Why Divergence as the theme?
Several polarizing trends have been observed on the Global as well as Domestic front
Divergence is observed in Markets and Economy, Value and Growth theme, Yields on G-Sec and AAA over AA/A, etc
The outlook aims to highlight such divergent trends and ways to navigate the same
Brief on our Equity Outlook
Union Budget, real estate debt de-leveraging and credit growth pick-up key triggers for the markets in 2020
Stark divergence between Value and Growth themes makes Value and Special Situations themes attractive
Asset Allocation schemes may be considered to address near term volatility
Recommend Small and Multicap schemes due to reasonable valuations
Recommend adding equities in a staggered manner through SIP/STP
Our Recommendations
To benefit from Value Vs. Growth divergence - ICICI Prudential Value Discovery Fund
To benefit from Special Situations Theme - ICICI Prudential India Opportunities Fund
To benefit from reasonable valuations - ICICI Prudential Smallcap Fund
To benefit from Volatility - ICICI Prudential Balanced Advantage Fund and ICICI Prudential Asset Allocator Fund
For Long Term Wealth Creation - SIP/STP in ICICI Prudential Multicap Fund and ICICI Prudential Smallcap Fund
Brief on our Debt Outlook
Continue to remain positive on accrual space/spread assets
Recommend combination of short term assets and long term assets with a portfolio maturity range of 2-5 years
Extreme short end (less than 3 months), due to ample liquidity may give lower real returns
Fiscal concerns and inflation in the first half may keep longer end volatile. Hence, use the longer end of the yield curve for trading strategy
Our Recommendations
To earn higher accrual - ICICI Prudential Credit Risk Fund and ICICI Prudential Medium Term Bond Fund
Short/Medium Duration Scheme - ICICI Prudential Banking and PSU Debt Fund and ICICI Prudential Short Term Fund
To benefit from Volatility - ICICI Prudential All Seasons Bond Fund
Short Term Solution - ICICI Prudential Ultra Short Term Fund and ICICI Prudential Floating Interest Fund
Equity Outlook: Long-term view on equity remains positive, however the medium-term view has turned cautious due to valuations moving higher.
Fixed Income: In the current phase, a more nimble and active duration management strategy is recommended
Market outlook April 2021 - ICICI Prudential Mutual Fundiciciprumf
The resurgence of the pandemic may delay the recovery and growth of the Indian Economy. And with limited room for rate cuts going forward, investors could benefit from active duration management and accrual strategies.
To know more, read our Market Outlook for April 2021.
Annual Fixed Income Outlook 2022 | ICICI Prudential Mutual Fundiciciprumf
Shifting Sands, a year of active management - In the Fixed Income space, currently there are lot of dynamic elements at play. With limited scope for rate cuts, we recommend investing in Floating Rate Bonds which may benefit from rising interest rates. We recommend investing in spread assets with an aim to benefit from higher carry.
• Owing to growth concerns, Global Central Banks are reducing interest rates. The Reserve Bank of India
(RBI) too is expected to follow suits and may deliver 25-50 bps rate cut
• Central Banks are expected to continue with the loose monetary policy
• Food inflation is beginning to see some moderation although CPI Inflation continues to remain above
RBI‟s comfort zone. RBI‟s operation twist and LTRO too bodes well for the bond markets
• In light of the above factors, we have added duration across our portfolios as we have become positive
on the duration segment in the near term
• We continue to believe that the best strategy would be to create portfolio maturity in the range of 2-5
years
• We also continue to remain positive on the accrual space, as the divergence between Gsec/AAA & AA/A
yields persist.
Equity Outlook: Long-term view on equity remains positive, however the medium-term view has turned cautious due to valuations moving higher.
Fixed Income: In the current phase, a more nimble and active duration management strategy is recommended
Market outlook April 2021 - ICICI Prudential Mutual Fundiciciprumf
The resurgence of the pandemic may delay the recovery and growth of the Indian Economy. And with limited room for rate cuts going forward, investors could benefit from active duration management and accrual strategies.
To know more, read our Market Outlook for April 2021.
Annual Fixed Income Outlook 2022 | ICICI Prudential Mutual Fundiciciprumf
Shifting Sands, a year of active management - In the Fixed Income space, currently there are lot of dynamic elements at play. With limited scope for rate cuts, we recommend investing in Floating Rate Bonds which may benefit from rising interest rates. We recommend investing in spread assets with an aim to benefit from higher carry.
• Owing to growth concerns, Global Central Banks are reducing interest rates. The Reserve Bank of India
(RBI) too is expected to follow suits and may deliver 25-50 bps rate cut
• Central Banks are expected to continue with the loose monetary policy
• Food inflation is beginning to see some moderation although CPI Inflation continues to remain above
RBI‟s comfort zone. RBI‟s operation twist and LTRO too bodes well for the bond markets
• In light of the above factors, we have added duration across our portfolios as we have become positive
on the duration segment in the near term
• We continue to believe that the best strategy would be to create portfolio maturity in the range of 2-5
years
• We also continue to remain positive on the accrual space, as the divergence between Gsec/AAA & AA/A
yields persist.
• Historically, financial crisis have generally occurred due to endogenous factors – economic imbalances like high crude prices, high inflation, etc. This time it is different since macros being stable, the current crisis is the result of an external factor i.e. COVID-19
• India’s long term growth story remains intact since it is better placed in terms of fundamentals
• We believe, Emerging Markets have the potential to recover better than Developed Markets & that Value as a theme performs better than Growth during recovery phase. Hence, we recommend investing in ICICI Prudential Value Discovery Fund
• Owing to the temporary economic crisis due to COVID-19, we recommend investing in ICICI Prudential India Opportunities Fund
• Given further uncertainty regarding the spread of COVID-19, volatility is expected to prevail. We recommend investing in ICICI Prudential Balanced Advantage Fund to manage volatility • We remain positive on the Smallcap space as valuations are reasonable & recommend investing in ICICI Prudential Smallcap Fund
• Post any crisis, sectoral leadership has changed in the past. Aim to invest in future potential leaders through ICICI Prudential Focused Equity Fund
Interbank call money rates remained mostly below the RBI‟s repo rate of 4% in May owing to comfortable liquidity in the system. However, some pressure was seen on the rates following intermittent spike in demand for funds from banks.
Currency in circulation rose 18.4% on-year in the week ended May 22, 2020, compared with 14.2% growth a year ago. The RBI, via its liquidity window, absorbed Rs 5114.71 billion on a net daily average basis in May 2020, compared with net liquidity absorption of Rs 4751.55 billion in April 2020.
Bank credit growth rose 6.5% on-year in the fortnight ended May 8, 2020, compared with 7.2% on-year growth reported in the fortnight ended April 10, 2020.
We believe that the divergence between Value and Growth stocks continues to prevail, & that volatility is a factor which is inherent in equity as an asset class.
As per our, VCTS (Valuations, Cycle, Trigger, Sentiments) Framework, Equity investing needs to be looked at only from a long term perspective coupled with ‘Dynamic Asset Allocation Scheme’ that aims to manage volatility.
Annual Outlook 2022 | ICICI Prudential Mutual Fundiciciprumf
The current environment is akin to shifting sands, where dynamism is at its peak. Hence, it would be prudent to have an active management approach. Read our annual outlook 2022, to know more.
- Globally, markets ended in positive terrain on renewed hopes of positive outcome from high level US-China trade talks scheduled this month.
- Indian Markets cheered the announcement of substantial cuts in the corporate tax rate.
- Sectors which may benefit from lower corporate taxes – Consumer, Energy, Finance, etc. ended on positive note
- Sectors like Healthcare, IT, etc. are likely to benefit relatively less as they have a lower effective tax rate due to export / investment related exemptions
Have a detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Monthly Market Outlook (November 2021) | ICICI Prudential Mutual Fundiciciprumf
Equity Outlook: Equity markets pacing ahead now the Economy prepares to catch up.
Fixed income: RBI policy normalisation process may result in short-term rates moving higher and reduction in steepness of yield curve.
We believe that the divergence between Value & Growth stocks continues to prevail. Currently, fundamentally sound value stocks are available at inexpensive valuations & have better earnings visibility. Read our Equity Update for August 2020
In the past year, we have experienced the need and importance of a strong Healthcare sector, so if you are looking for a sign to invest in this sector, look no more, because this is it. Invest in a sector that's growing for the greater good and give your portfolio the boost it needs with ICICI Prudential Healthcare ETF.
NFO starts on May 6th, 2021.
For more on this head to https://bit.ly/3ujXO9z
Invest in products that make up your daily routine and aim to be a part of their growth with ICICI Prudential FMCG ETF. Start investing today and include diverse and innovative companies to your portfolio.
Hurry! NFO closes on 2nd August 2021.
Know more at https://bit.ly/3zfR0f8
We remain positive on the bond markets. A good strategy may be to create a portfolio with maturity in the range of 2-5 years along with accumulating spread assets to give better carry to the portfolio. Read our Fixed Income Update for Aug 2020
Valuations are not cheap, Business Cycle remains in the nascent stage. We believe, the current macro-economic scenario is much more conducive for a Business Cycle Recovery due to Global and domestic policy response.
Indian equity benchmarks recorded
splendid performance in September 2019 and clocked their
biggest single-day jump in 10 years on September 20, 2019,
following the announcement of corporate tax cut and other
measures by the government to boost the economy.
Benchmark S&P BSE Sensex and Nifty 50 ended the month with nearly 4% gains.
Read the full document to know more.
Triggers to watch out for -
1. General Election Outcome
2. Key Reforms Implemented over 5 years
3. Analysis of market returns post-election
4. High-frequency indicators
5. FPI flows trend
A detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Currently, valuations seem reasonable for long term investment, Business Cycle has bottomed out and relatively low FII flows have been recorded. Our framework suggests that it is time to accumulate equities and stay invested for long term.
• Historically, financial crisis have generally occurred due to endogenous factors – economic imbalances like high crude prices, high inflation, etc. This time it is different since macros being stable, the current crisis is the result of an external factor i.e. COVID-19
• India’s long term growth story remains intact since it is better placed in terms of fundamentals
• We believe, Emerging Markets have the potential to recover better than Developed Markets & that Value as a theme performs better than Growth during recovery phase. Hence, we recommend investing in ICICI Prudential Value Discovery Fund
• Owing to the temporary economic crisis due to COVID-19, we recommend investing in ICICI Prudential India Opportunities Fund
• Given further uncertainty regarding the spread of COVID-19, volatility is expected to prevail. We recommend investing in ICICI Prudential Balanced Advantage Fund to manage volatility • We remain positive on the Smallcap space as valuations are reasonable & recommend investing in ICICI Prudential Smallcap Fund
• Post any crisis, sectoral leadership has changed in the past. Aim to invest in future potential leaders through ICICI Prudential Focused Equity Fund
Interbank call money rates remained mostly below the RBI‟s repo rate of 4% in May owing to comfortable liquidity in the system. However, some pressure was seen on the rates following intermittent spike in demand for funds from banks.
Currency in circulation rose 18.4% on-year in the week ended May 22, 2020, compared with 14.2% growth a year ago. The RBI, via its liquidity window, absorbed Rs 5114.71 billion on a net daily average basis in May 2020, compared with net liquidity absorption of Rs 4751.55 billion in April 2020.
