inflows into large cap funds have seen a sharp uptick in the last two months

while inflows into midcap funds remain stable. Small cap funds are

witnessing some decline in inflows over the last three months.

Midcaps and small caps corrected significantly since the start of CY18,

offering an investment opportunity in select stocks. However, many midcap

and small cap stocks had significantly outperformed prior to the recent

correction. In general, many midcap/small cap stocks are offering a good

investment opportunity, particularly in a stable government environment.

Investors may consider investing lumpsum amount in midcap/small cap

funds from a long term perspective.

Multicap funds offer fund managers flexibility to allocate funds across all

market segments. Therefore, they are relatively better placed from a long

term perspective. Multicap funds should form the major portion of an

investor’s equity allocation.

Exhibit 6: Monthly flows: Large cap funds witness higher inflows in last two months. Inflows into mid/small cap remain stable

while multicap sees sharp reduction in inflows

Source: AMFI

Infrastructure funds – In focus

The re-election of the incumbent government with absolute majority

provides confidence on consistency in the economic governance framework

for the next five years.

The BJP’s manifesto envisages inclusive growth spanning infrastructure,

rural/agri population, industries and basic necessities such as housing &

healthcare that could be a catalyst for a decade of robust economic growth

ahead.

The government has planned overall infrastructure investment to the tune

of | 100 lakh crore by 2022, implying annual investment of | 20 lakh crore.

To meet this, we believe the government will have to step up tendering &

awarding activity exponentially from | 9.6 lakh crore & | 3.3 lakh crore,

respectively, in FY19. This could offer huge opportunities to EPC players and

could see a doubling of the order book from the current level over the next

three years.

All these augur well for efficient and well managed companies operating in

infrastructure and allied activities. We believe the infrastructure sector may

outperform and lead the next market rally.

Investors may invest in infrastructure funds as part of their thematic

allocation with an investment horizon of more than two to three years.

-

500

1,000

1,500

2,000

2,500

Large C

ap F

und

Focused F

und

Mid

Cap F

und

Sm

all C

ap F

und

ELS

S

Large &

Mid

Cap

Fund

Mult

i Cap F

und

Sectoral/Them

ati

c F

und

s

Jul-19 Jun-19 May-19

Recommended Funds

Sundaram Infra Advantage Fund

Tata Infrastructure Fund

UTI Infrastructure Fund




Exchange traded funds (ETFs)

Exhibit 7: ETF AUM rises to all-time high levels of | 1.45 lakh

crore on back of fresh inflows

Source: AMFI

Exhibit 8: ETFs witness record high inflows in July

Source: AMFI

Exhibit 9: Around 15 categories of ETFs available

Source: ACE MF

50000

70000

90000

110000

130000

150000

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

Jan-19

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

| C

rore

Equity ETFs

-3982

178524092820

1634

10878

721

5234

10540

-4241

2432

5383

12353

-10000

-5000

0

5000

10000

15000

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

Jan-19

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Net Inflow

( |

Cr )

