September 2018

Trusted Corporate Financial Advisors For Three Decades

 MONEY GUIDE
CREATE - OPTIMISE - SECURE

SEPTEMBER : 2018 • Issue 145

Did you know? Market Outlook pg 3

FII - ACTIVITY NET (Crs)
Month Equity Debt
Behavioural Finance In Investment
Decisions And Strategies pg 4
Aug-18 -2,028.81 2,366.77

Jul-18 490.67 178.22 GDP growth posted upside surprise to

Jun-18 -1,899.55 -10,005.65

8.2% in Q1 FY2019; an analysis
pg6
Till Date -3,437.69 -7,460.66
Turkish crisis and the rupee pg12
MF - ACTIVITY NET (Crs)
AUM break-up of the industry
Month

Aug-18
Equity

4,094.53
Debt

35,744.36 
after SEBI rationalization
pg 13
Jul-18 3,995.60 -3,635.21

Jun-18 6,485.78 38,657.97

JRL Best 40 Funds pg14
Till Date 14,575.91 70,767.12

Data Cruncher pg 16
Financial
Wisdom
-“In the short run, the market is a
voting machine but in the long run,
it is a weighing machine.”

- Benjamin Graham

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 MONEY GUIDE
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Market Outlook
Uncertainty regarding trade conflict continues. The United States is
potentially entering into a bilateral trade agreement with Mexico,
however a truce with Canada is pending. The US focus has narrowed
to China, while the tensions with European Union have eased. US-
China trade tensions are unlikely to be resolved that easily and the US
administration is now expected to impose 25% tariff on additional US$
200 billion worth of Chinese imports taking the total value of goods
affected by tariffs to US$ 435bn (i.e. 2.3% of global trade or 0.5% of
global GDP).
Total trade value of US and China is equivalent of 10% of global GDP.
US and China together account for one-fourth of the global trade.
Hence, given global value chains, basking in the bilateral nature US-
China trade spat is gross underestimation of the spill-over effects.
Chinese policy response is stepping up, and provides some near-term
offset
Total trade value of US and China is equivalent of 10% of global GDP.
US and China together account for one-fourth of the global trade.
Hence, given global value chains, basking in the bilateral nature US-
China trade spat is gross underestimation of the spill-over effects.
Chinese policy response is stepping up, and provides some near-term
offset
Interestingly, amidst the global worries, Indian equities are up
meaningfully since July. NIFTY is up 11% YTD, 9% of which has come
in last two months. Owing to the weakness in rupee, NIFTY is flat in
US$ terms, but is still one of the best performing emerging market. The
up move can be explained by confluence of factors such as continued
participation by domestic investors, consumption oriented Indian
growth leaving it less vulnerable to trade tensions and healthy
earnings outcome in 1Q FY19. That said, it is a narrow band of
companies that had participated in recent upside. Return in BSE 500
index was lower at 5.6%. Performance down the capitalization curve
has also been poor with mid and small cap down 5% and 11 % YTD
respectively.
The 1Q FY19 earnings have come to a close with NIFTY companies
clocking 10% y-o-y growth. The miss in the aggregate PAT was driven
by financials, mainly PSU banks and corporate lenders due to higher
provisions and MTM treasury losses. Excluding three corporate banks,
PAT growth was robust at ~25%
Aggregate 1QFY19 revenue growth continues the strong momentum
with double-digit growth in most of the NIFTY 50 companies reflecting
the improvement in domestic economic activity. The same trends
were also being resonated by various economic activity data and the
latest (Q1 FY19) GDP data which took the market by surprise (8.2% y-o-
y vs. expectation of 7.6%). EBITDA growth was healthy at 17% but
missed the estimated strength. Margins moderated on rising raw
material cost. They may remain under pressure for some time as rupee
slides, raw material and interest costs escalate and competitive
pressures in few sectors (telecom, aviation, staples and auto) inhibits
the capacity to take the parallel price hikes. With 2-3% downgrades,
FY19 earnings growth is now placed at nearly 19%.
Market rally coupled with earnings miss had led to richness in
valuations. Nifty is trading at ~ 19 times forward earnings. Earnings
yield is at 60% premium to bonds (highest level since 2012). India
MSCI P/E compared to MSCI EM index is at 66% premium which is a
record high. Sectorally, valuations have been re-rated across most
sectors while IT, consumer staples, healthcare and energy are trading
higher than their historical trend.
The rally in equity indices has come amidst macro headwinds (rising
import bill led primarily by high commodity prices, tightening liquidity,
rising cost of funds and raw materials, fiscal pressure raising the
probability of clamp-down on government capex) and upcoming
political uncertainty. We remain positive on the medium-term
structural story as the reforms implemented (GST, IBC, RERA) in the
last two-three years should start paying off. In the near-term, however,
the richness in valuations command increased importance to stock
selections.
RBI's release of FY18 Household savings trend poses some worrying
trends. Household Net Financial Savings (7.1% of GDP) is low while
there is a sharp rise in household liabilities (4.0% in FY18 vs. 2.4% of
GDP in FY17). Given that general government fiscal deficit stands ~6-
6.5%, less than 1% of GDP is left for private sector borrowing needs.
Muted net financial savings pose risks to India's external account. We
already saw CAD rise to 1.9% of GDP in FY18 from 0.9% in FY19. It is
further slated to edge up to 2.8% in FY19.
Savings in the form of bank deposits is declining in share - reflecting
the reduced attractiveness in return. While the penetration of long-
term financial products (insurance, pension and mutual funds) is still
low, investment in mutual funds have depicted a handsome gain (0.9%
of GDP vs. 0.2% for multi years now).
There has been a sharp rise in the overall retail lending space due to a
confluence of push and pull factors. While the enabling environment
(CIBIL, digitalization) and low starting penetration provide comfort,
one needs to be watchful. On the other hand, as a response to NPA
cycle, the corporate lending space has seen battery of reform actions
which will place it on a stronger footing. RBI has sped up the process of
early recognition and resolution of stress. Decision in February to do
away with various restructuring scheme is a case in point. Given the
newness of the NCLT and IBC, the resolution process is taking longer
than expected, but it will set better precedence for future cases. The
strengthening of the institutional capability such as judicial (NCLT),
legislative system (IBC) and market structure (specialized asset
management, legal, valuation and insolvency resolution expertise etc)
coupled with forced stressed asset recognition will ensure that the
corporate lenders start on a clean slate as and when the new cycle
begins.
Coming to the bond market, with the RBI giving a 50bps of pre-emptive
rate hike (in June and August), we expected the central bank to take a
pause in the October meeting. The same can also be reinforced by the
softening of recent inflation prints (4.2% in July and expected at ~4%
in August)
However, one needs to take cognizance of surmounting worries in the
emerging market currencies, particularly the ones with current
account deficit such as India. Rupee reached its lowest level vs. US$
(presently hovering around 71.2) as contagion fears from Turkish crisis
weighed on EM currencies and domestic trade deficit surged to a five
year high of US$18.0 billion in July. RBI has actively intervened as FX
reserves deplete by US$ 23 billion FYTD. While Indian fundamentals
are relatively better than some of the high yielding currencies, Indian
rupee has been amongst the weakest of the lot and given in to the
contagion pressures and worries of the rising crude prices. Brent
moved up to US$ 79/bbl from US$ 72/bbl at the start of the month, as
the US sanctions on Iran led to a steep drop in Iranian oil exports this
month. Given that India is one of the largest oil importer and imports
nearly 85% of its oil needs, hence the currency impact.
In terms of valuations, the rupee is now trading closer to the longer-
term trend. That said, the valuations typically tend to work over a
medium to long-term. In the near-term, EM assets are in the slippery
zone and as such, the continued pressure on rupee could not be ruled
out. If the currency pressure sustains, the calculus of the October
policy meeting could change
10-year G-sec yield has touched 8% to factor in these challenges
(currency and oil), apart from lower than expected government tax
collections. As such, we maintain the cautious stance on bond market
and a tactical approach to duration. Notwithstanding the near-term
hazy outlook, investors should consider SIPs in fixed income funds as
valuations enter an attractive zone. Timing the market may not be
easy!
Navneet Munot
CIO- SBI Funds Management Private Limited
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BEHAVIOURAL FINANCE IN INVESTMENT DECISIONS AND STRATEGIES
INTRODUCTION
Classical investment theories are based on the assumption
that investors always act in a manner that maximizes their
return. Yet a number of research shows that investors are not
always so rational. Humans become puzzled when the
uncertainty regarding investment decision engulfs them.
People are not always rational and markets are not always
efficient. Behavioural finance explains why individuals do not
always make the decisions they are expected to make and why
markets do not reliably behave as they are expected to behave.
Recent research shows that the average investor makes
decisions based on emotions, not logic; most investors buy
high on speculations and sell low on panic. Psychological
studies reveal that the pain of losing money from investment is
really three times greater than the joy of earning money.
Emotions such as fear and greed often play a pivotal role in
investors' decision, besides other factors. It is observed that
stock prices move up and down on a daily basis without any
change in fundamentals of companies. It is also observed that
people in the stock market move in herds and this influences
stock price. Theoretically markets are efficient, but in practice
they never move efficiently. For example, a reputed company
announces a mega investment in an emerging area over the
next few years and the stock price of the company starts
moving up immediately without the prospects, return on
investment or the investment amount of the project having
been looked into.
BEHAVIOURAL FINANCE
Behavioural finance is a relatively new field that seeks to
combine behavioural and cognitive psychological theory with
conventional economic and finance to provide explanations
for why people make irrational financial decisions. It is very
popular in stock market across the world for investment
decisions Behavioural finance is the study of psychology and
sociology on the behavior of the financial practitioners and the
subsequent effect on the security market. It helps to
understand why people buy or sell stock without doing
fundamental analysis and behave irrationally in investment
decisions.
Forbes (2009) has defined behavioural finance as a science
regarding how psychology influences financial market. This
view emphasizes that the individuals are affected by
psychological factors like cognitive biases in their decision-
making, rather than being rational and wealth maximizing.
Thus, behavioural finance is the application of scientific
research on the psychological, social and emotional
contributions to market participants and market price trends. It
also studies the psychological and sociological factors that
influence the financial decision making process of individual
groups and entities.
CAUSES OF BEHAVIOURAL FINANCE
Some of the common causes of Behavioural Finance are
described below:
Anchoring
The assumption of rationality says that our thoughts and
opinion should always based on relevance and fact. In reality,
4
however, this is not always so. People have a tendency to
attach or “anchor” their thoughts to a reference point even
though that may hardly have any logical association with the
decision at hand. Although the company is making more
money, its stock price does not rise because investors assume
that the change is earning is only temporary. Thus, the
investors remain anchored to their previous view of the
companies potential profitability because they have under-
reacted to the new, positive information. This does not mean
that investors will never move away from their initial reference
point or anchor. They will realize that the company is likely to
continue to be more profitable in the future and that its stock is
probably an attractive potential investment.
Overconfidence
People are generally overconfident regarding their ability and
knowledge. They tend to underestimate the imprecision of
their beliefs or forecasts, and they tend to overestimate their
ability. Terrence Odean in his research found that
overconfident investors generally conduct more trade as they
believe they are better than others at choosing the best stocks
and best times to enter or exist a position. Thus,
overconfidence can cause investors to under-react to new
information and that leads to earn significantly lower yields
than the market.
Herd Behavior
Herd behavior is the tendency of individual to follow the
actions (rational or irrational) of a larger group. This herd
mentality is the result of two reasons. Firstly, there may be a
social pressure of conformity. Most people do not want to be
outcast from the group they belong. Secondly, there is a
common rational that a large group is unlikely to be wrong.
Purchasing stocks based on price momentum while ignoring
basic economic principles of supply and demand is known in
the behavioural finance arena as herd behavior and that leads
to faulty decision. In the late 1990s, venture capitalists and
private investors were frantically investing huge amount of
money into internet related companies, even though most of
them did not have financially sound business models.
Over and Under-Reaction
Disproportionate reaction to news, both good and bad has
been often seem in the financial market. They tend to become
more optimistic when the market goes up and more
pessimistic when the market goes down. Irrational optimism
and unjustified pessimism are shown in over and under-
reaction of investors.
Loss Aversion
It means that investor is risk seeker when faced with respect of
loss, but becomes risk averse when faced with the prospects of
enjoying gains. Khaneman has said that investors are “Loss
averse”. This 'Loss Aversion' means that people are willing to
take more risks to avoid loss than to realize gain.
Behavioural Finance and Investment Decisions
Behavioural finance seeks to find how investor's emotions and
psychology affect investment decisions. It is the study of how
people in general and investors in particular make common
errors in their financial decision due to their emotions. It is
 MONEY GUIDE
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nothing but the study of why otherwise rational people take which was purchased for their portfolio. Investors should also
some really dumb investment decisions. decide specific criteria for making an instant decision to buy,
Decision making is a process of choosing best alternatives sale or hold.
among a number of alternatives. This decision has come out Investors should also keep in mind the answer of the
after a proper evaluation of all the alternatives. Decision following questions before taking any decision of buying,
making is the most complex and challenging activity of selling and holding new shares:
investors. Every investor differs from the others in all aspects (i) Why investors purchase the stock?
due to various factors like demographic factor, socioeconomic (ii) What is the time horizon of the investment?
background, educational level, sex, age and race. An optimum (iii) What is the expected rate of return?
investment decision plays an active role and is a significant (iv) After one year the stock has under-performed or over-
consideration. performed.
Investor is a rational being who will always act to maximize his (v) Do you plan on buying, selling or holding your position?
financial gain. Yet we are not rational beings; we are human (vi) How risky is this stock within your overall portfolio?
beings; an integral part of this humanness is the emotion Mutual Fund Investment
within us. Indeed, we make most of our life decisions on purely Tomic and Ruccuardi recommended that investors select
emotional considerations. mutual funds with a simple four step process which include
In the financial world, investor's sometimes base their the followings:
decisions on irrelevant figures and statistics, e.g., some (i) Invest in only no-load mutual fund with low operating
investor may invest in the stock that have witnessed expense;
considerable fall after a continuous growth in recent past. They (ii) Look for funds with a strong historical track record over
believe that price has fallen which is only due to short- term 5-10 years;
market movements, creating an opportunity to buy the stock
(iii) Invest with tenured Portfolio Manager with a strong
cheap. However, in reality, stocks do quite often also decline in
investment philosophy; and
value due to changes in their underlying fundamentals.
(iv) Understand the specific risk associated with each mutual
Cognitive dissonance is the perception of incompatibility
fund.
between two cognitions, which can be defined as any element
The key to successful investing is recognizing the type of
of knowledge including attitude, emotion, belief or behavior.
investor you are along with implementing a solid investment
The theory of cognitive dissonance holds that contradicting
strategy. Behavioural factors can help investors to avoid
cognition serve as a driving force that compels the mind to
mistakes. Avoiding mistakes is called defensive behavioural
acquire or invent new thoughts or beliefs or to modify existing
finance applications in investment decision making.
beliefs, so as to reduce the amount of dissonance (conflict)
CONCLUSION
between cognition.
Behavioural finance provides explanations for why investors
Strategies for Overcoming Behavioural Bias
make irrational financial decisions. It demonstrates how
In recent years, behavioural finance is becoming an integral
emotions and cognitive errors influence investors in the
part of decision-making process because it heavily influences
decision making process. The various causes that led to
the investor's performance. Understanding behavioural
behavioural finance are anchoring, overconfidence, herd
finance will help the investor to select a better investment
behavior, over and under reaction and loss aversions. In
instrument and they can avoid repeating the expensive error in
essence, behavioural finance approach investigates the
future. They can improve their performance by recognizing
behavioural patterns of investors and tries to understand how
their biases and errors of judgement to which we are all prone.
these patterns guide investment decision. Behavioural
The main issue of studying behavioural finance is how to
finance offers many useful insights for investment
minimize or eliminate the psychological biases in investment
professionals and thus, provides a framework for evaluating
decisions of the investors.
active investment strategies for the investors.
After an extensive study of the literature on behavioural
finance, it is believed that its perfect application could make a
Anoop Trivedi
successful investor making fewer mistakes.
Regional Sales Head - Wealth Management
Several psychological and behavioural factors influence
(Article Inspired From Different Sources)
investors in decision making. Various safeguards are needed
to control mental error and psychological roadblocks while
investing in stocks and mutual funds. A disciplined trading
strategy is required to control these mental roadblocks to all
types of investors.
Stock Investment
There is a need to focus a 'specific investment strategy' over
the long period to control “mental mistakes” by the investors.
Investors should keep detailed records of the specific stock

