ICICI Prudential Real Estate Scheme-1

VENTURE CAPITAL:

This venture Capital is managed by ICICI Prudential Assets Management Company Ltd

FUND DETAILS:
Fund Size	Rs 500 Crore with additional Rs 500 Cr Optional
Target Return	NOT PROVIDED. However, Gross IRR of 22%-27% Expected as another fund managed by them already yielded in this range
Hurdle Rate	10% Pre-Tax
Min Invest.	Individual: INR 30 Lac Insti. Investor: INR 50 Lac
Initial Draw Down	30% of the fund
Draw Down	1+ 1 Year after final closing in two tranches- 30% & 40%
Management Fee	2%
Performance Fee Ratio	10% with 100% catch up
Upfront Cost/ Set up Fee	2%, if Invest. > Rs 50 Lac 2.5%, if Invest. < Rs 50 Lac
Investment Horizon	Long Term- Min 4 Yrs (Max 6 Yrs)

FUND FACTS:

•  The objective of this venture Capital is “Structured/ High yield financing in real estate aiming for superior risk-adjusted returns.
• Contemplated investment in top 7 cities of India- Mumbai Metropolitan Region (MMR), NCR, Bangalore, Chennai, Hyderabad, Pune and Kolkata.
• Investment Preference for under construction residential projects with visibility of cash flows- Mainly with start-up companies/ projects.
• Dedicated team with Average Experience of approx 20 Years and active support of ICICI Bank.

INVESTMENT HYPOTHESIS:

• Restrictive financing options available to developers provide opportunity for better returns.
• Regulatory hurdles: RBI regulations restrict bank financing for land acquisition; developers forced to use internal reserves and private market Borrowings.
• Muted bank lending: Banking sector’s exposure towards commercial real estate lending in India reduced from 23.2% in June 2011 to 4% in June 2012.
• Lower realizations: Slowdown in unit absorption forcing developers to give steep discounts for projects under construction.

INVESTMENT RESTRICTIONS:

• Not more than 25% Fund exposure in any city other than Mumbai Metropolitan Region (MMR) and National Capital Region (NCR)
• Not more than 25% Fund exposure in a single deal
• Up to 70% or higher investment in structured / high yield transactions, up to 30% investment in deals with equity kicker

 

VENTURE CAPITAL ANALYSIS:

The Venture Capital Fund is expected to invest in real estate in 7 cities/ municipal region on project basis with reputed developers.  They are focusing on initial project finance i.e. for new land acquisition/ starved start-up projects. Investment managers are expecting that the restriction, to not finance developers for land acquisition/ initial project start-ups, imposed by RBI on banks and slowdown in unit absorption create opportunities for participation with reputed developers in well located projects.

AS per ‘Master Circular On Housing Finance’ dated July 1, 2011, banks are not permitted to extend fund based or non-fund based facilities to private builders for acquisition of land even as part of a housing project. This is a major concern for developers to start new projects or to continue soft lunched projects and developers has already started looking for other sources of funds. This is has created a very big opportunities for Venture Capitals and especially to those who are backed by a very big financial institutions/ Banks like ICICI Bank in this case.

This is a long term fund having investment horizon of 4 (+1+1) i.e. Max 6 years after final closing. Fund manager has not set target return but their previous assignments have yielded gross IRR of approx 22-27% which they may achieve considering market condition.

RISK: Venture Capital is a closed ended fund and there is no direct exit option.

BSLI Foresight Plan- Complete Review

KEY FEATURES


NATURE OF PLAN:

• ULIP with option of Guaranteed Minimum Maturity Benefits (GMMB) - similar like guaranteed   highest NAV Plans.
• Self-Managed Option:– Funds to be managed by investor by investing in different funds available.
• Guaranteed Option:- Investment in Foresight Fund with GMMB at Maturity. Highest NAV during first 7 policy year would be considered to calculate GMMB at maturity.

