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Monthly Markets Update (India) - November 2010

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Monthly review of key market segments within India including Equity (Domestic and International), Fixed Income, Currency, Economic Indicators, Mutual Funds & Recommended Portfolios (India).

Monthly review of key market segments within India including Equity (Domestic and International), Fixed Income, Currency, Economic Indicators, Mutual Funds & Recommended Portfolios (India).

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    Monthly Markets Update (India) - November 2010 Monthly Markets Update (India) - November 2010 Document Transcript

    • ` Monthly Markets Update - India November 2010 Prepared by: iFAST Research Team
    • Monthly Markets Update - India November 2010 Key Points • Most of the global markets continue to rally in the month of October. Technology heavy weight NASDAQ was the best performing market and delivered return of 6.33% during the month, followed by Russia which delivered return of 5.27%. Nikkei was the worst performing market for the month on account of greater risk of economic slowdown and deflation than earlier expected. • During the month of October, BSE Sensex was flat and ended the month with marginal negative return of 0.18%. BSE mid-cap and small-cap Index outperformed Sensex and delivered return of 2.70% and 3.43% respectively during the same tenure. • BSE Health care was the best performing index for the month on account of strong defensive buys. BSE Power was the worst performing index because of disappointing second quarter results by two index heavy weight companies. • Foreign Institutional Investors (FIIs) continued to pump in money into Indian stocks making a net investment of about US$ 6.42 billion (INR 28,563 Crore) into Indian equities. Mutual funds continued to be net sellers to the tune of INR 5800 Crore. • The Dollar depreciated against most other currencies during the month of October and the Dollar Index was down by about 1.85% during the month. The Rupee closed the month strongly and appreciated against Dollar by 1.18%. • In Fixed Income market, Yields rose across the board on account of tight liquidity condition. Reverse Repo volumes continued to be negative throughout the month of October. • RBI increased both Repo and Reverse Repo rate by 25 basis points on 2 November 2010 policy meet. The WPI for the month of September was at 8.62%, a bit higher than the Bloomberg estimate of 8.50%. • After underperforming Sensex in September, the actively managed diversified equity funds have outperformed the benchmark Sensex index on m-o-m basis, delivering on an average return of 1.08% in the October. • The top performing fund from the equity segment was Magnum Sector Fund Umbrella – Pharma. The bottom performing fund for the same segment was JM Telecom Fund.
    • Monthly Markets Update - India November 2010 Equity Markets Update International Markets (as at end of October 2010): Earnings Earnings 2010 2010 2009 P/E P/E P/E Growth Growth MTD YTD Return (%) Yr 2010 Yr 2011 Yr 2012 2010 (%) 2011 (%) Asia ex Japan (MSCI Asia ex Japan) 2.58% 12.67% 68.30% 15.1 13.5 12.0 29.4 11.6 Emerging Markets (MSCI EM) 2.81% 11.75% 74.50% 13.6 11.6 10.4 37.0 16.8 Europe (DJ Stoxx 600) 2.40% 4.75% 28.00% 11.9 10.3 9.2 32.3 15.4 Japan (Nikkei 225) -1.78% -12.74% 19.00% 16.4 14.6 11.9 63.5 12.3 USA (S&P 500) 3.69% 6.11% 23.50% 14.2 12.4 10.9 35.8 14.5 Australia (S&P/ASX 200) 1.72% -4.29% 30.80% 13.6 11.9 11.0 - 13.8 Brazil (IBOV) 1.79% 3.04% 82.70% 12.7 10.2 9.0 30.3 23.9 China (HS Mainland 100) 3.81% 4.90% 61.30% 14.2 12.3 10.6 21.2 15.7 Hong Kong (HSI) 3.30% 5.60% 52.00% 14.8 12.8 11.2 19.2 15.6 India (SENSEX) -0.18% 14.70% 81.00% 20.2 16.8 14.3 15.4 20.3 Indonesia (JCI) 3.83% 43.44% 87.00% 18.5 15.0 13.1 19.0 23.3 Malaysia (KLCI) 2.88% 18.30% 45.20% 16.3 14.6 13.5 19.0 11.4 Russia (RTSI$) 5.27% 9.87% 128.60% 8.1 6.8 6.2 50.5 18.3 Singapore (STI) 1.45% 8.46% 64.50% 15.4 14.0 12.8 19.7 9.8 South Korea (KOSPI) 0.54% 11.90% 49.70% 10.6 9.7 8.7 54.7 9.6 Taiwan (Taiwan Weighted) 0.60% 1.21% 78.30% 13.9 12.1 11.5 100.3 14.5 NASDAQ 100 (Technology Heavy) 6.33% 14.20% 53.50% 17.3 15.1 13.2 58.1 14.9 Thailand (SET Index) 0.94% 34.02% 63.20% 13.2 11.4 9.9 15.9 16.1 • Most of the global markets continue to rally in the month of October. • Technology heavy weight NASDAQ was the best performing market and delivered return of 6.33% during the month, followed by Russia which delivered return of 5.27%. Global chip sales soared to yet another monthly record-high in August and the global tech bellwether companies have reported stellar earning for the third quarter of 2010 which has resulted in healthy performance by NASDAQ 100. • Among BRIC nations, Russia was the best performing market for the month on account of the approved US$59 billion privatisation plan, the largest, since 1990. • Nikkei was the worst performing market for the month on account of greater risk of economic slowdown and deflation than earlier expected. In addition, the Japanese government has also downgraded its monthly economic assessment in October 2010 for the first time since February 2009. • Indian markets traded around 20,000 levels throughout October but ended the month with marginal negative return of 0.18%.