Equity ETFs

Nos. Types of ETFs Name of ETF

I Largecap oriented ETFs

1 Nifty 50 ETF Most AMCs

2 Sensex ETF Most AMCs

3 BSE 100 ETF SBI-ETF BSE 100

4 Nifty 100 ETF ICICI Pru Nifty 100 ETF

LIC MF ETF-Nifty 100

Reliance ETF Nifty 100

5 Nifty 100 Quality 30 ETF Edelweiss ETF - Nifty 100 Quality 30

6 Nifty Low Vol 30 ETF ICICI Pru Nifty Low Vol 30 ETF

7 Nifty Next 50 ETF Aditya Birla SL Nifty Next 50 ETF

ICICI Pru Nifty Next 50 ETF

SBI-ETF Nifty Next 50

UTI-Nifty Next 50 ETF

8 Sensex Next 50 ETF SBI-ETF Sensex Next 50

UTI S&P BSE Sensex Next 50 ETF

9 NV 20 ETF ICICI Pru NV20 ETF

Kotak NV 20 ETF

Reliance ETF NV20

II Midcap Oriented ETFs

10 Midcap 100 ETF Motilal Oswal Midcap 100 ETF

11 Nifty Midcap 150 Reliance ETF Nifty Midcap 150

12 Midcap Select ETF ICICI Prudential Midcap Select ETF

III ETF in Multicap segment

13 S&P BSE 500 ETF ICICI Pru S&P BSE 500 ETF

IV ETFs based on sectors/Themes

14 Banking ETF Edelweiss ETF - Nifty Bank

Kotak Banking ETF

SBI-ETF Nifty Bank

15 PSU Bank ETF Kotak PSU Bank ETF

Reliance ETF PSU Bank BeES

ETFs, as a category, are gaining popularity. Apart

from Sensex or Nifty ETFs, many other equity

oriented ETFs are now available tracking various

indices across market cap and sectors




Hybrid funds

In general, hybrid funds witness inflows in most of their categories as volatile

equity markets compelled investors to invest in relatively stable funds.

Hybrid funds viz. conservative hybrid, aggressive hybrid, dynamic asset

allocation, multi asset allocation and equity savings category witness inflow

of | 1580 crore in July 2019 compared to outflow of | 2300 crore in June

2019.

Aggressive hybrid funds witnessed inflows of | 674 crore for the first time

after six months of consecutive outflows. Inflows into aggressive hybrid

funds was after the category had witnessed ~| 12500 crore of outflow from

January 2019 to June 2019. Aggressive hybrid funds category has become

the largest equity oriented category at | 1.39 lakh crore overtaking

multicap/large cap funds category, which both are at similar levels of | 1.36

lakh crore.

Exhibit 10: Aggressive hybrid funds witness inflows in July

for the first time in seven months

Source: AMFI

Exhibit 11: Major hybrid categories witness inflows during

July. AUM in aggressive hybrid funds at | 1.39 lakh crore,

highest across category

Source: AMFI

Debt Funds

Exhibit 12: Sharp fall in G-sec yields leads to duration/gilt funds outperforming significantly in last year. Credit funds average

return turns negative due to negative returns in few funds

Source: CRISIL. Category average annualised returns as on June 19, 2019

-4000

-2000

0

2000

4000

6000

8000

10000

Jul-17

Oct-17

Jan-18

Apr-18

Jul-18

Oct-18

Jan-19

Apr-19

Jul-19

Net Inflow

( |

Cr )

Aggressive Hybrid

Hybrid CategoryInflow/(Outflow)

during July 2019

AUM

Balanced Hybrid Fund/Aggressive Hybrid Fund 674 139,061

Dynamic Asset Allocation/Balanced Advantage 1,324 92,154

Arbitrage Fund 5,810 63,043

Equity Savings (221) 17,013

Conservative Hybrid Fund (284) 14,295

Multi Asset Allocation 91 12,353

16.3

11.7

9.7

7.8

7.4 6.9

6.9

6.0

5.3

2.9

1.4

-1.2

-1.4

-4.1

14.8

12.9

9.3

7.3

8.8

8.5

6.9

6.1

5.5

5.1

3.9

1.9

3.0

1.5

9.5

8.4

7.6

7.0

6.7 7.0

6.8

6.0 6.5

6.1

5.6

5.4

5.7

5.1

-7

-2

3

8

13

18

Long D

uratio

n

Gilt F

unds

Bankin

g a

nd P

SU

Money M

arket

Mediu

m t

o L

ong D

uratio

n

Dynam

ic B

ond

Liq

uid

Overnig

ht

Ult

ra S

hort D

uratio

n

Short D

uratio

n

Corporate B

ond

Credit

Ris

k

Low

Duratio

n

Mediu

m D

uratio

n

Returns (

%)

6 months 1 year 3year




Short-term debt allocation (investment horizon of less than a

year)

We believe ultra-short term funds and low duration fund categories offer a

relatively better investment opportunity.

Ultra short-term bond funds and low duration funds are ideal options to park

money temporarily compared to overnight or liquid fund categories. They

offer higher return potential by investing a higher proportion in a mix of

corporate bonds and commercial papers compared to overnight/liquid

funds. At the same time, most funds in these categories do not have exit

load restrictions, thereby making them liquid from an investors’ perspective.

Money market funds are also a worthwhile option from a liquidity and credit

quality perspective, particularly for conservative investors. However, the

return potential may be lower compared to ultra-short/low duration

categories.

Long term debt allocation (investment horizon of more than a

year)

We believe medium duration funds and credit risk funds categories offer a

relatively better investment opportunity based on risk profile of investors.

Short-term funds are also a worthwhile option for conservative investors.

