This document analyzes and compares the DSP Merril Lynch Bond Fund and DSP Merril Lynch Equity Fund over time. It discusses the objectives, background of the fund houses, portfolio structures, asset allocations, sector allocations, top holdings, returns and risks of both funds from 2006 to 2008. The analysis shows that the bond fund's asset ratings have declined and the equity fund has shifted assets from growth to more stable sectors while increasing its cash exposure and reducing equity exposure.

1. Presentation on DSP Merril Lynch Mutual Fund DSP Merril Lynch Bond Fund DSP Merril Lynch Equity Fund By : Kapil Makkar Roll No. 913

2. Contents Objective 2. Introduction of Fund House 3. Analysis of DSP Merril Lynch Bond Fund Portfolio Structure Asset Allocation Comparison of Asset allocation Comparison of Rating Profile Comparative Performance

3. 4. Introduction & analysis of DSP Merril Lynch Equity Fund Portfolio Structure Asset Allocation Comparison of Asset allocation Comparison of Rating Profile Comparative Performance

4. Objective To analyze the changes in the Portfolio How the fund has performed

5. Background

6. DSP HMK Holdings Pvt. Ltd. and DSP ADIKO Holdings Pvt. Ltd. DSP HMK Holdings Pvt. Ltd. and DSP ADIKO Holdings Pvt. Ltd. are companies incorporated in 1983 under the Companies Act, 1956 and are also registered with the Reserve Bank of India as non deposit taking Non-banking Finance Companies. These companies have been functioning as investment companies. BlackRock BlackRock is a premier provider of global investment management services to institutional and retail clients around the world managing assets in excess of US$ 1.2 trillion (approx Rs. 56,00,000 Cr.)*. Headquartered in New York, BlackRock serves clients from offices in 19 countries, maintaining a major presence in North America, Europe, Asia-Pacific, and the Middle East. With approximately 5,700 employees, including more than 700 investment professionals worldwide, BlackRock offers clients in-depth local knowledge and understanding, while leveraging the strength of their global presence and infrastructure to deliver focused investment solutions. Today, BlackRock services clients in over 60 countries.

7. DSP Blackrock Mutual Fund DSP BlackRock Investment Managers Ltd. is the investment manager to DSP BlackRock Mutual Fund. The philosophy of DSP BlackRock Investment Managers Ltd. has been grounded in the belief that experienced investment professionals, using a disciplined process and sophisticated analytical tools, can consistently add value to client portfolios. DSP BlackRock Investment Managers Ltd. takes a three dimensional approach to the management of the organization, incorporating functional, product and regional elements in support of clients' goals. With three-dimensional approach to managing the organization, we seek to: Ensure consistency on a global basis; Allow for the tailoring of products and services according to client or local needs; Promote teamwork among our employees worldwide; and Facilitate operational integrity and efficiency

8. Schemes & their AUM (as on 30,sep’08)

10. Scheme Details

11. Non-Equity Market(0ct ‘06) • Bond Markets: The yield on the 10-year Indian government bond remained largely steady, ranging around 7.65-7.70% • Currency: The USD/INR FX rate closed the month at 45.03 against 45.93 as of September end; this represents an INR

13. Asset Allocation (%) Instruments Percentage Debt 71.24 Money Market 18.25 Cash / Call 10.51 Total 100

14. As on 30/09/2008

16. Portfolio as on 30/09/2008

17. Asset Allocation (%) Instruments Percentage Debt 53.42 Money Market 35.77 Cash / Call 10.81 Total 100

18. Asset Allocation (%) Instruments Oct '06 Sep '08 Debt 71.24 53.42 Money Market 18.25 35.77 Cash / Call 10.51 10.81 Total 100 100

19. Comparison Of Rating Profile of Instruments Rating Profile(in%) Ratings OCT'06 SEP'08 AAA 54.9 31.78 AA+ 34.59 5.56 AA 16.08 A1+/P1+ 35.77 CASH& CASH EQUIVALENT 10.51 10.81 TOTAL 100 100

21. Returns & risk Aggregates Rating & Risk Modern Portfolio Stat Volatility Measures Fund Rating R-Squared 0.08 Mean 4.35 Fund Risk Grade Average Alpha -1.14 Standard Deviation 2.16 Fund Return Grade Below Average Beta 0.08 Sharpe Ratio -0.4

23. Market Overview OCT 2006 • The month of October saw the BSE Sensex Index rise to an all-time high of 13,076 to close at 12,962, an appreciation of 4.07% over the previous month. On a year-to-date basis the Sensex rose 37.92%. • The rally in the market was quite broad-based with stocks across sectors as well as market capitalisation registering gains during the month. The BSE Midcap index gained 4.81% followed by the BSE Smallcap Index which gained 3.75%. • India outperformed both emerging markets and Asia in October. India is now the 7th best performing emerging market (year-to-date). After being the second worst performing market during the May crash, India remains the second best performing market since the June bottom from the previous month. • The BSE IT index was the biggest gainer with a rise of 9.75% on the back of surprisingly good results by all the major IT companies. The BSE Bankex and BSE Capital Goods sectoral indices continued their previous months rally to gain 7.37% and 5.64% during the month. The rally in the global metal prices led to a 6.55% rise in the BSE Metals index.

