India Monthly Markets Update October 2010
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India Monthly Markets Update October 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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India Monthly Markets Update October 2010 Document Transcript

  • 1. Monthly Markets Update - India October 2010 Prepared by: iFAST Research Team
  • 2. Monthly Markets Update - India October 2010 Key Points • Globally, September was one of the best months for equity markets in the year 2010, with S&P 500 rising 8.76%, the best September rally since 1939. • Among Emerging markets, Indonesia continues to be one of the best performing markets for the month as well as Year to date (YTD) with a return of 13.61% and 38.15% respectively. • During the month of September, Sensex has surpassed 20,000 levels and delivered a return of 11.67% as compared to 0.58% during the previous month. On the other hand, BSE Midcap and BSE Small cap have delivered a return of 6.41% and 7.38% during the same tenure. • Domestically, all the sectoral indices ended the month in green. BSE Bankex was the best performing index and ended the month with a gain of 15.05%. • Foreign Institutional Investors (FIIs) continued to pump in money into Indian stocks making a net investment of about US$ 5.43 billion into Indian equities. Domestic Mutual Funds continued to be net sellers in the month of September 2010 to the tune of INR 7,979.2 Crore. • The Dollar depreciated against most currencies during the month of September and the dollar index was down by about 5.4% during the month. The Australian Dollar gained the most against the greenback in September rising by 8.59%. The Rupee closed the month strongly and appreciated against the Dollar by 4.47%. • In Fixed Income market, Yields rose on the shorter end of the curve but registered a fall on longer end of the curve. • Industrial production growth jumped back into double digit territory to 13.8% in July 2010, India’s Wholesale Price Index (WPI) has a new base year of 2004-05 from the earlier 1993-94. The WPI increased by 8.51% y-o-y in August, following 9.78% rise in July. • The RBI in its first ever mid quarter monetary policy review hiked both the Repo rate by 25 Basis Points from 5.75% to 6.0% and the Reverse Repo rate by 50 Basis Points from 4.50% to 5.0%. • Indian fund industry’s assets (average assets under management) increased by 4.06 % in the month of September after registering a marginal rise of 3.30% in August. • Banking funds have topped the list for the equity segment and for debt segment; MIP was the best performer in the month of September.
  • 3. Monthly Markets Update - India October 2010 Equity Markets Update International Markets (As of September 2010 end): 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) 11.06% 9.83% 68.30% 14.7 13.2 11.7 29.4 11.6 Emerging Markets (MSCI EM) 10.87% 8.70% 74.50% 13.3 11.4 10.1 37.0 16.8 Europe (DJ Stoxx 600) 3.35% 2.30% 28.00% 11.7 10.2 9.1 34.9 15.6 Japan (Nikkei 225) 6.18% -11.16% 19.00% 16.1 14.4 11.8 66.0 12.3 USA (S&P 500) 8.76% 2.34% 23.50% 13.7 12.0 10.5 35.8 14.5 Australia (S&P/ASX 200) 4.06% -5.91% 30.80% 15.8 13.1 11.5 14.9 20.3 Brazil (IBOV) 6.58% 1.23% 82.70% 13.4 10.8 9.1 28.2 24.3 China (HS Mainland 100) 7.88% 1.06% 61.30% 13.7 11.9 10.5 20.7 14.7 Hong Kong (HSI) 8.87% 2.22% 52.00% 14.1 12.2 10.6 20.1 15.5 India (SENSEX) 11.67% 14.91% 81.00% 20.3 16.9 14.4 15.6 20.5 Indonesia (JCI) 13.61% 38.15% 87.00% 17.0 14.5 12.6 26.0 17.4 Malaysia (KLCI) 2.88% 14.98% 45.20% 16.0 14.2 13.0 25.4 12.6 Russia (RTSI$) 6.08% 4.36% 128.60% 6.2 4.9 4.0 87.3 25.4 Singapore (STI) 4.99% 6.90% 64.50% 15.2 13.9 12.6 19.7 9.8 South Korea (KOSPI) 7.46% 11.29% 49.70% 10.4 9.6 8.8 54.5 8.6 Taiwan (Taiwan Weighted) 8.16% 0.61% 78.30% 13.8 12.3 11.4 99.7 11.9 NASDAQ 100 (Technology Heavy) 13.05% 7.40% 53.50% 16.3 14.2 12.4 58.1 14.9 Thailand (SET Index) 6.80% 32.78% 63.20% 13.8 11.8 10.3 14.5 16.5 Source: Bloomberg, iFAST Compilations All returns are in respective local currency terms and MSCI Index returns are in USD • Globally, September was one of the best months for equity markets in 2010, with S&P 500 rising 8.76%, the best September rally since 1939. Technology shares were among the best performers during the month with NASDAQ rising 13.05%. • The Malaysian market was one of the worst performing market due to slow growth in Industrial Production number and higher than expected Consumer Price Index. • Among Emerging markets, Indonesia continues to be one of the best performing market for the month as well as Year to date (YTD) with a return of 13.61% and 38.15% respectively. This is on account of better-than-expected GDP numbers, political stability and huge FII inflows. • September was the best month for Indian Market in the calendar year 2010 with Sensex surpassing 20,000 levels and is currently trading at 33 month high. This was on the back of positive outlook on the macro economy front and net FII inflow into equity to the tune of INR 24,978 Crore during the month.
  • 4. Monthly Markets Update - India October 2010 Domestic Markets (as at September 2010 end): • During the month of September, Sensex has delivered a return of 11.67% as compared to just 0.58% during the previous month. On the other hand, BSE Midcap and BSE Small cap delivered a return of 6.41% and 7.38% during the same tenure. After being flat for the last few months, large cap stocks outperformed their midcap counterparts by a huge margin during September. • Domestically, all the sectoral indices ended the month in green. BSE Bankex continues to rally and ended the month with a gain of 15.05% on the back of strong numbers expected in the coming quarter and most of the banking stocks are currently trading at all time high levels with heavy weights like SBI and HDFC giving a return of more than 16% for the month of September. • Rally during the month was also strongly supported by Metals, Realty, Consumer Durables and IT. Consumer Durables is the best performing sector on a yearly basis, which can be attributed to strong consumption demand in both Rural and Urban India. • Oil and Gas Index continued to be a laggard for the month due to weak performance by oil marketing companies. Although crude oil rose by 11.19% during the month, the oil marketing companies were not able to pass on the complete price rise in the domestic market. However, the index heavy weight, Reliance Industries, has delivered a return of 7.34% and as a result, BSE Oil and Gas Index were able to give a return of 5.31% in September.
  • 5. Monthly Markets Update - India October 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$ 5.43 billion INR (24,978.5 Crore) into Indian equities following a US$ 2.51 billion 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$ 18.37 billion till the end of September 2010. 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 September 2010 to the tune of INR 7979.2 Crore. In last 12 months, mutual funds have been net sellers during all the months except for the month of May 2010. • In the calendar year 2010, domestic funds have been net sellers to the tune of INR 23,609.4 Crore till the end of September 2010.
  • 6. Monthly Markets Update - India October 2010 Currency Update • The Dollar depreciated against most currencies during the month of September and the dollar index was down by about 5.4% during the month. The Australian Dollar has gained the most against the greenback in September rising by 8.59% whereas, HK Dollar was the one of the weakest and rose only by 0.25%. • Australian Dollar is about to hit a record high against the US Dollar on the back of strong export demand from China , South Korea, India and ASEAN. These regions together constitute almost 50% of the total exports from Australia. In addition to this, severe rate hikes done by Reserve Bank of Australia have also led to the appreciation of Australian Dollar. • Yen continues to appreciate against the Dollar and traded at a record level during the month of September, the highest in almost 15 years. The Japanese Government is trying its best to control appreciation of Yen and the risk of economic recession by announcing new economic stimulus of worth 920 billion yen. • The Rupee closed the month strongly and appreciated against the Dollar by 4.47%. During the month, there was an inflow of $7.10 billion foreign capital into the country on account of rate hikes done by the RBI, additional limit allowed by the Government for investment in the bond market and positive outlook on the macroeconomic front .
