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September, 2010

MUTUAL FUND RESEARCH


September Outlook
Equity Markets

Mutual Funds Monthly

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

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

Schemes Watch (Growth Plans)


Equity Funds Short Term: Neutral; Long Term: Positive
DSP BlackRock Small and Midcap Fund - Gr. HDFC Taxsaver - Growth Reliance Equity Opportunities Fund - Gr. HDFC Equity Fund - Gr. IDFC Premier Equity Fund - Plan A - Gr.

Equity Linked Savings Schemes Positive


Reliance Tax Saver Fund - Growth Fidelity Tax Advantage Fund - Growth

Balanced Funds Equity-oriented Neutral


HDFC Prudence Fund-Growth HDFC MIP - LTP - Growth DSP BlackRock Balanced Fund - Growth

Monthly Income Plans (MIP) Neutral


Reliance MIP - Growth Canara Robeco Liquid - Super IP - Growth

Liquid Funds Positive


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

Short-term Floating Rate Funds Neutral


Reliance FRF - ST - Growth LIC MF Floating Rate Fund - ST - Growth Templeton FRIF - Long Term - Super IP - Growth LIC MF Savings Plus Fund - Growth Birla Sun Life Medium Term Plan - IP - Growth

Long-term Floating Rate Funds Neutral


Birla Sun Life Floating Rate Fund - LTP - Growth Birla Sun Life Ultra Short Term Fund - IP - Growth

Short-term Debt Funds Cautious to Neutral Long-term Debt Funds Cautious to Neutral
DSP Blackrock Strategic Bond Fund - IP - Growth

Long-term Gilt Funds Cautious to Neutral


Birla Sun Life G Sec Fund - LT - Growth SBI Magnum Gilt LTP - Growth

Mutual Funds Monthly

Contents
Institutional Business Group R. Swaminathan - Senior Vice President & Head Institutional Business Group (91-22) 43221201 r.swaminathan@idbicapital.com MD / CEO / CIO / Fund House Views August Highlights Equity Funds Annexure: Scheme-wise Returns and Volatility Fund Flows Returns Analysis Portfolio Review Outlook Equity Linked Savings Schemes Annexure: Scheme-wise Returns and Volatility Fund Flows Returns Analysis Portfolio Review Outlook Balanced Funds Annexure: Equity-oriented Balanced Funds: Scheme-wise Returns and Volatility Fund Flows Returns Analysis Portfolio Review Outlook Liquid Funds Annexure: Growth Option Scheme-wise Returns and Volatility Annexure: Portfolio details as on August 31, 2010 Fund Flows Returns Analysis Portfolio Review Outlook Floating rate Funds Annexure: Short-term Floaters: Growth Option Scheme-wise Returns and Volatility Annexure: Long-term Floaters: Growth Option Scheme-wise Returns and Volatility Annexure: Short-term Floaters: Portfolio details as on August 31, 2010 Annexure: Long-term Floaters: Portfolio details as on August 31, 2010 Fund Flows Returns Analysis Portfolio Review Outlook Short-term Debt Funds Annexure: Growth Option Scheme-wise Returns and Volatility Annexure: Portfolio details as on August 31, 2010 Fund Flows Returns Analysis Portfolio Review Outlook Long-term Debt Funds Annexure: Growth Option Scheme-wise Returns and Volatility Annexure: Portfolio details as on August 31, 2010 Fund Flows Returns Analysis Portfolio Review Outlook Long-term Gilt Funds Annexure: Growth Option Scheme-wise Returns and Volatility Annexure: Portfolio details as on August 31, 2010 Fund Flows Returns Analysis Portfolio Review Outlook Monthly Income Plans (MIP) Annexure: Growth Option Scheme-wise Returns and Volatility Annexure: Portfolio details as on August 31, 2010 Fund Flows Returns Analysis Portfolio Review Outlook Review of August Schemes Watch 2 3 4 6-8 6 7 7 7 8 9-10 9 10 10 10 10 11-12 11 12 12 12 12 13-16 13 14 15 15 15 16 17-20 17 17 18 18 19 19 20 20 21-24 21 22 23 23 23 24 25-28 25 26 27 27 27 28 29-32 29 30 31 31 31 32 33-35 33 34 34 35 35 35 36

Mutual Fund Client Advisory Group / Research Mumbai : Subrat Udgata - General Manager (91-22) 43221204 (0) 9867333073 subrat.udgata@idbicapital.com Sonal Parmar (91-22) 43221207 sonal.parmar@idbicapital.com Kavita More (MF Operation) (91-22) 43221208 kavita.more@idbicapital.com Snigdha Singh (91-22) 43221255 snigdha.singh@idbicapital.com Kritika Jhalani (91-22) 43221269 (0) 9323006604 kritika.jhalani@idbicapital.com Ashutosh Bisen (91-22) 43221195 (0) 9594811412 ashutosh.bisen@idbicapital.com Delhi : Prithpal Singh (91-11) 32210678 (0) 9811771501 prithpal.singh@idbicapital.com

Hyderabad : P. Viswanadh (0) 9440465432 p.viswanadh@idbicapital.com

Production & Database S. Narasimhan Rao (91-22) 43221165 narasimhan.rao@idbicapital.com

IDBI Capital Market Services Ltd. (A wholly owned subsidiary of IDBI Ltd.) Registered Office: 5th Floor, Mafatlal Centre 229, Nariman Point Mumbai 400 021 Tel.: (91-22) 43221212 Fax: (91-22) 22850785 Email: info@idbicapital.com

Mutual Funds Monthly

CEO Views L&T Mutual Fund


Sanjay Sinha, CEO, L&T Mutual Fund, which was known as DBS Chola Mutual Fund before it was acquired by L&T Finance in January 2010. Before joining DBS Cholamandalam Asset Management in September 2008, Mr. Sinha was the Chief Investment Officer at SBI Mutual Fund. He started his career with UTI AMC Pvt. Ltd. and was with them for over 16 years. He joined SBI Funds Management in 2005. Mr. Sinha is an Honours Graduate in Economics from University of Delhi and a Post Graduate from IIM Calcutta. To what extent do you see bond yields hardening in 2010? How do you see bank lending rates moving in the shorter term? We expect the bond yields to peak out at 8.25% in the coming periods and remain in the range of 7.75-8.00% over medium term. The bank lending rates would edge up as the busy season starts and demand for loans increases putting pressure on deposit rates. What are the reforms with reference to government policies that you anticipate in the immediate future? Major policy reforms are expected in Mining sector and continuation of reforms in oil sector. Implementation of UID projects, GST and DTC would fuel further reforms. Do you think the current valuations of the Indian equity market are justified? Do you think the same is poised for further growth from present levels in the near term? While sharp uptick in the current month would have stretched the valuations in the near term, we are not in a bubble zone yet. The sharp move has come after a long period of consolidation in narrow range. Taking a call on near term may be good for traders but would be hazardous for investors. We believe that with the nominal GDP growth expected to be ~15% over next couple of years, one can expect similar returns from equities. Hence, if one is investing with the horizon of 2-3 years, he can expect the above stated returns. Which are the sectors you are bullish and bearish on? Financial services, Capital Goods and Pharma are the preferred sectors from the point of returns. Consumer staples and Power sector would deliver lower returns from investment perspective. On a Contra note, we would like to play the global recovery theme and hence, believe that commodities and textiles would deliver higher returns in medium to long term. What is the medium-to-long term strategy of your Mutual Fund in India? Your views on the road ahead and any latest Fund Offering that you are proposing now? Medium to long term strategy of L&T Investment Management is to strive and deliver superior risk adjusted returns through research based stock selection and active fund management. We would achieve our goal by periodical sector and stock rotation strategies. We may shortly launch a fund to capitalise on the opportunities in the natural resources and energy space. We are also bullish on the financial services sector and have filed an offer document to launch a fund that would be focussed on this theme.

What is your outlook for Rupee, Home Loans and Deposit rates after RBI has raised benchmark interest rates? Your view on the economy, inflation, dollar, crude ,gold as well as GDP Projections? Hike in benchmark interest rates would lead to appreciation in rupee in the short term. Home loans and deposits rates would also rise given the general rise in interest rates. We expect the economy to sustain higher growth rates on the back of strong domestic consumption, pick up in private investments over a period of time and gradual revival in external trade. Inflation is bound to be higher in near term mainly on account of supply side concerns, but with monetary actions we expect inflation to subside towards tail end of the FY2011. Dollar is gaining strength mainly on account of risk aversion across the globe and also because US economy is relatively better off the Eurozone. We expect the dollar to remain stable going forward. Crude Oil is expected to be in the range unless some meaningful recovery in growth is seen in the global economy. Gold has gained its strength on the back of risk aversion and hedge against inflation. But as the growth returns in the global economy with the stability gold as investment may lose some relevance. We expect the Indian GDP to grow at 8-8.5% over next few years on the back of strong growth prospects for both manufacturing and services driven by domestic demand and private investments. Do you anticipate any moderation in inflation and what is your take on interest rate movement in the near future? Inflation in India is largely supply side driven and hence, would remain relatively higher. Only catch-up of base effect would lead to the appearance of moderation in headline numbers. Interest rates are expected to remain firm as economy grows at higher pace and demand for resources rises on the back of demand for private investments.

33

Mutual Funds Monthly

The benchmark 10-yr yield witnessed an upside bias in August


8.10 8.00 7.90

August Highlights Equity Markets


During the month of August, Equity Markets posted marginal losses supported by substantial amount of FII inflow into the system. The BSE Sensex was fell by 0.61% and the broader S&P Nifty went down by 0.54%. Over the month of August, the smaller mid-cap and small-cap indices had rallied. The BSE Midcap Index was up by 1.39%, while the BSE Small-cap index went up by 1.12%. From the leading indices BSE Auto, BSE CD and BSE Bankex increased by 4.26%, 5.37%, 3.16% while BSE Oil & Gas lost by -3.36%. FIIs gained momentum in August & invested $2513.61 million into domestic equities. June quarter results were disappointing with aggregate results of 3,000 companies in manufacturing sector, a decline of 6.43% in net profit from last year. Issues concerning the same are high commodity prices coupled with higher interest rates.

% p.a.

7.80 7.70 7.60 7.50 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug 2-Aug 4-Aug 6-Aug 8-Aug 10-year 7.80% GOI 2020 y ield in August 2010

Source: IDBI Capital Market Services

Over August, the yield curve realigned higher


31-Aug-10 9.00 8.50 8.00 31-Jul-10

% p.a.

7.50 7.00 6.50 6.00 5.50 1 yr 3 yr 5 yr 7 yr 10 y r 15 y r 25 y r 30 y r

Debt Markets
Maturity

Commercial paper and Certificate of deposit issuances were on a new high, due to hike in benchmark prime lending rates and introduction of the new base rate system. The WPI inflation declined to 8.51% during August, after change in base year to 2004-05.

Source: IDBI Capital Market Services

Net change in assets over July


Net Inflow s / Outflow s 39,000 34,000 29,000 24,000 33,061

Rs Crore

19,000 14,000 9,000 4,000 (1,000) (6,000) (11,000) Liquid STF LTF STDebt LTDebt LTGilt MIP Grow th BEO ELSS (1,453) (640) (3,863) (592) 4 1,667 1,767

The Rupee ended the month at 47.07, 90 bps higher than than the previous month's close of 47.17.The INR had improved at the end of the month upon net positive FII flows of close to USD 1.6 billion. But as the flows reversed and turned negative towards close, the rupee too weakened in reaction. Widening of the domestic trade deficit has also impacted the movement on rupee. The INR closed the fortnight at Rs 47.07 levels against the USD.
458 364

The corporate bond yields had hardened during the month seeing tightness in liquidity and rise in G-Sec yields. However, as the liquidity improved, the bond yields fell slightly from high levels. The bond yields experienced hardening towards the close of fortnight tracking rise in short term yields, especially considerably high cut-off yield at T-bill auctions. The corporate bond yields at the short end were also impacted by widening of credit spreads.

Source: IDBI Capital Market Services

Fund Category

August Returns %

3 month Returns %

6 month Returns %

Liquid STF LTF ST Debt LT Debt LT Gilt MIP Growth B-Eo ELSS

5.35 5.07 5.05 4.46 4.32 3.19 6.18 2.18 1.48 2.07

5.16 5.08 5.09 4.28 2.93 1.41 8.35 11.22 8.57 11.28

4.72 4.78 5.01 5.28 5.52 5.68 7.52 13.23 10.83 13.47

Note: All figures are annualised %. Figures for Growth Funds, ELSS Funds and Balanced Funds are absolute %.
Source: IDBI Capital Market Services

Mutual Funds Monthly

Assets under Management (as on August 31, 2010)


B-Eo 2% Growth 35% ELSS 6% Liquid 31%

Mutual Funds
Net Inflows / Outflows in August 2010
Net Inflows/Outflows (` Cr) ` August 10 July 10 Assets under Management ` (` Cr) August 10 July 10

Liquid
STF LTF MIP LT Gilt 6% 1% LT Debt 5% ST Debt 10% 2% 2%

33,061 (2,092) (3,863) (592) 4 1,667 1,767 364 458 30,774

27,934 39 (1,529) (431) 204 1,336 536 1,616 433 30,138

126,061 18,015 40621 19,829 2,129 24,058 137,868 22,400 9,974 400,955

93,000 20,107 44,484 20,420 2,125 22,391 136,101 22,037 9,516 370,181

Floaters STDebt LTDebt LTGilt MIP Growth

Source: IDBI Capital Market Services

Returns depict market trends


Aug-10 32 24 16 Jul-10

ELSS BEO Total

% p.a.

8 0 -8 -16 -24 ST Debt LT Debt ST Floaters LT Floaters Growth LT Gilt ELSS B - Eo Liquid MIP

Mutual Funds During the month of August, the total AUM (AAUM) of the Mutual Funds industry increased by `22114.13 At the August end, industry assets stood at `689542.70 cr, up from `667428.57 cr as at July-end. The largest Fund House in terms of AAUM for the month of August was Reliance Mutual Fund, with a corpus of `104511.22cr. This was followed by HDFC Mutual Fund, which was managing assets to the tune of `90,178.73cr. The third place went to ICICI Prudential Mutual Fund with an AAUM of `68795.94cr. Over August, the highest net accretion to AUM was registered by HDFC Mutual Fund, which gained funds to the tune of `5550.53 cr. The Fund House that witnessed the highest net redemptions amounting to `3533.79 cr over the previous month was LIC Mutual Fund. The total AAUM of the schemes tracked by us stood at `400,955 cr as on August 31st 2010. This is relatively higher than the previous month's AAUM of `370181 cr (with reference to our universe of schemes). With reference to the schemes tracked by us, the largest net inflows were witnessed by the Liquid Fund category, which gained AAUM to the tune of `33061 cr during the month. The highest net redemptions were from Short Term Debt Funds category, which amounted to `3863 cr.