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GDP growth posted upside surprise to 8.2% in Q1 FY2019; concerns linger on sustainability of
V-shaped recovery in remaining quarters of FY2019
HIGHLIGHTS
• Growth of India's GDP (at constant 2011-12 prices) in
year-on-year (YoY) terms has been placed at a nine-
quarter high 8.2% in Q1 FY2019, exceeding the pace of
5.6% in Q1 FY2018 and 7.7% in Q4 FY2018, as well as
our forecast (+7.5%). The pickup in GDP growth in Q1
FY2019 relative to the previous quarter was driven by
private final consumption expenditure (PFCE; to
+8.6% from +6.7%), whereas the growth of
government final consumption expenditure (GFCE; to
+7.6% from +16.9%) and gross fixed capital
formation (GFCF; to +10.0% from +14.4%) recorded
some easing while remaining healthy.
• Similarly, the pace of growth of gross value added
(GVA) at basic prices stood at 8.0% in Q1 FY2019,
exceeding the prints for Q1 FY2018 (+5.6%), Q4
FY2018 (+7.6%) and our expectation (+7.4%). The
sequential uptick in Q1 FY2019 relative to Q4 FY2018
was led by industry (to +10.3% from +8.8%) and
agriculture (to +5.3% from +4.5%), while the pace of
growth of services eased mildly (to +7.3% from
+7.7%).
• Manufacturing was the key driver of industrial growth
in Q1 FY2019. The improvement in the growth of
volumes and the healthy earnings reported by
corporates, which partly reflects the base effect
related to the transition to the Goods and Services
Tax (GST), boosted the GVA growth of manufacturing
to 13.5% in Q1 FY2019 from (-1.8% in Q1 FY2018;
+9.1% in Q4 FY2018).
• The decline in construction GVA growth to 8.7% in Q1
FY2019 from 11.5% in Q4 FY2018 was led by the
waning of the base effect. Nevertheless, the pace of
OVERVIEW
Growth of India's GDP (at constant 2011-12 prices)
improved to a nine-quarter high 8.2% in Q1 FY2019 from
5.6% in Q1 FY2018 and 7.7% in Q4 FY2018 (refer Exhibit 1
and 2), exceeding our forecast of 7.5%. Similarly, the
growth in GVA at basic prices improved to 8.0% in Q1
FY2019 from 5.6% in Q1 FY2018 and 7.7% in Q4 FY2018,
which was higher than our forecast (+7.4%).
The substantial improvement in GDP growth to an eight-
quarter high 8.2% in Q1 FY2018 from 5.6% in Q1 FY2018
was led by a pickup in growth of GFCF, inventories, PFCE
and exports, which more than offset the slowdown in
growth of GFCE. GFCF growth improved sharply to 10.0%
in Q1 FY2019 from 0.8% in Q1 FY2018; this was in line with
the pickup in growth of capital goods output (+9.5% in Q1
FY2019, -4.2% in Q1 FY2018), while somewhat at odds with
the trends related to project announcement and
completion. Moreover, inventories recorded a YoY growth
of 8.6% in Q1 FY2019, in contrast to the contraction of 2.9%
in Q1 FY2018. In addition, the growth of PFCE improved to
8.6% in Q1 FY2019 from 6.9% in Q1 FY2018. However,
GFCE growth slowed to 7.6% in Q1 FY2019 from 17.6% in
Q1 FY2018, partly on account of unfavourable base effect.
Despite a moderation in the expansion of imports (to
+12.5% in Q1 FY2019 from +18.5% in Q1 FY2018) and an
uptick in the growth of exports (to +12.7% from +5.9%),
net imports exerted a drag of 0.4% on the GDP growth in Q1
FY2019.
Exhibit 1: Growth of GDP and its Components (in %,
Constant 2011-12 Prices, YoY)
Private Final Consumption Exp.
Q1 FY2018
6.9%
Q2 FY2018
6.8%
Q3 FY2018
5.9%
Q4 FY2018
6.7%
Q1 FY2019