Bank credit growth rose 6.5% on-year in the fortnight ended May 8, 2020, compared with 7.2% on-year growth reported in the fortnight ended April 10, 2020.
We believe that the divergence between Value and Growth stocks continues to prevail, & that volatility is a factor which is inherent in equity as an asset class.
As per our, VCTS (Valuations, Cycle, Trigger, Sentiments) Framework, Equity investing needs to be looked at only from a long term perspective coupled with ‘Dynamic Asset Allocation Scheme’ that aims to manage volatility.
Annual Outlook 2022 | ICICI Prudential Mutual Fundiciciprumf
The current environment is akin to shifting sands, where dynamism is at its peak. Hence, it would be prudent to have an active management approach. Read our annual outlook 2022, to know more.
- Globally, markets ended in positive terrain on renewed hopes of positive outcome from high level US-China trade talks scheduled this month.
- Indian Markets cheered the announcement of substantial cuts in the corporate tax rate.
- Sectors which may benefit from lower corporate taxes – Consumer, Energy, Finance, etc. ended on positive note
- Sectors like Healthcare, IT, etc. are likely to benefit relatively less as they have a lower effective tax rate due to export / investment related exemptions
Have a detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Monthly Market Outlook (November 2021) | ICICI Prudential Mutual Fundiciciprumf
Equity Outlook: Equity markets pacing ahead now the Economy prepares to catch up.
Fixed income: RBI policy normalisation process may result in short-term rates moving higher and reduction in steepness of yield curve.
We believe that the divergence between Value & Growth stocks continues to prevail. Currently, fundamentally sound value stocks are available at inexpensive valuations & have better earnings visibility. Read our Equity Update for August 2020
In the past year, we have experienced the need and importance of a strong Healthcare sector, so if you are looking for a sign to invest in this sector, look no more, because this is it. Invest in a sector that's growing for the greater good and give your portfolio the boost it needs with ICICI Prudential Healthcare ETF.
NFO starts on May 6th, 2021.
For more on this head to https://bit.ly/3ujXO9z
Invest in products that make up your daily routine and aim to be a part of their growth with ICICI Prudential FMCG ETF. Start investing today and include diverse and innovative companies to your portfolio.
Hurry! NFO closes on 2nd August 2021.
Know more at https://bit.ly/3zfR0f8
We remain positive on the bond markets. A good strategy may be to create a portfolio with maturity in the range of 2-5 years along with accumulating spread assets to give better carry to the portfolio. Read our Fixed Income Update for Aug 2020
Valuations are not cheap, Business Cycle remains in the nascent stage. We believe, the current macro-economic scenario is much more conducive for a Business Cycle Recovery due to Global and domestic policy response.
Indian equity benchmarks recorded
splendid performance in September 2019 and clocked their
biggest single-day jump in 10 years on September 20, 2019,
following the announcement of corporate tax cut and other
measures by the government to boost the economy.
Benchmark S&P BSE Sensex and Nifty 50 ended the month with nearly 4% gains.
Read the full document to know more.
Triggers to watch out for -
1. General Election Outcome
2. Key Reforms Implemented over 5 years
3. Analysis of market returns post-election
4. High-frequency indicators
5. FPI flows trend
A detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Currently, valuations seem reasonable for long term investment, Business Cycle has bottomed out and relatively low FII flows have been recorded. Our framework suggests that it is time to accumulate equities and stay invested for long term.
Indian equities surged in the month of March in a catch-up rally after months of range-bound trading on the back of easing inflation giving rise to expectation of lower interest rates, strengthening rupee and record foreign investor flows. Indian equities rose by 7.8 per cent during the month.
Read the full document to know more.
Government’s release of Rs 86.55 billion to certain
banks for preferential allotment of shares, hopes of more reform
measures by the government in the upcoming Budget, and
sustained inflows from the foreign institutional investors (FIIs)
augured well for the local indices.
Read the full document to know more.
Triggers to watch out for -
General Election Outcome
Budget to be presented post elections
Re-balancing of MSCI Indices
Monsoon
Crude price volatility
FII flows trend
Rich Market Valuations
A detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
As there has been a trend of performance concentration across market cycles, different investment styles may perform at different phases of a market cycle. Our Market Outlook for November 2020
• India‟s macroeconomic scenario remains positive
• There is a huge spread between policy rates of India and Global Central Banks
• There is low FPI ownership of debt compared to other countries
• Inflation expected to moderate significantly in the current environment
• Fiscal Deficit not a concern in the absence of private credit demand (No crowding-out effect)
Indian Equity Markets (Nifty 50 Index) inched higher (+1.5%) during the month outperforming its emerging market peers.
New set of positive reforms by the government on domestic front and expectations of resolution of US-China trade war on
the global front were the major contributing factors which lifted sentiments.
Read the full document to know more.
Interim Budget 2019, presented on Feb 1, held a few good surprises for the farmer community and the salaried classes but was largely in line with market expectations. Markets, which had already ended January 2019 on a flat note (up 0.5% for the month), remained largely unaffected by the Budget announcements. Read the document to know more.
Global market Impact:
On the global front, the Federal Reserve's
decision to raise the target range for the federal
funds rate by 25bps to 5.25%-5.5% in July 2023
was in line with market expectations
Triggers to watch out for:
1. Breaking down GDP Numbers
2. Equity Valuations Update
3. Why ICICI Prudential Accrual Funds
4. Investment Philosophy
Have a detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Triggers to watch out for:
1. Our Equity Outlook
2. Market Cap Valuations
3. Our SIP Recommendations
4. Our Fixed Income Outlook
5. Investment Philosophy
Have a detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Indian equities ended a very volatile month of February down 1.1% from the previous month on account of the Interim Budget, a preemptive military strike by India, slow recovery in earnings growth over the last two quarters, buzz around general elections, and receding tensions between US and China.
Read the full document to know more.
October 2018 saw the Indian markets tumble by about 5 per cent, in a month that saw heavy volatility in the equity markets owing to on-going concerns regarding weakening currency, rising crude oil prices, widening fiscal deficit, along with muted earnings performance and the liquidity crunch-woes in the NBFC sector.
"Sell in May and go away‟ this old Wall Street adage has once again proved correct for most of the Global Markets which have witnessed a correction in the month of May. However, Indian markets took no cue from the above saying and continued to chug along through the month ending in a positive territory
( 1.7%).
Read the full document to know more.
Similar to ICICI Pru MF - Annual Market Outlook 2020 (20)
Does your portfolio have a blend of reasonable stability and potential growth?
Just as how a Sturdy Suspension and Powerful Engine together contribute to a smoother car ride, investing in a combination of Large and Mid cap stocks can offer the best of both worlds – Reasonable Stability + Potential Growth.
Know more: https://bit.ly/3UuS9x8
#ICICIPrudentialMutualFund #LargeCapFund #MidCapFund #MutualFunds #Investment
The rising sun of 2024 brings new hope for global markets! This sun shines a little brighter on the Indian economy as it gets off the tag of a 'fragile economy' to emerge as a robust one. The world economy is headed towards a 'Paradigm Shift' with India leading the way.
Explore this shift further with our Annual Outlook Report 2024!
#ICICIPrudentialMutualFund #AnnualOutlook #ETF
Equity Valuations Perspective | January 2024iciciprumf
Navigate Equity Markets better through our VCTS (Valuations, Cycle, Triggers and Sentiments) framework. The document below highlights the impact of various dynamic variables on the equity market across time periods. Read on to know more!”
#ICICIPrudentialMutualFund #Equity #Investments #MutualFunds
Stepping into 2024 with resilience and foresight!
New year has begun with a Paradigm Shift in trends of global and domestic macros.
While the global economies remain fragile, the Indian economy emerges as robust, defying the label of a fragile economy.
Explore the 2024 Outlook for insights on this Paradigm Shift!
#ICICIPrudentialMutualFund #MutualFunds #Investments #NewYear #2024
While there is some decline in China, there are positive market situations for India. What does that mean for an investor like you? See in December's Monthly Market Outlook here.
#ICICIPrudentialMutualFund #Investment #December2023 #MonthlyMarketOutlook #MutualFunds
Amidst global tensions, the global economies might be taking the strain but Indian economy continues the Goldilocks streak. Take a holistic view at what that might mean for you as an investor with the Monthly Market Outlook.
#ICICIPrudentialMutualFund #MonthlyMarketOutlook
ICICI Prudential Equity Valuation Index | Nov 2023 iciciprumf
Our latest Equity Valuation Index remains in the Neutral Index even after market corrections. But how do you smartly navigate through the market's volatility? Allocating your funds across different classes may help you. Have a look to understand better!
#ICICIPrudentialMutuaFund #Equity #EquityValuationIndex #Market #Investments
How can we prepare for the mood of the market? Use micro indicators for a comprehensive look at the market in this month's Market Outlook!
#ICICIPrudentialMutualFund #MonthlyMarketOutlook #October #Investment #MutualFunds
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
3. DIVERGENCE TO SET TONE FOR 2020
Off late, several polarizing trends have been observed on the Global as well as Domestic
front which are hard to overlook. Such diverging trends can be seen in many segments of
the economy like Economy Vs. Markets, Value Vs. Growth, Yields of G-Sec/AAA Vs. AA/A,
Headline Inflation Vs. Food Inflation, etc. These divergences can be managed by investing in
themes that are at their inflection or turnaround points. This document aims to delve deeper
in assessing such divergent trends and ways to navigate through the same.
.
3
4. Rear-View Mirror: Glancing Through 2019
(Equity)
.
4Source: Morgan Stanley, Data as of Dec 18,2019. PSU – Public Sector Undertaking, FM – Finance Minister, FPI – Foreign Portfolio Investor, MPC – Monetary Policy Committee, GDP – Gross Domestic Product,
Jan/19
Feb/19
Mar/19
Apr/19
May/19
Jun/19
Jul/19
Aug/19
Sep/19
Oct/19
Nov/19
Dec/19
35,000
36,000
37,000
38,000
39,000
40,000
41,000
42,000
S&PBSESensexLevels
Interim Budget
F20 presented
Re-election of incumbent
Govt. with a clear
mandate in India
F20 Union Budget: INR
700 Bn Recapitalization
of PSU banks
US announces
tariff hikes on
Chinese Imports
FM announces
withdrawal of
Enhanced Surcharge
of FPI and Domestic
Investors
US Federal Reserve
announcement to buy
$60 bnT-Bills/month
Increased
Tension in
Kashmir
MPC cuts GDP growth
estimate for F2020 to
6.1% from 6.9%
Telecom operators
announce tariff hikes
from December
GDP growth
slumps to
4.5%
Closure of Phase
1 US- China Trade
deal
Corporate Tax Cut
announced by the FM
5. Recap: Our Calls In 2019
SIP – Systematic Investment Plan, STP – Systematic Transfer Plan, YTM – Yield to Maturity
Our Calls Rationale
Invest in Asset Allocation Schemes
Invest in Value & Special Situations theme
Positive on Smallcap & Multicap space
Staggered investment in the form of SIP/STP
Buy on Accrual Schemes
Markets expected to remain volatile
Divergence between Value & Growth &
probable special situations opportunities
Smallcap valuations reasonable post
recent corrections
Mid cycle. Recommend accumulating
equities
Valuations (Repo minus YTM) attractive
RECAP
.
