ITI - Cover Page - Final Low · 2019-12-13 · ITI BAF is an all-rounder fund which can take care...

Your partner for long-term wealth creation

NOVEMBER 2019FUND FACTSHEET

Our Equity Investment Philosophy

SMARGIN

OF SAFETY

QQUALITY OF

THE BUSINESS

LLOW

LEVERAGE

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

George Heber JosephCEO & CIO

“If you don’t find a way to make money while you sleep, you will work until you die.” - Warren Buffett

The virtues of Investing are Patience, Discipline, Judicious Risk Management and Right Asset Allocation. Historically peak of the markets coincides with the massive retail investments flowing into mutual funds. Mostly the peak of equity markets and bottom of Debt Markets (ie. peak interest rate scenario) happens at the same time.

Generally Indians are very conservative people and try to buy small items like mobile phones etc after checking the prices on various websites/retail outlets to make sure that they are buying it cheap. If a “SALE” happens people rush to that place to do bargain hunting, but in the case of buying of equity shares investors don’t follow the same discipline, mostly they buy at market peaks and get panicked at market bottoms which makes them sell at absolute market lows.

In India Equity, Debt and Gold are liquid asset classes where people can invest their hard earned money easily and take it out whenever required. In the year 1996-1997 Debt instruments were providing very attractive investment opportunities, many blue chip companies in India were borrowing at 17-19% yields. Year 1996 to 2002 Equity as an asset class didn't deliver returns. If you are following a good asset allocation framework, you would have moved your money out of equity and allocated money towards Debt instruments in this period. This approach would have given a good wealth creation experience, while the equity markets went through massive turmoil (Asian Financial Crisis, Dotcom Bubble & Bust etc). So it is very critical to understand right asset allocation provides risk diversification, limits the downside and at the same time give a smooth investing experience over various market cycles.

At ITI Mutual Fund we have introduced 5 investor centric products in the last 6 months and on 9th December 2019 we are launching one of our thoroughly researched Asset Allocation Product – ITI Balanced Advantage Fund with a unique value proposition – Smooth Investment Experience & Consistent Long-term risk adjusted returns. We are quite excited to offer this product to our investors. The NFO closes on 23rd December 2019. We believe this fund is suitable for all types of investors and has the potential to deliver consistent returns in all market conditions, because of the efficient framework of allocating the money from equity to debt and debt to equity at appropriate time.

’

‘

NOVEMBER 2019 1FUND FACTSHEET

“If we avoid the losers, the winners will take care of themselves.”

We have established a very unique investment philosophy – SQL, which we believe would help us to avoid the losing stock or bond bets in our portfolios. Moreover, our belief is that the ITI Balanced Advantage Asset Allocation Framework & the excellent risk management methods institutionalised at our end would help us to avoid the losing periods in the markets. We strongly believe that as fund managers our primary job is to avoid losing periods in the market and also avoid losing bets in the portfolio.

Equity Market OutlookWe are quite constructive on markets at this point of time. Lot of actions from the government, Demonetisation/GST/RERA/IBC/Curbing blackmoney, has slowed the economic growth in a meaningful manner and therefore the corporate profitability to GDP has come to 15 year lows. The biggest impact has been in the unorganised sectors which can potentially turn out to be strong structural benefits/tailwinds for organised players in the years to come.

All data points coming out at the bottom of the economic cycle, for obvious reasons will be negative like Low GDP Growth Rates (4.5%), Low Credit Growth rates (8%) and Multi-year low in Corporate Profitability to GDP (2.7%) but when we see these negative headlines we need to remember that the cyclical rebound will be seen all these numbers. As an equity investor the best time to buy equities is when you see all headline numbers are bad and not after economy advancing significantly. The situation seems to be very similar to year 2003 where all macro economic factors are suggesting a slowdown but when I look at the valuations - Price to Book Value of Nifty 50 or Nifty Midcap 100 or BSE Small cap Indices, Market Cap to GDP (79%) and Low Gsec Yields (6.6%), it gives us indications that our economy is at the inflection point and we will see significant rebound in companies earnings soon.

“If you don’t find a way to make money while you sleep, you will work until you die.” - Warren Buffett

The virtues of Investing are Patience, Discipline, Judicious Risk Management and Right Asset Allocation. Historically peak of the markets coincides with the massive retail investments flowing into mutual funds. Mostly the peak of equity markets and bottom of Debt Markets (ie. peak interest rate scenario) happens at the same time.

Generally Indians are very conservative people and try to buy small items like mobile phones etc after checking the prices on various websites/retail outlets to make sure that they are buying it cheap. If a “SALE” happens people rush to that place to do bargain hunting, but in the case of buying of equity shares investors don’t follow the same discipline, mostly they buy at market peaks and get panicked at market bottoms which makes them sell at absolute market lows.

In India Equity, Debt and Gold are liquid asset classes where people can invest their hard earned money easily and take it out whenever required. In the year 1996-1997 Debt instruments were providing very attractive investment opportunities, many blue chip companies in India were borrowing at 17-19% yields. Year 1996 to 2002 Equity as an asset class didn't deliver returns. If you are following a good asset allocation framework, you would have moved your money out of equity and allocated money towards Debt instruments in this period. This approach would have given a good wealth creation experience, while the equity markets went through massive turmoil (Asian Financial Crisis, Dotcom Bubble & Bust etc). So it is very critical to understand right asset allocation provides risk diversification, limits the downside and at the same time give a smooth investing experience over various market cycles.

At ITI Mutual Fund we have introduced 5 investor centric products in the last 6 months and on 9th December 2019 we are launching one of our thoroughly researched Asset Allocation Product – ITI Balanced Advantage Fund with a unique value proposition – Smooth Investment Experience & Consistent Long-term risk adjusted returns. We are quite excited to offer this product to our investors. The NFO closes on 23rd December 2019. We believe this fund is suitable for all types of investors and has the potential to deliver consistent returns in all market conditions, because of the efficient framework of allocating the money from equity to debt and debt to equity at appropriate time.


Investment Philosophy as an Edge! Our investment philosophy is represented by SQL and this is applicable to both Equity and Fixed Income.

The “SQL” philosophy is aligned to our equity investment objective of ‘Long Term Wealth Creation’. We believe this investment philosophy would stand the test of times and follows our overriding belief that "If we avoid the losers, the winners will take care of themselves." Avoiding losers from the portfolio (low quality companies, companies with bad corporate governance, etc) is very important and core to our investment philosophy.

How do we manage Risk & Return? Our primary goal is superior investment performance with less-than-commensurate risk. So our goal is not superior investment performance but our focus will be superior risk adjusted returns vs. Benchmarks and Peer funds. We do not believe in the predictive ability required to correctly time markets so we will keep Equity and Debt portfolios more than 90% invested all the time whenever attractively priced assets can be bought.

