Monthly Issue 3

Vol.
5, Issue IV, Pages 60, April 2013
From the Managing Directors Desk

Indian equity markets have been trending downwards with about 6% negative movement since the start 2013. This may be primarily on account of perceived political instability and external factors impacting the global sentiments like Euro Zone sovereign default and untoward developments in North Korea. Though there may be unrest in the short term, the long term Indian growth story remains intact. We have already started to witness green shoots of an economic turnaround in some of the latest Anup Bagchi data points. Trade deficit has MD & CEO shown signs of improvement in ICICI Securities Ltd. February, shrinking to less then $15 billion from an average of over $19.2 billion in December quarter. Moreover, Indian equities have witnessed record FII inflow of over $10 billion in first 100 days of calendar year. The crude prices have started to cool off in the international market. Most of the macro economic issues in India would be automatically taken care off with lower fuel prices. Fall in crude prices would benefit India on three major counts; firstly, it will bring down the current account deficit, secondly, it will bring down imported inflation, and thirdly it would help reduce under recoveries faster than anticipated, which in turn would help contain the fiscal deficit. In addition, the Oil Marketing Companies have been consistent in passing on the diesel price hike to consumers. Collectively, this has immensely benefited the expected fuel under-recovery for FY14, which has come down from Rs 1,30,000 crore to Rs 93,000 crore.
The government has also increased the duty on gold imports which may taper down the gold imports. Moreover, the loosing sheen of gold in the international market would put its hedge against inflation tag under risk. This may reduce Indian consumers penchant to the unproductive asset. With Gold and crude collectively forming about 60% of our import bill, softness in their price augers well for the Indian economy. Wholesale Price Index (WPI) has also fallen down to 40-month low of 5.96% for March, which sets the path for further repo rate cut by the Reserve Bank. Declining interest rates would not only boost discretionary spending, but would also help reduce the cost of funds and improve investments, thereby restarting the capex cycle. There may not be overnight solutions to address the economic slowdown, but the government has been steadfast in undertaking reformist measures in the last six months, which would have a positive bearing in the longer term. There have been positive developments on various other fronts like addressing coal linkages and coal pooling, State Electricity Board (SEB) restructuring, favorable judgments in a couple of Ultra Mega Power Projects (UMPP) projects, speeding up of infrastructure clearances etc. While the government has been seriously tackling the policy logjam that prevailed in yesteryears, the political uncertainty remains till the elections. Though the domestic factors have shown improvements, their reflection on the equity markets may take some time. Moreover, external factors on the Euro Zone and North Korea would continue to play in the minds of investors. We expect that the markets may remain range bound in the immediate future. However, we would advice investors to stick to buying in a staggered manner as it may be difficult to time the market. Building a long term portfolio with a Systematic Investment Plan (SIP) approach is always advisable in a volatile market.
ICICIdirect Money Manager 1
April 2013
EDITORIAL
Investing directly in equities can be an overwhelming experience, but not everyone has the time or expertise to research so many individual stocks available. Mutual funds offer a good alternative here, as you let the fund manager do much of the work for you. But among mutual funds also, the selection is wide with thousands of funds to choose from. How do you know which ones are right for you? In general, when investors select mutual funds, they take into account only past performance. However, there are multiple factors you should consider, such as fund manager's expertise, his track record, riskadjusted rate of return, size of the fund, expense ratio, and so on. Choosing the right funds based on your needs is an integral part of building a good mutual funds portfolio. Our cover story explains you how to narrow down the multitude of funds. I would also like to draw your attention to our updated Model Mutual Funds Portfolio. We've constructed three portfolios - conservative, moderate and aggressive - keeping in mind various key parameters like investment objective, time horizon, scheme ratings, and fund management. This package is ideal for building up a wholesome mutual funds portfolio. The edition also offers comprehensive information and analysis on mid-cap mutual funds. Lastly, do not forget to check out our new columns - 'Getting Technical' by Dharmesh Shah, Head - Technical Research, and 'Derivatives Strategy' by Amit Gupta, Head - Derivatives Research, who share their views on markets going ahead. So read on, stay updated and involved. Do write in with your feedback at moneymanager@icicisecurities.com and share your thoughts. Take ICICIdirect Money Manager with you on the go! Your magazine is now available on
Editor & Publisher Coordinating Editor Editorial Board Editorial Team : Abhishake Mathur CFPCM, : Yogita Khatri : Sameer Chavan, Pankaj Pandey : Anil Shenoy, Azeem Ahmad, Nithyakumar VP , Nitin Kunte, Sachin Jain, Shaboo Razdan, Sheetal Ashar, Venil Shah
ICICIdirect Money Manager
April 2013
CONTENTS
MD Desk........................................................................................................... 01 Editorial............................................................................................................ 02 Contents........................................................................................................... 03 News................................................................................................................. 04 Markets Round-up & Outlook......................................................................... 05 Getting Technical with Dharmesh Shah........................................................ 07 Derivatives Strategy by Amit Gupta.............................................................. 09 Stock Ideas: Dish TV and Power Grid............................................................ 12 Opinion: Gold price crash - A buying opportunity? Gold has witnessed sharp fall in prices. Is this a buying opportunity? Here's what our Research Head, Pankaj Pandey has to say........................... 16 Flavour of the Month: How to choose the right mutual fund Learn how to evaluate mutual funds and find the right one for you............. 18 Tte--tte Interview with Kenneth Andrade, CIO, IDFC Mutual Fund............................. 26 Ask Our Planner - Your personal finance queries.......................................... 30 Your Financial Health Check........................................................................... 33 Primer: How MF investments are taxed......................................................... 36 Mutual Fund Analysis: Category Midcap................................................... 38 Equity Model Portfolio.................................................................................... 44 Mutual Funds Model Portfolio........................................................................ 47 Quiz Time......................................................................................................... 49 Monthly Trends................................................................................................ 50 Premium Education Programmes Schedule.................................................. 54
Important: All the contents of ICICIdirect Money Manager are the exclusive property of ICICI Securities Ltd. No article, either in whole or in part, may be published circulated or distributed through any medium without the express consent of ICICI Securities Ltd. Join us on Facebook at http://www.facebook.com/icicidirect ICICIdirect Money Manager 3
April 2013
NEWS
Inflation-indexed bonds may be issued in a month: RBI The Reserve Bank is expected to launch within a month the inflation-indexed bonds (IIBs), with 7-15 years maturity, which will help investors hedge their savings against inflation. "This was announced in the Budget. We have also announced in our auction calendar and we hope (to issue IIBs) within a month's time," said RBI Deputy Governor H R Khan. "Bonds will have their own guidelines and features. As of now it will be linked to Wholesale Price Index... Every six months, it will be indexed," he said. Courtesy: The Economic Times IRDA allows kirana shop, PCO owners to sell micro-insurance products Insurance regulator IRDA has allowed owners of kirana shops, medical stores, petrol pumps, PCOs and fair price shops to sell micro-insurance products in rural areas. IRDA has also allowed regional rural banks, rural and urban cooperative banks, district cooperative banks, primary agriculture societies and cooperative societies to act as micro insurance agents in rural areas in an effort to increase insurance penetration particularly in remote areas and to cover poor families under insurance cover. Micro insurance schemes are designed for the lower income population. These policies aim to cover risk of poor families from illness, injury or death. As the coverage value is lower than a usual insurance plan, the insured people pay smaller premiums. Courtesy: Cafemutual New interest rates on PPF, other schemes The Reserve Bank has notified a 0.1 per cent reduction each in interest rates on the Public Provident Fund (PPF) and the Senior Citizen Savings Scheme (SCSS), to be effective from the financial year beginning April 1. The rate of interest on PPF has been lowered from 8.8 per cent to 8.7 per cent. The rate of interest on a five-year SCSS has been reduced to 9.2 per cent from 9.3 per cent for entire 2013-14 financial year, it said. The National Savings Certificates (NSC), having maturity of five and 10 years, will attract 8.5 per cent and 8.8 per cent interest, respectively, down 0.10 per cent each. Courtesy: Business Standard I-T dept to 'name and shame' habitual tax evaders The Income Tax department has decided to name and shame "chronic" tax defaulters by publicising their names and addresses. It is in the process of finalising the procedures of compiling the names and cases pertaining to habitual tax dodgers and subsequently uploading them on its website. During a recent meeting of its senior officials on this issue in the Central Board of Direct Taxes (CBDT), the department decided that while its public campaign asking taxpayers to pay their dues has bore fruit; there are select cases of "chronic" and "persistent" default which needs to be put in public domain to obtain vital leads in these cases. Courtesy: The Economic Times
April 2013
MARKETS ROUND-UP
Earning blues to weigh on sentiments The US markets started the month by hitting new highs, driven by robust economic data. However, the sentiment reversed when a plan to tax bank accounts in Cyprus to help pay for the country's bailout stoked worries that it could threaten the stability of financial institutions in the eurozone. Later, continuance of the quantitative easing programme by the Federal Reserve helped the markets post a modest recovery. European markets were driven by fresh assurances of global central bank stimulus and with European Central Bank (ECB) and Bank of England (BoE) both maintaining their respective interest rates, upbeat corporate updates and strong economic data. However, a sovereign downgrade of Italy by Fitch and worries over the situation in Cyprus almost completely
wiped out the gains made by the markets. Back home, the Reserve Bank of India (RBI) cut the repo rate by 25 basis points (bps) and left the cash reserve ratio (CRR) unchanged while maintaining its hawkish stance rejecting the high inflation as a new normal. Later, withdrawal of a key ally from the ruling coalition, raising doubts about the fate of government reforms, hit sentiment and the domestic markets ended marginally in the red. Crude (Nymex) rose by 5.2% in March. Global markets In March 2013, markets round the world ended mixed. Things looked positive in the US with, the Dow Jones, the S&P 500 and the Nasdaq rising 3.7%, 3.6% and 3.4%, respectively. The European markets grew marginally with the UK FTSE,
April 2013
MARKETS ROUND-UP
German Dax and French CAC rising by 0.8%, 0.7% and 0.2%, respectively. In Asia, while Japan Nikkei rose 7.3%, Hang Seng and Shanghai SSEC ended in the red falling 3.1% and 5.5%, respectively. Domestic markets In March, FIIs were net buyers to the tune of ` 8381 crore while MFs were net sellers to the tune of ` 1614 crore. The Sensex and the Nifty fell marginally by 0.1% and 0.2% respectively, in March. The BSE Midcap and BSE Small cap took a heavier beating falling by 2.5% and 6.5%, respectively. Only the BSE FMCG, BSE IT & BSE Teck were the sectors that ended with gains for the month, rising 4.5%, 1.9% and 0.1% while BSE Realty, BSE Power and BSE PSUs were the main losers, falling 11.5%, 5.6% and 5.6% respectively. Outlook Global markets remained choppy throughout March with the Cyprus crisis at one end and aggressive monetary easing by Bank of Japan (BoJ) at the other end. Back home, RBIs action (albeit on expected lines) of a second rate cut within a span of two months was nullified by some political tensions in the ruling UPA coalition. Come April, corporate earnings are expected to hit another nadir with the onslaught of Q4FY13 numbers (consensus: worst show in almost 14 quarters). With this, a downgrade of FY14E Sensex earnings per share (EPS) is almost inevitable. In this scenario, markets are unlikely to take into consideration the global cues, be they the worsening Korean escalation or weak US data. Markets are expected to remain jittery in April.
April 2013
GETTING TECHNICAL
Bulls rising from slumber, stage set for a relief rally! mid-cap and small-cap indices have lost 2.55% and 6.47%, respectively. The relentless sell-off in the broader markets highlights the extent of pessimism prevailing on the Street. After the recent spate of underperformance vis--vis global peers, Sensex is seen approaching its key support zone of 18300-18000. The index has witnessed a bounce back precisely after testing its 200-day SMA (simple moving average) placed at 18568 levels in the previous month. We expect the current decline to pause around 18300-18000 range being the confluence of key technical supports as following:

