Indian Mutual Fund Monthly Report July 2012

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July 2012

.

Mutual Fund Monthly Report July 30, 2012

Equity Markets: Indian equity benchmarks closed at a two-month high on the last trading day of the month as global markets rallied quite sharply after European leaders agreed to take emergency action to bring down Italy's and Spain's spiraling borrowing costs at European Summit. Markets made their biggest monthly gains since January 2012, after European leaders unveiled a plan to address Europe’s distressed banking sector, easing some of the concerns about the region. BSE Sensex and Nifty ended the month higher by 7.5% and 7.2% respectively.The world markets ended the month of June 2012 on a positive note with India (Sensex), Japan and UK being the top three gainers, which rose by 7.5%, 5.4% and 4.7% respectively. China and Brazil were the only losers, which fell by 6.7% and 0.2% respectively.

* Approx.

Overview: The Assets Under Management (AUM) of Indian Mutual Fund industry fell by 1.5% M-o-M in June 2012 on the back of large outflows of funds from liquid funds (Source: AMFI Monthly data). The overall mutual fund industry witnessed outflows of Rs. 23,969 crore in June. Within the categories, maximum growth during the month was observed in the AUM of Other ETFs category by 6.23%, while the AUM of Liquid category dropped themost by 13.1%. The month end AUM of the industry for June 2012 stood at Rs. 6.89 lakh crore, down from Rs. 6.99 lakh crore in May 2012. The Average Assets Under Management (AAUM) of mutual fund industry which is declared on quarterly basis witnessed a 4% increase to Rs 6.92 lakh crore.

Source: AMFI

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July 2012

Mutual Fund Monthly Report contd…

Debt Markets: The Indian debt markets witnessed yields moderating over the month of June. Factors that influenced the market sentiments negatively during the month included fear on expectation of aggressive response from the RBI due to weaker IIP numbers and higher WPI inflation, disappointment in the wake of policy rates that were kept unchanged by the RBI in the monetary policy review, lesser hope on further OMO operation and depreciation in rupee value. The other factors such as risk aversion in the overseas financial markets, fall in crude oil prices, a deteriorating outlook on global economy, improvement in liquidity and an increase in FII investment limit in domestic debt helped the market sentiments during the month. The RBI launched the new 10 Year benchmark G Sec and set cut off yield at 8.15%. The benchmark, ‘G Sec 8.15% GS 2022’ bond yield closed the month at 8.18%, down 20 bps over the month.

The banking system witnessed easing liquidity conditions over the course the month. The daily average LAF infusion during June was at Rs. 91,700 crore as compared to Rs. 98,975 crore in May. WPI Inflation for May 12 was at 7.55 % y-o-y as compared to 7.23% in Apr 12. In the Mid-Quarter Monetary Policy Review held on June 18, the Central Bank left all policy rates unchanged.

The yields of government securities are likely to trade in the same range or ease further given the improved liquidity condition in the system. Expectation on further OMO operations by the RBI (instead of cutting policy rates or CRR) will further support the liquidity.

Net injection through RBI’s LAF window (Rs. Cr.):

-200000-150000-100000-50000

0

50000100000150000200000250000

Jan-

09

May

-09

Oct

-09

Feb-

10

Jul-1

0

Nov

-10

Apr

-11

Aug

-11

Jan-

12

May

-12

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00Net injection (LHS)10 Yr Yeild (RHS)

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July 2012


.

The AUM for equity category rose by 5.45% (value led) MoM to Rs 1,56,389 crore during the month despite the fact that the category witnessed outflows of Rs. 186 crore. The increase in the AUM of the category was mainly due to mark-to-market gains. The equity market represented by the benchmark Nifty and Sensex rose around 7.5% & 7.2% respectively in June due to a rally in the global markets after European leaders agreed to take emergency action to bring down Italy's and Spain's spiraling borrowing costs at European Summit. The category accounts for 23% of the industry’s total asset base.

The category ‘Other ETFs’ witnessed most rise in the AUM during the month mainly due to positive equity markets. Better performance of banking and infra stocks in the month was also one of the reasons for the increase in the AUM of the category. The other ETFs category witnessed net inflows of Rs. 15 crore during the month and the AUM stood at Rs. 1,603 crore. The AUM of the ELSS category also witnessed an increase of 5.16% (value led) to Rs. 23,229 crore during the month. Meanwhile, the category witnessed net outflows of Rs 100 croreduring the month.