S

Q

L

Margin of Safety

Quality of the Business

Low Leverage

Safety


Liquidity

Investment Philosophy Equity Fixed Income

ITI BAF is an all-rounder fund which can take care of the money very efficiently and enables to ride through the emotions of greed & fear with an ease. The back tested results of our asset allocation framework suggests that the returns since Jan’08 to Sep’19 has been 14% CAGR whereas the Nifty50 has generated 5.5% CAGR.

Our endeavour is to launch the right product for the investors at the right time and provide superior risk adjusted return experience over the long term. We have established a very unique investment philosophy – SQL, which we believe would help us to avoid the losing stock or bond bets in our portfolios. Moreover, our belief is that the ITI BAF Asset Allocation Framework & the excellent risk management methods institutionalised at our end would help us to avoid the losing periods in the markets.

We strongly believe that as fund managers our primary job is to avoid losing periods in the market and also avoid losing bets in the portfolio. Our underlying belief is that “if we avoid the losers, the winners will take care of themselves.”

Most of the Nifty 50 sectors are trading at multi-years bottom in earnings and I can see all the interest rate sensitive sectors like Auto/Auto Ancs, Corporate Banks, NBFCs, Real Estate, Construction, Capital Goods & other global Sectors like Pharma/Commodities etc are at absolute bottom earnings scenario which cannot continue like this for ever – so this is not the time to worry about markets by looking at optically high P/E multiples. Our belief is that P/E will start compressing as and when corporate earnings through and that is when markets also will start reacting to the earnings trend. We believe Indian economy is close to the bottom of the economic cycle. We have seen some early signs of economic recovery in the last two months. We expect recovery to be very gradual as the credit flow to broader economy /SMEs is still weak due to the credit events of last two years. Corporate India’s profitability, as a % of GDP is also at cyclical low, and at levels last seen in 2003.

Weak economic cycle is often very good time to invest into some of the good companies at attractive valuations. As business cycle starts improving, investors benefit from both, improved earnings growth and re-rating of valuation multiples. In this back drop, we feel the risk reward is clearly in favour of mid & small cap stocks and are at attractive valuations. We have over the last three months, added such stocks in our portfolios and made the portfolios more diversified. To capture the upside in equity markets we have well designed products like ITI Multi Cap fund, ITI Long Term Equity Fund and ITI Balanced Advantage Fund. The funds are well positioned as they have the flexibility to shift from mega caps to broader range of stocks. We are now launching ITI Balanced Advantage Fund, which gives the investors the added advantage of dynamic asset allocation, based on our internally developed sound valuation based asset allocation framework.

Some of the key structural beneficiaries that will be part of our funds from a long-term perspective are as follows:

Market Share Gainers such as Private corporate banks and Private insurers (General & Life)

Unorganised to organised shift: Real Estate, FMCG, Retail, Flexi-staffing

Under penetrated sectors & Beneficiaries of Indian Demography - Consumer Durables, Healthcare, Infrastructure, Auto & Auto Ancillaries, FMCG

Exporters & Import substitution businesses – IT, Pharma & Manufactured Exports, Consumer Durables, Chemicals

Anti Pollution – Gas

Debt Market OutlookWe believe interest rates have bottomed out and started moving up. Food Inflation is picking up and as the economic growth also picks up from the multi-year lows, the inflation also will pick up from the current levels. We believe at the current juncture it is advisable to be invested at the low end of the curve. High quality accrual income papers available in the Low to medium duration bond categories are the ones investors should be looking to invest at this point of time.

Equity Market OutlookWe are quite constructive on markets at this point of time. Lot of actions from the government, Demonetisation/GST/RERA/IBC/Curbing blackmoney, has slowed the economic growth in a meaningful manner and therefore the corporate profitability to GDP has come to 15 year lows. The biggest impact has been in the unorganised sectors which can potentially turn out to be strong structural benefits/tailwinds for organised players in the years to come.

All data points coming out at the bottom of the economic cycle, for obvious reasons will be negative like Low GDP Growth Rates (4.5%), Low Credit Growth rates (8%) and Multi-year low in Corporate Profitability to GDP (2.7%) but when we see these negative headlines we need to remember that the cyclical rebound will be seen all these numbers. As an equity investor the best time to buy equities is when you see all headline numbers are bad and not after economy advancing significantly. The situation seems to be very similar to year 2003 where all macro economic factors are suggesting a slowdown but when I look at the valuations - Price to Book Value of Nifty 50 or Nifty Midcap 100 or BSE Small cap Indices, Market Cap to GDP (79%) and Low Gsec Yields (6.6%), it gives us indications that our economy is at the inflection point and we will see significant rebound in companies earnings soon.


Most of the Nifty 50 sectors are trading at multi-years bottom in earnings and I can see all the interest rate sensitive sectors like Auto/Auto Ancs, Corporate Banks, NBFCs, Real Estate, Construction, Capital Goods & other global Sectors like Pharma/Commodities etc are at absolute bottom earnings scenario which cannot continue like this for ever – so this is not the time to worry about markets by looking at optically high P/E multiples. Our belief is that P/E will start compressing as and when corporate earnings through and that is when markets also will start reacting to the earnings trend. We believe Indian economy is close to the bottom of the economic cycle. We have seen some early signs of economic recovery in the last two months. We expect recovery to be very gradual as the credit flow to broader economy /SMEs is still weak due to the credit events of last two years. Corporate India’s profitability, as a % of GDP is also at cyclical low, and at levels last seen in 2003.

Weak economic cycle is often very good time to invest into some of the good companies at attractive valuations. As business cycle starts improving, investors benefit from both, improved earnings growth and re-rating of valuation multiples. In this back drop, we feel the risk reward is clearly in favour of mid & small cap stocks and are at attractive valuations. We have over the last three months, added such stocks in our portfolios and made the portfolios more diversified. To capture the upside in equity markets we have well designed products like ITI Multi Cap fund, ITI Long Term Equity Fund and ITI Balanced Advantage Fund. The funds are well positioned as they have the flexibility to shift from mega caps to broader range of stocks. We are now launching ITI Balanced Advantage Fund, which gives the investors the added advantage of dynamic asset allocation, based on our internally developed sound valuation based asset allocation framework.

Some of the key structural beneficiaries that will be part of our funds from a long-term perspective are as follows:

Market Share Gainers such as Private corporate banks and Private insurers (General & Life)

Unorganised to organised shift: Real Estate, FMCG, Retail, Flexi-staffing

Under penetrated sectors & Beneficiaries of Indian Demography - Consumer Durables, Healthcare, Infrastructure, Auto & Auto Ancillaries, FMCG

Exporters & Import substitution businesses – IT, Pharma & Manufactured Exports, Consumer Durables, Chemicals

Anti Pollution – Gas

Debt Market OutlookWe believe interest rates have bottomed out and started moving up. Food Inflation is picking up and as the economic growth also picks up from the multi-year lows, the inflation also will pick up from the current levels. We believe at the current juncture it is advisable to be invested at the low end of the curve. High quality accrual income papers available in the Low to medium duration bond categories are the ones investors should be looking to invest at this point of time.