    • Monthly Markets Update - India November 2010 Domestic Markets (as at end of October 2010): • During the month of October, BSE Sensex was flat and ended the month with marginal negative return of 0.18%. BSE mid-cap and small-cap Index outperformed Sensex and delivered return of 2.70% and 3.43% respectively during the same tenure • Domestically, the performance of sectoral indices during the month was mixed. BSE Health care was the best performing index for the month on account of strong defensive buys. Index heavy weight like Dr Reddy's Laboratories Ltd (16.8% weight), Cipla Ltd (14.85% weight) gave return of 15.1% and 9.5% respectively. • Rally during the month was also strongly supported by BSE Oil &Gas, Auto and Consumer Durables. BSE Oil & Gas, one of laggard for last couple of months, gave a decent return this month on account of strong performance by Reliance Industries with strong second quarter earnings number aided by plans to bid in a government auction of Oil and Gas block. The stock accounts for 60% weight in the index. Consumer Durables and Auto continues to be best performing sector in last one year owing to strong consumption as well as vehicle demand in both Rural and Urban India. • BSE Power was the worst performing index because of disappointing second quarter results by two index heavy weight companies i.e., NTPC and ABB. BSE FMCG also gave negative return of 3.08% due to poor performance by ITC and HUL which account for nearly 70% of the index.
    • Monthly Markets Update - India November 2010 Institutional Flows Into Indian Equity Markets • Foreign Institutional Investors (FIIs) continued to pump in money into Indian stocks making a net investment of about US$ 6.42 billion (INR 28,563 Crore) into Indian equities following a US$ 5.43 billion (INR 24,978 Crore) net investment made in the previous month. • Over the past one year, FII net inflows have been positive every month, except in the months of January 2010 and May 2010. • During this calendar year, FIIs have pumped in close to US$ 24.79 billion in the Indian Equity market till the end of October 2010. Out of this around 48% (US$ 11.85 billion) has come in last two months. In calendar year 2009, FIIs made a net investment of US$ 17.5 billion in Indian equities. • Domestic mutual funds continued to be net sellers in the month of October 2010 to the tune of INR 5800 Crore. Except for the month of May, for all other months in last one year, Mutual Funds have been net sellers. • In the calendar year 2010, domestic funds have been net sellers to the tune of INR 29,409.4 Crore till the end of October 2010.
    • Monthly Markets Update - India November 2010 Currency Update • The Dollar depreciated against most other currencies during the month of October and the Dollar Index was down by about 1.85% during the month. The Japanese yen gained the most against the greenback in October rising by 3.75% during the month whereas Brazilian Real was the one of the weakest and depreciated by 0.81%. • Yen continues to appreciate against Dollar and gained 13.57% in the calendar year 2010. The Dollar reached 15 year low against Yen on 29 October 2010 as a result of the Federal meet scheduled next month where it is expected that it will announce second round of quantitative easing. • Brazilian Real depreciated against Dollar during the month as Bank of Brazil elected to hold the target Selic rate (benchmark interest rate) unchanged at 10.75% at 19 October 2010 as it is afraid that the further increase in the key interest rate may lead to more foreign investment inflows which will drive the domestic currency higher. The government has also raised the IOF tax (a financial operations tax on foreign fixed income inflows) twice from 2.0% to 6.0% in October to counter inflows. • The Rupee closed the month strongly and appreciated against Dollar by 1.18%. During the month, there was inflow of US$ 5.47 billion foreign capital on account of low interest rate and quantitative easing done by Japan with similar expectations from US.
