Volume 4, Issue 8

09Aug2012

The monthly newsletter from FundsIndia

FundsIndia receives a second round of Funding

Srikanth Meenakshi

Inside this issue:

Greetings from FundsIndia!

FundsIndia receives second

round of Funding
- Srikanth
Meenakshi

The month ahead

- Equity recommendations B.Krishna Kumar

Consistent Performers FundsIndia Research

Horses for
Courses
Dhirendra
Kumar

Earlier last week, we made the happy announcement of the successful completion of a second
round of funding in FundsIndia. We sent out an email to all our customers and the news media
carried the details in print and online publications (In case you have not read it, you can find it
here: https://www.fundsindia.com/content/jsp/corporate/latestNews7.jsp)
Many of you have written in congratulating us and wishing us the best. Thank you! For small,
early-stage companies such as FundsIndia, our customers are more than just consumers of our
services they are well-wishers who take an active interest in seeing us grow and do well. We would not be in the position we are in today without the support of such customers. As we said in the email, we are grateful for it and re-dedicate
ourselves to the cause of creating the best online investment platform in the country.
Some of our customers have written in asking about our plans for the money and how we are going to use it to grow the
company. Simply put, we are going to use the money to enhance the experience of investing in meaningful and enriching
ways for our customers. This includes creating better ways to navigate and find funds, smarter systems to provide you
advice, more value-added services, more useful reports, support for more ways to access your portfolio such as mobile,
tablets etc. We are also actively developing ways and means to make the FundsIndia experience as fully digital (and
paperless) as possible. You may have already noticed our efforts with respect to open ECS mandates and ISIP registrations. A sizeable sum of money would also be spent on expanding our customer base such that more investors around
the country experience our unique platform.
In all these efforts that we take, we would really appreciate if you could keep those feedbacks coming in through the
mails and support tickets. Throughout the history of our company, customer feedback has made the single biggest difference in terms of the development of our platform, and we hope that would continue. Of course, referrals and good wordof-mouth recommendations are always welcome too! :-)

The current month also looks to bring interesting developments in the regulatory front. Around the middle of the month, we are told, there would be a meeting at
SEBI which would come out with directions for the benefit of the mutual fund industry. Suffice to say, well be following the events closely, and report both the
news and our opinions on any outcome.
Happy Investing!
Srikanth Meenakshi
For FundsIndia Team

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

Volume 4, Issue 8

Page 2

The month ahead - Equity recommendations

B.Krishna Kumar
July turned out to be an uneventful one for the equity and currency markets. The Nifty was stuck in a narrow trading range in July and so did the Indian Rupee in relation to the US Dollar. The rainfall this year has been below normal and this has raised concerns about inflation remaining stubborn
at higher levels.
Foodgrains, oilseed and sugar prices have been firming up and the situation could get worse if the rainfall deficit worsens going forward. International
crude oil futures have recovered off their recent lows and any further rise would escalate the subsidy burden.
The change of guard at the finance ministry is widely expected to bring in some bold measures towards tackling inflation and address the fiscal deficit.
Any progress on this front is likely to cheer the stock markets.
The 10-year bond yield has stabilized around the 8% mark and has staged a sharp recovery in the past few days. This is a sign that the bond market is
not expecting the Reserve Bank of India to cut rates any time soon.
From a technical perspective, the Nifty managed to seek support near the 5,000-mark and has since registered a sharp recovery. The recovery has
pushed the index to a crucial area of resistance at the 5,270-5,300 range.