5
6. AA S S E T M A N A G E M N T
Growth of ICICI Prudential Asset Allocator Fund
(FoF)
.
ICICI Prudential Asset
Allocator Fund (FoF)
began its journey with
an AUM of 6.7 Crs in
Jan’19 and closed at
6,002 Crs in Dec-19
Data as of Dec 31, 2019. Source: MFI Explorer. The AUM movement is illustrated since the scheme’s re-positioning i.e. Feb 4, 2019. MFI Explorer is a tool provided by ICRA Online Ltd. For their standard disclaimer please visit
http://www.icraonline.com/legal/standard-disclaimer.html. ICICI Prudential Asset Allocator Fund (FoF) (erstwhile ICICI Prudential Advisor Series - Conservative Fund), is an ended fund of funds scheme investing in equity oriented schemes, debt oriented schemes
and gold ETFs/schemes. The scheme was re-positioned on Feb 4, 2019.
6
18
315
765
1,234
1,720
2,340
3,041
3,569
4,372
5,228
6,002
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Scheme AUM Movement (INR Crs – approx. figures)
7. AA S S E T M A N A G E M N T
2020 – Invest your way to Financial Freedom
through “ICICI Prudential FREEDOM SIP”
.
Receive Your Monthly Payout through SWPGrow Your Wealth through SIP
Switch to Target
Scheme
SIP – Systematic Investment Plan, SWP – Systematic Withdrawal Plan. ICICI Prudential Freedom SIP is an optional feature offered by ICICI Prudential AMC. This feature does not in any way give assurance of the performance of
any of the Schemes of ICICI Prudential Mutual Fund or provide any guarantee of withdrawals through SWP mode. Freedom SIP allows investors to switch the SIP investments to a target scheme, post completion of the SIP tenure
& monthly SWP will continue from the target scheme. 7
9. Global Indices Performance in CY2019
9
Germany - DAX Index; China - SSE Composite Index; France - CAC 40 Index; Japan - Nikkei; Eurozone - Euronext 100; Hong Kong - HangSeng; US - Dow Jones; Singapore - Strait Times; Russia - RTS Index; Indonesia - Jakarta Composite Index; U.K. - FTSE; South Korea - Kospi;
Brazil - Ibovespa Sao Paulo Index; Indonesia – Jakarta Composite Index; Switzerland – Swiss Market Index; Taiwan – Taiwan Stock Exchange Corporation; India – S&P BSE Sensex; Returns in % terms. GDP – Gross Domestic Product. Data Source: MFI & ACEMF; Returns are
absolute returns for the index calculated between December 31, 2018 – December 26, 2019. Past performance may or may not be sustained in future. Map source: mapchart.net.Map not to scale. This map has been used for design and representational purpose only, it does not
depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India. MFI Explorer is a tool provided by ICRA Online Ltd. For their standard disclaimer please visit http://www.icraonline.com/legal/standard-
disclaimer.html. Source of US GDP data: Bureau of Economic Analysis (US Dept. of Commerce).
.
44.0
27.5 27.2 26.0
23.4 23.2 22.7 20.6 19.5
14.1 13.4
7.8 7.7
5.0
2.0
0
10
20
30
40
50
Russia
France
Switzerla
nd
Germany
Taiwan
Brazil
US
China
Japan
India
UK
Hong
Kong
South
Korea
Singapore
Indonesia
Returns(%)
Returns Performance - 2019
10. US Fed’s Double Tightening and Global Growth
US Fed’s double tightening (rate hike until Dec-18 + Balance Sheet Contraction until July-19),
squeezed global liquidity thereby hampering Global growth
Source: Edelweiss Securities Ltd. Data as of Sep 30, 2019. DM – Developed Markets, EM – Emerging Markets. IIP – Index of Industrial Production, MMA – Monthly Moving Average
3700
3900
4100
4300
4500
1.10
1.40
1.70
2.00
2.30
2.60
Sep 17 Mar 18 Sep 18 Mar 19 Sep 19
(USDBn)
(%)
US Fed Rate Hike & Balance Sheet Expansion
Fed funds rate Fed Balance Sheet - RHS
1
4
7
10
(2)
0
2
4
Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19
(3MMA,%YoY)
(3MMA,%YoY)
Global growth has hit lows
World IIP DM IIP EM IIP (RHS)
.
10
12. Largecap, Midcap, Smallcap Returns
S&P BSE Sensex
Closed at 41,164
S&P BSE Midcap
Closed at 14,801
S&P BSE Smallcap
Closed at 13,435
28%
6%
14%
0%
5%
10%
15%
20%
25%
30%
2017 2018 2019
S&P BSE Sensex Returns
48%
-13%
-4%
-20%
0%
20%
40%
60%
2017 2018 2019
S&P BSE Midcap Returns
60%
-24%
-9%
-40%
-20%
0%
20%
40%
60%
80%
2017 2018 2019
S&P BSE Smallcap Returns
Smallcaps and Midcaps continued their underperformance relative to Largecaps for the second year in a row
Source: BSEIndia; Data as of Dec 26, 2019; Past performance may or may not be sustained in future
.
12
13. Rate sensitive sectors performed well during 2019
25 23 22 21 18
13 12
10
-2 -2 -4 -5
-10 -11 -12 -13-16
-6
4
14
24
34
Realty
Energy
CD
Bankex
Finance
Telecom
IT
Oil&Gas
FMCG
Power
HC
BasicMat.
CG
Auto
Metal
Infra
Returns(%)
Sector Performance
Realty and Energy
were leaders
whereas Metals
and Infra were
major laggards
All indices are of S&P BSE and carry the prefix of S&P BSE; Abbreviated CD - S&P BSE Consumer Durables; CG - S&P BSE Capital Goods; FMCG - S&P BSE Fast Moving Consumer Goods; HC - S&P BSE Health Care; Infra. - S&P BSE India
Infrastructure; IT - S&P BSE Information Technology, NBFC – Non-banking Finance Companies. Data Source: MFI, ACEMF ; Returns are absolute returns for the TRI variant of the index calculated between December 31, 2018– December 27,
2019; Past performance may or may not be sustained in future. The sectors)/stock(s) mentioned in this slide do not constitute any recommendation and ICICI Prudential Mutual Fund may or may not have any future position in this
sector(s)/stock(s). MFI Explorer is a tool provided by ICRA Online Ltd. For their standard disclaimer please visit http://www.icraonline.com/legal/standard-disclaimer.html
.
13
14. FPI & DII Flows in 2019
FPI flows bounced back sharply post last year’s dismal flows
-30,000
-10,000
10,000
30,000
50,000
Jan-Mar2017
Apr-Jun2017
July-Sep2017
Oct-Dec2017
Jan-Mar2018
Apr-Jun2018
July-Sep2018
Oct-Dec2018
Jan-Mar2019
Apr-Jun2019
July-Sep2019
Oct-Dec2019
FPI & DII Net Flows (in Rs. Crs)
FPI Net Flows (in Rs. Crs) DII Net Flows (in Rs. Crs)
Source: NSDL, BSEIndia; Data as of Dec 26, 2019; FPI – Foreign Portfolio Investors; DII – Domestic Institutional Investors
.
14
16. Unicorn Valuations
UNICORN IS A PRIVATELY HELD START-UP
COMPANY VALUED AT $1 BILLION
Many Unicorns in
the Venture Capital
space collapsed
recently
Source: Pitchbook
.
16
17. Japanization of Interest Rates
Total outstanding debt globally in negative yield zone is close to US $ 11 Trillion out of US $ 55 Trillion
5
7
9
11
13
15
17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
OutstandingDebt($Tn)
Negative Yield ($ Trillion)
Source: Reuters, Data as of Dec 23, 2019
.
17
18. Passive Edge
The unravelling of stock pickers accelerated after the financial crisis, when investors flocked to low cost index funds.
More money is now being managed in passive than active US Equity Funds
Source: Reuters, Data as of Aug-19
.
4.1
4.2 4.2
4.4
4.1
4.3
4.4
4.2
3.9
4
4.1
4.3
4
4.3
4.4
4.3
3.8
3.9
4.0
4.1
4.2
4.3
4.4
4.5
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19
Active Vs. Passive Stock Funds AUM ($ Tn)
Active Stocks Funds ($ Trillion) Passive Stock Funds ($ Trillion)
18
22. Economy-Market Divergence
.
22GDP – Gross Domestic Product. Data as of Sep 30, 2019. Source: Edelweiss Securities, NSE
4%
5%
6%
7%
8%
8,000
9,000
10,000
11,000
12,000
13,000
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
GDP
Nifty50Index
Nifty 50 Vs. GDP growth
Nifty 50 GDP
2%
4%
6%
8%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
Sep-19
GDP
Nifty50EarningsGrowth
Nifty 50 Earnings Growth Vs. GDP growth
Nifty Earnings Growth Real GDP Growth
Currently, markets do not represent the economy correctly. This divergence has existed since the last 3 years
23. Divergence –
Emerging Markets Vs. Developed Markets
.
Significant divergence between Emerging and Developed Markets clearly indicates investor preference for less risky assets
113
155
70
90
110
130
150
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Emerging Market Vs. Developed Market Indices
Emerging Markets Developed Markets
23
For Emerging Markets, MSCI Emerging Market Index Values have been considered. For Developed Markets, S&P 500 Index values have been considered. Prices have been re-based to 100. Data as of December 23, 2019. Source: Reuters.
Past performance may or may not sustain in future
24. Economic Divergence –
Consumption & Savings
Data is Calendar year data. Source: Kotak Securities
.
India’s growth in the
last 5 years was
fuelled primarily by
consumption which
was supported by
leverage and not
income growth
58
57
56
56 57
56
55
56 56
58
58
59
59
59
59
24 24
23
23
24
26
24 24
22
20
20
18
17 17
17
14
16
18
20
22
24
26
28
54
55
56
57
58
59
60
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019E
Private Consumption Vs. Household Savings
Private consumption/GDP (%, LHS) Household savings/GDP (%, RHS)
24
25. Index Divergence –
All time high markets Vs. Declining Share Prices
.
25
Baring few growth stocks, markets have broadly underperformed.
This makes ‘VALUE’ as a theme relatively attractive to ‘GROWTH’
43.1%
20.9%
6.2%
0.7%
-4.3%
-23.2%
-56.5%-60%
-40%
-20%
0%
20%
40%
Top10
Top11-20
Top21-50
Top51-100
101-250
251-500
>=501
Marketcap Change
(Since Feb 2018 till Dec 2019)
Nifty 50 Index gained 1409 points during the year out of which
below 10 stocks added 1652 points and the rest 40 stocks
gave negative contribution
Company Name
Returns Contribution
in Points
Reliance Industries Ltd 404
ICICI Bank Ltd 296
HDFC Bank Ltd 250
HDFC Ltd 177
Kotak Mahindra Bank Ltd 144
Bharti Airtel Ltd 87
Bajaj Finance Ltd 87
TCS Ltd 86
Infosys Ltd 68
Axis Bank Ltd 53
Total Universe considered is 1690 listed stocks. Stocks are arranged in descending order as per Marketcap. Marketcap change is
considered for period between 28-Feb-18 and 20-Dec-19. Source: Capitaline.. Past performance may or may not sustain in future
Universe considered is Nifty 50 Index. Source: Capitaline. Returns are calculated between 1-Jan-2019 and 25-Dec-
2019. Past performance may or may not sustain in future.
The stocks mentioned in this slide do not constitute any recommendation and ICICI Prudential Mutual Fund may or may not have any future position in these stocks
26. Index Divergence –
Value Vs. Growth
P/E – Price to Earnings, P/B: Price to Book. Ex – Excluding. Source : NSE, Capitaline, Data as of December 23, 2019. Past performance may or may not sustain in future
.
