Hsbc Tax Saver Equity Fund Snapshot by sxq72523


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									Visit us at                                                                                                             May 13, 2011

                                  Sharekhan’s top equity mutual fund picks


                       Equity market overview (May 2011)

                       Top rated equity funds >> Large-cap funds

                                                    >> Mid-cap funds

                                                    >> Multi-cap funds

                                                    >> Tax saving funds

                                                    >> Thematic funds

                                                    >> Balanced funds

                       Fund focus                   >> Birla Sun Life Frontline Equity Fund - Plan A
                                                    >> Reliance Equity Opportunities Fund

                       Fund ranking procedure

                                              Equity market overview (May 2011)

On May 3, 2011, the day the Reserve Bank of India (RBI) hiked the             have shown some signs of easing out in the past few days), there is a
interest rates by 50 basis points, the market expressed its discomfort        risk of more aggressive measures from the RBI in future. Our research
by plunging 463 points (2.44%). But what spooked the market was not           team expects an additional hike of around 50-75 basis points in the
the measure of the hike, which no doubt was unexpectedly higher, but          policy rates by December 2011. Though the RBI’s monetary tightening
the change in the RBI’s stance from pro-growth to anti-inflation.             will have an adverse effect on the market in the short term, the same
Turning aggressive in its fight against inflation, the RBI is now aiming      is prudent and necessary to prevent the economy from getting
to tame inflation by curbing demand, thereby sacrificing some growth          overheated as well as to achieve a soft landing.
in the short term. Clearly, inflation has occupied the centre-stage.
Under the double whammy of rising interest rates and surging input            Fortunately, the India Meteorological Department has forecast a
prices, industrial growth has already slowed down to 3.6% as in               normal monsoon for this year. A good rainfall will help maintain the
February 2011 from 15.08% in July last year. The aggressive monetary          growth momentum in the agricultural sector, which is expected to
tightening (the RBI has raised the key policy rates nine times in the         grow at 5.4% in FY2011 compared to 0.4% in FY2010. The agriculture
past 13 months) along with the soaring input prices will hurt growth          sector will also benefit from the RBI’s recent directive to banks to
further. The RBI has already moderated its growth outlook for FY2012          increase lending to farmers. A higher agricultural output will not only
to 8% (a 7.4-8.4% band) against 8.6% in FY2011. The hardening interest        support the economy’s growth but also help bring down the prices.
rates will also dent corporate earnings by inflating the cost of borrowing    Thus, inflation could be expected to moderate to 6% in the second
and affecting demand. Indian companies are reeling under the pressure         half of FY2012.
of high raw material prices, the continued hardening of interest rates
will push up their borrowing cost further. Not to mention the fact that       So far the fourth quarter results of Indian companies have not been
the market may also have to deal with the flight of some amount of            much to write home about. The market heavyweights like Infosys
funds from equities to debt instruments as the latter become more             Technologies, Wipro, Axis Bank, Bharti Airtel and Reliance Industries
attractive in a high interest rate regime.                                    have all announced disappointing results for Q4FY2011. Some more
                                                                              results are to follow in the weeks ahead and these coupled with the
Inflation is likely to stay high in the first half of FY2012 at around 9%     mixed global cues could keep the market volatile in the near term.
level due to the expected increase in fuel prices post-assembly               However, the market has adjusted to the evolving macro scenario
elections. If the commodity prices also remain firm (though the same          and corrected significantly since the beginning of this year.

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Mutual Funds                                                                                                                              Mutual Gains

                                                     Top rated equity mutual funds
                                                                                                                                Data as on April 30, 2011
Scheme Name                                                         Stars               N AV                     Returns (%)
                                                                   rating               (Rs)   6 mths     1 yr        3 yrs     5yrs         Since

Large-cap funds
Franklin India Bluechip                                                            218.16        -2.05   11.68       11.20     13.19          27.06
Birla Sun Life Frontline Equity Fund - Plan A                                       89.40        -4.77    8.24       10.17     16.72          28.75
Reliance Quant Plus                                                                 13.86        -3.86   16.21       10.05         --         11.37
DSP BlackRock Top 100 Equity                                                       102.02        -2.79   10.71        9.60     15.09          33.01
Principal Large Cap                                                                 28.84        -6.27    9.27        9.04     13.83          21.38
BSE Sensex                                                                     19135.96          -4.47    9.01        3.45      9.70               --