Dharmesh Shah
Head - Technical Analysis, ICICIdirect
Indian equity benchmarks witnessed extreme volatility in March reacting to a host of global and domestic triggers. The highly oversold market conditions at the start of the month did produce a bounce back in index during the first week of the month. However, such a bounce back proved short lived amid lack of broader market participation and the Sensex wiped out more than 1180 points from an intramonth high of 19754 to hit a low of 18568 falling just short of our earmarked support zone placed near 18300-18000 region. The broader market continued to underperform for a third consecutive month resulting in further deterioration in market breadth. On a month-onmonth basis, even though the benchmark index has posted a modest loss of 0.15%, the real carnage has been in the broader market space as the
The November 2012 low is placed at 18255.

The major rising gap area formed in September 2012 is placed between 18284 and 18062 levels.

At 18311, the current down move from March high of 19754 would achieve price parity with the first down leg from January 2013 high of 20203 to
April 2013
GETTING TECHNICAL
early March 2013 low of 18760 (20203-18760=1443 points reduced from March high of 19754-1443=18311 levels). A technical bounce from 18300-18000 range is seen as a corrective rally, which could retrace entire decline from January high of 20203 by 61.8%, which is placed around 19475. Among oscillators, the 14week RSI (relative strength index) has cooled off from the overbought readings witnessed during January 2013, and is currently positioned in the neutral territory with a reading of 46.
BSE Sensex Daily Candlestick Chart
Meanwhile, the 14-period RSI on the daily chart is exhibiting a positive divergence as it has formed a higher low while prices have formed a lower low. It indicates early signs of waning downward momentum pending confirmation on the price front. Going forward, we expect index to garner good buying support in the range of 1830018000, therefore, we advise traders to look for buying opportunities from a short to medium term perspective as post pull-back, index is expected to rally towards 19475 levels.
Source: Reliable Software, ICICIdirect.com Research
The views expressed in the article are personal views of the author and do not necessarily represent the views of the organization. ICICIdirect Money Manager 8
April 2013
DERIVATIVES STRATEGY Nifty has major support at 5630
Amit Gupta
Head - Derivartives Research, ICICI Securities
March series lived up to its expectation on volatility, as Nifty moved over 250 points in the first half to conquer 5950 and then fell over 250 points to finally closed flat for the month. Going ahead, we believe, major Support for Nifty is placed at 5630. Stop loss for long positions should be placed below 5630 on a closing basis. We expect the Nifty to slip towards 5400 if it closes below 5630. On the higher side, 5850/6000 would act as hurdles where FIIs had created shorts in index futures in the last couple of series. We have been advocating major support at 5600-5630 since February. The index has respected this level so far.
Looking at almost double the open interest base (vis-vis any other Nifty option strikes) at 5600 Put, it seems it should continue to extend the vital support in the coming sessions. The second highest Put base is at 5700 where writing is seen at an average premium of ` 70 Hence, Put writers have comfort till 5630. We expect a close below 5630 would bring panic among Put writers and the cascading effect of Put closure would lead downsides till 5400. Bank Nifty: Major support for index is placed at 1100011200 Just like 5600 levels in Nifty, Bank Nifty has highest Put base placed at 11000 strike.
April 2013
DERIVATIVES STRATEGY
We believe this would act as crucial support. On upsides, 11500 and 12000 holds the noticeable Call base. Sustainability above 11500 may bring short covering towards 12000. FIIs added 9% in index futures open interest. Hence, we believe the immediate hurdle is at 5850. Above this, short covering may be seen towards 6000.
Date Net Index futures (in ` Crores) 191.18 409.58 568.96 -68.07 -517.56 -223.24 45.42 298.38 -699.30 -805.54 -362.44 -129.55 Open Chg. in Internet Open (in Interest shares) 339743 4.0% 330783 -2.6% 330503 -0.1% 341070 3.2% 352720 3.4% 339369 -3.8% 335474 -1.1% 345496 3.0% 362488 4.9% 376320 3.8% 369056 -1.9% 369028 -0.1%
FIIs trend of shorting index futures to be keenly watched amid Q4 earnings FIIs trend of shorting index futures would be keenly watched amid Q4 earnings. FIIs have been forming short positions in index futures since the February series. The shorts were formed at 6000 and 5850 levels. Recently, they created shorts of over ` 1867 crore between March 18 and March 20 when the Nifty was trading near 5850. During this period,
6-Mar-13 7-Mar-13 8-Mar-13 11-Mar-13 12-Mar-13 13-Mar-13 14-Mar-13 15-Mar-13 18-Mar-13 19-Mar-13 20-Mar-13 21-Mar-13
Majority of Nifty stocks have hit six month low open interest: We believe it points towards the lack of interest in stock futures, which may lead Nifty moving in broad range. We have analyzed the futures open interest data for the last six months. The following are the major observations of the same:
April 2013
DERIVATIVES STRATEGY
Total 26 of 50 (52%) Nifty stocks are currently at lowest open interest (OI) seen in the last six months. The Nifty is also at 6M lowest OI while Bank Nifty is 15% higher. Out of 144 F&O stocks, 60 (42%) stocks are at lowest OI. Majority of the stocks from the cement and pharma space are figuring in this list. Nine out of top 10 Nifty stocks (excluding TCS) are at the lowest open interest of last 6M. India VIX: Nifty likely to find support at 5600 till India VIX remains below 16 levels Since February, the volatility index has moved above the 200 DMA twice but it failed to sustain above this level. This, in turn, has strengthened the support near 5600. We believe traders should keep a close watch on current 200 DMA of 16 levels. Till IndiaVIX is below 16, the likelihood of the Nifty witnessing round of short covering increases.
Forthcoming triggers
events
and
On the domestic front we have IIP data on April 12 and Monthly WPI on April 15, which is likely to create some volatility, as the expectation of a rate cut in May policy is still strong. Internationally, the Cyprus crisis resolution holds the key and any adverse news flows could also hurt the Euro zone, which is already reeling under pressure. In US, where the equity indices are making record highs, the Initial jobless claims (Apr 4), Industrial Production (Apr 16) and GDP (Apr 26) are likely to be the key triggers for the further directions on equity indices.
The views expressed in the article are personal views of the author and do not necessarily represent the views of the organization. ICICIdirect Money Manager 11
April 2013
STOCK IDEAS
Dish TV India Limited Company Background Dish TV is Asia Pacifics largest direct-to-home (DTH) company and part of the media conglomerate - Zee Group. Dish TV has on its platform more than 400 channels and services including 22 audio channels and over 40 HD services with ~15 million gross subscribers as of December 31, 2012. The company has transponders on the Asiasat 5 platform, which increased its bandwidth capacity by 216 MHz to reach a total of 648 MHZ, the largest held by any DTH player in the country. The company has a vast distribution network of over 1,480 distributors and over 1,14,000 dealers that span across 8,567 towns in the country. Dish TV customers are serviced by four 24*7 call centres with over 1,600 seats in 11 different languages to take care of subscriber requirements at any point of time.
Investment Rationale Digitisation to subscriber growth drive
Digitisation provides a vast opportunity to DTH players in the country to speed up their subscriber additions and Dish TV, being the market leader in DTH industry is comfortably placed to capture this opportunity. Though digitisation was successfully completed only in Delhi and Mumbai by December 31, 2012. Dish TV witnessed a superior subscriber addition of 8.3 lakh in Q3FY13 as against average quarterly additions of 5 lakh in H1FY13. With partial completion of digitization in Phase II and Phase III/IV yet to start, we expect Dish TV to add 2.7 million and 2.5 million subscribers in FY14 and FY15 respectively. Focus on profitability The company has recently raised the monthly subscription tariffs by ~10%
April 2013
STOCK IDEAS
which is the third price hike in the last year and a half. This price hike comes after ~` 300 increase in set-top box (STB) price recently. Other DTH operators have followed suit with a similar hike in entry cost to subscribers. The hike in STB price is expected to significantly reduce the subscriber acquisition cost while the hike in channel packages would kick in operating leverage and lead to an earnings before interest, taxes, depreciation and amortization (EBITDA) margin expansion. We believe with digitisation throwing up a huge opportunity to the DTH industry to add subscribers, operators, sanely, are focusing on profitability, (Year-end March) Net Profit (` crore) EPS (`) P/E (x) EV/EBITDA MCap/Sales FY12 (133.1) (1.3) NA 18.8 4.3 which is a positive for the industry. Growth in sales and margin expansion The growth in subscriber addition along with growth in average revenue per user (ARPU) are expected to drive the revenue of the company at a compounded annual growth rate (CAGR) of 15.4% in FY12-15 to ` 3008.7 crore while the EBITDA margin is expected to expand from 25.3% in FY12 to 31.3% in FY15. We expect the company to break even in FY15 with a profit after tax (PAT) of ` 22.3 crore. We have used discounted cash flow (DCF) methodology to arrive at a target price of ` 80. We rate the stock as BUY. FY13E (85.7) (0.8) NA 16.1 3.9 FY14E (60.2) (0.6) NA 11.9 3.3 FY15E 22.3 0.2 331.3 9.5 2.8
Key risks include: Slow rollout of digitisation.
13
April 2013
STOCK IDEAS
Power Grid Corporation of India Limited (PGCIL) Company Background Power Grid, the central transmission utility (CTU), is engaged in Bulk Power transmission. Its responsibilities include planning, coordination, supervision and control over inter-state transmission system and operation of national & regional power grids. The company owns and operates about 98,367 circuit kms of transmission lines at 800/765kV, 400kV, 220kV & 132kV EHVAC & +500kV HVDC levels and 160 sub-stations. Also the transformation capacity of about 1,57,158 MVA as on 31st January, 2013. This gigantic transmission network, spread over length and breadth of the country, is consistently maintained at an availability of over 99%. Investment Rationale PGCIL delivered Q3FY13 earnings above our expectations. Even though Q3FY13 capitalisation stood at ` 2586 crore v/s expectation of ` 3500 crore, core operations in the transmission segment led to revenue beat. The
earnings before interest, taxes, depreciation and amortization (EBIDTA) margins at 86.9% were above our estimates of 85.5%. Consequently profit after tax (PAT) came in ` 1,129 crore. We expect PGCIL to keep up the good operational show in FY14E as well. Strong operational performance leads to forecasts upgrades Reported revenues were up 36% YoY vs. our expectations of 29% YoY growth. This was mainly on the back of whopping 44% YoY growth in transmission income in Q3FY13. The key reason was the commissioning of several significant projects during 9MFY13 which included projects like 765 KV Sasan UMPP , 400KV Mundra (Jetpur line and Gandhar-Navsari lines associated with Mundra UMPP) and 400KV RaipurWardha Line associated with western region. Going ahead with strong commercialization of assets to continue, we expect PGCIL to post a compounded annual growth rate (CAGR) of 20% in revenues over FY12-FY14E as
April 2013
STOCK IDEAS
we have revised revenues by 4% for FY14E. Capitalisation to be Q4YFY13E heavy as capex will achieve guidance PGCIL has achieved ~47% of its guidance with respect to capitalization of assets in FY13E which as of 9MFY13 stands at ` 9,386 crore. We expect PGCIL to do ` 17,000 crore of capitalisation which implies a huge bump in commercialization of assets in Q4FY13E. In terms of capex, PGCIL is very much on track to meet its FY13 capex guidance of ` 20,000 crore as YTDFY13 capex done stands at ` 15,000 crore. Improvement in ROEs to keep valuations high and hence maintain Buy
(Year-end March) Net Profit (` crore) EPS (`) Growth (%) P/E (x) Debt:Equity (x) Price / Book (x) EV/EBITDA (x) ROE (%) ROCE (%) RoNA (%) RoE (%) FY11 2692.6 5.8 38.5 18.2 1.8 2.3 12.1 12.6 13.7 0.9 15.7
We expect PGCILs ROEs will show an incremental improvement of 120 basis points (bps) to 15% by FY14E on the back of robust asset capitalisation and 20% and 19% CAGR over FY12-FY14E revenues and profit after tax (PAT), respectively. Given the challenges in power sector, we believe PGCIL is putting up a commendable show of earnings growth. We maintain Buy with a target of ` 129/ share. Given consistency in commercialisation of assets in 9MFY13, we expect the same trend to continue for rest of FY13 and FY14E. Consequently we have revised our revenue and PAT estimates by ~4% and 9% respectively for FY14E.
FY12 3236.3 7.0 20.2 15.2 2.2 2.1 11.6 13.8 13.0 1.0 15.4 FY13E 4058 8.8 25.4 12.1 2.4 1.8 10.8 14.7 12.0 1.0 15.2 FY14E 4614 10.0 13.7 10.6 2.6 1.6 10.3 15.0 11.5 1.0 15.7
15
April 2013
OPINION
Gold price crash: A buying opportunity? After generating unprecedented positive returns for 12 consecutive calendar years, gold has surprised everyone by declining sharply by around 20% from its high of ` 32800 per 10 gram in November 2012 in a span of five months. Is this a buying opportunity? We asked Pankaj Pandey, our Research Head, the reasons for recent correction and what should retail investors do now Q: Why are tumbling? gold prices
A: One of the main reasons for the recent correction in global gold prices is the confidence in the US economy that has led to investors shifting money from safe havens like gold to riskier assets like stocks. The US stock markets are currently trading at all-time high levels. At the same time, the holdings of the SPDR Gold Shares, the largest gold ETF in the world, have fallen 15% from their peak levels. At 1,154 tonne, SPDRs gold holdings are at their lowest level since April 2010. The rise of the dollar due to the economic crisis in Europe also resulted in prices being adjusted as it is denominated in US dollar terms. The dollar has also moved up on hopes that
Pankaj Pandey Head - Research, ICICIdirect
the US economy is emerging from its crises. Expectations of the US Fed withdrawing the stimulus soon, which would results in sussing of easy money that is currently available. The news flow of Cyprus selling its gold reserve also led to price crash. Cyprus holds just 13.9 tonnes of gold.
April 2013
OPINION
Speculation that Portugal and Italy may follow Cyprus in selling gold added to the negative sentiments. However, it is unlikely that Portugal and Italy will resort to gold selling to meet the fiscal deficit. The sell-off was seen across commodities including metals and crude oil prices as weak Chinese GDP raised concerns over demand. The news flows, as mentioned above, led to panic selling and speculative or hot money, which was chasing the rising metal, got reversed. Q: Do you expect further fall in prices? A: Technically, we expect the current decline to stabilise in the ` 24000-23000 price range. Prices will witness time-wise correction while the base formation takes place. Investors should be patient and should not expect new highs in the near term. Q: Is this the time to buy? the outlook on gold, a small portion of your portfolio should be allocated to the metal to give it some stability. Since the factors that affect gold and other asset classes are different, the metal offers a good diversification potential. Due to this, the portfolio with gold offers better risk adjusted returns. Since Indians do not have too many international investments, gold can be a proxy for global diversification and protect the portfolio from a sudden depreciation of the rupee. Instead of a fixed percentage, allocate 5-15% of your portfolio to gold. Hit the lower end of the band when the outlook is bearish, keep it at 10% when the outlook is neutral (as it is right now), and raise it to 15% when the going gets better. You can invest either in physical gold or paper gold. While the former offers greater psychological satisfaction to the investor, the latter provides better returns and is more tax-efficient. However, both options carry more or less the same risks and rewards.
A: Gold is a good diversification tool. Irrespective of
Views expressed in the article are the personal views of the author and do not necessarily represent the views of the organization. ICICIdirect Money Manager 17
April 2013
FLAVOUR OF THE MONTH

