The document reviews and compares two corporate bond funds - Templeton India Corporate Bond Opportunities Fund and Birla Sun Life Medium Term Plan. It finds that Birla SL Medium Term Plan has a longer track record, has consistently outperformed its peers, and has a lower expense ratio. It recommends holding a mix of duration and accrual funds for diversification after recent volatility in the debt market.

2. Fund review 22nd July 2013

3. T I Corporate Bond Opportunities FundT I Corporate Bond Opportunities Fund

4. 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.

5. 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

6. 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).

7. 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.

8. 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

9. 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

10. 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.

11. 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.

12. 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 (%)

13. 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.

14. 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.

15. Birla Sun Life Medium Term Plan

16. Vital Stats
◌ःCategory: Income fund
◌ःStarted in March 2009
◌ःStyle: high credit quality and low interest-
rate sensitivityrate sensitivity

17. 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

18. 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).

19. 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.

20. 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.

21. 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

22. 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)

23. 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.

24. 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.

25. 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).

26. 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.

27. 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.