Mutual Funds

Sharekhan’s Top SIP Fund Picks

Sharekhan July 13, 2017

Sharekhan’s top SIP fund picks

Why SIP?  SIP over a longer period can reduce the cost per unit
 Disciplined investing Example (see table below): An investment of Rs24,000
in a mutual fund resulted in a value of Rs25,200 after
Being disciplined is a key to investing success. Through
12 months; whereas an SIP mutual fund investment of
a systematic investment plan (SIP) you can choose to
Rs2,000 per month grew to Rs27,095 after the same
invest fixed amounts in a mutual fund scheme which
period.
could be as low as Rs500 at regular intervals (like every
month) for a chosen period of time (say for a year).  Fewer efforts to opt for SIP
The amount you invest every month or every quarter
The procedure to invest through SIP is easy. All you
will be used to purchase units of a SIP of a mutual fund
need to do is give post-dated cheques or opt for an
scheme. Small amounts set aside every month towards
auto debit of a specific amount towards SIP from your
well performing SIP mutual fund schemes can make an
bank account. SIP plans are completely flexible. One can
investor achieve his financial goals in future.
even start an SIP just by placing an order by logging into
 Invest in instruments that beat inflation Sharekhan’s online mutual fund page. One can invest for
a minimum of six months or for a long tenure. Also, there
Equity investing can help you combat rising inflation that
is an option of choosing the investment interval which
diminishes the value of your savings.
could be monthly or quarterly.

Illustrative example
One-time investment SIP
Price per unit
Month Amount Units Amount Units
(Rs)
invested (Rs) purchased invested (Rs) purchased
Jan-10 20 24,000 1,200 2,000 100.0
Feb-10 18 -- 2,000 111.1
Mar-10 14 -- 2,000 142.9
Apr-10 22 -- 2,000 90.9
May-10 26 -- 2,000 76.9
Jun-10 20 -- 2,000 100.0
Jul-10 18 -- 2,000 111.1
Aug-10 17 -- 2,000 117.7
Sep-10 15 -- 2,000 133.3
Oct-10 18 -- 2,000 111.1
Nov-10 20 -- 2,000 100.0
Dec-10 21 -- 2,000 95.2
Total investment (Rs) 24,000 24,000
Average price (Rs) 20 19
Total units purchased 1,200 1,290
Value of investment after 25,200 27,095
12 months (Rs)
*NAV as on the 1st of every month. These are assumed NAVs in a volatile market.

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Disclosure Document issued by SEBI & relevant exchanges andJulythe13,
T &2017
C on www.sharekhan.com ; Investment in securities market are subject to market
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risks, read all the related documents carefully before investing.
Mutual Funds Sharekhan’s Top SIP Fund Picks

Data as on June 30, 2017

SIP investment (monthly Rs1,000)* 1 year 3 years 5 years
Total amount invested (Rs) 12,000 36,000 60,000
Present Compounded Present Compounded Present Compounded
Funds would have grown to NAV value annualised value annualised value annualised
(Rs) return (%) (Rs) return (%) (Rs) return (%)

Large-Cap Funds

IDFC Classic Equity Fund - Reg - Growth 41 13,559 13.0 46,269 8.7 91,739 8.9

Birla Sun Life Top 100 Fund - Growth 53 13,176 9.8 43,847 6.8 93,075 9.2

ICICI Prudential Focused Bluechip Equity Fund - Growth 36 13,142 9.5 43,506 6.5 89,465 8.3

BNP Paribas Equity Fund - Growth 79 13,448 12.1 43,089 6.2 90,981 8.7

Franklin India Bluechip - Growth 421 12,891 7.4 42,520 5.7 85,907 7.4

BSE Sensex 30922 13,086 9.1 40,835 4.3 78,476 5.5

Mid & Small Cap Funds

Mirae Asset Emerging Bluechip Fund - Growth 45 14,062 17.2 52,600 13.5 1,32,812 17.2

Reliance Small Cap Fund - Growth 37 14,155 18.0 51,312 12.5 1,36,269 17.8

Canara Robeco Emerging Equities - Growth 84 14,040 17.0 50,197 11.7 1,28,143 16.4

Kotak Emerging Equity Scheme - Reg - Growth 36 13,505 12.6 49,263 11.0 1,19,625 14.8

Sundaram Select Midcap - Reg - Growth 467 13,390 11.6 48,551 10.5 1,16,673 14.2

BSE Midcap 14644 13,278 10.7 46,849 9.2 1,01,558 11.1

Multi-Cap Funds

L&T India Value Fund - Reg - Growth 34 13,720 14.4 49,111 10.9 1,17,043 14.3

Birla Sun Life Advantage Fund - Growth 391 13,359 11.4 47,041 9.3 1,06,501 12.2

Kotak Select Focus Fund - Reg - Growth 30 13,428 11.9 46,576 9.0 1,02,315 11.3

Mirae Asset India Opportunities Fund - Reg - Growth 42 13,547 12.9 46,190 8.7 1,00,729 10.9