How to zero down on the right mutual fund Mutual funds are the best investment option for beginners as well as busy and seasoned investors. They offer diversification, professional money management, liquidity, convenience, and a wide range of options to choose from. Today, there are over 1,000 of mutual fund schemes in the market, managed by 44 fund houses. How does one sift through such a vast selection and pick the winners? Most investors choose the funds solely on the basis of past performance without giving much attention to other factors. What are those factors one should consider while assessing a fund? Here we discuss... 1. Identify your investment objectives To begin with, it is important to understand your investment objectives and time frame. For example, you may plan to invest for your childs higher education in 10 years, or to fund your retirement in 20 years. After defining your goals, the next step is to identify funds that match your requirements. Generally speaking, if you have longer time to achieve your goals, you should allocate more towards equity funds as they have higher earning potential over the long term.
On the other hand, if you have less than five years to achieve your goals, you should look at conservative, incomeproducing funds such as debt funds. 2. Track record fund managers
The next important factor to consider is to track the fund managers record - His experience in managing the fund and his total experience in the fund management industry - the higher, the better. You should also look at his consistency in delivering the returns over various market
April 2013

cycles, and choose the one with longer performance history. Sachin Jain, Research Analyst - Mutual Funds, ICICIdirect says, Fund manager is an important driver of the fund performance. Unless there is a good driver, journey even in a luxury car can be pain stacking. Its the skills of a driver that makes the journey to your destination smooth and pleasurable. What most mutual fund investors forget is to evaluate or pay attention to the fund manager who manages the fund, he adds. In active funds, especially for mid-cap funds, its crucial to know how much experience the fund manager has, what is his style of investing, his investment philosophy, and how he is going to position the portfolio in future. Some ratios like Information Ratio and Alpha can help you analyze his past performance, he adds further. Information ratio is a measure that assesses fund managers
ability to generate riskadjusted returns, and Alpha indicates his ability to deliver excess return relative to funds benchmark return. 3. Size matters The fund size, reflected by its assets under management (AUM), is another important factor you should look at. The funds size should neither be too small nor too big. If its too big, the fund manager might face difficulties finding better opportunities to deploy funds and hence it may affect returns. The size of the fund should be evaluated on the basis of its category. For instance, in case of sector funds and gilt funds, AUM of ~` 100 crore may be considered as enough. For other categories, ` 200 crore may be considered as minimum, says Sheetal Ashar, Research Analyst Mutual Funds, ICICIdirect. 4. Weigh the expense ratio impact of
Expense ratio is the annual