However, the return potential may be lower compared to medium duration

and credit risk categories due to higher credit quality.

In the medium duration category, many funds offer an optimum mix of credit

quality along with higher return potential. Credit quality in this category is

lower than short duration funds but higher than credit risk category.

We are cautious on credit risk funds as a category, especially in the current

weak credit environment. Credit risk fund category is only suitable for

aggressive investors who want to invest for long term (more than three

years).

Categorisation of debt funds

Exhibit 13: Ultra short/low duration for short-term, corporate bond for long term

should in general be preferred category

Category Comment

Investment Horizon: Less than one year

Overnight funds Maturity up to 1 day

Liquid funds Maturity up to 91 days

Ultra short funds Maturity between 3-6 months

Low duration funds Maturity between 6-12 months

Money market funds Money market securities with maturity up to 1 year

Investment Horizon: More than one year

Short duration Maturity between 1-3 years

Medium duration Maturity between 1-4 years

Medium to long duration Maturity between 4-7 years

Long duration Maturity of more than 7 years

Dynamic bond funds Across duration

Corporate bond funds High rated instruments (AA+ and AAA)

Credit risk funds Below high rated instruments (below AA+)

Gilt funds G-Secs across maturity

Source: ICICI Direct Research

Ultra short term funds and low duration funds with

optimal mix of credit quality are better options to

invest for investment horizon of less than a year

Credit funds should be avoided in a current weak

credit environment. Corporate bond fund category is

best suited for long term debt allocation




Gold: Lower rates, geopolitical tension, volatile capital market

support near term outlook

After trading in a narrow range since the start of calendar year 2019, global

gold prices rose sharply crossing US$1500 per ounce while Indian prices

crossed | 38000 per 10 gram.

Sustained demand for safe haven as US-China trade war aggravates, global

growth slowing signs of slowdown and central banks around the world ease

monetary policy. Investment demand through higher inflows into global

gold ETFs and central bank purchases boosted demand.

The recent sharp rally was boosted by the Trump administration that

threatened fresh tariffs against Chinese goods. The Yuan was allowed to sink

and the US branded China a currency manipulator. The stand-off has

boosted the odds of more easing from the Federal Reserve.

One of the major factors viz. US Federal Reserve interest rate trajectory, is

moving down with more rate cuts expected apart from the recent cut. The

same provides structural supported for higher gold prices as interest rates

have inverse correlation with gold prices.

Many central bankers have bought gold in the last few months including the

Reserve Bank of India. Investor demand in global gold ETF is also witnessing

some interest with the holding increasing.

Exhibit 14: Global gold prices

Source: Bloomberg

Exhibit 15: Indian gold prices

Source: Bloomberg

1000

1100

1200

1300

1400

1500

1600

1700

1800

Aug-12

Aug-13

Aug-14

Aug-15

Aug-16

Aug-17

Aug-18

Aug-19

Global prices ($/ounce)

29000

31000

33000

35000

37000

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

Jan-19

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19

Price (|/10 grams)