Source: IDBI Capital Market Services

August 31, 10 Yield 364-day t-bill 7.27% 2013 6.49% 2015 7.02% 2016 6.90% 2019 7.80% 2020 7.35% 2024 8.28% 2032 7.50% 2034 6.83% 2039 6.41 7.13 7.77 7.88 8.08 7.93 8.19 8.37 8.38 8.41

July 31, 10 Yield 6.10 7.16 7.50 7.74 7.74 7.80 8.20 8.34 8.25 8.20

Average maturities
Aug-10 12 Jul-10

10

Average maturity in years

5.10 8

6 3.28 4 6.16 2 0.10 0.07 Liquid 0.15 0.13 ST Floaters 0.37 0.34 LT Floaters 0.75 0.75 ST Debt 3.51 1.67 LT Debt LT Gilt MIP 1.60

Source: IDBI Capital Market Services

55

DiversifiedMonthly Equity Schemes Mutual Funds


Diversified Equity Schemes invest in equities across sectors No. of schemes studied 167 * For the schmes studied below Scheme-wise Returns and Volatility
Scheme Name August Absolute Returns (%) July Absolute Returns (%) (3.17) 4.97 3.98 1.50 2.84 6.68 2.77 5.36 4.41 2.70 2.31 3.35 7.61 3.90 8.36 4.56 5.17 2.26 4.71 4.09 3.54 3.47 3.40 3.47 4.51 2.99 3.38 5.04 4.45 5.42 4.48 3.89 2.95 1.10 1.80 3.31 5.93 3.42 4.09 1.49 2.60 5.37 4.45 3.31 2.99 3-month Absolute Returns (%) 12.62 19.28 16.22 14.14 13.16 16.62 13.80 16.50 16.04 11.85 12.96 13.51 20.02 15.03 17.80 14.98 16.35 11.65 16.38 10.68 13.67 13.93 13.01 13.64 15.37 13.74 13.22 16.36 14.90 15.28 13.72 13.59 11.89 11.16 10.89 12.30 15.71 13.10 13.63 10.59 13.43 14.52 13.50 12.31 11.22 6-month Absolute Returns (%) 10.89 25.04 23.04 20.86 12.73 18.42 17.84 25.20 17.03 22.06 20.23 10.82 24.49 18.13 23.65 20.16 25.93 15.97 17.95 12.82 13.78 18.22 19.16 12.82 26.37 14.50 22.62 23.44 23.41 15.87 11.83 13.51 10.89 18.50 8.15 14.56 13.48 18.91 13.64 12.64 21.38 13.71 13.64 14.88 13.23 1-mth over 1-mth over 1-yr Rolling 1-yr volatility Returns (%) of returns 1.95 2.87 4.02 2.96 2.10 2.77 2.75 2.83 2.95 2.69 2.80 1.88 3.74 3.15 3.87 3.22 3.56 2.82 2.59 1.80 2.84 2.99 2.77 2.24 3.72 1.86 3.66 4.03 3.50 2.97 2.51 1.89 1.77 3.05 1.52 2.26 2.70 2.50 2.43 2.55 3.87 2.25 2.38 3.28 2.23 5.61 4.03 4.24 4.19 4.63 4.85 4.18 3.57 4.51 3.96 3.55 5.02 4.28 3.96 4.81 3.92 4.25 3.83 4.71 5.10 4.71 3.45 3.31 4.16 4.77 4.58 3.88 4.84 4.15 4.49 5.06 4.80 4.14 2.91 4.65 4.09 5.62 3.74 3.87 4.14 4.76 6.10 4.62 4.50 4.29

September Outlook Short Term - Neutral; Long Term - Positive Aug. Return 2.18% Aug. AUM* `137,868 cr

Quartile I Sundaram BNP Paribas Media & Entert Opp Fund - Ret 7.61 Birla Sun Life India GenNext Fund - Growth 6.03 DSP BlackRock Small and Midcap Fund - Growth 5.26 Fortis Dividend Yield Fund - Growth 5.06 UTI Opportunities Fund - Growth 5.01 Taurus Discovery Fund - Growth 4.84 DSP BlackRock Equity Fund - Growth 4.77 Kotak Lifestyle Fund - Growth 4.58 Sundaram BNP Paribas Select Midcap - Growth 4.08 Escorts High Yield Equity Plan - Growth 4.07 HDFC Growth Fund - Growth 4.06 Quartile 2 Birla Sun Life Special Situations Fund - Growth 4.03 IDFC Premier Equity Fund - Plan A - Growth 4.03 SBI Magnum Global Fund 94 - Growth 3.98 SBI Magnum Sector Umbrella - Emerging Businesses 3.97 HDFC Equity Fund - Growth 3.95 Kotak Midcap Fund - Growth 3.89 UTI Dividend Yield Fund - Growth 3.87 Sundaram BNP Paribas Rural India Fund - Growth 3.83 JM Mid Cap Fund - Growth 3.81 HSBC Midcap Equity Fund - Growth 3.79 Quantum Long-Term Equity Fund - Growth 3.73 Quartile 3 PRINCIPAL Dividend Yield Fund - Growth 3.73 Franklin India Prima Plus - Growth 3.73 Canara Robeco Emerging Equities - Growth 3.69 Sahara Power & Natural Resources Fund - Growth 3.68 ING Dividend Yield Fund - Growth 3.67 Reliance Equity Opportunities Fund - Growth 3.63 Fortis Future Leaders Fund - Growth 3.53 L&T Midcap Fund - Growth 3.51 Franklin India High Growth Companies Fund - Growth 3.51 Sundaram BNP Paribas Growth Fund - Growth 3.50 IDFC Classic Equity Fund - Plan A - Growth 3.40 Quartile 4 Tata Dividend Yield Fund - Growth 3.39 UTI Top 100 Fund - Growth 3.32 Kotak Opportunities Fund - Growth 3.31 JM Emerging Leaders Fund - Growth 3.18 DSP BlackRock Opportunities Fund - Growth 3.17 Tata Contra Fund - Growth 3.16 Tata Select Equity Fund - Appr 3.15 UTI Master Value Fund - Growth 3.15 SBI Magnum Midcap Fund - Growth 3.13 Franklin India Flexi Cap Fund - Growth 3.12 Principal Emerging Bluechip Fund - Growth 3.11 Average 2.18

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

Mutual Funds Monthly

Net change in assets of Growth Funds


Net Inflow s / Outflow s 12,000 10,000 8,000 6,000 8,720

Fund Flows Over the month of August the stock markets showed a Bearish trend. The BSE Sensex was up by negative 0.61%, while the broader 50-stock S&P Nifty was down by negative 0.54%. BSE Mid-cap Index was up by 1.39%, while the BSE Small-cap index went up by 1.12%.From the leading indices BSE CD, BSE AUTO and BSE FMCG increased by 5.37%, 4.26%, 3.66% while BSE Metal, BSE Oil and Gas decreased by negative 4.08% and 3.36%. Over the month, Diversified Equity Funds witnessed net increase in AUM to the tune of `1767 cr. as on August 31st, 2010, the category AUM stood at `137868.5 cr., accounting for about 34% of industry assets (with reference to our universe of schemes). Top AUM gainers in August 2010
Net Inflow in August

Rs Crore

4,000 2,000 0 (2,000) (4,000) (6,000)

2,900 899 536 Apr-10 May -10 (2,619) Jun-10 Jul-10

1,767

Mar-10

Aug-10

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

(` Cr) `
Corpus as on Aug. 31, '10

HDFC Equity Fund - Growth HDFC Top 200 - Growth Reliance Equity Opportunities Fund - Growth UTI Dividend Yield Fund - Growth Reliance RSF - Equity - Growth Assets under management of Growth Funds
AUM as at month-end 160,000 140,000 120,000
Rs Crore

373.80 303.96 209.76 158.59 128.90

7,450.56 8,610.71 2,529.73 2,522.67 3,111.97

Top AUM losers in August 2010


137,868

(` Cr) `
Corpus as on Aug. 31, '10

126,564

129,464

126,845

135,565

136,101

Net Outflow in August

Reliance Natural Resources Fund - Growth ICICI Prudential Infrastructure Fund - Growth Birla Sun Life Special Situations Fund - Growth Reliance Equity Fund - Growth

(126.77) (78.71) (59.60) (56.75)

3,170.11 3,753.83 1,293.68 420.42 1,844.46

100,000 80,000 60,000 40,000 20,000 0 Mar-10 Apr-10 May -10 Jun-10 Jul-10 Aug-10

Reliance Equity Advantage Fund - Retail - Growth (73.92)

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

Returns Analysis During the month of August, Diversified Equity Funds generated an average absolute return of 2.18%, less than the return of 2.99% generated in the month of July. The 3 months & 6-month average absolute return were at 11.22% & 13.23% respectively, while the 1-month over 1-year rolling return average was at 2.23%. The volatility of returns was noted at 4.29. Portfolio Review

August 31, 10

July 31, 10

Equity Fund Indicators Growth Option: Point-to-Point Return 1 month over 1 year Rolling Return Volatility Equity Market Indicators BSE Sensex S&P CNX Nifty
Note: All figures are absolute %.
Source: IDBI Capital Market Services

2.18 2.33 4.29

2.99 2.50 4.60

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

(0.61) (0.54)

2.05 2.21

77

Mutual Funds Monthly

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


18,600 18,500 18,400 18,300

Top 10 Sector Holdings in August 2010


Oil & Gas, Petro. & Refinery Auto & Auto ancilliaries Fert., Pest. & Agrochem. Pharmaceuticals Banks Computers - Software & Edu. Engg. & Industrial Machinery Media and Entertainment Others FMCG Power Gen., Trans. & Equip 11% 7% 4% 6% 15% 9% 5% 4% 29% 5% 5%

Top 10 Sector Holdings in July 2010


Oil & Gas, Petro. & Refinery Auto & Auto ancilliaries Miscellaneous Pharmaceuticals Banks Computers - Software & Edu. Engg. & Industrial Machinery Media and Entertainment Others FMCG Power Gen., Trans. & Equip 10% 7% 5% 7% 14% 10% 5% 4% 29% 5% 4%

Index

18,200 18,100 18,000 17,900 17,800 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug 2-Aug 4-Aug 6-Aug 8-Aug BSE Sensex in August 2010

Source: IDBI Capital Market Services

Outlook
...While the broader S&P Nifty was down by -0.54%
5,700 5,650 S&P CNX Nifty in August 5,600 5,550

In August NIFTY declined 0.54% during the month as domestic events dominated the market sentiment in absence of significant developments in international markets. India remains somewhat insulated from global economic downturns due to prospects of sustained growth in India's private consumption and fixed capital formation. India continues to witness a surge of foreign portfolio flows, mainly due to its economy's stable and high growth characteristics. Thus, in 2010 CYTD India accounted for around 50% of Asian FII inflows. The June 2010 quarter earnings for Sensex companies were below expectations, declining by 1% YoY, compared to an expectation of 7% growth.WPI Inflation for August 2010 at 8.51% (Base: 2004-05). The FII's bought $2513.61Mn of Indian equities in August. Thus on the back of weak global sentiment and positive domestic news markets have been volatile but largely range bound. Schemes Watch

Index

5,500 5,450 5,400 5,350 5,300 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug

Source: IDBI Capital Market Services

Over August, net FII inflows stood at $2513.61 mn


Net FII Investment 5,000 4,371.91 4,000 3,000 2,099.14 2,000 3,553.19 2,513.61

DSP BlackRock Small and Midcap Fund - Growth Reliance Equity Opportunities Fund - Growth HDFC Equity Fund - Growth IDFC Premier Equity Fund - Plan A - Growth

2,271.91

$US mn

1,000 0 (1,000) (2,000) (2,039.89) (3,000) March April May June July August

Source: IDBI Capital Market Services

Mutual Funds Monthly

Equity Linked Savings Schemes


September Outlook Positive 35 Aug. Return Aug. AUM* 2.07% `22,400 cr

ELSS Tax Saving Schemes No. of schemes studied * For the schemes studied below Growth Option Scheme-wise Returns and Volatility
Scheme Name August Absolute Returns (%) 4.42 4.00 3.92 3.71 3.70 3.53 3.51 3.38 3.15 2.96 2.94 2.58 2.28 2.13 2.12 2.11 1.93 1.86 1.70 1.67 1.61 1.54 1.34 1.30 1.25 1.07 1.06 1.04 1.02 0.92 0.90 0.62 0.58 0.45 0.24 2.07 July Absolute Returns (%) 5.19 4.08 3.20 2.23 3.06 2.81 3.43 3.27 3.36 3.27 2.62 3.31 3.09 3.37 2.70 3.19 2.11 1.90 3.18 1.72 3.62 2.97 3.33 2.73 1.44 3.45 4.93 1.94 2.61 1.94 5.02 5.33 2.22 0.92 3.27 3.05 3-month Absolute Returns (%) 16.40 15.02 13.84 12.81 12.85 11.16 15.22 10.21 13.90 11.78 11.48 12.99 10.96 11.91 10.60 10.81 11.60 11.95 11.66 8.58 12.00 10.98 10.03 10.42 10.17 10.36 10.91 9.89 9.01 6.97 10.52 11.90 8.98 8.20 8.75 11.28 6-month Absolute Returns (%) 18.06 19.30 17.85 17.09 17.66 19.78 21.66 7.29 16.39 16.30 11.17 16.89 11.71 10.33 11.00 10.36 16.47 11.50 14.57 12.27 18.86 9.46 9.51 11.76 9.28 16.45 10.75 11.36 8.98 11.48 16.36 12.59 7.91 7.93 11.15 13.47

1-mth over 1-mth over 1-yr Rolling 1-yr volatility Returns (%) of returns 2.30 2.84 2.91 2.77 3.05 2.78 2.51 2.12 2.00 2.24 1.96 2.60 2.31 1.65 2.23 1.71 2.61 1.99 2.36 1.86 2.95 1.62 1.93 2.06 1.21 2.68 2.24 2.24 1.85 2.06 2.28 2.60 1.47 1.84 3.01 2.25 4.71 3.91 3.42 3.53 3.70 3.47 4.31 5.50 4.37 4.57 4.78 3.70 3.73 4.76 4.25 4.64 4.26 4.49 4.18 3.66 3.67 4.36 4.31 4.12 4.75 4.03 4.86 4.70 3.78 4.75 4.72 4.46 4.70 4.26 3.82 4.26

Quartile I Taurus Taxshield - Growth Reliance Tax Saver Fund - Growth Quantum Tax Saving Fund - Growth Religare Tax Plan - Growth HDFC Taxsaver - Growth Canara Robeco Equity Taxsaver - Growth Sahara Taxgain - Growth Bharti AXA Tax Advantage Fund - Reg - Growth Edelweiss ELSS Fund - Growth Quartile 2 Kotak Taxsaver - Growth L&T Taxsaver Fund - Growth HDFC Long Term Advantage Fund - Growth Franklin India Taxshield - Growth Sundaram BNP Paribas Taxsaver -Growth HSBC Tax Saver Equity Fund - Growth Birla Sun Life Tax Plan - Growth ING Tax Saving Fund - Growth Fortis Tax Advantage Plan - Growth Quartile 3 JPMorgan India Tax Advantage Fund - Growth Tata Tax Saving Fund Fidelity Tax Advantage Fund - Growth Baroda Pioneer ELSS 96 UTI Equity Tax Savings Plan - Growth Principal Personal Taxsaver LIC Tax Plan - Growth DSP BlackRock Tax Saver Fund - Growth DWS Tax Saving Fund - Growth Quartile 4 Birla Sun Life Tax Relief 96 - Growth PRINCIPAL Tax Savings Fund JM Tax Gain Fund - Growth Escorts Tax Plan - Growth IDFC Tax Advantage (ELSS) Fund - Growth Franklin India Index Tax Fund SBI Magnum Tax Gain Scheme 93 - Growth ICICI Prudential Taxplan - Growth Average

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

99

Mutual Funds Monthly

Net change in assets of ELSS Funds


Net Inflow s / Outflow s 2,000 1,750 1,500 1,250 1,000 750 500 250 0 (250) (500) (750) (1,000) 1,616

Fund Flows During the month of August, ELSS Funds witnessed net inflow in AUM of `363.76 cr. The category AUM as on August 31st, 2010 stood at `22,400.65 cr, representative of 6% of industry assets (with reference to our universe of schemes).
364

833 490 102

Rs Crore

Top AUM gainers in August 2010


Net Inflow in August

(` Cr) `
Corpus as on Aug. 31, '10

Mar-10

Apr-10

May -10 (541)

Jun-10

Jul-10

Aug-10

Note: Figure shows fund flows for 35 schemes. Source: IDBI Capital Market Services

HDFC Taxsaver - Growth Reliance Tax Saver (ELSS) Fund - Growth Sundaram BNP Paribas Taxsaver - Growth Birla Sun Life Tax Relief 96 - Growth ICICI Prudential Taxplan - Growth

95.80 59.79 42.30 36.71 18.41

2,742.15 2,335.91 1,492.49 1,511.90 1,241.23

Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
Corpus as on Aug. 31, '10

HSBC Tax Saver Equity Fund - Growth Fortis Tax Advantage Plan - Growth ING Tax Saving Fund - Growth Fidelity Tax Advantage Fund - Growth Assets under management of ELSS Funds
AUM as at month-end 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 0 19,637 20,128 19,587 20,420 22,037 22,400

