Tarakki Times English April 2018

A COMPILATION OF ICICI PRUDENTIAL MUTUAL FUND MEDIA VIEWS MUMBAI | APRIL 2018 | PAGES 10 Professional Views Opt for dynamic asset allocation fundsPg. 2Reduce portfoliovolatility byinvesting acrossasset classes S Naren, ED & CIO ICICI Prudential Mutual FundICICI Prudential Long Term EquityFund (Tax Saving)One Fund ReviewPg. 3 & 4Defensive theme ina choppy market S Naren, ED & CIO S Naren ET Wealth | April 02, 2018 ICICI Prudential Mutual Fund ED & CIO ICICI Prudential Mutual Fund These funds allocate to debt and equity segments based on theICICI Prudential MF launches market situation and help navigate volatility better.Bharat Consumption Fund Despite the correction, valua- performs steadily, as has been mid- and small-caps. This isPg. 5 tions continue to be expensive, the case with equities over the because as the market movesGood debt fund in current especially in the mid- and small- past three years. However, it is into the ma-ture phase of the bullinterest rate environment cap segment. Large-caps time to consider one's asset market, it is seen that large- are more reasonably valued. allocation and make the required caps tend to outperform both on Learn from the Masters Earnings outlook is key for the tweaks, if necessary. the upside and the potential equity market to sustain high downside. You can also considerPg. 7 valuations and it seems positive, Go for dynamic asset allocation opting for systematic transferA good stock picker must mainly on account of supportive plans (STPs) for investing in pureresort to ‘critical thinking’ global growth, improving capex, Given the uncertainties surrou- equity products. fiscal spending, and buoyant nding the near-to-medium term Larissa Fernand, Website Editor consumer demand. However, outlook, it is advisable that you Add debt to your portfolio Morningstar markets are likely to remain invest in debt and equity, rather volatile. We are not in a phase than equity alone. The easiest For fresh investments in debt, Fund Review where one can take excessive way to execute such an allo- consider accrual-based schemesPg. 8 risk because valuations are not cation is to invest in products and dynamically managed funds.List of ICICI Prudential very attractive. So, it would be such as balanced advantageFunds in Mint best to approach equities in a funds, which allocate to debt and Don't panicSIP Top UP more measured manner. equity segments based on the relative attractiveness of the Do not stop ongoing SIPsPg. 9 Follow asset allocation market at any point in time. because of short-term volatility.ETW Funds 100 disciplineSystematic Investment Plans Looking for pure equity Investors often tend to go products? Tarakki Corner overboard on a certain asset Pg. 10 class, especially when it out- Consider large-cap funds over Given the uncertainties surrounding Mrigesh Baruah the near-to-medium term outlook, it ARN - 12562 is advisable that you invest in debt North East and equity, rather than equity alone.Bharat Bangla ARN - 0135West BengalThe information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

2 TARAKKI TIMES, APRIL 2018 Interview Reduce portfolio volatility by investing across asset classes Business Standard | April 01, 2018S Naren A BASIC ASSET ALLOCATION • Of what is left, allocate 70 per across equity, debt, internationalED & CIO APPROACH cent to large-cap funds and 30 funds and gold. Equities tend toICICI Prudential Mutual Fund per cent to mid- and small-cap be volatile in the short term but • In a long-term portfolio, funds. can offer good returns over theAs data from the past 10 years allocate to equities using 100- long term. Investment in fixeddemonstrate, no one asset class less-age formula. A 30-year-old Often investors tend to invest in income offers safety, liquidityperforms every year. Only if you will have a 70 per cent one asset class only, based on and reasonable returns.allocate across various asset allocation their personal preference. Theclasses will your portfolio Key is to allocate one's invest- Investing in gold provides abenefit, irrespective of which • More risk averse investors ment across asset classes so hedge against inflation, andclass performs in a particular should have lower equity that the portfolio is not affected international funds provideyear. A diversified portfolio is key allocation than dictated by this by volatility in a particular asset exposure to global markets. Doto achieving financial goals. formula class. Also, different asset this exercise under the aegis of a classes respond to various financial advisor. • Allocate 10-15 per cent to gold macroeconomic developments in different ways. Hence, • What is left may be allocated to following asset allocation is fixed income important for the performance of one's overall portfolio and for • Within equities, allocate long-term wealth creation. around 15-20 per cent to international funds Within mutual funds, diversifyNO ONE ASSET CLASS KEEPS PUTPERFORMINGFund Category 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 FY18*Gold ETF 26.35 7.16 25.52 34.42 3.79 -6.74 -6.58 9.63 -2.46 5.75International diversified funds -30.46 36.75 14.84 6.93 11.26 23.89 8.93 -1.46 6.63 13.83Large-cap funds -34.14 79.45 9.01 -6.35 6.24 18.60 39.10 -8.75 22.59 10.16Mid- and small-cap funds -46.27 125.76 5.63 -0.67 5.21 26.64 69.42 -4.92 32.99 14.14Intermediate bond funds 9.24 6.68 5.50 7.83 10.51 4.20 14.47 6.21 10.30 4.65*YTD up to March 209; Figures are category average returns; Source: Ace MF ICICI Prudential Long Term Equity Fund (Tax Saving) One Fund ReviewMint | March 2018mint Return50BEST Mint 50 is a curated list of 50 How ` 10,000 has grownFUNDS investment-worthy funds. 4,10,000ICICI Prudential Long Term Equity Fund 3,60,000 ICICI Prudential Long Term Equity Fund 3,51,000(Tax Saving) 3,10,000 (Tax Saving) 2,60,000 Nifty 500 Total Return IndexCorpus (` cr) (as on 28 Feb 2018) 5,033.96 2,10,000 1,27,043 351.00 1,60,000NAV (as on 15 Mar 2018) 2.31Expense ratio (as on 31 Jan 2018) 2.47 1,10,000Category average expense ratio ` 5,00 60,000(as on 31 Jan 2018)Minimum Investment 10,000 15 Mar 2018 19 Aug 1999 Source: Value Research Base value taken as 10,000The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