Gold prices in near term may find support due to

concerns on trade war and higher volatility in capital

markets




Model Portfolio: Equity

Investors who are wary of investing directly into equities can still get returns

almost as good as equity markets through the mutual fund route. We have

designed three mutual fund model portfolios, viz. conservative, moderate

and aggressive mutual fund portfolios. These portfolios have been designed

keeping in mind various key parameters like investment horizon, investment

objective, scheme ratings, and fund management

Exhibit 16: Equity Model Portfolio


Exhibit 17: Model portfolio performance

Source: ACE MF. Since inception (May 2009) CAGR return as on July 31, 2019

Particulars Aggressive Moderate Conservative

Risk ReturnHigh Risk- High

Return

Medium Risk -

Medium Return

Low Risk - Low

Return

Funds Allocation

Mirae Asset Largecap Fund 20 20 20

HDFC Equity Fund - 20 20

Principal Emerging Bluechip Fund - 20 20

ICICI Prudential Midcap Fund 20 20 -

HDFC Smallcap Fund 20 20 -

Franklin India Focused Equity Fund 20 - -

L&T India Value Fund 20 - -

Reliance Largecap Fund - 20

IDFC Core Equity Fund - - 20

Total 100 100 100

% Allocation

15.3%

14.0% 14.0%

13.4%

10.0%

12.0%

14.0%

16.0%

Aggressive Moderate Conservative BSE 100 TRI

%

Aggressive Moderate Conservative BSE 100 TRI




Model Portfolio: Debt

Investors who are wary of investing directly into equities can still get returns

almost as good as equity markets through the mutual fund route. We have

designed three mutual fund model portfolios, viz. conservative, moderate

and aggressive mutual fund portfolios. These portfolios have been designed

keeping in mind various key parameters like investment horizon, investment

objective, scheme ratings, and fund management

Exhibit 18: Equity Model Portfolio


Exhibit 19: Model portfolio performance

Source: ACE MF. Since inception (May 2009) CAGR return as on July 31, 2019

Note: Index: 0-6 month’s portfolio – Crisil Liquid Fund Index; six months-one year – Blended Index with 50% weight to Crisil

Liquid Index, 50% weight to Crisil Short Term Bond Fund Index; Above 1 year: Crisil Short Term Bond Fund Index

Objective LiquidityLiquidity with

moderate return

Above FD

Funds Allocation

SBI Mag Ultra Short Duration 20 20

ICICI Pru Savings Plan 20

Kotak Savings Fund 20

HDFC Medium Term Fund 20 20

IDFC Low Duration Fund 20 20 20

IDFC Corporate Bond Fund 20 20

L&T Ultra Short Term Fund 20 20

HDFC Corporate Bond Fund 20

Aditya Birla SL Corporate Bond Fund 20

Total 100 100 100

% Allocation

8.1% 8.1%

8.3%

7.6%

7.9%

8.2%

5.0%

6.0%

7.0%

8.0%

9.0%

0-6 Months 6Months - 1Year Above 1yr

%

Portfolio Index




Mutual Fund Recommendation

Exhibit 20: Equity Oriented Funds


Exhibit 21: Debt Funds


Largecaps IDFC Large Cap Fund

Mirae Asset Largecap Fund

Reliance Large Cap Fund

Large and Midcaps IDFC Core Equity Fund

Principal Emerging Bluechip Fund

SBI Large and Midcap Fund

Multicaps HDFC Equity Fund

L&T India Equity Fund

UTI Equity Fund

Midcaps ICICI Prudential Midcap Fund

Kotak Emerging Equity Fund

L&T Midcap Fund

Smallcaps HDFC Small Cap Fund

L&T Emerging Businesses Fund

Reliance Small Cap Fund

Focused Franklin India Focused Equity Fund

ICICI Pru Focused Equity Fund

Reliance Focused Equity Fund

ELSS Aditya Birla Tax Relief 96 Fund

DSP Blackrock Tax Saver Fund

IDFC Tax Advantage Fund

Aggressive Hybrid HDFC Hybrid Equity Fund

ICICI Pru Equity & Debt Fund

Mirae Asset Hybrid Equity Fund

Category wise top picks

Category Fund Category Comment

Overnight / Liquid / Ultra Short Term Kotak Savings Fund Volatility - low

L&T Ultra Short Term Fund Investment horizon - 0-6m

SBI Magnum Ultra Short Duration Fund

Low Duration / Money Market ICICI Prudential Savings Fund Volatility - low

IDFC Low Duration Fund Investment horizon - 0-12m

SBI Low Duration Fund UTI Treasury Advantage Fund

Short Term HDFC Short Term Debt Fund Volatility - low

IDFC Bond Fund - Short Term Investment horizon - more than 1 year

L&T Short Term Bond Fund Credit risk - low

Medium Term HDFC Medium Term Debt Fund Volatility - medium

IDFC Bond Fund - Medium Term Plan Investment horizon - more than 1 year

SBI Magnum Medium Duration Fund Credit risk - medium

Medium to Long Term / Long Term Aditya Birla SL Income Fund Volatility - high

ICICI Pru Bond Fund Investment horizon - more than 1 year

Reliance Income Fund Credit risk - low

Dynamic Bond Fund ICICI Pru All Seasons Bond Fund Volatility - high

IDFC Dynamic Bond Fund Investment horizon - more than 1 year

Kotak Dynamic Bond Fund Credit risk - medium

Corporate Bond Aditya Birla SL Corporate Bond Fund Volatility - low

HDFC Corporate Bond Fund Investment horizon - more than 1 year

IDFC Corporate Bond Fund Credit risk - low

Credit Risk Axis Credit Risk Fund Volatility - medium

IDFC Credit Risk Fund Investment horizon - more than 1 year

SBI Credit Risk Fund Credit risk - high

Gilt IDFC G-Sec Fund - Investment Plan Volatility - high

Reliance Gilt Securities Fund Investment horizon - more than 1 year

UTI Gilt Fund Credit risk - low

Category wise top picks




Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No. 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]

Disclaimer

ANALYST CERTIFICATION

We, Sachin Jain, CA, Research Analyst, author and the name subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject

issuer(s) or Funds. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.