UNIQUENESS OF THE PLAN:
Lowest NAV during the year would be applicable for the Premium investment during that particular year and will be calculated on completion of 5th policy year.


FUND COMPOSITION:
11 Different Fund Available with different fund composition. But the GMMB is only with Foresight Fund. Asset Exposure of Foresight Fund is:
Asset Type                               Max Exposure                   Min Exposure
Equity and Related:                       100%                              0%
Debt/ Derivatives:                          100%                              0%

LIQUIDITY:

• Partial withdrawals: Only Only After completion of 5th year.
• Policy Surrender: Only After completion of 5th year.
• If Premium not Paid: If Premium not paid at any time during first 5 policy years, policy is considered to be discontinued and the fund value will be calculated by applying discontinuation charge and paid at the completion of 5th policy years.
• Loans Facility: available upto 40% of fund value. Interest rate applicable: SBI PLR + 2

FUND ANALYSIS

• Highest NAV Funds only guarantee “Return of Investment” not “Return on Investments”.
• Funds’ Portfolio are managed and allocated dynamically between equity and debt in such a way that the highest NAV attained is locked by moving a portion of equity holding to debt, whose maturity value will be equal to highest NAV attained till then.
• Over a period of time, equity exposures are bound to move to debt. The reverse, however, may not be possible as when equity markets fall, it may not be possible to move debt exposure to equity as they may be locked in to assure highest NAV.
• Peer ULIPs (guaranteed return): “Insure Smart Plan” (Canara HSBC Oriental Bank of Commerce Life Insurance) ICICI Pru Pinnacle Fund II etc. All these plans have more or less similar features. However, they differ in charges like Premium Allocation Charges, Fund Management Charges, Mortality Charges etc and fund management approach.
• Fund managers will not take high risk as he has to guarantee NAV attained during the initial policy years. This will result in lower return as compared to other pure non-guaranteed funds. However, these ULIPs are safe for investment and is suitable for Risk Averse Investors.

FUND DETAILS

Particulars                        Details

Entry Age:                         Min- 8 years, Max- 60 years

Minimum Premium:          Single Pay Option: Rs 2,00,000

                                          5 Annual Pay: Rs 1,00,000 p.a.
                                          (premiums can be paid in advance. Present discount rate 5%)

Maximum Premium:         No Limit

Policy Term:                    10 Years

Min Sum Assured:            Age Single Pay 5 Annual Pay

Below 45 Yrs:                  1.25 x Basic Premium 10 x Basic Premium

45 Yrs Above:                  1.10 x Basic Premium 7 x Basic Premium
Can also Choose Higher Sum Assured at Policy Inception

Riders:                           No Riders with this plan

Maturity Benefit:

Guarantee Option:          Higher of ‘Fund Value at Maturity’ or ‘Fund Value at Guaranteed Benefit’.
Self Managed Option:      Fund Value at maturity.

Death Benefit:                ‘Fund Value’ + ‘Sum Assured (reduced by partial withdrawals)’.

Partial Withdrawal:       Only After completion of 5th year.

                                       Min- Rs 5000; Max- no limit but have to maintain Fund Value = Rs 25000

Policy Surrender:         Only After completion of 5th year.

CHARGES

Policy Allocation Charges:             5% of Annual Premium.

                                                        Similar to other funds- no advantage with this fund


Policy Administration Charges:      No Policy Administration Charges.
                                                        Advantage with this fund.
  Fund Management Charge:

Foresight Plan

5 Year Pay Option: 1.35% pa + 0.40% pa = 1.75% pa
Single Pay Option: 1.35% pa + 0.25% pa = 1.60% pa

For Self managed plans
(other than guaranteed Foresight Plan) charges varies between 1% - 1.35%

charges are at high side as compared to other similar plans.

