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CIO’s Comments
March 2011
On February 28th, the Finance Minister 17% and to the Bharat Nirman programme by Rs.10, 000 crores.
presented the Union Budget 2012. While Concessions were also made to spur growth in the housing sector.
CIO’s Comments
nothing in the budget was the stuff of
The budget does however fall short as far as its commitment to
headlines, the budget did not have anything
pushing ahead the reform agenda is concerned. While there were a
negative. This in itself led to a relief rally in
Fund Performance slew of announcements regarding the governments' commitment
both equity and bond markets.
to financial sector reform and amendment to the Banking
Mr. Sashi Krishnan
The finance minister faced four big Regulation Acts, all this is not new. One far reaching reform
Asset allocation fund CIO, BALIC challenges in this budget. These challenges measure in the financial sector was allowing mutual funds to
were fiscal consolidation, maintaining the accept subscription from foreign investors in equity schemes.
growth momentum, pushing ahead with the
Cash funds Rising inflation has been centre stage for some time. The budget
reform agenda and containing inflation. The budget attempted to
has tried to address this concern squarely. It desisted from
balance all these objectives and was reasonable successful.
increasing excise duties across the board, which would have been
Debt funds On the fiscal front, the budget surprised positively. The level of inflationary. Agriculture, which has been the main cause for rising
government borrowing has been kept at an astoundingly low level inflation, was also the focus in this budget, with larger credit to the
of just Rs.3, 43,000 crores. This lower than expected deficit target sector and allocation to setting up food parks and augmenting
Capital Shield storage capacity.
for 2011-2012 at just 4.6% of GDP surprised both the debt and
equity markets positively. But a careful look at the numbers does
On the whole the Finance Minister has been able to do a fine
leave one a little perplexed as some of the assumptions look too
Shield Plus balancing act, one that will keep growth going while reigning in
good to be true. Growth is assumed to be at 9%, which seems quite
inflation. Fiscal deficit will however be the joker in the pack.
an ambitious target, given the current domestic and global
Max Gain concerns. The next assumption of a lower increase in expenditure On the political front, February was indeed a busy month for India.
of just 3% seems even more ambitious given that inflation is The 2G scam probe intensified and the ex telecom minister was
expected to be close to 7%. Subsidies seem to be underestimated at taken into custody. Many businessmen associated with the
index linked Funds Rs.1, 43,570 crores when the last years subsidy bill itself is Rs.1, telecom industry also felt the heat. The Government had to
64,000 crores. The revenue side assumes tax buoyancy of 18% and ultimately agree to a JPC probe into the 2G scam to end its standoff
PSU disinvestment of Rs.40, 000 crores which will not be easy to with the opposition in Parliament. The Prime Minister continued to
Equity Funds achieve. face pressure on the scandal surrounding the appointment of the
Central Vigilance Commissioner. All this dampened sentiment in
This budget continues to hug the governments' growth agenda.
asset markets.
Equity Mid-cap Funds Large allocations continue to be made to infrastructure - a 23%
increase from last year. To fund massive infrastructure expansion The situation in the Middle East is also a big worry for India. With
tax free bonds worth Rs.30, 000 crores will be issued. The FII limit Egypt and Libya on the boil and the contagion spreading to the rest
Ethical Equity Funds for debt investments in long term infrastructure investment has of the surrounding autocracies, oil prices have soared to close to
been increased by US$20 billion. The government has committed USD117/bbl. India imports 70% of its oil requirements and this rise
to a manufacturing policy to take up the share of manufacturing to in oil prices will impact both the fiscal deficit as well as inflation.
25% of GDP. Allocation to the social sector has been increased by
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CIO’s Comments
March 2011
The domestic economy continues to face a fair amount of
headwinds. In spite of food inflation showing some signs of easing,
CIO’s Comments
inflationary pressure continues to persist and this could lead to RBI
raising interest rates by at least 100 basis points this year. Liquidity
in the system continues to be negative to the extent of about
Fund Performance
Rs.80,000 crores. Growth is slowing down and the GDP growth
recorded for Q3 of 2011 is lower at 8.2% compared to 8.9% in the
Asset allocation fund first two quarters. Industrial growth slowed to a dismal 1.6% in
December 2010 as compared to 18% for the same period a year
ago. With the balance of payment situation not improving, the
Cash funds current account deficit will remain high at over 3% of GDP
throughout this year. Corporate earnings will be under pressure as
both input costs as well as interest costs are rising.
Debt funds
February was a difficult month for the equity markets and the BSE
Sensex fell 2.2% to close at 17,823. Foreign Institutional Investors
Capital Shield sold about USD 1 billion worth of stock in February taking the total
FII outflow in 2011 to about USD 2.05 billion. Domestic investors
however have been buyers at lower levels and have bought stock
Shield Plus worth over USD 2 billion this calendar year.