26
4.9
3.9
3.8
4.0
4.2
4.4
4.6
4.8
5.0
5.2
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
P/B(x)
Nifty 50 Index –
Nifty Top 10 P/B Vs. Nifty Bottom 40 P/B
Nifty 10 Ex Bottom 40 Nifty 40 Ex Top 10
P/E – Price to Earnings, P/B: Price to Book. Ex – Excluding. Source : NSE, Capitaline, Data as of December 23, 2019. Past performance may or may not sustain in future
38.5
26.3
20
25
30
35
40
45
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Nifty 50 Index –
Nifty Top 10 P/E Vs. Nifty Bottom 40 P/E
Nifty 10 Ex Bottom 40 Nifty 40 Ex Top 10
The narrow rally of Nifty 50 Index led to the polarization in index valuations
27. 27Data as of December 2019. Source: ICICI Securities. Largecaps: top 100 Mcap companies, Midcaps – Next 150, Smallcaps – Next 250. Only profit making companies are considered.
0.6%
2.3%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Earnings Yield Spread of Mid and Smallcaps over Largecaps
Midcap Smallcap
Smallcaps are currently offering better Margin of Safety in terms of risk spread over Largecaps
Marketcap Divergence –
Earnings Yield Spreads over Largecaps
.
28. 28
Marketcap Divergence –
Largecap, Midcap & Smallcap
Top 100 indicates top 100 companies by market capitalization,101-250 indicates next 150 companies by market cap and above 250 indicates 251st onwards by marketcap. Source : Edelweiss Securities, Data as of December 31,2019
Share in the Overall Market Cap (%)
Index 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Mar-19 Jun-19 Nov-19 Dec-19
Top-
100
79 75 74 71 79 77 78 79 78 81 75 74 72 65 70 73 73 73.8 73.7
101-
250
11 12 12 13 11 12 13 13 14 13 14 15 15 16 16 16 16 15.7 15.8
Above
250
11 13 14 16 10 11 9 8 8 6 10 11 14 18 14 12 11.7 10.5 10.5
The recent correction in Smallcap space has led to Marketcap divergence in terms of valuations
.
29. Marketcap Returns Divergence –
Largecap, Midcap and Smallcap
Over the last 2 years, there has been a significant divergence in returns posted by Large, Mid and Smallcaps
13
(22)
(39)
(50)
(40)
(30)
(20)
(10)
0
10
20
Jan-18
Feb-18
Apr-18
May-18
Jul-18
Sep-18
Oct-18
Dec-18
Feb-19
Mar-19
May-19
Jul-19
Aug-19
Oct-19
Dec-19
%Returnssince1-Jan-18
Largecap Vs. Midcap Vs. Smallcap Returns (1-Jan-18 to 10-Dec-19)
Nifty 50 Index Nifty Midcap 100 Index Nifty Smallcap 100 Index
.
29
Source: Edelweiss Alternative Research. Data as of Dec 10, 2019. Data in % terms. Past performance may or may not sustain in future.
31. Positive Catalysts
Ample Liquidity –
Global & Domestic
Closure of US-
China Phase
one trade deal
Recent
Government
Reforms
Earnings
Recovery
Receding
Agrarian Crisis
.
31
32. Increasing Global Liquidity
0
20
40
60
80
100
Dec11
Dec12
Dec13
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
(%)
Most broad-based
easing since
Lehman crisis
% OF CENTRAL BANKS EASING
(1,000)
(500)
0
500
1,000
1,500
2,000
2,500
2011
2012
2013
2014
2015
2016
2017
2018
2019E
2020E
Net change in balance sheet of Developed Market
central banks, calendar year-ends, 2011-20E (US$ bn)
Fed ECB BoJ Total
CHANGE IN BALANCE SHEETS OF DEVELOPED MARKETS
.
32Central Banks Policy easing data as of Dec-19. Source: Edelweiss Securities. Developed Market Central Banks Data as on Calendar year ends. Source: Kotak Securities. ECB – European Central Bank, BoJ – Bank of Japan
33. Domestic Liquidity Aided By Lower Interest Rates
Data as of Dec-19. Source: Kotak Securities, RBI, SLF – Standing Liquidity Facility, MSF – Marginal Standing Facility, LAF – Liquidity Adjustment Facility
(3,000)
(2,000)
(1,000)
0
1,000
2,000
Dec-18
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Total Liquidity in the system (INR Bn)
Net LAF Net term repo
Others (MSF/SLF) Total liquidity deficit
6.50
6.25
6.00
5.75
5.40
5.15
5.00
5.30
5.60
5.90
6.20
6.50
Dec-18
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Repo Rate (%)
.
33
34. US-China Trade War Timeline &
Phase 1 deal closure
Hostility between US
and China continues
with counter tariffs &
China blaming US for
stalled trade negotiations
The 2 sides mutually
agree to re-start
negotiations on the
sidelines of G20
Devaluation of
Yuan by China
irks the US.
The US announces
likelihood of US-
China Phase 1
trade deal
US-China
negotiators agree
on trade clauses
The phase 1 trade
deal is implemented
just before the next
scheduled tariff hike
The US announces
likelihood of US-
China Phase 1
trade deal
US-China
negotiators agree
on trade clauses
Hostility between
and China continu
with counter tariff
China blaming US
stalled trade negotia
Devaluation of
Yuan by China
irks the US.
The 2 sides mutual
agree to re-start
negotiations on th
sidelines of G20
The phase 1 trade
deal is implemente
just before the nex
scheduled tariff hik
May
2019
Source: Business Insider
.
June
2019
August
2019
October
2019
November
2019
December
2019
34
35. Recent Reforms
REFORMS
Corporate Tax Cut measures introduced in line with global peers (a step towards global
standardization)
Major positive overhaul in few sectors including NBFC, Telecom, Housing
Bank books cleanup activity a positive reform. Bank book cleanup activity initially led to a
jump in NPL ratio which is now declining
Move to reduce Government stake in major public sector entities to help reduce
financial burden
Implementation of GST an efficient version of indirect tax system
Source: CLSA. NPL – Non performing loans. NBFC – Non Banking Financial Company, GST – Goods and Services Tax
.
35
36. Earnings Recovery
Data as of Q2 FY20. Earnings growth is represented by PAT growth. Source: Edelweiss Securities
There has been an incremental pick-up in earnings post corporate tax cuts
20% 18%
25%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nifty Earnings growth
.
36
37. Receding Agrarian Crisis
.
37
Increase in food prices may keep deflation in
check leading to revival in rural demand
Centre + States spend on rural have
incrementally improved
Sufficient water levels due to good
monsoons to boost farm produce
-1.7
6.9
16.9
-6.7
6.0
-25
-20
-15
-10
-5
0
5
10
15
20
25
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
(%, yoy)
India food inflation (%) Global food Price
4.1
7.6
9.6
10.8
12.3
5%
14%
27%
12%
14%
0%
5%
10%
15%
20%
25%
30%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
FY14
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
Amtin(Tn)
Rural Thrust
Centre + states spend on rural (Rs. tn)
Growth (%, yoy)
53
67
62 61
86
0
10
20
30
40
50
60
70
80
90
100
Nov'
FY16
Nov'
FY17
Nov'
FY18
Nov'
FY19
Nov'
FY20
Water availability in reservoirs
(% of total storage)
Source: Spark Capital
38. Negative Catalysts
GLOBAL FACTORS DOMESTIC FACTORS
• US-China trade war escalating
• US Election outcome
• Hong Kong unrest, Brexit and Oil
price volatility due to possible
tensions between Saudi and Iran
• Fiscal deficit concerns
• Credit concerns – Contagion Effect
• Revenue collection uncertainty
• Pace of Growth (GDP) pickup
• Corporate Earnings Trajectory
GDP – Gross Domestic Product
.
38
40. ‘VCTS’ Back To The Neutral Zone
With Valuations being fully priced in, Business Cycle in low to mid phase and moderating flows, the framework
suggests that markets are in accumulation phase. We recommend accumulating equities in a staggered manner
P/E – Price-to-Earnings; P/B – Price to Book Value Ratio; MF – Mutual Funds; FPI – Foreign Portfolio Investors; GDP – Gross Domestic Product, SIP – Systematic Investment Plan, FII – Foreign Institutional Investor
.
40
VALUATIONS –
FULLY PRICED IN
CYCLE – Quality: High;
Non-Quality – Low to Mid
TRIGGERS –
WATCHFUL
SENTIMENTS –
NOT EUPHORIC
Market Valuations Business Cycle Triggers Sentiments
• High P/E
• P/B – Above Average
• Moderate Marketcap
to GDP
• Moderate Capacity
Utilisation
• Low Credit Growth
• Flows moderating
• SIP Flows steady
• FII Flows picking up
• Union Budget 2020-
2021
• Real Estate Debt De-
leveraging
• Credit growth pick-up
• Govt. Reforms
41. In-House Equity Valuation Index:
Back to the Neutral Zone
Equity Valuation index is calculated by assigning equal weights to Price-to-Earnings (PE), Price-to-Book (PB), G-Sec*PE and Market Cap to GDP ratio. G-Sec – Government Securities. GDP – Gross Domestic Product; Data as of Dec 31, 2019
The Valuation Index
indicates that
valuations are in a
neutral zone and hence
it is a good time to
remain constructive on
equities with a long
term perspective
41
50
70
90
110
130
150
170
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Invest in Equities
Aggressively invest in Equities
Neutral
Incremental Money to Debt
Book Partial Profits
112.67
42. Valuations – P/E and P/B Above 10-yr Average
Source: NSE India; Data as of Dec 24, 2019; P/E – Price to Earnings; P/B – Price to Book Value ; SD – Standard Deviation
28.6
12
14
16
18
20
22
24
26
28
30
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
P/EValuations
Nifty P/E Valuations
Nifty 50 PE Average -1 SD +/- 1SD
3.79
2.0
2.5
3.0
3.5
4.0
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Nifty50P/BRatio
Nifty 50 P/B ratio
Nifty 50 P/B ratio Average -1 SD +/- 1SD
42
43. Valuations – Marketcap To GDP
Source: BSE, RIMES, Morgan Stanley Research; Data as of Nov 2019; GDP - Gross Domestic Product
93%
80%
77%
70%
80%
90%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Marketcap to GDP ratio below 100
2017 2018 2019
The Marketcap to GDP
ratio has corrected over
the last 3 years and is
contained well below
100. This highlights that
valuations are not in
euphoric zone
43
44. Business Cycle – Capacity Utilisation
0.5
68.9
68
70
72
74
76
78
80
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
(%YoY)
Gross capital formation (% YoY) Capacity utilisation % (RHS)
Gross Capital
Formation and
Capacity
utilisation are at
the bottom. This
highlights that the
economy is in mid
to low phase
Source: RBI, JM Financial, Data as of September 2019
44
45. Business Cycle –
Credit Growth lagging Deposit Growth
Source: RBI, Kotak Securities; Data as of Dec 6, 2019
10%
15%
8%
4%
6%
8%
10%
12%
14%
16%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Credit Growth
2017 2018 2019
3%
9%
10%
2%
4%
6%
8%
10%
12%
14%
16%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Deposit Growth
2017 2018 2019
45
46. We are slowly approaching a better time to invest and hence, it may be a good time to add equities at this juncture
Cycle
.