(2.26) (0.96) (0.51) (0.49) (0.47)

279.29 60.00 43.56 1,231.70 41.71

LIC Tax Plan - Growth

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

Rs Crore

Mar-10

Apr-10

May -10

Jun-10

Jul-10

Aug-10

Portfolio Review Between July and August, the highest allocation of ELSS Funds was to the Banking sector at 15.67%. The Petroleum, Gas and petrochemical products industry stood in second place with 9.93% average exposure. This was followed by the Software and Consultancy Services sector with an average allocation of 9.01%, while fourth place was taken by Auto & Auto Ancillaries with 6.72% share of net assets. The other important sectors were Pharmaceuticals & Biotechnology, Engineering and Capital Goods, FMCG, Power & Control equipment Manufacturer, Steel and Ferrous Metal. Outlook Equity-linked savings schemes (ELSS) are said to be good for investors with a investment horizon of more than 3 years. They provide the Fund Manager flexibility to focus on long term value creating opportunities instead of being unduly concerned over short term redemption pressures. Also both drafts of the direct tax code-in August 2009 and June 2010-left out ELSS as one of the instruments, classified as "permitted saving intermediary", that would be allowed to offer tax benefits under section 80C. Investment in an ELSS fund leaves the investor with a disposable surplus (amount of tax saved, `30,900 for highest tax bracket) which, if re-invested, can add substantially to the wealth created. Schemes Watch HDFC Taxsaver - Growth Reliance Tax Saver Fund - Growth Fidelity Tax Advantage Fund - Growth

Note: Figure shows assets for 35 schemes. Source: IDBI Capital Market Services

August 31, 10

July 31, 10

ELSS Fund Indicators Growth Option: Point-to-Point Return 1 month over 1 year Rolling Return Volatility Equity Market Indicators BSE Sensex S&P CNX Nifty
Note: All figures are absolute %.
Source: IDBI Capital Market Services

2.07 2.25 4.26

3.05 2.52 4.56

(0.61) (0.54)

2.05 2.21

10

Mutual Funds Monthly

Balanced Funds
September Outlook Equity-oriented Funds: Neutral Aug. Return Aug. AUM* Equity-oriented 1.48% `9,974 cr

Balanced Funds invest in Debt & Equity in 60:40 or 40:60 ratio No. of schemes studied * For the schemes studied below Balanced Funds (Equity-oriented): Growth Option Scheme-wise Returns and Volatility
Scheme Name August Absolute Returns (%) 3.74 3.58 2.77 2.70 2.54 2.37 2.35 2.11 1.25 1.17 1.03 1.01 0.94 0.87 0.86 0.81 0.76 0.67 0.46 (2.30) 1.48 July Absolute Returns (%) 3.37 2.03 2.32 3.64 1.32 2.28 3.79 0.96 2.96 3.13 1.84 1.43 2.51 1.74 3.39 2.42 1.99 2.32 0.87 2.94 2.36 3-month Absolute Returns (%) 12.04 10.32 9.14 11.11 8.24 8.98 11.19 7.66 9.21 9.29 7.60 7.28 7.64 7.80 9.13 7.85 7.57 7.36 4.96 7.08 8.57

Equity-oriented 20

6-month Absolute Returns (%) 15.73 13.77 16.37 18.16 9.27 4.95 14.51 8.59 15.49 9.65 9.60 8.82 8.43 10.69 12.18 8.15 8.43 8.67 2.86 12.24 10.83

1-mth over 1-mth over 1-yr Rolling 1-yr volatility Returns (%) of returns 2.38 2.14 2.13 3.01 1.60 0.96 2.16 1.37 2.81 1.74 1.81 1.44 1.63 2.15 1.99 1.20 1.59 1.82 0.48 1.41 1.79 3.08 3.14 2.95 2.68 3.11 4.20 3.02 2.48 2.45 3.75 3.36 2.76 3.15 3.14 4.21 3.24 3.35 2.86 2.80 4.04 3.19

Quartile I Reliance RSF - Balanced - Growth DSP BlackRock Balanced Fund - Growth Canara Robeco Balance - Growth HDFC Prudence Fund - Growth Kotak Balance Quartile 2 LIC Balanced - Plan C (Growth) Birla Sun Life 95 - Growth FT India Balanced Fund - Growth HDFC Balanced Fund - Growth Sundaram BNP Paribas Balanced Fund - Growth Quartile 3 UTI Balanced Fund - Growth ING Balanced Fund - Growth PRINCIPAL Balanced Fund - Growth Tata Balanced Fund - Growth Escorts Balanced Fund - Growth Quartile 4 Baroda Pioneer Balance Fund - Growth SBI Magnum Balanced Fund - Growth ICICI Prudential Balanced - Growth Birla Sun Life Freedom Fund - Growth JM Balanced - Growth Average

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

11 11

Mutual Funds Monthly

Net change in assets of Equity-oriented Balanced Funds


Net Inflow s / Outflow s 600 500 400 369 236 123 391 433 458

Fund Flows During August, Equity-oriented Balanced Funds witnessed net investment in AUM to the tune of `457.70 cr. The category AUM as at the end of August stood at `9,974.19 cr, accounting for 3% of industry assets (with reference to our universe of schemes). Top AUM gainers in August 2010
Net Inflow in August

Rs Crore

300 200 100 0 (100) (200)

(` Cr) `
Corpus as on Aug. 31, '10

Mar-10

Apr-10

May -10

Jun-10

Jul-10

Aug-10

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

HDFC Prudence Fund - Growth Reliance RSF - Balanced - Growth DSP BlackRock Balanced Fund - Growth Birla Sun Life 95 - Growth UTI Balanced Fund - Growth

335.89 68.72 27.34 19.85 8.73

5,078.31 662.43 746.99 340.87 1,095.58

Top AUM losers in Augsut 2010


Net Outflow in August

(` Cr) `
Corpus as on Aug. 31, '10

AUM of Equity-oriented Balanced Funds


AUM as at month-end 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 9,083 9,516 9,974

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

113.01 279.93 64.50 16.44 28.97

8,200

8,569

8,692

Rs Crore

Returns Analysis During August, Equity-oriented Balanced Funds generated an average absolute return of 1.48% considerably lower than the July return of 2.36%. The 3 months & 6-month average absolute return were at 8.57% & 10.83% respectively, while the 1-month over 1-year rolling return noted at 1.79%. The volatility of returns for August was noted at 3.19. Portfolio Review At the end of August, the average allocation of Equity-oriented Balanced Funds to equities was stable at around 65% -70% levels. The average allocation to Bonds was down from 14.13% to 10.95% between the two months, while the exposure to the CP / CD segment decreased from 13.58% in July to 11.40% in August. The exposure to the overnight markets has increased from 9.71% to 9.84% over the two months. Outlook The aim of Balanced Funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. This proportion affects the risks and the returns associated with the balanced fund - in case equities are allocated a higher proportion, investors would be exposed to risks similar to that of the equity market. These might also be sound investment as retirement solutions. Schemes Watch

Mar-10

Apr-10

May -10

Jun-10

Jul-10

Aug-10

Note: Figure shows assets for 20 schemes Source: IDBI Capital Market Services

August 31, 10

July 31, 10

Equity-oriented Balanced Funds Growth Option: Point-to-Point Return 1 month over 1 year Rolling Return Volatility Equity Market Indicators BSE Sensex S&P CNX Nifty
Note: All figures are asbsolute %.

1.48 1.79 3.19

2.36 1.91 3.35

(0.61) (0.54)

2.05 2.21

G-sec Market Indicators 1 yr g-sec yield 3 yr g sec yield 5 yr g sec yield Corporate Bond Market Indicators 5 yr AAA spreads
Note: All figures are annualised %.

6.41 7.13 7.77

6.10 7.16 7.36

Equity-oriented Balanced Funds HDFC Prudence Fund-Growth DSP BlackRock Balanced Fund - Growth

69bps

73bps

12

Mutual Funds Monthly

Liquid Funds
September Outlook Positive Aug. Return Aug. AUM* 5.35% `126,061 cr

Liquid Funds invest in ultra short-term debt / money market instruments No. of schemes studied Avg Maturity (on August 31) * For the schemes studied below Growth Option Scheme-wise Returns and Volatility
Scheme Name August July Annualised Annualised Returns (%) Returns (%) 6.52 6.15 5.86 5.84 5.80 5.78 5.75 5.73 5.72 5.72 5.70 5.70 5.70 5.69 5.69 5.65 5.60 5.60 5.59 5.59 5.56 5.56 5.56 5.55 5.54 5.53 5.53 5.53 5.52 5.52 5.51 5.51 5.50 5.50 5.50 5.50 5.50 5.49 5.49 5.49 5.49 5.48 5.40 5.39 5.35 5.62 6.02 5.52 5.43 5.75 5.70 6.03 5.69 5.68 5.10 5.39 5.81 5.78 5.73 5.63 5.17 5.62 5.60 5.66 5.66 5.22 4.95 5.61 5.07 5.77 5.51 5.43 5.53 5.74 5.52 5.03 7.74 5.50 5.43 5.46 5.64 5.70 5.63 5.42 5.43 5.50 5.13 5.47 5.60 5.34 3 Month Annualised Returns (%) 5.84 5.88 5.45 5.48 0.07 5.80 5.95 5.40 5.39 5.17 5.39 5.58 5.57 5.50 5.48 5.05 5.50 5.48 5.59 5.59 5.15 5.02 5.46 4.95 5.56 5.48 5.39 5.40 5.43 5.45 5.25 6.20 5.44 5.34 5.39 5.45 5.62 5.45 5.41 5.34 5.42 5.13 5.30 5.52 5.16

72 25 days

6 Month Aug. Aug. Annualised Rolling Volatility Returns (%) Returns (%) 5.08 5.24 4.97 5.10 0.77 5.06 5.39 4.87 4.86 4.79 4.92 5.09 5.08 5.02 5.01 4.46 5.08 5.07 5.16 5.17 4.66 4.64 5.02 4.34 5.07 5.01 5.05 4.94 4.99 5.06 4.89 5.63 5.04 4.97 4.99 4.81 5.19 4.96 4.99 4.96 5.02 4.89 4.96 5.09 4.72 6.44 6.16 5.86 5.71 5.78 5.81 5.72 5.74 5.74 5.59 5.88 5.71 5.71 5.67 5.68 5.60 5.58 5.54 5.59 5.59 5.56 5.44 5.56 5.49 5.51 5.53 5.51 5.52 5.55 5.47 5.44 6.22 5.45 5.47 5.47 5.49 5.49 5.48 5.46 5.47 5.48 5.46 5.38 5.38 5.34 0.45 0.09 0.11 0.27 0.11 0.11 0.15 0.10 0.10 0.34 0.89 0.11 0.11 0.20 0.11 0.16 0.12 0.16 0.02 0.02 0.11 0.33 0.07 0.16 0.10 0.09 0.13 0.07 0.12 0.14 0.14 2.23 0.15 0.14 0.04 0.06 0.08 0.06 0.07 0.14 0.09 0.05 0.13 0.08 0.20

Aug. Sharpe Ratio * 8.27 38.23 29.07 11.09 26.91 27.12 19.42 29.78 29.17 8.41 3.50 26.87 27.48 14.52 26.41 17.77 23.72 17.82 124.93 127.15 26.29 8.04 43.05 17.51 26.56 31.35 20.76 37.86 24.17 19.20 18.92 1.55 18.63 19.90 74.42 45.28 32.51 44.93 39.71 18.76 29.31 52.01 20.61 34.02 25.07

Quartile I Escorts Liquid Plan - Growth Quantum Liquid Fund - Growth Templeton India TMA - Super IP - Growth Birla Sun Life Cash Manager - I P - Growth Taurus Liquid Fund - Super IP - Growth Shinsei Liquid Fund - IP - Growth JPMorgan India Liquid Fund - Super IP - Growth JM High Liquidity - Super I P - Growth JM High Liquidity - I P - Growth Fidelity Cash Fund - Super IP - Growth IDFC Ultra Short Term Fund - Growth Quartile 2 Baroda Pioneer Liquid Fund - Growth Baroda Pioneer Liquid Fund - Inst Plan - Growth DSP BlackRock Liquidity Fund - IP - Growth Taurus Liquid Fund - Growth L&T Liquid Fund - Super IP - Growth Canara Robeco Liquid - Super IP - Growth ING Liquid Fund - Super IP - Growth Sahara Liquid Fund - Fixed Pricing Option - Growth Sahara Liquid Fund - VP - Growth Templeton India TMA - IP - Growth Fidelity Cash Fund - IP - Growth Quartile 3 IDFC Cash Fund - Plan C - Super I P - Growth L&T Liquid Fund - IP Plus - Growth Kotak Liquid - Inst Premium Plan - Growth Birla Sun Life Cash Plus - Insti. Premium Plan - Gr. Tata Liquid Fund - SHIP - Growth UTI Liquid Fund - Cash Plan - IP - Growth Axis Liquid Fund - IP - Growth SBI Premier Liquid Fund - Super IP - Growth Sundaram BNP Paribas Money Fund - Super IP - Gr. Fortis Overnight Fund - IP - Growth SBI Premier Liquid Fund - IP - Growth Quartile 4 HDFC Liquid Fund - Premium Plan - Growth Reliance Liquidity Fund - Growth Religare Liquid Fund - IP - Growth DWS Insta Cash Plus Fund - Super IP - Growth Religare Liquid Fund - Super IP - Growth SBI Magnum Insta Cash - Cash Plan HDFC Liquid Fund - Premium Plus Plan - Growth ICICI Prudential Liquid - Super IP - Growth UTI Money Market - IP - Growth HDFC Cash Mgmt Fund - Savings Plan - Growth DWS Insta Cash Plus Fund - IP - Growth Average * Sharpe Ratio = August Rolling Return % - Risk free rate August Volatility Risk free rate = 7 to 14 Days Term Deposit

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

13 13

Mutual Funds Monthly

Portfolio details as on August 31, 2010


Scheme Name Bonds (%) --0.54 ----------1.10 ----1.55 1.55 0.54 ---0.06 ---12.65 ---0.06 0.14 -1.46 --0.06 5.03 -0.17 1.46 ----60.78 -11.00 5.37 CP/CD/ MM (%) -62.69 82.31 83.63 94.48 72.90 80.81 97.64 97.64 99.64 100.31 99.86 99.86 94.62 94.48 87.78 85.97 91.02 93.98 93.98 82.31 99.64 94.42 87.78 94.26 71.60 60.39 99.63 62.35 97.59 61.96 92.04 97.59 37.15 81.73 93.12 34.12 93.12 92.29 37.15 91.44 97.10 43.68 34.12 91.02 67.21 84.04 85.97 33.80 94.42 61.96 84.76 FRB Cash/ Fixed (%) Call Deposits (%) (%) -12.22 ---26.71 10.89 -----------3.11 3.11 -----0.48 1.16 -9.85 -----0.08 -----------1.75 ----5.34 -0.66 16.60 16.37 0.43 (3.04) 0.68 --0.36 (0.31) 0.14 0.14 1.65 0.43 (4.02) 14.03 -1.36 1.36 16.60 0.36 4.32 (4.02) 3.82 27.91 38.04 0.08 15.16 -27.04 0.36 -60.44 15.70 6.88 37.58 6.88 2.65 60.44 3.54 2.55 53.27 37.58 -32.79 11.32 14.03 5.42 4.32 27.04 15.75 --9.86 ----------1.55 --13.84 ---9.86 -4.05 -3.35 ---2.73 -------5.68 -2.65 ----5.68 ---13.84 -4.05 -8.59 AA (%) --0.97 ---2.02 ------1.10 ------0.97 -1.01 ----0.27 ------2.03 -1.86 ---0.23 0.35 -1.86 ----9.76 1.01 -1.44 AAA (%) -97.89 88.63 93.93 68.06 90.33 79.33 61.07 61.07 90.41 83.67 86.08 86.08 64.63 68.06 77.26 84.22 72.24 99.59 99.59 88.63 90.41 88.26 77.26 96.28 99.04 97.94 99.73 97.27 62.45 71.01 88.27 62.45 88.86 93.36 89.72 67.08 89.72 62.00 88.86 97.22 99.65 92.73 67.08 72.24 48.10 97.11 84.22 89.79 88.26 71.01 80.12 Sovereign Fund Average Size Maturity (` Cr) (days) ` 9.77 24.56 4,613.39 2,904.81 654.19 291.91 3,606.16 2,748.93 2,748.93 402.83 1,202.80 1,830.56 1,830.56 3,234.65 654.19 1,195.97 2,240.57 389.91 483.01 483.01 4,613.39 402.83 5,055.57 1,195.97 6,719.12 10,254.96 4,803.50 11,480.27 1,462.57 2,315.10 736.28 981.35 2,315.10 8,728.73 10,014.13 2,321.85 2,201.04 2,321.85 3,769.19 8,728.73 11,825.15 586.48 5,980.93 2,201.04 389.91 282.91 857.97 2,240.57 5,581.79 5,055.57 736.28 2,991.23 91 29 29 37 26 9 31 28 28 33 104 28 28 26 26 26 16 16 16 29 33 26 33 26 23 35 26 26 26 23 26 13 26 22 18 22 29 13 31 23 17 18 16 17 22 26 32 26 26 25