April 2013

fee that all funds charge for managing your money. It is deducted from your investments every year. Expense ratio differs from fund to fund and is an important factor to be considered, as higher expense ratio can eat into your long-term returns. If the funds size is too small, its expense ratio can be quite high as itll have to meet its expenses from a restricted asset base. So choose a fund that has lower expense ratio as it enables fund to deliver better returns in comparison to its peers. Sheetal Ashar says, Expense ratio is important especially in case of debt funds, as in the long run, returns from debt funds are generally lower compared to equity funds, and a higher expense ratio can drag down their returns by ~50-100 basis points (bps). The Securities and Exchange Board of India (SEBI) has capped the expense ratio for equity funds at 2.50% (additional allowance 0.3 per
cent given for selling in TierII and Tier-III cities). For debt funds, the cap is at 2.25%, while for index funds and fund of funds, the ceiling is at 1.5% and 0.75%, respectively. 5. Factor in level of risk All funds carry certain level of risk. Even debt funds, which invest in government securities, e.g. gilt funds, because their performance is very sensitive to interest rate changes. In fact, funds even in the same category can have varied levels of risk and some funds may provide equal returns even with lesser risk. Therefore, it is important to consider both - risk and returns before investing to gauge funds risk-adjusted performance. Here are some ratios that can come handy to you while analyzing equity funds risk profile: Alpha: It indicates excess return generated by a fund over the return of its benchmark index. It represents the value that a fund manager adds to or
April 2013

subtracts from a funds return. For example, if Nifty has delivered returns of 10% p.a. and the fund A has delivered 16% p.a., then the funds alpha would be 6% p.a. Beta: It finds out funds volatility against market indices (Sensex/Nifty). In other words, it measures how sensitive a fund is to the market. For example, if a funds beta is 1.5, and Sensex moves up by 10%, then funds return will move up by 15%. On the other hand, if Sensex goes down by 10%, the fund return would take a hit of 15%. Standard Deviation (SD): Standard deviation gives the overall volatility or variation from average returns. Unlike Beta, it evaluates the funds overall risk. The higher the standard deviation, the more volatile the fund is, and hence the more risky as its returns will deviate sharply from its average return. Sharpe ratio: The Beta and Standard Deviation are
measures of risk. However, returns also need to be seen, as risk alone cannot define the performance of a fund. Sharpe Ratio is therefore an overall measure of risk and return. This ratio combines both risk and returns to evaluate the fund and is an important measure. It gives the relative return of a fund (to a benchmark) per standard deviation (or risk). In other words, it quantifies how a fund performs relative to the risk it takes. It is calculated as: Fund return risk free rate / standard deviation. Lets understand this with an example: An equity fund A has given return of 16% p.a. and has a standard deviation of 34%, assuming 6% is the risk-free rate; the Sharpe ratio would be 0.29. That is, 16 6/34 = 0.29. The higher the Sharpe ratio, the better the fund has performed in proportion to the risk taken by it. All these ratios are important to consider before selecting an equity
April 2013

fund to gauge its risk-adjusted performance. Duration: Mutual funds in the debt markets are prone to interest rate risks. Duration defines the sensitivity of a bond/debt portfolio to changes in the interest rates. The higher the duration more is the interest rate risk. The capital value of a debt fund can reduce if interest rates increase, similarly the capital value can increase with decrease in interest rates. It is best to match the duration of a debt fund to your investment horizon. MF color coding: New system by SEBI SEBI has recently introduced a system - color coding and product labeling of mutual funds - to help investors understand the level of risk involved. This is applicable for all the existing as well as upcoming funds, effective July 1, 2013. Level of risk, depicted by color code would be: Blue principal at low risk; Yellow principal at medium risk; and Brown
principal at high risk. How will it help you? Sachin Jain says, The color tags will give investors a preliminary idea of the kind of product they are looking to invest in, and may prove informative as a starting step for new investors. However, investors should not use these as a sole criterion to define the risk, because it merely indicates the generic risk associated i.e. equity funds carry high risk over debt schemes. But, in case of debt funds, for example, longer duration income funds carry higher risk than short term funds; however all the debt funds will carry same blue color label. Similarly, in case of equity funds, large-cap funds or index funds are less risky than midcap or sectoral funds, but again they will carry same brown color label, he explains. For selection of funds, factors like financial goals, time horizon, risk appetite, and riskadjusted performance should be taken into consideration, he adds.
April 2013

Keys to successful MF investing Invest systematically: Investing though systematic Sachin Jain, investment plan (SIP) and Research Analyst Mutual Funds, ICICIdirect target investment plan (TIP) helps you spread your investments across markets ups and downs, and also helps you avoid timing the market. Diversify: Most investors are very comfortable having funds from one particular fund house or a fund category. Remember, it increases the portfolio concentration risk and should be avoided. Spread investment across asset classes and fund houses, 2-3 funds per category should reduce the concentration risk. Look for consistency: Fund manager is an important driver of the fund performance. Pay due attention to fund managers performance and his consistency in delivering the returns through various market cycles. Go for one with the longer performance history. Take action in case of merger of schemes/fund house: In case, the fund house with whom you have invested is taken over by another fund house, then it is prudent to take a fresh review of how the new fund house would operate and manage your funds in the future. In case there is major variation in terms of investment philosophy, fund managers style of investment or his experience, then the no exit load period may be utilized to switch your mutual fund investments. Do not shy away from booking profits: If your funds have yielded desired rate of return in a short period, you may book profits and avoid being too greedy.
April 2013

Performance analysis How have the various categories of mutual funds performed over the years as compared to key benchmark indices? Lets take a look: Equity Funds Categories Equity Diversified Midcap and Small-cap Large-cap Equity Linked Savings Scheme (ELSS) - Tax-saving funds Sector and Thematic Infrastructure Arbitrage International Equities Index funds CNX Nifty Index CNX Midcap Index S&P BSE Midcap S&P BSE Sensex CNX 500 Index CNX Infrastructure S&P 500 International Average Returns (%) 1-year 7.46 8.43 8.57 8.54 5.84 -4.68 9.43 4.72 8.02 Key Benchmark Indices 9.39 -1.29 -0.79 10.01 7.49 -10.64 11.64 2.46 -1.12 -3.15 2.20 0.96 -13.24 10.36 2.83 3.10 -1.20 2.84 2.25 -12.88 3.59 3-year 2.88 4.32 2.94 2.75 2.57 -8.09 8.06 4.94 6.93 5-year 4.58 5.64 4.20 4.05 5.97 -5.21 7.17 4.14 6.11
(Data as on March 31, 2012; all returns are annualized; Source: CRISIL and ICICIdirect)
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Debt Funds Categories MIP Aggressive MIP Conservative Liquid Funds Gilt Funds Income Funds Short term Income Funds- Long term Crisil MIPEX Crisil LiquiFex CRISIL Gilt Index CRISIL Short Term Bond Index CRISIL Composite Bond Index To sum up Before investing in mutual funds, do have a clear idea of your goals, time horizon and risk tolerance, so that you can choose your funds wisely. Next, make sure funds investment objectives match with your goals. Finally, dont fall for funds recent performance look for consistency in returns - along with various factors discussed above. Average Returns (%) 6-month 5.26 5.76 8.07 10.19 8.68 10.31 7.16 7.85 12.20 8.34 8.81 1-year 7.89 8.72 8.76 10.45 8.40 9.74 9.13 8.24 13.06 8.13 8.50 3-year 6.55 6.78 7.79 7.53 9.57 10.45 6.77 7.60 8.22 9.08 9.05
Key Benchmark Indices
(Data as on March 31, 2012; all returns are annualized; Source: CRISIL and ICICIdirect)
Please send your feedback to moneymanager@icicisecurities.com
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April 2013
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Expect markets to recover going forward: Kenneth Andrade In an interview with ICICIdirect Money Manager, Kenneth Andrade, Chief Investment Officer (CIO), IDFC Mutual Fund, shares his views on the present state of the markets and talks about Corporate Indias prospects in the current economic environment. Q: Could you give us your take on the present state of the market? A: In the current Indian context to put some data, the Reserve Bank of India (RBI) cut the repo rate by 0.25 basis points (bps) and indicated that room for further rate cuts was quite limited and hinted at the need for continued fiscal consolidation on the part of the Indian Government. In a tight liquidity scenario and at a time when credit to deposit ratio is at a 40-year high at 79%, we see no scope of transmission of this cut in the economy. This does not help the case of either interest sensitive demand housing, autos or investment demand and thus the period of balance sheet recession
Kenneth Andrade Chief Investment Officer (CIO), IDFC Mutual Fund
continues for some more time. Consumer price index (CPI) inflation continues to be high and consumer companies and non (discretionary
discretionary) are indicating a cracking of consumption demand across products categories. Loss of pricing power is indicated by the slew of promotional schemes
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Tte--tte
being offered by the auto sector, slow price reduction by tyre companies because of replacement demand are price cuts by some FMCG (fast moving consumer goods) companies categories. in competitive this Hopefully at the beginning of March 2013, indicating a high level of volatility. Internationally, as a part of the Cyprus bailout package, the proposal to tax the depositors wreaked havoc
demand destruction should help inflation and lead to further cuts in interest rates (though it does not augur well for the overall growth of the economy). On the political front in India the DMK withdrew support from the government and the sword of SP withdrawing its support also looms large. While it is not a crisis situation it does add a lot of uncertainty and shifts the governments focus from getting the economy back to its feet to getting the power equation right and stable. Market has remained fairly volatile since this event. The India VIX (volatility index) has gone up to 15.54 from 14.06
in the international markets triggering a risk off trade. The result was an equity sell-off across the world and the safe haven assets like gold, yen, Swiss franc and US treasury gaining. Q: Some investors are skeptical about Indias growth story. What is your view on this? A: We finished a very tough year in the Indian environment. If you take a rough poll within Corporate India on how business has shaped up, I think it actually has deteriorated towards the end of the last six months. After a very long time in Corporate India, profits have grown virtually flat. What had
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helped overall Corporate India to maintain profitability and grow in the past few years was reasonably significant rebound in the consumer spend, and strong momentum in exports that had actually helped this economy sail through. The current environment has deteriorated, with an all time high fiscal deficit, a high social sector spending and elections around the corner. If you step back into the last decade when the emergence of the investment economy started domestic off, the growth (GDP) product to year 2000, which was the end of the first investment cycle. We are at a decade low ROE (return on equity) and PAT (profit after tax) margin. We think that incrementally to grow profits from here, corporate India does not need to invest in anything, there is enough capacity on the ground which needs to turn profitable. We believe in such an environment what also comes through is that the companies that have been able to handle the pressures of a bad market can do extremely well in a market which is expected to recover, going forward. So the focus incrementally is on putting together a portfolio of companies that can come out at the top. Q: In terms of sectors, where do you see the opportunities for investors in the current phase?
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went up from 5% to 9%, and today from a GDP context we are back at 5%. From a fiscal deficit context, we are back at its all-time high. From a current account deficit, we still need exports to kick in quite sharply to correct the balance of trade. So this is a macro-environment
where
we have virtually gone back
Tte--tte
A: We believe that this is the last leg of the economic slowdown and things should improve hereon as indicated by moderate improvement in index of industrial production (IIP) and the export growth. The targeted increase of 16% in the total expenditure with a targeted 29% increase in plan expenditure The growth (Budget FY14) of should aid growth. premium the consumer part of the economy is slowing giving way as GDP slows and inflation impacts disposable incomes. The income and wealth effect have delivered the initial impetus to the consumer we is a story in India
and brought us here. While believe consumption story for structural
India for the next decade we enter a time correction zone for some time in this part of the economy. The portfolios are under moderate transition the to the cyclical is part of the economy where valuations matrix favorable. This space offers opportunities of consolidation (led by companies generating strong cash flows and having cash on balance sheet) and return leading of to pricing better power capital
efficiencies.
The opinions expressed in an interview are the views of the author.