46
BURST BORING BUBBLEBOOM
• Lehman Crisis 2008
• Dot com burst – 2001
BETTER TIME
TO INVEST
• Equity Markets
currently and in
2012
• Real Estate in 2013
• e-Commerce in
2014
• Bitcoin in 2017
• Equity in 2007 &
2000
• Equity Markets in
2011 & 2017
• Equity Markets in
2013-16
• Equity Markets in
2009-11
• Debt Accrual
Schemes in 2019
47. Triggers For 2020
UNION BUDGET
REAL ESTATE DEBT
DE – LEVERAGING
CREDIT GROWTH
PICK-UP
GOVERNMENT
REFORMS
2020
TRIGGERS
.
47
48. Sentiments
Domestic Mutual Fund Flows (Equity)
have been moderating
0
500
1,000
1,500
2,000
2,500
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Domestic Mutual fund equity flows (in Rs bn)
2019
2018
2017
SIP Flows as a % of total equity flows have gone up
0%
20%
40%
60%
80%
100%
120%
140%
160%
20
30
40
50
60
70
80
90
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
SIP (Rs. Bn) SIP as % of Total
Source: Morgan Stanley. Data as of December 23, 2019.
48
The increase in SIP flows can be attributed to midcaps and smallcaps. However, midcap and smallcap performance has
been muted for the last couple of years which may lead to volatility in the flows going forward
50. Investment Themes For 2020
SIP – Systematic Investment Plan, STP – Systematic Transfer Plan
ECONOMY-MARKET DIVIDE
Current Market rally is driven by select Growth stocks making Value as a theme attractive
MARKETCAP DIVERGENCE
Smallcaps have corrected significantly in the recent past whereas Largecap valuations are
above historic averages. This makes Smallcaps attractive
VOLATILITY
Volatility is expected to continue given the current Global and Domestic economic scenarios.
Aim to manage volatility through Asset Allocation Schemes
MARKET VALUATIONS
With market valuations fully priced in and business cycle in mid to low phase,
we believe it is a good time to accumulate equities in a staggered manner through SIP/STP
.
50
51. Summary Equity Outlook – 2020
• Union Budget, Real Estate debt de-leveraging and Credit growth pick up key triggers for the
markets
• Constructive on equities and recommend accumulating equities in a staggered manner through
SIP/STP
• Stark divergence in Growth and Value themes. Value and Special Situations theme expected to
play out well
• Positive on Smallcap post recent underperformance and reasonable valuations. Multicap space
can be looked at from a long term perspective
• Asset Allocation schemes may be considered to address near term volatility
• Continue to remain watchful of de-escalation of US-China trade war, US Election outcome,
Central banks monetary easing regime and corporate earnings trajectory.
51
52. Equity & Hybrid Scheme Recommendations for 2020
DIVERGENCE ACCUMULATION
VOLATILITY
VALUE VS. GROWTH &
MARKETCAP DIVERGENCE
Marketcap Divergence –
• ICICI Prudential Smallcap Fund
TO BENEFIT FROM VOLATILITY
FOR LONG TERM
WEALTH CREATION
Value and Special Situation Theme –
• ICICI Prudential Value Discovery Fund
• ICICI Prudential India Opportunities Fund
SIP/STP in
• ICICI Prudential Smallcap Fund
• ICICI Prudential Multicap Fund
• ICICI Prudential Balanced Advantage Fund
• ICICI Prudential Asset Allocator Fund (FoF)
.
52
53. Our Asset Allocation Bouquet
.
ICICI Prudential Regular
Savings Fund*
ICICI Prudential Equity
Savings Fund
CICI P d i l
15 - 50%
ICICI Prudential Balanced
Advantage Fund
30 - 80%
ICICI Prudential
Multi-Asset Fund
ICICI P d i
10 - 80%
ICICI Prudential Asset Allocator Fund (FoF)*^
ICICI Prudential Equity
& Debt Fund
65 - 80%
10 - 25%
A All
0-100%
The asset allocation and investment strategy will be as per the Scheme Information Document, *These schemes will attract debt taxation. ^Investors may please note that they will be bearing the recurring expenses of this Scheme in addition
to the expenses of the underlying Schemes in which this Scheme makes investment.
53
54. Our SIP Recommendations
.
ICICI Prudential
India Opportunities
Fund
(An open ended equity
scheme following
special situations theme)
ICICI Prudential
Value Discovery
Fund
(An open ended equity
scheme following a
value investment
strategy)
ICICI Prudential
Smallcap Fund
(An open ended equity
scheme predominantly
investing in smallcap
stocks)
ICICI
Prudential
Midcap Fund
(An open ended equity
scheme predominantly
investing in mid cap
stocks)
ICICI Prudential
Multicap Fund
(An open ended equity
scheme investing
across large cap, mid
cap, small cap stocks)
54
55. FIXED INCOME OUTLOOK
55
Carrying forward our theme in the Fixed Income space as well, we are currently
witnessing diverging trends like yields of Gsec/AAA Vs. AA/A, Credit Growth Vs.
Deposit growth, CPI Inflation Vs. Food Inflation etc. In the subsequent slides we
will try to cover these aspects highlighting our theme for 2020
56. Rear-View Mirror: Glancing Through 2019
(Fixed Income)
6.0
6.5
7.0
7.5
8.0
Jan/19
Feb/19
Mar/19
Apr/19
May/19
Jun/19
Jul/19
Aug/19
Sep/19
Oct/19
Nov/19
Dec/19
India10-YrG-SecYield(%)
Govt. Infuses
109 Bn in 4
PSU Banks
Interim Budget
Presented
RBI approves
interim dividend
of INR 280Bn
RBI to inject
liquiditythrough
USD/INR Swap
RBI cuts rateby
25 bps to 6%
General
electionsresult
RBI shifts policy stance
to accommodative, cuts
repo rate by 25bps
10 Year Gsec hits
lowest point since
demonetisation
Corporate Taxcut
announcedby theFM
Unconventional
rate cutof 35bps
by the RBI GDP growth
slumps to 4.5%,
RBI announces
Operational
Twist
Source: Morgan Stanley, Data as of Dec 27,2019. RBI – Reserve Bank of India, FM – Finance Minister, NBFC – Non Banking Financial Company, GDP – Gross Domestic Product, IBC – Indian Bankruptcy Code. PSU – Public Sector Undertaking
NBFCs came
undertheambitof IBC
.
56
57. OUR FIXED INCOME OUTLOOK CAPTURES
Divergence 2019 Vs. 2020
Case for Short/ Medium Duration Schemes
Case for Accrual Schemes
Product Recommendations
.
57
59. Our View –
2019 Monetary Stimulus to 2020 Fiscal Stimulus
YEAR GONE BY
FISCAL
STIMULUS
GOING FORWARD
FISCAL
STIMULUS
MONETARY
STIMULUS
MONETARY
STIMULUS
Monetary Stimulus was in the driving seat in 2019 with:
• 135 bps rate for CYTD 19
• Ample Liquidity
• Accommodative Stance
We believe that monetary stimulus will play the
supporting role and fiscal stimulus will take the
driving seat in 2020. However, fiscal deficit
remains a constraint.
STIMULUS STIMULUS STIMULUSSTIMULUS SULUS
.
60. 2019 Liquidity Deficit to 2020 Surplus Liquidity
426.1
398.3
448.6
390
400
410
420
430
440
450
460
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
-400000
-300000
-200000
-100000
0
100000
200000
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Interbank Liquidity (In Crs.)
Deficit
Surplus
In 2019, RBI reserves
were highest ever due
to dollar purchases
RBI Forex Reserves (In US$ Bn.)
Dec-19
RBI’s liquidity stance and forex intervention has kept the liquidity abundant in the system.
This has kept downward pressure on the short term rates.
.
60Source Morgan Stanley Research. Data as of Dec 25, 2019, Forex – Foreign Exchange
61. 2019 Deflation to Reflation in Food Prices
Source: CRISIL Research, Data as on30-Nov-2019
0%
1%
2%
3%
4%
5%
6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Inflation Data
Core CPI Food inlfation Fuel and light inflation Headline CPI
Owing to Food
Inflation, the
Consumer Price Index
(CPI) numbers are at
its 40 months high as
of Nov-2019. Food
prices, due to its
transitory nature, are
expected to
normalize
.
61
62. 2019 Low to 2020 Moderate – GST Collection
Source : Spark Research, GST – Goods & Services Tax, Data as on 30-Nov-2019
800
850
900
950
1000
1050
1100
1150
Sep/17
Nov/17
Jan/18
Mar/18
May/18
Jul/18
Sep/18
Nov/18
Jan/19
Mar/19
May/19
Jul/19
Sep/19
Nov/19
GST Collection (Rs. Bn)
0
1
2
3
4
5
6
7
8
9
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Total filings (Mn.)
GST revenue has started to pick up and filings remained stable. However, the same needs to be monitored for establishing a growth trend
.
62
64. Low Real
Returns
Opportunistic &
Trading exposure
Most Favoured Space :
Better Accrual
+Opportunistic Capital
Appreciation
Ideal for Short
term parking with
higher exposure
to Corporate
bonds
Bird’s Eye View of Fixed Income Space
Divergence between Short Term Rates and Long Term Rates
Yield Curve – Sovereign and Corporate (In %)
.
KEY TAKEAWAY:
Accrual/spread assets
main theme to play.
Capital Appreciation
theme should be played
opportunistically.
We prefer 2-5 Yr
segment due to probable
high total returns
5.0
5.5
6.0
6.5
7.0
7.5
8.0
3 Mnths 6 Mnths 1 Yrs 3 Yrs 5 Yrs 10 Yrs 13 Yrs 15 Yrs
Corporate Bond - CP and AAA Government Security - Tbill and Gsec
64Source : RBI, CCIL India, CRISIL Research, Data as of Dec 25, 2019
65. Fiscal Concerns may put pressure
on the Long End Yields
.
Increased borrowings
from Central Govt., State
Govt. and Central PSU
Enterprises (Total Gross
Deficit) has heightened
fiscal concerns for India.