    • Monthly Markets Update - India November 2010 Fixed Income Markets Update • During the month of October, Yields rose across the board on account of tight liquidity condition. On the shorter end of the curve, the yields on 3 month, 6 Month and 1 year rose by 50 bps, 27 bps and 32 bps respectively. This was on account of expectation of 25 basis point hike on policy rates by RBI in its quarterly policy meet and liquidity constraint in the market because of Coal India IPO which was oversubscribed by more than 15 times. • Due to the tight liquidity condition, the RBI had announced two measures on 29 October 2010 i.e., the scheduled commercial banks may avail of additional liquidity support under the liquidity adjustment facility (LAF) to the extent of up to 1.00% of their net demand and time liabilities (NDTL) as at 8 October 2010 and special second LAF (SLAF) will be conducted at 4.15 p.m. on all days between 1-4 November 2010 • Reverse repo volumes continued to be negative throughout the month of October because of the liquidity squeeze emanating from the demand for Coal India IPO as well as spurt in consumption demand on account of start of the festive season in India. M3 (broad money) growth remains flat and stands at 15.20% as at 8 October 2010. • RBI increased Repo and Reverse Repo rate by 25 basis points on 2 November 2010 policy meet. It also issued a statement that purely on current growth and inflation trends; it believes that the likelihood of further rate actions in the immediate future is relatively low. Hence, it would be ideal time to lock-in part of you debt corpus in the longer end of yield curve by investing in long tenure FMP or Gilt/Income fund.
    • Monthly Markets Update - India November 2010 Economic Indicators Economic Releases during the Month of October 2010 Event Period Consensus Actual Previous India Local Car Sales September -- 169,082 160,794 Industrial Production Year on Year August 9.50% 5.60% 13.80% Monthly Wholesale Prices Year on Year % August 8.50% 8.62% 8.51% Exports Year on Year % July -- 22.50% 13.20% Imports Year on Year % July -- 32.20% 34.30% Source: Bloomberg, iFAST Compilations • Exports growth has picked up from 13.20% year-on-year (y-o-y) a month ago to 22.50% y-o-y growth in August. Imports grew a bit slower at 32.20% y-o-y in August from 34.30% y-o-y growth in July. On month-on-month (m-o-m) basis, the exports rose by 2.50% and the imports have grown by 1.70% • September Local car sales hit an all-time high of 169,082 cars. The car sales have increased by 30.38% on y-o-y basis and 5.15% on m-o-m basis. The Auto industry is very upbeat as the industry has been selling over a lakh cars every month since January 2009. However, we can expect moderation in car sales once the banks start increasing their lending rates. • For the past few months the Industrial production growth has become very volatile. After jumping back into double digit territory to 13.80% in July 2010, the industrial growth again fell to single digit at 5.60%. We are of the view that the slow growth in the manufacturing sector which has the maximum weightage in the index along with the contraction in Capital Goods and Consumer-Non Durables is a cause of concern as it signals a slowdown in industrial activity. Despite the volatility witnessed in the industrial production growth, we expect the IIP number to moderate in the coming months on the back of base effect and rate hikes which normally impact the real economy with a time lag • The WPI for the month of September was at 8.62%, a bit higher than the Bloomberg estimate of 8.50%. The inflation for the month of August was 8.51%. Although, the RBI is doing everything possible to reduce inflation without affecting the economic growth, the inflation continues to be well above the RBI’s expected level of 5.50% by March 2010.
