ICICI Securities Limited

Fund managers survey

We have done a mutual fund managers survey of 11 major AMCs fund
managers to gauge the overall view for the market in 2011. Based on their
feedback, the compiled views are as follows:

Broader Indian equity market on a Medium term (3 months) view

valuation scale… about the broader market…
Most of the fund managers believe the market is fairly 60 55 80
valued. However, most of them had a cautious tone in the 64
short-term while their year-end consensus target projects a 36 60
40
10-20% upside i.e. 22000-24000 on Sensex

(%)
40

(%)
20
9
18 18
0 0 20
0
0 0

Overvalued

Overvalued
Undervalued

Undervalued

Fairly Valued
0

Grossly
Slightly
Grossly

Slightly

bullish

Bearish 
Neutral

Bearish
Bullish
Very

Very
Options of Exhibit 17: Asset allocation strategy to be Year end BSE Sensex target…
adopted
A. Rewards far outweigh risk, move 100% of debt/cash
to equity 80 80
B. Risk/reward ratio is favourable to equity, move a part 64 64
of debt/cash to equity 60
60
C. Risk-reward ratio is balanced now; maintain the pre-
decided asset allocation (based on age, etc) 40
27

(%)
40
D. Equity is risky now; move a part of equity portfolio to
(%)

27
debt/cash 20 9
E. Equity is very risky now; move 100% of equity to 20 0 0
9
debt/cash 0
0 0 > 20000

< 16000
22000-

18000 -

16000-
24000

18000
22000
0
B

E
C

D
A

Will India continue to command Major global risk for Indian equity
valuation premium over other emerging markets?
Majority of the fund managers believe the major global risk markets?
80 73
for Indian equity market is higher crude oil prices followed by
80 73
the repercussions of the EU crisis
60 60

40 27
(%)

40
27
(%)

20
0
0 20 9
No
Yes. Will continue to

0 0
Yes. But premium

0
may reduce

recovery
Slow US
Higher

slowdown
EU crises

Others
Crude
enjoy

China

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Corporate earnings growth expected Corporate earnings growth expected

for FY11-12… for FY12-13…
100 60 55
82
80
40
Most of the fund managers are confident of 15-20% growth 60
27
over the next two years

(%)

(%)
40
20
20 9
9 9
0 0
0 0

Less than

10-15%

15-20%

>20%

Less than

10-15%

15-20%

>20%
10%

10%
Preference towards large caps or Will Indian equity markets
midcaps? underperform other emerging markets in 2011?
100 100
82 82
Majority of the fund managers believe large-caps will 80 80
outperform in 2011 as midcaps may take time to recover 60
60
(%)

Majority of them believe India may continue to outperform 40

(%)
among its emerging market peers… 18 40
20
18
0 20
Largecaps

Midcaps

No
Yes
Which global equity market are Benchmark 10 year G-Sec yields
expected to outperform in 2011? range expected in the next 3 months?
80 73 60
45
60
Consensus believes that among other global market, US 40
equity markets are likely to outperform in CY11 40 27 27
(%)

(%)

18 20
20
9
Total 70% of fund managers believe Indian benchmark 10
0
year G-Sec yields will remain below 8.2% 0
0
0
US

Brazil

European
countries
China

Above

Below
8-8.20%

7.75-8%

7.75%
8.20%

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Over 6 months horizon, which Asset class to outperform in 2011?

segment of the debt market is expect to deliver
60 55
better returns?
60
Most of the fund managers believe short-term and ultra 40
45
short-term funds will outperform in the next six months.

(%)
However, a majority of them believe that opportunity 40 18 18 18
20
also exist in longer duration funds 27 9

(%)
20
9 9 0

Gold
Indian equity

Global equity

Indian Debt

commodities
Opinion seems divided over outperformance among

Agro
Indian equity, global equity, Indian debt market and gold 0
in 2011

G-Sec

Income

Short term

term funds
Ultra short
Fund

Funds

Funds
Pharma and IT are the most preferred sectors among fund Sector preference…
managers while cement, capital goods, construction,
media and aviation are least preferred. But they expect
further price erosion to be a buying opportunity in the
above mentioned sectors

Aviation
IT

BFSI
Pharma

Cement
FMCG

Auto

Telecom

Capital

Media

Construction
Metals

Oil and Gas

Goods

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