8.6%
FY2017RE
7.3%
FY2018PE
6.6%

construction GVA growth was healthy in Q1 FY2019, Government Final Consumption Exp.
Exports
17.6%
5.9%
3.8%
6.8%
6.8%
6.2%
16.8%
3.6%
7.6%
12.7%
12.2%
5.0%
10.9%
5.6%
less Imports 18.5% 10.0% 10.5% 10.9% 12.5% 4.0% 12.4%
in line with the trend in its inputs, like cement and Gross Fixed Capital Formation
GDP
0.8%
5.6%
6.1%
6.3%
9.1%
7.0%
14.4%
7.7%
10.0%
8.2%
10.1%
7.1%
7.6%
6.7%
steel consumption, and activity in the infrastructure Agriculture, Forestry & Fishing
Q1 FY2018
3.0%
Q2 FY2018
2.6%
Q3 FY2018
3.1%
Q4 FY2018
4.5%
Q1 FY2019
5.3%
FY2017RE
6.3%
FY2018PE
3.4%

sector including affordable housing. However, real Industry

Services
0.1%
9.5%
6.1%
6.8%
7.1%
7.7%
8.8%
7.7%
10.3%
7.3%
6.8%
7.5%
5.5%
7.9%

estate and industrial capex is yet to pick up and GVA at Basic Prices
GVA ex-Agri
5.6%
6.0%
6.1%
6.6%
6.6%
7.5%
7.6%
-19.5%
8.0%
8.4%
7.1%
7.2%
6.5%
7.0%

consumer sentiment is yet to recover appreciably. RE: Revised Estimates: PE: Provisional Estimates Source: Central Statistics Office
• While GFCF growth eased in Q1 FY2019 relative to the (CSO); ICRA research
14.4% recorded in Q4 FY2018, it outpaced the
expansion displayed by PFCE and GFCE in the just- Exhibit 2: YoY Growth in GDP and GVA at Basic Prices
concluded quarter. The 9.5% YoY rise in the output of (Constant 2011-12 Prices)
capital goods, which benefitted from a low base, and 10%
the healthy 27.3% expansion in the Government of 9%
India's (GoI's) capital spending in Q1 FY2019, 8%
supported the 10.0% GFCF growth in Q1 FY2019, 7%
6%
despite unfavourable trends in project announcement
5%
and completion. 4%
• While GDP and GVA growth posted an upside surprise 3%
in Q1 FY2019, some concerns linger on the 2%
1%
sustainability of growth around 8.0% in the remaining
0%
quarters of FY2019, given the expected waning of the
favourable base effect, fiscal constraints, as well as
risks posed by higher crude oil prices GVA at basic prices GDP

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Exhibit 3: YoY Growth in Agriculture, Industry and quarter. The decline in construction GVA growth to 8.7% in
Services (Constant 2011-12 Prices) Q1 FY2019 from 11.5% in Q4 FY2018, was led by the
14% waning of the base effect. Nevertheless, the pace of
12% construction GVA growth was healthy in Q1 FY2019, in line
10%
with the trend in its inputs, like cement and steel
8%
6%
consumption, and activity in the infrastructure sector
4% including affordable housing. However, real estate and
2% industrial capex is yet to pick up and consumer sentiment is
0% yet to recover appreciably.
-2%
-4%
The service sector growth eased to 7.3% in Q1 FY2019
from 7.7% in Q4 FY2018, with the considerable moderation
in growth in public administration, defence and other
Agriculture, Forestry & Fishing Industry Services services (PADOS; to +9.9% from +13.3%), and mild dip in
expansion of trade, hotels, transport, communication and
Source: CSO; ICRA research
services related to broadcasting (THTCS; to +6.7% from
+6.8%), partly offset by the pickup in growth of financial,
In sequential terms, the pickup in GDP growth in Q1 FY2019 real estate and professional services (FRP; to +6.5% from
relative to the previous quarter was driven by PFCE (to +5.0%).
+8.6% from +6.7%), whereas the growth of GFCE (to In nominal terms, GDP growth rose considerably to 13.8%
+7.6% from +16.9%) and GFCF (to +10.0% from +14.4%) in Q1 FY2019 from 10.9% in Q4 FY2018, while the GVA
recorded some easing while remaining healthy. In growth improved to 12.9% in Q1 FY2019 from 10.7% in Q4
particular, while GFCF growth eased in Q1 FY2019 relative FY2018 (refer Exhibit 4). The GDP and GVA deflator rose to
to the 14.4% recorded in Q4 FY2018, it outpaced the 5.6% and 4.9%, respectively, in Q1 FY2019 from 3.1% each
expansion displayed by PFCE and GFCE in the just- in Q4 FY2018.
concluded quarter.
On a YoY basis, the pace of expansion of GVA at basic Exhibit 4: GDP and GVA data
prices improved to 8.0% in Q1 FY2019 from 5.6% in Q1
GDP Q1 Q2 Q3 Q4 Q1 GVA at Basic Prices Q1 Q2 Q3 Q4 Q1
FY2018 (refer Annexures A, B and C), led by an FY2018 FY2018 FY2018 FY2018 FY2019 FY2018 FY2018 FY2018 FY2018 FY2019
improvement in growth of industry (to +10.3% from Constant 5.6% 6.3% 7.0% 7.7% 8.2% Constant 5.6% 6.1% 6.6% 7.6% 8.0%
Current 8.3% 9.5% 11.0% 10.9% 13.8% Current 8.0% 9.2% 10.7% 10.7% 12.9%
+0.1%; driven by manufacturing, construction and Deflator 2.7% 3.2% 4.0% 3.1% 5.6% Deflator 2.5% 3.1% 4.1% 3.1% 4.9%
electricity, gas, water supply and other utility services) and
Source: CSO; ICRA research
agriculture, forestry and fishing (to +5.3% from +3.0%).
However, this was offset by a slowdown in the growth of
With an 11.7% growth of taxes on products less subsidies
services to 7.3% in Q1 FY2019 from 9.5% in Q1 FY2018.
on products, GDP expansion (8.2%) exceeded the pace of
In sequential terms, GVA growth increased to 8.0% in Q1
GVA growth (8.0%) by 23 bps in Q1 FY2019. This was in
FY2019 from 7.6% in Q4 FY2018, led by the agricultural
contrast to the trend in Q1 FY2018, with GDP and GVA
sector (to +5.3% from +4.5%, reflecting the robust rabi
growth having converged to 5.6% in that quarter.
harvest), and industry (to +10.3% from +8.8%). However,
the growth in the services sector eased to 7.3% in Q1
FY2019 from 7.7% in Q4 FY2018. Notably, the growth of OUTLOOK
GVA excluding agriculture improved to 8.4% in Q1 FY2019 Amid an uneven monsoon, the hikes in minimum support
from 8.1% in Q4 FY2018. prices (MSPs) for kharif crops would boost rural demand,
The industrial recovery in Q1 FY2019 relative to the but contribute to higher inflation and/or fiscal risks. The
previous quarter was led by manufacturing (to +13.5% improvement in sentiment, staggered pay revision by
from +9.1%), which was the key driver of industrial growth various state governments and the recent GST rate cuts,
in that quarter. The improvement in the growth of volumes would support urban consumption demand. However,
and the healthy earnings reported by corporates, which there is a risk that higher inflation would weigh upon the
partly reflects the base effect related to the transition to the disposable income of consumers and the margins of
GST, boosted the GVA growth of manufacturing to 13.5% producers, preventing a faster pickup of economic growth.
in Q1 FY2019 from 9.1% in Q4 FY2018. However, the Continued consumption demand, as well as the benefits of
performance of construction (to +8.7% from +11.5%), the implementation of the GST, are expected to support
electricity, gas and water supply (to +7.3% from +7.7%) as volume growth. However, in the initial commentary on Q1
well as mining and quarrying growth (to +0.1% from FY2019 results, some companies have indicated that the
+2.7%) deteriorated in Q1 FY2019 relative to the previous unorganized segment continues to have a reasonable

7
 MONEY GUIDE
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market share and the transition from the unorganized to
organized segment has been modest.
A pickup in capacity utilisation is expected to set the stage
for a broadening of the investment recovery in H2 FY2019.
Completion of the resolution process of cases admitted to
the NCLT would improve utilisation of existing capacity and
promote consolidation in some sectors. While bond yields
have hardened over the last year, the two rate hikes would
partly transmit into higher bank lending rates, which may
constrain the strength of the investment recovery.
Additionally, the ability of the public sector banks to
support lending growth remains a concern. With the extent
of the INR weakness only modestly larger than many of the
other emerging market currencies, it is unlikely to improve
the volume growth of Indian exports. Moreover, the
heightened risk of trade wars poses a concern.
While GDP and GVA growth posted an upside surprise in
Q1 FY2019, some concerns linger on the sustainability of
growth around 8.0% in the remaining quarters of FY2019,
given the waning of the favourable base effect, fiscal
constraints, as well as risks posed by higher crude oil
prices, interest costs and a weakening rupee.
Manufacturing, construction and public administration
were the three fastest growing sectors in Q1 FY2019.
While the former two sectors benefited from a favourable
base effect, which would wane going forward, the extent
to which government expenditure can prop up growth in
the remaining quarters of FY2019 without contributing to
a fiscal slippage, would take a cue from revenue
buoyancy. Moreover, despite the out-turn of the monsoon
so far, agricultural growth may ease in the quarters
ahead, given the high base of the last kharif and rabi
harvests. Given the various risks posed by higher
commodity prices and interest costs, and the looming
threat of trade wars, ICRA expects a shallow recovery in
the GDP and the GVA growth in FY2019. Nevertheless,
given the higher-than-expected growth print for Q1
FY2019, we have revised our forecast for FY2019 GDP and
GVA growth to 7.2% and 7.1%, respectively, from our
earlier estimates of 7.1% and 7.0%, respectively.
GVA AT BASIC PRICES
GVA growth picks up for fourth consecutive quarter to
8.0% in Q1 FY2019: Real growth of GVA at basic prices
increased to 8.0% in Q1 FY2019 from 5.6% in Q1 FY2018,
and 7.6% in Q4 FY2018 (refer Exhibit 6). The increase in
GVA expansion in Q1 FY2019 relative to Q1 FY2018 was led
by industry (to +10.3% from +0.1%) and agriculture,
forestry and fishing (to +5.3% from +3.0%). In contrast,
the growth of services slowed to 7.3% in Q1 FY2019 from
9.5% in Q1 FY2018, respectively.
8
Exhibit 6: YoY GVA Growth and its Composition
(Constant 2011-12 Prices)
9%
8.0%
8% 7.6%
6.6%
7% 6.1%
5.6%
6%
5%
4%
3%
2%
1%
0%
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019
Agriculture, Forestry & Fishing Industry Services GVA at basic prices
Source: CSO; ICRA research
Industrial growth stood at 10.3% in Q1 FY2019: Industrial
growth increased to 10.3% in Q1 FY2019 from 0.1% in Q1
FY2018 and 8.8% in Q4 FY2018 (refer Exhibit 7), benefitting
from a favourable base effect. The muted industrial growth
in Q1 FY2018 had partly reflected the inventory de-stocking
ahead of the implementation of the GST in the country from
July 1, 2017. Industry accounted for a substantial 3.2% of
the 8.0% GVA growth in Q1 FY2019, led by manufacturing
(+2.3%), construction (+0.7%) and electricity, gas, water
supply and other utility services (+0.2%).
Manufacturing GVA growth improved substantially to
13.5% in Q1 FY2019 from (-)1.8% in Q1 FY2018, and 9.1%
for Q4 FY2018. Manufacturing was the key driver of
industrial growth in Q1 FY2019. The improvement in the
growth of volumes and the healthy earnings reported by
corporates, which partly reflects the base effect related to
the transition to the GST, supported the revival in
manufacturing GVA growth in Q1 FY2019.
Construction GVA growth improved sharply to 8.7% in Q1
- Rakesh Jhunjhunwala
FY2019 from 1.8% in Q1 FY2019, but was lower than the
11.5% expansion in Q4 FY2018. The sequential decline in
construction GVA growth was led by the waning of the
base effect. Nevertheless, the pace of construction GVA
growth was healthy in Q1 FY2019, in line with the trend in
its inputs, like cement and steel consumption, and activity
in the infrastructure sector including affordable housing.
However, real estate and industrial capex is yet to pick up
and consumer sentiment is yet to recover appreciably.
The growth of electricity, gas, water supply and other utility
services improved to 7.3% in Q1 FY2019 from 7.1% in Q1
FY2018, but eased from 7.7% in Q4 FY2018. Data released
by the Central Electricity Authority indicates that the pace
of expansion of nuclear generation (to +10.4% from -0.5%)
and thermal electricity generation (to +5.7% from +2.3%)
posted an uptick in Q1 FY2019 relative to Q1 FY2018.
However, hydroelectricity generation contracted by 12.7%
in Q1 FY2019, in contrast to the healthy 17.6% expansion
registered in Q1 FY2018.
 MONEY GUIDE
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The GVA of mining and quarrying eased to a marginal 0.1% FY2019, from 26.8% in Q1 FY2018, according to data
in Q1 FY2019 from 1.7% in Q1 FY2018 and 2.7% in Q4 released by the Controller General of Accounts (CGA)
FY2018. The dip in growth in Q1 FY2019 relative to Q1
FY2018 was led by natural gas (to +0.4% from +4.4%) and Exhibit 8: YoY Services Growth and its Composition
crude oil (to -2.4% from +0.2%), despite the considerable (Constant 2011-12 Prices)
improvement in coal (to +13.2% from -4.4%).
10% 9.5%
7.7% 7.7%
Exhibit 7: YoY Industrial Growth and its Composition 8%
6.8%
7.3%
(Constant 2011-12 Prices) 6%