Mid-cap funds
HDFC Mid-Cap Opportunities                                                          15.69       -6.11    14.82       15.62         --         12.43
DSP BlackRock Small and Midcap                                                      17.88       -9.83     9.97       15.25         --         13.92
IDFC Small & Midcap Equity                                                          18.70       -6.58     9.40       24.89         --         22.02
IDFC Premier Equity - Plan A                                                        32.58       -7.76    11.49       14.69     20.24          23.54
Sundaram Select Midcap                                                             150.97      -11.19     8.77       11.43     12.48          36.36
BSE MID CAP                                                                       7094.26      -14.55    -1.26       -0.21      3.95               --

Multi-cap funds
ICICI Prudential Discovery                                                          49.86        -2.73   10.44       19.50     12.75          27.06
HDFC Equity                                                                        286.33        -4.78   17.15       17.14     16.98          22.80
Reliance Equity Opportunities                                                       36.29        -5.68   12.71       15.21     12.81          23.61
Mirae Asset India Opportunities                                                     16.68        -3.74   11.25       14.68         --         18.13
HDFC Top 200                                                                       215.23        -4.67   14.59       14.61     16.89          25.08
BSE 500                                                                           7427.14        -7.59    5.47        2.56      8.98               --

Tax saving funds
HDFC Taxsaver                                                                      235.27        -6.64   12.50       14.11     10.66          31.08
Fidelity Tax Advantage                                                              22.33        -5.33   14.06       12.43     15.16          16.81
Reliance Tax Saver (ELSS)                                                           21.49        -7.26   10.35       12.10      8.69          14.74
ICICI Prudential Taxplan                                                           143.91        -4.23   10.02       11.10      8.00          25.59
HDFC Long Term Advantage                                                           140.42        -5.57   15.29       10.74      9.78          29.16
CNX500                                                                            4615.30        -7.19    5.68        3.02      8.53               --

Thematic funds
DSP BlackRock Natural Resources & New Energy                                        14.79       -5.59    12.55       12.66         --         13.88
Birla Sun Life India GenNext                                                        24.53       -5.44    13.66        9.93     11.95          16.94
Fidelity India Special Situations                                                   18.83       -6.41    10.11        8.00         --         13.67
UTI India Lifestyle                                                                 11.89       -3.41    14.26        7.96         --          4.81
HDFC Infrastructure                                                                 11.96      -11.79     2.53        7.03         --          5.57
S&P Nifty                                                                         5749.50        -4.46    8.96        3.64     10.07               --

Balanced funds
HDFC Prudence                                                                      216.39        -2.55   14.87       17.24     17.63          21.34
HDFC Balanced                                                                       56.39        -1.23   16.54       15.79     13.82          17.66
Reliance RSF - Balanced                                                             22.47        -6.95    6.49       15.82     15.72          14.72
Birla Sun Life 95                                                                  315.67        -2.27   10.74       13.00     14.48          23.71
Tata Balanced                                                                       83.90        -2.23    8.52       10.42     12.30          16.94
Crisil Balanced Fund Index                                                        3565.12        -1.84    7.77        5.76      9.73               --
Note: Returns < 1 year - absolute, > 1 year - CAGR (compunded annualised growth rate)

                                                               Sharekhan      2         May 13, 2011
Mutual Funds                                                                                                                                                          Mutual Gains

                                                          Birla Sun Life Frontline Equity Fund - Plan A

 Fact sheet                                                                                                 Key features

Birla Sun Life Frontline Equity Fund is an open-ended diversified                                          • Fund category             Large-cap funds
equity fund which primarily seeks growth of capital and income                                             • Launch date               30-Aug-02
generation.                                                                                                • Minimum investment        Rs5,000
                                                                                                           • Load structure            Entry: 0%,
 Scheme performance                                                                                                                    Exit: 1%, if redeemed within 1 year
                                                                                                           • Fund Manager              Mahesh Patil
          Birla Sun Life Frontline Equity Fund - Plan A          Category Average           BSE200
                                                                                                           • Latest NAV (Growth)       Rs87.06
 30%                                                                                28.7%                  • Latest NAV (Dividend)     Rs20.93
 25%                                                                                                       • Expense ratio             2% (31-Mar-11)
 20%                                                              16.7%                                    • Average AUM               2749.14
                                                                       10.2%                               • Benchmark Index           BSE200
 10%                         8.2%                                          9.5%
                                     6.0%          4.8%
   5%                                                 3.1%                                                  Holding by market cap
                                                                                                           Particular                                            %
          6 Months              1 Year            3 Years             5 Years      Since Inception
      -4.8%                                                                                                BSE Sensex                                        58.37
           -5.2% -7.0%         Returns < 1 yr: Absolute, >1yr: CAGR
                                                                                                           BSE Midcap                                         8.96
                                                                                                           BSE Small cap                                         --
 Style box analysis                                                                                        Benchmark (BSE 200)                               89.89
                                                                                                           Top 5 holdings                                    23.51
                                                 Large Cap                                                 Top 10 holdings                                   38.72