Escorts Liquid Plan - Growth Quantum Liquid Fund - Growth Templeton India TMA - Super IP - Growth Birla Sun Life Cash Manager - I P - Growth Taurus Liquid Fund - Super IP - Growth Shinsei Liquid Fund - IP - Growth JPMorgan India Liquid Fund - Super IP - Growth JM High Liquidity - Super I P - Growth JM High Liquidity - I P - Growth Fidelity Cash Fund - Super IP - Growth IDFC Ultra Short Term Fund - Growth Baroda Pioneer Liquid Fund - Growth Baroda Pioneer Liquid Fund - Inst Plan - Growth DSP BlackRock Liquidity Fund - IP - Growth Taurus Liquid Fund - Growth L&T Liquid Fund - Super IP - Growth Canara Robeco Liquid - Super IP - Growth ING Liquid Fund - Super IP - Growth Sahara Liquid Fund - Fixed Pricing Option - Growth Sahara Liquid Fund - VP - Growth Templeton India TMA - IP - Growth Fidelity Cash Fund - IP - Growth IDFC Cash Fund - Plan C - Super I P - Growth L&T Liquid Fund - IP Plus - Growth Kotak Liquid - Inst Premium Plan - Growth Birla Sun Life Cash Plus - Insti. Premium Plan - Growth Tata Liquid Fund - SHIP - Growth UTI Liquid Fund - Cash Plan - IP - Growth Axis Liquid Fund - IP - Growth SBI Premier Liquid Fund - Super IP - Growth Fortis Overnight Fund - IP - Growth SBI Premier Liquid Fund - IP - Growth HDFC Liquid Fund - Premium Plan - Growth Reliance Liquidity Fund - Growth Religare Liquid Fund - IP - Growth DWS Insta Cash Plus Fund - Super IP - Growth Religare Liquid Fund - Super IP - Growth SBI Magnum Insta Cash - Cash Plan HDFC Liquid Fund - Premium Plus Plan - Growth ICICI Prudential Liquid - Super IP - Growth UTI Money Market - IP - Growth HDFC Cash Mgmt Fund - Savings Plan - Growth DWS Insta Cash Plus Fund - IP - Growth ING Liquid Fund - IP - Growth HSBC Cash Fund - Institutional Plus - Growth PRINCIPAL Cash Mgmt Fund LO- Inst Prem. Plan - Gr. Canara Robeco Liquid - IP - Growth LIC MF Liquid Fund - Growth IDFC Cash Fund - Plan B - IP - Growth Sundaram BNP Paribas Money Fund - IP - Growth Average

----------------21.68 --------0.96 -------0.29 2.46 -1.13 -1.70 0.29 2.55 --1.13 ---21.68 ---17.89

Sundaram BNP Paribas Money Fund - Super IP - Growth 11.00

14

Mutual Funds Monthly

Net change in assets of Liquid Funds


Net Inflow s / Outflow s 50,000 40,000 30,000 20,000 9,244 1,730 5,746 27,934 33,061

Fund Flows During the month of August, the Liquid Funds category witnessed highest net inflow among all the categories to the tune of `33061.28 Cr. As at the end of August month, the category AUM stood at `126061.08, accounting for 31.44% of industry assets (with reference to our universe of schemes). Top AUM gainers in August 2010 (` Cr) `
Corpus as on Aug. 31, '10

Rs Crore

10,000 0 (10,000) (20,000) (30,000) (40,000)

(26,959) Mar-10 Apr-10 May -10 Jun-10 Jul-10 Aug-10

Net Inflow in August

UTI Liquid Fund - Cash Plan - IP - Growth Templeton India TMA - Super IP - Growth Reliance Liquidity Fund - Growth Birla Sun Life Cash Manager - I P - Growth

4,794.86 2,977.81 2,848.16 2,767.85

11,480.27 4,613.39 10,014.13 2,904.81 10,254.96

Note: Figure shows fund flows for 72 schemes Source: IDBI Capital Market Services

Birla Sun Life Cash Plus - Insti. Premium Plan 2,727.63

Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
Corpus as on Aug. 31, '10

IDFC Savings Advantage Fund - Growth Assets under management of Liquid Funds
AUM as at month-end 140,000 120,000 100,000 77,031 86,276 59,317 65,063 93,000 126,061

(923.55) (743.25) (643.58) (445.62) (257.66)

1,322.94 6,719.12 1,195.97 2,201.04 2,315.10

Kotak Liquid - IP - Growth L&T Liquid Fund - Super IP - Growth DWS Insta Cash Plus Fund - Super IP - Gr. SBI Premier Liquid Fund - Super IP - Growth

Rs Crore

80,000 60,000 40,000 20,000 0

Returns Analysis Over the month of August, Liquid Funds category registered an average annualized return of 5.35%, compared to same with the return of 5.34% generated in the month of July. The 3 months & 6-month annualized returns were noticed at 5.16% & 4.72% respectively, while August rolling returns stood at 5.34%. The volatility of returns during the month was at 0.20. The average Sharpe Ratio for August noted at 25.07. Portfolio Review At the end of August the average allocation of Liquid funds to bonds was 5.37%. The exposure to CP/CD segment was 84.76% lower than the 81.66%, level seen at July end. The average allocation to FRBs was at 5.34% which is lower than the previous month's figure of 8.11%. As at the end of August, the percentage of net assets invested in the overnight markets were 15.75% higher from the allocation of 15.39% seen in July. The exposure of Fixed Deposits increased to 8.59% in August as compared to last month's exposure of 7.35% .The credit quality of the portfolios in August was fairly impressive with over 80.12% of average net assets invested in AAA rated paper, which was a bit lower than the previous month's level of 81.22%. Average maturity witnessed a significant decrease from 36 days in July to 25 days in August.

Mar-10

Apr-10

May -10

Jun-10

Jul-10

Aug-10

Note: Figure shows assets for 72 schemes Source: IDBI Capital Market Services

August 31, 10

July 31, 10

Liquid Fund Indicators Growth Option: Point-to-Point Return 7-days over 1 month Rolling Return Volatility Money Market Indicators Mibor month Average Call rate range Repo-rate range 90-day CP Reference
Note: All figures are annualised %.

5.35 5.34 0.20

5.34 5.31 0.23

4.60-6.00 5.00-5.15 4.00-5.10 7.50

4.86-6.00 4.00-5.20 3.75-5.10 7.14

15 15

Mutual Funds Monthly

The NSE Mibor moved lower at the end of August


8.00 7.00 6.00

Asset allocation

CP / CD

FRB

Bonds

Cash/Call

August 31 July 31
Note: Figures are as a % of net assets Source: IDBI Capital Market Services
MIBOR in August 2010

84.76 81.66

5.34 8.11

5.37 5.38

15.75 15.39

% p.a.

5.00 4.00 3.00 2.00 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug

Rating Profile

Sovereign

AAA/P1+

AA/P1-

August 31 July 31
Note: Figures are as a % of net assets. Source: IDBI Capital Market Services

17.89 8.23

80.12 81.22

1.44 1.87

Source: IDBI Capital Market Services

7 day rolling returns over 1 month for Liquid Funds


6.00 5.75 5.50

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

% p.a.

5.25 5.00 7-day rolling return ov er 1 month 4.75 4.50 1-Aug 3-Aug 5-Aug 7-Aug 9-Aug 11-Aug 13-Aug 15-Aug 17-Aug 19-Aug 21-Aug 23-Aug 25-Aug 27-Aug 29-Aug 31-Aug

Source: IDBI Capital Market Services

Schemes Watch
6-month rolling return for Liquid Funds
7.00 6.00 5.00

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

% p.a.

4.00 3.00 2.00 1.00 12-Apr 15-Mar 29-Mar 26-Apr 1-Mar 10-May 24-May 7-day rolling return ov er 6 months
Trend Line

16-Aug

Source: IDBI Capital Market Services

Asset Allocation as on 31 August 2010


FRB 4% Cash/Call 13% FD 7% Bonds 4%

CP/CD/MM 72%

Source: IDBI Capital Market Services

Rating Profile as on 31 August 2010


Sov ereign 18% AA 1%

AAA 81%

Source: IDBI Capital Market Services

16

30-Aug

21-Jun

19-Jul

2-Aug

7-Jun

5-Jul

Mutual Funds Monthly

Floating Rate Funds


September Outlook ST Floating Rate Funds: Neutral LT Floating Rate Funds: Neutral ST Floaters LT Floaters Aug. Return 5.07% 5.05% Aug. AUM* `8,631 cr `9,384 cr

Floating Rate Funds invest in floating rate / money market instruments ST Floaters 18 46 days LT Floaters 10 125 days

No. of schemes studied Avg Maturity (on August 31) * For the schemes studied below ST Floaters: Growth Option Scheme-wise Returns and Volatility
Scheme Name August July Annualised Annualised Returns (%) Returns (%) 5.35 5.56 5.60 5.92 4.91 5.36 5.19 5.13 4.95 4.81 4.83 5.20 5.13 5.06 4.98 5.21 4.89 4.24 5.13 3 Month Annualised Returns (%) 5.65 5.41 5.49 5.85 5.31 5.33 4.98 5.03 4.97 4.82 4.86 5.01 4.93 4.98 4.80 4.99 4.72 4.33 5.08

6 Month Aug. Aug. Annualised Rolling Volatility Returns (%) Returns (%) 5.23 5.16 5.40 5.33 5.06 5.39 4.63 4.45 4.83 4.38 4.77 4.81 4.71 4.82 3.94 5.14 3.86 4.21 4.78 6.51 5.54 5.49 5.46 5.39 5.28 5.24 5.19 4.98 4.90 4.93 4.81 4.71 4.63 4.57 4.43 4.49 4.16 5.04 1.73 0.14 0.31 0.61 0.48 0.19 0.09 0.12 0.12 0.23 0.07 0.25 0.25 0.33 0.28 1.40 0.28 0.76 0.42

Aug. Sharpe Ratio * 2.17 20.55 8.74 4.43 5.50 13.29 27.47 20.37 18.74 9.29 31.53 8.29 7.93 5.72 6.55 1.20 6.33 1.85 11.11

Quartile I SBI Magnum Insta Cash Fund - Liquid Floater Plan - Growth 6.59 ICICI Prudential FRF - Plan D - Growth 5.56 LIC MF Floating Rate Fund - ST - Growth 5.46 Reliance FRF - Growth 5.44 Canara Robeco FRF - ST - Growth 5.43 Quartile 2 Birla Sun Life Floating Rate Fund - STP - IP - Growth 5.31 Templeton FRIF - Short Term - IP - Growth 5.24 L&T Short Term - FRF - Cumulative 5.20 UTI Floating Rate Fund - STP - Growth 5.00 Tata FRF - ST - IP - Growth 4.99 Quartile 3 PRINCIPAL Floating Rate Fund - SMP - IP - Growth 4.93 ICICI Prudential FRF - Plan C - Growth 4.83 ICICI Prudential FRF - Plan B - Growth 4.73 JM Floater Fund - S T P - Growth 4.65 Quartile 4 HSBC FRF - STP - Inst Plus - Growth 4.56 SBI Magnum Income - FRP - ST - Growth 4.52 HSBC FRF - STP - IP - Growth 4.49 Kotak Floater - ST - Growth 4.28 Average 5.07 * Sharpe Ratio = August Rolling Return % - Risk free rate August Volatility Risk free rate = 46 to 90 Days Term Deposit

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

LT Floaters: Growth Option Scheme-wise Returns and Volatility


Scheme Name August July Annualised Annualised Returns (%) Returns (%) 5.87 5.47 5.43 5.31 5.10 5.07 4.91 4.85 4.66 3.85 5.05 6.45 6.04 4.91 5.47 4.83 4.95 1.53 4.89 5.46 6.07 5.06 3 Month Annualised Returns (%) 5.93 5.52 5.31 5.44 4.82 5.01 4.18 4.84 5.22 4.65 5.09 6 Month Aug. Aug. Annualised Rolling Volatility Returns (%) Returns (%) 5.66 5.25 5.06 5.47 4.77 5.04 4.71 4.08 5.22 4.88 5.01 5.89 5.49 5.39 5.30 4.97 4.99 3.54 4.84 4.67 4.09 4.92 0.27 0.26 0.48 0.47 0.41 0.14 4.73 0.36 0.40 2.50 1.00 Aug. Sharpe Ratio * 11.83 10.57 5.50 5.48 5.46 16.41 0.17 5.76 4.82 0.54 6.65

Quartile I Templeton FRIF - Long Term - Super IP - Growth Templeton FRIF - Long Term - IP - Growth Canara Robeco FRF - LT - Growth Quartile 2 Birla Sun Life Floating Rate Fund - LTP - Growth HSBC FRF - LTP - IP - Growth SBI Magnum Income - FRP - LT - Growth Quartile 3 HDFC F R I F - LTF - Growth Tata FRF - LT - Growth Quartile 4 Escorts Floating Rate Funds - Growth ICICI Prudential LT FRF - Plan B - Growth Average * Sharpe Ratio = August Rolling Return % - Risk free rate August Volatility Risk free rate = 1 Year and above

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

17 17

Mutual Funds Monthly

ST Floaters Portfolio details as on August 31, 2010


Scheme Name Bonds (%) CP / CD / MM (%) 60.62 99.98 15.12 15.12 99.11 99.11 99.11 100.00 92.91 48.97 50.34 79.58 66.34 69.38 65.25 97.50 83.08 91.42 74.05 FRB (%) ------------11.63 -----11.63 Cash / Call (%) 39.38 0.02 84.88 84.88 0.89 0.89 0.89 -0.59 2.22 (1.62) 20.42 2.89 6.60 28.26 2.50 16.92 0.38 17.12 Fixed Deposits (%) ----------------12.84 -12.84 Fund Size (` Cr) 59.86 34.41 39.48 39.48 599.01 599.01 599.01 3.64 768.89 4.00 1,147.20 35.70 4,370.51 19.92 92.40 55.71 428.49 971.53 548.24 Average Maturity (days) 11 29 1 1 73 73 73 1 51 110 18 157 77 26 47 22 58 46

Birla Sun Life Floating Rate Fund - STP - IP - Growth -Canara Robeco FRF - Growth -HSBC FRF - STP - Inst Plus - Growth -HSBC FRF - STP - IP - Growth -ICICI Prudential FRF - Plan B - Growth -ICICI Prudential FRF - Plan C - Growth -ICICI Prudential FRF - Plan D - Growth -JM Floater Fund - S T P - Growth -Kotak Floater - ST - Growth -L&T Short Term - FRF - Cumulative -LIC MF Floating Rate Fund - ST - Growth 51.28 PRINCIPAL Floating Rate Fund - SMP - IP - Growth -Reliance FRF - ST - Growth 2.85 SBI Magnum Income - FRP - ST - Growth -SBI Magnum Insta Cash Fund - Liquid Floater Plan - Growth -Tata FRF - ST - IP - Growth -Templeton FRIF - Short Term - IP - Growth -UTI Floating Rate Fund - STP - Growth -Average 27.07