Discontinued Charges:
In Policy Year 1 Lower of 6% of Annual Premium or Face Value (Maximum of Rs 6,000)
In Policy Year 2 Lower of 4% of Annual Premium or Face Value (Maximum of Rs 5,000)
In Policy Year 3 Lower of 3% of Annual Premium or Face Value (Maximum of Rs 4,000)
In Policy Year 4 Lower of 2% of Annual Premium or Face Value (Maximum of Rs 2,000)
In Policy Year 5 Nil

Deducted from Total Fund Value at the time of surrender and 3.5%pa interest will be credit till the payment of amount Policy Year Foresight Plan
 Mortality Charges:

Mortality Charges Applicable as per Age and Gender. But the mortality charges are at higher end.

More than many similar fund like Insure Smart Plan (Canara HSBC Oriental Bank of Commerce) ICICI pinnacle Fund II etc.

ICICI Prudential PMS Fundamental Strategy Index Portfolio

ICICI Prudential PMS Fundamental Strategy Index Portfolio

A Series Under Diversified Portfolio 

INVESTMENT STRATEGY:

ICICI Prudential PMS Fundamental Strategy Index would be a passively managed portfolio tracking the Nomura India Fundamental Strategy Index, with an endeavour to achieve the returns of the above strategy as closely as possible.

PORTFOLIO FACTS:

 20 stocks are selected from top 100 listed stocks (by market capitalization).

 Two Plans available: FSI 15 (with min Rs 15 Lac investments) and FSI 25 (with min Rs 25 Lac investments)

 Selection of stocks:

o Fundamental Strategy Index has identified 8 parameters- P/E, P/BV, P/Sales, Enterprise Value (EV)/ Sales, EV/ EBIT, EV/Free Cash Flow, Dividend Yield, Market Capitalization.

o The strategy takes into account the most recent trends, giving more weight to the fundamental factor that the market is assigning importance on quarterly basis.

o Based on these parameters and using a mathematical model, each stock is analyses and top 20 highest scorers are selected.

o Equal Weightage given to all stocks i.e. 5% of total portfolio allocated to each of 20 stocks in the portfolio.

 Portfolio allocation:   Equity:                                         65%-100%

                                  Debt and money market instruments: 0%-35% in.

 Risk Mitigation Strategy:

o Equity allocation reviewed every quarter and decreases portfolio exposure to equities with increase in volatility.

o If strategy underperforms nifty by more than 10% within a quarter, the equity allocation for that quarter is switched to a portfolio that replicates the broad index like Nifty.

 PMS Charges: for Rs 15 Lac minimum investment

o Upfront Fee: 2.25% of total investment

o Fixed Fee: 2.5% pa calculated daily and deducted quarterly of portfolio value

o Accounting Charges: Approx Rs 10,000 pa

o Custody Fee: 0.15% pa of portfolio value

o Exit Load: Upto 1 Year:             2.25% of portfolio value.
                        1-2 Year:          1.25% of portfolio value.
                        2-2.5 Year: 1.00% of portfolio value.

                        Above 1 Year: Nil


 Portfolio is suitable for an investment horizon of 3 years & more.
                     

ANALYSIS & RECOMMENDATION:

 The strategies adopted for the PMS look impressive. But efficient execution of these strategies will remain a major concern.

 PMS is claiming that if the portfolio had been operational since 30 January 1998(till 16 July 2010), it would have yielded returns of 5,893% (39% CAGR) as compared to the Nifty return of 559% (15% CAGR) i.e. more than 10 times better than the Nifty during this period. This sounds mis-selling.

 In any case 65% of the portfolio assets will be in equities which make this portfolio risky especially in bearish market. Even ICICI Risk Profile of the portfolio is 5 (on a scale of 6). This will lower the effect of passively managed portfolio and maintain a high level of risk.

 Considering parameters like high market capitalization, Reliance, Infosys, TCS, SBI, ONGC may be in the portfolio which may generate average return in next 2-3 years. This will restrict Portfolio to perform at average level.