  • 7. Monthly Markets Update - India October 2010 Fixed Income Markets Update • Yields rose on the shorter-end of the curve as RBI increased the Repo and Reverse Repo rate by 25 Basis Points (bps) and 50 bps which are more than consensus estimates. But yields on the longer end of the curve registered a fall on account of the reduction in the borrowing programme of the Government for the second half of the year. The yield on the Benchmark 3 month and 6 month paper rose by 9 and 11 bps respectively, while the yield of the benchmark 10 year and 30 year paper softened by 11 bps and 7 bps respectively during the month. • Government has increased the FII limit in Government Bonds and Corporate bonds by US$5 billion each raising the cap to US$10 billion and US$20 billion respectively. The incremental limit for corporate bonds can be invested in bonds issued by companies in infrastructure sector only and the residual maturity of both G-sec bonds and corporate bonds has to be 5 years. This action also bought some relief to yields of long-term papers. • Reverse Repo volumes continued to be negative for most part of the month, on account of the liquidity squeeze due to advance tax outflows. Banks continues to borrow money from RBI making repo rate as operational rate. M3 (broad money) growth rose marginally to 15.2% on 10 September 2010. • The debt market is likely to take cues from the implementation new borrowing programme announced recently and will keenly watch the Quarterly Monetary Policy review which is due on 2 November 2010.
  • 8. Monthly Markets Update - India October 2010 Economic Indicators Economic Releases during the Month of September 2010 Event Period Consensus Actual Prior India Local Car Sales August -- 160,794 158,764 Industrial Production Y-o-y July 7.8% 13.8% 7.1% Monthly Wholesale Prices Y-o- y% August -- 8.51% 9.78% Repo Rate September 6.00% 6.00% 5.75% Reverse Repo Rate September 4.75% 5.00% 4.50% Exports Y-o-y% July -- 13.20% 30.40% Imports Y-o-y% July -- 34.30% 23% Source: Bloomberg, iFAST Compilations • Exports growth slowed down dramatically to 13.20% y-o-y in July from 30.40% y-o-y growth in the previous month but, imports grew to 34.30% y-o-y in July from 23% y-o-y growth in the previous month. • August local car sales hit all time high of 160,794 cars. The car sales have increased by 33.2% on y-o-y basis and 1.28% on m-o-m basis. The Auto industry is very upbeat as the industry has been selling over one lakh cars every month since January 2009. • Industrial production growth jumped back into double-digit territory to 13.8% in July 2010, beating analysts’ estimate of 7.80%. We can expect the industrial production growth to moderate in the second half of this year due to high base effect and RBI’s rate hikes which has started taking a toll on the growth of the industry. • India’s Wholesale Price Index (WPI) has a new base year of 2004-05 from the earlier 1993-94. The WPI has increased by 8.51% y-o-y in August following 9.78% rise in July. Currently, the inflation is higher than RBI’s target rate of 6.00%, but we can expect it to moderate in the coming months. • The RBI in its first ever mid quarter monetary policy review hiked both the Repo rate by 25 Basis points from 5.75% to 6.00% and the Reverse Repo rate by 50 basis points from 4.50% to 5.00%. The mid-term monetary policy review is to be held on 2 November 2010. The inflation for the month of September and the capital inflows will decide if RBI will go in for a rate hike for the sixth time this year.
