November 05, 2011 l Issue No.

01

www.sharekhan.com

November 2011 issue

Sharekhan's top fund picks Top equity picks

Scheme name Star rating NAV (Rs) Absolute 6 months 15.5 201.5 25.2 17.5 43.4 32.2 33.8 15.1 31.6 203.5 20.5 202.1 -10.0 -8.7 -13.2 -1.0 10.3 2.8 -7.6 -10.7 -8.0 -5.3 -9.4 -5.7
Data as on September 30, 2011

Returns (%) Compounded annualised 1 year 3 years 5 years -10.1 -11.3 -18.4 -10.5 -0.7 -8.6 -13.1 -13.8 -11.5 -7.6 -13.7 -7.9 19.7 15.9 15.7 28.9 24.4 24.1 32.0 30.2 28.9 25.2 17.7 16.8 -11.1 10.3 -10.6 23.0 11.9 -13.7 11.1 12.7 11.1

Since inception 13.1 25.7 16.8 17.3 23.1 21.3 20.4 12.3 18.1 26.4 13.4 27.1

Large-cap funds ICICI Prudential Focused Bluechip Equity Fund Franklin India Bluechip Principal Large Cap Fund Mid-cap funds IDFC Small & Midcap Equity Fund SBI Magnum Sector Funds Umbrella IDFC Premier Equity Fund - Plan A Multi-cap funds Reliance Equity Opportunities Fund Mirae Asset India Opportunities Fund Tata Dividend Yield Fund Tax saving funds ICICI Prudential Taxplan Fidelity Tax Advantage Fund Franklin India Taxshield

Top SIP picks

(monthly SIP of Rs1,000)

(*invested on 1st day of every month)

Investment period Total amount invested (Rs) Funds would have grown to (Rs)

1 year 12,000 Present Avg. annual value (Rs) return (%) 10,644 9,792 10,080 10,680 10,332 10,728 11,916 10,968 10,344 10,260 10,356 11,052 -11.3 -18.4 -16 -11 -13.9 -10.6 -0.7 -8.6 -13.8 -14.5 -13.7 -7.9

Present value (Rs) 45,750 45,608 45,116 52,751 51,662 49,881 52,329 52,078 49,253 47,022 47,054 46,397

3 years 36,000 Avg. annual return (%) 15.9 15.7 15.0 24.9 23.6 21.4 24.4 24.1 20.6 17.9 17.7 16.8

5 years 60,000 Present Avg. annual value (Rs) return (%) 79,730 78,054 81,234 87,375 82,109 84,122 78,677 1,10,818 80,156 71,779 83,219 79,730 11.1 10.3 11.8 14.5 12.2 13.1 10.6 23.0 11.3 7.1 12.7 11.1

Large-cap funds Franklin India Bluechip Principal Large Cap Fund Birla Sun Life Frontline Equity Fund - Plan A Multi-cap funds Birla Sun Life Dividend Yield Plus Reliance Equity Opportunities Fund Tata Dividend Yield Fund Mid-cap funds SBI Magnum Sector Funds Umbrella IDFC Premier Equity Fund - Plan A Sundaram Select Midcap Tax saving funds ICICI Prudential Taxplan Fidelity Tax Advantage Fund Franklin India Taxshield

SIP calculator
Monthly SIP of Rs5,000 Expected rate of returns (pa) 8% 10% 15% 25% Expected maturity value of your monthly investment (Rs) 5 369,834 390,412 448,408 599,222 Years to achieve financial goal 10 20 920,828 1,032,760 1,393,286 2,664,023 2,964,736 3,828,485 7,579,775 34,295,476 25

Crorepati calculator
Target: Rs10,000,000 Expected rate of returns (pa) 8% 10% 15% 25% Expected investment per month to achieve your goal (Rs) 5 135,196 128,070 111,506 83,442 Years to achieve financial goal 10 15 54,299 48,414 35,887 18,769 28,708 23,928 14,775 5,114 20 16,865 13,060 6,597 1,458

4,786,833 6,689,452 16,420,369 118,774,708

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Mutual fund Benefits of MF-IN-DEMAT

Simplicity & ease: You can purchase/redeem/flexi SIP in over 1,000 schemes through NSE. Instant order placement: Now you can place or modify orders instantly between 9.00am and 2.00pm. Dematerialised mutual fund units: You can transfer your existing mutual fund portfolio to your demat account. Single view of all your holdings: You will have a consolidated demat statement showing a single view of all your holdings in equities and mutual funds across AMCs. Instant transaction proof: You can view order details instantaneously on placing orders on the MF-IN-DEMAT platform. No additional KYC: For demat account holders, no additional KYC is needed. mandatory lock-in for three years inculcates a long-term investment habit. Superior return: Investments in equity over a long term have historically delivered better returns than the "guaranteed return" avenues. Tax-free gain: Dividends and long-term gains are tax-free (these schemes give you the twin options of tax savings and capital gains). SIP: Investors can opt for a systematic investment plan and keep on investing small amounts periodically, say on a monthly basis.