The categories - Balanced saw net inflows of Rs. 19 crore and the AUM stood at Rs. 16,231 crore.

Net Flow in Equity Schemes Vs. Volatility Index:

Month end AUM:

-8000

-4000

0

4000

8000

Jan-

10

Feb

-10

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb

-11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12

Feb

-12

Mar

-12

Apr

-12

May

-12

Jun-

12

10

15

20

25

30Equity Netflow (LHS) India VIX (RHS)

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July 2012


The Gold ETF category saw net outflows for the second consecutive month witnessing the fund outflows of Rs. 227 crore during the month of June 2012. On the other hand, the AUM of the category witnessed a fall after five month period decreasing 2.19% during the month. However, the price of the gold increased by 0.8% during the month. The decline in the asset value of the Gold ETF category was primarily due to profit booking after the price of the underlying metal rose sharply in the past one year due to global risk aversion and domestic buying. The AUM of the category stood at Rs. 10,086 crore.

The AUM of liquid funds declined notably during June due to the huge outflow of Rs. 25,128 crore redeemed by banks and corpotates to meet their quarter end requirements. The AUM of the category came Rs. 1,58,853 crore, down from Rs. 1,82,617 crore previous month. The AUM of the income category rose 1.06% to Rs. 3,16,735 crore. The AUM of Gilt category rose during the month by 4.31% due to an increase the prices of the gilts during the month.

Funds mobilized from 61 newly launched schemes in June stood at Rs 4,516 crore, out of which Rs 4,070 crorecame from 55 close ended income funds. Baroda Pioneer Banking and Financial Services Fund and IIFL Dividend Opportunities Index Fund mobilized Rs 73 crore.

Total AUM Vs. Liquid category AUM:

400,000

600,000

800,000

1,000,000Ju

n-10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12

Feb-

12

Mar

-12

Apr

-12

May

-12

Jun-

12

0

50,000

100,000

150,000

200,000

250,000

TOTAL AUM (LHS) Liquid AUM (RHS)

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July 2012


The Average Assets Under Management (AAUM) of the mutual fund industry climbed up 4.12% (by Rs. 27388.92 crore) to Rs. 6.92 lakh crore during the quarter ended June 2012 as against Rs. 6.64 lakh crore registered during the quarter ended March 2012. AAUM that was dipping during the previous three quarters, improved during the latest quarter due to inflows into liquid and income funds and also due to mark-to-market gains.

Of the top five fund house based on AAUM, average assets of Birla Sun Life MF increased the most by 9.92% (by Rs. 6063.44 crore) to Rs. 67205.95 crore, it was followed by ICICI Prudential MF by 6.30% (by Rs. 4331.17 crore) to Rs. 73049.66 crore, UTI MF by 3.40% (by Rs. 2000.47 crore) to Rs. 60922.62 crore, Reliance MF by 3.31% (by Rs. 2582.67 crore) to Rs. 80694.47 crore and HDFC MF by 3.05% (by Rs. 2745.78 crore) to Rs. 92624.52 crore. Of the 44 mutual funds, 29 fund houses registered increase in Average AUM while the rest resulted in decline.

Average Quarter end AUM:

Growth of Indian Mutual Fund Industry over a decade (Rs in Crs):

Folios: The mutual funds folios of retail investors have witnessed drop during the month of June 2012 due to profit booking in the recent rise in the equity markets. At the end of June 2012, the total number of folios stood at 4.59 crore while the equity folio stood at 3.69 crore. During June, around 4.21 lakh equity folios were closed. The decline in equity folios is also due to a merger of schemes. If two schemes are getting merged, the common investors get one folio. From April to June 2012, the total industry has seen a decline of 9.22 lakh folios from all the funds.

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Sep-

02

Mar

-03

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

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July 2012


On the equity side, Mutual funds were turned as net buyers for Rs. 295 crore during the month of June 2012 after being the net sellers of Rs. 397 crore in May 2012. The net inflows during the last month was a result of gross purchases Rs 9,267 crore and gross sales Rs 8,972 crore.

On the debt side, mutual funds were the net buyers for tenth consecutive month as they bought the debt securities to the tune of Rs. 78,465 crore. The net inflow during the month was a result of gross purchases of Rs1,50,700 crore and gross sales of Rs 72,235 crore.

FIIs were reported as net sellers to the tune of Rs. 501 crore in cash markets in June 2012 after being net sellers of Rs. 347 crore in May 2012.