  • 9. Monthly Markets Update - India October 2010 Mutual Fund Industry Asset Trends • Indian fund industry’s assets (average assets under management) increased by 4.06 % in the month of September after registering a marginal rise of 3.30% in August. However, on a Year to Date (YTD) and a 1 year basis, the average assets have registered a decline of 9.95% and 3.69% respectively • In absolute terms, SBI Mutual Fund registered the largest addition in average assets, as th fund the house added on about INR 3,549 Crore of assets during the month, closely followed by the UTI ouse Mutual Fund at about INR 3,445 Crore. • For the third consecutive month, LIC Mutual Fund has seen a large drop in assets during the month, as the average assets of the fund house fell by INR 1,164 crore. ets • In percentage terms, Pramerica Mutual Fund saw the largest growth in average assets (+519.63%) in September, while Bharti AXA Mutual Fund registered the largest drop in average assets during the month (-23.10 23.10%).
  • 10. Monthly Markets Update - India October 2010 Fund Category Returns Fund Category Returns (as of September 2010) 1 Month YTD 1 Year Equity: Diversified 7.07 18.90 26.40 Equity: ELSS 7.76 19.02 26.55 Equity: Index 10.86 15.91 18.10 Equity: Overseas 5.93 6.98 12.20 Balanced 5.37 14.72 20.10 Debt: MIP 1.55 5.40 7.45 Debt: Income 0.61 3.51 4.97 Debt: Gilt Short Term 0.39 3.00 3.77 Debt: Gilt Long Term 0.63 3.20 4.16 Debt: Floating Rate 0.48 3.64 4.83 Debt: Ultra Short Term 0.44 3.52 4.56 Debt: Short Term 0.46 3.51 4.97 Liquid 0.46 3.22 4.07 Fund of Funds: Overseas 5.57 4.41 9.07 Source: MFI Explorer, iFAST Compilations (Excludes Institutional Plans) • Actively managed diversified equity funds have underperformed the benchmark index on m-o-m basis, delivering an average return of 7.07% in the month of September while the Sensex delivered an impressive 11.67% over the same period. • Since index funds replicate their benchmark indices, these funds have also delivered good returns. The index funds have given average returns of 10.86% as both SENSEX and NIFTY went up in September by 11.67% and 11.62% respectively. • With majority of global equity markets delivering over 5% returns in September, overseas funds performed well during with the Equity: Overseas and Fund of Funds: Overseas categories returning 5.93% and 5.57% respectively. However, the gains would have been much higher if the Rupee did not appreciate by 4.47% in September. • In the debt segment, Long Term Gilt Funds have gained the most in September on account of lower borrowing by the government in the second half of this fiscal as indicated in the borrowing calendar released by the RBI. However, Short Term Gilt Funds have underperformed Liquid Funds on 1 Month, YTD and 1 Year basis.
  • 11. Monthly Markets Update - India October 2010 Top and Bottom Five Performing Equity Funds in September Top Five Performing Equity Funds on our Platform during the Month of September MTD YTD Sector Returns Returns ICICI PRUDENTIAL BANKING & FINANCIAL SERVICES FUND Banking 13.73% 39.16% UTI BANKING SECTOR FUND Banking 13.45% 43.56% SUNDARAM BNP PARIBAS FINANCIAL SERVICES OPPORTUNITIES Banking 13.25% 44.09% RELIANCE BANKING FUND Banking 13.16% 49.34% RELIANCE QUANT PLUS FUND Speciality 13.05% 21.80% Bottom Five Performing Equity Funds on our Platform during the Month of September MTD YTD Sector Returns Returns JM BASIC FUND Infrastructure 3.40% -6.84% AIG INFRASTRUCTURE AND ECONOMIC REFORM FUND Infrastructure 3.08% 12.54% EDELWEISS ABSOLUTE RETURN EQUITY FUND Speciality 2.97% 13.03% JM MID CAP FUND Mid Cap & Small Cap 2.47% 6.80% JM SMALL & MIDCAP FUND Mid Cap & Small Cap 1.95% 6.77% Source: iFAST Compilations • Banking funds have topped the list for the equity segment in the month of September. • The top performing fund from the equity segment was ICICI Prudential Banking and Financial Services Fund. The fund delivered a handsome 13.73% return during the month of September; however, none of the top performing banking funds were able to beat the performance of banking index, the BSE BANKEX, which gave 15.05% returns in September. • Reliance Banking Fund is our Recommended Banking sector fund and on YTD basis, this fund has given 49.34%, the highest return of any equity fund in India. • The bottom performing funds from the equity segment for September comprised primarily Infrastructure and Midcap & Small Cap funds. However, none of the bottom performing funds have given negative performance in September • The bottom performing fund for the month of September was JM Small & Midcap Fund which delivered a return of 1.95%.