    • Monthly Markets Update - India November 2010 Fund Category Returns Fund Category Returns (as of October 2010) 1 Month YTD 1 Year Equity: Diversified 1.08 20.22 33.43 Equity: ELSS 0.87 20.45 33.65 Equity: Index -0.11 15.66 27.02 Equity: Overseas 1.81 8.25 15.95 Balanced 0.74 15.63 25.44 Debt: MIP 0.31 5.74 8.20 Debt: Income 0.09 3.70 4.74 Debt: Gilt Short Term 0.26 3.20 3.82 Debt: Gilt Long Term -0.15 2.90 3.92 Debt: Floating Rate 0.48 4.14 4.95 Debt: Ultra Short Term 0.49 4.02 4.74 Debt: Short Term 0.35 3.86 4.87 Liquid 0.53 3.83 4.43 Fund of Funds: Overseas 2.91 6.68 13.47 Source: MFI Explorer, iFAST Compilations (Excludes Institutional Plans) • After underperforming Sensex in September, the actively managed diversified equity funds have outperformed the benchmark Sensex index on m-o-m basis, delivering on an average return of 1.08% in the October. On the other hand, the Sensex gave a slightly negative return of 0.18% over the same period • Although the Index funds mimic the performance of their benchmark indices, the Index funds in October have given better returns in comparison to SENSEX and NIFTY in October. The index funds have given average returns of -0.11% in October while SENSEX and NIFTY have given -0.18% and -0.20% returns respectively • With the majority of global equity markets giving positive returns, overseas funds have performed better than domestic diversified funds in October with the Equity: Overseas and Fund of Funds: Overseas categories returning 1.81% and 2.91% respectively in October. However, the gains from the overseas funds would have been slightly higher if the Rupee did not appreciate by 1.18% in October • In the debt segment, Liquid funds as a category have given the highest returns in October on account of the liquidity crunch experienced in the market at the end of October. To tide over the liquidity crisis, the RBI conducted a special two days Liquidity Adjustment Facility (LAF). However, long-term Gilt funds are the only category of funds to have delivered negative returns among debt funds in the month of October.
    • Monthly Markets Update - India November 2010 Top and Bottom Five Performing Equity Funds in October Top Five Performing Equity Funds on Our Platform during the Month of October MTD YTD Sector Returns Returns MAGNUM SECTOR FUND UMBRELLA-PHARMA Pharmaceuticals 6.85% 24.21% RELIANCE BANKING FUND Banking 6.22% 58.63% UTI PHARMA & HEALTHCARE FUND Pharmaceuticals 5.38% 29.59% JM HOUSING, INFRASTRUCTURE & FINANCIAL SERVICES FUND Speciality 5.08% 14.84% BSL COMMODITY EQUITIES FUND GLOBAL AGRI PLAN Overseas 4.91% 7.63% Bottom Five Performing Equity Funds on Our Platform during the Month of October MTD YTD Sector Returns Returns SUNDARAM SELECT THEMATIC FUNDS ENTERTAINMENT OPPORTUNITIES Speciality -2.45% 7.45% DSP BLACKROCK TECHNOLOGY.COM FUND IT -2.49% 10.75% RELIANCE INFRASTRASTRUCTURE FUND Infrastructure -2.92% 3.40% RELIANCE MEDIA & ENTERTAINMENT FUND Speciality -2.95% 16.54% JM TELECOM SECTOR FUND Speciality -6.70% 3.95% Source: iFAST Compilations • Pharma funds have topped the list for the equity segment in the month of October. Year-to- Date (YTD), the pharma sector has been one of the better performing sectors. YTD, the BSE Healthcare index has given 28.12% returns • The top performing fund from the equity segment was Magnum Sector Fund Umbrella - Pharma. The fund delivered a Month to Date (MTD) 6.85% return in October; however, none of the top performing pharma funds were able to beat the performance of BSE Healthcare index, which gave 7.30% returns in October. • Reliance Banking Fund is our Recommended Banking sector fund and on YTD basis this fund has given 58.63%, the highest return of any equity fund in India. • The bottom performing funds from the equity segment for October comprised primarily of sectoral funds. Both the fund focusing on media and entertainment have also performed negatively in October. • The bottom performing fund for October was JM Telecom Fund with MTD -6.70% returns in October. JM Telecom fund is India’s only telecom fund. The major reason for the poor performance of telecom stocks were the disappointing quarterly results of few telecom companies.