At the juncture, we remain on the sidelines watching what the Nifty is up to. Rather than second guessing the direction of the next significant move, it
would make sense to let the Nifty do take the lead and an appropriate action can always be taken thereafter.
From the daily chart of the Nifty, it is apparent that the 5,000-5,050 range is a crucial support zone. A break below the lower blue line marked in the
chart would be a sign of weakness and we would expect further weakness thereafter.
As long as the support zone is intact, we would expect prices to seek higher levels. But, before putting the money at risk, it would make sense to watch if
the Nifty has the momentum to get past the resistance level of 5,300. Beyond 5,300, the index could rally to the next major resistance at 5,650.
This month, we recommend two stocks from the mid-cap space that look good to deliver returns of over 10% from a short-term perspective. Investors
may use any price weakness to buy Indian Bank and Crompton Greaves.
From the daily chart of Indian Bank featured below, it is evident that the stock has sought support at the crucial support zone of Rs.167-170 range. The
price action in the past few days suggests that the short-term trend is bullish and a rally to Rs.220 appears likely.
Turning attention to the individual stocks, we cover the outlook for heavyweights from the four-wheeler space. Tata Motors and Maruti-Suzuki are the
candidates we discuss this month. Both stocks have been in a downtrend in the past few months and are traded near their crucial support levels.
After being a star performer, Tata Motors has flipped roles and has seen a sharp cut in the recent weeks. Have a look at the daily chart of the stock featured below.

Continued on page 3 . . .

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

Volume 4, Issue 8

Page 3

Continued from page 2 . . .

As highlighted in the chart, the stock has managed to stage a minor recovery off the significant support level at the Rs.200-210 zone. In a worst case
scenario, there is a possibility of a slide to the Rs.180-190 range.
Given this scenario, we advise investors to use a SIP-kind of an approach to accumulate shares of Tata Motors, from a medium-term perspective. We
expect returns in excess of 30% for a holding period of 8-12 months. The stop-loss for all long positions may be placed at Rs.150.
From the daily chart of Maruti-Suzuki featured below, it is evident that the stock has sought support at the upsloping red trendline. In a worst-case
scenario, we would expect price to fall to the long-term support at 1,000-1,010 range.

A fall below the red trendline would open up the possibility of a slide to the above mentioned support zone. Similar to Tata Motors, we suggest a SIP
approach in Maruti as well. Use weakness to build exposures in the stock for a target of Rs.1,300, to begin with.
All bets would be off if the stock were to close below the stop-loss level of Rs.890. Those planning to buy Maruti must take cognizance of this stop loss
and exposures must be pared if the stock closes below the stop loss level.
Mr. B.Krishnakumar is the Head of Equity Research at FundsIndia. With extensive experience in tracking the stock market (over 15 years) he has
worked with companies such as The Hindu , Business Line and Dow Jones Newswires. He will be contributing to our monthly newsletter with his
stock market outlook which shall hold good for a month. Mr.B.Krishnakumar can be reached at b.krishnakumar@fundsindia.com
Mr.B.Krishna Kumar also hosts a weekly webinar that discusses the market outlook for the following week. You can register
for the webinar by clicking here: https://www4.gotomeeting.com/register/927617871

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

Volume 4, Issue 8

Page 4

Consistent Performers
FundsIndia Research
In this page, we feature mutual fund schemes in popular categories that have stood the test of time and delivered performance consistently. These schemes have consistently
featured in the top quartile of their category in terms of performance over multiple time periods in the past. For equity funds and income funds, we have chosen three, five
and seven year time periods for such ranking. For short term and ultra-short term funds, we have chosen shorter time frames. Please note that in some cases, we have
pruned the list for length - we have removed institutional schemes and those that have very high initial investment amounts (in the debt side) from this list. This list will be
updated every month, although we do not anticipate significant changes on a month-on-month basis. Rankings data for this report has been sourced from Value Research
Online.

Large Cap Funds

Fund Name
Franklin India Bluechip
SBI Magnum Equity
HDFC Index Sensex Plus
ICICI Prudential Top 100

3-Y Re5-Y Return

7-Y Return (%) 3-Y Rank (%)
5-Y Rank turn (%) 7-Y Rank Average VRO Rating
9.15
4/63
6.75
3/43 16.21
2/37 6.24%
YYYYY
8.03
7/63
5.59
6/43 16.21
3/37 11.06%
YYYY
7.45
12/63
5.63
4/43 14.91
4/37 13.05%
YYYY
8.83
5/63
5.33
7/43 14.59
6/37 13.48%
YYYY

Large & Mid Cap

Fund Name
UTI Dividend Yield
ICICI Prudential Dynamic
Canara Robeco Equity DiversiHDFC Growth

3-Y Re5-Y Return

7-Y Return (%) 3-Y Rank (%)
5-Y Rank turn (%) 7-Y Rank Average VRO Rating
11.13
8/63
10.93
2/46 16.83
5/30 11.24%
YYYYY
11.62
5/63
7.33
9/46 17.71
2/30 11.39%
YYYY
11.62
10.28

