Sharekhan Mutual Fund Finder

October 2016 | Issue No. 60 www.sharekhan.com Sharekhan’s top fund picks Top equity fund picks Data as on September 01, 2016 Returns (%) Star Compounded annualised Scheme name rating NAV (Rs) Absolute 6 months Since 1 year 3 years 5 years inception Large-cap funds SBI Bluechip Fund êêêêê 32.1 23.3 17.7 28.8 19.7 11.7 Birla Sun Life Frontline Equity Fund êêêê 183.2 26.0 18.1 25.8 18.1 23.1 Kotak 50 êêêê 188.5 22.4 14.1 24.3 14.7 24.4 ICICI Prudential Focused Bluechip Equity Fund êêêê 32.3 25.9 16.2 22.5 16.3 15.2 UTI Bluechip Flexicap Fund êêêê 27.0 24.4 14.1 20.8 14.2 9.9 Mid-cap funds DSP BlackRock Micro Cap Fund êêêêê 50.8 36.6 26.7 55.0 28.3 19.3 Franklin India Smaller Companies Fund êêêêê 47.3 33.0 26.2 47.3 29.1 15.7 Mirae Asset Emerging Bluechip Fund êêêê 37.1 32.4 24.8 46.5 28.0 23.7 SBI Magnum Midcap Fund êêêê 69.8 29.7 19.8 45.2 26.4 18.5 Birla Sun Life Small & Midcap Fund êêêê 30.5 37.8 27.0 41.4 21.4 12.8 Multi-cap funds Birla Sun Life Pure Value Fund êêêêê 46.2 33.6 22.9 43.9 23.8 19.9 L&T India Value Fund êêêêê 28.1 26.9 16.5 36.9 23.3 16.8 Franklin India High Growth Companies Fund êêêê 31.9 26.5 13.5 34.8 22.8 13.6 SBI Magnum Global Fund 94 êêêêê 143.3 18.9 8.7 33.3 20.6 15.2 ICICI Prudential Multicap Fund êêêê 234.5 29.8 18.5 28.9 18.6 15.5 Tax-saving funds Reliance Tax Saver (ELSS) Fund êêêêê 49.9 28.1 16.8 36.6 21.0 15.8 Axis Long Term Equity Fund êêêêê 33.4 20.5 10.6 33.3 22.4 19.8 DSP BlackRock Tax Saver Fund êêêê 37.9 32.2 21.8 31.0 20.2 14.9 ICICI Prudential Long Term Equity Fund (Tax Saving) êêêê 303.5 25.7 16.5 28.5 18.8 22.2 BNP Paribas Long Term Equity Fund êêêê 31.5 19.2 9.4 26.0 18.2 11.3 Thematic funds Franklin Build India Fund êêêêê 32.4 29.8 17.6 40.7 24.9 18.3 Kotak Infrastructure & Economic Reform Fund êêêê 17.4 28.3 17.6 35.6 14.0 6.7 Sundaram Rural India Fund êêêêê 33.7 39.4 34.0 33.5 18.3 12.5 DSP BlackRock Natural Resources & New Energy Fund êêêêê 24.0 43.2 43.9 30.9 10.6 11.1 Birla Sun Life India GenNext Fund êêêê 63.8 30.8 21.1 30.7 21.2 18.2