Disclaimer: The Disclosures of opinions/in house views incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alterations to this statement as may be required from time to time. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information, which is already available in publicly accessible media or developed through analysis of IDFC Mutual Fund. Neither the IDFC Mutual Fund / Board of Trustee/ IDFC Asset Management Co. Pvt. Ltd nor IDFC, its Directors or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
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ASK OUR PLANNER Should you take insurance for your home loan?
Q: I am going to take a home loan next month. The bank has insisted me to take a home loan insurance cover, when I take the home loan from them. Should I consider the same? What are the benefits? Do I have any other option, as the premium seems to be very high? - Naresh Kumar A: Home loan insurance is often sold along with the home loan and offers a risk cover (sum assured) equal to the loan amount. As the outstanding loan amount reduces, the size of the cover also reduces. Usually it is a single premium policy. In case of your unfortunate death, the outstanding loan amount is repaid by the insurer to the bank. Some of the insurance companies also offer this protection against permanent disability and critical illness, in addition to death. Some companies offer to pay some equated monthly installments (EMIs), if there is loss of income due to loss of
job under this cover. Some companies also provide cover for structure against calamities and contents against burglary, as a part of home loan insurance cover. You can also consider taking term insurance policy instead of home loan insurance. Term insurance also can be considered for the loan amount for the same tenure; but in such a case, the sum assured remains constant till the end of the tenure. However, remember that in term insurance, the cover is paid only on death and not on permanent disability or in case of critical illness. Lets understand the difference with an example: For a 35-year old person, home loan of ` 50 lakh for 20-year period, home loan insurance (with a sum assured of ` 50 lakh) will cost only around ` 1,72,650 (single premium). At the same time, for a term insurance cover of ` 50 lakh for a 20 year term, it will cost around ` 7,000 to 8,000 p.a. Add to that, cost
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ASK OUR PLANNER

of taking a personal accident cover & critical illness cover. You can compare the quotes of both home loan insurance and combination of term insurance, personal accident and critical illness cover, before taking a decision. Also, check for all the features of home loan insurance offered. Q: We, a family of four, have planned a trip to Singapore for 15 days. Is it necessary to take travel insurance policy while traveling? If yes, how much will it cost and how does it work? - M K Roy A: Travel insurance offers insurance protection while you travel. It may be called by different names by insurance companies. Travel insurance protects you and/ or family against travelrelated accidents, unexpected medical expenditure during travel, losses such as baggage loss, loss of passport, etc. and interruption or delays in flights or delayed arrival of baggage, etc.
Travel insurance generally offers cover only during a specific period of travel. However, some insurance companies may offer various combinations of protection to cater to the specific needs of customers e.g., there could be a special policy for corporate frequent travelers, etc. The following covers are generally provided under travel insurance, though the combination may vary. The list, however, is not exhaustive: Medical expenses with or without cashless facility (most travel insurance products offer cashless facility), personal accident, loss of baggage, delay in baggage arrival, loss of passport, travel delay, repatriation, transportation of dead body etc. The sum insured offered may vary and so would the premium rates, which would depend on the country in question, apart from other factors such as age, period of travel, etc. Though its not mandatory to take travel insurance, you can consider taking one. The
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ASK OUR PLANNER

approximate premium will be around ` 4,000 to ` 5,000 for sum assured of USD 1 lakh to 2.50 lakh. Q: Im 48 years old and earn about ` 60,000 per month. I have no idea of how to prepare for retirement. My current total expenses are ` 40,000 a month. I intend to retire in the next 10 years. I have accumulated around ` 30 lakh in my Employees Provident Fund (EPF) account till now and contribute ` 5,000 a month currently (including employers contribution). Please help. - Sumohan Pal A: With the provided information and certain assumptions, we will be able to provide you only a rough estimate. Assuming inflation and annuity rate at 7% p.a., you will require a retirement corpus of ` 2.08 crore by the time you retire. Through your EPF, you will be able to accumulate ` 80.63 lakh by the age of 58, if your income grows by 8% p.a. If you invest the monthly surplus of ` 20,000 for the next 10 years, stepping it by 8% p.a., it will fetch you a corpus of ` 54.96 lakh. This will leave you with a shortfall of ` 72.13 lakh. You have not provided more details on your other existing investments. If you already have other investments, which if you allocate towards your retirement, this can help fill the shortfall. Also, if you will get income through rent and pension from employer, the required corpus can come down. Having said all this, its always better to approach a financial planner to plan for your retirement in detail and more customized. This will help you get an in-depth view on your requirement. ICICIdirect also provides customized and detailed Retirement Planning for its customers. For more details, you may visit www.icicidirect. com.
Do you also have similar queries to ask our experts? You may write to us at: moneymanager@icicisecurities.com. ICICIdirect Money Manager 32
April 2013
YOUR FINANCIAL HEALTH CHECK

Create a concrete investment plan to achieve goals Every month, ICICIdirect Money Manager assesses one familys current financial situation, and suggests a suitable way forward to help them reach their goals THE GUPTAS Ashok (35), Meera (32), Amol (7), Sonia (infant) Reside in: Family annual Mumbai income: ` 8,28,000 FAMILY PROFILE Ashok and Meera, both work as marketing managers with an MNC. The couple wishes to buy a new home (by selling existing home) and wants FAMILY NETWORTH Assets Self-occupied house Car Endowment policies Savings account Net-worth ` ` ` ` 4.70 lakh 25 lakh 80,000 ` 4 lakh to plan for their childrens education, along with retirement. BASIC EXPENSES (ANNUAL BREAK-UP): Household Vehicle Loan Medical Education Vehicle Maintenance Medical Insurance Others Total Liabilities 40 lakh Outstanding car loan ` 4 lakh ` 1,20,000 ` 1, 42,944 ` 24,000 ` 60,000 ` 12,000 ` ` ` 9,600 24,000 3,92,544
` 70.50 lakh ` 66.50 lakh

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GOALS New Home (2018, inflation 7%) Current Value: ` 85,00,000 Future Value: ` 1,24,89,289 PLANNING Buying a house (2018): Ashok plans to sell-off his existing house to buy a new one. Assuming the cost of increase to be 7% p.a., the value of existing house after 5 years will be ~` 56.10 lakh. Ashok can make a down payment with this amount and take a home loan for the remaining amount (` 68,79,082). Amols education: Ashok Amols education (2023, inflation 10%) Current Value: ` 10,00,000 Future Value: ` 25,93,742 Sonias education (2031, inflation 10%) Current Value: ` 15,00,000 Future Value: ` 83,39,876 Sonias marriage (2034, inflation 6%) Current Value: ` 17,00,000 Future Value: ` 57,79,258
can plan for his child goals well. Ashok needs to save and invest ` 11,577 p.m. or ` 1.31 lakh p.a. As the goal tenure is long, he can consider investing into equity and start an SIP (systematic investment plan) into equity mutual funds. Sonias education: Ashok
needs to save and invest ` 11,718 p.m. or ` 1.33 lakh p.a. in equity mutual funds for this goal. Sonias marriage: Ashok
hasnt started any investments yet, and all his endowment policies also are maturing late. However, considering his current investible surplus, he
needs to save and invest ` 5,541 p.m. or ` 63,160 p.a. in equity mutual funds for this goal. The current investible
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April 2013

surplus may not be sufficient. As Ashoks income increases, he can regularly increase the monthly / annual contribution. RETIREMENT Ashok has accumulated ` 2 lakh in his provident fund (PF) with a monthly contribution of ` 4,000. He expects his salary to increase by 10% annually, and this will also help him increase PF contributions. As a first step, Ashok has gone through the exercise of listing down all expenses that will incur post retirement. He estimates annual expenses, post-retirement, in todays cost at ` 1.92 lakh. He expects inflation at 6%. Considering that, at his annual of expenses retirement he needs the time After taking into consideration his current investments (PF, endowment policies), hell still have a shortfall of ~ ` 26.6 lakh, for which, he needs to save and invest ` 43,720 per annum. OTHER RECOMMENDATIONS Life Insurance: Ashok has a total insurance cover of ` 25 lakh, which does not seem to be sufficient considering his expenses and goals. It is recommended to take an additional term cover of ` 25 lakh. Medical Insurance: The
family has a health cover of ` 7 lakh, currently. They should review and renew it every year. Additionally, it is recommended to take separate policy for critical illness and personal accident policies. Ashok should also ensure that his home is insured against any loss.
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April 2013
(54 years) would be ` 5.80 lakh. Therefore, to accumulate a retirement corpus of ` 1.09 crore. (Life expectancy - 74 years).
PRIMER How your mutual fund investments are taxed?