This may keep yields at
the longer end of the
curve volatile
65
Source: Kotak Research, E – Estimates, GFD – Gross Fiscal Deficit, PSU – Public Sector Undertaking. GDP – Gross Domestic ProductData as of Dec 25, 2019
2.5
6.0
6.5
4.8
5.9
4.9
4.5
4.1 3.9
3.5 3.5 3.4
3.81.5
2.4
2.9
2.1
1.9
2.0
2.2 2.6 3.1 3.5 3.1 2.9
3.0
1.1
1.7
1.5
1.1
1.3
1.3
0.8 1.0
1.4 1.6 1.8 2.6 2.2
5.2
10.1
10.9
7.9
9.2
8.2
7.4 7.7
8.4 8.5 8.4
8.9 9.0
0
2
4
6
8
10
12
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E
Gross Fiscal Deficit as a % of GDP
Central GFD State GFD Central PSU borrowing Total GFD Fiscal Deficit
66. In order to curb the steepening of the yield curve the RBI
resorted to “Operation Twist”
Term Premium - Spread between Government security yields
(10 Yr/ 1 Yr) at the highest levels since 2010
RBI in Dec-2019 introduced “Operation Twist” to reduce term premium.
This has made the case for tactical investing at the long end of the curve.
Month
OMOs by RBI (Rs. Bn)
Purchase Sale Objective
Jan-19 400 -
Adding Liquidity
Feb-19 350 0.2
Mar-19 375 0.3
Apr-19 0.4 0.1
May-19 250 -
Jun-19 275 -
Sep-19 7.55 -
Oct-19 0.55 0.05
Dec-19 200 153 Reducing term premium
Operation Twist
RBI OMOs to Operation Twist
.
Source: Morgan Stanley. Data as of Dec 30, 2019. OMO – Open Market Operations
66
67. Lower end Yields – Real Returns low
.
67
5.0
5.2 5.3
6.3
6.4
6.6
8.0
7.7
5.2
5.9
6.3
6.8
7.1
7.5 7.6 7.6
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
3 Mnths 6 Mnths 1 Yrs 3 Yrs 5 Yrs 10 Yrs 13 Yrs 15 Yrs
Interest Rates (%)
Government Security - Tbill and Gsec Corporate Bond - CP and AAA CPI Inflation
Positive real returns
Inflation
Extreme short end
(less than 3 months),
due to ample liquidity
has moved into lower
real returns territory.
Hence moving up the
yield curve is
recommended
Low real returns
Source: Kotak Research, RBI, Data as on 25-Dec-2019, Inflation data as on Nov-2019. Inflation for Nov-19 (5.5%) is considered as the base reading for the graph
68. Summary –
Case for Short to Medium Duration Schemes
.
68
• Recommend combination of short term assets and long term assets with a portfolio maturity
range of 2-5 Years
• Focus should be on spread assets while Capital Appreciation strategy would be more
opportunistic in approach
• Short and medium end of the curve may deliver higher risk adjusted returns
• Fiscal concern and inflation in the first half may keep the longer end volatile
• Hence, use the longer end of the yield curve for trading strategy, as the rate cuts might be
opportunistic
• Extreme short end (less than 3 months), due to ample liquidity may give lower real returns
69. Case for Accrual Schemes
Current Scenario
and historical
trend of rate
transmission
Lack of
transmission
Case for
investment
in accrual
schemes
Why ICICI
Prudential
Accrual Funds?
.
69
70. Current Scenario
.
70
• RBI has delivered 135 bps rate cut in CY'19
• Rate Transmission channels are broken due to credit concerns, NBFC slowdown and
crowding-out effect
• Banks Marginal Cost of Lending Rates (MCLR) continues to remain elevated, which has
further hampered the rate transmission process
• Despite the rate cuts, the corporate bond rates continue to remain elevated
• Also, high small savings rate have been a deterrent for banks to reduce deposit rate
even post rate cuts
71. Divergence –
Sharp Policy Rate Cuts But Transmission Limited
.
71
-135
-40 -39
5
-160
-140
-120
-100
-80
-60
-40
-20
0
20
Repo Rate MCLR WALR - fresh rupee
loans
WALR - outstanding
rupee loans
InBasisPoints(bps)
Monetary Transmission from Feb 2019 till Oct 2019 (In Bps)
Source: UBS Research, MCLR – Marginal Cost of Lending Rate, WALR – Weighted Average Lending Rate, Data as on 31-Oct-2019
Despite the Monetary Policy
Committee (MPC) reducing repo
rates by 135bps, the weighted
average lending rate (WALR) on
fresh rupee loans of
commercial banks declined
merely by around 40bps while it
increased by 5bps for WALR on
outstanding rupee loans during
the same period
72. Transmission – Historical Trend
.
72
25
-125
-50
-25
50
-135
-7
-63 -55 -52
36
-44
-300
-250
-200
-150
-100
-50
0
50
-150
-130
-110
-90
-70
-50
-30
-10
10
30
50
CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019
Monetary Transmission
Repo Rate (Y-o-Y absolute bps) WALR (Y-o-Y absolute bps) : RHS
Source: UBS Research, WALR – Weighted Average Lending Rate, Data as on 31-Oct-2019
Despite the repo rate being
reduced from 6.5% in Jan
2019 to 5.15% till date
(135bps), the WALR reduced
merely from 9.97% in Jan
2019 to 9.53% till date i.e.
44bps. On an absolute basis,
the transmission has been
the least in last 5 years
73. Transmission – Historical Trend
.
73
Spread of Banks Weighted Average Domestic Term Deposit Rate (WADTDR) and Weighted Average Lending Rate (WALR)
over Repo in October 2019 has been the highest in the last 5 years
Date WADTDR (%) Repo Rate (%)
Difference
(bps)
Sep-14 8.7 8.0 70
Mar-15 8.6 7.8 82
Sep-15 8.0 7.3 78
Mar-16 7.7 6.8 98
Sep-16 7.4 6.5 91
Mar-17 7.0 6.3 72
Sep-17 6.7 6.0 65
Mar-18 6.7 6.0 67
Sep-18 6.8 6.5 27
Mar-19 6.9 6.3 64
Sep-19 6.8 5.4 144
Oct-19 6.8 5.2 160
Date WALR (%) Repo Rate (%)
Difference
(bps)
Sep-14 11.5 8.0 352
Mar-15 11.1 7.8 332
Sep-15 10.8 7.3 352
Mar-16 10.5 6.8 372
Sep-16 10.4 6.5 385
Mar-17 9.7 6.3 349
Sep-17 9.4 6.0 342
Mar-18 9.3 6.0 334
Sep-18 9.7 6.5 317
Mar-19 9.7 6.3 348
Sep-19 9.6 5.4 417
Oct-19 9.5 5.2 438
Source: Kotak Research, WALR – Weighted Average Lending Rate, Data as on 31-Oct-2019
74. Divergence –
Sharp fall in lending by Banks & NBFCs
.
74
(5,000)
0
5,000
10,000
15,000
20,000
25,000
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
1HFY19
1HFY20
Total credit to commercial sector (INR Bn.)
Banks NBFC-NDSI/HFC Other non-banks Foreign Total
Source: Kotak Research, 31-Sep-2019. NBFC-NDSI – Non Banking Financial Company Non Deposit Taking Systematically Important, HFC – Housing Finance Company
Post the credit crisis in 2019,
there has been a squeeze in
the flow of resources to the
commercial sector.
Incremental credit from
Banks and NBFCs have
declined in FY2020 owing to
risk aversion
75. Reasons for lack of transmission
NBFC Credit
Concerns
Flight for Safety
High rates of Small
Savings Schemes
(SSS)
Bank NBFC
.
75
76. Divergence between Corporate Bond Yields
and NBFC Yields
.
76
Source : Kotak Economic Research, Data as on25-Dec-2019. NBFC – Non Banking Financial Company
8.81
40.31
3.93
34.15
(10)
0
10
20
30
40
50
60
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
SpreadsbetweenNBFC&CorporateBonds
(%)
NBFC Spread over AAA & AA rated Corporate Bonds
1 year AAA NBFC-corporate bond (in bps) 5 year AAA NBFC-corporate bond (in bps)
Post Sep-18, NBFC
premiums over
corporate bonds have
gone up substantially on
the back of credit
concerns.
This resulted in the
slowdown in
transmission
77. Flight to Safety
.
77Source : RBI, Spark Research, Data as on25-Dec-2019. SLR – statutory Liquidity Ratio. The above data points represent current market position
4.2
-1.0
1.2
3.2
-3
-2
-1
0
1
2
3
4
5
Jun/16
Sep/16
Dec/16
Mar/17
Jun/17
Sep/17
Dec/17
Mar/18
Jun/18
Sep/18
Dec/18
Mar/19
Jun/19
Sep/19
Dec/19
Net liquidity (Rs tn) One of the major
bank’s corporate book
(46% of the total loan
book)
Mar-18 Sept-18 Mar-19 Sept-19
AAA 21% 24% 39% 36%
AA 22% 26% 25% 25%
A 16% 21% 14% 18%
Total A & above 60% 71% 78% 79%
BBB 10% 13% 10% 9%
Investment Grade 70% 84% 88% 88%
BB & Below 18% 9% 6% 7%
Unrated 13% 7% 6% 5%
Instead of lending, banks started parking money with RBI at reverse repo rate i.e. most of its incremental deposits have been
channelled towards SLR investments. Also, of what they have lent, A & above rated corporate bonds are 79% of such loans in
September 2019 over 60% in March 2018, majorly on the back of risk aversion
78. Big Thing About Small Saving Schemes
(SSS)
.
78
Index Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
(A) Small saving interest rate (average) 7.4% 7.4% 7.4% 7.7% 7.8% 7.7% 7.7% 7.7%
Post Office 5-year Recurring Deposit Account 6.9% 6.9% 6.9% 7.3% 7.3% 7.2% 7.2% 7.2%
Post Office 1-year Fixed Deposit Account 6.6% 6.6% 6.6% 6.9% 7.0% 6.9% 6.9% 6.9%
Public Provident Fund Account 7.6% 7.6% 7.6% 8.0% 8.0% 7.9% 7.9% 7.9%
National Savings Certificate 7.6% 7.6% 7.6% 8.0% 8.0% 7.9% 7.9% 7.9%
Kisan Vikas Patra 7.3% 7.3% 7.3% 7.7% 7.7% 7.6% 7.6% 7.6%
Sukanya Samriddhi Yojna 8.1% 8.1% 8.1% 8.5% 8.5% 8.4% 8.4% 8.4%
(B) Bank term deposit rate (>1 year) 6.7% 6.7% 6.7% 6.9% 6.9% 6.9% 6.8% 6.8%
Gap (A-B) 0.7% 0.6% 0.6% 0.9% 0.9% 0.9% 0.8% 0.8%
Note: Kisan Vikas Patra was launched in November 2014; Sukanya Samriddhi Yojna was launched in January 2015. Banks correspond to scheduled commercial banks. We have used the SBI term deposit rate as a proxy for the December 2019
quarter as the bank term deposit rate is only available until the September 2019 quarter. Source: Ministry of Finance, UBS
SSS spread over Bank Deposit Rates have remained elevated thereby restraining Banks from reducing their Deposit Rates further
79. Why Accrual Funds?
Industry Flows
are slowing down
Valuations are
attractive
Narrative
associated with
category is
negative
.
79
80. Divergence –
Corporate Bond & G-sec Spread
.
80
5
6
7
8
1 Year 3 Year 5 Year 10 Year
Yields(%)
AA AAA Gsec Repo Rate
Source : CRISL Research, Data as on25-Dec-2019
Corporate bonds
provide better
risk-adjusted returns
over G-Sec, as they
can provide a better
cushion from any
unforeseen event.