LT Floaters Portfolio details as on August 31, 2010


Scheme Name Bonds (%) ---57.33 -31.94 31.94 ----40.40 CP / CD / MM (%) 96.68 --40.82 93.42 67.54 67.54 81.52 -75.05 75.05 74.70 FRB (%) ------------Cash / Call (%) 3.32 --1.85 6.58 0.53 0.53 3.77 -18.39 18.39 6.67 Fixed Deposits (%) ---------17.17 17.17 17.17 Fund Size (` Cr) 3,028.50 -0.1641 (30-Jun-10) 1,498.97 460.50 431.20 431.20 5.44 3.07 1,979.86 1,979.86 1,090.96 Average Maturity (days) 58 -99 380 37 266 266 62 1 40 40 125

Birla Sun Life Floating Rate Fund - LTP - Growth Canara Robeco FRF - LT - Growth Escorts Floating Rate Funds - Growth HDFC F R I F - LTF - Growth HSBC FRF - LTP - IP - Growth ICICI Prudential LT FRF - Plan B - Growth ICICI Prudential LT FRF - Plan C - Growth SBI Magnum Income - FRP - LT - Growth Tata FRF - LT - Growth Templeton FRIF - Long Term - IP - Growth Templeton FRIF - Long Term - Super IP - Growth Average

18

Mutual Funds Monthly

Assets under management of ST Floaters


21,000 18,000 15,000 14,288 12,422 AUM as at month-end

Fund Flows During August, Short Term Floaters registered net outflow in AUM to the tune of `1452.67 cr, while Long Term Floaters witnessed net outflows amounting to `639.80 cr. Their category AUMs stood at `8630.74 cr and `9384.33 cr respectively. While Short Term Floaters were representative of 2.15% of industry assets, their Long Term counterparts accounted for a 2.34% of industry assets (with reference to our universe of schemes). Short-term Floating Rate Funds: Top AUM gainers in August 2010 (` Cr) `
768.89 4,370.51 428.49 92.40 4.00

15,942 11,185

Rs Crore

12,000 9,000 6,000 3,000 0 Mar-10 Apr-10 May -10

10,083 8,631

Jun-10

Jul-10

Aug-10

Net Inflow in August

Corpus as on Aug. 31, '10

Note: Figure shows assets for 18 schemes Source: IDBI Capital Market Services

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

Assets under management of LT Floaters


AUM as at month-end 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 10,024 7,976 6,725 5,454 8,883 9,384

Short-term Floating Rate Funds: Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
971.53 1,147.20 599.01 59.86 35.70

Corpus as on Aug. 31, '10

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

Rs Crore

Mar-10

Apr-10

May -10

Jun-10

Jul-10

Aug-10

Long-term Floating Rate Funds: Top AUM gainers in August 2010


Net Inflow in August

(` Cr) `
1,498.97 0.18 5.44 3.07

Note: Figure shows assets for 10 schemes Source: IDBI Capital Market Services

Corpus as on Aug. 31, '10

HDFC F R I F - LTF - Growth Escorts Floating Rate Funds - Growth SBI Magnum Income - FRP - LT - Growth Tata FRF - LT - Growth
August 31, 10 July 31, 10

0.49 0.01 (0.11) (0.36)

Short-term Floating Rate Funds Growth Option: Point-to-Point Return 7-days over 1 month Rolling Return Volatility Long-term Floating Rate Funds Growth Option: Point-to-Point Return 7-days over 1 month Rolling Return Volatility Money Market Indicators Mibor month Average Call rate range Repo-rate range 90-day CP Reference
Note: All figures are annualised %.

Long-term Floating Rate Funds: Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
3,028.50 431.20 1,979.86 460.50

Corpus as on Aug. 31, '10

5.07 5.04 0.42

5.13 5.13 0.20

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

5.05 4.92 1.00

5.06 4.94 5.23

Returns Analysis During August, the Short Term Floaters category generated an average annualized return of 5.07%, somewhat lower than the July return of 5.13%. The 3-month annualized returns averaged at 5.08% & 6-month annualized returns averaged at 4.78%, while August rolling returns were seen at 5.04%. The volatility of returns, as measured by the Standard Deviation, stood at 0.42, and the Sharpe Ratio for the category averaged at 11.11. The Long Term Floaters category generated returns of 5.05% in August. This return was nearly equal to the July returns of 5.06%. The 3-months & 6-month annualized returns clocked in at 5.09% & 5.01% respectively, while August rolling returns were at 4.92%. The volatility of returns averaged at 1, and the Sharpe Ratio for the category was measured at a positive 6.65.

4.60-6.00 5.00-5.15 4.00-5.10 7.50

4.86-6.00 4.00-5.20 3.75-5.10 7.14

19 19

Mutual Funds Monthly

7-day rolling returns over 1 month for ST Floaters


8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1-Aug 3-Aug 5-Aug 7-Aug 9-Aug 11-Aug 13-Aug 15-Aug 17-Aug 19-Aug 21-Aug 23-Aug 25-Aug 27-Aug 29-Aug 31-Aug 7-day rolling return ov er 1 month

Portfolio Review Between the months of July and August, the average exposure of Short Term Floaters funds to bonds stood at 27.07%, lower than the exposure of 29.92% seen at the end of July. The average exposure to the CP / CD segment decreased from 74.64% in July to 74.05% in August. The average percentage of net assets invested in FRBs decreased from 12.76% in July to 11.63% in August. The average allocation to the overnight markets increased from 16.22% in July to 17.12% in August. The average maturity of the portfolios decreased from 56 days to 46 days between the two months. In case of Long Term Floaters, the average exposure to Bonds was 40.40% for the month of August. The average share of nets assets invested in the CP / CD segment was 74.70%. The share of cash/ call market was seen at 6.67%. The average maturity of the portfolios decreased from 134 to 125 days between the two months. Outlook

% p.a. % p.a.

Source: IDBI Capital Market Services

7-day rolling return over 6 months for ST Floaters


7.00 6.00 5.00 4.00 3.00 2.00 1.00 12-Apr 15-Mar 29-Mar 26-Apr 1-Mar 10-May 24-May
Trend Line

7-day rolling return ov er 6 months

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

2-Aug

7-Jun

16-Aug

Source: IDBI Capital Market Services

7-day rolling returns of LT Floater Funds


10.00 8.00 6.00

30-Aug

21-Jun

19-Jul

5-Jul

Short-term Floaters Reliance FRF - ST - Growth LIC MF Floating Rate Fund - ST - Growth Long-term Floaters Birla Sun Life Floating Rate Fund - LTP - Growth Templeton FRIF - Long Term - Super IP - Growth

% p.a.

4.00 2.00 7-day rolling return ov er 1 month 0.00 (2.00) 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug

Source: IDBI Capital Market Services

ST Floaters: Asset Allocation as on 31 August 2010


FRB 8% Cash/Call 12% FD 9% Bonds 19%

CP/CD/MM

Source: IDBI Capital Market Services

52%

LT Floaters: Asset Allocation as on 31 August 2010


FRB Cash/Call 5% 0% FD 12% Bonds 29%

CP/CD/MM 54%

Source: IDBI Capital Market Services

20

Mutual Funds Monthly

Short-term Debt Funds


September Outlook Cautious to Neutral 4.46% `40,621 cr

Short-term debt funds invest in short-term G-secs, bonds, other paper No. of schemes studied 28 Avg Maturity (on August 31) 0.75yrs * For the schemes studied below

Aug. Return Aug. AUM*

Growth Option Scheme-wise Returns and Volatility


Scheme Name August July Annualised Annualised Returns (%) Returns (%) 3 Month Annualised Returns (%) 6 Month Aug. Aug. Annualised Rolling Volatility Returns (%) Returns (%) Aug. Sharpe Ratio *

Quartile I UTI Short Term Income Fund - IP - Growth JM Short Term Fund - IP - Growth Sahara Short Term Bond Fund - Growth Birla Sun Life Short Term Opportunities Fund - IP - Gr. DSP BlackRock Short Term Fund - Growth Birla Sun Life Ultra Short Term Fund - IP - Growth LIC MF Savings Plus Fund - Growth Quartile 2 Religare Credit Opportunities Fund - IP - Growth Templeton India STIP - IP - Growth AIG Short Term Fund - IP - Growth Sundaram BNP Paribas Flexible Fund - STIP - Gr. Religare Short Term Plan - IP - Growth Fortis Short Term Income Fund - IP - Growth PRINCIPAL Income Fund - STP - I P - Growth Quartile 3 HDFC HIF - S T P - Growth Bharti AXA Short Term Income Fund - IP - Growth DWS Short Maturity Fund - IP - Growth HDFC Short Term Plan - Growth Canara Robeco Short Term Fund - IP - Growth Reliance Short Term Fund - Growth ICICI Prudential STIP- Growth Quartile 4 Sundaram BNP Paribas Select Debt - S T A P - Appr. ING Short Term Income Fund - Growth Kotak Bond Short Term Plan - Growth IDFC SSIF - Short Term - Plan C - Super IP - Gth SBI SHDF - Short Term - Ret - Growth Tata Short Term Bond Fund - Growth Average 3.43 3.38 2.49 2.27 0.99 0.41 4.46 3.87 3.98 (0.04) (2.67) 4.61 3.03 3.07 3.73 4.25 2.03 1.17 3.61 3.12 4.28 3.12 5.13 5.35 3.96 4.40 4.11 5.28 3.45 3.24 1.59 1.49 0.85 (0.52) 3.95 0.86 3.22 4.86 4.56 3.41 9.48 2.98 0.81 0.15 (0.24) (0.28) (0.56) (0.34) 6.52 4.33 4.30 3.96 3.95 3.87 3.49 3.47 0.84 5.88 3.32 2.52 1.99 1.56 (0.35) 3.58 5.47 4.46 3.84 3.93 3.28 3.06 6.15 4.98 6.52 5.74 5.27 5.42 5.50 3.48 4.27 3.92 3.07 3.16 2.36 2.42 4.02 1.34 3.03 2.78 3.93 3.99 4.25 0.18 1.13 0.39 0.12 0.10 (0.10) (0.08) 5.39 5.38 5.28 5.00 4.91 4.84 4.78 5.34 2.31 (1.65) (0.77) 4.86 5.39 2.97 5.38 4.65 3.26 2.79 4.85 5.18 4.50 5.29 6.60 5.08 4.56 5.08 5.18 5.69 5.33 4.52 3.15 3.91 5.03 4.84 4.09 0.76 3.59 5.53 2.99 0.92 0.97 2.17 3.38 0.49 0.07 0.39 2.47 2.16 0.62 8.14 6.80 6.40 6.15 5.77 5.75 5.49 1.86 4.82 6.44 6.06 5.68 5.52 5.43 5.30 5.57 5.95 6.06 5.55 5.57 5.35 5.59 6.55 5.29 5.80 5.34 5.45 5.33 6.50 6.66 6.39 6.42 5.83 5.69 5.51 7.70 1.34 0.03 2.53 1.66 0.23 0.37 0.49 2.93 138.27 1.45 1.85 12.71 7.52

* Sharpe Ratio = August Rolling Return % - Risk free rate August Volatility Risk free rate = 46 to 90 Days Term Deposit

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

21 21

Mutual Funds Monthly

Portfolio details as on August 31, 2010


Scheme Name G-Sec Bonds CP/CD (%) MM (%) FRB Cash/ Fixed (%) Call Deposits (%) (%) ---15.87 -----------9.19 ----1.66 ---------8.90 0.16 0.08 -27.95 0.62 0.43 5.34 0.35 5.02 1.64 1.57 -2.76 12.05 --4.12 -4.56 --1.38 1.54 1.54 2.58 1.87 1.74 2.58 100.00 2.60 2.18 1.39 6.97 -------------------------------AA (%) A A A Sovereign (%) Fund Average Size Maturity (` Cr) (years) 59.40 81.33 4180.93 3099.45 241.75 639.17 320.61 302.25 3378.58 1899.25 157.96 176.82 1802.51 425.32 78.33 47.82 1005.52 3657.95 1.40 123.76 4550.33 2128.45 401.53 15.52 855.80 792.89 0.08 42.73 7222.52 851.47 1,284.71 1.13 0.20 0.35 0.15 1.26 0.30 1.01 0.39 1.33 0.82 0.44 0.64 1.23 1.15 0.77 0.26 1.40 0.44 0.00 0.77 1.79 0.52 1.23 0.04 0.62 0.50 0.00 0.78 1.33 1.55 0.75

AIG Short Term Fund - IP - Growth

--

----47.62 9.91 19.43 -66.27 49.71 --74.99 ---1.00 9.64 -9.81 8.80 8.04 37.48 12.89 -12.86 --6.82 -25.02

66.56 99.92 -55.99 51.75 89.66 13.54 65.24 21.44 45.19 98.43 -19.69 52.87 69.57 79.20 19.85 94.92 -39.93 55.11 52.23 29.46 85.24 94.96 84.56 -72.20 29.07 64.06 59.64

----

91.37 81.24 --

8.63 -----1.56 -----2.56 --29.05 0.25 --3.96 11.82 ---------8.26

Bharti AXA Short Term Income Fund - IP - Growth -Birla Sun Life Short Term Opportunities Fund - IP --

Birla Sun Life Ultra Short Term Fund - IP - Growth -Canara Robeco Short Term Fund - IP - Growth DSP BlackRock Short Term Fund - Growth DWS Short Maturity Fund - IP - Growth Fortis Short Term Income Fund - IP - Growth HDFC HIF - S T P - Growth HDFC Short Term Plan - Growth HSBC Income Fund - S T P - I P - Growth HSBC Income Fund - S T P - Inst Plus - Growth ICICI Prudential STIP- Growth IDFC SSIF - Short Term - Plan C - Super IP - Gth ING Short Term Income Fund - Growth JM Short Term Fund - IP - Growth Kotak Bond Short Term Plan - Growth LIC MF Savings Plus Fund - Growth Mirae Asset Short Term Bond Fund - IP - Growth PRINCIPAL Income Fund - STP - I P - Growth Reliance Short Term Fund - Growth Religare Credit Opportunities Fund - IP - Growth Religare Short Term Plan - IP - Growth Sahara Short Term Bond Fund - Growth SBI SHDF - Short Term - Ret - Growth ----------------------

-- 100.00 8.83 -35.37 6.70 28.33 17.15 --30.18 20.13 7.56 10.32 50.79 37.54 -39.62 10.15 20.18 35.40 82.52 89.70 59.57 88.82 71.67 82.34 88.78 -67.25 79.87 91.10 57.68 48.96 61.78 -56.42 74.05 77.20 57.67

-- 100.00 -6.51 -98.37 92.13 22.56

Sundaram BNP Paribas Flexible Fund - STIP - Gr. -Sundaram BNP Paribas Select Debt-S T A P-Appr. -Tata Short Term Bond Fund - Growth Templeton India STIP - IP - Growth UTI Short Term Income Fund - IP - Growth Average -----

-- 100.00 20.62 20.38 22.54 63.68 72.47 76.19

22

Mutual Funds Monthly

Net change in assets of ST Debt Funds


Net Inflow s / Outflow s 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 (2,000) (4,000) (6,000) (8,000) (10,000) (5,935) (5,629) 10,644 7,293

Fund Flows Over the month of August, Short Term Debt Funds witnessed net redemptions. The category AUM decreased by `3863.03 cr and the category AUM stood at `40621.2 cr. This accounted for about 10% of industry assets (with reference to our universe of schemes).

