Your SlideShare is downloading. ×
Fund reviews   july 2013
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Fund reviews july 2013

32
views

Published on

Our View on Mutual Funds

Our View on Mutual Funds

Published in: Economy & Finance, Business

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
32
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Fund review 22nd July 2013
  • 2. T I Corporate Bond Opportunities FundT I Corporate Bond Opportunities Fund
  • 3. Vital Stats ◌ःCategory: Income Fund ◌ःBenchmark: Crisil Short-term Bond Index ◌ःStarted: November 2011 ◌ःStyle: High credit quality/low interest rate◌ःStyle: High credit quality/low interest rate sensitivity.
  • 4. Assets under management AUM (Rs-crore) Templeton India Corporate Bond Opportunities Fund(G) 4,298.12 Maximum-income fund category 16,203.34 Minimum-income fund category 0.83Minimum-income fund category 0.83 Average-income fund category 1,806.58 Median-income fund category 578.88 Fund is 13th-largest within the category
  • 5. Trailing returns 6.97 5.24 8.52 10.40 6.93 5.08 7.80 8.36 6.00 8.00 10.00 12.00 Templeton India Corporate Bond Opportunities Fund(G) -1.30 0.27 2.88 5.24 -0.67 0.84 3.13 5.08 -0.63 -0.58 -0.25 0.04 0.16 0.72 2.04 -2.00 0.00 2.00 4.00 6.00 1 Month 3 Months 6 Months YTD 9 Months 1 Year Since inception Crisil Short Term Bond Fund Index Out/under performance The fund has outperformed its benchmark over longer-term horizons (YTD and higher).
  • 6. Calendar year return 10.81 9.07 4.00 6.00 8.00 10.00 12.00 2012 1.74 0.00 2.00 4.00 Templeton India Corporate Bond Opportunities Fund(G) Crisil Short Term Bond Fund Index Out/under performance In the one complete calendar year for which it has existed, the fund beat its benchmark by a comfortable margin.
  • 7. Low-risk fund 0.5 0.6 0.7 0.8 0.496904171 0.663425153 0.709222691 Templeton India Corporate Bond Opportunities Fund(G) 0 0.1 0.2 0.3 0.4 SD Semi SD Beta (Slope) 0.130732938 0.114171503 0.184822356 0.148757788 0.188607807 0.152159951 Opportunities Fund(G) Average-income fund category Median-income fund category Measures of risk calculated over one-year span
  • 8. Risk-adjusted return 0.1200 0.1400 0.1600 0.1800 0.2000 0.1538 0.1762 0.1398 0.1878 0.1130 0.1383 Templeton India Corporate Bond Opportunities Fund(G) 0.0000 0.0200 0.0400 0.0600 0.0800 0.1000 Treynor Sharpe Sortino 0.0405 0.0459 0.0297 Average-income fund category Median-income fund category Risk-adjusted return measures calculated over one-year span Marginally lower/higher than average; higher than median
  • 9. A low-duration fund 4 5 6 2.74 5.14 3.46 Templeton India Corporate Bond 0 1 2 3 Average Maturity (Yrs) Mod Duration (Yrs) 2.74 2.47 Templeton India Corporate Bond Opportunities Fund(G) Average-income fund category Fund does not take duration risk.
  • 10. Credit risk Rating Fund allocation (%) Category allocation- income funds (%) AAA 0.02 30.64 AAA(SO) 0.07 1.71 AA+ 11.71 7.70 AA+(SO) 7.08 0.80 AA 7.66 3.18 AA(SO) 2.17 0.07 AA- 19.96 3.66AA- 19.96 3.66 AA-(SO) 0.67 0.06 A1+ 17.61 9.81 A+ 6.83 0.53 BWR A+(SO) 2.89 0.24 A 16.02 1.35 A(SO) 4.47 0.58 A-(SO) 0.53 0.02 Cash & Equivalent 2.30 11.20 Does invest in sub-AAA bonds in search of yield.
  • 11. Expense ratio on the higher side 1.40 1.60 1.80 2.00 1.82 1.46 1.67 Expense ratio (%) 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 Templeton India Corporate Bond Opportunities Fund(G) Average-income fund category Median-income fund category Expense ratio (%)
  • 12. Fund manager ◌ःUmesh Sharma and Sachin Padwal Desai have been managing this fund since November 2011. ◌ःThe fund has done well under their watch.◌ःThe fund has done well under their watch.