Bond markets remained lack lustre in February with the 10 year
Max Gain bond yields falling marginally from 8.15% to 8.02% mainly due to
the fact there were few primary offerings in the month. However,
tight liquidity caused short term rates to shoot up. One year CP
index linked Funds rates touched 10.25%.
While the next few months will be challenging, it will also be an
opportunity for retail equity investors as they will be able to invest
Equity Funds
at levels where the Indian equities are looking reasonably priced.
Bond fund investors will also get an opportunity to lock into the
Equity Mid-cap Funds currently prevailing higher interest rates.
Fund Performance
March 2011 Asset Class Asset Allocation Cash Debt Equity Funds Equity Index Ethical
ASSET PROFILE
Fund Funds Funds Large Cap Mid Cap Funds Funds
EQUITY SHARES 36.6% 0.0% 0.0% 85.3% 85.4% 99.0% 79.5%
Money Market Instruments 10.0% 75.0% 30.0% 12.7% 14.3% 1.0% 20.5%
CIO’s Comments Fixed Deposits - Security 5.1% 25.0% 19.2% 2.0% 0.1% 0.0% 0.0%
Non Convertible Debentures. 42.2% 0.0% 37.5% 0.0% 0.0% 0.0% 0.0%
GOVT SECURITIES(GSE) 6.1% 0.0% 10.2% 0.0% 0.0% 0.0% 0.0%
LOANS 0.0% 0.0% 3.2% 0.0% 0.0% 0.0% 0.0%
WARRANTS 0.0% 0.0% 0.0% 0.0% 0.2% 0.0% 0.0%
Fund Performance Grand Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Shield Plus DEBT FUNDS Bond Fund 0.6% 1.2% 2.7% 6.8% 7.3% 9.3%
DEBT FUNDS Premier Bond Fund 0.5% 0.5% 1.5% 4.7% 5.5% 7.2%
DEBT FUNDS Bond Pension Fund 0.6% 1.3% 2.9% 6.9% 7.4% 9.9%
Crisil Composite Bond Index 0.6% 0.9% 2.1% 5.0% 4.6% 5.7%
LARGE CAP Unit Gain - Equity Gain -3.4% -8.8% -3.4% 7.9% 38.1% 2.6%
Max Gain LARGE CAP Unit Gain Plus - Equity Plus -3.9% -9.5% -3.2% 7.2% 39.0% 3.1%
LARGE CAP Equity Plus Pension -4.5% -9.1% -2.0% 14.4% 46.9% 8.3%
LARGE CAP Premier Equity Gain -4.4% -9.8% -2.3% 12.6% 45.0% 6.4%
LARGE CAP Equity Growth Fund -4.2% -8.2% -3.8% 9.6% 38.1% 1.3%
LARGE CAP Equity Growth Fund II -3.7% -8.1% -0.9% 13.1%
index linked Funds LARGE CAP Premier Equity Growth Fund -4.5% -9.3% -2.6% 13.1% 41.8% 1.3%
LARGE CAP Equity Growth Pension Fund -4.2% -8.3% -1.6% 14.5% 44.8% 4.1%
CNX NSE Nifty Index -3.1% -9.0% -1.3% 8.3% 38.9% 0.70%
MID CAP Unit Gain Mid Cap -6.9% -14.5% -11.9% 1.5% 44.1% 5.5%
MID CAP Unit Gain Mid Cap Plus -6.9% -14.3% -11.4% 7.3% 57.2% 12.2%
Equity Funds MID CAP Unit Gain Mid Cap Plus Pension -7.2% -13.9% -11.6% 7.1% 58.9% 14.4%
MID CAP Accelerator Mid cap Fund -7.3% -14.6% -11.7% 5.6% 55.4% 5.9%
MID CAP Accelerator Mid Cap Fund II -6.0% -12.4% -8.9% 7.2%
MID CAP Accelerator Mid Cap Pension Fund -6.9% -13.4% -10.8% 6.4% 58.9% 7.0%
NIFTY MID CAP 50 index -9.5% -20.9% -17.9% -8.1% 45.7% -6.2%
Equity Mid-cap Funds INDEX Unit Gain – Equity -3.4% -9.3% -2.1% 7.0% 36.6% -0.6%
INDEX Unit Gain Plus - Equity Index -2.9% -8.7% -1.1% 8.9% 38.7% 0.8%
INDEX Equity Index Pension -2.8% -9.0% -1.0% 9.1% 38.9% 0.9%
INDEX Premier Equity Fund -3.4% -9.3% -2.1% 7.0% 36.7% -0.6%
Ethical Equity Funds INDEX Equity Index Fund II -3.3% -9.0% -1.6% 8.1% 38.2% 0.5%
INDEX Premier Nifty Index Fund -3.4% -9.4% -2.4% 6.4% 35.8% -1.2%
INDEX Equity Index Pension Fund II -3.3% -9.0% -1.7% 8.1% 38.1% 0.5%
CNX NSE Nifty Index -3.1% -9.0% -1.3% 8.3% 38.9% 0.70%
Ethical Fund Pure Equity Fund -5.0% -9.6% -3.4% 4.9% 40.9% 11.7%
Ethical Fund Pure Stock Fund -4.8% -9.2% -3.2% 5.3% 39.4% 10.5%
Ethical Fund Pure Stock Pension Fund -4.8% -10.7% -4.7% 8.2% 51.6%
CNX NSE Nifty Index -3.1% -9.0% -1.3% 8.3% 38.9% 0.70%
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Cash Funds
March 2011
Returns
Cash funds Annualised Returns
1 Month 3 Month 6 Month 1 year
Asset Profile
Unit Gain - Cash 6.23% 6.00% 5.91% 5.39% Fixed Deposits
Debt funds - Security
Unit Gain Plus - Cash Plus 7.86% 7.60% 7.12% 6.95% 25.04%
Maturity Profile
0 - 3 Months
Max Gain 24.89%
AVERAGE MATURITY AND PORTFOLIO YTM
Rating Profile
Equity Mid-cap Funds Fund Manager Comments Deposit with
Banks
25.04%
The funds continued to invest in highly liquid short term papers as per the
Ethical Equity Funds
mandates.