    • Monthly Markets Update - India November 2010 Top and Bottom Five Performing Debt Funds in October Top Five Performing Debt Funds on Our Platform during the Month of October MTD YTD Sector Returns Returns L&T GILT FUND Gilt - Long Term 0.95% 0.34% UTI MIS ADVANTAGE PLAN MIP 0.91% 7.21% MAGNUM MONTHLY INCOME PLAN FLOATER MIP 0.83% 8.44% JM MIP FUND MIP 0.78% 4.87% HDFC MULTIPLE YIELD FUND MIP 0.72% 10.75% Bottom Five Performing Debt Funds on Our Platform during the Month of October MTD YTD Sector Returns Returns TATA GILT SECURITIES FUND REGULAR PLAN Gilt - Long Term -0.56% 2.26% IDFC GOVERNMENT SECURITIES FUND INVESTMENT PLAN A Gilt - Long Term -0.59% 1.68% BSL GOVERNMENT SECURITIES FUND LONG TERM PLAN Gilt - Long Term -0.61% 7.79% FIDELITY FLEXI GILT FUND Gilt - Long Term -0.68% 0.53% TATA MIP PLUS FUND MIP -0.85% 6.51% Source: iFAST Compilations • The top performing funds from the debt segment during October were Monthly Income Plans (MIP). All the MIPs in top 5 performing funds list are aggressive MIPs, with higher exposure to equities ranging between 15-25% of the portfolios • The bottom performing debt funds during October are mostly Gilt – Long Term funds. The negative performance of long-term gilt funds was caused by volatility in long-term government securities market on expectations of rate hike from RBI.
    • Monthly Markets Update - India November 2010 Recommended Portfolios Update 1. Conservative Portfolio: Portfolio Objective: The portfolio aims to achieve long-term capital appreciation by investing 90% into bond funds and 10% into equity funds. The target allocation may change depending on our views on financial markets. At present, we have an overweight position in equities and we target to have an exposure of 80% to bond funds and 20% to equity funds. Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 8.63% (Inception Date: 26 February 2010) Portfolio Value: INR 1,08,630 October 2010 Portfolio Return: 0.36% Portfolio Commentary: The portfolio gave a return of 0.36% in the month of October. The contribution from Debt category funds to the total returns was higher than the returns from Equity funds unlike in the previous months. The debt funds contributed approximately 65% to the overall portfolio returns with the balance coming from Equity funds. In the debt segment, it was floating rate funds that have contributed around 37% to the overall debt returns. Also, the returns from short-term funds were relatively low owing to the rise in yields on account of liquidity squeeze due to the Coal India IPO and the expected rate hike by RBI which was already factored in the yields. BNP Paribas Flexi Debt Fund is the only fund which delivered negative returns during the month. 2. Moderately Conservative Portfolio: Portfolio Objective: The portfolio aims to achieve long-term capital appreciation by investing 70% into bond funds and 30% into equity funds. The target allocation may change depending upon our views on financial markets. At present, we have an overweight position in equities and we target to have an exposure of 60% to bond funds and 40% to equity funds. Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 (Inception Date: 26 Feb 2010) 12.53% Portfolio Value: INR 1,12,530 October 2010 Portfolio Returns: 0.51%
    • Monthly Markets Update - India November 2010 Portfolio Commentary: The portfolio gave a return of 0.51% in the month of October. The Equity funds have contributed about 70% to the overall returns. The top performer among the equity funds was Reliance Growth; it has contributed around 78% of the total equity funds return. Also as far as the overall portfolio is concerned, it has contributed 55% to the total returns despite having a low weightage of 10% in the portfolio. In the Debt category, the returns from short-term funds and bond funds are the lowest and negative on account of rise in the yields across the board. This was mainly on the back of liquidity crunch which could be attributed to the Coal India IPO and the expected rate hike by RBI which was already discounted in the yields. The floating rate funds have contributed about 48%, the highest, to overall returns from the debt category. 3. Balanced Portfolio: Portfolio Objective: The portfolio aims to achieve long-term capital appreciation by investing 50% into bond funds and 50% into equity funds. The target allocation may change depending upon our views on financial markets. At present, we have an overweight position in equities and we target to have an exposure of 40% to bond funds and 60% to equity funds. Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 16.89% (Inception Date: 26 Feb 2010) Portfolio Value: INR 1,16,890 October 2010 Portfolio Returns: 0.54% Portfolio Commentary: The portfolio gave a return of 0.54% in the month of October. Our overweight position on equities helped post good returns with approximately 84% share coming from the Equity funds. Among the Equity funds, Sundaram Select Midcap was the top performer followed by Reliance Growth. Both these funds taken together have contributed about 106% of the overall returns from equity funds. On the Debt front, the floating rate funds alone have contributed around 69% followed by HDFC Cash Mgmt Fund - Treasury Advantage which accounts for another 43% of the overall returns from debt funds.