(*invested on 1st day of every month) Top SIP fund picks (monthly SIP of Rs1,000)* Data as on September 01, 2016 Investment period 1 year 3 years 5 years Total amount invested (Rs) 12,000 36,000 60,000 Present Avg. annual Present Avg. annual Present Avg. annual Funds would have grown to (Rs) Nav (Rs) value (Rs) return (%) value (Rs) return (%) value (Rs) return (%) Large-cap funds SBI Bluechip Fund 32 13,382 12.6 47,567 10.0 1,00,256 11.0 Birla Sun Life Frontline Equity Fund 183 13,604 14.6 46,237 8.9 96,219 10.1 Reliance Top 200 Fund 26 13,359 12.4 45,436 8.3 93,863 9.5 ICICI Prudential Focused Bluechip Equity Fund 32 13,466 13.3 44,659 7.7 90,700 8.8 UTI Bluechip Flexicap Fund 27 13,408 12.8 43,515 6.7 86,754 7.8 Mid-cap funds DSP BlackRock Micro Cap Fund 51 14,006 18.3 60,511 19.5 1,40,977 19.0 Mirae Asset Emerging Bluechip Fund 37 14,054 18.7 56,189 16.5 1,30,859 17.2 Franklin India Smaller Companies Fund 47 14,037 18.6 55,763 16.2 1,34,402 17.8 Canara Robeco Emerging Equities 70 13,722 15.7 55,243 15.8 1,27,131 16.5 SBI Magnum Midcap Fund 70 13,634 14.9 53,816 14.8 1,26,886 16.5 Multi-cap funds Birla Sun Life Pure Value Fund 46 14,024 18.4 53,642 14.6 1,21,874 15.5 L&T India Value Fund 28 13,409 12.8 51,355 12.9 1,13,676 13.9 Franklin India High Growth Companies Fund 32 13,323 12.0 48,622 10.8 1,09,041 12.9 SBI Magnum Global Fund 94 143 12,960 8.7 47,862 10.2 1,05,341 12.1 BNP Paribas Dividend Yield Fund 38 13,265 11.5 46,204 8.9 95,681 10.0 Tax-saving funds DSP BlackRock Tax Saver Fund 38 13,972 18.0 49,349 11.4 1,04,319 11.9 Axis Long Term Equity Fund 33 13,103 10.0 47,930 10.3 1,07,938 12.7 Reliance Tax Saver (ELSS) Fund 50 13,509 13.7 47,876 10.3 1,04,438 11.9 ICICI Prudential Long Term Equity Fund (Tax Saving) 304 13,461 13.3 46,522 9.2 98,776 10.7 HDFC Long Term Advantage Fund 266 13,675 15.3 45,226 8.1 92,473 9.2 For Private Circulation only For Private

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Performance of hybrid and debt funds

Top Fund Picks (Hybrid) Returns (%) <1 Year absolute and >1 year CAGR Equity Balanced Schemes Rating Stars NAV 6 Months 1 Year 3 Years 5 Years Since Inception HDFC Balanced Fund êêêê 121 22.6 14.9 28.2 17.1 16.9 Tata Balanced Fund êêêê 186 20.7 12.3 26.6 18.5 16.7 Reliance RSF - Balanced êêêê 44 19.9 14.8 25.5 16.8 14.2 ICICI Prudential Balanced êêêê 104 23.3 17.1 25.5 17.9 14.9 SBI Magnum Balanced Fund êêêêê 105 17.1 12.6 25.2 18.2 16.4

Debt MIP Schemes AUM NAV 6 Months 1 Year 3 Years 5 Years Exp Ratio Birla Sun Life MIP II - Wealth 25 1,070 34 19.0 16.1 18.8 13.5 2.1 ICICI Prudential MIP 25 1,172 35 13.4 12.4 15.8 12.0 2.0 SBI Magnum MIP 404 35 10.5 12.7 13.8 11.1 2.2 BNP Paribas MIP 204 24 10.9 10.7 12.2 10.4 2.5 UTI Monthly Income Scheme 275 32 9.9 10.3 12.1 9.6 1.8