A1+/P1+/PR1+
74.96%
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Debt Funds
March 2011
Investment Objectives
CENTRAL GOVERNMENT SECURITIES 10.17%
CIO’s Comments GOI 10.17%
The objective of the fund is to provide accumulation of income through CORPORATE BONDS
L I C Housing Finance Ltd. 5.93%
37.47%
Fund Performance exposure of maximum 20% in money market instruments and minimum Tata Sons Ltd.
Power Finance Corpn. Ltd.
2.53%
2.26%
of 80% in G Secs, bonds and fixed deposits. Shriram Transport Finance Co. Ltd.
Other Corporate Bonds
2.18%
14.67%
FIXED DEPOSITS 19.19% 19.19%
Money Market Insruments 30.01%
Asset allocation fund Fund Performance Punjab National Bank
Bank Of Baroda
9.96%
7.25%
Bank Of India 3.71%
State Bank Of Bikaner & Jaipur 2.41%
Annualized Returns Other MMI 6.69%
LOAN 3% 3%
Cash funds FUND NAMES 1 month 3 months 6 months 1 year Grand Total 100% 100%
Capital Shield Life Long Gain 9.00% 3.62% 4.52% 4.43% 37.47%
The Government has announced its budget for FY2011-12 and projected fiscal deficit at Rating Profile
Equity Mid-cap Funds 4.6% of the GDP on the back of lower budgeted expenditure. The budgeted fiscal deficit is Fixed Deposits
19.19%
SOV
lower than what markets were expected. The continued high Inflation especially primary 10.17%
A1+/P1+/PR1+
article inflation is still a source of worry for RBI. The brent crude oil price rose by more than C ARE AA/LAA
30.01%
Ethical Equity Funds 10% due to political unrest in Middle east region. In addition, the prevailing tight liquidity 9.14%
condition is also keeping market interest rate high. If inflation persists at high levels, we
continue to expect more policy action from the Reserve bank going forward.
AAA/AAA(IND)/L
AAA/C AREAAA
31.49%
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Capital Shield
March 2011
Capital Shield
EQUITY
SHARES
Equity Funds 4.69%
AAA
58.83%
Annualized Returns
Ethical Equity Funds FUND NAMES 1 month 3 months 6 months 1 year
Capital Shield I 0.22% -0.19% 1.54% 6.49%
Capital Shield II -3.29% -6.91% -2.90% 10.01%
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Shield Plus
P1+/A1+/C AREP
Max Gain SOV R1
12.74% 13.69%
Ethical Equity Funds Shield Plus Fund III 0.59% 1.02% 2.52%
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Equity Funds
Returns
Asset allocation fund instruments and minimum 85% in Equities. Housing Development Finance Corpn. Ltd.
Larsen & Toubro Ltd.
5.16%
5.13%
H D F C Bank Ltd. 4.62%
State Bank Of India 4.31%
Tata Consultancy Services Ltd. 3.59%
Bharti Airtel Ltd. 2.55%
Max Gain
Equity Funds
March 2011
Investment Objectives
Money Market Insruments 12.71%
CIO’s Comments State Bank of Patiala 1.61%
The objective of the fund is to provide capital appreciation through State Bank of Mysore 1.43%
State Bank Of Travancore 1.32%
investment in selected equity shares that have the potential for capital State Bank of Hyderabad
Corporation Bank
0.98%
0.94%
Other MMI 6.42%
Fund Performance appreciation. This fund will have an exposure of maximum 20% in bank SHARES 85.27%
Infosys Technologies Ltd. 8.25%
depositsand money market instruments and minimum 80% in Equities. I C I C I Bank Ltd.