FIIs were net buyers in the debt side as they bought to the tune of Rs. 1,682 crore during the month of June 2012. The net inflow during the last month was a result of gross purchases Rs 18,723 crore and gross sales Rs17,042 crore. They were net buyers in the month of May 2012 buying debt securities for Rs. 3,569 crore.

MF’s net investment in Equity and Debt during the month of June 2012 (Rs in Crs):

FII & MF Activity:

-500

1500

3500

5500

7500

1-Ju

n

4-Ju

n

5-Ju

n

6-Ju

n

7-Ju

n

8-Ju

n

11-J

un

12-J

un

13-J

un

14-J

un

15-J

un

18-J

un

19-J

un

20-J

un

21-J

un

22-J

un

25-J

un

26-J

un

27-J

un

28-J

un

29-J

un

Equity Debt

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July 2012

Indices & asset class returns (%) across the globe for the month of June 2012:


-6.7

2.7

3.43.8 3.9

4.44.7 4.9

5.4

10.5

9.49.1

7.57.2

6.6 6.6 6.6

4.3 4.23.6

3.3

1.7

0.7 0.7 0.8

1.7

4.9

4.1

1.81.3

-0.8

-2.0

-2.8

-8

-4

0

4

8

12

Sha

ngha

i Com

p

MS

CI

Bric

MS

CI

Em

ergi

ng

Nas

daq

Dow

Jon

es

Han

g S

eng

FT

SE

100

MS

CI

Wor

ld

Nik

kei 2

25

CN

X I

nfra

BS

E B

AN

KE

X

BS

E F

MC

G

SE

NS

EX

Nift

y

BS

E A

UT

O

S&

P C

NX

500

CN

X M

idca

p

BS

E S

MA

LLC

AP

BS

E M

IDC

AP

BS

E H

ealth

C

CN

X P

harm

a

BS

E I

T

Cris

il Li

quid

Cris

il C

omp

Bon

d

Cris

il ST

Bon

d

Cris

il M

IP B

lend

Cris

il Ba

lanc

ed

CR

B

Gol

d-In

dia

I-S

ec C

omp

Gilt

US

D I

NR

DX

Y

10 Y

r G

ilt p

aper

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July 2012

Mutual Fund Monthly Report contd….

Schemes: UTI-Banking Sector, Escorts Power & Energy and Religare Banking were the top performing schemes in the month. They posted 10.63%, 9.89% and 9.69% of absolute returns respectively. Birla Sun Life CEF - Global PMP, ING Global Commodities and Mirae Asset China Advantage were the least performers as they registered negative returns of 2.39%, 0.95% and 0.53% respectively.

Category: All the mutual fund categories posted positive returns during the month of June 2012. Indian equity markets reported an increase for June 2012. All the sectoral indices ended in the green last month. Capital Goods, Power, Bankex and FMCG were the top four gainers, which rose by 13.7%, 9.6%, 9.4% and 9.1% respectively. Even PSU, Metals, Auto and Oil & Gas witnessed strong performance, rising in the range of 6.4-7.4% during the month.

Equity Sector- Banking category was the top performer during last month. Bankex rose by 9.4%. Banking stocks rose on hopes that the RBI would cut interest rates at mid-quarter monetary policy. Bankex rose by 9.4% in June 2012. Gold ETF was the bottom performer which ended flat during the month.

MF Categories returns (%) during the month of June 2012:

Toppers and Laggards for the month based on simple average basis:

0.00.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 1.0 1.4 1.4 1.5

2.0 2.1 2.32.7

3.8 3.94.4 4.4

5.8 5.96.4

7.3 7.6

9.4

-2.00

1.00

4.00

7.00

10.00

Gol

d - E

TFs

Gilt

- LT

Liqu

id F

unds

Gilt

- S

T

Inco

me

Fund

s

Ultr

a S

hort

Term

Floa

ting

Rat

e - S

T

Floa

ting

Rat

e - L

T

Arb

itrag

e

Sho

rt Te

rm In

com

e

FoF

- Gol

d

MIP

LT

FoF

- Deb

t

MIP

ST

Glo

bal -

For

eign

Eq

Hyb

rid -

Deb

t

Info

tech

Glo

bal -

For

eign

MF

Pha

rma

FoF

- Equ

ity

Mid

Cap

Hyb

rid -

Equ

ity

ELS

S

Mul

tiCap

Larg

e C

ap

FMC

G

Equ

ity In

fra

Ban

king

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July 2012

Top 3 & Bottom 3 performers from MF categories during the month (based on Simple average returns):


The following charts depict the top three (Sky blue) and the bottom three (Orange) performers in each category in June 2012.