Avg. 177
bps
Avg.
85 bps
S
P
R
E
A
D
Avg. 246
bps
81. .
Divergence –
Corporate Bond & G-sec Spread
81
Due to flight to safety, the yields on the AA and A space are still available at elevated spread over repo,
providing higher accrual and margin of safety
Instrument
Today 1 Year Ago
3 Year 5 Year 3 Year 5 Year
Yields(%)
Spread
over
Repo
Yields(%)
Spread
over
Repo
Yields(%)
Spread
over
Repo
Yields(%)
Spread
over
Repo
G-Sec 6.3 1.2 6.5 1.3 7.4 0.9 7.5 1.0
AAA Bonds 6.8 1.6 7.1 2.0 8.9 2.4 9.0 2.5
AA rated Bonds 7.4 2.3 7.8 2.7 9.4 2.9 9.6 3.1
A rated Bonds 8.9 3.7 9.3 4.2 10.4 3.9 10.5 4.0
Source : CRISIL Research, Data as on25-Dec-2019. Past performance may or may not sustain in future
83. SAFETY LIQUIDITY RETURNS
The investment team seeks to achieve Safety, Liquidity and Returns (SLR) in order of
priority for managing variety of our fixed income schemes.
S L R
Investment Philosophy
.
83
84. Robust Investment Process
COMPANY SHORTLISTED FOR INVESTMENT
Assessment of
Management Risk
& Business Risk
Asset Quality
Past track record
of the company
Cash Flows
Credit Due
Diligence
.
84
85. Strong Credit Selection Process
All target credit investment proposal face multiple checks
• Independent evaluation
by Risk team
• Decision making is not concentrated
to one person
• Focus not just on credit
and liquidity risk but also
on diversification
TARGET LIST FILTERS
• Independent research team
• Internal Credit Analysis
• External credit rating
CREDIT
SELECTION
.
85
86. Security Name
Month of
Downgrade to D
IPRU Exposure at the
time of Downgrade Security Name
Month of
Downgrade to D
IPRU Exposure at the
time of Downgrade
IL&FS Financial Services Ltd. Sep-18 0 Reliance Big Pvt Ltd. Jun-19 0
IL&FS Ltd. Sep-18 0
Reliance Infrastructure Consulting &
Engineers Pvt Ltd. Jun-19 0
IL&FS Transportation Networks Ltd. Sep-18 0 Sintex Industries Ltd. Jun-19 0
Kwality Ltd. Sep-18 0
IL & FS Education and Technology
Services Ltd. Jul-19 0
IL&FS Energy Development Company Ltd. Oct-18 0 Reliance Home Finance Ltd. Aug-19 0
IL & FS Tamil Nadu Power Co. Ltd. Jan-19 0 Sintex-BAPL Ltd. Aug-19 0
Jharkand Road Projects
Implementation Co Ltd. Jan-19 0 Altico Capital India Pvt Ltd. Sep-19 0
Jorabat Shillong Expressway Ltd. Mar-19 0 Reliance Broadcast Network Ltd. Sep-19 0
Hazaribagh Ranchi Expressway Ltd. Apr-19 0 Business Broadcast News Holdings Ltd. Sep-19 0
Reliance Commercial Finance Pvt Ltd. Apr-19 0 Simplex Infra Dec-19 0
Dewan Housing Finance Corporation Ltd. Jun-19 0 Essel Infra Dec-19 0
Our exposure to securities that were
downgraded last year
The securities mentioned in this slide do not constitute any recommendation and ICICI Prudential Mutual Fund may or may not have any future position in these securities.
.
86
Total ICICI Prudential Mutual Fund Exposure at the time of Downgrade = NIL
87. ICICI Prudential Credit Risk Fund:
Spread Over Repo (Since Inception)
.
Data as on November 30, 2019, YTM values taken since scheme inception. Past Performance may or may not be sustained infuture.
YieldSpreads(%)
87
88. ICICI Prudential Medium Term Bond Fund:
Spread Over Repo (Last 10 year trend)
.
YieldSpreads(%)
Data as on November 30, 2019. YTM values taken for the last 10 years. Past Performance may or may not be sustained infuture.
88
89. Summary – Case for Accrual Funds
• The elevated spread of Corporate Bonds over Repo provides good accrual income and high margin of
safety
• We expect compression of Corporate Bond spreads over Repo to happen going forward, due to ample
liquidity
• We believe, hereafter, banks would start seeking higher yielding assets, implying higher risk appetite,
which may narrow the spread between G-sec and Corporate Bond
• We continue to focus on risk adjusted returns, rather than focusing only on YTMs
• With our credit selection process we have been able to avoid any major credit stress/event on our
portfolio
• We continue to remain cognizant of managing liquidity, concentration, credit and duration in our accrual
portfolio to provide better risk adjusted returns
.
89
91. Macro Outlook
.
91
Indicators Dec-19 Outlook Remarks
RBI Policy Rates 5.15% Neutral Opportunistic rate cuts
RBI Policy Stance Accommodative Positive Growth supportive
CPI inflation 5.5% (Nov 2019) Neutral First half expected to high, second half should normalize
Oil Prices (USD/barrel) 68.44 Neutral Monitor long term trend
CAD (% of GDP) 2.0% (Apr-Jun 2019) Positive Weak domestic growth supporting CAD
Fiscal Deficit (% of GDP) 3.5% to 3.7% (Expected) Negative Weak growth and further fiscal stimulus
FX Reserves (USD Bn) 449 Positive RBI looking to buy dollar
10yr G-Sec 6.54% Neutral Play opportunistically to benefit from capital appreciation
Political Scenario Strong Mandate Cautious Local unrest
Source : CRISIL Research, RBI, CCIL India,Data as on30-Dec-2019, CAD – Current Account Deficit, CPI - Consumer Price Index, GDP – Gross Domestic Product
92. Fixed Income Strategy for 2020
.
92
Particulars View Reason Strategy
Accrual/ Spread Assets Highly Positive High spread over Repo Higher allocation recommended
Short/Medium Space Positive Risk Adjusted returns high
Recommended for Total return strategy
(Accrual + Capital Appreciation)
Dynamic Duration
Strategy
Positive Manage duration dynamically
Recommended for Total return strategy
(Accrual + Capital Appreciation)
Long End Space Opportunistic
RBI Intervention through
opportunistic rate cut + Operation
twist
Use trading strategy and do tactical
allocation for capital appreciation
Extreme Short End Negative Lower real rates
Move to higher spread assets and add more
duration
93. Key Takeaways – Fixed Income Space
• Continue to remain highly positive on accrual space/spread assets and should be the
main theme for 2020
• Capital Appreciation strategy would be more tactical in approach, due to RBI’s
opportunistic rate cuts
• Recommend combination of short term assets and long term assets with a portfolio
maturity range of 2-5 Years
• Fiscal concerns and inflation in the first half may keep the longer end volatile. Hence,
use the longer end of the yield curve for trading strategy
• Extreme short end (less than 3 months), due to ample liquidity may give lower real
returns
.
93
94. Triggers For 2020
FISCAL STIMULUS
RESOLUTION OF
STRESSED SECTOR
DOMESTIC
GROWTH RECOVERY
EM GROWTH
RECOVERY
2020
TRIGGERS
.
94
95. Debt Valuation Index
Debt Valuation Index considers WPI, CPI, Sensex YOY returns, Gold YOY returns and Real estate YOY returns over G-Sec yield, Current Account Balance and Crude Oil Movement for calculation. WPI – Wholesale Price Index; CPI –
Consumer Price Index. None of the aforesaid recommendations are based on any assumptions. These are purely for reference and the investors are requested to consult their financial advisors before investing.
.
95
4.52
1
2
3
4
5
6
7
8
9
10
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Feb-18
Apr-18
Jun-18
Aug-18
Oct-18
Dec-18
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Ultra Low Duration
Low Duration
Moderate Duration
High Duration
Aggressively in High Duration
We recommend investors to
invest in Short to Medium
Duration for total return
benefit or Accrual Schemes for
higher carry over repo.
For investors who aim to
benefit from volatility we
recommend investing in
Dynamic Duration Schemes
96. Debt Strategy to Follow
.
96
Accrual
Schemes
Low/Short
Duration
Schemes
Dynamic
Duration Scheme
BENEFITS
Aim to capture current
Elevated Yield
Aim to mitigate interest
rate volatility
Aim to manage volatility
by active duration
management
98. Fixed Income Recommendations
.
98
ICICI Prudential Floating Interest Fund
Cash Management Solution
(which aims to benefit from better risk adjusted returns)
ICICI Prudential Ultra Short Term Fund
ICICI Prudential Medium Term Bond Fund
Accrual Schemes
(which aims to benefit from capturing yields at elevated levels)
ICICI Prudential Credit Risk Fund
ICICI Prudential All Seasons Bond Fund
Dynamic Duration Schemes
(which aims to benefit from volatility by actively managing duration)
ICICI Prudential Short Term Fund
Short/Medium Duration Schemes
(which aims to benefit from mitigating interest rate volatility)ICICI Prudential Banking and PSU Debt Fund
99. Our PMS Recommendations –
ICICI Prudential PMS Contra Portfolio
(A series under “Deep Value Portfolio”)
.
99
Portfolio Strategy
ICICI Prudential PMS Contra Portfolio aims to provide long term capital
appreciation and generate returns by investing in underperforming stocks or
sectors, which are available at intrinsic valuations and are expected to perform
well in the long run.
To strike an appropriate balance of concentration and diversification Portfolio
Manager retains the flexibility to invest across market capitalization and
sectors.
Key Features
Invest across Market Capitalisations
The Portfolio is suitable for investors seeking
long term wealth creation by investing in equities
Investment Horizon: 4 Years & Above
Benchmark Index: S&P BSE 200
Portfolio Performance (%) 1 Month 3 Months 6 Months 1 Year
Since
Inception*
ICICI Prudential PMS Contra Portfolio 1.77 6.85 3.03 14.43 15.28
S&P BSE 200 1.23 6.56 3.70 9.90 2.55
Data as on 30th Dec, 2019. Past performance may or may not be sustained in future. The return mentioned above is the return of the oldest client of the portfolio. Further, the portfolio value is re-based as and when applicable.
*Inception date: September 14, 2018. All the returns calculated above are before charging of expenses
The investment strategy, approach and the structure of the portfolio herein involves risk and there can be no assurance that specific objectives will be met under differing market conditions or cycles. The investment strategy and the composition of the
portfolio as stated herein is only indicative in nature and is subject to change within the provisions of the disclosure document and client agreement without any prior notice to investors. Please refer to the disclosure document & client agreement for
details and risk factors.
100. Our PMS Recommendations –
ICICI Prudential PMS PIPE Portfolio
(A series under “PIPE Portfolio”)
100
Portfolio Strategy
ICICI Prudential PMS PIPE Portfolio aims to provide long term capital
appreciation and generate returns by investing primarily in Mid and Small
segment of the market by having exposure in companies enjoying some
economic moat or undergoing special situations or in the midst of unfavourable
business cycle.