4%
10.3%
2%
8.8%
7.1% 0%
8%
6.1% Q3 FY2017 Q4 FY2017 Q1 FY2018 Q2 FY2018 Q3 FY2018

Public administration, defence and Other Services

Financial, real estate & professional services
3% Trade, hotels, transport, communication and services related to broadcastin
g
Services
0.1%
Source: CSO; ICRA research
-2%
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019 Agricultural growth stood at 5.3% in Q4 FY2018: Growth
Construction Manufacturing Electricity, gas, water supply & other utilities
Industry Mining & quarrying in agriculture, forestry and fishing improved to 5.3% in Q1
FY2019 from 3.0% in Q1 FY2018, and 4.5% in Q4 FY2018.
Source: CSO; ICRA research Agriculture, forestry and fishing accounted for a muted
0.7% of the 8.0% GVA growth in Q1 FY2019.
Services sector growth stood at 7.3% in Q1 FY2019: As per the Fourth Advance Estimates (4th AE) released by
Service sector growth eased to 7.3% in Q1 FY2019 from the Department of Agriculture and Farmers Welfare, total
9.5% in Q1 FY2018, and 7.7% in Q4 FY2018 (refer Exhibit 8). production of food grains rose by 3.5% in FY2018, to a
Nevertheless, the services sector remained the principal record high production of 284.8 million hectare (refer
driver of GVA growth, accounting for 4.1% of the 8.0% GVA Exhibit 9). The 4th AE forecast a 5.4% rise in rabi production
growth in Q1 FY2019; the contribution of FRP, THTCS, and of food grains to 144.1 million in FY2018, which supported
PADOS to GVA growth stood at 1.6%, 1.3% and 1.2%, the agricultural growth in Q1 FY2019. While the rabi output
respectively. of pulses (+17.3%), coarse cereals (+15.6%) and rice
The YoY growth of THTCS eased to 6.7% in Q1 FY2019 (+15.0%) posted a double-digit expansion, that of oilseeds
from 8.4% in Q1 FY2018 and 6.8% in Q4 FY2018. In (+5.6%) and wheat (+1.2%) recorded modest growth.
particular, one of the key indicators of railways, namely the
passenger kilometres expanded by a modest 1.0% in Q1 Exhibit 9: Trends for production of major crops (Million
FY2019, as per data released by the CSO. In the transport Tonnes)
and communication sectors, cargo handled at major ports
posted a growth of 4.0% in Q1 FY2019 (source: CSO), Total Production (Kharif + Rabi)
similar to the expansion in Q1 FY2018 (source: Indian Ports FY2017 FY2018 Growth
th
Association). Final Estimate 4 AE
Moreover, the growth of FRP slowed to 6.5% in Q1 FY2019 Wheat 98.5 99.7 1.2%
from 8.4% in Q1 FY2018, but exceeded the 5.0% recorded Rice 109.7 112.9 2.9%
in Q4 FY2018. This was in line with the pickup in non-food Coarse Cereals 43.8 47.0 7.4%
bank credit growth to 12.9% at end-June 2018 from 10.2% Pulses 23.1 25.2 9.1%
at end-March 2018, as per the data from the Reserve Bank Oilseeds 31.3 31.3 0.1%
of India (RBI). Cotton 32.6 34.9 7.1%
The growth of PADOS eased to 9.9% in Q1 FY2019 from Sugarcane 306.1 376.9 23.1%
13.5% in Q1 FY2018 and 13.3% in Q4 FY2018. This is AE: Advance Estimates
similar to the slowdown in the growth of the GoI's revenue Source: Ministry of Agriculture, GoI; ICRA research
expenditure (net of interest payments) to 6.0% in Q1

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EXPENDITURE ON GDP
GDP growth improved for fourth quarter in a row to 8.2%
in Q1 FY2019: The YoY growth of GDP (at constant 2011-12
prices) rose to a nine-quarter high 8.2% in Q1 FY2019 from
5.6% in Q1 FY2018 and 7.7% in Q4 FY2018.
Exhibit 10: YoY Growth of PFCE and GFCE (Constant
2011-12 Prices)
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019
PFCE GFCE
Source: CSO; ICRA research
PFCE growth increased to 8.6% in Q1 FY2019: The pace of
expansion of PFCE increased to 8.6% in Q1 FY2019 from
6.9% in Q1 FY2018 and 6.7% in Q4 FY2018 (refer Exhibit
10). Consumption demand may have benefited from the
healthy rabi output, as well as the staggered pay revision by
various state governments.
PFCE as a percentage of GDP (at current prices) stood at
58.4% in Q1 FY2019, in line with Q1 FY2018, but higher than
Q4 FY2018 (57.8%). Moreover, PFCE accounted for a
substantial 4.7% of the 8.2% GDP growth in Q1 FY2019,
exceeding the contributions of both GFCF and GFCE.
GFCE growth eased in Q1 FY2019: The pace of growth of
GFCE stood at 7.6% in Q1 FY2019, lower than the prints of
17.6% in Q1 FY2018 and 16.9% in Q4 FY2018, partly
reflecting the unfavourable base effect.
GFCE accounted for a modest 0.9% of the 8.2% GDP
growth in Q1 FY2019. GFCE as a percentage of GDP (at
current prices) stood at 12.5% in Q1 FY2019, similar to Q1
FY2018 (+12.6%), but higher than Q4 FY2018 (+10.1%).
GFCF expanded by 10.0% in Q1 FY2019: GFCF growth
rose to 10.0% in Q1 FY2019 from the muted 0.8% in Q1
FY2018. However, the pace of growth of GFCF eased in
sequential quarters, compared to 14.4% in Q4 FY2018
(refer Exhibit 11). The 9.5% YoY rise in the output of capital
goods and the healthy 27.3% expansion in the GoI's capital
spending in Q1 FY2019, are likely to have supported the
GFCF growth in Q1 FY2019. While there is a perceptible
improvement in sentiment, it is yet to translate into a broad-
10
based pickup in the investment cycle, in our view. For
instance, capital spending of a sample of 18 state
governments1 displayed a modest 3.3% growth in Q1
FY2019. Moreover, the value of new projects and
completed projects contracted on a YoY basis to Rs. 2.3
trillion and Rs. 0.8 trillion, respectively, in Q1 FY2019 from
Rs. 2.6 trillion and Rs. 0.9 trillion, respectively, in Q1 FY2018
(source: www.economicoutlook. cmie.com, Centre for
Monitoring Indian Economy, August 13, 2018).
Exhibit 11: YoY Growth of GFCF (Constant 2011-12 Prices)
16%
14%
12%
10%
8%
6%
4%
2%
0%
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019
Source: CSO; ICRA research
Bihar, Gujarat, Haryana, HP, Jharkhand, Karnataka, Kerala,
MP, Maharashtra, Mizoram, Nagaland, Punjab, Rajasthan,
TN, Telangana, UP, WB and Uttarakhand GFCF accounted
for 3.1% of the 8.2% GDP growth in Q1 FY2019. Notably,
GFCF as a percentage of GDP (at current prices) increased
mildly to 28.8% in Q1 FY2019 from 28.7% in Q1 FY2018,
but remained lower than Q4 FY2018 (29.1%).
Valuables recorded a contraction of 8.0% in Q1 FY2019
(constant 2011-12 prices), in sharp contrast to the high
expansion in Q1 FY2018 (+122.2%) and Q4 FY2018
(+29.1%). At current prices, valuables displayed a de-
growth of 15.1% in Q1 FY2019, narrower than the 25.1%
contraction in the value of gold imports in that quarter
(source: Ministry of Commerce). Valuables as a percentage
of GDP (at current prices) stood at 1.6% in Q1 FY2019,
lower than the print in Q1 FY2018 (2.2%), but higher than
the level of 1.1% for Q4 FY2018.
The pace of growth of inventories increased to 8.6% in Q1
FY2019 relative to the prints for Q1 FY2018 (-2.9%) and Q4
FY2018 (+7.8%). The contraction of 2.9% in Q1 FY2018
may have reflected the de-stocking that happened prior to
the implementation of the GST. Inventories as a percentage
of GDP (at current prices) stood at a mild 0.6% in Q1
FY2019, in line with the print in Q1 FY2018, but lower than
Q4 FY2018 (+0.7%).
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Exhibit 12: YoY Growth of Exports and Imports (Constant Exhibit 14: GDP and Final Expenditures (YoY Growth,
2011-12 Prices) Constant 2011-12 Prices)
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019 FY2017 RE FY2018 PE
20%
GDP 5.6% 6.3% 7.0% 7.7% 8.2% 7.1% 6.7%
18% PFCE 6.9% 6.8% 5.9% 6.7% 8.6% 7.3% 6.6%
16% GFCE 17.6% 3.8% 6.8% 16.9% 7.6% 12.2% 10.9%
Exports 5.9% 6.8% 6.2% 3.6% 12.7% 5.0% 5.6%
14% less Imports 18.5% 10.0% 10.5% 10.9% 12.5% 4.0% 12.4%
Gross Capital Formation 5.1% 8.0% 10.1% 14.9% 8.6% 4.7% 9.6%
12%
GFCF 0.8% 6.1% 9.1% 14.4% 10.0% 10.1% 7.6%
10% Change in Stocks -2.9% 5.8% 7.2% 7.8% 8.6% -61.2% 4.5%
Valuables 122.2% 54.2% 37.2% 29.1% -8.0% -13.9% 58.8%
8% Discrepancies 57.3% 15.4% -55.0% -21.8% 0.4% 7.3% 13.9%
6%
4% Source: CSO; ICRA research
2%
0%
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019 ANNEXURE B
Exports Imports
Source: CSO; ICRA research
Exhibit 15: Composition of GVA at Basic Prices (Constant
Net exports exerted a drag on GDP expansion in Q1 2011-12 Prices)
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019 FY2017 RE FY2018 PE
FY2019: At constant prices, growth of exports posted an
GVA at Basic Prices 100% 100% 100% 100% 100% 100% 100%
uptick to 12.7% in Q1 FY2019 from the subdued prints of Agriculture, Forestry & Fishing 13.6% 11.3% 18.8% 15.3% 13.3% 15.3% 14.8%
Industry 30.7% 30.9% 30.5% 32.8% 31.3% 31.5% 31.2%
5.9% in Q1 FY2018 and 3.6% in Q4 FY2018 (refer Exhibit Mining & Quarrying 3.4% 2.6% 3.0% 3.7% 3.2% 3.3% 3.2%
Manufacturing 17.1% 18.5% 17.5% 19.2% 18.0% 18.2% 18.1%
12). In contrast, the growth in imports eased to 12.5% in Q1 Electricity, gas, water supply & other utilities 2.3% 2.3% 2.1% 2.1% 2.3% 2.2% 2.2%
Construction 7.8% 7.5% 7.9% 7.8% 7.9% 7.8% 7.8%
FY2019 from 18.5% in Q1 FY2018, but remained higher Services 55.7% 57.8% 50.7% 51.9% 55.4% 53.2% 54.0%
Trade, Hotels, Transport, Communication &
than 10.9% in Q4 FY2018. Overall, net exports exerted a Services related to Broadcasting 19.1% 18.5% 18.8% 20.6% 18.9% 19.0% 19.3%