Rs Crore

Top AUM gainers in August 2010


(1,529) (3,863)

(` Cr) `
Corpus as on Aug. 31, '10

Net Inflow in August

Birla Sun Life Short Term Opportunities Fund-IP 2,258.00


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

6,438.93 792.89 2,128.45 851.47 855.80

Sundaram BNP Paribas Flexible Fund - STIP UTI Short Term Income Fund - IP - Growth SBI SHDF - Short Term - Ret - Growth

410.94 186.64 75.07

Note: Figure shows fund flows for 28 schemes Source: IDBI Capital Market Services

Religare Credit Opportunities Fund - IP - Growth 222.46

Assets under management of ST Debt Funds


AUM as at month-end 60,000 51,642 50,000 44,349 33,705 46,013 44,484 40,621

Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
Corpus as on Aug. 31, '10

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

3,099.45 3,657.95 401.53 1,899.25 302.25

Rs Crore

40,000 30,000 20,000 10,000

Mar-10

Apr-10

May -10

Jun-10

Jul-10

Aug-10

Note: Figure shows assets for 28 schemes Source: IDBI Capital Market Services

Returns Analysis During August, the Short Term Debt Funds category generated an average annualized return of 4.46%, higher than the July return of 3.07%. The 3-month & 6-month annualized return was stood at 4.28% & 5.28% respectively, while August rolling returns noted at 3.95%. During the month the volatility of returns, as reflected by the Standard Deviation, averaged at 2.98%, and the average Sharpe Ratio for the month noted at 6.52. Portfolio Review As at the end of August, Short Term Debt Funds had an average allocation of around 25.02% to Bonds, considerably lower than the 26.69% allocation seen at the end of July. The percentage of net assets invested in the CP/CD segment decreased from 60.75% in July to 59.64% in August. The category average exposure to FRBs, at 8.90%, was higher than the previous month's figure of 7.61%. The average allocation to cash/call market was 6.97% for the month of August higher than the July exposure of 6.09%. The average credit quality of the portfolios remained more or less stable with around 70%-80% investments in AAA rated papers between the two months. The average maturity of the portfolios noted 0.75 for the month of August.

August 31, 10

July 31, 10

Short-term Debt Fund Indicators Growth Option: Point- to-Point Return 7-days over 1 month Rolling Return Volatility Money Market Indicators Mibor month Average Call rate range Repo-rate range 90-day CP Reference G-sec Market Indicators 1 yr g-sec yield 3 yr g sec yield 4.60-6.00 5.00-5.15 4.00-5.10 7.50 6.41 7.13 4.86-6.00 4.00-5.20 3.75-5.10 7.14 6.10 7.16 103bps 63bps 4.46 3.95 2.98 3.07 3.57 1.78

Corporate Bond Market Indicators 1 yr AAA spreads 129bps 3 yr AAA spreads


Note: All figures are annualised %.
Source: IDBI Capital Market Services

85bps

23 23

Mutual Funds Monthly

7-day rolling returns over 1 month


20.00 15.00 10.00

Asset allocation

CP/CD

Bonds

Cash/Call

August 31 July 31
Note: Figures are as a % of net assets Source: IDBI Capital Market Services
7-day rolling return ov er 1 month

59.64 60.75

25.02 26.69

6.97 6.09

% p.a.

5.00 0.00 (5.00) (10.00) 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug

Rating Profile

Sovereign

AAA/P1+/Call

AA/P1-

August 31 July 31
Note: Figures are as a % of net assets Source: IDBI Capital Market Services

8.26 2.07

76.19 78.94

22.54 18.99

Source: IDBI Capital Market Services

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


50.00 40.00 30.00 20.00

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

% p.a.

10.00 0.00 (10.00) (20.00) (30.00) 13-Apr 16-Mar 30-Mar 27-Apr 2-Mar 8-Jun 11-May 25-May 7-day rolling return ov er 6 months
Trend Line

Schemes Watch Birla Sun Life Ultra Short Term Fund - IP - Growth LIC MF Savings Plus Fund - Growth

6-Jul

20-Jul

17-Aug

Source: IDBI Capital Market Services

Asset Allocation as on 31 August 2010


G-Sec Cash/Call 7% FRB 9% 0% FD 0% Bonds 25%

CP/CD/MM 59%

Source: IDBI Capital Market Services

Rating Profile as on 31 August 2010


Sov ereign 8% AA 21%

AAA 71%

Source: IDBI Capital Market Services

24

31-Aug

22-Jun

3-Aug

Mutual Funds Monthly

Long-term Debt Funds


September Outlook Cautious to Neutral 4.32% `19,829 cr

Long-term debt funds invest in long term g-secs and bonds No. of schemes studied 50 Avg Maturity (on August 31) * For the schemes studied below Growth Option Scheme-wise Returns and Volatility
Scheme Name August July Annualised Annualised Returns (%) Returns (%) (8.47) (5.48) 11.57 0.06 8.99 3.59 (7.28) (1.87) 6.35 (7.49) (1.03) (1.64) 3.32 (1.39) 5.53 (2.61) 5.18 2.30 10.05 5.10 5.10 0.65 9.29 5.20 4.82 4.82 (4.14) (8.05) 1.53 (1.35) 2.08 (5.24) 4.35 1.53 (2.89) (6.07) (4.72) (9.32) 0.04 (4.89) (1.56) (4.68) 2.76 (4.86) (6.11) (2.22) (4.25) (4.18) (2.38) (6.10) (0.32) 3 Month Annualised Returns (%) 2.82 2.19 8.26 4.96 7.35 6.04 1.32 2.10 6.19 0.76 3.44 2.82 5.23 3.87 5.38 2.24 4.99 3.20 17.40 4.94 4.94 3.86 6.55 4.86 4.64 4.64 1.30 1.24 3.66 3.06 3.45 1.62 4.48 3.46 1.60 0.70 1.09 (1.87) 2.18 0.50 1.74 (0.19) 2.58 0.49 (0.88) 0.04 (1.84) (1.01) (0.61) (5.28) 2.93

Aug. Return Aug. AUM*

3.51yrs

6 Month Aug. Aug. Annualised Rolling Volatility Returns (%) Returns (%) 6.07 2.99 8.49 6.89 7.29 6.23 6.20 4.93 5.70 5.65 7.17 7.38 5.62 7.02 5.11 6.89 4.80 6.24 13.28 4.16 4.16 5.89 7.34 4.58 3.86 3.86 4.15 5.04 5.60 7.84 5.39 4.97 5.05 4.91 6.52 5.97 6.22 4.53 5.80 6.76 4.64 4.21 1.89 4.46 2.90 3.61 4.11 1.67 6.00 5.97 5.52 4.95 6.08 6.56 10.01 5.90 7.61 1.93 3.77 6.18 0.95 5.29 2.11 5.27 3.20 5.45 0.95 5.16 6.00 11.08 4.78 4.77 4.17 10.79 4.45 4.43 4.43 0.04 0.22 3.39 1.95 3.22 2.19 3.63 3.77 0.91 5.65 0.28 (1.42) 3.14 2.51 0.71 (1.58) 2.34 0.24 (1.83) (0.06) (2.20) (3.00) (3.75) (7.13) 2.99 11.75 10.71 5.96 15.21 4.12 5.18 19.59 8.31 0.12 19.37 10.36 15.29 3.69 6.42 0.09 14.22 0.02 3.98 12.01 0.34 0.34 4.11 12.61 1.14 0.32 0.32 15.54 14.78 3.09 7.11 3.92 7.36 1.10 7.06 9.36 14.63 11.21 25.47 7.99 24.63 8.83 13.28 0.17 6.65 10.39 4.83 12.08 10.52 10.41 10.52 8.53

Aug. Sharpe Ratio * (0.09) 0.01 0.09 0.26 (0.02) 0.31 (0.21) (0.27) 1.44 (0.26) (0.07) (0.25) (0.20) (0.44) (6.07) (0.36) (53.30) (0.00) 0.42 (3.64) (3.65) (0.44) 0.38 (1.35) (4.90) (4.90) (0.38) (0.39) (0.84) (0.57) (0.71) (0.52) (2.16) (0.32) (0.54) (0.02) (0.51) (0.29) (0.36) (0.14) (0.60) (0.57) (21.42) (0.87) (0.75) (1.25) (0.68) (0.86) (0.94) (1.25) (2.29)

Quartile I SBI Magnum Income - Growth 10.03 L&T Triple Ace - Reg - Growth 9.29 SBI Dynamic Bond Fund - Growth 8.22 LIC Bond Fund - Growth 7.94 Baroda Pioneer Income Fund - Growth 7.25 Fortis Bond Fund - Regular - Growth 7.19 IDFC SSIF - Invt Plan - Plan C - Super IP - Growth 7.16 HSBC Flexi Debt Fund - IP - Growth 6.25 Taurus Short Term Income Fund - Growth 6.21 IDFC SSIF - Invt. Plan - Plan A - Growth 6.19 PRINCIPAL Income Fund - I P - Growth 6.19 HDFC Income Fund - Growth 6.17 Birla Sun Life Medium Term Plan - IP - Growth 6.06 Quartile 2 Escorts Income Plan- Growth 5.86 Sahara Classic Fund - Growth 5.45 HDFC HIF - Growth 5.32 Sahara Income Fund - Growth 5.17 JM Income - Growth 5.07 Sundaram BNP Paribas Bond Saver - I P - Growth 5.00 Tata Income Plus Fund - Plan A - Growth 4.77 Tata Income Plus Fund - Plan B - Growth 4.76 Birla Sun Life Dynamic Bond Fund - Ret - Growth 4.69 Sundaram BNP Paribas Bond Saver - Growth 4.68 DSP BlackRock Strategic Bond Fund - IP - Growth 4.57 Tata Dynamic Bond Fund - Option A - Growth 4.42 Tata Dynamic Bond Fund - Option B - Growth 4.42 Quartile 3 Fortis Flexi Debt Fund - Growth 4.25 Canara Robeco Dynamic Bond Fund - Insti. - Growth 4.07 Reliance RSF - Debt - Growth 4.07 IDFC SSIF - MTP - Plan A - Growth 3.96 Birla Sun Life Income Fund - Growth 3.91 ICICI Prudential L T P - Regular - Cumulative 3.86 Morgan Stanley Short Term Bond Fund - IP Plus 3.84 ICICI Prudential Income Opportunities Fund - IP 3.78 UTI Bond Fund - Growth 3.76 DWS Money Plus Advantage Fund - IP - Growth 3.74 Canara Robeco Income Scheme - Growth 3.48 IDFC D B F - Plan B - IP - Growth (Re-Launched) 3.41 Quartile 4 ING Income Fund - IP - Growth 3.26 DWS Premier Bond Fund - IP - Growth (Re-Launched) 3.06 ICICI Prudential Income Fund - I P - Growth 2.54 Reliance Income Fund - Retail - G P - Growth 2.32 Sundaram BNP Paribas Income Plus- Growth 2.31 Templeton India IBA - Plan A - Growth 2.31 Templeton India Income Fund - Growth 1.60 Birla Sun Life Income Plus - Growth 1.10 Tata Income Fund - Growth (0.07) Fidelity Flexi Bond Fund - Ret - Growth (0.92) DSP BlackRock Bond Fund - Retail Plan - Growth (1.38) Kotak Bond Regular Plan - Growth (4.35) Average 4.32 * Sharpe Ratio = August Rolling Return % - Risk free rate August Volatility Risk free rate = 1 Year and above

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

25 25

Mutual Funds Monthly

Portfolio details as on August 31, 2010


Scheme Name G-Sec Bonds CP / CD (%) (%) MM (%) ------------------------------------------------------9.30 10.12 6.89 -19.76 32.72 31.37 -7.94 13.25 ----26.69 29.26 -61.35 46.39 94.14 ---------92.28 6.32 11.99 -15.99 -0.32 --68.65 68.65 --------51.52 26.78 0.65 31.84 88.50 32.12 30.28 12.72 78.55 48.99 25.50 6.43 98.18 23.21 --61.11 11.65 28.60 5.81 -50.33 22.71 41.15 1.62 3.76 --59.10 41.97 78.02 -8.12 3.85 -86.86 11.95 12.34 26.53 64.33 99.55 9.76 -------34.56 --83.75 2.41 12.46 10.78 36.60 Cash / Call (%) 11.50 8.65 13.19 13.49 5.02 (18.18) 0.38 2.50 0.05 6.35 21.42 -(0.05) 2.69 (3.17) 8.92 16.68 22.31 1.51 2.21 4.24 6.70 8.61 8.61 1.55 ---12.45 4.52 7.72 6.82 10.82 4.84 3.52 35.67 0.13 13.01 11.18 14.17 14.17 -100.00 --12.10 --0.44 2.95 1.24 14.59 9.66 AA (%) -18.23 -0.79 4.01 -6.08 --37.17 10.28 -19.62 26.82 25.71 ---20.79 24.19 30.59 ---7.75 14.83 21.98 -48.17 -41.70 -31.66 -60.53 ---17.34 33.80 33.80 -------11.84 23.80 -7.08 23.14 A A A Sovereign Fund Size Average (%) (` Cr) Maturity (years) 11.50 78.43 82.37 43.86 95.99 25.72 45.52 43.90 94.68 49.94 36.32 -26.75 60.29 60.52 41.42 45.94 56.07 64.79 65.57 69.41 6.70 46.60 46.60 78.12 27.03 28.35 -23.76 52.47 58.30 100.00 34.75 26.56 29.37 100.00 85.35 13.01 38.25 37.72 37.72 -14.95 --72.66 --88.16 76.20 51.71 62.92 51.92 -3.34 11.78 55.35 -51.51 41.40 52.63 1.77 -51.81 -19.32 -5.09 58.58 54.06 20.73 14.43 10.24 -93.30 53.40 53.40 14.13 33.93 --28.07 34.44 --33.59 73.44 ---77.23 44.41 17.18 17.18 ----27.34 ----48.29 23.87 36.30 0.14 7,340.61 596.45 542.38 1,304.31 20.19 218.90 100.32 832.77 299.07 23.38 4.21 76.93 73.68 283.96 168.23 451.29 90.60 607.17 243.63 172.04 80.12 166.20 166.20 460.82 26.60 12.90 25.80 125.88 5.47 87.93 78.81 41.42 317.59 3,388.88 0.37 156.44 9.52 55.21 29.58 29.58 4.38 0.74 1.01 1.01 36.60 2.61 2.61 272.61 80.02 616.34 328.83 385.81 0.00 1.20 2.53 7.15 0.51 6.37 9.39 9.07 0.30 0.75 5.96 4.65 2.30 1.36 3.75 7.95 9.53 2.71 3.69 2.54 1.85 8.67 8.35 8.35 2.38 4.54 0.82 0.18 3.51 3.19 0.28 4.89 9.94 1.60 0.03 0.04 3.79 3.17 5.12 5.12 0.00 0.00 0.00 0.00 5.02 0.00 0.00 7.79 1.55 5.88 4.59 3.51

Baroda Pioneer Income Fund - Growth Birla Sun Life Dynamic Bond Fund - Ret - Growth Birla Sun Life Income Fund - Growth Birla Sun Life Income Plus - Growth Birla Sun Life Medium Term Plan - IP - Growth Canara Robeco Dynamic Bond Fund - Institutional - Growth Canara Robeco Income Scheme - Growth DSP BlackRock Bond Fund - Retail Plan - Growth DSP BlackRock Strategic Bond Fund - IP - Growth DWS Money Plus Advantage Fund - IP - Growth DWS Premier Bond Fund - IP - Growth (Re-Launched) Escorts Income Plan- Growth Fidelity Flexi Bond Fund - Ret - Growth Fortis Bond Fund - Regular - Growth Fortis Flexi Debt Fund - Growth HDFC HIF - Growth HDFC Income Fund - Growth HSBC Flexi Debt Fund - IP - Growth ICICI Prudential Income Fund - I P - Growth ICICI Prudential Income Opportunities Fund - IP - Growth ICICI Prudential L T P - Regular - Cumulative IDFC D B F - Plan B - IP - Growth (Re-Launched) IDFC SSIF - Invt Plan - Plan C - Super IP - Growth IDFC SSIF - Invt. Plan - Plan A - Growth IDFC SSIF - MTP - Plan A - Growth ING Income Fund - IP - Growth JM Income - Growth JPMorgan India Active Bond Fund - IP - Growth Kotak Bond Regular Plan - Growth L&T Triple Ace - Reg - Growth LIC Bond Fund - Growth Morgan Stanley Short Term Bond Fund - IP Plus - Growth PRINCIPAL Income Fund - I P - Growth Reliance Income Fund - Retail - G P - Growth Reliance RSF - Debt - Growth Sahara Classic Fund - Growth Sahara Income Fund - Growth SBI Dynamic Bond Fund - Growth SBI Magnum Income - Growth Sundaram BNP Paribas Bond Saver - Growth Sundaram BNP Paribas Bond Saver - I P - Growth Sundaram BNP Paribas Flexible Fund - Flexible Income - IP Sundaram BNP Paribas Income Plus- Growth Tata Dynamic Bond Fund - Option A - Growth Tata Dynamic Bond Fund - Option B - Growth Tata Income Fund - Growth Tata Income Plus Fund - Plan A - Growth Tata Income Plus Fund - Plan B - Growth Taurus Short Term Income Fund - Growth Templeton India IBA - Plan A - Growth Templeton India Income Fund - Growth UTI Bond Fund - Growth Average

26

Mutual Funds Monthly

Net change in assets of LT Debt Funds


Net Inflow s / Outflow s 2,500 2,000 1,500
Rs Crore

Fund Flows Over the month of August, Long Term Debt Funds category registered net outflow in AUM to the tune of `591.59 cr and the category AUM stood at `19828.55 cr as at the end of August. This accounted for 4.95% of industry assets (with reference to our universe of schemes). Top AUM gainers in August 2010
(592)

1,644 848 714

1,000 500 0 (500) (1,000) (1,500) Mar-10 (198)

(431)

(` Cr) `
Corpus as on Aug. 31, '10

Net Inflow in August

Apr-10

May -10

Jun-10

Jul-10

Aug-10

Birla Sun Life Medium Term Plan - IP - Growth Templeton India Income Fund - Growth IDFC SSIF - MTP - Plan A - Growth Taurus Short Term Income Fund - Growth IDFC SSIF - Invt Plan - Plan C - Super IP - Gr.