New Pension System By PFRDA: Part-I

OVERVIEW OF NPS

• Pension Fund Regulatory and Development Authority (PFRDA) was established by Government of India on 10th October, 2003 (Ministry of Finance Notification No: F.No.5/7/2003- ECB & PR).

• New Pension System was initially developed for Central Government's new recruits (mandatory except armed forces) with effect from 1st January, 2004. The monthly contribution is 10% of the salary and DA to be paid by the employee and matched by the Central Government.

• New Pension System (NPS) was extended to all Citizens from 1st May 2009. The new pension system is voluntary for Individuals (who are not Government employees) .

• There is no contribution from the Government in respect of Individuals.

• The contributions and returns thereon would be deposited in a non-withdrawable pension account (TIER-I).

• NPS uses the existing network of bank branches/ post offices etc to collect contributions. PFRDA issued a list of more than 4500 branches of banks and post offices etc covering all over India.

• No headache in transfer of accumulations in case of change of employment and/or location.

• It offers a basket of investment choices and Pension Fund managers.

• Pension Fund Managers are: SBI Pension Funds Pvt Ltd, ICICI Prudential Pension Fund Management Company Ltd, IDFC Pensin Fund Management Comapny Ltd, Kotak Mahindra Pension Fund Ltd, Reliance Capital Pension Fund Ltd.
• In addition to the above pension account, each individual can have a voluntary TIER-II withdrawable account (optional). These assets would be managed in the same manner as the pension i.e. TIER-1 A/c. The accumulations in this account can be withdrawn anytime without assigning any reason.

• Policy holder can normally exit at or after age 60 years from the pension system.

• At exit, the individual would be required to invest at least 40 percent of pension wealth to purchase an annuity. The individual would receive a lump-sum of the remaining pension wealth, which he/she would be free to utilize in any manner.

• Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, the mandatory annuitisation would be 80% of the pension wealth.

• In case of retirement of Government employees, the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse.

• There will be one or more central record keeping agency (CRA), several pension fund managers (PFMs) to choose from which will offer different categories of schemes.

• The participating entities (PFMs, CRA etc.) would give out easily understood information about past performance & regular NAVs, so that the individual would able to make informed choices about which scheme to choose.

Next Post:
New Pesion System:        Part II- Detalied information about NPS

LIC Market Plus-1 (Table No. 191) Withdrawn by LIC

• This is a Unit Linked Deferred Pension Plan which is a mix of Insurance, Investment and Retirement benefit (Pension). Insurance is optional.


• Four types of investment Funds (Bond Fund, Secured Fund, Balanced Fund and Growth Fund). Premiums paid after allocation charge will purchase units of the Fund type chosen.


Benefits:
o Death Benefit: Fund Value + Insured Amount (if taken) + Accident Benefit (if taken). Policyholder’s   Fund Value shall be payable either in a lump sum or as pension.

o Accident benefit and Critical Illness Benefit only opted when insurance is opted

o Benefit on Vesting: may opt to commute up to one-third of fund value and rest compulsorily be utilized to purchase annuity option for pension.


Surrender Charges: Nil
o If surrendered within first 3 years, the monetary value of fund calculated and that amount will be payable at the completion of 3 policy anniversary.

o In case of death of life assured after surrender but before completion of 3 years from date of commencement of policy, the calculated surrender value will be after completion of 3 years to the nominee.


Recommendation:
This is ULIP based Pension Plan by LIC which was launched in Mid 2008. The fund has performed well since inception with CAGR of 15% approx. The Sensex (when the plan was launched) was at approx 14000-15000 with downward trend. Initially, the fund collected in this plan were invested at lower price and hence performed well. Also, the new ULIP Regulation will be affected from 1st September 2010. As per the regulations, all ULIP pension/annuity products has to offer a minimum guaranteed return of 4.5% per annum or as specified by IRDA from time to time. The return of the fund may be around 8% for long term. LIC will have to change some features of the plan and make it to as per new regulation or to close the plan. The Plan withdrawn by LIC with effect from August 31st, 2010.