“The most important thing you can have is a good strategic asset allocation mix. So, what the investor needs to do is to have a balanced, structured portfolio – a portfolio that does in different environments… we don’t know that we’re going to win. We have to have diversified bets”– Ray Dalio

Presenting ITI Balanced Advantage Fund

Research Based Asset Allocation Framework

Benefits to Investors

• The allocation between equity and debt is decided using a research based framework focusing on fundamental factors

• Our framework removes emotions driven by greed at market highs and fear at market lows

• It’s a three factor framework - Valuations, Trend and Volatility

• Valuation factor guides in strategic allocation, Trend & Volatility factors helps in tactical allocations

• Above methodology acts as the guiding principle in deciding right asset allocation of equity & debt and also helps in equity allocation across market capitalizations

An All Rounder Proposition forall Categories of InvestorsUnique SQL

investmentphilosophy

Wealthcreation with

peace ofmind

Equity taxationirrespective of

actual equity risk

No need forinvestor to

time themarkets

Factors inputsfrom multiple

market variables

Overriding humanemotions likegreed & fear

Tax efficientrebalancingwith arbitrage

Dynamic behaviordepending onmarket scenario Downside

protection withreduced drawdown

EXPE

RIEN

CERI

SK P

ROFI

LEAG

E

Long termwealth creation

MILLENNIAL

Long termwealth creationand automatic

rebalancing

MIDDLE AGED

Downside mitigation with

growth

AGED

Risk mitigationduring volatile

times

CONSERVATIVE

Prudent &balanced equity

proposition

MODERATE

Potentialalpha from

active assetallocation

AGGRESSIVE

Smoothequity investing

experience

1st TIMER

Reapingbenefits of

emotionlessinvesting

EXPERIENCED

Activeasset allocation

management

SEASONED

TRENDVALUATIONS(P/BV)

VOLATILITY

THREE PILLARSOF ITI MF RESEARCH

BASED ASSET ALLOCATIONFRAMEWORK

ITI MUTUAL FUND INVESTMENT PHILOSOPHY - SQL

Margin of Safety


Low Leverage

Safety


Liquidity

• Net Equity Allocation - 0% to 100%

• Style of Investing - GARP

• Bottom up stock selection

EQUITY DEBT

• Debt Exposure – 0% to 35%

• No Duration Risk – Investment restricted to debt papers with maturity of up to 3 Years

• Focus on Good Credit Quality Accrual

EQUITY DEBT

Market ReviewNovember 2019

Equity Market Update

According to data from the National Securities Depository Ltd, foreign portfolio investors (FPIs) were net buyers of domestic stocks worth Rs. 25,231 crores compared with net purchase of Rs. 12,367.99 crore in Oct 2019.

Net inflows in Equity funds (including ELSS, close-ended and interval schemes) fell 7.24% MoM to Rs. 6,009 crore in October despite the Sensex touching new highs in the month. This marked the second monthly decline in FY2020 for the category.

Indian equity markets continued with upward march for the second month in a row, with Key benchmark indices S&P BSE Sensex and Nifty 50 rising 1.66% and 1.50% respectively in November 2019. Broader indices S&P BSE Mid-Cap and S&P BSE Small-Cap increased 1.48% and 0.02%.

Key sectors that outperformed were banking, realty and metals while capital goods and autos underperformed.

Trends in key global equity markets were also positive in November 2019 led by optimism over US China trade deal and better corporate earnings.

3M 6M 1Y

Change in %

S&P BSE SensexNifty 50S&P BSE 200Nifty 500Nifty Mid CapS&P BSE Small Cap

9.279.379.499.31

10.038.18

1MMonth End

ValueIndex

1.661.501.261.282.400.02

40793.8112056.05

5046.499813.65

17222.1513560.57

2.721.121.200.09

-4.10-8.79

12.7410.87

9.107.76

-1.61-6.02

3Y

15.2613.6112.3711.51

4.933.23

5Y

7.287.017.527.236.803.76

1M3M6M1Y3Y5Y

25,23145,14717,73196,926

104,232151,817

-4,8449,621

48,34453,765

299,334416,252

Net Flows

Domestic Indices Performance

Net Institutional Flows - Equity (in Rs. Crore)

Source: NSE & BSE

Source: SEBI

FII Flows MF Flows

3M 6M 1Y

Change in %

DJIAS&P 500FTSEDAXCACNikkeiHang SengKOSPIShanghaiMSCI EMMSCI India

6.247.331.93

10.867.75

12.512.426.11

-0.495.666.78

1MMonth End

ValueIndex

3.723.401.352.873.061.60

-2.080.22

-1.95-0.19-0.44

28051.413140.987346.53

13236.385905.17

23293.9126346.49

2087.962871.981040.05

18.89

13.0414.13

2.5812.8713.3913.07-2.062.26

-0.924.21

-3.04

9.8413.80

5.2617.6318.06

4.23-0.61-0.4311.00

4.564.33

3Y

13.6412.63

2.697.568.868.374.961.73

-4.046.439.29

5Y

9.488.711.795.806.105.931.891.061.370.692.05

Global Indices Performance

Source: Thomson Reuters Eikon

3M 6M 1Y

Change in %

Nifty AutoNifty BankNifty EnergyNifty FMCGNifty India ConsumptionNifty InfrastructureNifty ITNifty MetalNifty CommoditiesNifty PharmaNifty PSENifty Realty

15.3616.4712.86

5.876.89

10.73-6.3214.6511.15

1.467.685.56

1MMonth End

ValueIndex

-4.306.25

-1.54-4.16-3.380.02

-3.614.990.043.96

-5.434.85

8086.0031946.1016232.1530975.50

4994.803323.30

14998.052625.503431.908189.953261.60

282.05

-1.091.82

-1.983.773.85

-0.47-7.19-9.48-6.87-3.14

-10.75-0.67

-12.8118.9813.36

2.831.467.682.47

-17.061.02

-11.741.53

21.64

3Y

-3.9119.7217.7814.7911.84

5.9814.15-2.113.68

-9.59-4.4918.91

5Y

-1.0911.5211.38

9.107.880.454.73

-1.553.89

-6.15-2.595.20

Sectoral Performance

Source: NSE

Nifty 50 - P/E

Nifty 50 - P/B

Source: NSE

Source: NSE


22

25

28

31

Nov-18 Mar-19 Jul-19 Nov-19

3.10

3.40

3.70

4.00

Nov-18 Mar-19 Jul-19 Nov-19

Yiel

d (%

)