4/63
10/63

9.11
7.12

4/46
10/46

16.09
17.19

8/30 13.90%
3/30 15.87%

YYYY
YYYY

Mid & Small Cap

Fund Name
Reliance Equity Opportunities
ICICI Prudential Discovery

3-Y Re5-Y Return

7-Y Return (%) 3-Y Rank (%)
5-Y Rank turn (%) 7-Y Rank Average VRO Rating
19.12
4/51
9.46
7/41 18.08
1/23 9.75%
YYYY
16.45
8/51
11.52
3/41 16.67
3/23 12.02%
YYYYY

Multi Cap
Fund Name
HDFC Equity

3-Y Re5-Y Return

7-Y Return (%) 3-Y Rank (%)
5-Y Rank turn (%) 7-Y Rank Average VRO Rating
10.78
3/34
8.15
4/30 17.77
1/20 9.05%
YYYYY

Hybrid: Equity-oriented
Fund Name
HDFC Balanced
HDFC Prudence
Canara Robeco Balance
Tata Balanced

3-Y Re5-Y Return

7-Y Return (%) 3-Y Rank (%)
5-Y Rank turn (%) 7-Y Rank Average VRO Rating
15.23
2/25
11.61
1/25 14.97
4/23 9.80%
YYYYY
13.49
3/25
10.31
4/25 17.15
1/23 10.78%
YYYY
11.26
6/25
9.12
5/25 16.31
2/23 17.57%
YYYY
11.84
4/25
8.83
6/25 15.48
3/23 17.68%
YYYY

Tax Planning
3-Y Re5-Y Return
7-Y ReFund Name
turn (%) 3-Y Rank (%)
5-Y Rank turn (%) 7-Y Rank Average VRO Rating
Canara Robeco Equity Tax Saver
12.1
3/35
10.65
1/28 18.65
1/19 5.80%
YYYYY
Franklin India Taxshield
11.59
4/35
7.62
5/28 14.88
4/19 16.78%
YYYY
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

Volume 4, Issue 8

Page 5

Continued from page 4. . .

MIP

Fund Name
DSPBR MIP
HDFC Multiple Yield Plan 2005

6-M
Return 6-M
1-Y Re- 1-Y
3-Y Re- 3-Y
(%)
Rank turn (%) Rank turn (%) Rank Average VRO Rating
5.3100 4/63 10.29 1/61
7.44 12/49 10.83%
YYYY
4.6100 15/63
7.7 14/61 10.39 2/49 16.95%
YYYYY

Debt Short Term

Fund Name
DWS Short Maturity Premium Plus

3-M
6-M
Return 3-M
Return 6-M
1-Y Re- 1-Y
(%)
Rank (%)
Rank turn (%) Rank Average VRO Rating
2.62 4/34 5.1300 3/33 10.14 3/31 10.20%
Unrated

Debt Ultra Short Term

Fund Name
Birla Sun Life Short Term Opportunities Ret
HDFC Floating Rate Income LT
IDFC Ultra Short Term
Peerless Short Term

3-M
Return 3-M
(%)
Rank
3.59
2.8
2.8
2.63

2/180
8/180
7/180
17/180

6-M
Return 6-M
(%)
Rank
5.8400
5.8100
5.3700
5.3400

2/178
3/178
13/178
15/178

1-Y Re- 1-Y

turn (%) Rank
10.75
10.96
10.42
10.59

Average VRO Rating

5/176
3/176
16/176
7/176

1.69%
2.61%
6.76%
7.28%

Tata Fixed Income Portfolio Scheme

Taurus Short Term Income

2.83 6/180 5.4600 5/178

2.59 25/180 5.2300 26/178

10.15 41/176
10.41 17/176

9.81%
12.72%

Tata Fixed Income Portfolio Scheme

JM Money Manager Super
Templeton India Low Duration
Birla Sun Life Floating Rate LT Ret