  • 12. Monthly Markets Update - India October 2010 Top and Bottom Five Performing Debt Funds in September Top Five Performing Debt Funds on our Platform during the Month of September MTD YTD Sector Returns Returns ICICI PRUDENTIAL MIP 25 MIP 2.47% 7.43% HDFC MF MIP LONG TERM PLAN MIP 2.31% 9.79% AXIS INCOME SAVER FUND MIP 2.29% - RELIANCE MONTHLY INCOME PLAN MIP 2.25% 8.11% HDFC MULTIPLE YIELD FUND MIP 2.19% 9.95% Bottom Five Performing Debt Funds on our Platform during the Month of September MTD YTD Sector Returns Returns LICMF GILT FUND PF PLAN GILT–Long Term 0.13% 0.86% LICMF GILT FUND REGULAR PLAN GILT–Long Term 0.13% 0.86% MIRAE ASSET GILT FUND SAVINGS PLAN GILT–Short Term 0.11% 0.87% TEMPLETON INDIA GOVERNMENT SECURITIES FUND LONG TERM PLAN GILT–Long Term 0.10% 0.06% TEMPLETON INDIA GOVERNMENT SECURITIES FUND COMPOSITE PLAN GILT–Long Term 0.09% 0.00% Source: iFAST Compilations • Again, the top performers from the debt segment during September were Monthly Income Plans (MIP), taking up all the top five spots. All the MIPs in the top 5 list are aggressive MIPs, with higher exposure to equities ranging between 15-25% of the portfolios. • The top performing fund from the debt segment in September was ICICI Prudential MIP 25. • The bottom performing debt funds during the September are mostly Gilt – Long Term funds. This is quite a surprise as the best performing debt category apart from MIPs were Gilt – Long Term Funds with an average performance of 0.63% in September. Even the YTD returns of these Gilt long term funds are well below the category average of 3.20%. • The bottom performing debt fund in September was Templeton India Government Securities Fund Composite Plan.
  • 13. Monthly Markets Update - India October 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. Currently 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 8.24% (Inception Date: 26 Feb 2010) Portfolio Value: INR 1,08,240 September 2010 Portfolio Return: 2.21% Portfolio Commentary: The portfolio gave a return of 2.21% in the month of September. Being overweight on equities helped improve the returns on the portfolio where two equity funds, namely HDFC Top 200-Growth and UTI Dividend Yield Fund-Growth alone have contributed about 82% to the overall portfolio returns. In the Debt category, the returns from short-term funds were relatively low due to rate hike by RBI in its mid- quarter review and the liquidity squeeze on account of advance tax outflows. All debt funds have given positive returns in the range of 0.40% to 0.65%. The bond funds have performed better than the last month as the yields on the long-end of the curve have eased. The debt funds in total contributed only 18% of the overall portfolio returns in September. 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. Currently, 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) 11.94% Portfolio Value: INR 1,11,940 September 2010 Portfolio Returns: 3.63%
  • 14. Monthly Markets Update - India October 2010 Portfolio Commentary: The portfolio has given a return of 3.63% in the month of September. Our strategy of being overweight on equities actually gave a boost to the overall returns with 94% share coming from the equity pie. The top performer among equity funds was DSP Black Rock Top 100 Equity Fund – Growth which delivered a return of 9.75%. Although the fund accounts for only 10% of the equity portfolio, it has contributed 24% of the total returns from equity. The debt funds have contributed a mere 6% of the overall portfolio returns in September. Within the Debt category, the allocation to floating rate funds is only 20% but these funds have contributed to around 37% of the returns from this category. 3. Balanced Portfolio Portfolio Objective: The portfolio aims to achieve long-erm 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. Currently, 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 16.23% (Inception Date: 26 Feb 2010) Portfolio Value: INR 1,16,230 September 2010 Portfolio Returns: 5.25% Portfolio Commentary: The portfolio gave a return of 5.25% in the month of September. The portfolio benefitted from its Equity exposure as the Equity funds contributed close to 96% of the portfolio returns and 4% of the overall portfolio return was from the Debt category. ICICI Prudential Infrastructure Fund – Growth which was seen in the negative territory last month gave a positive return of 7.93% for the current month. The top performers in the Equity segment were diversified funds, making a contribution of 34% to total equity returns. In the Debt segment, it was the floating rate funds which have contributed approximately 44% to the overall debt returns.