Terms & conditions and other disclosures:

ICICI Securities Limited (ICICI Securities) AMFI Registration. No.: ARN-0845. Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India. ICICI

Securities Limited is a Sebi registered Research Analyst having registration no. INH000000990. ICICI Securities Limited Sebi Registration is INZ000183631 for stock broker. ICICI Securities is a subsidiary of

ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund

management, etc. (“associates”), the details in respect of which are available on www.icicibank.com.

ICICI Securities is one of the leading distributors of Mutual Funds and participate in distribution of Mutual Fund Schemes of almost all AMCs in India.

The selection of the Mutual Funds for the purpose of including in the indicative portfolio does not in any way constitute any recommendation by ICICI Securities Limited (hereinafter referred to as ICICI

Securities) with respect to the prospects or performance of these Mutual Funds. The investor has the discretion to buy all or any of the Mutual Fund units forming part of any of the indicative portfolios on

icicidirect.com. Before placing an order to buy the funds forming part of the indicative portfolio, the investor has the discretion to deselect any of the units, which he does not wish to buy. Nothing in the

indicative portfolio constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to the investor's specific circumstances.

The details included in the indicative portfolio are based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy

or completeness guaranteed. The funds included in the indicative portfolio may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives,

financial positions and needs.

This may not be taken in substitution for the exercise of independent judgement by any investor. The investor should independently evaluate the investment risks. ICICI Securities and affiliates accept no

liabilities for any loss or damage of any kind arising out of the use of this indicative portfolio.

Past performance is not necessarily a guide to future performance. Actual results may differ materially from those set forth in projections. ICICI Securities may be holding all or any of the units included in

the indicative portfolio from time to time as part of our treasury management. ICICI Securities Limited is not providing the service of Portfolio Management Services (Discretionary or Non Discretionary) to

its clients.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

Kindly note that such research recommended funds in indicative portfolio are not based on individual risk profile of each customer unless a customer has opted for a paid Investment Advisory Service offered

by I-Sec. Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

The information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other

person or to the media or reproduced in any form, without prior written consent of ICICI Securities Limited. The contents of this mail are solely for informational purpose and may not be used or considered

as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. While due care has been taken in preparing this mail, I-Sec and affiliates

accept no liabilities for any loss or damage of any kind arising out of any inaccurate, delayed or incomplete information nor for any actions taken in reliance thereon. This mail/report is not directed or intended

for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be

contrary to law, regulation or which would subject I-SEC and affiliates to any registration or licensing requirement within such jurisdiction.

ICICI Securities and/or its associates receive compensation/ commission for distribution of Mutual Funds from various Asset Management Companies (AMCs). ICICI Securities host the details of the

commission rates earned by ICICI Securities from Mutual Fund houses on our website www.icicidirect.com. Hence, ICICI Securities or its associates may have received compensation from AMCs whose

funds are mentioned in the report during the period preceding twelve months from the date of this report for distribution of Mutual Funds or for providing marketing advertising support to these AMCs. ICICI

Securities also provides stock broking services to institutional clients including AMCs. Hence, ICICI Securities may have received brokerage for security transactions done by any of the above AMCs during

the period preceding twelve months from the date of this report.

It is confirmed that Sachin Jain, CA, Research Analysts of this report have not received any compensation from the Mutual Funds house whose funds are mentioned in the report in the preceding twelve

months.

Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

ICICI Securities or is associates may be holding all or any of the units included in the indicative portfolio from time to time as part of our treasury management. Hence, ICICI Securities or its associates may

own 1% or more of the units of the Mutual Funds mentioned in the report as of the last day of the month preceding the publication of the research report.

Research Analysts or their relatives of this report do not own 1% or more of the units of the Mutual Funds mentioned in the report as of the last day of the month preceding the publication of the research

report.

Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies/ AMCs including the AMCs whose

funds are mentioned in this report or may have invested in the funds mentioned in this report.

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