drag of 0.4% on the GDP growth in Q1 FY2019. Financial, Real Estate & Professional Services
Public Administration, Defence and Other Services
24.4%
12.2%
26.3%
13.0%
18.5%
13.3%
17.9%
13.4%
24.1%
12.4%
21.7%
12.6%
21.7%
13.0%

At current prices, data released by the CSO indicates that Source: CSO; ICRA research
exports and imports expanded by 17.3% and 17.1%,
respectively, in Q1 FY2019. However, the data released by Exhibit 16: Composition of GDP and Final Expenditures
the RBI, indicates a lower expansion of 14.3% and 11.5%, (Constant 2011-12 Prices)
respectively, in merchandise exports and imports in Q1 Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019 FY2017 RE FY2018 PE
FY2019, in US$ terms. Notably, services exports and GDP 100% 100% 100% 100% 100% 100% 100%
imports (in US$ terms) recorded a robust rise of 27.4% and PFCE 54.7% 54.5% 59.3% 54.6% 54.9% 55.8% 55.9%
GFCE 11.8% 11.8% 10.0% 9.5% 11.8% 9.9% 10.3%
40.9%, respectively, in Q1 FY2019. Exports 20.5% 20.6% 20.2% 19.5% 21.4% 20.8% 20.4%
less Imports 23.8% 22.7% 23.0% 20.9% 24.7% 22.1% 21.4%
Gross Capital Formation 34.4% 33.5% 33.9% 34.6% 34.5% 34.0% 33.2%
GFCF
Discrepancies rose marginally on a YoY basis: Change in Stocks
31.0%
0.7%
30.8%
0.7%
31.6%
0.7%
32.2%
0.7%
31.6%
0.7%
30.3%
2.0%
31.1%
0.7%
Discrepancies refer to the residual that remains after Valuables 2.6% 1.9% 1.6% 1.7% 2.2% 1.6% 1.3%
Discrepancies 2.3% 2.3% -0.4% 2.6% 2.2% 1.6% 1.6%
disaggregating GDP into its expenditure components, such
Source: CSO; ICRA research
as PFCE, GFCE and GFCF. The discrepancies in the GDP
data for Q1 FY2019 rose marginally to (+) Rs. 732.1 billion
(at 2011-12 prices), from the value of (+) Rs. 729.3 billion in
Q1 FY2019.

ANNEXURE A

Exhibit 13: GVA at Basic Prices and its Components (YoY

Growth, Constant 2011-12 Prices)
Q1 FY2018 Q2 FY2018 Q3 FY2018 Q4 FY2018 Q1 FY2019 FY2017 RE FY2018 PE

GVA at Basic Prices 5.6% 6.1% 6.6% 7.6% 8.0% 7.1% 6.5%
Agriculture, Forestry & Fishing 3.0% 2.6% 3.1% 4.5% 5.3% 6.3% 3.4%
Industry 0.1% 6.1% 7.1% 8.8% 10.3% 6.8% 5.5%
Mining & Quarrying 1.7% 6.9% 1.4% 2.7% 0.1% 13.0% 2.9%
Manufacturing -1.8% 7.1% 8.5% 9.1% 13.5% 7.9% 5.7%
Electricity, gas, water supply & other utilities 7.1% 7.7% 6.1% 7.7% 7.3% 9.2% 7.2%
Construction 1.8% 3.1% 6.6% 11.5% 8.7% 1.3% 5.7%
Services 9.5% 6.8% 7.7% 7.7% 7.3% 7.5% 7.9%
Trade, Hotels, Transport, Communication &
Services related to Broadcasting 8.4% 8.5% 8.5% 6.8% 6.7% 7.2% 8.0%
Financial, Real Estate & Professional Services 8.4% 6.1% 6.9% 5.0% 6.5% 6.0% 6.6%
Public Administration, Defence and Other Services 13.5% 6.1% 7.7% 13.3% 9.9% 10.7% 10.0%

Source: CSO; ICRA research

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 MONEY GUIDE
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Turkish crisis and the rupee

Taking control of monetary policy and is against an increase in Rouble 0.33 6.92
Brazil real -1.73 5.21
interest rates. There are around $ 16 bn of bonds which will Pound sterling 0.88 3.69
come up for refinancing by the end of the year which has to be Chile peso 1.21 2.87
addressed. Renminbi 3.47 2.39
Mexican peso -6.47 2.34
The collateral damage on global currencies is palpable as can Rupee 0.91 1.72
be seen by the depreciation in various currencies as the dollar Singapore dollar -0.08 1.39
Ringgit 0.95 1.17
has become stronger. This background should be kept in mind Won 0.58 1.16
when interpreting the future movement of the rupee. Taiwan dollar 0.42 1.14
Philippine peso -0.46 0.51
Baht 0.89 0.25
The Turkish response Hong Kong dollar -0.02 0.02
On August 15, Turkey announced higher tariffs on 22 types of Yen 1.22 -0.22
goods imported from US, including imports of cars, alcohol
and tobacco, amounting to $533 mn of extra duties. This is just Source: Pacific Exchange rate service (Positive change is
after USA had done the same on Turkish steel and aluminum depreciation)
last week. The tariff on cars would be 120% and that on alcohol
The table shows that:
140%. There would also be a boycott on iPhones and other • Post 25th July, when the trade war escalated between the
goods from the USA. While the tariffs involved are not really two countries, the euro fell by 3.2% as the dollar
significant in terms of the total trade between these two strengthened in the second period. The lira fell by 25.2%.
countries, which according to US data was $ 19 bn, it has had • There are 10 currencies which have done worse than the
repercussions for currencies across the world. This response rupee which includes the renminbi, pound and rouble.
from Turkey can be seen against the pledge from Qatar to • All the 4 major Latin American currencies (Argentina peso,
invest $15 bn in the country to bring it out of the currency crisis, Mexican peso, Brazil real and Chile peso)have depreciated
which has positively aided the Turkish currency. at a higher rate than the rupee.
• The rupee has fared unsatisfactorily compared with other
How is Turkey faring? Asian currencies in this period.
Based on data in Economist, the following is the broad picture:
• GDP is to grow by 4.3% this year and Q1 growth has been How are Indian fundamentals?
• Trade deficit has widened this year (Apr-July) so far at $ 63
7.4%. IIP for May is 7%. Unemployment is at 9.6%.
bn as against $ 54 bn in the corresponding period last year.
• Inflation in July was at a high of 15.8%.
• FPI flows have been moving upwards. After being negative
• The latest CAD is at -5.9% of GDP which is not sustainable
in the first three months of the year, they turned positive in
and will further make the currency depreciate. July at $ 336 mn and increased further to $ 941 mn so far in
The fiscal balances are on target with the deficit at 2.8% of August. The good news is that both equity and debt flows
GDP. Interest rates are high and the 3 months rate is 20.5% and are positive.
10 years is at 19.1%. • ECB registrations for first quarter of the year are higher at $
The stock market has been down since December unlike in 8.0 bn compared with $ 4.4 bn last year.
other countries where the indices have moved up. In local • Foreign currency assets have dipped by $ 21.2 bn but are
currency the Borsa Istanbul (BIST), stock exchange entity of still high at $ 378 bn.
Turkey is down by 16% and in dollar terms is down by 40%. • RBI has sold $ 14.4 bn in first quarter of the year as against a
The external debt is about 50% of the GDP and one-third of the cumulative purchase of $ 8.8 bn in the corresponding
domestic debt is in foreign currency. quarter last year.