I T C Ltd.
5.24%
4.71%
Hindustan Unilever Ltd. 3.38%
a diversified basket of mid cap and large cap stocks. This fund will have an Bank Of Baroda
Corporation Bank
1.48%
1.22%
Fund Performance exposure of maximum 20% in bank deposits and money market
Other CD
SHARES
5.94%
85.35%
Ultratech Cement Ltd. 4.17%
instruments and 80% in equities. Of the equity investment at least 50% Syndicate Bank
Chennai Petroleum Corpn. Ltd.
3.78%
3.29%
Federal Bank Ltd. 3.11%
Asset allocation fund will be in mid cap shares. Andhra Bank 2.95%
Eicher Motors Ltd. 2.82%
Mindtree Ltd. 2.75%
Unichem Laboratories Ltd. 2.66%
Returns Tata Chemicals Ltd.
Mphasis Ltd.
2.44%
2.36%
Accelerator Mid cap Fund -14.59% -11.73% 5.64% 55.41% 5.89% 15.59%
Accelerator Mid Cap Fund II -12.40% -8.91% 7.24% 6.55% Asset Profile
Shield Plus Accelerator Mid Cap Pension Fund -13.39% -10.85% 6.41% 58.87% 7.05% 16.75%
Fixed Deposits -
Warrants Security
0.19% 0.12%
The investments in this fund will specifically exclude companies dealing Hindustan Unilever Ltd.
Bharti Airtel Ltd.
3.74%
3.27%
Cipla Ltd. 3.20%
in Gambling, Contests, Liquor, Entertainment (Films, TV, etc.), Hotels, Idea Cellular Ltd. 3.04%
Aventis Pharma Ltd. 2.85%
Fund Performance Banks and Financial Institutions, Investment would be atleast 80% in Reliance Industries Ltd. 2.81%
Unichem Laboratories Ltd. 2.79%
equities and not more than 20% in bank deposits and money market Maruti Suzuki India Ltd.
Tata Global Beverages Ltd.
2.64%
2.42%
Gujarat Industries Power Co. Ltd. 2.41%
Asset allocation fund instruments. G A I L (India) Ltd. 2.21%
Pfizer Ltd. 2.19%
Ultratech Cement Ltd. 2.01%
Wipro Ltd. 1.94%
Returns Tata Chemicals Ltd.
B A S F India Ltd.
1.87%
1.87%
Cash funds Chennai Petroleum Corpn. Ltd.
Bharat Petroleum Corpn. Ltd.
1.82%
1.81%
Absolute Returns CAGR Akzo Nobel India Ltd. 1.79%
Other Shares 26.40%
FUND NAMES 3 month 6 months 1 year 2 year Returns since TREASURY BILLS 20.48% 20.48%
Grand Total 100% 100%
inception
Debt funds
Pure Equity Fund -9.58% -3.38% 4.89% 40.93% 16.03%
Pure Stock Fund -9.21% -3.17% 5.34% 39.43% 16.72%
Capital Shield Pure Stock Pension Fund -10.68% -4.72% 8.23% 51.64% 19.60%
Money Market
Max Gain Instruments
Pharmaceuticals 17.8%
Technology 16.3%
20.48%
Oil&Gas 11.2%
FMC G 11.0%
Auto & Ancillaries 8.3%
index linked Funds Telecommunications 7.9%
C hemicals 7.2%
Metals & Mining 5.8%
Electric 5.2%
C ement 4.4%
Equity Funds Engg, Industrial & C ap Goods 3.2% EQUITY SHARES
Transportation & logistics 1.8% 79.52%
Disclaimer: "This document is for information purposes only and must not be treated as solicitation done the Company. All effort have been made to ensure accuracy of the contents of this
Ethical Equity Funds newsletter and the Company shall not be held liable for any errors, opinions, or projections published herein. The customers are requested to consult their financial advisors before investing or
deciding to invest with the Company and shall not hold the Company liable for any loss caused to the customer based on information contained herein.
Unlike a traditional product, a unit linked product(ULIP) is subject to investment risks associated with capital markets and the NAV of the unit may fluctuate based on the performance of funds.
The insured is responsible for his or her decision. Investments in ULIP is subject to market risk. Past performance is not indicative of future performance.
Bajaj Allianz Life Insurance Company Limited, GE Plaza, Airport Road, Yerwada, Pune- 411006. IRDA Registration No.116" Insurance is the subject matter of the solicitation.
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March 2011
CIO’s Comments
Chote-chote premium
Fund Performance kuch saal.
Badi khushiyaan
Asset allocation fund
saalon-saal.
Cash funds
Debt funds
Capital Shield
Equity Funds