Debt Market Update

Market ReviewNovember 2019

Government data showed that the growth of the Indian economy plunged to its lowest level in over six years in the quarter ended Sep 19 which can be attributed to a fall in exports on account of global economic slowdown. Gross domestic product (GDP) grew 4.5% in the second quarter of FY20, down from 5.00% in the previous quarter and 7.00% in the same period of the previous year.India’s consumer price index-based inflation rate increased to 4.62% in Oct 2019 from 3.99% in Sep 2019 and 3.38% in Oct 2018. This marked a 16-month high and crossed the Reserve Bank of India’s medium target of 4%.India’s Index of Industrial production (IIP) shrunk 4.3% in Sep 2019 compared with 1.4% decline in Aug 2019. Manufacturing and electricity declined 3.9% and 2.6% in Oct 2019 respectively while the mining sector also contracted 8.5% in the same month.Latest data shows credit growth declined to 8.1% vs 14.9% YoY while deposit growth remained flat at 9.9% vs 9.1% YoY. Credit growth to the services sector decelerated sharply to 6.5% in October 2019 from 27.4% last year, while non-food bank credit growth decelerated to 8.3% vs 13.4% YoY. GST collections rose by 6% from a year ago to Rs.103,492 cr in November 2019.Liquidity conditions remained favourable during the month under review as the overnight call rate traded in a range from 4.59% to 5.09%, much lower than the

key policy repo rate of 5.15% compared with that of the previous month when call rates traded in the range of 4.86% to 5.26%.Yield on gilt securities increased on 3-year paper and 13 to 30-year maturities by up to 15 bps Yields fell across the remaining maturities in the range of 3 bps to 19 bps barring 6, 11 and 12-year paper which closed steady. Yield on corporate bonds fell across the maturities by up to 74 bps barring 4-year paper which closed steady.Yields on the 10-year U.S. Treasury bond rose 2 bps to close at 1.69% compared with the previous month’s close of 1.67%. U.S. Treasury prices fell as market participants grew optimistic for a resolution to the U.S.-China trade war which eased concerns of a slowdown in global growth to some extent.Markets will now focus on threats of fiscal breach and the borrowing program with close eye on disinvestment proceeds. RBI’s challenge of further reduction in rates is likely to be restricted due to rising food inflation, fiscal maths and Fed rate pause.On the global front, developments over Brexit and trade developments between U.S. and China will remain in sharp focus and oil prices acting as a joker in the pack.

India Yield Curve Shift (Year- on- Year)

1M

3M

6M

1Y

3Y

5Y

-2,358

321

29,746

35,245

112,572

144,907

39418

112310

258995

551441

1225858

2016221

Net Flows

Net Institutional Flows - Debt (in Rs. Crore)

Source: SEBI, NSDL

FII Flows MF Flows

3M 6M 1Y

Change in BPS

10Y GSEC CMT10Y AAA CMT10Y SPREAD*1Y CD3M CD1Y CP3M CP

-10-10-15-71-41-35-60

1MMonth End

ValueIndex

-18-1911-8

-27-15-20

6.466.56131

5.795.086.655.30

-57-5910

-141-139-135-150

-115-119

64-269-216-245-245

3Y

222244

-59-97-41

-118

5Y

-163-172105

-287-326-231-325

Key Domestic Yield Indicators

Source: Thomson Reuters Eikon; *Absolute Change

3M 6M 1Y

Change in %

CPIFOOD & BEVERAGESFUEL & LIGHTHOUSINGCORE CPI

1.474.60

-1.73-0.29-0.81

1MOct

2019Index

0.632.230.16

-0.17-0.55

4.626.93

-2.024.583.44

1.635.55

-4.58-0.18-1.11

1.247.07

-10.57-1.97-2.76

3Y

0.423.22

-4.92-0.57-1.42

5Y

0.002.60

-5.45-1.03-1.60

Inflation Indicators

Source: Thomson Reuters Eikon, Bloomberg

3M 6M 1Y

Change in %

US 2Y CMT YIELD (Change in BPS)US 10Y CMT YIELD (Change in BPS)BrentUSD/INRIIPManufacturing PMIService PMI

Trade DeficitNet Oil ImportsNet Non-Oil Trade DeficitNet Gold ImportsTrade Deficit ex Oil & GoldNET of Principal CommoditiesElectronic Goods

1027

8.52-0.05-5.600.300.30

1MIndex

89

12.331.29

-2.903.503.50

1.601.78

66.3471.73-4.3052.7052.70

-34-37

-2.472.75

-7.002.502.50

-121-124

15.272.97

-8.90-1.00-1.00

3Y

49-59

40.284.67

-9.30N.A.N.A.

5Y

111-42

-8.0315.74-8.60

N.A.N.A.

147.5964.8982.7029.2253.4845.54

182.6992.3490.3524.1066.25

49.6

129.9370.8759.0614.8644.2038.78

97.4647.3750.09

4.6445.4534.69

125.7657.6368.1320.1947.9434.52

140.4095.8444.5717.6626.9129.13

150.59100.08

50.5119.8030.7124.14

Key Indicators

Source: Thomson Reuters Eikon, Bloomberg

2017 2016 20152018Jan to Oct2019 2014 2013

10-Yr Benchmark Gsec Bond

Source: Thomson Reuters Eikon

Source: CCIL

US $ Billion

Change in bps Nov-19 Nov-18

Month EndValue

-210

-140

-70

0

5.00

6.00

7.00

8.00

1 Yr 5 Yr 10 Yr 20 Yr 30 Yr

Yiel

d (%

)

6.0

6.8

7.6

8.4

Nov-16 Nov-17 Nov-18 Nov-19

47-19

THIS PRODUCT IS SUITABLEFOR INVESTORS WHO ARE SEEKING^

Face Value per Unit: Rs. 10 unless otherwise specified; Data is as of November 30, 2019 unless otherwise specified.

* Includes TREPs,Marginal Fixed Deposits and Net Current Assets

FUND FACTSHEET NOVEMBER 2019 6

PORTFOLIO

ITI Multi Cap Fund(An open-ended equity scheme investing acrosslarge cap, mid cap, small cap stocks)

CATEGORY OF SCHEME: Multicap Fund

INVESTMENT OBJECTIVEThe investment objective of the Scheme is to generate long-term capital appreciation from a diversified portfolio that predominantly invests in equity and equity-related securities of companies across various market capitalisation. However, there can be no assurance that the investment objective of the Scheme will be realised.

SCHEME DETAILS

FUND MANAGER

Inception Date(Date of Allotment):Benchmark:

15-May-19Nifty 500 TRI

Minimum ApplicationAmount:

Load Structure:Entry Load:

Mr. George Heber Joseph (Since 15-May-19)Total Experience: 17 years

AUM (in Rs. Cr): 66.0757.5121.54%35.70%90

NAV as on November 29, 2019

Regular Plan(in Rs.)

11.284511.2845

Growth:Dividend:

Direct Plan(in Rs.)