Equity Arbitrage Schemes AUM NAV 1 Months 3 Months 6 Months 1 Years Exp Ratio HDFC Equity Savings Fund 151 30 2.2 9.5 18.2 15.3 2.5 ICICI Prudential Equity Income Fund 575 12 2.3 7.6 15.1 14.4 1.2 SBI Equity Savings Fund 219 11 0.7 4.5 11.8 12.8 2.5 Kotak Equity Savings Fund 812 12 0.8 4.1 8.5 8.6 1.6 Reliance Equity Savings Fund 911 11 0.9 4.7 11.5 8.2 2.0 Note: A hybrid fund is a category of mutual fund that is made up of a mix of equity and debt portfolio Top Fund Picks (Debt) Data as on September 01, 2016 Tax rates for debt funds Returns (%) (simple annualised) AAUM ** Exp* Scheme Ind./HUF Corp. NRI Scheme name 3 6 1 (in %) (in %) (in %) (Rs cr) 1 mth ratio (%) mths mths yr Dividend Distribution Tax Accruals (payable by the scheme) Birla Sun Life Medium Term Plan 5,822 13.01 13.57 13.55 10.64 1.68 Debt schemes 28.84^ 34.608** 28.84^ HDFC Medium Term Opportunities Fund 4,670 9.41 13.70 12.62 10.11 0.34 Money mkt schemes 28.84^ 34.608** 28.84^ Kotak Bond Short Term Plan 2,908 10.98 12.54 11.70 9.22 1.10 ^(25% + 12 % Surcharge + 3% cess) BNP Paribas Short Term Income 184 7.83 10.99 10.28 8.72 1.22 **(30% + 12 % Surcharge + 3% cess) Crisil Short Term Bond Fund Index -- 8.76 11.45 10.94 9.42 -- Scheme Ind./HUF Corp. NRI Duration Funds (in %) (in %) (in %) ICICI Prudential Long Term Gilt Fund 1,544 17.13 29.25 26.33 14.33 1.07 Long-term capital gain (investments > 36 months) Franklin India GSF - LTP 373 11.39 27.86 24.38 13.48 1.74 Debt schemes Birla Sun Life Dynamic Bond Fund 12,445 15.59 25.75 22.59 13.25 1.62 Without indexation - - 10% ^ Reliance Dynamic Bond Fund 5,367 13.64 21.96 18.81 11.75 1.68 With indexation 20# 20** 20# ^ Crisil 10 Yr Gilt Index -- 8.56 17.18 14.11 11.52 -- Short-term capital gain Ultra Short term (investments = or < 36 months) Birla Sun Life Savings Fund 13,606 8.69 10.01 10.40 9.22 0.39 Debt schemes* 30# 30** 30# ^ ICICI Prudential Flexible Income 16,043 8.66 9.79 9.92 8.94 0.33 #Surchage at 12% is to be levied in case of IDFC Ultra Short Term Fund - Reg - Growth 3,863 8.25 9.57 9.84 8.77 0.37 individual/HUF unit holders when their income exceeds Rs1 crore Crisil Liquid Fund Index -- 6.80 7.38 7.86 7.78 -- **Surchage at 7% is to be levied for domestic Liquid corporate unit holders when their income exceeds HDFC Liquid Fund 33,843 6.91 7.26 7.87 7.91 0.20 Rs1 crore but less than Rs10 crore and ^Short-term/long-term capital gain tax will be IDFC Cash Fund - Reg - Growth 10,648 6.93 7.27 7.88 7.90 0.18 deducted at the time of redemption in case of NRI BNP Paribas Overnight Fund 1,009 6.97 7.28 7.81 7.83 0.06 investors only Crisil Liquid Fund Index -- 6.80 7.38 7.86 7.78 -- *Assuming investors fall in the highest tax bracket

SIP calculator Crorepati calculator Monthly SIP of Rs5,000 Target: Rs10,000,000 Expected Expected maturity value of Expected Expected investment per month rate of your monthly investment (Rs) rate of to achieve your goal (Rs) returns Years to achieve financial goal returns Years to achieve financial goal (pa) 5 10 20 25 (pa) 5 10 15 20 8% 369,834 920,828 2,964,736 4,786,833 8% 135,196 54,299 28,708 16,865 10% 390,412 1,032,760 3,828,485 6,689,452 10% 128,070 48,414 23,928 13,060 15% 448,408 1,393,286 7,579,775 16,420,369 15% 111,506 35,887 14,775 6,597 25% 599,222 2,664,023 34,295,476 118,774,708 25% 83,442 18,769 5,114 1,458