Key Features
Invest predominantly in Mid and Small Caps
Investment Horizon: 5 Years & Above
Benchmark Index: S&P BSE Small Cap
PROVEN PERFORMANCE WITH TIMELY EXIT
After a successful 4-year period, the exit strategy helped limiting a significant downside The erstwhile ICICI Prudential PMS PIPE Portfolio –
Series I* delivered ~303% absolute return between 1st
Nov 2013 to 31st Jan 2018 against ~215%of S&P BSE
Smallcap Index. The Portfolios of the clients who were
invested in the strategy was wound up in January 2018,
considering valuation were at cyclical peak. The Strategy
is now beeing offered with an aim to capture the
opportunity in the mid and small cap space.0
100
200
300
400
500
Nov/2013 Sep/2014 Jul/2015 May/2016 Mar/2017 Jan/2018 Nov/2018
ICICI Prudential PMS PIPE Portfolio
S&P BSE SMALL CAP
Performance between 1st Nov 2013 to 31st Jan 2018. Past Performance may or may not sustain in future. The above return was pertaining to the oldest client of the Portfolio The return of individual portfolios may vary.
The investment strategy, approach and the structure of the portfolio herein involves risk and there can be no assurance that specific objectives will be met under differing market conditions or cycles. The investment strategy and the composition of the
portfolio as stated herein is only indicative in nature and is subject to change within the provisions of the disclosure document and client agreement without any prior notice to investors. Please refer to the disclosure document & client agreement for
details and risk factors.
101. Our Equity Schemes
.
101
Scheme Name Type of Scheme
ICICI Prudential Bluechip Fund An open ended equity scheme predominantly investing in large cap stocks
ICICI Prudential Large & Mid Cap Fund An open ended equity scheme investing in both large cap and mid cap stocks.
ICICI Prudential Midcap Fund An open ended equity scheme predominantly investing in mid cap stocks.
ICICI Prudential Smallcap Fund An open ended equity scheme predominantly investing in small cap stocks.
ICICI Prudential Value Discovery Fund An open ended equity scheme following a value investment strategy.
ICICI Prudential Multicap Fund
An open ended equity scheme investing across large cap, mid cap, small cap
stocks.
ICICI Prudential India Opportunities Fund An Open Ended Equity Scheme following Special Situations theme
102. Our Hybrid Schemes / Fund of Funds Scheme
Scheme Name Type of Scheme
ICICI Prudential Asset Allocator Fund (FoF)*
An open ended fund of funds scheme investing in equity oriented schemes,
debt oriented schemes and gold ETFs/schemes.
Scheme Name Type of Scheme
ICICI Prudential Balanced Advantage Fund An open ended dynamic asset allocation fund
ICICI Prudential Regular Savings Fund An open ended hybrid scheme investing predominantly in debt instruments
ICICI Prudential Equity Savings Fund An open ended scheme investing in equity, arbitrage and debt.
ICICI Prudential Equity & Debt Fund
An open ended hybrid scheme investing predominantly in equity and equity related
instruments
ICICI Prudential Multi-Asset Fund
An open ended scheme investing in Equity, Debt, Gold/Gold ETF/units of REITs
& InvITs and other asset classes as may be permitted from time to time.
.
*Investors may please note that they will be bearing the recurring expenses of this Scheme in addition to the expenses of the underlying Schemes in which this Scheme makes investment.
102
103. Our Fixed Income Schemes
Scheme Name Type of Scheme
ICICI Prudential Ultra Short Term Fund
An open ended ultra-short term debt scheme investing in instruments such that the Macaulay
duration of the portfolio is between 3 months and 6 months.
ICICI Prudential Short Term Fund
An open ended short term debt scheme investing in instruments such that the Macaulay
duration of the portfolio is between 1 Year and 3 Years.
ICICI Prudential Medium Term Bond Fund
An open ended medium term debt scheme investing in instruments such that the Macaulay
duration of the portfolio is between 3 Years and 4 Years. The Macaulay duration of the portfolio
is 1 Year to 4 years under anticipated adverse situation.
ICICI Prudential Credit Risk Fund An open ended debt scheme predominantly investing in AA and below rated corporate bonds.
ICICI Prudential Floating Interest Fund
An open ended debt scheme predominantly investing in floating rate instruments (including
fixed rate instruments converted to floating rate exposures using swaps/derivatives).
ICICI Prudential All Seasons Bond Fund An open ended dynamic debt scheme investing across duration.
ICICI Prudential Savings Fund
An open ended low duration debt scheme investing in instruments such that the Macaulay
duration of the portfolio is between 6 months and 12 months
ICICI Prudential Banking & PSU Debt Fund
An open ended debt scheme predominantly investing in Debt instruments of banks, Public
Sector Undertakings, Public Financial Institutions and Municipal Bonds
ICICI Prudential Corporate Bond Fund An open ended debt scheme predominantly investing in AA+ and above rated corporate bonds.
ICICI Prudential Money Market Fund An open ended debt scheme investing in money market instruments
.
103
Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price
104. Riskometers
ICICI Prudential Multi-Asset Fund is suitable for investors whoare seeking*:
Long term wealth creation
An open ended scheme investing across asset classes.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential Equity & Debt Fund is suitable for investors who are seeking*:
Long term wealth creation solution
A balanced fund aiming for long term capital appreciation and current income by investing in equity as well as fixed income securities.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential Balanced Advantage Fund is suitable for investors who are seeking*:
Long term wealth creation solution
An equity fund that aims for growth by investing in equity and derivatives.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
.
104
105. Riskometers
ICICI Prudential Bluechip Fund is suitable for investors who are seeking*:
Long term wealth creation
An open ended equity scheme predominantly investing in large cap stocks.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential Value Discovery Fund is suitable for investors who are seeking*:
Long term wealth creation
An open ended equity scheme following a value investment strategy
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential Large & Mid Cap Fund is suitable for investors whoare seeking*:
Long term wealth creation
An open ended equity scheme investing in both largecap and mid cap stocks
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
.
105
106. Riskometers
ICICI Prudential Credit Risk Fund is suitable for investors who are seeking*:
Medium term savings
A debt scheme that aims to generate income through investing predominantly in AA and below rated corporate bonds while
maintaining the optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential Medium Term Bond Fund is suitable for investors who are seeking*:
Medium term savings
A debt scheme that invests in debt and money market instruments with a view to maximize income while maintaining optimum balance
of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential Regular Savings Fund is suitable for investors who are seeking*:
Medium to long term regular income solution
A hybrid fund that aims to generate regular income through investments primarily in debt and money market instruments and long term
capital appreciation by investing a portion in equity.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
.
106
107. Riskometers
ICICI Prudential Short Term Fund is suitable for investors who are seeking*:
Short term income generation and capital appreciation solution
A debt fund that aims to generate income by investing in a range of debt and money market instruments of various maturities.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential All Seasons Bond Fund is suitable for investors who are seeking*:
All durationsavings
A debt scheme that invests in debt and money market instruments with a view to maximize income while maintaining optimum balance
of yield, safety andliquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
ICICI Prudential Smallcap Fund is suitable for investors who are seeking*:
Long Term wealth creation
An open ended equity scheme that seeks to generate capital appreciation by predominantly investing in equity and equity related
securities of small cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
.
107
108. Riskometers
ICICI Prudential Floating Interest Fund is suitable for investors who are seeking*:
Short term savings
An open ended debt scheme predominantly investing in floating rate instruments
*Investors should consult their financial advisers if in doubt about whether the product is suitable forthem
ICICI Prudential Ultra Short Term Fund is suitable for investors who are seeking*:
Short term regular income
An open ended ultra-short term debt scheme investing in a range of debt and money market instruments
*Investors should consult their financial advisers if in doubt about whether the product is suitable forthem
ICICI Prudential Midcap Fund is suitable for investors who are seeking*:
Long Term wealth creation
An open-ended equity scheme that aims for capital appreciation by investing in diversified mid cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable forthem
.
108
109. Riskometers
ICICI Prudential India Opportunities Fund (The scheme is suitable for investors who are seeking*)
Long term wealth creation
An equity scheme that invests in stocks based on special situations theme.
*Investors should consult their financial advisors if in doubt about whether the product is suitable forthem.
ICICI Prudential Equity Savings Fund is suitable for investors who are seeking*:
Long term wealth creation
An open ended scheme that seeks to generate regular income through investments in fixed income securities, arbitrage and other
derivative strategies and aim for long term capital appreciation by investing in equity and equity related instruments.
*Investors should consult their financial advisers if in doubt about whether the product is suitable forthem
ICICI Prudential Multicap Fund is suitable for investors who are seeking*:
Long term wealth creation
An open ended equity scheme investing across largecap, mid cap and small cap stocks.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them
.
109
110. Riskometers
ICICI Prudential Savings Fund is suitable for investors who are seeking*:
Short term savings
An open ended low duration debt scheme that aims to maximize income by investing in debt and money market instruments while
maintaining optimum balance of yield, safety and liquidity
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
ICICI Prudential Banking & PSU Debt Fund is suitable for investors who are seeking*:
Short term savings
An open ended debt scheme predominantly investing in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions
and Municipal Bonds
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
.
110
ICICI Prudential Corporate Bond Fund is suitable for investors whoare seeking*:
Short term savings
An open ended debt scheme predominantly investing in highest rated corporate bonds
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
111. Riskometers
ICICI Prudential Money Market Fund is suitable for investors who are seeking*:
Short term savings
A money market scheme that seeks to provide reasonable returns, commensurate with low risk while providing a high level of liquidity
*Investors should consult
•Long Term wealth creation
•An open ended fund of funds scheme investing in equity oriented schemes, debt oriented schemes and gold ETF/schemes.
*Investorsshouldconsulttheirfinancialadvisorsif in doubt aboutwhethertheproduct is suitablefor them.
ICICI Prudential Asset Allocator Fund (FoF) (An open ended fund of funds scheme investing in equity oriented schemes,
debt oriented schemes and gold ETFs/ schemes) is suitable for investors who are seeking*:
.
111
112. Disclaimer
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
All figures and other data given in this document are dated. The same may or may not be relevant at a future date. The AMC takes no responsibility of updating any
data/information in this material from time to time. The information shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any
other person or to the media or reproduced in any form, without prior written consent of ICICI Prudential Asset Management Company Limited. Prospective investors
are advised to consult their own legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the
Products mentioned herein. Investing in securities including equities and derivatives involves certain risks and considerations associated generally with making
investments in securities. The value of the portfolios may fluctuate and can go up or down. Past Performance may or may not be sustained in future.
Disclaimer: In the preparation of the material contained in this document, ICICI Prudential Asset Management Company Ltd. (the AMC) has used information that is
publicly available, including Budget speech and information developed in-house. The stock(s)/sector(s) mentioned in this slide do not constitute any recommendation
and ICICI Prudential Mutual Fund may or may not have any future position in this stock(s). Some of the material used in the document may have been obtained from
members/ persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and
material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any
information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”,
“believe” and similar expressions or variations of such expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by
the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general
economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of
India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. ICICI Prudential Asset
Management Company Limited (including its affiliates), the Mutual Fund, The Trust and any of its officers, directors, personnel and employees, shall not liable for any
loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the
use of this material in any manner. Further, the information contained herein should not be construed as forecast or promise or investment advice. The recipient alone
shall be fully responsible/are liable for any decision taken on this material.
.
112