11.412311.4123

AAUM (in Rs. Cr):

NA

% of top 5 holdings:% of top 10 holdings:No. of scrips:

Mr. Pradeep Gokhale (Since 15-May-19)Total Experience: 24 years

Rs. 1,000/- and in multiples of Re. 1/- thereafter

Nil

Exit Load: If units are redeemed/switched out within 12 months - 1%. Nil thereafter

Name of the Instrument % toNAV

% to NAVDerivatives

3.77

0.871.07

0.81

Equity & Equity Related TotalAutoMaruti Suzuki India Ltd.TVS Motor Company Ltd.Mahindra & Mahindra Ltd.Hero MotoCorp Ltd.V.S.T Tillers Tractors Ltd.Escorts Ltd.Auto AncillariesJtekt India Ltd.Motherson Sumi Systems Ltd.Suprajit Engineering Ltd.Exide Industries Ltd.MRF Ltd.BanksState Bank of IndiaHDFC Bank Ltd.ICICI Bank Ltd.Kotak Mahindra Bank Ltd.Axis Bank Ltd.City Union Bank Ltd.Bank of BarodaThe Karnataka Bank Ltd.Yes Bank Ltd.CementUltratech Cement Ltd.Grasim Industries Ltd.Shree Cement Ltd.ChemicalsAtul Ltd.ConstructionNBCC (India) Ltd.Mahindra Lifespace Developers Ltd.KNR Constructions Ltd.Godrej Properties Ltd.Construction ProjectLarsen & Toubro Ltd.Ashoka Buildcon Ltd.Consumer DurablesCrompton Greaves Consumer Electrical LtdV-Guard Industries Ltd.Johnson CtrlsHitachi Air Cond India Ltd.Titan Company Ltd.Consumer Non DurablesITC Ltd.Nestle India Ltd.Jubilant Foodworks Ltd.Hindustan Unilever Ltd.United Spirits Ltd.Asian Paints Ltd.Coffee Day Enterprises Ltd.Marico Ltd.Godrej Industries Ltd.Ferrous MetalsTata Steel Ltd.FinanceHousing Development Finance Corp Ltd.Equitas Holdings Ltd.Geojit Financial Services Ltd.Cholamandalam Investment & Fin Co Ltd.

93.55

2.820.860.340.250.230.22

1.320.870.490.350.30

4.033.582.532.392.351.301.060.680.37

2.300.770.36

0.23

1.081.010.780.29

3.060.89

1.160.920.910.83

1.931.190.730.690.670.530.530.480.23

0.55

2.731.731.521.42

Name of the Instrument

Can Fin Homes Ltd.Reliance Nippon Life Asset Mgmt Ltd.ICICI Securities Ltd.HDFC Life Insurance Co. LtdMahindra & Mahindra Financial Serv Ltd.ICICI Prudential Life Insrnce Co. Ltd.ICICI Lombard General Insurance Co. Ltd.Max Financial Services Ltd.GasGAIL (India) Ltd.Aegis Logistics Ltd.Healthcare ServicesDr. Lal Path labs Ltd.Industrial Capital GoodsSiemens Ltd.ABB India Ltd.Bharat Heavy Electricals Ltd.Industrial ProductsSupreme Industries Ltd.Schaeffler India Ltd.Bharat Forge Ltd.Cummins India Ltd.Minerals/MiningCoal India Ltd.Non - Ferrous MetalsHindustan Zinc Ltd.PesticidesPI Industries Ltd.Petroleum ProductsReliance Industries Ltd.PharmaceuticalsTorrent Pharmaceuticals Ltd.Natco Pharma Ltd.Lupin Ltd.Alembic Pharmaceuticals Ltd.Cipla Ltd.PowerNTPC Ltd.RetailingAvenue Supermarts Ltd.Trent Ltd.ServicesThomas Cook (India) Ltd.Quess Corp Ltd.SoftwareInfosys Ltd.Tata Elxsi Ltd.Oracle Financial Services Software Ltd.Larsen & Toubro Infotech Ltd.HCL Technologies Ltd.Tata Consultancy Services Ltd.Hexaware Technologies Ltd.Cyient Ltd.Telecom - ServicesBharti Airtel Ltd.TransportationBlue Dart Express Ltd.Short Term Debt & Net Current Assets

Market Capitalisation Wise Exposure

FUND FEATURES

Top Ten HoldingsDerivatives are considered at Exposure Level and included in Portfolio Aggregates

Long-term capital growthInvestment in equity and equity-related securities of companies across various market capitalization

^Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Computed for the 3-yr period ended November 29, 2019. Based on month-end NAV. * Risk free rate: NA (Source: FIMMDA MIBOR)

QUANTITATIVE DATA

PORTFOLIO DETAILS

Total Expense Ratio (TER):

Direct Plan: 0.45%Regular Plan: 2.59%

Including Additional Expenses and Goods and Service Tax on Management Fees

Portfolio Allocation (%)

November 2019

Fresh, no legacy/no baggage portfolio

Smooth investing experience for the investor

Long term wealth creation focus

Portfolio TurnoverRatio (Last 1 year):

NANANA

RISK RATIO

Standard Deviation:Beta:Sharpe Ratio :*

% toNAV0.990.970.900.770.740.620.490.45

0.870.25

0.78

0.690.380.35

0.600.590.450.39

0.53

1.21

0.45

4.91

1.271.130.970.920.35

1.11

0.310.23

1.550.41

4.091.261.091.030.780.760.650.42

0.78

0.192.68

% to NAVDerivatives

0.55

0.47

Strong expertise in equity research

Differently positioned as a flexi cap within the multicap segment

SQL investment philosophy

When markets are expensive, the fund generally reduces risk and when markets are undervalued fund increases the risk in the portfolio so that risk adjusted return and investor experience becomes smooth and rewarding

0.19%0.23%0.45%0.53%0.54%0.55%0.78%0.78%1.11%1.12%1.21%1.42%

1.96%2.04%

2.68%3.16%3.32%3.43%3.83%3.95%

4.65%4.72%

5.38%6.99%

10.06%13.89%

21.04%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%Transportation

ChemicalsPesticides

Minerals/MiningRetailing

Ferrous MetalsTelecom - Services

Healthcare ServicesPower

GasNon - Ferrous Metals

Industrial Capital GoodsServices

Industrial ProductsCash and Cash Equivalent*

ConstructionAuto Ancillaries

CementConsumer Durables

Construction ProjectPharmaceuticals

AutoPetroleum Products

Consumer Non DurablesSoftwareFinance

Banks

Large Cap64.64%

Mid Cap17.62%

Small Cap17.73%

87-19



* Includes TREPs,Marginal Fixed Deposits and Net Current Assets


PORTFOLIO

ITI Long Term Equity Fund(An open ended equity linked saving scheme with a statutory lock-inof 3 years and tax benefit)

CATEGORY OF SCHEME: ELSS Fund

INVESTMENT OBJECTIVETo provide long-term capital appreciation by investing predominantly in equity and equity related securities. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The scheme does not assure or guarantee any returns.

SCHEME DETAILS

FUND MANAGER


18-Oct-19Nifty 500 TRI



Mr. George Heber Joseph (Since 18-Oct-2019)Total Experience: 17 years

AUM (in Rs. Cr): 15.7814.4824.89%40.54%91



10.503010.5030

Growth:Dividend:

Direct Plan(in Rs.)