Sharekhan 2 October 2016 Sharekhan Mutual Fund Finder

Fund of the month

Franklin India Smaller Companies Fund Key features Objective • Fund category Mid-cap The Fund seeks to provide long-term capital appreciation • Launch date January 13, 2006 by investing in mid and small cap companies. • Minimum investment Rs5,000 • Load structure If redeemed bet. 0 year to 1 year exit load is 1% • Fund manager R Janakiraman, Srikesh Nair, Hari Shyamsunder • Latest NAV (gr) Rs47.33 Scheme’s performance • Latest NAV (div) Rs27.70 • Expense ratio (%) 2.3219 Franklin India Smaller Companies Fund Mid Cap Category Average • AUM Rs2,886.5 cr Nifty Free Float Midcap 100 • Benchmark Index Nifty Free Float Midcap 100

50.0 47.3 45.0 41.4 40.0 33.0 35.0 32.3 Holdings by market cap 30.6 29.0 29.1 30.0 26.2 25.0 23.2 19.8 Particulars % 18.2 19.6 20.0 15.9 15.718.4 15.0 Nifty 50 11.6 10.0 5.0 Nifty Free Float Midcap 100 9.8 0.0 Nifty Free Float Small cap 100 5.0 6 Months 1 Year 3 Years 5 Years Since Inception Returns < 1 yr: Absolute, > 1yr: CAGR BSE Sensex - Top 5 holdings 17.4

Style box analysis Top 10 holdings 28.1

Large-cap Top 10 stock holdings (total no. of scrips: 72) Mid-cap Company name % of net assets Small-cap Equitas Holdings 4.99 Growth blend value Finolex Cables 4.36 Top 5 sectors Yes Bank 2.96 Eclerx Services 2.59 Financial Services 21.78 Repco Home Finance 2.54 Industrial Manufacturing 19.60 HDFC Bank 2.21 Construction 6.49 Fag Bearings India 2.17 Consumer Goods 5.96 Voltas 2.15 IT 5.71 Deepak Nitrite 2.09 0.00 5.00 10.00 15.00 20.00 25.00 Finolex Industries 2.06

Scheme analysis With more than ten years of experience, the Fund has been an outstanding performer in comparison with both, the benchmark index Nifty Free Float Midcap 100 and the category average. Despite the volatility and uncertainties in the market, the Fund has performed better than its peers, giving returns of 26.2% over the last one year as against returns of 19.6% and 18.2% given by the benchmark index and the category average, respectively, in the same period. Over the longer time horizon of three years, the Fund has grown at 47.3% compounded annual growth rate (CAGR) while the Nifty Free Float Midcap 100 Index and the category average have grown at 32.3% and 41.4%, respectively. In the recent months, the Fund has garnered returns of 33% compared to 29% & 30.6% returns posted by the benchmark index and the Mid Cap category average, respectively. The Fund currently has about 72 stocks in its portfolio. It has nearly 90% of its net assets exposed to equity while the rest is exposed to other money-market instruments. The top ten stocks form about 28% of the portfolio. The Fund has invested ~21.78% of its funds in the Financial Services sector followed by Industrial Manufacturing and Construction sectors, with allocations of 19% and 6%, respectively.