Eligibility Conditions and Other Restrictions:
 
Particulars                                 Without Life Cover                   With Life Cover

Min Entry:                                   Age 18 years                            18 years
Max Entry Age:                             Regular Prem.: 75 years              65 years
                                                 Single Prem.: 80 years                65 years


Min/ Max Vesting Age:                 40 years/ 85 Years                      40 years/ 75 Years
Min Deferment Term                    Regular Prem.: 10 years                Regular prem.: 10 years
                                               Single Prem.: 5 years                   Single Prem.: 5 years


Sum Assured (Only in case of With life cover plan)                     
Min:  Regular Premium: Rs. 30,000         Single Premium: upto Prem.
Max: Regular Premium: 10 times if more than 40 years of age (5 times if critical illness rider opted for)

Min. Premium Regular premium: For both with life cover and without life cover
o Single premium: Rs 30,000/-

o Regular premium:
  Rs 5,000/- for 20 years & above
  Rs 10,000/- for 15-19 years
  Rs 15,000/- for 10-14 years
  Single premium: Rs 30,000/-

o Payment of Premiums Yearly, half-yearly or quarterly or monthly (through ECS mode only) for regular premium.

o Top-up additional premium in multiples of Rs.1,000 without any limit at anytime during the term of policy

Incr. / Decr. of risk covers:
No increase of covers will be allowed under the plan. Can decrease in covers.

Partial Withdrawal: No partial withdrawal of units

Exclusions:
If Life Assured commits suicide at any time within one year, the LIC will not entertain any claim by virtue of the policy except to the extent of the Fund Value of the units held in the Policyholder’s Unit Account on death

Different Charges:

1. Premium Allocation Charge:
Single premium policies: 3.3% of the single premium

Regular premium policies:

Premium Band (per annum)                                            % of Premium Paid                  
                                                                 First Year                                 Thereafter


5,000 to 75,000                                        16.50%                                        2.50%
75,001 to 1,50,000                                    15.75%                                         2.50%
1,50,001 to 3,00,000                                 15.00%                                         2.50%
3,00,001 to 5,00,000                                 14.25%                                         2.50%
5,00,001 and above                                   13.50%                                         2.50%

2. Policy Administration charge:

Rs. 60/- per month during the first policy year and Rs. 20/- per month thereafter

3. Fund Management Charge
0.50% p.a. of Unit Fund for “Bond” Fund
0.60% p.a. of Unit Fund for “Secured” Fund
0.70% p.a. of Unit Fund for “Balanced” Fund
0.80% p.a. of Unit Fund for “Growth” Fund

4. Surrender Charge – Nil

5. Accident Benefit charge

Rs. 50/ Lac Accident Benefit Sum Assured per policy year.

6. Presently NAV moving around Rs14.

China's Exchange Rate and the Wage Explosion - By RONALD MCKINNON

(Mr. McKinnon is a professor at Stanford University and a senior fellow at the Stanford Institution for Economic Policy Research)

Recent Chinese labor strikes—particularly in the heartland of manufactured exports in Guangdong and the Pearl River Delta—have taken most observers by surprise. Labor shortages in and around Shanghai and the Beijing area are also widespread. Many local governments, particularly on the developed eastern seaboard, have increased minimum wages by 15% to 20% this year.

A wage explosion fed by labor militancy is obviously disconcerting to Beijing. But in the long term China's wage increases should reflect its remarkably high productivity growth in manufacturing. Higher wage growth would have two great advantages for China and for the rest of the world. First, Chinese wages would become closer to those in the more mature industrial countries, thus reducing protectionist pressures against imports from China. Second, higher wage settlements would reverse labor's declining share in China's national income. With a shift away from business profits—which have become exorbitantly high in the last several years—to greater household disposable income, consumption would naturally rise and reduce China's trade surplus.