  • 15. Monthly Markets Update - India October 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. Currently, 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) 21.74% Portfolio Value: INR 1,21,740 September 2010 Portfolio Returns: 6.85% Portfolio Commentary: The portfolio returns for the month of September stood at 6.85%. Banking sector was the best performer during the month owing to pick up in retail and infrastructure spending towards the end of the month along with strong numbers expected in the Quarter. Reliance banking fund with a return of 12.67% was the top performer among Equity funds. The return from this fund alone accounted for 19% of the total equity portfolio returns despite having a low weightage of 5% in the portfolio basket. Equity funds have contributed around 98% to overall portfolio returns. All equity funds have given positive returns in the range of 6.46% to 12.67%. The returns from Debt funds form only 2% of the overall returns. 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. Currently, 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) 28.03% Portfolio Value: INR 1,28,030 September 2010 Portfolio Returns: 8.56% Portfolio Commentary: The portfolio gave a return of 8.56% in the month of September. Our stance of being overweight in equities has helped post good returns compared to previous month. In this month, no equity fund has delivered a return of less than 6% .The sector funds alone have contributed around 37% to the overall
  • 16. Monthly Markets Update - India October 2010 returns with Reliance Banking Fund leading the pack. Banking sector among others topped the charts, owing to pick up in retail and infrastructure spending towards the end of the month along with strong numbers expected in the quarter. The diversified funds have also contributed about 37% to the portfolio returns. In the Mid-Cap space, both Reliance Growth – Growth and Sundaram BNP Paribas Select Midcap – Growth with a return of 7.07% and 7.03% respectively have managed to outperform its benchmark BSE- Mid Cap which gave a return of 6.41% during the 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. Currently, 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) 16.58% Portfolio Value: INR 1,16,580 September 2010 Portfolio Returns: 5.92% Portfolio Commentary: The portfolio has given a return of 5.92% in the month of September. Domestic equity contributed the highest with 80% returns followed by Global equity delivering 18% of the overall portfolio returns. On the other hand, the Debt category accounts for only 2% of overall returns. The global funds in general have given a return of 6% due to good performance by the Emerging markets which delivered a return of 10.87%. The top performers in the domestic Equity segment were diversified funds making a contribution of 40% to total equity returns. 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. Currently 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.
  • 17. Monthly Markets Update - India October 2010 Portfolio Absolute Return since inception: Total Investment: INR 1,00,000 (Inception Date: 26 Feb 2010) 22.11% Portfolio Value: INR 1,22,110 September 2010 Portfolio Returns: 7.75% Portfolio Commentary: The portfolio gave a return of 7.75% in the month of September. The portfolio stands to gain from over exposure to equities. Out of the total returns on the portfolio, 77% is contributed by Domestic equity with the balance 23% coming from the Global equity funds. The global funds in general have given a return of 6% which was on the back of good performance by the Emerging markets which delivered a return of 10.87%. Fidelity International Opportunities Fund – Growth leads the pack with a 7.33% returns and contributes around 40% of the total returns from global equity funds.