                                                  Mid Cap
                                                                                                            Top 10 stock holdings (Total no of scrips: 57)
                                                  Small Cap
                                                                                                           Company name                             % of net assets
                           Growth Blend Value
                                                                                                           Reliance Industries                                5.91
                                                                                                           ICICI Bank                                         5.65
 Top 5 sectors
                                                                                                           ITC                                                4.23
                                                                                                           Bharti Airtel                                      4.04
                 Banks                                                                         18.7%
                                                                                                           Infosys Technologies                               3.69
              Oil & Gas                                                11.9%
                                                                                                           Tata Consultancy Services                          3.64
                      IT                                       9.3%
                                                                                                           Larsen & Toubro                                    3.44
 Auto & Auto Ancillaries                                7.6%
                                                                                                           Oil & Natural Gas Corpn                            2.86
                  FMCG                          6.0%
                                                                                                           Tata Steel                                         2.72
                       0.0%              5.0%               10.0%              15.0%           20.0%       Mahindra & Mahindra                                2.56

                                                                                            Scheme analysis
 The fund stands tall over the longer time frame. It has showed a remarkable performance since its inception in August 2002
 and has grown at a compounded annual growth rate (CAGR) of 28.7% since then, It has outperformed its benchmark, the BSE
 200 which has returned 23.6% during the similar time frame. Over the shorter time frame also the fund has contained losses
 better than the benchmark and the category on an average.

 As the name suggests the fund aims to target large cap stocks. This strategy has held the fund in good stead. Usually the
 fund doesn’t churn its holdings very drastically as is evidenced by a very low portfolio turnover ratio. Among the scrips held
 consistently by the fund include Reliance Industries, ICICI Bank, Infosys Technologies, ITC, TCS and ONGC. The fund’s top 10
 holdings account for 38.72% of net assets, which indicates a comfortable level of diversification. Over the past one year, the
 fund has been holding 59 scrips on an average. On the sectoral front, banks occupied a significant chunk of assets over the
 past two years.

                                                                                       Sharekhan       3      May 13, 2011
Mutual Funds                                                                                                                                                      Mutual Gains

                                                                  Reliance Equity Opportunities Fund

 Fact sheet                                                                                                Key features

The Reliance Equity Opportunities Fund is a diversified equity                                            • Fund category           Multi-cap funds
fund that intends to be unbiased in terms of sector or market                                             • Launch date             31-Mar-05
cap portfolio allocation. It intends to carry out investments                                             • Minimum investment      Rs5,000
depending upon the potential and opportunities as and when
                                                                                                          • Load structure          Entry: 0%
they arise, as perceived by the fund management.
                                                                                                                                    Exit: 1%, if redeemed within 1 year
 Scheme performance                                                                                       • Fund manager            Sailesh Raj Bhan,Viral Belawala
                                                                                                          • Latest NAV (Growth)     Rs35.75
          Reliance Equity Opportunities Fund - Grow th           Category Average           BSE100
  30%                                                                                                     • Latest NAV (Dividend)   Rs23.11
  25%                                                                               23.6%                 • Expense ratio           2% (31-Mar-11)
                                                                                            18.9%         • Average AUM             2837.87
  15%                      12.7%                                 12.8%
                                                                                                          • Benchmark Index         BSE 100
  10%                                                                   8.9%
                                      6.6%           5.2%                                                  Holding by market cap
   5%                                                   2.8%

                                                                                                          Particular                                         %
           6 Months              1 Year             3 Years         5 Years         Since Inception
                                                                                                          BSE Sensex                                     26.10
                  -6.1%                   Returns < 1 yr: Absolute, >1yr: CAGR                            BSE Midcap                                     32.00
                                                                                                          BSE Small cap                                   4.07
 Style box analysis                                                                                       Benchmark (BSE 100)                            45.54
                                                                                                          Top 5 holdings                                 22.13
                                                Large Cap                                                 Top 10 holdings                                39.13