ING ADAPT- Review

ING ADAPT is a Discretionary PMS.

A:   ACTIVE
D:   DYNAMIC
A:   ASSET
PT: PORTFOLIO

Objective of the Portfolio:
To generate long term capital appreciation by investing in multiple asset classes, according to the risk band specified for each of the investment options.

MAIN FEATURES:

• Assets allocation in
     o Equity- direct into equity/ mutual funds including ETFs
     o Debt- Mutual Funds including ETFs
     o Gold- ETFs
     o Cash- Mutusl funds including ETFs
     o Global Products- Global Feeder Funds domiciled in India

• Investment Options
     o Very Conservative
     o Conservative
     o Moderate and
     o Aggressive

• Only Dynamic Asset Allocation facility, Not static for any investment option.
• The asset allocation will be rebalanced monthly.
• No Benchmark for the fund.
• Disciplined investment procedures.

• Monthly Downside return: This is maximum monthly negative return (if any) expected by the fund manager.
     o Very Conservative: -1.5%
     o Conservative: -3.25%
     o Moderate: -5%
     o Aggressive: -7%


Analysis & Recommendation:
The features highlighted like dynamic asset allocation (not static assets allocation) is now offered by many PMSs. However, the PMS offered by ING has some unique features. ING ADAPT will invest in Gold and Cash ETFs along with other instruments make this fund unique. The Portfolio manager has clearly defined downside risk. The Portfolio will be managed by robust process to avoid human error which is already tested in their earlier products. ING ADAPT says that the fund is even suitable for first time investor. In my view if you have a balanced investment portfolio (like separate investment in PPF, FDs, And Mutual fund etc) you may go for it.

What is Portfolio Management Services (PMS)?

PORTFOLIO:

As per SEBI Definition,
A collection of securities owned by an individual or an institution (such as a mutual fund) that may include stocks, bonds and money market securities.

In another words,
Portfolio (Investment Portfolio) is a collection of investments held by an Individual/ Institution. The collection of investments may be a combination of stocks, bonds and mutual funds, ETFs (Exchange Traded Funs like gold funds) etc.


PORTFOLIO MANAGER:

As per SEBI Definition,
A portfolio manager is a body corporate who, pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client, the management or administration of a portfolio of securities or the funds of the client.

A portfolio manager may be a body corporate or an individual who manages the portfolio of the client as per agreement with the investor i.e. manages the portfolio of the investor with the objective set by the investor.

There are two types of portfolio manager:
• Discretionary Portfolio Manager: one who individually and independently manages the funds of   each client in accordance with the objective of the client.

• Non Discretionary Portfolio Manager: one who advices the client and manages the funds in accordance with the directions of the client.



PORTFOLIO MANAGEMENT SERVICES (PMS):

Portfolio management is defined as the management of a portfolio to enhance the value of the underlying investment to meet specified investment goals of the investor. Fund manager consider appropriate risk-reward level i.e. the return is set as per risk (high/ medium/low) appetite of the investor. It involves a proper investment decision with regards to what to buy and when to sell. This also involves proper money management.

The service provided by body corporate or an individual to manage individuals/ institutions/ fund portfolio as per agreement is called PMS.

The service provider is supposed to have professional experience/ expertise in portfolio management/ investment services and is responsible to take appropriate action to implementing investment strategy and managing the day-to-day activity.

By hiring PMS, an investor actually hires experience/ expertise to manage portfolio. It enables investors to promote and protect their investments that help them to generate higher returns.

Special Domestic Term Deposit Rate Offered by Dhanlaxmi Bank

Presently when interest rates on term deposit are not high, Dhanlakshim Bank has come out with an interesting rate of 7.75%p.a. for 400 day (upto Rs 50 Lacs). This is a highest interest rate offered by any bank for such low deposit duration.