Knowledge Today
What is a monthly income plan (MIP)? MIPs invest predominantly in debt instruments with a small portion of assets allocated to equities. The equity component provides MIPs with the edge needed to outperform the conventional debt funds. The equity component usually varies between 5% and 30% of assets. MIPs are best suited for those investors who want to start investing in equities/stocks in small proportions. Though MIPs generally declare dividend every month, they do not guarantee the same. At times when the equity market slumps substantially the net asset values can also dip to an extent, hence fund houses skip dividends.

Systematic Investment Plan (SIP)

Disciplined investing: Through SIP you can choose to invest fixed amounts (as low as Rs500) in a mutual fund scheme at regular intervals (like every month or every quarter) for a chosen period of time (say for a year). Accumulate wealth: Set aside a small amount every month through SIP and achieve financial goals like buying a car or a house. Beat inflation: Equity investing can help you combat inflation that diminishes the value of your savings. Rupee cost averaging: A regular investment in a mutual fund scheme can reduce the cost of acquiring mutual fund units over a longer period as you end up buying more units when the price is low and fewer units when the price is high. Fewer efforts: You can start an SIP by simply placing an order by logging on to Sharekhan's online mutual fund page. Click on the "SIP" button and fill in the SIP amount, SIP date etc and provide the information asked by the system.

How to place orders in Sharekhan MFIN-DEMAT

Log on to www.sharekhan.com and click on Login. Click on Mutual Funds. A welcome screen will be displayed after accepting terms and conditions. For the first time log in on the online mutual fund page; click and accept terms and conditions. Click on Place Order. Transfer funds from the bank account to the mutual fund pool account or allocate funds from the trading account to the mutual funds pool account. Select scheme available under MF-IN-DEMAT and confirm order. Successful order placement page is displayed.

Tax-saving mutual fund schemes

Tax waiver (ELSS): Tax benefit on investments up to Rs100,000. Lower lock-in-period: These schemes have a lower lock-in period of three years compared to the other tax saving avenues. A

Fund ranking procedure

Top equity funds: We have identified the best equity-oriented schemes available in the market today based on the following five parameters: the past performance as indicated by the one-year, two-year and three-year returns, the Sharpe ratio and Information ratio. For our final selection of schemes, we have generated a total score for each scheme giving 60% weightage each to the relative performance as indicated by the one-year, two-year and three-year returns, 20% weightage to the relative performance as indicated by the Sharpe ratio and the remaining 20% to the relative performance as indicated by the Information ratio of the scheme. Top SIP funds: We have identified the best equity scheme for SIP investment based on three parameters: minimum corpus as indicated by at least 10% of the average category-corpus, the past performance as indicated by one-year, three-year and five-year returns and the risk returns ratios, namely Sharpe, Information and Sortino. Sharekhan mutual fund ranking scale Stars Description For top 10 percentile of the eligible schemes Next 22.5 percentile of the eligible schemes Next 35 percentile of the eligible schemes Next 22.5 percentile of the eligible schemes Bottom 10 percentile of the eligible schemes

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November 05, 2011

Sharekhan Mutual Fund Finder

Fund of the month

Reliance Equity Opportunities Fund

Fact sheet
The Reliance Equity Opportunities Fund is a moderate multi-cap oriented fund, framed with the flexibility to be overweight in a particular sector or market cap depending on the potential and opportunities as they arise. The primary investment objective of the scheme is to seek to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio constituted of equity securities and equity related securities. The secondary objective is to generate consistent returns by investing in debt and money market securities. Scheme performance
Reliance Equity Opportunities Fund - Grow th 40% 30% 20.4% 20% 10% 0% -10% -20% -30% 6 Months 1 Year -7.6% -10.2% -13.7% -13.1% -17.1% -20.0% 3 Years 5 Years Since Inception 12.4% 9.2% 11.9% 7.9% 6.1% 11.2% 32.0% Multicap funds Category Average BSE 500

Holding by market cap Particular BSE Sensex BSE Mid-cap BSE Small cap Benchmark (BSE 500) Top 5 holdings Top 10 holdings % 24.7 26.8 5.3 73.3 23.3 38.5

Top 10 stock holdings (total no. of scrips: 37) Company name Aventis Pharma India Divis Laboratories Infosys Trent Maruti Suzuki India State Bank of India % of net assets 5.2 4.7 4.7 4.4 4.2 3.6 3.3 3.3 2.5 2.4