Currency movement Therefore, prima facie, there may be little reason to suspect
Turkish Elections took place on 24th June this year and this has that the fundamentals will drive down the rupee. However
factors of concern will be:-
been the benchmark used here in the table below for tracking
• Speculative interest in the market which can drive
exchange rate movements of various currencies. The dialogue movements
with USA was on but escalated towards the end of July and • Exporters delaying bringing back dollars
hence the point from whence the lira started to depreciate • Importers rushing in for buying dollars
continuously has been chosen as the second point of • Non Deliverable forwards market over which the RBI has
reference. The lira had moved in a range of 4.58-4.88/$ during little control.
the first period and then came down to 4.82/$ on 25th July.
Subsequently it rose continuously to 6.95/$ on 13th and then Where should the rupee be valued?
came down to 6.04/$ on 15th August.
While the present imbroglio in the political space will cause
How have currencies moved since June 24th (%) volatility depending on the way in which the dollar-lira value
moves, it may be expected that a value of Rs 69/$ should be the
Currency June 25 to Jul 25 July 25 to Aug 15 equilibrium one based on expected fundamentals in the rest of
Euro 0.02 3.19 the year which is predicated on the expectation of a higher
Turkish lira 2.88 25.17 trade deficit and CAD but higher invisibles, FPI, FDI and
Rand -3.00 10.79
Argentina peso 0.74 9.79 maintenance of ECBs
- CARE Ratings

12
 MONEY GUIDE
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AUM break-up of the industry after SEBI rationalization
A recent study by AMFI-CRISIL analyses the impact of the
SEBI rationalisation exercise and the reshuffling of AUM
that followed. The CRISIL analysis shows that around 4.8%
of the open-ended schemes across AMCs, accounting for
4.2% of the total open-ended AUM have been merged.
Additionally, 15.5% of open-ended schemes accounting
for about 17.3% of the total open-ended AUM have seen a
change in the way they were being managed.
In October 2017, SEBI issued guidelines reclassifying all
mutual fund schemes under five broad groups: equity,
debt, hybrid, solution-oriented, and others (index,
exchange-traded funds or ETFs and fund of funds). Each of
these five broad categories are further bifurcated into sub-
categories whereby there are 10 categories of equity funds,
16 categories of debt funds, 6 categories of hybrid funds
and 2 categories each of solution-oriented and other funds.
These categories segregate fund groups based on portfolio
characteristics such as market capitalisation for equity,
duration and credit for debt, and asset allocation for hybrid
funds.
In addition, as per the guidelines henceforth a fund house
can only have one scheme per sub category (except in the
case of index funds, ETFs, fund of funds and sectoral and
thematic funds).
Subsequently, many schemes have been merged,
renamed and recategorised to align with the market
regulator's circular, said the study.
The study shows that on the equity side, mutlicap funds are
the most popular followed by large cap and ELSS schemes
while liquid and low duration schemes hold the top spots
on the debt front.
What it means for the industry and investors?
The recategorisation exercise benefits both the investor
and the industry, claims the report.
For investors, it simplifies the fund selection and
investment process by introducing better nomenclature
and clear-cut demarcation between different categories.
For the industry, it ensures more accurate peer group
comparisons. It also gives fund managers better clarity and
a degree of comfort to follow a set of guidelines in
identifying securities.
Finally, it sets the practice of managing the portfolio and
generating alpha based on fund manager's capability and
stock selection rather than market capitalisation, says the
report.
- Cafemutual
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 MONEY GUIDE
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With at least 1000 mutual fund schemes in the market and fund houses pitching different awards and rating, how to choose the 6-8 funds you
need to invest in? We have handpicked 40 Schemes across various categories based on different parameters like Risk adjusted returns,
JRL 40 Consistent performance and good Portfolio quality. We have also used the ratings from different rating agencies and tested the funds on
qualitative and quantitative risks to filter out the odd ones. We carefully looked at how a fund performs in Bull and Bear market cycles since we
Best Funds need funds that do well at all times. The results of these filters is JRL 40. Treat JRL 40 as the final universe of funds from which you will pick the
Performance as on 02-Sep-2018 ones that suit your investment needs and risk appetite to give you superlative returns in all markets.

Debt Schemes Annualized Addi onal Informa on

Liquid Funds NAV 1D 1W 1M 3M 6M "ExpRatio" "AUM(in Crs.)" YTM MD Exit Load
Aditya Birla SL Liquid Fund(G) 286.57 8.03 7.10 7.03 7.30 7.35 0.23 53016.94 7.60 32.85 Nil
Reliance Liquid Fund(G) 4349.01 7.15 7.11 7.06 7.32 7.36 0.23 39579.14 7.57 45.00 Nil
HDFC Liquid Fund(G) 3510.54 7.05 7.00 6.89 7.13 7.14 0.25 41119.98 7.01 32.00 Nil
DSP Liquidity Fund-Reg(G) 2548.28 6.88 6.99 7.07 7.32 7.33 0.21 22712.54 7.82 36.50 Nil
Benchmark
Crisil Liquid Fund Index 6.96 7.44 7.48 7.59 7.53
Ultra Short Term Funds NAV 1D 1W 1M 3M 6M "ExpRatio" "AUM(in Crs.)" YTM MD Exit Load
Aditya Birla SL Savings Fund(G) 351.19 6.77 7.09 7.19 7.98 7.31 0.35 18727.57 8.07 156.95 Nil
DHFL Pramerica Ultra ST(G) 21.69 8.08 6.91 7.18 7.80 7.47 0.57 1748.17 8.03 142.35 Nil
UTI Ultra Short Term Fund-Reg(G) 2903.91 7.52 6.72 7.19 7.45 7.05 0.96 5682.2 8.52 146.00 Nil
Essel Ultra Short Term Fund-Reg(G) 1940.62 5.42 5.71 5.65 8.12 7.07 0.89 23.25 7.05 105.85 Nil
Benchmark
Crisil Liquid Fund Index 6.96 7.44 7.48 7.59 7.53
Crisil Short Term Bond Fund Index -1.17 3.96 6.20 7.85 6.30
Short Duration NAV 1W 1M 3M 6M 1Y Exp Ratio AUM (in Crs.) YTM MD Exit Load
Franklin India ST Income Plan(G) 3768.48 7.89 6.55 8.48 8.15 9.55 1.18 10854.77 10.53 1.71 Nil upto 10% of units on or before 1Y, For
remaining investment 0.50% on or before
1Y and Nil after 1Y
Baroda Pioneer ST Bond Fund(G) 18.93 7.30 6.12 7.48 8.00 8.74 1.30 240.51 9.14 1.13 0.25% on or before 15D, Nil after 15D
IDBI ST Bond(G) 17.67 5.88 5.20 5.92 6.64 7.94 1.32 59.2 8.65 1.42 Nil
BOI AXA Short Term Income Fund-Reg(G) 19.40 6.33 4.87 6.77 7.64 8.48 1.17 189.52 8.95 1.22 Nil
JM Short Term Fund(G) 24.97 6.21 4.62 6.00 7.15 7.98 0.89 16.12 7.85 0.79 0.25% on or before 30D
Benchmark
Crisil Short Term Bond Fund Index 6.30 4.63 6.38 7.40 8.61
Medium to Long Duration NAV 6M 1Y 2Y 3Y 5Y Exp Ratio AUM (in Crs.) YTM MD Exit Load
ICICI Pru Bond Fund(G) 24.36 4.22 1.68 4.99 6.82 8.99 1.07 3181.27 8.46 3.17 1% on or before 6M, Nil after 6M
Canara Rob Income Fund-Reg(G) 36.29 4.93 0.92 4.66 6.51 7.82 1.90 109.02 8.37 2.42 1% on or before 12M, Nil after 12M
Tata Income Fund-Reg(G) 52.29 2.15 -0.45 3.99 5.94 7.76 1.80 79.95 7.96 4.81 1% on or before 365D,Nil after 365D
LIC MF Bond Fund(G) 46.05 3.54 -0.18 3.52 5.42 7.38 1.13 301.07 8.23 4.49 1% on or before 1Y
Benchmark
Crisil Composite Bond Fund Index 4.66 0.91 5.03 7.21 9.08
Corporate Bond Fund NAV 6M 1Y 2Y 3Y 5Y Exp Ratio AUM (in Crs.) YTM MD Exit Load
HDFC Corp Bond Fund(G) 19.64 5.90 4.33 6.55 7.73 9.05 0.44 11963.73 8.47 1.88 Nil
ICICI Pru Corp Bond Fund(G) 18.15 6.12 4.81 6.55 7.54 8.42 0.55 6065.53 8.53 1.24 Nil
BNP Paribas Corp Bond Fund(G) 19.13 4.32 3.92 6.36 7.38 8.27 0.50 121.05 8.50 3.06 --
Edelweiss Corporate Bond Fund-Reg(G) 13.53 4.98 3.54 6.25 6.54 -- 1.05 315.86 9.15 2.55 Nil upto 10% of units on or before 365D,
For remaining units 1% on or before
365D and Nil after 365D
Principal Corp Bond Fund(G) 29.83 5.89 1.02 4.25 5.97 7.27 1.55 20.93 8.25 1.38 1% on or before 365D, Nil after 365D
Benchmark
Crisil Short Term Bond Fund Index 6.30 4.63 6.38 7.40 8.61
Crisil Composite Bond Fund Index 4.66 0.91 5.03 7.21 9.08
Credit Risk Fund NAV 6M 1Y 2Y 3Y 5Y ExpRatio AUM(in Crs.) YTM MD Exit Load
Invesco India Credit Risk Fund(G) 1395.99 6.28 5.25 7.12 8.06 -- 1.50 419.72 9.22 1.30 1% on or before 1Y, Nil after 1Y
Reliance Credit Risk Fund(G) 24.69 6.50 5.28 6.96 7.85 8.96 1.86 10912.32 10.11 1.67 Nil for 10% of units and 1% for remaining units
on or before 12M, Nil after 12M
Axis Credit Risk Fund-Reg(G) 13.89 5.85 4.55 6.51 7.49 -- 1.70 1725.07 9.48 1.80 Nil for 10% of investments and 1% for remaining
investment on or before 12M, Nil after 12M
IDBI Credit Risk Fund(G) 14.04 6.32 5.00 5.77 6.77 -- 1.16 103.84 9.34 2.29 0.75% on or before 12M,Nil after 12M
Benchmark
Crisil Short Term Bond Fund Index 6.30 4.63 6.38 7.40 8.61
Crisil Composite Bond Fund Index 4.66 0.91 5.03 7.21 9.08
Gilt Fund NAV 6M 1Y 2Y 3Y 5Y ExpRatio AUM(in Crs.) YTM MD Exit Load
Canara Rob Gilt 1988-Reg(G) 47.94 6.21 -0.97 4.64 7.60 8.90 1.25 62.01 7.34 3.16 Nil
Indiabulls Gilt(G) 1517.86 4.02 -0.48 3.78 7.06 8.12 1.25 4.84 7.58 4.81 Nil
DHFL Pramerica Gilt Fund(G) 19.07 3.44 0.91 4.58 6.85 8.64 0.85 152.6 8.25 5.04 Nil
Invesco India Gilt Fund(G) 1809.17 6.91 -2.62 3.39 6.32 7.87 1.25 32.37 7.62 5.38 Nil
Axis Gilt Fund(G) 15.01 4.69 -1.43 3.02 5.93 7.25 0.75 40.48 7.05 2.50 Nil
Benchmark
Crisil 10 Yr Gilt Index 4.69 -3.54 2.53 5.54 6.83
Income Funds - Short Term NAV 6M 1Y 2Y 3Y 5Y ExpRatio AUM(in Crs.) YTM MD Exit Load
Aditya Birla SL Credit Risk Fund-Reg(G) 13.24 7.55 5.65 7.99 8.60 -- 1.69 7868.52 10.27 1.55 Nil upto 15% of units, 1% in excess of limit on
or before 365D and Nil after 365D
UTI Credit Risk Fund-Reg(G) 16.12 5.51 4.90 6.84 7.76 9.15 1.67 5292.02 9.41 1.25 Nil for 10% of units and 1% for remaining units
on or before 12M, Nil after 12M
Kotak Corporate Bond Fund(G) 2347.25 7.45 6.30 7.31 7.70 8.63 0.59 910.16 8.48 1.13 Nil
HDFC Banking and PSU Debt Fund-Reg(G) 14.22 5.40 3.98 6.24 7.63 -- 0.80 3178.35 8.86 2.49 Nil
DSP Banking & PSU Debt Fund-Reg(G) 14.90 5.29 3.81 6.07 7.30 -- 0.49 1432.53 8.42 1.51 Nil
Aditya Birla SL Dynamic Bond Fund-Reg(G) 30.23 5.93 -0.41 3.03 6.40 8.69 1.65 6309.55 9.23 3.32 Nil upto 15% of units,0.50% in excess of limit
on or before 90D and Nil after 90D
Benchmark
Crisil Short Term Bond Fund Index 6.30 4.63 6.38 7.40 8.61
Funds of Funds NAV 6M 1Y 2Y 3Y 5Y ExpRatio AUM(in Crs.) YTM MD Exit Load
DSP US Flexible Equity Fund-Reg(G) 26.31 30.37 31.84 21.58 15.85 13.12 2.76 200.59 -- -- 1% before 12M, Nil on or after 12M
Franklin India Feeder - Franklin U.S. Opportunities Fund(G) 31.74 40.35 36.67 24.58 15.33 14.56 1.91 623.44 -- -- 1% on or before 3Y
Franklin India Dynamic PE Ratio FOFs(G) 81.49 10.38 8.41 9.45 9.62 13.96 1.72 896.13 -- -- 1% on or before 1Y
Benchmark
CRISIL Hybrid 35+65 - Aggressive Index 15.56 11.75 12.94 12.99 16.29
Income Funds - Long Term NAV 6M 1Y 2Y 3Y 5Y ExpRatio AUM(in Crs.) YTM MD Exit Load
Reliance Strategic Debt Fund(G) 14.19 5.29 3.69 6.54 7.84 -- 1.68 7760.13 9.50 2.31 1% on or before 12M, Nil after 12M
UTI Bond Fund-Reg(G) 52.21 5.62 0.41 5.36 7.03 8.48 1.72 1093.52 9.08 2.30 Nil
ICICI Pru Bond Fund(G) 24.36 4.22 1.68 4.99 6.82 8.99 1.07 3181.27 8.46 3.17 1% on or before 6M, Nil after 6M
HDFC Dynamic Debt Fund(G) 58.86 4.04 -0.01 3.50 6.56 8.46 1.85 1295.32 8.49 3.71 0.50% on or before 6M, Nil after 6M
Reliance Dynamic Bond(G) 23.22 4.59 -0.50 3.89 6.54 8.30 1.63 1713.82 8.13 3.00 1% on or Before 12M, Nil After 12M
Aditya Birla SL Income Fund(G) 75.99 4.28 -0.79 3.38 6.18 7.75 1.60 1305.67 7.95 3.79 Nil
Kotak Bond Fund-Reg(G) 47.82 5.49 -0.46 2.82 5.85 7.63 1.85 2071.47 8.37 2.96 0.20% on or before 3M, Nil after 3M
Benchmark
Crisil Composite Bond Fund Index 4.66 0.91 5.03 7.21 9.08