Sharekhan 3 October 2016 Sharekhan Mutual Fund Finder Mutual fund Benefits of MF-IN-DEMAT l Lower lock-in-period: These schemes have a lower lock-in l Simplicity & ease: You can purchase/redeem/flexi SIP in period of three years as compared with the other tax saving over 1,000 schemes through NSE. avenues. A mandatory lock-in for three years inculcates a long-term investment habit. l Instant order placement: Now you can place or modify orders instantly between 9.00am and 2.00pm. l Superior return: Investments in equity over a long term have historically delivered better returns than the “guaranteed l Dematerialised mutual fund units: You can transfer your return” avenues. existing mutual fund portfolio to your demat account. l Tax-free gain: Dividends and long-term gains are tax-free l Single view of all your holdings: You will have a consolidated (these schemes give you the twin options of tax savings and demat statement showing a single view of all your holdings capital gains). in equities and mutual funds across AMCs. l SIP: Investors can opt for a systematic investment plan l Instant transaction proof: You can view order details and keep on investing small amounts periodically, say on a instantaneously on placing orders on the MF-IN-DEMAT monthly basis. platform. l No additional KYC: For demat account holders, no additional KYC is needed. Knowledge Today l Monthly Income Scheme (MIP): An MIP is a debt mutual fund scheme which invests a small part of the Systematic Investment Plan (SIP) funds (around 15%-25%) in equities. It offers regular l Disciplined investing: Through SIP you can choose to invest income in the form of periodic dividend payouts. Due fixed amounts (as low as Rs500) in a mutual fund scheme at to the presence of equity, MIP returns can be volatile. regular intervals (like every month or every quarter) for a chosen period of time (say for a year). l Accumulate wealth: Set aside a small amount every month How to place orders in Sharekhan MF–IN-DEMAT through SIP and achieve financial goals like buying a car or l Log on to www.sharekhan.com and click on “Login”. a house. l Click on “Mutual Funds”. l Beat inflation: Equity investing can help you combat l A welcome screen will be displayed after accepting terms inflation that diminishes the value of your savings. and conditions. l Rupee cost averaging: A regular investment in a mutual l For the first time log in on the online mutual fund page; fund scheme can reduce the cost of acquiring mutual fund click and accept terms and conditions. units over a longer period as you end up buying more units when the price is low and fewer units when the price is l Click on “Place Order”. high. l Transfer funds from the bank account to the mutual fund l Fewer efforts: You can start an SIP by simply placing an pool account or allocate funds from the trading account to order by logging on to Sharekhan’s online mutual fund page. the mutual funds pool account. Click on the “SIP” button and fill in the SIP amount, SIP date l Select scheme available under MF-IN-DEMAT and confirm etc and provide the information asked by the system. order. Tax-saving mutual fund schemes l Successful order placement page is displayed. l Tax waiver (ELSS): Tax benefit on investments up to Rs150,000.

Fund ranking procedure Top equity funds: We have identified the best equity-oriented as indicated by at least 10% of the average category-corpus, schemes available in the market today based on the following the past performance as indicated by one-year, three-year and five parameters: the past performance as indicated by the one- five-year returns and the risk returns ratios, namely Sharpe, year, two-year and three-year returns, the Sharpe ratio and Information and Sortino. Information ratio. For our final selection of schemes, we have generated a total Sharekhan mutual fund ranking scale score for each scheme giving 60% weightage each to the relative Stars Description performance as indicated by the one-year, two-year and three- êêêêê year returns, 20% weightage to the relative performance as For top 10 percentile of the eligible schemes indicated by the Sharpe ratio and the remaining 20% to the êêêê Next 22.5 percentile of the eligible schemes relative performance as indicated by the Information ratio of êêê Next 35 percentile of the eligible schemes the scheme. êê Next 22.5 percentile of the eligible schemes Top SIP funds: We have identified the best equity scheme for SIP investment based on three parameters: minimum corpus ê

Disclaimer Nothing in this report constitutes investment advice or tax advice in any form and these products may or may not be suitable for you. Investors should make independent judgment taking into account specific investment objectives, financial situations and needs before taking any investment decision. Mutual fund investments are subject to market risk. Please read the offer document carefully before investing. Past performance may or may not be sustained in the future. This document has been prepared by Sharekhan Ltd. (SHAREKHAN) and is intended for use only by the person or entity to which it is addressed to. This document may contain confidential and/or privileged material and is not for any type of circulation and any review, retransmission, or any other use is strictly prohibited. This document is subject to changes without prior notice. 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Also, there may be regulatory, compliance, or other reasons that may prevent SHAREKHAN and affiliates from doing so. Sharekhan provides non-advisory/order execution services for Mutual Funds. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Mutual fund investments are subject to market risk. Please read the offer document carefully before investing. Also, Recipients of this report should also be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The user assumes the entire risk of any use made of this information. 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