Equity Diversified – Large Cap: Equity Diversified – Mid Cap:

ELSS:Equity Diversified – Multi Cap:

Equity - Infrastructure: Equity - Bank:

0

3

6

9

12

ING CoreEquity

PramericaEquity

BarodaPioneerGrowth

SBI M agnumEquity

DSP BR Top100 Equity

DSP BREquity

0

3

6

9

12

SundaramEquity

M ultiplier

SundaramSelect

M idcap

TaurusDiscovery

ICICI PruM idCap

SBI M agnumGlobal

DSP BRSmall AndM id Cap

0

3

6

9

12

EscortsPower &Energy

JM Core 11 EscortsLeadingSectors

EdelweissAbsoluteReturn

UTI-M NC Tata LifeScience &

Tech

0

3

6

9

12

UTI-LongTerm

Advantage

HSBC TaxSaver Equity

BarodaPioneer ELSS

'96

EdelweissELSS

ICICI PruR.I.G.H.T.

SBI TaxAdvantageFund - Sr II

0

3

6

9

12

SBIInfrastructureFund - Series I

UTI-Infrastructure

TaurusInfrastructure

L&TInfrastructure

Franklin BuildIndia

PrincipalServices

Industries

0

3

6

9

12

UTI-BankingSector

ReligareBanking

SaharaBanking &FinancialServices

Sundaram FinServ

Opportunities

ICICI PruBanking &FinancialServices

RelianceBanking

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July 2012


MIP - LT: Income Funds:

Ultra Short Term Funds:Liquid Funds:

Hybrid - Equity Oriented: Gilt Funds - Medium & LT:

0

3

6

9

12

UTI-CCPAdvantage

PrincipalSM ARTEquity

BarodaPioneerBalance

ICICI PruBalanced

DSP BRBalanced

AXIS TripleAdvantage

0

3

6

HSBC M IP -Savings

LIC NOM URAM F Floater

M IP

HDFC M IP -LTP

RelianceM onthly

Income P lan

DWS TwinAdvantage

SBI M agnumIncome P lus -

Savings

0.0

1.0

2.0

PrincipalRetail M oney

M anager

EscortsLiquid P lan

PramericaLiquid

AIG IndiaLiquid

M irae AssetLiquid

TempletonIndia Cash

M anagement

0.0

1.0

2.0

IDFC UltraShort Term

DWSTreasury -

Investment

IDFC M oneyM anager -Invest - A

BOI AXATreasury

Advantage

DWSTreasury

Fund - Cash

M irae AssetUltra ST Bond

0

1

2

L&T TripleAce -

(Cumulative)

SundaramIncome Plus

CanaraDynamic

Bond

B irla Sun LifeIncome Plus -

Retail

AXIS DynamicBond

UTI-DynamicBond

0

1

2

3

4

Kotak Gilt -Invest P lan

B irla Sun LifeGilt P lus -Regular

M otilal OswalM ost 10 Year

Gilt

M irae AssetGilt - Savings

Religare Gilt -Long Duration

Taurus Gilt

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July 2012

Weighted average returns (%) for categories over periods:


Note: Weighted returns (in proportion to corpus) are trailing in which up to 1 year are absolute and over 1 year are CAGR. NAV/index values are as on June 30, 2012.

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July 2012


II. AMCs showing the largest value change in equity holdings during the quarter:

III. AMCs showing the largest % change in equity holdings during the quarter:

Macro Analysis (period between March 2012 and June 2012): (Source: NAVindia.com- based on month end AUM)I. AMCs having the largest AUM during the quarter:

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July 2012


II. Sectors showing highest % growth in exposure during the quarter:

I. Sectors attracting most exposure during the quarter:

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July 2012


IV. Sectors showing highest % de-growth in exposure during the quarter:

III. Sectors showing highest growth in value terms during the quarter:

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July 2012


I. Stocks that have the most equity exposure (value terms) during the quarter:

V. Sectors showing highest de-growth in value terms during the quarter:

Micro Analysis (period between March 2012 and June 2012): (Source: NAVindia.com)