504.39 99.05 89.06 84.47 53.70

1,304.31 616.34 460.82 272.61 166.20

Note: Figure shows fund flows for 50 schemes Source: IDBI Capital Market Services

Assets under management of LT Debt Funds


AUM as at month-end 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 0 20,138 20,851 20,420 19,829

Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
Corpus as on Aug. 31, '10

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

7,340.61 299.07 832.77 542.38 283.96

17,645

18,494

Rs Crore

Mar-10

Apr-10

May -10

Jun-10

Jul-10

Aug-10

Returns Analysis Over the month of August, Long Term Debt Funds registered average annualized returns of negative 4.32%, much higher than the returns of negative 0.32% generated in the month of July. The 3-month & 6-month annualized returns stood at an average of 2.93% & 5.52% respectively. The rolling returns for August were noted at 2.99%. The volatility of returns during the month stood at 8.53, and the average Sharpe Ratio stood at negative 3.50.

Note: Figure shows assets for 50 schemes Source: IDBI Capital Market Services

August 31, 10

July 31, 10

Long-term Debt Fund Indicators Growth Option: Point-to-Point Return 7-days over 1 month Rolling Return Volatility Money Market Indicators Mibor month Average Call rate range Repo-rate range 90-day CP Reference G-sec Market Indicators 10 yr g sec yield Corporate Bond Market Indicators 5 yr AAA spreads 10yr AAA spreads
Note: All figures are annualised %.
Source: IDBI Capital Market Services

Portfolio Review
4.32 2.99 8.53 -0.32 1.31 5.24

4.60-6.00 5.00-5.15 4.00-5.10 7.50

4.86-6.00 4.00-5.20 3.75-5.10 7.14

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

7.93

7.80

69bps 60bps

73bps 83bps

27 27

Mutual Funds Monthly

The 5-yr AAA yield fell by just 1 bps over the month of August
9.10 8.80 8.50

Asset allocation

G-Sec

Bonds

Cash/Call

August 31 July 31
Note: All figures are as a % of net assets
Source: IDBI Capital Market Services

0.00 0.00

31.84 29.83

9.66 9.39

% p.a.

8.20 7.90 7.60 7.30 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug 5-y ear AAA y ield in August 2010

Rating Profile

Sovereign

AAA/P1+/Call

AA/P1-

August 31 July 31
Note: Figures are as a % of net assets
Source: IDBI Capital Market Services

36.30 33.98

51.92 57.17

23.14 20.61

Source: IDBI Capital Market Services

7-day rolling returns over 1 month


60.00 45.00 30.00 15.00 0.00 (15.00) (30.00) (45.00) (60.00) 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug 7-day rolling return ov er 1 month

Outlook The corporate bond yields hardened seeing tightness in money market on grounds of tightness in liquidity. The Benchmark 10Y AAA bond yield closed at 7.93% while benchmark 5Y AAA yield closed at 7.77%. The corporate bond yields are expected to track movement in G sec which may be influenced by RBI's actions in its Policy review. The WPI inflation for the month of August was seen at 8.51%. Based on the different factors our outlook on Long-term debt funds is still cautious. Schemes Watch DSP Blackrock Strategic Bond Fund - IP - Growth Birla Sun Life Medium Term Plan - IP - Growth

% p.a. % p.a.

Source: IDBI Capital Market Services

1-month rolling return over 6-months for LT Debt funds


80.00 60.00 40.00 20.00 0.00 (20.00) (40.00) (60.00) (80.00) 3-Aug 17-Aug 11-May 25-May 31-Aug 13-Apr 16-Mar 30-Mar 27-Apr 2-Mar 8-Jun 6-Jul 22-Jun 20-Jul
AA Sov ereign 33% 21%

1-month rolling return ov er 6 months


Trend Line

Source: IDBI Capital Market Services

Asset Allocation as on 31 August 2010


Cash/Call 12% G-Sec 0% Bonds 41%

CP/CD/MM 47%

Source: IDBI Capital Market Services

Rating Profile as on 31 August 2010

AAA 46%

Source: IDBI Capital Market Services

28

Mutual Funds Monthly

Long-term Gilt Funds


September Outlook Cautious to Neutral 27 6.16yrs Aug. Return Aug. AUM* 3.61% `2,129 cr

Long-term gilt funds invest in long-term G-secs No. of schemes studied Avg Maturity (on August 31) * For the schemes studied below Growth Option Scheme-wise Returns and Volatility
Scheme Name August July Annualised Annualised Returns (%) Returns (%) 3 Month Annualised Returns (%)

6 Month Aug. Aug. Annualised Rolling Volatility Returns (%) Returns (%)

Aug. Sharpe Ratio *

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

* Sharpe Ratio = August Rolling Return % - Risk free rate August Volatility Risk free rate = 1 Year and above

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

29 29

Mutual Funds Monthly

Portfolio details as on August 31, 2010


Scheme Name Cash / Call (%) 9.97 33.94 35.30 18.03 2.41 -7.44 46.26 4.97 4.84 4.84 -16.04 3.14 100.00 24.38 4.60 54.84 100.00 8.61 32.04 -3.84 (1.37) 5.16 5.12 15.91 13.96 22.17 CP/CD/ MM (%) 90.03 5.04 -16.27 8.10 --16.92 11.66 --100.00 10.97 4.86 --------15.36 101.37 --16.00 9.19 31.21 1 To 5 Years (%) 6.21 11.00 34.98 32.43 6.21 26.09 17.81 16.89 8.23 2.45 0.11 5.80 5 To 9 Years (%) 14.82 15.33 21.93 15.32 3.25 7.47 2.79 9 To 15 Years (%) 52.67 42.03 46.90 58.97 33.83 31.55 48.49 95.16 95.16 64.38 65.91 29.17 47.49 45.16 67.96 32.96 72.91 79.57 62.39 69.27 40.78 15 To 20 Years (%) 8.36 5.91 9.75 18.16 5.27 0.57 13.82 7.81 39.62 3.90 > 20 Years (%) 12.59 9.75 5.59 7.83 1.28 Fund Size (Rs Cr) 0.13 256.93 80.23 39.47 101.72 0.15 35.50 0.94 194.36 8.85 8.85 26.43 54.72 1.50 110.39 165.18 63.53 11.17 0.09 206.60 0.29 77.18 187.80 0.01 109.42 62.66 153.92 257.33 79.12 Average Maturity (years) 0.00 7.77 6.33 1.02 11.35 12.12 9.56 4.06 6.31 9.21 9.21 0.10 6.54 0.00 7.00 11.08 6.14 0.00 4.38 6.57 -10.75 -9.02 9.33 5.38 6.89 6.16

Baroda Pioneer Gilt Fund - Growth Birla Sun Life G Sec Fund - LT - Growth Birla Sun Life GPRP - Growth Canara Robeco Gilt PGS - Growth DSP BlackRock Government Securities Fund - Growth Escorts Gilt Plan - Growth HDFC Gilt Fund - L T P - Growth HSBC Gilt Fund - Growth ICICI Prudential GFIP - Growth IDFC G Sec Fund - Investment - Plan A - Growth IDFC G Sec Fund - Invt. Plan - Plan B - IP - Growth JM G Sec Regular Plan - Growth Kotak Gilt - Investment Regular Plan - Growth L&T Gilt Investment - Growth LIC G Sec Fund - Growth PRINCIPAL G Sec - Investment - Growth Reliance G Sec Fund - IP - Growth Religare Gilt Fund - Long Duration Plan - Reg - Gr Sahara Gilt Fund - Growth SBI Magnum Gilt LTP - Growth Sundaram BNP Paribas Gilt Fund - Growth Tata Gilt High Investment Fund - Growth Tata Gilt Securities Fund - Growth Taurus Gilt Fund - Growth Templeton India GSF - Composite Plan - Growth Templeton India GSF - LTP - Growth UTI Gilt Advantage Fund - L T P - Growth UTI G-Sec Fund - Growth Average

30

Mutual Funds Monthly

Net change in assets of LT Gilt Funds


Net Inflow s / Outflow s 300 200
Rs Crore

Fund Flows
204

100 0 (100) (200) Mar-10 Apr-10 May -10 Jun-10 Jul-10 Aug-10 7 (4) 20 4 (69)

Long Term Gilt Funds category witnessed net investment in AUM to the tune of `3.73 cr, during the month of August. The category AUM stood at `2129.18 cr. as at the end of the month. This accounted for merely 0.53% of industry assets (with reference to our universe of schemes). Top AUM gainers in August 2010
Net Inflow in August

(` Cr) `
Corpus as on Aug. 31, '10

Birla Sun Life G Sec Fund - LT - Growth PRINCIPAL G Sec - Investment - Growth Reliance G Sec Fund - IP - Growth ICICI Prudential GFIP - Growth

62.92 11.46 5.79 4.96

256.93 101.72 165.18 63.53 194.36

DSP BlackRock Government Securities Fund - Gr. 15.03

Note: Figure shows fund flows for 28 schemes. Source: IDBI Capital Market Services

Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
Corpus as on Aug. 31, '10

Assets under management of LT Gilt Funds


AUM as at month-end 3,000 2,500 1,974 2,000 1,970 1,990 1,921 2,125 2,129

Tata Gilt Securities Fund - Growth UTI Gilt Advantage Fund - L T P - Growth LIC G Sec Fund - Growth Canara Robeco Gilt PGS - Growth Templeton India GSF - LTP - Growth

(7.60) (6.87) (4.94) (1.97) (1.71)

187.80 153.92 110.39 39.47 62.66

Rs Crore

1,500 1,000 500 0 Mar-10 Apr-10 May -10 Jun-10 Jul-10 Aug-10

Returns Analysis During the month of August, Long Term Gilt Funds generated an average annualized return of 3.61% considerably higher than the July returns of negative -5.07%. The 3-month & 6-month average annualized returns were noted at 0.12% & 5.05% respectively, while rolling returns for the month of August were stood at 0.03%. The volatility of returns was registered at 14.46, and the average Sharpe Ratio for the category was seen at a positive 0.06. Portfolio Review Long Term Gilt Funds had an exposure of 22.17% in overnight markets in the month of August, lower than the level of around 24.85% seen at the end of July. The allocation to the CP/CD segment decreased from 35.54% to 31.21% between the two months. In August, the highest allocation was to the 9-15 years segment at around 40.78%, while the second most preferred category comprised securities of 1-5 years maturity and accounted for 5.80% of average net assets. The average maturity increased from 5.10 years as at the end of July to 6.16 years as at the end of August.

Note: Figure shows assets for 28 schemes. Source: IDBI Capital Market Services

August 31, 10

July 31, 10

Long-term Gilt Fund Indicators Growth Option: Point-to-Point Return 7-days over 1 month Rolling Return Volatility G-sec Market Indicators 5 yr g sec yields 10 yr g sec yield 15 yr g sec yield
Note: All figures are annualised %.
Source: IDBI Capital Market Services

3.61 0.03 14.46

-5.07 -1.52 7.76

7.77 7.93 8.19

7.50 7.80 8.20

31 31

Mutual Funds Monthly

7-day rolling returns over 1-month


100.00 75.00 50.00 25.00 0.00 (25.00) (50.00) (75.00) (100.00) 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug 7-day rolling return ov er 1 month

G-sec maturity profile

5-9 years

9-15 years

15-20 years

>20 years

August 31 July 31
Note: All figures are as a % of net assets
Source: IDBI Capital Market Services

2.79 2.76

40.78 29.69

3.90 4.07

1.28 1.41

% p.a.

Outlook The sentiments in the government securities Market remained bearish with huge volatility in short term yields over the month of August. The benchmark 10Y paper 7.80% GOI 2020 closed at a yield of 7.93% while 5Y benchmark paper 6.49% 2015 closed at a yield of 7.77%. In the ultimate analysis, we advise caution on the G-secs market too. Schemes Watch Birla Sun Life G Sec Fund - LT - Growth SBI Magnum Gilt LTP - Growth

Source: IDBI Capital Market Services

1-month rolling return over 6-months


80.00 60.00 40.00

% p.a.