Returns < 1 yr: Absolute, >1yr: CAGR

HCL Technologies

Style box analysis

Large Cap Mid Cap Small Cap
Growth Blend Value

ICICI Bank Info Edge Larsen & Toubro

Scheme analysis
Reliance Equity Opportunities Fund Growth has been in existence for more than six years and has grabbed the attention of many investors owing to its performance. The fund has consistently outperformed both its peers and the BSE Sensex by a huge margin which is well reflected in the funds performance over a period of three years where the fund clocked 32% returns as against the index (BSE 500) return of 9.2% compounded annual growth rate (CAGR). Overall, since its inception investors have garnered a 20% return (CAGR). Considering the dampened market sentiment the world over caused by the financial turmoil in the USA and the Europe, the fund has shown relative stability limiting its downside risk to (7.6%) whereas the BSE 500 has lost over 13.7% for the same period during the past six months. The equity portfolio is very actively managed. The fund has continued to diversify the portfolio with over 37 scrips since the last one year and reduced the concentration risk. The fund has invested 13.5% of its funds in the software and consultancy services segment followed by the pharmaceutical & biotechnology segment with 12.6% allocation, and automobiles and banks with 9% exposure each. As of September the top five holdings form 23.3% of the portfolio whereas the top ten form 38.5%. 3
November 05, 2011

Top 5 sectors
Retailers Banks Auto & Auto Ancillaries Pharmaceuticals & Biotechnology Software and Consultancy Services 6.5% 9.0% 9.1% 12.6% 13.5%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

Key features
Fund category
Launch date Minimum investment Load structure : : : : Multi cap funds March 31, 2005 Rs5,000 Entry = 0%; exit = 1% if redeemed within 1 year Sailesh Raj Bhan , Viral Belawala Rs33.77 Rs21.84 1.84% (March 31, 2011) Rs3,192.9 crore BSE 500

Fund manager : Latest NAV (gr.) : Latest NAV (div.) : Expense ratio : AUM (September 2011) : Benchmark index :

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Performance of debt funds and ETFs Top fund picks (debt)

Returns (%) (simple annualised) Scheme name Monthly income plan HDFC Multiple Yield 2005 Birla SF MIP Savings 5 Birla SL Monthly Income Income funds Birla Sun Life MTP ICICI Pru MTP BNP Paribas Bond Short-term debt funds Sahara Short Term Bond JM Short Term Fund DSP BlackRock Short Term Ultra short-term funds Tata Floater Fund Kotak Floater LT L&T Ultra Short Term AAUM** (Rs cr) 370.5 460 614.2 947.7 103.5 210 223.6 353.8 575.1 4751.2 4031.2 711.4
1 mth 3 mths 6 mths 1 Data as on September 30, 2011

Tax rates for debt funds

Scheme

yr 6.8 6.4 4.3 8.8 7.9 7.7

Exp* Avg. ratio mat. (%) (Days) 1.8 1.2 1.7 0.1 0.6 2 0.4 0.8 1 0.3 0.5 0.7 240 -

Credit quality (% allocation)

AAA/ P+ AA/ AA+ Below AA Cash & Call

Ind./HUF (in %)

Corp.

NRI

(in %) (in %)

Long-term capital gain (investments > 12 months) Debt schemes

5.2 6.5 2.5 18.3 9.2 10.6 8.7 9.2 8.1 9 9 8.8

5.9 7.5 3 8.6 8.4 9.5 8.8 9.2 8.7 9.1 9.2 8.9

9.8 8.1 5 9.7 8.7 8.9

68.8 76.1 70.9

15.1 2.3 14.2 27.3 47.8 investment 24.8 investment 1.3 7.9 -

13.5 14.2 3.6

Without indexation With indexation

10.3 20.6

10.8 21.6

10.3 20.6

18.4 13.3 9.5 8.4 9 8.1 9.1 9.2 9 8.7 8.7 8.5

71.1 266 96.8 402 46.2 (1-2 years 65 93.2 69 99.5 573 64.8 (1 year or less 86 95.3 135 74.9 67 89.2

1.6 3.2 6 horizon) 6.8 0.5 - 10.4 horizon) 3.5 - 17.2 11

*Short-term capital gain (investments = or < 12 months) Debt schemes Dividend Distribution Tax (payable by the scheme) Debt schemes Money market schemes 13.5 27.0 32.5 32.5 13.5 27.0 30.9 32.5 30.9

*Assuming investors fall into the highest tax bracket

Exchange traded funds (ETF)