Highest Rates offered by Banks: Domestic Term Deposits (Investment below Rs 15 Lacs)

Bank                                        Interest Rate(p.a.)            Investment Duration
State Bank of India                      7.50 %                              8 to 10 years
Bank of Baroda                            7.00 %                              2 Years & Above
State Bank of Travancore              7.75 %                              8 to 10 years
ICICI BANK                                  7.75 %                             5-10 Years
HDFC BANK                                  7.50 %                             3 Years & Above
Karnataka Bank                            7.50 %                             3 Years & Above
Federal Bank                                7.75 %                             5-10 Years

Special Offers:
State Bank of Travancore              7.50 %                             400 days
Dhanlaxmi Bank                            7.75 %                             400 days

SBI PSU FUND

MUTUAL FUND:  An open ended diversified equity fund.

Fund Objective:

Long Term growth opportunities in capital along with the liquidity through an active management of investment in a diversified basket of equity/ debt/ Money market instruments of domestic public sector undertakings.

Investment Strategy:

Invest in stocks of PSUs through primary as well as secondary market, private placement/ QIP, Preferential allotments etc.

Recommendation:

Why Only in PSUs? Invest in PSUs will make this fund safe with lower risk but at the same time return may be at average level as PSUs are not aggressive expect some sectors like Banks. Even presently disinvestment is not getting proper response. This may be a good fund but recommended not to subscribe presently.

FUND BRIEF:

Face Value: Rs. 10

Launch Date: NFO Closed on 14.06.2010

Net Assets: Not Available (New Fund, NFO Closed Recently and fund will re-open in next 1 month)

Fund Plan/ Option: Regular. SIP Available Option: Growth and Dividend

Minimum Amount: Regular: Rs 5,000. For SIP monthly: N.A.

Entry Load: Nil

Exit Load: For Regular Plan: 1% in 1st 3 Years For SIP: 1% in 1st 3 Years

Annual Recurring Expenses(Charges): 2.5%P.A. Of Weekly Average Net Assets

Assets Allocation:                                                      Min-Max

Equity and Related                                                    65%-100%

Debt and Money market Securities                                 0%-35%

Benchmark: BSE PSU INDEX

PEER PERFORMANCE:1. Religare PSU Equity:

Launched in October 2009. Trailing return of Religare PSU Fund: As on 18 Jun 2010

Period                             Fund Performance                                 Category Performance

Year to Date                         1.55 %                                                        3.29 %

1-Month                               2.05 %                                                        2.2 %

3-Month                               4.6 %                                                          2.68 %

Category: Equity Diversified

2.UTI PSU Fund

Launched in March 2004 and merged in 2007 with UTI Top 100 Fund. Return in year 2006 and 2007 were negative.

Click for More Details

TATA EQUITY PE FUND

MUTUAL FUND:  Open Ended Diversified Equity Fund

Fund Objective:

To provide reasonable and regular income along with possible capital appreciation to its unit holder.

Investment Theme:
Investing 70% of the total assets in stocks having a trailing P/E ratio less than that of the BSE Sensex at the time of investment.

Others:

· Automatic Dividend Trigger Option : Fund will declare dividend automatically when NAV appreciate 5% (Option A) and 10% (Option B) (maximum one dividend per quarter).
· Fund has been performing very well in long term as compared to category (Equity Diversified) and benchmark. However, the short term performance is below average.
· The Fund Manager Mr Sachin Relekar has chosen traditional fund portfolio with main focus on Energy, Finance and Technology sectors. Hindalco, ONGC and Bharti Airtel from BSE Sensex are among top 15 stocks in the fund portfolio. His diverse portfolio won’t see much aggression with individual stock bets.
· The fund is sitting on a cash of almost Rs 70 Crore. As per fund manager, this is not cash call but gives them the flexibility to pick stocks in distress.
· Currently Portfolio PE 17.11 is undervalued and may go up with any upward movement in the market. Also, 13% approx net asset in form of cash & equivalent will provide opportunity in case of any correction in the market.