20.00 0.00 (20.00) (40.00) (60.00) 2-Apr 16-Apr 19-Mar 30-Apr 5-Mar 14-May 1-month rolling return ov er 6 months
Trend Line

6-Aug
5%

Source: IDBI Capital Market Services

Maturity Profile as on 31 August 2010


15-20 Years 7% > 20 Years 2% 1-5 Years 11% 5-9 Years

9-15 Years 75%

Source: IDBI Capital Market Services

32

28-May

20-Aug

11-Jun

25-Jun

9-Jul

23-Jul

Mutual Funds Monthly

Monthly Income Plans (MIP)


September Outlook Neutral 6.18% `24,058 cr

MIP-invest predominantly in debt instruments and 10%-20% in equity No. of schemes studied 37 Avg Maturity (on August 31) * For the schemes studied below Growth Option Scheme-wise Returns and Volatility
Scheme Name August July Annualised Annualised Returns (%) Returns (%) 10.92 9.02 8.93 11.49 11.19 9.62 (5.08) 6.70 3.93 4.86 29.10 4.53 7.56 12.11 10.77 5.90 5.39 2.73 2.03 1.14 1.14 (3.85) 1.77 4.04 (3.64) 3.65 10.66 7.78 (8.24) 4.12 6.81 7.26 (5.81) (3.48) 10.43 7.43 0.41 5.23 3 Month Annualised Returns (%) 16.44 12.08 13.61 14.53 13.17 11.72 4.39 9.48 11.07 11.30 16.81 7.78 10.03 11.26 10.87 8.06 8.88 7.86 10.75 6.40 6.40 5.02 6.25 6.71 3.82 8.29 10.17 10.10 1.48 5.79 7.00 8.04 0.27 0.76 7.14 8.10 (3.02) 8.35

Aug. Return Aug. AUM*

1.67yrs

6 Month Aug. Aug. Annualised Rolling Volatility Returns (%) Returns (%) 14.53 11.29 11.90 9.91 8.60 9.19 2.16 11.35 9.15 8.05 12.32 6.53 8.96 10.70 9.27 6.36 6.97 7.59 11.26 6.51 6.51 8.94 5.78 6.05 4.47 6.37 9.30 9.59 2.81 5.94 7.66 3.33 2.65 4.29 5.43 7.50 (0.96) 7.52 17.37 14.37 12.07 11.49 8.85 9.46 9.63 9.64 8.51 6.78 16.54 7.02 8.47 11.36 8.17 5.66 5.71 4.67 4.39 3.23 3.23 8.88 4.17 4.28 1.74 4.31 5.45 3.57 1.16 3.59 1.35 1.35 (1.42) (1.15) 1.88 0.45 (28.22) 5.35 17.16 13.36 11.58 24.23 16.57 12.26 16.17 11.14 14.29 14.15 26.19 8.40 8.55 19.02 12.52 11.04 6.16 10.07 20.10 10.13 10.13 22.25 8.71 9.39 15.22 11.00 19.33 16.18 11.81 19.26 9.18 8.79 7.97 6.31 10.47 11.82 58.11 14.57

Aug. Sharpe Ratio * 0.85 0.87 0.81 0.36 0.37 0.55 0.43 0.62 0.40 0.28 0.53 0.51 0.67 0.45 0.43 0.26 0.48 0.19 0.08 0.05 0.05 0.28 0.16 0.16 (0.07) 0.14 0.14 0.05 (0.13) 0.04 (0.15) (0.16) (0.52) (0.62) (0.08) (0.20) (0.53) 0.21

Quartile I HDFC MIP - LTP - Growth 15.84 SBI Magnum MIP - Growth 12.82 Reliance MIP - Growth 12.38 Birla Sun Life MIP - Wealth 25 - Growth 10.21 HSBC MIP - Savings Plan - Growth 10.00 Birla Sun Life Monthly Income - Growth 9.94 Bharti AXA Regular Return Fund - Reg - Growth 9.45 Canara Robeco Monthly Income Plan - Growth 9.23 Kotak Income Plus - Growth 8.84 UTI - MIS - Advantage Fund - Growth 7.91 Quartile 2 SBI Magnum MIP - Floater - Growth 7.89 Birla Sun Life MIP - Savings 5 - Growth 7.78 HDFC MIP - STP - Growth 7.71 HDFC Multiple Yield Fund - Growth 7.53 Birla Sun Life MIP - Growth 7.38 HSBC MIP - Regular Plan - Growth 7.34 Sundaram BNP Paribas MIP - Moderate - Growth 6.85 UTI Monthly Income Scheme - Growth 6.42 Tata MIP Plus - Growth 5.39 Quartile 3 FT India MIP - Plan A - Growth 5.21 FT India MIP - Plan B - Growth 5.21 DWS Twin Advantage Fund - Growth 5.21 PRINCIPAL M I P - Growth 5.08 L&T Monthly Income Plan - Growth 4.91 Tata Monthly Income Fund - Growth 4.62 PRINCIPAL M I P Plus - Growth 4.61 LIC MF Floater - MIP - Growth 4.15 ICICI Prudential MIP 25 - Growth 3.21 Quartile 4 DSP BlackRock Savings Manager Fund - Aggres. - Gr. 2.89 JM MIP - Growth 2.26 ICICI Prudential MIP - Cumulative 1.85 ING MIP Fund - Growth 1.34 DSP BlackRock Savings Manager Fund - Moderate - Gr. 0.59 DSP BlackRock Savings Manager Fund - Conser. - Gr. 0.41 Baroda Pioneer MIP Fund - Growth 0.40 LIC MIP - Cumulative (0.51) Fortis MIP - Growth (24.81) Average 6.18 * Sharpe Ratio = August Rolling Return % - Risk free rate August Volatility Risk free rate = 1 Year and above

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

33 33

Mutual Funds Monthly

Portfolio details as on August 31, 2010


Scheme Name Equity (%) 12.92 15.37 13.05 6.81 24.13 13.54 18.34 20.70 6.73 14.19 18.58 10.76 14.71 14.71 23.22 11.98 19.39 15.17 21.62 14.69 21.66 13.13 12.96 17.70 16.96 14.63 18.99 11.33 16.62 17.05 14.69 13.09 -18.92 9.87 -21.51 13.91 15.66 G-Sec (%) ---------------------------------------Bonds (%) --8.51 9.11 1.64 0.45 13.33 6.39 -17.57 13.63 -28.74 28.74 43.21 60.97 25.26 2.39 1.72 40.47 36.85 --1.98 -57.97 71.13 3.36 3.14 3.12 --53.03 ----2.99 21.43 CP/CD/ MM (%) 85.60 79.52 43.84 52.97 38.93 51.88 60.41 26.37 74.59 27.81 -11.79 5.12 5.12 19.05 17.47 53.81 38.93 30.57 29.43 23.64 86.87 43.80 47.52 57.81 --28.94 25.55 34.08 -25.01 31.66 28.87 20.57 -17.23 16.50 37.61 Cash/ Call (%) 1.48 5.11 11.52 14.42 17.91 6.87 7.68 8.47 18.66 8.58 11.15 2.96 4.11 4.11 8.75 4.39 1.54 11.17 18.45 11.43 9.22 --2.81 0.50 24.82 6.62 1.72 4.59 1.27 63.96 9.13 4.74 13.24 22.14 -10.82 8.94 10.38 Fund Size (Rs Cr) 3.70 14.89 266.42 1,553.20 375.07 599.04 302.57 156.82 23.62 141.22 178.02 28.45 468.46 468.46 8,358.74 701.67 42.75 244.05 508.19 630.70 566.38 4.21 8.42 153.96 123.40 153.39 147.89 153.96 177.14 6,616.77 9.34 329.95 59.66 135.92 46.89 93.15 773.47 312.76 656.12 Debt Avg. Maturity (years) 0.06 0.20 1.10 1.02 1.62 0.91 0.96 1.98 0.41 2.04 0.93 1.12 3.05 3.05 2.19 1.60 0.37 3.50 3.08 1.48 1.57 0.44 0.90 0.90 1.25 2.58 2.57 3.09 2.48 0.08 2.30 0.78 3.79 4.56 1.69 1.93 2.07 1.67

Baroda Pioneer MIP Fund - Growth Bharti AXA Regular Return Fund - Reg - Growth Birla Sun Life MIP - Growth Birla Sun Life MIP - Savings 5 - Growth Birla Sun Life MIP - Wealth 25 - Growth Birla Sun Life Monthly Income - Growth Canara Robeco Monthly Income Plan - Growth DSP BlackRock Savings Manager Fund - Aggressive - Gr. DSP BlackRock Savings Manager Fund - Conservative - Gr. DSP BlackRock Savings Manager Fund - Moderate - Gr. DWS Twin Advantage Fund - Growth Fortis MIP - Growth FT India MIP - Plan A - Growth FT India MIP - Plan B - Growth HDFC MIP - LTP - Growth HDFC MIP - STP - Growth HDFC Multiple Yield Fund - Growth HSBC MIP - Regular Plan - Growth HSBC MIP - Savings Plan - Growth ICICI Prudential MIP - Cumulative ICICI Prudential MIP 25 - Growth ING MIP Fund - Growth JM MIP - Growth Kotak Income Plus - Growth L&T Monthly Income Plan - Growth LIC MF Floater - MIP - Growth LIC MIP - Cumulative PRINCIPAL M I P - Growth PRINCIPAL M I P Plus - Growth Reliance MIP - Growth SBI Magnum MIP - Floater - Growth SBI Magnum MIP - Growth Sundaram BNP Paribas MIP - Moderate - Growth Tata MIP Plus - Growth Tata Monthly Income Fund - Growth Templeton MIP - Growth UTI - MIS - Advantage Fund - Growth UTI Monthly Income Scheme - Growth Average

Net change in assets of MIP schemes


Net Inflow s / Outflow s 2,700 2,400 2,100 1,800 1,559 1,032 1,098 1,336 1,977 1,667

Fund Flows During the month of August, MIP schemes witnessed net accumulation to AUM to the tune of `1667.40 cr, taking the category AUM to `24058.32 cr as at the end of August. This accounted for about 6% of industry assets (with reference to our universe of schemes). Top AUM gainers in August 2010
Net Inflow in August

Rs Crore

1,500 1,200 900 600 300 0 Mar-10 Apr-10

(` Cr) `
Corpus as on Aug. 31, '10

HDFC MIP - LTP - Growth


May -10 Jun-10 Jul-10 Aug-10

747.09 698.91 142.89 70.68 54.20

8,358.74 6,616.77 566.38 123.40 508.19

Reliance MIP - Growth ICICI Prudential MIP 25 - Growth L&T Monthly Income Plan - Growth HSBC MIP - Savings Plan - Growth

Note: Figure shows fund flows for 37 schemes. Source: IDBI Capital Market Services

Assets under management of Monthly Income Plans


AUM as at month-end 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 22,391 24,058

Top AUM losers in August 2010


Net Outflow in August

(` Cr) `
Corpus as on Aug. 31, '10

18,925 16,948

19,957

21,055

Rs Crore

Birla Sun Life MIP - Savings 5 - Growth DWS Twin Advantage Fund - Growth HSBC MIP - Regular Plan - Growth

(131.03) (49.08) (17.07) (6.21)

1,553.20 178.02 244.05 141.22 156.82

DSP BlackRock Savings Manager Fund - Moder. (6.31)


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

DSP BlackRock Savings Manager Fund - Aggr.

Note: Figure shows assets for 37 schemes. Source: IDBI Capital Market Services

34

Mutual Funds Monthly

August 31, 10

July 31, 10

Returns Analysis Over the month of August, MIP schemes generated average annualized returns of 6.18%, much higher than the level of 5.23% seen in the month of July. The 3-month & 6-month annualized returns averaged were seen at 8.35% & 7.52%, while the rolling returns for the month of August were noted to be 5.35%. The volatility of returns was at 14.57, and the average Sharpe Ratio for the month stood at 0.21. Portfolio Review As at the end of August, MIP schemes had an average exposure of around 15.66% to equities. The average exposure to Bonds was at 21.43%, in August. The percentage of average net assets invested in the CP/CD segment increased from 36.10% in July to 37.61% in August. The exposure to overnight markets of MIP schemes was at 10.38% for August. The average maturity of the portfolios increased from 1.60 in July to 1.67 in August.
Asset allocation Equity G-Sec Bonds Cash/Call

MIP Indicators Growth Option: Point-to-Point Return 7-days over 1 month Rolling Return Volatility G-sec Market Indicators 1 yr g-sec yield 3 yr g sec yield 5 yr g sec yield Corporate Bond Market Indicators 5 yr AAA spreads Equity Market Indicators BSE Sensex S&P CNX Nifty
Source: IDBI Capital Market Services

6.18 5.35 14.57 6.41 7.13 7.77

5.23 6.66 11.45 6.10 7.16 7.36

69bps

73bps

(0.61) (0.54)

2.05 2.21

Note: All figures are annualised %. Equity market indicators are absolute %.

August 31 July 31
Note: All figures are as a % of net assets
Source: IDBI Capital Market Services

15.66 15.44

---

21.43 20.94

10.38 11.33

7 day rolling returns over 1 month for MIP schemes


140.00 105.00 70.00 35.00

Outlook During the turbulent times, the one type of mutual funds that is Monthly Income Plans (MIPs) comes into the minds of many investors as they not only promise regular returns to investors, but also give an incentive of earning higher returns, subject to the performance of equities. It get returns either monthly, quarterly, half-yearly or yearly, depending on the option chosen. Since the basic objective of MIP is to give regular income, the firm invests the major chunk of funds (at least 80%) into fixed income securities like commercial papers, (CPs), government securities, corporate bonds, and the like, while the remainder is invested into equities. Most of the firms invest 5%-20% into equities to obtain higher returns. The returns in MIPs are given in the form of dividends. The blend of debt and equity components (generally 80:20) manages to give regular returns. Schemes Watch
Equity 18% G-Sec 0%

% p.a.

0.00 (35.00) (70.00) (105.00) (140.00) 2-Aug 4-Aug 6-Aug 8-Aug 10-Aug 12-Aug 14-Aug 16-Aug 18-Aug 20-Aug 22-Aug 24-Aug 26-Aug 28-Aug 30-Aug 7-day rolling return ov er 1 month

Source: IDBI Capital Market Services

Asset Allocation as on 31 August 2010


Cash/Call 12%

HDFC MIP - LTP - Growth Reliance MIP - Growth

Bonds CP/CD/MM 45% 25%

Source: IDBI Capital Market Services

Assets under management of Hybrid schemes


MIP 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 22,391 B-Eo 24,058

21,055

9,083

9,516

9,974

Jun-10

Jul-10

Aug-10

Source: IDBI Capital Market Services

35 35

Mutual Funds Monthly

Review of August Schemes Watch (Growth Plans)


Fund Category Last months Outlook Positive Outcome
August returns (%)

Last months Schemes Watch Fortis Overnight Fund - IP - Growth JPMorgan India Liquid Fund - Super IP - Growth Baroda Pioneer Liquid Fund - Inst Plan - Growth Axis Liquid Fund - IP - Growth

Outcome
August returns (%)

Liquid

5.35

5.51 5.75 5.70 5.52 5.46 5.00 5.87 5.31 6.15 5.39 6.21 6.06 5.82 9.22 15.84 12.38 3.15 3.63 3.95 3.70 1.07 4.00 2.70 3.74

ST Floaters LT Floaters ST Debt LT Debt LT Gilt MIP Diversified Equity

Neutral Neutral Cautious to Neutral Cautious to Neutral Cautious to Neutral Neutral ST - Neutral; LT - Positive

5.07 5.05 4.46 4.32 3.19 6.18 2.18

LIC MF Floating Rate Fund - ST - Growth UTI Floating Rate Fund - STP - Growth Templeton FRIF - Long Term - Super IP - Growth Birla Sun Life Floating Rate Fund - LTP - Growth Birla Sun Life Short Term Opportunities Fund - IP - Growth Religare Credit Opportunities Fund - IP - Growth Taurus Short Term Income Fund - Growth Birla Sun Life Medium Term Plan - IP - Growth Birla Sun Life G Sec Fund - LT - Growth ICICI Prudential GFIP - Growth HDFC MIP - LTP - Growth Reliance MIP - Growth UTI Master Value Fund - Growth Reliance Equity Opportunities Fund - Growth HDFC Equity Fund - Growth

ELSS

Neutral

2.07

HDFC Taxsaver - Growth DSP BlackRock Tax Saver Fund - Growth Reliance Tax Saver (ELSS) Fund - Growth

Balanced Funds - Eo

Neutral

1.48

HDFC Prudence Fund - Growth Reliance RSF - Balanced - Growth

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

Notes: Information on Entry to / Exit from stocks of companies and Top Ten company holdings for each Diversified Equity scheme will be available on request by e-mail.
RISK FACTORS Mutual Funds and all securities investments are subject to market risks and there is no assurance or guarantee that the Fund's objectives will be achieved. As with any investment in securities, the NAVs of the units issued under the schemes can go up or down depending upon the factors and forces affecting the securities market. Past performance of the sponsor / Mutual Fund does not guarantee the future performance of the schemes of the Mutual Fund. The names of the schemes do not in any manner indicate either the quality of the schemes, its future prospects or its returns. The NAV of the schemes may be affected by settlement periods and transfer procedures. Trading volumes may restrict the liquidity of the scheme's investments. Before investing, please read the Offer Document for details and risk factors. DISCLAIMER This document has been prepared by IDBI Capital Market Services Ltd. (IDBI Capital) and is meant for the recipient for use as intended and not for circulation. This document should not be reported or copied or made available to others. The information contained herein is from the public domain or sources otherwise generally believed to be reliable. While reasonable care and effort has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. The price and value of the investments referred to in this report may go up or down. Past performance is neither a guide/indicator nor a guarantee for future performance. IDBI Capital, its directors and employees, will not in any way be responsible for the contents of this report. This is not an offer to sell or a solicitation to buy any securities. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. IDBI Capital, its directors or employees, may from time to time, have positions in, or options on, and buy and sell securities referred to herein. IDBI Capital, during the normal course of business, from time to time, may solicit from or perform investment banking, distribution, broking or other services for any company mentioned in this document. 36