Income from mutual funds can be divided into two parts - capital gains or dividends that you receive on regular intervals, if you have opted for dividend plans. So taxation also can be divided in two parts capital gains and dividends. Capital gain is appreciation in the value of an asset if you buy something for ` 1 lakh and sell it for ` 1.5 lakh, you have made a capital gain of ` 50,000. Capital gains are further divided into short term and long term depending on their investment horizon. Short term capital gain arises if investment is hold for less than 1 year (365 days) or in simple words sold before completion of 1 year. Long term capital gain arises if investment is sold after 1 year.
Mutual fund capital gain tax further debt. are depends Equity those on which funds where type of fund it is equity or mutual funds,
equity holding is more than 65% of the total portfolio, so even balanced funds will be categorized in equity funds. All other funds which will not qualify as equity fund, including fund of funds and international funds will be part of debt mutual funds. Long term capital gain on equity mutual funds: If you buy and hold an equity mutual fund for more than 1 year, there will be NIL tax. E.g. If you invest ` 1 lakh in XYZ fund, and after 1 year its value is at ` 1.3 lakh there will be zero tax on capital appreciation of ` 30,000. Short term capital gain
on equity mutual funds: If

April 2013
PRIMER
you sell equity mutual fund before completion of 1 year, you need to pay tax of 15% (plus education cess of 3%) on capital gains. In the above example where gain was ` 30,000 if this was a short term capital gain, you would have to pay ` 4,500 as short term capital gain. Short term capital gain on debt mutual funds: Any short term capital gain that arises due to selling of debt fund before 1 year will be added to your income. Once it is added to income, it will be taxed according to your tax slab. Long term capital gain on debt you mutual would funds: like to Here, use taxation depends on whether indexation or not. Without Indexation 10% tax on capital gains; With Indexation 20% tax on capital gains. The tax can be calculated using both the methods and lower of the two can be paid. The second part of income from mutual fund is dividend income. Again this taxation will depend on which type of mutual fund you are investing in equity or debt. There is no dividend distribution tax on equity mutual funds and also the dividend received by you is tax-free. Even in case of debt mutual funds, dividends received by you are taxfree in your hand. But there is dividend distribution tax (DDT) paid by mutual funds to income tax department.
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MUTUAL FUND ANALYSIS

Equity: Midcap
SBI Emerging Business Fund

Fund objective The objective is to provide investors maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy and also to participate in the growth potential presented by various companies that are considered emergent and have export orientation / outsourcing opportunities or are globally competitive by investing in stocks representing such companies. The fund may also evaluate emerging businesses with growth potential and domestic focus. Performance: In FY13, the fund has beaten the benchmark midcap index by a wide margin. While the CNX midcap index was down 4%, SBI Emerging Business fund delivered a whopping 20% return. For the same period, the midcap category average return was 5%. It has consistently beaten its peers and the benchmark across time periods (six months,
Key Information
NAV as on March 28, 2013 (`) Inception Date Fund Manager Minimum Investment (`) Lumpsum SIP 2000 1000 2.2 1% on or before 1Y,Nil-after 1Y. S&P BSE 500 1221 53.8 October 11, 2004 R. Srinivasan
Expense Ratio(%) Exit Load Benchmark Last declared Quarterly AAUM(` cr)
one year and three years). Even in market downturns, the fund has shown strength in protecting investors wealth. In CY11, while the benchmark was down 27%, the fund curtailed losses merely to 10%. Good quality high growth stocks have been the reason for such an exceptional performance in the downturn.
April 2013

Performance vs. Benchmark
20 Return% 10 5 0 6 Month - 1.7 -5 1 Year
Fund
7.1
9.9
15 1.9
15.5
25
3 Year
Benchmark
5 Year
Calendar Year-wise Performance 2012 2011 2010 2009 2008 NAV as on Dec 31(`) Return(%) Benchmark(%) Net Assets(` Cr) 61.2 39.1 43.8 32.9 15.7
56.3 -10.6 31.2 -27.4 1163 456
33.1 109.0 -68.5 16.4 294 90.2 -58.1 185 96
Last Three Years Performance Fund Name Fund Benchmark 31-Dec-11 31-Dec-12 56.31 31.20 31-Dec-10 31-Dec-11 -10.58 -27.41 31-Dec-09 31-Dec-10 33.08 16.35
Union Finance, Eicher Motors, Hawkins Cookers and Petronet LNG to name a few. Also, the fund manager does not shy away from taking opportunistic bets for three to six months. United Breweries Holding, TCS and HCL Technologies were some stocks in which profits were booked in a short period. The USP of the fund is that it does not get skewed towards a particular theme or sector. Individual stock ideas have been the contributors to the performance of the fund.
Top 10 Holdings CBLO Spicejet Ltd. DiviS Laboratories Ltd. Asset Type Cash & Cash Equivalents Domestic Equities Domestic Equities % 8.6 5.7 5.4 5.1 5.0 4.8 4.7 4.6 4.5
23.2
Portfolio: After Mr. Srinivasan took over the fund management in May 2009, the portfolio was redesigned in that whole year. Since then, the funds performance has scaled heights. As on date, the fund has the best portfolio among midcap funds. Midcap stocks with higher growth potential, good cash flows and corporate governance find a place in the portfolio. Stocks that have contributed to the performance in the last year are Shriram City
0.7
2.1
Shriram City Union Finance Domestic Equities Ltd. Kansai Nerolac Paints Ltd. Tech Mahindra Ltd. HDFC Bank Ltd. Page Industries Ltd. Redington (India) Ltd. Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities
Whats in Jaiprakash Power Ventures Ltd Whats out Oil & Natural Gas Corpn. Ltd. Mahindra & Mahindra Financial Services Ltd.
% 4.9 % 1.1 3.2
April 2013

Market Capitalisation Large Mid Small
Top 10 Sectors Finance - NBFC Tyres & Allied Airlines Pharmaceuticals & Drugs Paints Power Generation/ Distribution IT - Software Bank - Private Textile IT - Hardware Asset Type Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities
% 23.1 40.4 25.6

%
Asset Allocation Equity Debt Cash Dividend History Date Mar-30-2012 Mar-29-2011 Jul-30-2009 Mar-28-2008 Nov-02-2005 Apr-26-2005
89.2 0.0 10.8 Dividend(%) 25 25 25 25 51 21
9.0 8.0 5.7 5.4 5.0 4.9 4.8 4.7 4.6 4.5
Risk Parameters Standard Deviation (%) Beta Sharpe ratio R Squared Alpha(%) Portfolio Attributes Total Stocks Top 10 Holdings(%) Fund P/E Ratio Benchmark P/E Ratio Fund P/BV Ratio 32.0 48.3 19.0 16.9 4.8 11.76 0.66 0.09 0.76 16.99
Performance of all the schemes managed by the fund manager Fund Name 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-12 31-Dec-11 31-Dec-10 SBI Emerging 20.69 12.39 13.65 Businesses FundReg(G) S&P BSE 500 4.81 -9.11 7.48 SBI Magnum 15.66 -6.67 4.21 Balanced FundReg(D) Crisil Balanced 8.19 -3.17 9.37 Fund Index SBI Magnum 10.11 9.15 5.81 Global Fund 94-Reg(D) CNX Midcap -4.02 -4.09 4.35 SBI Contra Fund9.58 -9.93 -0.19 Reg(D) S&P BSE 100 6.84 -9.23 8.55 SBI Magnum 8.67 -2.94 10.70 Equity FundReg(D) CNX Nifty Index 7.31 -9.23 11.14
Data as on March 28,2013; Portfolio details as on Feb, 2013 Source: ACE MF
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April 2013

Equity: Midcap
ICICI Prudential Discovery Fund
Key Information
NAV as on March 28, 53.6 2013 (`) Inception Date August 16, 2004 Fund Manager Mrinal Singh Minimum Investment (`) Lumpsum 5000 SIP 1000 Expense Ratio(%) 2.1 Exit Load 3% on or before 6M,2% after 6M but on or before 18M,Nil after 18M Benchmark CNX Midcap Last declared Quarterly 2597 AAUM(` cr)
Fund objective The is to through primary generate a objective returns of
combination by
dividend income and capital appreciation investing primarily in a well diversified portfolio of value stocks. Performance: ICICI Prudential Discovery is among the few value centric funds, which have managed to successfully employ the value strategy. This is evident from its returns, which have beaten its benchmark index (CNX Midcap) by a wide margin the fund has appreciated 13.4% over the last 12 months whereas the benchmark index drifted lower by 1.3%. The presence of a few largecap stocks in the
portfolio helped the fund to contain losses during the downturn. The inclination towards quality midcap and smallcap stocks has facilitated such a performance to a large extent. This was evident in 2009 and 2010 when the fund managed to better the returns delivered by its benchmark by a wide margin.
Performance vs. Benchmark
10 5 0 -5.6 -10 -1.3 -1.1 -5 6 Month 0.8 8.1 15 Return% 15 3 Year
Fund Benchmark
20
13.4
1 Year
5 Year
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April 2013
3.1

Calendar Year-wise Performance 2012 2011 2010 2009 2008 NAV as on Dec 31(`) Return(%) Benchmark(%) Net Assets(` Cr) 57.4 39.3 51.5 40.4 17.2 Top 10 Holdings Bharti Airtel Ltd. ICICI Bank Ltd. Amara Raja Batteries Ltd. Rain Commodities Ltd. GAIL (India) Ltd. Mindtree Ltd Exide Industries Ltd. Asset Type Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities % 4.0 3.5 3.5 3.2 3.1 3.1 2.7 2.6 2.3
46.0 -23.7 39.2 -31.0
27.7 134.3 -54.6 19.2 99.0 -59.4 566 205
2503 1665 1583
Sterlite Industries (India) Ltd. Domestic Equities
Last Three Years Performance Fund Name ICICI Prudential Discovery Fund Benchmark 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-12 31-Dec-11 31-Dec-10 46.01 39.16 -23.73 -31.00 27.71 19.16
Container Corpn. Of India Domestic Equities Ltd.
Whats in Orient Cement Ltd. Whats out Standard Chartered PLC Market Capitalisation Large Mid Small
Top 10 Sectors Bank - Private IT - Software Cement & Construction Materials Auto Ancillary Pharmaceuticals & Drugs Pesticides & Agrochemicals Gas Transmission/ Marketing Bank - Public Telecommunication Service Provider Metal - Non Ferrous Asset Type Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities Domestic Equities
% 0.8 % 1 % 39.0 31.1 21.9