2.62
2.58
2.54
2.57

10.15
10.43
10.26
10.17

13.15%
13.83%
18.32%
18.93%

21/180
30/180
45/180
31/180

5.4300
5.2000
5.2300
5.1900

9/178
29/178
25/178
33/178

40/176
15/176
28/176
37/176

YY
Y
YYY
YYYYY
Y
YYYYY
Y
YYYYY
YYYYY
YYYY

Debt Income

Fund Name
Kotak Bond Deposit
Kotak Bond Regular
SBI Magnum Income
Birla Sun Life Medium Term Retail
IDFC Dynamic Bond Plan B
Templeton India Income Builder

3-M
6-M
Return 3-M
Return 6-M
1-Y Re- 1-Y
(%)
Rank (%)
Rank turn (%) Rank Average VRO Rating
3.72 2/97
5.82 3/91 12.69 2/89
2.54%
YYY
3.72 3/97
5.82 4/91 12.68 3/89
3.62%
YYY
3.67 4/97
5.43 6/91 11.56 6/89
5.82%
YYY
3.51 6/97
6.05 2/91 11.18 10/89
6.54%
YYYYY
2.88 14/97
5.06 11/91 11.77 5/89 10.71%
YYY
2.78 20/97
5.49 5/91
11 13/89 13.57%
YYYY

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.

Volume 4, Issue 8

Page 6

Horses for Courses

Dhirendra Kumar

Before you look for the best fund, the first thing you need to figure out is the type of fund you should invest
in

When investors want to know which fund to invest in, they tend to ask the obvious question,
Which fund should I invest in? As an answer, they are looking for the name of the one fund that
is the best one, according to some nebulous definition of best that they have in their minds. But actually, its the wrong
question, or at least, thats the wrong question to start with. If you start with that question and expect an answer in those
terms then theres practically no chance of getting the right answer.
Actually, the right question is What type of fund should I invest in? Choosing the right fund is not a bottom-up activity
but a top-down one. The reason becomes self-evident when you pause for a moment and think about the original question, What fund should I invest in? The most important word in that sentence is not fund but I. There are many,
many funds that are good enough to invest in. The point is who is investing?
Depending on your circumstances, your financial goals, the time-horizon of your investments, different types of funds
will be suitable. Only after the type of fund is defined does the question of which specific fund come up. Theres an old
joke that if there is a race between five horses and five humans, then theres very little point in trying to figure out which
human is the fastest. The choice of fund category is a little bit like that.
For example, suppose you have just sold some real estate and have a large sum of money that you dont need for about a
year. Having decided to park the money in a mutual fund for the period you ask someone which is the best fund around
without defining your actual need. You are suggested a good mid-cap equity fund which has a five-star rating from Value
Research, into which you promptly invest the entire sum. A year down the line, the stock markets remain shaky and your
treasure shrinks by perhaps 10 or 20 per cent. Did you choose a bad fund? No, the fund you chose was fine. Its just that
the type of fund chosen was utterly unsuitable for the purpose. For a predictable time horizon of one year, a Fixed Maturity Plan (FMP) would have provided a reasonable return with negligible risk.
Conversely, suppose you are putting aside a certain sum of money from your monthly income for long-term savings,
which you may not need at least for a decade or more. In such a case, choosing anything but an equity fund is pointless.
The period is long enough for the volatility of the equity markets to be damped out. Since you will be investing gradually
in a monthly SIP, you will be able to earn returns that are actually better than the overall gains of the equity markets.
However, for such a purpose, a fixed income fund would be most unsuitable. In a high inflation environment like India,
fixed income rarely beats inflation and your money effectively becomes less over the years. Any equity fund, even a bad
one, would be better than keeping the money in a fixed-income fund or a bank deposit. This is literally true. Over the past
ten years, even the worst diversified equity funds like LIC Nomura Equity and JM Equity have given returns of 14 to 15
per cent per annum, which is far higher than any fixed income avenue could generate.

Syndicated from Value Research OnlineArticle can be viewed online herehttp://www.valueresearchonline.com/story/

h2_storyView.asp?str=20609

Wealth India Financial Services Pvt. Ltd.,

H.M Center, Second Floor,
29, Nungambakkam High Road,
Nungambakkam,
Chennai - 600 034.

Phone: 044-4344 3100

E-mail: contact@fundsindia.com

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.