Monthly Income Plan NAV 6M 1Y 2Y 3Y 5Y ExpRatio AUM(in Crs.) YTM MD Exit Load
Aditya Birla SL Regular Savings Fund(G) 39.14 5.56 1.16 6.96 9.71 13.92 2.10 2809.88 8.86 2.07 Nil upto 15% of units,1% in excess of limit on
or before 365D and Nil after 365D
ICICI Pru Regular Savings Fund(G) 40.71 7.92 5.36 8.50 9.65 12.84 2.01 1646.41 8.88 1.63 Nil on 10% of units within 1Y and 1% for more
than 10% of units within 1Y, Nil after 1Y.
HDFC Hybrid Debt Fund(G) 43.95 3.86 1.35 5.74 7.86 11.98 1.87 3442.34 8.42 3.80 Nil for 15% of investment and 1% for remaining
Investment on or before 1Y, Nil after 1Y
SBI Debt Hybrid Fund(G) 38.10 2.13 0.09 5.00 7.49 10.20 2.03 1486.58 8.58 2.85 Nil for 10% of investment and 1% for remaining
Investment on or before 1Y, Nil after 1Y
Benchmark
CRISIL Hybrid 85+15 - Conservative Index 7.20 3.38 6.86 8.59 10.78

14
 MONEY GUIDE
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When you want to invest in debt funds then you are confronted with scores of funds to choose from an exercise which no doubt leaves you
baffled. So, we have handpicked 40 schemes across various categories based on different parameters like superior return score, mean return
JRL 40 and volatility, portfolio concentration analysis, liquidity analysis, asset quality, average maturity, assets size, downside risk probability and
historic consistent performance. We have also used the ratings from various rating agencies. We will review these schemes once every quarter
Best Funds depending upon the liquidity and interest rate conditions and RBI's stance and our aim is to enable you to pick those schemes that meet your
investment horizon and risk appetite to give you returns better than over traditional fixed income instruments.
Performance as on 02-Sep-2018