% 7.8 6.8 6.0 6.0 5.8 4.2 4.2 4.1 4.0 3.1
Portfolio: In the last two years, the fund has maintained its exposure to the pharmaceuticals sector. The fund has also consistently remained invested in the banking and auto sectors. These bets have proved to be very lucrative for the fund. A key attribute of the funds portfolio is its diversity and inclination towards midcap stocks. The average number of stocks held over the last year (ended January) was 61 while the top 10 stocks in the portfolio accounted for not more than 37% of its assets in this period. Its portfolio is also prone to frequent changes as the value in companies is unlocked, these are exited.
April 2013

Risk Parameters Standard Deviation (%) Beta Sharpe ratio R Squared Alpha(%) Portfolio Attributes Total Stocks Top 10 Holdings(%) Fund P/E Ratio Benchmark P/E Ratio Fund P/BV Ratio Asset Allocation Equity Debt Cash Dividend History Date Mar-18-2013 Mar-19-2012 Mar-31-2011 Jun-29-2010 Dec-21-2009 Jun-22-2009 72.0 27.8 13.1 16.7 1.9 10.89 0.75 0.05 0.92 9.27
ICICI Pru Technology Fund-Reg(G) BSE IT ICICI Pru Discovery FundReg(G) CNX Midcap ICICI Pru Very Cautious-Reg(G) Crisil Liquid Fund Index ICICI Pru Cautious-Reg(G) Gold-India ICICI Pru Moderate-Reg(G) Gold-India ICICI Pru AggressiveReg(G) Gold-India ICICI Pru Very AggressiveReg(G) Gold-India ICICI Pru Midcap Fund-Reg(G) CNX Midcap Performance of all the schemes managed by the fund manager Fund Name 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-12 31-Dec-11 31-Dec-10 14.92 -2.52 30.86
13.21 11.29
-7.12 0.12
25.02 11.55
-4.02 9.11 8.22 7.55 5.08 7.36 5.08 5.91
-4.09 6.39 8.47 7.01 35.24 5.77 35.24 6.22
4.35 4.59 6.21 6.23 27.35 7.12 27.35 9.52
90.4 0.0 9.6 Dividend(%) 20 10 15 10 15 12
5.08 4.44
35.24 1.90
27.35 7.14
5.08 0.76 -4.02
35.24 -2.35 -4.09
27.35 -3.24 4.35
Data as on March 28,2013; Portfolio details as on Feb, 2013 Source: ACE MF
43
April 2013
EQUITY MODEL PORTFOLIO

Keeping varied investor interest in mind, we have selected 33 quality companies, segregated them into 18 large cap stocks and 15 mid-cap stocks. These stocks broadly belong to the BSE 200 universe as they provide a better representation of steady, matured and emerging businesses. The constituents of the BSE 200 index have been screened based on the quality of the management and several business parameters to arrive at a core list of 35 stocks, which fall in the I-direct coverage universe so that continuous monitoring can be maintained. After stock selection, we have further taken our exercise forward to bifurcate the above stocks into the three following portfolios: Large cap portfolio (stable, consistent, low volatility) Midcap portfolio (high growth, relatively more volatile) Diversified portfolio (blend of large and midcap portfolio) On the basis of risk tolerance, return expectation and time horizons, one can mimic any of the above three portfolios, which we believe will cater to investors of all kind. Portfolio allocation: Bet on large caps for longevity and midcaps for alpha A portfolio should always be allocated in an optimal form in terms of choosing the number of stocks from the large cap and the mid-cap space. The allocation ratio is again a function of the risk tolerance and return expectations of individual investors. If one is willing to take higher degree of risk given he understands the volatility that persists during difficult market conditions, then an overweight stance on mid-caps does make sense. On the other hand, beginners or inexperienced investors should go overweight on large caps and be less dependent on mid-caps as the former provides better safety of capital with a reasonable rate of return. The indicative model portfolio has been constructed using a balanced approach wherein the major part of the portfolio is concentrated on large cap stocks managed conservatively, and mid-cap stocks with relatively higher risks. We advise that these stocks be invested for periods of three to five years. Thus, they will be able to ride through market volatility and thus generate relatively superior returns adjusted for the risk attached to them.
April 2013

We have built a direct equity indicative model portfolio as a guiding tool for investments in direct equities. The indicative model portfolio has been constructed on the premise that the clients understand the risks associated with investments in equity markets and are comfortable remaining invested in sound businesses over a long period of time.
Name of the company Largecap (%) 9.0 5.0 4.0 26.0 6.0 8.0 6.0 6.0 6.0 6.0 12.0 4.0 8.0 7.0 4.0 3.0 11.0 3.0 8.0 10.0 4.0 6.0 13.0 8.0 5.0 6.0 6.0
45
Model Portfolio Midcap (%)
Largecap Stocks Auto Maruti Suzuki Tata Motors DVR BFSI HDFC HDFC Bank SBI Axis Bank Capital Goods L&T FMCG HUL ITC Metals & Mining Coal India Hindustan Zinc Oil and Gas ONGC Reliance Pharma Lupin Sun Pharma IT Infosys TCS Telecom Bharti Airtel
Diversified (%) 6.3 3.5 2.8 18.2 4.2 5.6 4.2 4.2 4.2 4.2 8.4 2.8 5.6 4.9 2.8 2.1 7.7 2.1 5.6 7.0 2.8 4.2 9.1 5.6 3.5 4.2 4.2
April 2013

Name of the company Largecap (%) Midcap Stocks Auto Exide Ind. Aviation Jet Airways BFSI Federal Bank Bank of India Yes Bank Infrastructure Simplex Infra FMCG Dabur India VST Pharma Cadilla Glenmark Capital Goods Cummins Realty Oberoi Retail Shoppers Stop IT Eclerx Media Dish TV Total
Content source: ICICIdirect.com Research
Model Portfolio Midcap (%) Diversified (%) 1.8 1.8 1.8 1.8 7.2 2.4 2.4 2.4 1.8 1.8 3.6 1.8 1.8 4.8 2.4 2.4 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 100
6.0 6.0 6.0 6.0 24.0 8.0 8.0 8.0 6.0 6.0 12.0 6.0 6.0 16.0 8.0 8.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 100 6.0 100
46
April 2013
MUTUAL FUND MODEL PORTFOLIO

EQUITY MUTUAL FUNDS MODEL PORTFOLIO Investors who are wary of investing directly into equities can still get returns almost as good as equity markets through the mutual fund route. We have designed three mutual fund model portfolios, namely, conservative, moderate and aggressive. These portfolios have been designed keeping in mind various key parameters like investment horizon, investment objective, scheme ratings, and fund management. Particulars Review Interval Risk Return Funds Allocation Franklin India Prima Plus HDFC Top 200 ICICI Prudential Dynamic Plan ICICI Prudential Focussed Bluechip Eq. UTI Opportunites Grand Total(a+b) Aggressive Moderate Monthly Monthly High Risk- High Medium Risk Return - Medium Return % Allocation 25 25 25 25 100 25 25 25 25 100 Conservative Quarterly Low Risk - Low Return
25 25 25 25 100
Value of ` 1 lakh investment in portfolio since inception

170000 165000 160000 155000 150000 145000 Aggressive Moderate Conservative BSE 100 153043.4 168305.3 161808.6 161271.6
Value of |Lakh
Source: Crisil Fund Analyser, ICICIdirect.com Research; Note: % Returns are as on March 28, 2013; Portfolio inception date: Sep 15, 2009
47
April 2013
MUTUAL FUND MODEL PORTFOLIO

DEBT FUNDS MODEL PORTFOLIO We have designed three different model portfolios for debt mutual funds for different investment duration namely less than six months, six months to one year and above one year. These portfolios have been designed keeping in mind various key parameters like investment horizon, interest rate scenarios, credit quality of the portfolio and fund management, etc.
Particulars Objective Review Interval Risk Return Funds Allocation Ultra Short term Funds IDFC Money Manager Fund Investment Plan Templeton India Low Duration Fund Reliance Medium term fund Short Term Debt Funds Taurus Short Term Income Fund Birla Sunlife Dynamic Bond ICICI Prudential Short Term HDFC High Interest STP ICICI Prudential Regular Saving Long Term/Dynamic Debt Funds IDFC Dynamic Bond fund Reliance Dynamic Bond Fund SBI Dynamic Bond Fund Total Time Horizon 0 6 months 6months - 1 Year Liquidity Liquidity with moderate return Monthly Monthly Very Low Risk Medium Risk Nominal Return Medium Return % Allocation 20 20 20 20 20 100 Above 1 Year Above FD Quarterly Low Risk - High Return -
20 20 20 20 20 100
20 20 20 20 20 100
Model portfolio performance: FY13 YTD (March 28, 2013)

12.0 10.0 8.0 6.0 4.0 2.0 0.0 0-6 Months 6Months - 1Year Portfolio Index Above 1yr 9.33 7.66 10.36 8.35 10.68 8.75
Source: Crisil Fund Analyser, ICICIdirect.com Research

*Index: 0-6 months portfolio Crisil Liquid Fund Index, ; 6 months-1 year Crisil Short term Index Above 1 year: Crisil Composite Bond Index
48
April 2013
QUIZ TIME
1. According to SEBIs new MF color coding system, Blue would mean principal at high risk. True/False. 2. Alpha finds out funds volatility against market indices. True/False 3. It is mandatory to take travel insurance. True/False 4. The higher the Sharpe ratio, the better the fund has performed in proportion to the risk taken by it. True/False 5. Expense ratio differs from fund to fund. True/False Note: All the answers are in the stories that have appeared in this edition of ICICIdirect Money Manager. You may send in your answers at: moneymanager@icicisecurities.com, mailto:moneymanager@ icicisecurities.com The answers will be published in our next edition. The names of the earliest all correct entries will be published too. So jog your grey cells and be quick to send in your entries. Correct answers for the March 2013 quiz are: 1. Rajiv Gandhi Equity Savings Scheme (RGESS) is now also available to those earning up to ` ______. A: ` 12 lakh 2. If you want to convert your e-gold units to physical gold, you need to have minimum ______ grams of units to your credit. A: 8 3. E-filing is now mandatory for people with annual income of above ` ______. A: ` 5 lakh 4. Employees Provident Fund (EPF) subscribers to get interest rate of ______ for 2012-13. A: 8.5% 5. e-Gold does not invite wealth tax. True/False A: False Congratulations to the following winners for providing correct answers! Honey Gaba; Vinay N Bhende
April 2013
MONTHLY TRENDS
INFLATION (FOOD)
12.0 10.0 8.0 (%) 6.0 4.0 2.0 0.0 Feb-13 Mar-13 8.73 11.38
(The figures are in per cent) CRUDE OIL