    • Monthly Markets Update - India November 2010 4. Moderately Aggressive Portfolio: Portfolio Objective: The portfolio aims to achieve long-term capital appreciation by investing 30% into bond funds and 70% into equity funds. The target allocation may change depending upon our views on financial markets. At present, we have an overweight position in equities and we target to have an exposure of 20% to bond funds and 80% to equity funds. Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 (Inception Date: 26 Feb 2010) 23.04% Portfolio Value: INR 1,23,040 October 2010 Portfolio Returns: 0.96% Portfolio Commentary: The portfolio gave a return of 0.96% in the month of October. The portfolio gained from its overweight equity exposure as the equity funds have contributed close to 95%. Reliance Banking Fund has topped the charts once again with approximately 52% of the overall equity funds return coming from this fund alone. Sundaram Select Midcap and Reliance Growth together contributed around 51% to the overall returns from equity funds. In the debt category, Birla Sun Life Floating Rate Fund - LTP – Growth has given a higher return when compared to the average returns from the debt category. 5. Aggressive Portfolio: Portfolio Objective: The portfolio aims to achieve long-term capital appreciation by investing 10% into bond funds and 90% into equity funds. The target allocation may change depending upon our views on financial markets. At present, we have an overweight position in equities and we will stay fully invested in equity funds. Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 (Inception Date: 26 Feb 2010) 30.10% Portfolio Value: INR 1,30,100 October 2010 Portfolio Returns: 1.49% Portfolio Commentary: The portfolio gave a return of 1.49% in the month of October. The sector funds alone have contributed around 39% to the overall returns with Reliance Banking Fund leading the pack. In fact, this fund alone makes up approximately 50% of the returns for the portfolio. The mid-cap funds too have made a
    • Monthly Markets Update - India November 2010 contribution of about 49% to the overall portfolio returns. Diversified equity funds, however have been laggards for this month. Although they account for 40% of the portfolio, the contribution from these funds is as low as about 6% of the overall returns. DSP BlackRock Top 100 Equity Fund and ICICI Prudential Infrastructure Fund are the only two funds which have delivered negative returns for this month. 6. Moderately Aggressive (Global) Portfolio: Portfolio Objective: The portfolio aims to achieve long-term capital appreciation by investing 30% into bond funds, 46% in domestic equity funds and 25% in global equity funds. The target allocation may change depending upon our views on financial markets. At present, we have an overweight position in equities and we target to have an exposure of 20% to bond funds, 52% to domestic equity funds and 28% to global equity funds. Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 (Inception Date: 26 Feb 2010) 17.90% Portfolio Value: INR 1,17,900 October 2010 Portfolio Returns: 1.14% Portfolio Commentary: The portfolio gave a return of 1.14% in the month of October. Our stance of being overweight on equities helped improve our overall returns. The Equity funds have contributed around 94% out of which domestic equity accounts for about 50% returns and about 44% returns are from global equity funds. The contribution from debt funds stands at a negligible 6%. In the domestic equity segment, the top performers are from the mid & small-cap category. The two funds together account for approximately 118% of the overall returns from domestic equity. The global funds have performed better than the domestic funds despite having a low weightage in the portfolio. Sundaram Global Advantage Fund has delivered slightly higher returns compared to the average returns in Fund of Funds category. 7. Aggressive (Global) Portfolio: Portfolio Objective: The portfolio aims to achieve long-term capital appreciation by investing 10% into bond funds, 59% into domestic equity funds and 32% into global equity funds. The target allocation may change depending upon our views on financial markets.
    • Monthly Markets Update - India November 2010 At present, we have an overweight position in equities and we target to have an exposure of 65% into domestic equity funds and 35% into global equity funds. Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 (Inception Date: 26 Feb 2010) 23.98% Portfolio Value: INR 1,23,980 October 2010 Portfolio Returns: 1.49% Portfolio Commentary: The portfolio gave a return of 1.49% in the month of October. The portfolio stands to gain from the over exposure to equities. The domestic funds have contributed around 63% and the balance about 37% returns has come from the global funds. In the domestic equity segment, the diversified funds accounting for 30% have delivered negative returns. The top performers are from the mid & small-cap category followed by sector funds where maximum contribution comes from Reliance Banking Fund. Among the global funds, Sundaram Global Advantage Fund has delivered highest returns. In addition to this, the returns are higher than the category (Fund of Funds) average.