Equity Schemes Absolute Annualized Addi onal Informa on

Large Cap Funds NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
ICICI Pru Bluechip Fund(G) 43.38 8.53 15.01 15.87 15.10 19.82 16.13 18747.28 2.11 0.69 0.06 1% on or before 1Y, NIL after 1Y
Reliance Large Cap Fund(G) 35.20 8.15 16.55 17.01 14.16 22.85 13.89 10897.82 2.30 0.75 0.06 Nil upto 10% of units on or before 12M, For
remaining units 1% on or before 12M and
Nil after 12M
HDFC Equity Fund(G) 665.99 6.11 13.20 15.52 14.15 22.38 15.39 21753.76 1.97 0.94 0.04 1% on or before 1Y, Nil after 1Y
Aditya Birla SL Frontline Equity Fund(G) 231.20 7.08 9.67 12.30 13.42 20.27 15.01 21380.42 2.18 0.65 0.04 1% on or before 1Y, Nil after 1Y
SBI BlueChip Fund-Reg(G) 40.12 5.87 9.75 11.47 13.00 21.68 13.80 20283.92 2.35 0.66 0.03 1% on or before 1Y, Nil after 1Y
Franklin India Equity Fund(G) 621.16 6.60 12.32 12.33 12.41 22.66 15.23 11832.01 2.04 0.66 0.04 1% on or before 1Y
Benchmark
S&P BSE 200 - TRI 10.74 17.75 17.13 15.89 19.97 12.50
NIFTY 500 - TRI 8.81 16.33 16.96 15.84 20.42 12.39
S&P BSE 100 - TRI 11.61 18.02 16.95 15.51 18.75 12.06
NIFTY 100 - TRI 11.57 18.27 17.08 15.48 19.08 12.61
NIFTY 50 - TRI 12.43 19.40 16.84 15.08 17.82 11.69
NIFTY 500 7.88 14.92 15.50 14.41 19.04 11.08
S&P BSE 200 9.79 16.30 15.66 14.37 18.36 10.95
S&P BSE 100 10.60 16.50 15.41 13.94 17.13 10.51
NIFTY 100 10.51 16.69 15.48 13.90 17.53 11.16
NIFTY 50 11.32 17.77 15.30 13.57 16.36 10.34
Mid Cap Funds NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
Mirae Asset Emerging Bluechip-Reg(G) 52.64 5.46 12.23 18.98 20.14 34.92 -- 5729.87 2.22 0.80 0.04 1% on or before 1Y(365D), Nil after 1Y(365D)
DSP Midcap Fund-Reg(G) 56.64 0.68 9.31 13.30 15.66 30.45 18.81 5676.29 2.19 0.75 0.02 1% before 12M, Nil on or after 12M
Franklin India Smaller Cos Fund(G) 58.11 -4.56 5.02 10.69 15.01 31.46 19.61 7294.82 2.15 0.69 0.00 1% on or before 1Y
Reliance Growth Fund(G) 1146.39 0.47 7.54 13.08 12.55 23.13 13.63 6830.42 2.02 0.83 0.02 1% on or before 1Y, Nil after 1Y
SBI Magnum Global Fund-Reg(G) 179.45 3.55 15.88 11.86 10.41 24.31 16.45 3595.36 2.39 0.67 0.06 1% on or before 12M, Nil after 12M
SBI Magnum Midcap Fund-Reg(G) 77.85 -4.41 1.96 5.36 9.67 27.84 14.38 3636.21 2.39 0.75 -0.01 1% on or before 1Y, Nil after 1Y
Benchmark
S&P BSE Mid-Cap - TRI 2.58 9.65
Nifty LargeMidcap 250 Index - TRI 7.67 16.46
Nifty Midcap 100 - TRI 1.92 10.15
S&P BSE Mid-Cap 1.92 8.63
Nifty Midcap 100 1.30 8.99
Nifty Smallcap 250 - TRI -8.51 1.29
Nifty Smallcap 250
Nifty LargeMidcap 250 Index
Multi Cap Funds NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
Aditya Birla SL Equity Fund(G) 752.64 6.04 9.39 14.75 16.31 25.79 14.74 9749.37 2.25 0.68 0.03 1% on or before 365D, Nil after 365D
Kotak Standard Multicap Fund(G) 35.67 8.97 12.08 15.83 16.14 24.26 -- 21271.15 2.07 0.64 0.05 1% on or before 1Y, Nil after 1Y
Motilal Oswal Multicap 35 Fund-Reg(G) 27.12 2.48 3.76 16.65 16.05 -- -- 13860.92 2.04 0.70 0.00 Nil upto 12% of Investment, For remaining
investments 1% on or before 1Y and
Nil after 1Y
L&T India Value Fund-Reg(G) 38.10 0.72 6.72 16.35 15.62 28.39 -- 8160.28 2.30 0.82 0.01 1% on or before 1Y, Nil after 1Y
UTI Equity Fund-Reg(G) 151.44 16.82 24.38 16.24 14.58 21.39 15.48 8520.72 1.97 0.62 0.11 Nil upto 10% of units and 1% for remaning
units on or before 1Y, Nil after 1Y
ICICI Pru Value Discovery Fund(G) 154.77 7.67 13.99 10.82 11.11 25.70 19.70 16659.18 2.09 0.60 0.07 1% on or before 12M, Nil after 12M
Reliance Multi Cap Fund(G) 97.43 3.53 14.13 13.22 9.88 21.17 17.14 9731.64 2.00 0.82 0.05 1% on or Before 1Y, Nil after 1Y
Benchmark
S&P BSE 500 - TRI 8.91 16.53 17.13 16.02 20.42 12.42
S&P BSE 200 - TRI 10.74 17.75 17.13 15.89 19.97 12.50
NIFTY 500 - TRI 8.81 16.33 16.96 15.84 20.42 12.39
NIFTY 200 - TRI 10.48 17.54 17.05 15.69 19.79 12.27
S&P BSE 500 8.01 15.14 15.71 14.56 18.86 10.89
NIFTY 500 7.88 14.92 15.50 14.41 19.04 11.08
S&P BSE 200 9.79 16.30 15.66 14.37 18.36 10.95
NIFTY 200 9.49 16.05 15.52 14.17 18.25 10.81
Small Cap Funds NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
Reliance Small Cap Fund(G) 44.98 -2.25 15.70 24.15 22.12 39.07 -- 7018.87 2.31 0.93 0.05 1% on or before 1Y, Nil after 1Y
HDFC Small Cap Fund-Reg(G) 46.24 0.93 23.29 22.99 21.61 26.51 17.34 4577.95 2.04 0.77 0.08 1% on or before 1Y, Nil after 1Y
Aditya Birla SL Small Cap Fund(G) 39.41 -5.90 4.79 13.18 17.09 29.55 17.33 2246.68 2.42 0.88 0.00 1% on or before 365D, Nil after 365D
DSP Small Cap Fund-Reg(G) 60.48 -8.78 1.77 8.79 13.76 34.76 20.73 5351.38 2.22 0.83 -0.02 1% before 12M, Nil on or after 12M
Benchmark
S&P BSE Small-Cap - TRI -4.70 8.28 17.43 17.08 28.23 10.97
S&P BSE Small-Cap -5.16 7.51 16.59 16.14 27.03 9.56
Nifty Smallcap 100 - TRI -6.79 0.88 13.06 15.48 25.46 9.73
Equity Hybrid Category NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
ICICI Pru Equity & Debt Fund(G) 132.92 3.66 10.13 12.67 13.64 20.32 14.57 28633.37 2.23 0.52 0.05 Nil on 10% of units within 1Y and 1% for more
than 10% of units within 1Y, Nil after 1Y
Reliance Equity Hybrid Fund(G) 57.12 4.14 8.56 13.15 13.12 20.54 15.70 14202.63 2.12 0.54 0.03 Nil for 10% of investments and 1% for
remaining on or before 12M, Nil after 12M
DSP Equity & Bond Fund-Reg(G) 153.99 5.92 9.33 10.99 12.37 19.69 12.91 7188.49 2.04 0.55 0.04 NIL upto 10% of investment within 12M, 1%
exceding 10% of investment within 12M,
NIL after 12M
Aditya Birla SL Equity Hybrid '95 Fund(G) 781.03 4.50 6.36 10.26 12.21 19.32 15.02 14841.34 2.29 0.50 0.02 Nil upto 15% of units,1% in excess of limit
on or before 365D and Nil after 365D
SBI Equity Hybrid Fund-Reg(G) 131.75 5.34 11.67 11.87 11.70 19.80 13.36 26376.26 2.39 0.46 0.06 Nil for 10% of investments and 1% for
remaining investment on or before 12M,
Nil after 12M
L&T Hybrid Equity Fund-Reg(G) 27.10 3.92 6.97 12.16 11.51 20.17 -- 10935.86 2.26 0.49 0.02 Nil for 10% of units and 1% for remaining
units on or before 1Y, Nil after 1Y
Benchmark
S&P BSE 200 - TRI 10.74 17.75 17.13 15.89 19.97 12.50
CRISIL Hybrid 35+65 - Aggressive Index 7.84 11.75 12.94 12.99 16.29
Crisil Short Term Bond Fund Index 3.18 4.63 6.38 7.40 8.61 8.08
Arbitrage Funds NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
Reliance Arbitrage Fund(G) 18.23 2.88 6.17 6.11 6.16 6.99 -- 8719.56 1.06 0.06 0.17 0.25% on or before 1M, Nil after 1M
Kotak Equity Arbitrage Scheme(G) 25.44 2.87 5.95 6.03 6.17 7.28 7.37 11804.89 0.94 0.06 0.16 0.25% on or before 30D, Nil after 30D
Edelweiss Arbitrage Fund-Reg(G) 13.23 2.82 5.87 5.97 6.20 -- -- 4979.57 1.12 0.06 0.15 0.25% on or before 30D, NIL after 30D
Aditya Birla SL Arbitrage Fund(G) 18.26 2.74 5.70 5.79 5.95 6.80 -- 4051.06 0.95 0.06 0.14 0.50% on or before 30D, Nil after 30D
UTI Arbitrage Fund-Reg(G) 23.95 2.72 5.78 5.86 6.01 6.95 7.15 1470.29 0.83 0.06 0.15 0.50% on or before 30D, Nil after 30D
Axis Arbitrage Fund-Reg(G) 12.89 2.59 5.65 5.94 5.96 -- -- 2231.19 1.11 0.06 0.15 0.25% on or before 7D, Nil after 7D
Benchmark
Crisil Liquid Fund Index 3.79
Nifty 50 Arbitrage Index
Sector Funds NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
Reliance Banking Fund(G) 289.30 10.94 10.67 19.55 19.75 28.76 19.15 3044.08 2.13 0.85 0.03 1% on or before 1Y, Nil after 1Y
DSP India T.I.G.E.R Fund-Reg(G) 92.45 -5.68 0.82 10.17 10.54 22.54 9.89 1366.19 2.31 0.89 -0.01 1% before 12M, Nil on or after 12M
ICICI Pru Infrastructure Fund(G) 51.71 -4.36 3.67 10.63 8.75 19.31 7.62 1387.35 2.27 0.82 0.00 1% on or before 15D, NIL after 15D
Reliance Pharma Fund(G) 161.57 14.72 31.19 5.99 2.41 17.79 20.73 2266.32 2.47 0.93 0.10 1% on or before 1Y, Nil after 1Y
Benchmark
NIFTY BANK - TRI 12.22 15.86 19.71 18.63 26.33 17.62
NIFTY BANK 11.77 15.39 19.09 17.83 25.37 16.46
S&P BSE 100 - TRI 11.61 18.02 16.95 15.51 18.75 12.06
S&P BSE 100 10.60 16.50 15.41 13.94 17.13 10.51
NIFTY INFRA - TRI -3.86 0.62 7.54 5.25 12.48 0.23
S&P BSE Health Care - TRI 13.45 22.09 -0.10 -3.34 12.82 14.79
S&P BSE Health Care 12.98 21.26 -0.67 -3.89 12.19 13.96
ELSS Funds NAV 6M 1Y 2Y 3Y 5Y 10 Y "AUM(in Crs.)" "ExpRatio" SD Sharpe Exit Load
Aditya Birla SL Tax Relief '96(G) 33.59 8.28 19.71 18.38 16.40 25.89 14.95 6568.74 2.26 0.62 0.09 Nil
L&T Tax Advt Fund-Reg(G) 57.73 2.83 9.95 17.13 15.55 21.89 15.39 3334.7 2.26 0.70 0.03 Nil
DSP Tax Saver Fund-Reg(G) 48.52 5.13 8.65 12.92 15.12 23.52 15.14 4576.99 2.10 0.76 0.02 Nil
Sundaram Diversified Equity(G) 106.80 2.96 8.25 12.75 14.04 20.87 12.96 2750.35 2.26 0.70 0.02 Nil
Benchmark
S&P BSE 200 - TRI 10.74 17.75 17.13 15.89 19.97 12.50
NIFTY 500 - TRI 8.81 16.33 16.96 15.84 20.42 12.39
NIFTY 500 7.88 14.92 15.50 14.41 19.04 11.08
S&P BSE 200 9.79 16.30 15.66 14.37 18.36 10.95
15
 MONEY GUIDE
CREATE - OPTIMISE - SECURE

Data Cruncher
Indian Sta s cs 31-Aug-18 31-Jul-18 % Change Global Sta s cs 31-Aug-18 31-Jul-18 % Change
Stock Indices America
CNX Nifty 11,680.50 11,356.50 2.85 Dow Jones (USA) 25,964.82 25,415.19 2.16
BSE Sensex 38,645.07 37,606.58 2.76 Nasdaq (USA) 8,109.54 7,672 5.71
BSE 200 5,040.98 4,870.95 3.49 Bovespa (Brazil) 76,677.53 79,220.43 (3.21)
BSE Midcap 16,881.33 16,013.44 5.42 IPC (Mexico) 49,547.68 49,698.01 (0.30)
BSE SmallCap 17,193.20 16,584.16 3.67 Europe
BSE Realty 2,141.43 2,094.86 2.22 FTSE (UK) 7,432.42 7,748.76 (4.08)
BSE Healthcare 15,945.17 14,205.73 12.24 CAC 40 (France) 5,406.85 5,511.30 (1.90)
BSE Bankex 31,741.91 31,005.96 2.37 DAX (Germany) 12,364.06 12,805.50 (3.45)
BSE I.T. 15,548.52 14,527.23 7.03 Asia Pack
BSE PSU 7,907.60 7,688.09 2.86 Shanghai Composite (China) 2,725.25 2,876.40 (5.25)
Money Market Nikkei 225 (Japan) 22,856 22,553.72 1.34
3 months CD 7.17% 7.16% 0.14 Hang Seng (Hong Kong) 27,888.55 28,583.01 (2.43)
1 Year CD 8.05% 8.06% (0.12) Straits Times (Singapore) 3,213.48 3,319.85 (3.20)
3 months CP 7.77% 8.05% (3.48) Taiwan Weighted (Taiwan) 11,063.94 11,057.51 0.06
1 Year CP 8.55% 8.33% 2.64 Kospi (South Korea) 2,322.88 2,295.26 1.20
Call Rate 6.30% 6.00% 5.00 Jakarta Composite (Indonesia ) 6,018.46 5,936.44 1.38
Gilts KLCI Composite (Malaysia ) 1,819.66 1,784.25 1.98
91 Day T-Bill 6.81% 6.62% 2.87 Other Statistics
364 Day T-Bill 7.34% 7.16% 2.53 Crude Oil (Brent) 77.42 74.25 4.27
10 Yr Benchmark 7.95% 7.77% 2.32 Dollar Index 95.08 94.49 0.62
Corporate Bonds US Fed Rate 2.00% 2.00% 0.00
5 Yr AAA Benchmark 8.71% 8.69% 0.23 10 Year Government Yield (US) 2.86% 2.96% (3.38)
10 Yr AAA Benchmark 8.72% 8.68% 0.46 3 month USD LIBOR 2.32% 2.34% (0.01)
Other Statistics 6 month USD LIBOR 2.53% 2.53% 0.00
Cpi(Inflation-monthly) 4.17% 4.92% (15.24) European Central Bank (interest rate ) 0.00% 0.00% 0.00
Forex Reserves (Billion USD) 401.29 405.1 (0.94) Bank of England (interest rate ) 0.75% 0.75% 0.00
INR vs.USD 71.00 68.54 3.60 10 Year Government Yield (UK) 1.43% 1.33% 7.44
Gold (Rs./10gm) 30,230 29,420 2.75 Bank of Japan (Interest Rate) -0.10% -0.10% 0.00
Silver (Rs./ Kg) 37,975 41,249 (7.94) 10 Year Government Yield (Japan) 0.10% 0.056% 83.93

G-Sec and Corp Bonds prices move inversely to interest rates and hence opposite effect will be portrayed in percentage columns.
* CPI data is as of July and June 2018

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