98.0 96.0 94.0 $ per barrel 92.05 92.0 90.0 88.0 86.0 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 96.58
NYMEX crude oil prices ($/barrel) FII & DII INVESTMENTS

1500 1200 900 600 300 0 -300 -600 -900 -1200 -1500
626.89
573.87
-45.85
-346.12
1-Mar
8-Mar
15-Mar
FII DII
22-Mar
(Foreign institutional investors (FIIs) and domestic institutional investors (DII) net equity investment (` in crore)
April 2013
MONTHLY TRENDS
VOLATILITY INDEX (VIX) VIX is a key measure of market expectations of near term volatility. When the markets are highly volatile, the VIX tends to rise.
VIX 21 14 7 0 1-Mar 8-Mar 15-Mar
VIX
14.06
15.22
22-Mar
DOMESTIC INDICES BSE Sensex

19800 19600 19400 19200 19000 18800 18600 18400 18200 18000 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 18862 18836
0.17%
NSE Nifty
6000 5900 5800 5700 5600 5500 5400 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 5693 5683
0.18%
51
April 2013
MONTHLY TRENDS
GLOBAL INDICES Dow Jones

14700 14400 14100 13800 13500 13200 12900 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 14054 14579
3.73%
NASDAQ
3300 3256.5
3200 3160.2 3100
3.40%
3000 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar
EXCHANGE RATES USD-INR

55.2 55.0 54.8 54.6 USD / INR 54.4 54.2 54.0 53.8 53.6 53.4 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 54.4 54.3
0.17%
POUND-INR
83.5 83.0 82.5 82.0 / INR 81.5 81.0 80.5 80.0 79.5 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 82.5 82.5
52
April 2013
MONTHLY TRENDS
EURO-INR
72.0 71.5 71.0 70.5 / INR 70.0 69.5 69.0 68.5 68.0 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 69.6 71.0
2.05%
BULLION Gold
1620 1610 1600 $ per Ounce 1590 1580 1570 1560 1550 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 1579.8 1597.5
(The prices are in $ per ounce). SILVER

29.2 29.0 28.8 $ per Ounce 28.6 28.4 28.2 28.0 27.8 28-Feb 4-Mar 8-Mar 12-Mar 16-Mar 20-Mar 24-Mar 28-Mar 28.5 28.3
(The prices are in $ per ounce). (Source for all indicators: Bloomberg, Reuters)
53
April 2013
Premium Education Programmes Schedule

ICICIdirect Centre for Financial Learning (ICFL) imparts quality education on financial markets to beginners and amateurs, student, housewives, working professionals and self employed. ICFLs broad objective is to make participant feel confident to start investing in stock market. Here is the list of our programmes scheduled for the month of April, 2013.
Schedule for Beginners programme on Futures and Options Trading Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 City Bangalore Indore Nagpur Navi Mumbai Chennai Hyderabad Mumbai Andheri Mumbai Chembur New Delhi Gurgaon Pune Kolkata Thane Dates Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 27 and 28, 2013 Apr 27 and 28, 2013 For More Information & Registration call: Subrata on 9620001478 Kusmakar on 7875442311 Kusmakar on 7875442311 Manish on 8451057943 Makhizhnan on 8939646628 Srikanth on 8886110336 Vidhu on 9619716146 Manish on 8451057943 Vishal on 07838290143, Harneet on 09582158693 Harneet on 09582158693 Kusmakar on 7875442311 Sumit on 8017516187 Vidhu on 9619716146
Schedule for Fast Track Beginners programme on Futures and Options Trading Sr. No 1 2 3 4 5 City Bhuj Vadodara Jamnagar Ahmedabad Kochi Dates Apr 14, 2013 Apr 21, 2013 Apr 21, 2013 Apr 27, 2013 Apr 27, 2013 For More Information & Registration call: Yogesh on 8238053563 Yogesh on 8238053563 Yogesh on 8238053563 Yogesh on 8238053563 Subrata on 9620001478
54
March April 2013
Thrissur
Apr 27, 2013
Subrata on 9620001478
Schedule for Foundation Programme on Stock Investing Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 City Chennai Andheri Hyderabad Mumbai Chembur Kolkata New Delhi Bangalore Thane Pune New Delhi Bangalore Madurai Hyderabad Navi Mumbai Pune Mumbai Andheri Dates Apr 06 and 07, 2013 Apr 06 and 07, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 27 and 28, 2013 Apr 27 and 28, 2013 For More Information & Registration call: Makhizhnan on 8939646628 Vidhu on 9619716146 Srikanth on 8886110336 Manish on 8451057943 Sumit on 8017516187 Vishal on 07838290143, Harneet on 09582158693 Subrata on 9620001478 Vidhu on 9619716146 Kusmakar on 7875442311 Vishal on 07838290143, Harneet on 09582158693 Subrata on 9620001478 Makhizhnan on 8939646628 Srikanth on 8886110336 Manish on 8451057943 Kusmakar on 7875442311 Vidhu on 9619716146
Schedule for Fast Track Foundation Programme on Stock Investing Sr. No 1 2 3 4 5 City Lucknow Ahmedabad Aurangabad Kottayam Kochi Dates Apr 14, 2013 Apr 14, 2013 Apr 14, 2013 Apr 20, 2013 Apr 20, 2013 For More Information & Registration call: Vishal on 07838290143 Yogesh on 8238053563 Kusmakar on 7875442311 Subrata on 9620001478 Subrata on 9620001478
55
April 2013
6 7 8 9 10 11
Jamshedpur Meerut Varanasi Jaipur Agra Ghaziabad
Apr 21, 2013 Apr 21, 2013 Apr 21, 2013 Apr 21, 2013 Apr 21, 2013 Apr 28, 2013
Sumit on 8017516187 Vishal on 07838290143 Vishal on 07838290143 Harneet on 09582158693 Vishal on 07838290143 Vishal on 07838290143
Schedule for Advanced Derivative Trading Strategies is as given below :Sr. No 1 2 3 4 City Pune New Delhi Bangalore Chembur Dates Apr 06 and 07, 2013 Apr 20 and 21, 2013 Apr 27 and 28, 2013 Apr 27 and 28, 2013 For More Information & Registration call: Kusmakar on 7875442311 Vishal on 07838290143, Harneet on 09582158693 Subrata on 9620001478 Manish on 8451057943
Schedule for Technical Analysis Sr. No 1 2 3 4 5 6 City New Delhi Mumbai Andheri Chandigarh Bhubaneshwar Bangalore Chennai Dates Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 13 and 14, 2013 Apr 20 and 21, 2013 Apr 20 and 21, 2013 Apr 27 and 28, 2013 For More Information & Registration call: Vishal on 07838290143, Harneet on 09582158693 Vidhu on 9619716146 Harneet on 09582158693 Sumit on 8017516187 Subrata on 9620001478 Makhizhnan on 8939646628
Contact us Email: Send us an email at learning@icicisecurities.com Please mention the name, date and venue of the programme you have attended or wish to attend, for faster resolution of your queries. SMS: SMS EDU to 5676766 for more details
56
April 2013
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Monthly Issue 3

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Vol.

5, Issue IV, Pages 60, April 2013

From the Managing Directors Desk

ICICIdirect Money Manager

ICICIdirect Money Manager

The November 2012 low is placed at 18255.

Source: Reliable Software, ICICIdirect.com Research

DERIVATIVES STRATEGY Nifty has major support at 5630

Investment Rationale Digitisation to subscriber growth drive

Key risks include: Slow rollout of digitisation.

ICICIdirect Money Manager

ICICIdirect Money Manager

Pankaj Pandey Head - Research, ICICIdirect

A: Gold is a good diversification tool. Irrespective of

FLAVOUR OF THE MONTH

FLAVOUR OF THE MONTH

Expense ratio is the annual

FLAVOUR OF THE MONTH

FLAVOUR OF THE MONTH

FLAVOUR OF THE MONTH

FLAVOUR OF THE MONTH

FLAVOUR OF THE MONTH

ICICIdirect Money Manager

FLAVOUR OF THE MONTH

Key Benchmark Indices

Please send your feedback to moneymanager@icicisecurities.com

ICICIdirect Money Manager

Kenneth Andrade Chief Investment Officer (CIO), IDFC Mutual Fund

we have virtually gone back

and brought us here. While believe consumption story for structural

The opinions expressed in an interview are the views of the author.

ICICIdirect Money Manager

ASK OUR PLANNER

ASK OUR PLANNER

YOUR FINANCIAL HEALTH CHECK

` 70.50 lakh ` 66.50 lakh

ICICIdirect Money Manager

YOUR FINANCIAL HEALTH CHECK

ICICIdirect Money Manager

YOUR FINANCIAL HEALTH CHECK

PRIMER How your mutual fund investments are taxed?

on equity mutual funds: If

ICICIdirect Money Manager

MUTUAL FUND ANALYSIS

SBI Emerging Business Fund

MUTUAL FUND ANALYSIS

56.3 -10.6 31.2 -27.4 1163 456

33.1 109.0 -68.5 16.4 294 90.2 -58.1 185 96

% 4.9 % 1.1 3.2

MUTUAL FUND ANALYSIS

% 23.1 40.4 25.6

89.2 0.0 10.8 Dividend(%) 25 25 25 25 51 21

Data as on March 28,2013; Portfolio details as on Feb, 2013 Source: ACE MF

ICICIdirect Money Manager

MUTUAL FUND ANALYSIS

ICICI Prudential Discovery Fund

Fund objective The is to through primary generate a objective returns of

ICICIdirect Money Manager

MUTUAL FUND ANALYSIS

46.0 -23.7 39.2 -31.0

27.7 134.3 -54.6 19.2 99.0 -59.4 566 205

2503 1665 1583

Sterlite Industries (India) Ltd. Domestic Equities