10.529610.5296

AAUM (in Rs. Cr):

NA

% of top 5 holdings:% of top 10 holdings:No. of scrips:

Mr. Pradeep Gokhale (Since 18-Oct-2019)Total Experience: 24 years

Rs. 500/- and in multiples of Rs. 500/- thereafter

NilExit Load: Nil


% to NAVDerivatives

Equity & Equity Related TotalAutoMaruti Suzuki India Ltd.Mahindra & Mahindra Ltd.TVS Motor Company Ltd.V.S.T Tillers Tractors Ltd.Auto AncillariesMinda Industries Ltd.Motherson Sumi Systems Ltd.Amara Raja Batteries Ltd.Subros Ltd.Jtekt India Ltd.Endurance Technologies Ltd.BanksICICI Bank Ltd.HDFC Bank Ltd.State Bank of IndiaKotak Mahindra Bank Ltd.Axis Bank Ltd.DCB Bank Ltd.CementUltratech Cement Ltd.Ambuja Cements Ltd.Grasim Industries Ltd.Shree Cement Ltd.Ramco Industries Ltd.JK Cement Ltd.ChemicalsAtul Ltd.Commercial ServicesNESCO Ltd.3M India Ltd.ConstructionKNR Constructions Ltd.Godrej Properties Ltd.The Phoenix Mills Ltd.Mahindra Lifespace Developers Ltd.Ashiana Housing Ltd.Construction ProjectLarsen & Toubro Ltd.Consumer DurablesOrient Electric Ltd.V-Guard Industries Ltd.Blue Star Ltd.Crompton Greaves Consumer Electrical LtdConsumer Non DurablesITC Ltd.Nestle India Ltd.Godrej Industries Ltd.Godrej Agrovet Ltd.Jubilant Foodworks Ltd.United Spirits Ltd.Ferrous MetalsRatnamani Metals & Tubes Ltd.Tata Steel Ltd.FinanceHousing Development Finance Corp Ltd.Bajaj Holdings & Investment Ltd.Mahindra & Mahindra Financial Serv Ltd.Max Financial Services Ltd.

97.53

1.750.890.300.24

1.010.980.850.590.470.43

5.134.803.493.232.810.39

0.810.780.670.670.450.35

0.77

0.460.35

0.660.610.420.340.17

3.43

1.810.790.760.23

2.690.950.780.670.510.38

0.970.81

4.501.551.430.99


Central Depository Services (I) Ltd.Sundaram Finance Ltd.Equitas Holdings Ltd.ICICI Prudential Life Insrnce Co. Ltd.Cholamandalam Financial Holdings Ltd.Cholamandalam Investment & Fin Co Ltd.Can Fin Homes Ltd.Kalyani Investment Company Ltd.Tata Investment Corporation Ltd.Healthcare ServicesAster DM Healthcare Ltd.Industrial Capital GoodsABB India Ltd.Bharat Heavy Electricals Ltd.Industrial ProductsSwaraj Engines Ltd.Supreme Industries Ltd.Media & EntertainmentSun TV Network Ltd.Non - Ferrous MetalsHindustan Zinc Ltd.PesticidesPI Industries Ltd.Petroleum ProductsReliance Industries Ltd.Hindustan Petroleum Corporation Ltd.PharmaceuticalsAlembic Pharmaceuticals Ltd.Lupin Ltd.Cipla Ltd.Divi's Laboratories Ltd.Sanofi India Ltd.Glaxosmithkline Pharmaceuticals Ltd.Natco Pharma Ltd.Dishman Carbogen Amcis Ltd.Indoco Remedies Ltd.PowerTorrent Power Ltd.Power Grid Corporation of India Ltd.NTPC Ltd.SJVN Ltd.RetailingAditya Birla Fashion and Retail Ltd.ServicesThomas Cook (India) Ltd.SoftwareInfosys Ltd.Tata Consultancy Services Ltd.Oracle Financial Services Software Ltd.Larsen & Toubro Infotech Ltd.HCL Technologies Ltd.Cyient Ltd.Persistent Systems Ltd.Nucleus Software Exports Ltd.Hexaware Technologies Ltd.Telecom - ServicesBharti Airtel Ltd.Short Term Debt & Net Current Assets

Market Capitalisation Wise Exposure

Top Ten HoldingsDerivatives are considered at Exposure Level and included in Portfolio Aggregates

Capital appreciation over long termInvestment in equity and equity related securities



QUANTITATIVE DATA

PORTFOLIO DETAILS




Portfolio Allocation (%)

November 2019


NANANA

RISK RATIO


% toNAV0.980.750.700.650.630.590.540.220.20

0.54

1.220.30

0.390.35

0.84

1.47

0.28

6.631.06

0.780.730.690.680.520.510.490.420.27

0.900.870.680.34

0.89

1.44

3.831.261.161.020.840.630.490.470.45

0.702.47

% to NAVDerivatives

Large Cap,65.42%

Mid Cap,18.22%

Small Cap,16.36%

Long term wealthcreation potential

Benefits of Investing

Tax benefits up toRs. 46,800 underSection 80C*

3yrs

Investors get an opportunity to invest in equities across market caps and sectors

Lowest lock in period of 3 years among all 80C investments

Strong expertise in equity research

Tax saving through SIP builds discipline

0.28%0.54%0.70%0.75%0.77%0.81%0.84%0.89%

1.44%1.47%1.52%1.78%

2.20%2.47%2.79%3.17%3.43%3.60%3.73%

4.33%5.08%

5.99%7.68%

10.14%13.73%

19.86%

0.00% 5.00% 10.00% 15.00% 20.00%Pesticides

Healthcare ServicesTelecom - ServicesIndustrial Products

ChemicalsCommercial Services

Media & EntertainmentRetailingServices

Non - Ferrous MetalsIndustrial Capital Goods

Ferrous MetalsConstruction

Cash and Cash Equivalent*Power

AutoConstruction ProjectConsumer Durables

CementAuto Ancillaries

PharmaceuticalsConsumer Non Durables

Petroleum ProductsSoftwareFinance

Banks




PORTFOLIO

ITI Arbitrage Fund(An open ended scheme investing in arbitrage opportunities)

CATEGORY OF SCHEME: Arbitrage Fund

INVESTMENT OBJECTIVEThe investment objective of the Scheme is to generate income by predominantly investing in arbitrage opportunities in the cash and the derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments. However, there is no assurance that the investment objective of the scheme will be realized.

SCHEME DETAILS

FUND MANAGER


09-Sep-19Nifty 50 Arbitrage Index



Mr. George Heber Joseph (Since 09-Sep-19)Total Experience: 17 years

AUM (in Rs. Cr): 63.1659.25



10.123910.1239

Growth:Dividend:

Direct Plan(in Rs.)