25. Portfolio allocation as on 31/10/2006 in %

26. TOP 5 HOLDINGS Sector Percentage Industrial Capital Goods 10.23% Consumer Non Durables 10.82% Software 10.31% Auto Ancillaries 7.22% Banks 6.88% TOTAL 45%

27. Top 5 Company Holding Company Percentage L&T 4.37% Reliance Industries 4.02% Grasim Industries 3.37% ICICI Bank 2.97% State Bank of India 2.93% TOTAL 17.67%

28. As on 30/09/2008

30. Top 5 Sector Holding Sector Percentage Pharma 9.34% Consumer non-Durables 8.39% industrial Capital goods 7.44% software 5.93% Media 5.39% Total 36.49%

31. Top 5 Compamy Holding Company Percentage Hindustan Unilever 4.92% Oil & Natural Gas Corpn 4.04% Bharti Airtel 3.41% Infosys Technologies 2.46% HDFC Bank 2.15% Total 16.98%

32. Sectoral Allocation (oct 06) Sector Percentage auto 8.39% Auto Ancillaries 12.21% Banks 8.72% Cement 9.88% Construction 6.38% Consumer Non Durables 15.42% Ferrous Metals 1.10% Fertilisers 1.20% Industrial Capital Goods 8.37% Industrial Products 2.17% Media & Entertainment 4.01% Non - Ferrous Metals 2.84% Oil 0.90% Paper 0.89% Petroleum Products 1.72% Pharmaceuticals 3.11% Software 4.24% Telecom - Services 1.74% Textile Products 0.99% Others 5.73% Total 100.00% Sectoral Allocation (sep 08) Sector Percentage Pharma 9.34% Consumer non-Durables 8.39% industrial Capital goods 7.44% software 5.93% Media 5.39% Petroleum Products 4.99% Diversified 4.92% Auto 4.86% Banks 4.86% oil 4.62% Telecom 4.60% Power 2.49% Ferrous metal 2.16% Gas 1.91% Hotels 1.37% Paper 1.19% Finance 1.11% Industrial Products 0.94% Fertilisers 0.91% Construction 0.62% Textile Products 0.62% Pesticides 0.61% Retailing 0.53% Hardware 0.52% Healthcare 0.32% Telecom equipment 0.30% Index Futures 3.62% Debt & Cash & Equivalent 15.44% Total 100.00%

33. % of holding in top 10 sectors & derivatives Sectors Jan FEB March April May June July Aug Sep Avg. holding Pharma 3.39 4.36 4.36 4.38 9.7 9.7 9.95 11.07 9.34 7.36 Consumer non-Durables 7.57 7.6 7.6 8.39 6.57 6.57 7.47 8 8.39 7.57 industrial Capital goods 7.8 8.75 8.75 7.53 6.44 6.44 8.63 7 7.44 7.64 software 4.73 7.11 7.11 11.61 11.63 11.63 6.59 10 5.93 8.48 Media 3.3 4.04 4.04 4.28 6.44 6.44 4.43 5.1 5.39 4.83 Petroleum Products 8.61 6.77 6.77 8.93 6.92 6.92 5.88 4.58 4.99 6.71 Diversified 0 0 0 0 5.75 5.75 3.91 4.58 4.92 2.77 Auto 0 0 0 0 1.68 1.68 1.23 4.59 4.86 1.56 Banks 19.4 5.16 5.16 7.35 1.73 1.73 6.89 5.67 4.86 6.44 oil 2.32 4.72 4.72 4.41 3.47 3.47 3.12 2.37 4.62 3.69 Derivatives 2.99 4.5 4.5 1.12 0 0 4.59 1.96 3.62 2.59

37. Returns and Risk Aggregates Rating & Risk Modern Portfolio Stat Volatility Measures Fund Rating R-Squared 0.9 Mean 17.6 Fund Risk Grade Below Average Alpha 6.26 Standard Deviation 30.9 Fund Return Grade Above Average Beta 0.92 Sharpe Ratio 0.4

39. Findings Rating of Asset in DSPML bond fund has declined in the last two years Equity fund has moved its funds from growth sectors to more stable sectors Equity fund has increased its exposure to Cash & simultaneously reduced its exposure to equity.

40. Thank you