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July 2012


III. Stocks that have witnessed the highest growth in exposure in quantity during the quarter:

II. Stocks that have witnessed the largest change in market value during the quarter:

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July 2012


V. Stocks that have witnessed the highest de-growth in exposure in % quantity terms during the quarter:

IV. Stocks that have witnessed the highest growth in exposure in % quantity terms during the quarter:

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July 2012


VII. Stocks that have witnessed the largest rise in market value during the quarter:

MID Cap Fund Analysis:

VI. Stocks that have the most equity exposure (value terms) during the quarter:

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July 2012


IX. Stocks that have witnessed the highest growth in exposure in % quantity terms during the quarter:

VIII. Stocks that have witnessed the highest growth in exposure in quantity during the quarter:

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July 2012


X. Stocks that have witnessed the highest de-growth in exposure in % quantity terms during the quarter:

XI. Stocks that have witnessed highest increase in the number of schemes which holding over the quarter:

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July 2012


Stocks exited totally by more than one Mutual Fund during June 2012:

New stocks bought in from secondary market by more than one mutual fund during June 2012 :

Micro Analysis (period between May 2012 & June 2012):

Comments on Fund activities:

Funds have bought some stocks belonging to sectors like Banking, Tyres, & Refineries to name a few.

Funds have sold some stocks belonging to Engineering, Textiles, and Telecomm to name a few.

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July 2012


IDFC, DSP BR and Birla Mutual Funds did the maximum additions and exit of stocks during the month of June 2012. These funds have made fresh additions and total exits from 38, 19 and 16 stocks respectively.

HSBC, Franklin, and Principal Mutual Funds have done the least churning in terms of making fresh additions and total exits. These funds made fresh additions and total exits in 6, 7 and 8 stocks each respectively during the period.

Most common among Top 5 holdings – ICICI Bank, Infosys, ITC, SBI & RIL.

Most common among Top 10 holdings – In addition to the above, Bharti Airtel, HDFC Bank, ITC, Kotak Mahindra Bank, L&T & ONGC.

Bulk Deals:

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July 2012


Asset Allocation:

Diversified Equity category witnessed further reduction in its cash position in the month of June (lowest since Sept 2009) as compared to March month. The increased allocation into equity clearly shows that the fund managers are inclined towards buying stocks which were available at/near their fair value. The corpus of equity diversified category declined due to redemptions and mark to market losses as high uncertainty prevailed in the equity markets during the quarter. NEWS:

Franklin Templeton MF announced SIP through Stock Exchange: Franklin Templeton Mutual Fund has announced to enhance the network and service levels for investors from June 21, 2012. Investors can start the SIP (systematic investment plan) through National Stock Exchange as well as Bombay Stock Exchange.

Fidelity Mutual Fund announced the changes in the fund manager: Fidelity Mutual Fund announced that Mr. Shriram Ramanathan has been ceased to be the fund manager of Fidelity Wealth Builder, India Children's Education Plan, India Children's Marriage Plan and all debt schemes effective from June 23, 2012.

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July 2012


The Reserve Bank of India allowed Qualified Foreign Investors (QFIs) to invest in those mutual funds (MF) schemes that hold at least 25% of their assets (either in debt or in equity or both) in infrastructure sector under the current $3 bn sub-limit for investment in mutual funds related to infrastructure.

Sundaram India Leadership to Merge with Sundaram Growth Fund: Sundaram Mutual Fund announced the merger of Sundaram India Leadership Fund with Sundaram Growth Fund effective from July 11, 2012. SundaramIndia Leadership fund managed Rs.125.63 crores (as on March 31, 2012). This scheme was launched in June 2004. Investors of Sundaram India Leadership fund had been given an option of exit without paying any exit load from June 11, 2012 to July 7, 2012.

HDFC Securities Limited, I Think Techno Campus, Bulding –B, ”Alpha”, Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone (022) 30753400 Fax: (022) 30753435

Disclaimer: Mutual Fund investments are subject to risk. Past performance is no guarantee for future performance. This document has been prepared by HDFC Securities Limited and is meant for sole use by the recipient and not for circulation. This document is not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time solicit from, or perform investment banking, or other services for, any company mentioned in this document. This report is intended for non-Institutional Clients.

Analyst: Dhuraivel Gunasekaran. Data Source: AMFI website, NAVIndia & ACE MF.

Indian Mutual Fund Monthly Report July 2012

Economy & Finance

Transcript of Indian Mutual Fund Monthly Report July 2012