Franklin India High Growth Companies Fund - Growth 36 13,238 10.3 44,561 7.4 1,04,445 11.7

BSE 500 13178 13,260 10.5 43,204 6.3 85,954 7.5

Tax-saving funds (ELSS)

L&T Tax Advantage Fund - Reg - Growth 50 13,760 14.7 46,955 9.3 98,374 10.4

Birla Sun Life Tax Relief 96 - Growth 27 13,522 12.7 45,867 8.4 1,02,134 11.2

DSP BlackRock Tax Saver Fund - Growth 42 13,087 9.1 45,726 8.3 99,978 10.8

Reliance Tax Saver (ELSS) Fund - Growth 58 13,593 13.3 45,056 7.8 1,04,500 11.7

Franklin India Taxshield - Growth 509 12,995 8.3 43,383 6.4 94,415 9.5

Nifty 50 9521 13,051 8.8 41,301 4.7 79,854 5.9

BNP Paribas Mutual Fund Equity schemes

Present Compounded Present Compounded Present Compounded
Funds would have grown to Category value annualised value annualised value annualised
(Rs) return (%) (Rs) return (%) (Rs) return (%)
BNP Paribas Mid Cap Fund - Growth Mid Cap 13,592 13.3 46,934 9.2 1,10,992 13.1

BNP Paribas Dividend Yield Fund - Growth Multi Cap 13,534 12.8 45,012 7.7 96,416 10.0

BNP Paribas Long Term Equity Fund - Growth ELSS 13,433 12.0 43,160 6.2 93,317 9.2

BNP Paribas Equity Fund - Growth Large Cap 13,448 12.1 43,089 6.2 90,981 8.7
(*invested on 1st day of every month)
We will be showing compounded annualised returns for three years and five years from now on.
Disclosure: Sharekhan Limited is now part of the BNP Paribas SA group.

Sharekhan 2 July 13, 2017

Mutual Funds Sharekhan’s Top SIP Fund Picks

Reliance Small-Cap Fund

Objective Key features

The primary investment objective of the scheme is to • Fund category : Mid & Small Cap
generate long-term capital appreciation by investing • Launch date : September 16, 2010
predominantly in equity and equity-related instruments of • Minimum investment : Rs5,000
• Load structure : If redeemed between 0 year to 1 year,
small-cap companies and the secondary objective is to then exit load is 1%
generate consistent returns by investing in debt and money • Fund manager : Sunil Singhania, Samir Rachh
market securities. • Latest NAV (gr) : Rs.37.0185
• Latest NAV (div) : Rs.28.8206
• Expense ratio (%) : 2.03
Scheme’s performance • AUM : Rs.3,766
• Benchmark Index : S&P BSE SMALL CAP
Reliance Small Cap Fund - Growth Mid & Small Cap Category Average S&P BSE SMALL CAP

40.0
34.8 31.9
35.0 30.6
30.0 26.5 24.0 27.9 26.0 26.3 Holdings by market cap
24.4
25.0 21.4 21.3 18.6 22.7
20.0 18.7 Particulars %
14.7
15.0 Nifty 50 2.6
10.0
Nifty Free Float Midcap 100 11.0
5.0
0.0 Nifty Free Float Small cap 100 21.0
6 Months 1 Year 3 Years 5 Years Since Inception BSE Sensex -
Returns < 1 yr: Absolute, > 1yr: CAGR Top 5 holdings 13.1
Top 10 holdings 23.0
Style box analysis

Large-cap Top 10 stock holdings (total no. of scrips: 80)

Mid-cap
Company name % of net assets
Small-cap
Navin Fluorine International 3.51
Growth blend value
GIC Housing Finance 2.89
Top 5 sectors
West Coast Paper Mills 2.32
V I P Industries 2.19
Industrial Manufacturing 15.46
Consumer Goods
Deepak Nitrite 2.16
13.94
Financial Services 13.03 Seya Industries 2.11
Chemicals 11.84 Kalpataru Power Transmission 2.01
Cement & Cement Products 6.56 Atul 2.00
Bharat Electronics 1.92
0.00 5.00 10.00 15.00 20.00
RBL Bank 1.91

Scheme analysis
With more than six years of performance history, this MF scheme has been an outstanding performer compared to the benchmark S&P
BSE small-cap index and the mid and small-cap category average. Despite the volatility and uncertainties in the market, the MF scheme
has performed better than its peers, giving a return of 34.8% over the past one year as against 30% and 26% returns given by the S&P
BSE small-cap index and the mid and small-cap category average, respectively, in the same period. Over the long-term time horizon of
three years, the MF scheme has posted a compound annual growth rate (CAGR) of 24.4%, while the S&P BSE small-cap index and the
mid and small-cap category average posted CAGRs of 14.7% and 21.4%, respectively. In recent months, the MF scheme has given a return
of 26.5% compared to returns of 27.9% and 24% posted by the S&P BSE small-cap index and the mid and small-cap category average,
respectively.
The MF scheme currently has about 80 stocks in its portfolio. It has nearly 94% of its net assets exposed to equity, while the balance
is exposed to other money-market instruments. The top 10 stocks form about 23% of the MF scheme’s portfolio. The MF scheme has
invested nearly 15% of its funds in the industrial manufacturing sector followed by consumer goods and financial services, with 13.9%
and 13% allocation, respectively.