Scheme name AMC/Index NAV (Rs) Absolute 1 month ETF based on commodity (gold) Axis Gold ETF Birla Sun Life Gold ETF GS Gold BeES HDFC Gold ETF ICICI Prudential Gold ETF Kotak Gold ETF Quantum Gold Fund - Growth Reliance Gold ETF - Dividend Religare Gold ETF SBI Gold ETS UTI Gold ETF ETF based on international Indices GS Hang Seng BeES MOSt Shares NASDAQ 100 ETF based on equity (index) Birla Sun Life Nifty ETF GS Bank BeES GS Junior BeES GS Nifty BeES GS PSU Bank BeES GS S&P Shariah BeES Kotak Nifty ETF Kotak PSU Bank ETF MOSt Shares M100 MOSt Shares M50 Reliance Banking ETF S&P CNX NIFTY UTI National Depository Receipts Scheme Quantum Index Fund AXIS BIRLA SUN LIFE GOLDMAN SACHS HDFC ICICI KOTAK QUANTUM RELIANCE RELIGARE SBI UTI BENCHMARK MOTILAL OSWAL BIRLA SUN LIFE NIFTY BANK NIFTY JUNIOR NIFTY NIFTY CNX PSU BANK NIFTY SHARIAH NIFTY CNX PSU BANK CNX MIDCAP MOST50 BANK NIFTY NIFTY NIFTY Oct-11 2,633.8 2,694.6 2,573.2 2,635.3 2,653.0 2,582.6 1,285.4 2,515.0 2,654.5 2,632.9 2,583.5 July-11 1,257.7 118.6 Oct-11 52.0 963.7 97.4 529.5 315.3 120.6 527.4 325.5 7.1 70.3 986.3 567.0 528.5 -3.5 -3.3 -3.3 -3.3 -3.4 -4.0 -3.3 -3.3 -3.3 -3.3 -3.3 -6.9 4.9 -1.1 -0.7 -1.6 -1.1 -1.6 1.1 -1.1 -1.6 -2.6 -1.3 -0.7 -0.9 -1.1 3 months 17.2 17.4 17.1 17.5 17.4 17.2 17.6 17.7 17.6 17.7 17.6 -13.5 4.7 --15.8 -12.1 -12.2 -18.1 -9.2 -12.2 -18.1 -10.4 -12.7 -15.4 -11.1 -12.1 6 months 24.0 -23.9 24.2 24.0 23.9 24.4 24.5 24.4 24.5 24.4 -16.2 3.1 --18.7 -12.3 -13.8 -28.2 -11.8 -13.8 -28.2 -10.7 -17.6 -18.3 -12.4 -13.7 Return (%) Compounded annualised 1 year 3 years Since inception --32.8 33.1 32.6 33.0 33.4 33.6 33.4 33.4 33.7 -12.8 ---22.9 -21.7 -17.2 -33.4 -14.7 -17.3 -33.4 --23.3 -22.4 -15.1 -17.3 --22.6 --23.3 22.6 22.3 --22.7 ---18.8 17.6 8.9 16.7 --17.2 --19.0 9.8 8.5 26.1 17.2 23.7 36.3 32.2 28.2 22.9 25.4 31.7 26.5 24.3 -4.5 4.1 -10.6 20.9 25.6 18.6 6.2 23.6 -0.4 3.9 -9.2 -12.3 19.5 23.1 7.2

Disclaimer: Mutual fund investments are subject to market risk. Please read the offer document carefully before investing. Past performance may or may not be sustained in the future.
Disclaimer This document has been prepared by Sharekhan Ltd.(SHAREKHAN) This Document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed to and may contain confidential and/or privileged material and is not for any type of circulation. Any review, retransmission, or any other use is prohibited. Kindly note that this document does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. SHAREKHAN will not treat recipients as customers by virtue of their receiving this report. The information contained herein is from publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, SHAREKHAN, its subsidiaries and associated companies, their directors and employees (SHAREKHAN and affiliates) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance, or other reasons that may prevent SHAREKHAN and affiliates from doing so. We do not represent that information contained herein is accurate or complete and it should not be relied upon as such. This document is prepared for assistance only and is not intended to be and must not alone betaken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. We do not undertake to advise you as to any change of our views. Affiliates of Sharekhan may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject SHAREKHAN and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Sharekhan

November 05, 2011

SHAREKHAN & affiliates may have used the information set forth herein before publication and may have positions in, may from time to time purchase or sell or may be materially interested in any of the securities mentioned or related securities. SHAREKHAN may from time to time solicit from, or perform investment banking, or other services for, any company mentioned herein. Without limiting any of the foregoing, in no event shall SHAREKHAN, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. Any comments or statements made herein are those of the analyst and do not necessarily reflect those of SHAREKHAN.