10.141010.1410

AAUM (in Rs. Cr):

NA

Mr. Milan Mody (Since 09-Sep-19)Total Experience: 17 years


NilExit Load: If the Units are redeemed/ switched out on or

before 30 days from the date of allotment - 0.25%If the Units are redeemed/switched out after 30 days from the date of allotment - NIL (w.e.f. Nov 1, 2019)


% to NAVDerivatives

-69.32

-2.77-2.53-0.76-0.08

-7.62-2.08-0.52

-0.27

-2.78

-7.23-1.93-0.78-0.33-0.18

-7.13-1.09-1.03

-0.91

Equity & Equity Related TotalAutoMaruti Suzuki India Ltd.Mahindra & Mahindra Ltd.Bajaj Auto Ltd.Hero MotoCorp Ltd.BanksAxis Bank Ltd.The Federal Bank Ltd.Bank of BarodaCementUltratech Cement Ltd.Construction ProjectLarsen & Toubro Ltd.Consumer Non DurablesITC Ltd.United Spirits Ltd.Hindustan Unilever Ltd.Asian Paints Ltd.Godrej Consumer Products Ltd.FinanceHousing Development Finance Corp Ltd.Bajaj Finserv Ltd.Manappuram Finance Ltd.GasPetronet LNG Ltd.

69.02

2.752.520.750.08

7.582.070.52

0.27

2.76

7.211.920.770.320.18

7.091.081.03

0.90


Minerals/MiningNMDC Ltd.Non - Ferrous MetalsVedanta Ltd.PesticidesUPL Ltd.Petroleum ProductsReliance Industries Ltd.Hindustan Petroleum Corporation Ltd.PharmaceuticalsDr. Reddy's Laboratories Ltd.Cipla Ltd.Lupin Ltd.PowerTata Power Company Ltd.SoftwareInfosys Ltd.Tata Consultancy Services Ltd.Tech Mahindra Ltd.Telecom - ServicesBharti Airtel Ltd.TradingAdani Enterprises Ltd.TransportationAdani Ports & Special Economic Zone Ltd.Short Term Debt & Net Current Assets

To generate income by predominantly investing in arbitrage opportunitiesInvestments predominantly in arbitrage opportunities in the cash and derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments



QUANTITATIVE DATA

PORTFOLIO DETAILS




November 2019


NANANA

RISK RATIO


% toNAV

0.49

0.21

1.55

7.491.13

1.610.370.27

0.41

6.614.710.72

0.13

2.59

0.9130.97

% to NAVDerivatives

-0.49

-0.21

-1.56

-7.53-1.13

-1.62-0.37-0.27

-0.41

-6.64-4.74-0.73

-0.13

-2.59

-0.91

Lowest risk product in Equity segment

Fully hedged portfolio Better liquidity

Reasons to Invest

Zero credit risk on Arbitrage investments

Ideal investment option forinvestors with short tomedium term investmenthorizon

Tax efficient returns with low volatility

Alternate option toLiquid Fund andBank FD

Market neutral strategy

Note for ICRA A1 + mfs: Schemes with this rating are considered to have very strong degree of safety regarding timely receipt of payments from the investments that they have made. This rating should however, not be construed as an indication of the performance of the Mutual Fund scheme or of volatility in its returns.

November 2019

NOVEMBER 2019 9

Top Ten Holdings

PORTFOLIO

ITI Overnight Fund(An open ended debt scheme investing in overnight securities)

INVESTMENT OBJECTIVE

The investment objective of the Scheme is to provide reasonable returns commensurate with low risk and providing a high level of liquidity, through investments made primarily in overnight securities having maturity of 1 business day. However there can be no assurance or guarantee that the investment objective of the scheme would be achieved.

SCHEME DETAILS

FUND MANAGER

PORTFOLIO DETAILS

Benchmark:25-Oct-19CRISIL Overnight Index


Load Structure:


Entry Load: NilExit Load: Nil


Mr. George Heber Joseph (Since 25-Oct-19)Total Experience: 17 yearsMr. Milan Mody (Since 25-Oct-19)Total Experience: 17 years

AUM (in Rs. Cr): 6.9429.02


THIS PRODUCT IS SUITABLEFOR INVESTORS WHO ARE SEEKING

AAUM (in Rs. Cr):

Average Maturity:Macaulay Duration:Yield to Maturity:

1.98 Day2.01 Days4.93%


Name of the Instrument Ratings % toNAV

99.01

0.99

100.00

Debt Instruments

Reverse Repo/TREPS

The Clearing Corporation of India Ltd.

Net Current Assets

Total Net Assets

NA

NA

Market Value(Rs. Lakhs)

686.91

6.86

Portfolio Composition by Asset Class (%) Portfolio Classification by Rating Class (%)

CATEGORY OF SCHEME: Overnight Fund

QUANTITATIVE DATA


1005.02781001.48021001.51841005.0600

GrowthFortnightly DividendMonthly DividendAnnual Dividend

Direct Plan(in Rs.)

1005.12951001.53601001.5293

Regular income with low risk and high level of liquidityInvestment in money market and debt instruments with overnight maturity


FUND FACTSHEET


Face Value per Unit: Rs. 1000 unless otherwise specified; CD - Certificate of Deposit; CP - Commercial Papers;Data is as of November 30, 2019 unless otherwise specified.

^

Inception Date(Date of Allotment):

Triparty Repo99.01%

Net Current Assets, 0.99%

Cash & cashequivalent, 100.00%

ICRARating:

A1+ mfs

Key Benefits of Overnight Funds

Enables investors to earn same day returns since purchase takes place on previous day’s NAV

Same day returns

The fund provides highest liquidity within the fixed income mutual fund product segment with redemption on T+ 1

Highest liquidity

Positioned to deliver consistent and reasonable risk adjusted performance compared to traditional saving instruments

Efficient risk adjustedperformance

Carries effectively least interestrate/mark to market risk & lowest credit default risk

Lowest risk fund

Offers overnight liquidity without any exit load

No lock in period& no exit load

November 2019

Comparatively higher risk adjusted returns vis a vis savings accounts

Disciplined risk management

Low Risk

Hedge in rising interest rate scenario

Daily accrual

High liquidity

High credit qualitydebt papers

NOVEMBER 2019 10

FUND FEATURES

Top Ten Holdings

PORTFOLIO

ITI Liquid Fund(An open-ended liquid Scheme)

INVESTMENT OBJECTIVE

The investment objective of the Scheme is to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities. However, there can be no assurance that the investment objective of the scheme will be realised.

SCHEME DETAILS

FUND MANAGER

PORTFOLIO DETAILS

Benchmark:24-Apr-19CRISIL Liquid Fund Index


Load Structure:


Entry Load: NilExit Load: Investor exit upon

subscriptionUp to Day 1Day 2Day 3Day 4Day 5Day 6Day 7 onwards

Exit Load %0.0070%0.0065%0.0060%0.0055%0.0050%0.0045%0.0000%


Mr. George Heber Joseph (Since 24-Apr-19)Total Experience: 17 yearsMr. Milan Mody (Since 24-Apr-19)Total Experience: 17 years

AUM (in Rs. Cr): 33.0824.39


THIS PRODUCT IS SUITABLEFOR INVESTORS WHO ARE SEEKING

AAUM (in Rs. Cr):

Average Maturity:Macaulay Duration:Yield to Maturity:

2.26 Days2.29 Days4.91%


Name of the Instrument Ratings % toNAV

3.63

94.87

1.50

100.00

Debt Instruments

Fixed Deposits

Axis Bank Ltd.

Reverse Repo/TREPS

The Clearing Corporation of India Ltd.