  • 13. Bottomline ◌ःThe fund does not have a long track record. ◌ःNot a low-cost fund. ◌ःHas performed well during the limited period of its existence. ◌ःThe fund does not take duration risk. May◌ःThe fund does not take duration risk. May underperform peers with higher duration in a declining rate environment. ◌ःIt does invest in sub-AAA bonds but tries to mitigate risk through intensive research into the companies whose bonds it invests in.
  • 14. Birla Sun Life Medium Term Plan
  • 15. Vital Stats ◌ःCategory: Income fund ◌ःStarted in March 2009 ◌ःStyle: high credit quality and low interest- rate sensitivityrate sensitivity
  • 16. Assets under management AUM (Rs- crore) Birla SL Medium Term Fund(G) 825.96 Maximum-income fund category 16,203.3 4 Minimum-income fund category 0.83 Average-income fund category 1,806.58 Median-income fund category 578.88 It is the 36th-largest fund within the income fund category
  • 17. Trailing returns 5.05 7.37 5.67 10.61 9.71 5.87 4.20 8.82 8.27 6.00 8.00 10.00 12.00 Birla SL Medium Term Fund(G) -0.73 2.14 -1.69 0.39 2.79 -4.00 -2.00 0.00 2.00 4.00 1 Month 3 Months 6 Months 9 Months YTD 1 Year 3 Years Birla SL Medium Term Fund(G) Category average-income funds The fund has beaten the category average over most investment horizons (except 1-month).
  • 18. Calendar year returns 10.99 9.31 5.90 9.90 8.24 8.00 10.00 12.00 5.90 4.74 0.00 2.00 4.00 6.00 2012 2011 2010 Birla SL Medium Term Fund(G) Category average-income funds category The fund has beaten the category average in all three years of its existence.
  • 19. Low-risk fund 0.5000 0.6000 0.7000 0.8000 0.3786 0.6690 0.7109 Birla SL Medium Term Fund(G) 0.0000 0.1000 0.2000 0.3000 0.4000 SD Semi SD Beta (Slope) 0.0911 0.0600 0.3786 0.1355 0.1026 0.1285 0.1004 Birla SL Medium Term Fund(G) Category average-income funds Category median-income funds Risk parameters calculated over three years.
  • 20. High risk-adjusted returns 0.2500 0.3000 0.3500 0.4000 0.4500 0.2680 0.4068 0.1941 0.0000 0.0500 0.1000 0.1500 0.2000 0.2500 Treynor Sharpe Sortino 0.0645 0.0284 0.1538 0.1941 Birla SL Medium Term Fund(G) Category median-income funds Parameters for risk- adjusted returns calculated
  • 21. Fund does not take duration risk 2.5 3 3.5 3.42 3.44 Mod Duration (Yrs) 0 0.5 1 1.5 2 2.5 Birla SL Medium Term Fund(G) Category average-income funds Category median-income funds 1.64 Mod Duration (Yrs)
  • 22. Credit risk Rating Fund (%) Category (%) AAA 12.25 30.64 AA+ 8.91 7.70 AA+(SO) 8.22 0.80 AA- 4.43 3.66 BWR A+(SO) 0.45 0.24 A1+ 8.73 9.81A1+ 8.73 9.81 A1(SO) 7.64 0.24 A 17.89 1.35 A(SO) 4.96 0.58 BWR A-(SO) 18.91 0.36 Cash & Equivalent 7.61 11.20 The fund does go down the ladder of credit risk in search of higher yields.
  • 23. Low expense ratio 1.20 1.40 1.60 1.80 1.37 1.46 1.67 Expense Ratio (%) 0.00 0.20 0.40 0.60 0.80 1.00 1.20 Birla SL Medium Term Fund(G) Average-income fund category Median-income fund category Expense Ratio (%) Note: all references to income fund category refer to Value Research’s categorisation.
  • 24. Fund manager ◌ःThe fund is now managed by Rohit Murarka who assumed charged recently in January 2013. ◌ःHe was part of the research team when the◌ःHe was part of the research team when the fund was earlier managed by Maneesh Dangi (who has since become the Co-CIO).
  • 25. Bottomline ◌ःThe fund tries to earn returns by identifying credit opportunities in medium-term securities. ◌ःThe fund manager focuses on bottom-up◌ःThe fund manager focuses on bottom-up selection of bonds. ◌ःThose with a two-three year investment horizon may invest in this fund.
  • 26. Bottomline ◌ःOf the two funds, we like Birla SL Medium Term Plan better because of its longer track record, consistent performance, and lower expense ratio. ◌ःAfter the recent debacle in the debt market◌ःAfter the recent debacle in the debt market (yields spiked suddenly on 16 July after RBI tightened liquidity, causing losses in duration funds), investors should consider holding a mix of both duration and accrual funds in their portfolios.