                                                 Mid Cap
                                                                                                           Top 10 stock holdings (Total no of scrips: 34)
                                                    Small Cap
                                                                                                          Company Name                          % of net assets
                       Growth Blend Value
                                                                                                          Other equities                                 11.17
 Top 5 sectors                                                                                            Aventis Pharma India                            4.84
                                                                                                          Divis Laboratories                              4.49
                IT                                                                      15.47%            Maruti Suzuki India                             4.45
 Auto & Auto Anc                                                 9.90%                                    Infosys Technologies                            4.31
           Banks                                                9.55%                                     ICICI Bank                                      4.04
                                                                                                          Dish TV India                                   3.56
          Pharma                                               9.33%
                                                                                                          HCL Technologies                                3.52
   Media and Ent                                    6.70%
                                                                                                          Info Edge                                       3.38
                0.0%      2.0%     4.0%      6.0%     8.0% 10.0% 12.0% 14.0% 16.0% 18.0%
                                                                                                          Trent                                           3.30

                                                                                            Scheme analysis
 The fund has been around for more than six years now and has been able to show good return figures. Since inception the
 fund has generated compounded annualised returns of 23.6%, outperforming its benchmark BSE 100 which grew by 18.9%
 over the same time frame. Over the past five years, the fund has displayed a growth of 12.8% (CAGR) whereas other multi-cap
 funds grew by 8.9% on an average.

 As the fund’s strategy conveys, the fund manager has been investing in stocks across all the market-caps and not hesitated
 to concentrate a higher proportion of the portfolio in favour of mid-cap stocks at times. As evidenced between November
 2009 to October 2010, the net assets allocated to mid-cap stocks went as high as 56%. This paid off the fund very well. On the
 sector front, the fund has been maintaining a somewhat concentrated allocation to the top five sectors and allocation to
 these sectors has been quite consistent. The exposure of the fund to the top five sectors of its portfolio in terms of size of
 investments has averaged around 53% in the last two years. IT, pharmaceuticals, banks and capital goods have been the
 priority sectors for the fund manager over the past two years, while the fund has been increasing its exposure to the auto
 sector. Over the past one year the allocation to the auto sector has increased to 9.90% (as on April 2011) from 4.15% a year
 earlier (April 2010).

                                                                                      Sharekhan       4      May 13, 2011
Mutual Funds                                                                                                                                                                                                    Mutual Gains

                                                                                     Fund ranking procedure

We have identified the best equity-oriented schemes                                                                  Thereafter, we have calculated the percentage
available in the market today based on the following five                                                            underperformance or over performance of each scheme
parameters: the past performance as indicated by the one,                                                            (relative performance) in each of the five parameters vis
two and three year returns, the Sharpe ratio and                                                                     a vis maximum value among them.
Information ratio.
                                                                                                                     For our final selection of schemes, we have generated a
Sharpe indicates risk-adjusted returns, giving the returns                                                           total score for each scheme giving 60% weightage each to
earned in excess of the risk-free rate for each unit of the                                                          the relative performance as indicated by the one, two
risk taken. The Sharpe ratio is also indicative of the                                                               and three year returns, 20% weightage to the relative
consistency of the returns as it takes into account the                                                              performance as indicated by the Sharpe ratio and the
volatility in the returns as measured by the standard                                                                remaining 20% to the relative performance as indicated
deviation.                                                                                                           by the Information ratio of the scheme.

Information Ratio is one of the most important tools in
active fund management. It is the ratio of active return                                                               Sharekhan mutual fund ranking scale
(the return over the index return) to active risk                                                                       Stars              Description
annualized. A higher Information Ratio indicates better                                                                                    Top 10% of the eligible schemes
fund manager.                                                                                                                              Next 22.5% of the eligible schemes
                                                                                                                                           Next 35% of the eligible schemes
We have selected the schemes upon ranking on each of
                                                                                                                                           Next 22.5% of the eligible schemes
the above five parameters and then calculated the
                                                                                                                                           Bottom 10% of the eligible schemes
maximum value of each of the five parameters.

       Every individual has a different investment requirement, which depends on his financial goals and risk-taking capacities. We at
       Sharekhan first understand the individual’s investment objectives and risk-taking capacity, and then recommend a suitable portfolio.
       So, we suggest that you get in touch with our Mutual Fund Advisor before investing in the best funds.

 Disclaimer: Mutual fund investments are subject to market risk. Please read the offer document carefully before investing.
 Past performance may or may not be sustained in the future.

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                                                                                           Sharekhan             5        May 13, 2011

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