Recommendation:
The Investment theme of the fund, automatic dividend option and robust long term performance made this fund attractive. We may invest in this fund with long term investment horizon (more than 1 year) in mind.

FUND BRIEF:
FACE VALUE: Rs. 10
LAUNCH DATE: Jun, 2004
NET ASSETS: Rs 540 Crore (31/05/10)FUND PLAN & OPTION: Pan: Regular Plan. SIP available. Option: Growth and DividendMINIMUM AMOUNT: Regular: Rs 5,000. For SIP monthly: Rs 500 for 12 months.RISK/ REWARD: Grade: Average Risk with above average returns.

NAV DETAILS:       Growth Option                  Dividend Option
LATEST NAV:         Rs.44.46 (14/06/10)           Rs.39.40 (14/06/10)
52-Week High:       Rs.45.46 (18/01/10)           Rs.43.17 (15/01/10)
52-Week Low:       Rs.28.99 (13/07/09)           Rs.27.60 (13/07/09)

ASSETS ALLOCATION:

Type                                                      Standard Min-Max           Current Position
Equity and Related                                         70%-100%                       87%

(Fund PE Less Than Sensex PE, at investment) 
Equity and Related                                           0%-30%
Debt incl. Money Market etc                              0%-20%                          0%
Cash in Hand etc.                                                --                             13%

LOAD:Entry Load: NIL
Exit Load:      For Regular Plan: 1% below 1 Year                 For SIP: 1% below 2 Year

 BETA: 1.02
SHARPE RATIO: 0.41

BENCHMARK: BSE SENSEX
RECURRING EXPENSE (Charges): 2.5%P.A. Of Weekly Average Net Assets

FUND PERFORMANCE: Trailing Return as of 14.06.2010

Period                        Fund               Category                  Nifty                   Sensex
Year-to-Date              1.97 %              2.5 %                   -0.06 %              -0.73 %
1-Week                     1.64 %              2.61 %                   3.25 %                3.32 %
1-Month                    0.55 %              1.19 %                    2.05 %               2.02 %
3-Month                    2.83 %              2.96 %                   1.18 %                1 %
1 Year                     42.13 %            27.17 %                   13.4 %                13.78%
2 Year                     15.04 %            10.41 %                   7.27 %                 6.84 %
3 Year                     15.4 %               8.08 %                   7.62 %                 6.87 %
5 Year                     24.37 %            20.28 %                 19.73 %               20.37 %
Note: Return less than 1-year are absolute and over 1 year is annualized.

FUND PORTFOLIO DETALS:

Only 4 stocks are from NSE Nifty (top 50 companies). Portfolio consists of mainly Mid Cap stocks.
Ratios                                        Fund            Sensex          Nifty           Nifty Mid-Cap
Portfolio P/B Ratio:                3.47              3.30              3.70                 2.44
Portfolio P/E Ratio:               17.11            20.64            21.77                17.39

Top 10 Investments:

Polaris Software Lab                        4.60 %
Axis Bank                                       4.38 %
ONGC                                            4.26 %
Tata Chemicals                               3.44 %
Hindalco Inds.                                 3.21 %
Cadila Healthcare                             3.07 %
Balrampur Chini Mills                         2.77 %
Voltas                                           2.41 %
HPCL                                             2.31 %
Patni Computer Systems                   2.31 %



Sector Wise Asset Allocation:


Energy                                    16.9 %
Financial                                  12.4 %
Technology                              11.7 %
Services                                  7.3 %
Metals                                     6.4 %
Health Care                              6.3 %
FMCG                                      5.8 %
Diversified                                4.6 %
Automobile                               4.0 %
Engineering                              3.6 %
Chemicals                                3.4 %
Communication                         2.9 %
Construction                            1.7 %
Cash & Equivalent             12.9 %
Total                                     100.0 %