Net Current Assets

Total Net Assets

NA

NA

NA

Market Value(Rs. Lakhs)

120.00

3138.58

49.63

Portfolio Composition by Asset Class (%) Portfolio Classification by Rating Class (%)

CATEGORY OF SCHEME: Liquid Fund

QUANTITATIVE DATA


1032.87511001.00001001.5098--1001.50861033.5281

Growth:Daily Dividend:Weekly Dividend:Fortnightly Dividend:Monthly Dividend:Annual Dividend:

Direct Plan(in Rs.)

1033.56201001.3218--1001.51791001.52271033.5716

Income over short term.Investment in money market and debt instruments.


FUND FACTSHEET


Face Value per Unit: Rs. 1000 unless otherwise specified; CD - Certificate of Deposit; CP - Commercial Papers;Data is as of November 30, 2019 unless otherwise specified.

^

Inception Date(Date of Allotment):

Fixed Deposit3.63%

Cash & cashequivalent 96.37%

ICRARating:

A1+ mfs

Note for ICRA A1 + mfs: Schemes with this rating are considered to have very strong degree of safety regarding timely receipt of payments from the investments that they have made. This rating should however, not be construed as an indication of the performance of the Mutual Fund scheme or of volatility in its returns.

Net Current Assets1.50%Fixed Deposits3.63%

Triparty Repo94.87%

Reasons to Invest

Differentiation with a fresh thinking and no baggage portfolio

Stringent Internal research will prevail over external ratings by credit rating agencies. As per our internal research, only select AAA/A1+ rated papers available in the market would pass muster of our credit criteria as part of SQL philosophy

Ideal Short Term Parking Avenue and also for smart risk efficient asset allocation strategies with the objective of long term wealth creation

SQL Investment Philosophy - Safety, Quality and Liquidity are primary focus to enable smooth investing experience

Debt fund with lowest risk and no legacy

Overnight Liquidity Smooth investing experience for the investor

Glossary

How to read factsheet

Average MaturityWeighted average maturity of the securities in scheme.

Macaulay Duration (Duration)Macaulay Duration (Duration) measures the price volatility of fixed income securities. It is often used in the comparison of interest rate risk between securities with different coupons and different maturities. It is defined as the weighted average time to cash flows of a bond where the weights are nothing but the present value of the cash flows themselves. It is expressed in years. The duration of a fixed income security is always shorter than its term to maturity, except in the case of zero-coupon securities where they are the same.

Portfolio Yield (Yield To Maturity)Weighted average yield of the securities in a scheme portfolio.

Total Expense Ratio (TER)Total expenses charged to scheme for the month expressed as a percentage to average monthly net assets.


Portfolio Turnover RatioPortfolio Turnover Ratio is the percentage of a fund’s holdings that have changed in a given period. This ratio measures the fund’s trading activity, which is computed by taking the lesser of purchases or sales and dividing it by average monthly net assets.

Tracking ErrorTracking error indicates how closely the portfolio return is tracking the benchmark index return. It measures the deviation between portfolio return and benchmark index return. A lower tracking error indicates portfolio is closely tracking benchmark index and higher tracking error indicates higher deviation of portfolio returns from benchmark index returns.

Risk Free ReturnThe theoretical rate of return of an investment with safest (zero risk) investment in a country.

Growth and Cumulative optionGrowth and Cumulative words are used alternatively.

Fund ManagerAn employee of the asset management company such as a mutual fund or life insurer, who manages investments of the scheme. He is usually part of a larger team of fund managers and research analysts.

Application Amount for Fresh SubscriptionThis is the minimum investment amount for a new investor in a mutual fund scheme.

Minimum Additional AmountThis is the minimum investment amount for an existing investor in a mutual fund scheme.

SIPSIP or systematic investment plan works on the principle of making periodic investments of a fixed sum. It works similar to a recurring bank deposit. For instance, an investor may opt for a SIP that invests Rs. 500 on every 15th of a month in an equity fund for a period of three years.

NAVThe NAV or the net asset value is the total asset value per unit of the mutual fund after deducting all related and permissible expenses. The NAV is calculated at the end of every business day. It is the value at which an investor enters or exits the mutual fund.

BenchmarkA group of securities, usually a market index, whose performance is used as a standard or benchmark to measure investment performance of mutual funds. Some typical benchmarks include the NIFTY, Sensex, BSE200, NSE500, Crisil Liquid Fund Index and 10-Year Gsec.

Entry LoadA mutual fund may have a sales charge or load at the time of entry and/or exit to compensate the distributor/agent. Entry load is charged when an investor purchases the units of a mutual fund. The entry load is added to the prevailing NAV at the time of investment. For instance, if the NAV is Rs. 100 and the entry load is 1%, the investor will enter the fund at Rs. 101.(Note: SEBI, vide circular dated June 30, 2009 has abolished entry load and mandated that the upfront commission to distributors will be paid by the investor directly to the distributor, based on his assessment of various factors including the service rendered by the distributor).

Exit LoadExit load is charged when an investor redeems the units of a mutual fund. The exit load is reduced from the prevailing NAV at the time of redemption. The investor will receive redemption proceeds at net value of NAV less Exit Load. For instance, if the NAV is Rs. 100 and the exit load is 1%, the investor will receive Rs. 99.

Yield to Maturity (YTM)The Yield to Maturity or the YTM is the rate of return when a bond is held until maturity. YTM is expressed as an annual rate. The YTM factors in the bond’s current market price, par value, coupon interest rate and time to maturity.

Modified DurationModified duration is the price sensitivity and the percentage change in price for a unit change in yield.

Standard DeviationStandard deviation is a statistical measure of the range of an investment’s performance. When a mutual fund has a high standard deviation, it means its range of performance is wide, implying greater volatility.

Sharpe RatioThe Sharpe Ratio, named after its founder, the Nobel Laureate William Sharpe, is a measure of risk-adjusted returns. It is calculated using standard deviation and excess return to determine reward per unit of risk.

Beta Ratio (Portfolio Beta)Beta is a measure of an investment’s volatility vis-a-vis the market. Beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 implies that the security’s price will be more volatile than the market.

AUMAUM or assets under management refers to the recent / updated cumulative market value of investments managed by a mutual fund or any investment firm.

HoldingsThe holdings or the portfolio is a mutual fund’s latest or updated reported statement of investments/securities. These are usually displayed in terms of percentage to net assets or the rupee value or both. The objective is to give investors an idea of where their money is being invested by the fund manager.

Nature of SchemeThe investment objective and underlying investments determine the nature of the mutual fund scheme. For instance, a mutual fund that aims at generating capital appreciation by investing in stock markets is termed an equity fund or growth fund. Likewise, a mutual fund that aims at capital preservation by investing in debt markets is a debt fund or income fund. Each of these categories may have sub-categories.

Rating ProfileMutual funds invest in securities after evaluating their creditworthiness as disclosed by the ratings. A depiction of the mutual fund in various investments based on their ratings becomes the rating profile of the fund. Typically, this is a feature of debt funds.

135-19

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