Sharekhan 3 July 13, 2017

Mutual Funds Sharekhan’s Top SIP Fund Picks

Mutual Fund Selection Criteria

Equity Mutual Funds provide excess returns relative to category benchmark
Equity Mutual Fund selection within a particular category is on a consistent basis. We also consider Sortino Ratio,
done on two broad parameters, namely ‘Returns’ and ‘Risk’. which is similar to the Sharp Ratio, except that it uses
Our selection process helps to identify funds with a track downside deviation instead of standard deviation
record of giving superior returns consistently compared to in the denominator. We give equal weightage (15%
the category benchmark and peers. Along with superior each) to the Sharp Ratio, the Information Ratio and the
returns, it is also important to factor in risk and volatility in Sortino ratio to finally arrive at the ranking of a Mutual
returns to take a holistic investment decision. Equity Mutual Fund scheme in a particular category.
Fund rating is decided by giving different weightages to In addition to quantitative analysis, we also use qualitative
the below mentioned risk and return parameters. factors to filter out relatively smaller fund houses or funds
1. ‘Returns’ - measured across 1, 3 and 5 years SIP with small asset size to minimise allied risk.
returns: To rank the funds we give a 10% weightage to Fixed Income or Debt Mutual Fund
1-year SIP performance, 20% to 3-year SIP performance In the Fixed Income Mutual Fund segment, the selection is
and 25% to 5-year SIP performance. done by considering returns, along with other criteria like
2. ‘Risk’ - captured through Sharpe ratio, Sortino ratio credit quality, volatility, yield to maturity, modified duration,
and Information ratio: These ratios are widely used expense ratio etc. Also, the ranking depends upon macro-
in the Mutual Fund industry to measure risk-adjusted economic factors like the view on interest rates and the
returns of a Mutual Fund scheme. The Sharpe Ratio economic cycle. Overall, we follow a conservative approach
considers Standard Deviation to measure a portfolio’s while recommending Debt Mutual Funds with a clear focus
risk-adjusted returns, whereas the Information Ratio on minimising risks rather than chasing marginally excess
measures the ability of the portfolio manager to returns.

Disclaimer
This document has been prepared by Sharekhan Limited (Sharekhan) and is meant for sole use by the recipient and not
for circulation. The information contained in this report is intended for general information purposes only. The information
published should not be used as a substitute for any form of investment advertisement, investment advice or investment
information. The information in this report has not been prepared taking into account specific investment objectives,
financial situations and needs of any particular investor, and therefore may not be suitable for you. You should verify all
scheme related information before relying on it. Further, the selection of the Mutual Funds for the purpose of including
in the indicative portfolio does not in any way constitute any recommendation by Sharekhan Limited with respect to the
prospects or performance of these Mutual Funds. We recommend investors to seek advice from professional financial
advisors.
• Mutual funds, like securities investments, are subject to market and other risks and there can be no assurance that the
objectives of any of the schemes of the Fund will be achieved. Please read the Offer Document carefully in its entirety
prior to making an investment decision
• The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces
affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the
units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement
periods, transfer procedures and performance of individual securities. The NAV will inter-alia be exposed to Price /
Interest Rate Risk and Credit Risk.
• Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the
Mutual Fund. Sharekhan shall not responsible or liable for any loss or shortfall incurred by the investors.
• Investors are not being offered any guaranteed or assured rate of return through this document.
Sharekhan and/or its associates receive commission for distribution of Mutual Funds from various Asset Management
Companies (AMCs) and the details of the commission rates earned from various Mutual Fund houses is available on
our website. Sharekhan or its associates may have received commission from AMCs whose funds are mentioned in the
report during the period preceding twelve months from the date of this report for distribution of Mutual Funds. Sharekhan
also provides stock broking services to institutional clients including AMCs and hence may have received brokerage for
security transactions done by any of the above AMCs during the period preceding twelve months from the date of this
report.
Compliance Officer: Ms. Namita Amod Godbole; Tel: 022-61150000; e-mail: compliance@sharekhan.com
Contact: myaccount@sharekhan.com

Sharekhan 4 July 13, 2017