Interview 3TARAKKI TIMES, APRIL 2018Defensive theme in a choppy marketWealth Forum | April 02, 2018ICICI Prudential’s new Bharat The stocks/sectors mentioned in this presentation is only for illustration purpose S NarenConsumption Fund – Series I only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India ED & CIOcomes at a time when global and Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not ICICI Prudential Mutual Fundlocal factors are likely to keep constitute any recommendation of the same and ICICI Prudential Mutual Fund may ormarkets choppy over the next 12- may not have any future position in these sector(s)/stock(s).The portfolio of the auto sector, the outlook for18 months. Times like these are scheme is subject to changes within the provisions of the Scheme Information specific companies appears tousually when one turns to document of the scheme. Please refer to the SID for investment pattern, strategy and be reasonable.defensives like the consumption risk factors.theme. Read on as Naren shares We believe the sectors that canhis perspectives on markets and Naren: Under the consumption attractive; media is attractive on benefit from the consumptionthe rationale for this fund at this theme, a variety of sectors are a stock selection basis, while theme are:time. under consideration. telecom and power are very attractive on a valuation basisWF: Is it reasonable to deduce We feel health care is broadly with a long-term view. Within thefrom the launch of a con-sumption oriented fund that Auto: Discretionary Spendprospects for the cyclicalrecovery which was being hoped • India is world’s fourth largest automobile industry and 7th largest commercialfor looks a little challenging now vehicle manufacturer.and that domestic consumptionseems to be on balance a more • Sales of cars, utility vehicles and vans grew at 8.85% during year 2017.attractive proposition? • As of FY 15, around 31% of global sale of small cars are manufactured in India.Naren: Due to a combination ofdomestic and global factors, we • India, emerged as a world leader in manufacturing ofbelieve that there is a scope of (i) Diesel and Petrol Engine of small capacityvolatility in the market. Hence we (ii) Commuter 2 and 3 wheelerdecided to launch a more (iii) Low powered tractorsdefensive theme product. (iv) Auto componentsWe believe, the advantage here • Automotive sector is likely to contribute in excess of 12% of India’s GDP as peris that you can invest in sec- AMP 2016-26.tors like consumer staples,healthcare which are defensive, Source: Auto Motive Mission Plan 2016-26, IDFC Securities. The stocks/sectors mentioned in this Presentation is only forauto and consumer durables illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty India Consumption Index. Thealong with sectors which are sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutualcheap on a valuation front and Fund may or may not have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes withinhave also been under pressure the provisions of the Scheme Information document of the scheme. Please refer to the SID for investment pattern, strategy andlike telecom and power, coupled risk factors.with good stock picking insectors like media. Consumer Non-DurableWF: How is the earnings • Household and Personal Care is the leading segment, accounting for 50% of thegrowth story panning out in overall market.key consumption sectors andhow do valuations appear now • Hair care contribute 23% and Food and Beverages contributes 19% in terms ofvs. historical averages in this market share.theme? • Edible oil market in India grew by 25.6 per cent in 2017.Naren: There has been a steadyearnings growth in the sector • Aggregate financial performance of the leading 10 FMCG companies over theover the last 6-7 years, except for past 8 quarters displays that the industry has grown at an average 16-21 per centtimes when there have been in the past 2 years.event-based issues which arenot structural in nature. So, the • In Fy17, rural India accounted for 60% of the total FMCG market.consumption sector has beensteady on the earnings growth • With expected up-tick in rural income and better living quality due to Swachhfront. Therefore, even though the Bharat Abhiyan may boost share of non-food expenditure in rural India.sector is relatively inexpensive,the scheme aims to invest in Source: Kantar worldpanel india, World Bank, AC Nielsen, ibef.org. E : Estimate. The stocks/sectors mentioned in thisstocks which offer reasonable Presentation is only for illustration purpose only. The stocks mentioned herein are a part of the scheme benchmark i.e Nifty Indiamargin of safety. Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in these sector(s)/stock(s).The portfolio of the scheme isWF: Out of the broad subject to changes within the provisions of the Scheme Information document of the scheme. Please refer to the SID forconsumption theme, which investment pattern, strategy and risk factors.segments appear moreattractive now and why?The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

4 TARAKKI TIMES, APRIL 2018 Interview Pharma & Healthcare • Healthcare has become one of largest sectors both in terms of revenue & employment. • The industry is growing at a tremendous pace owing to its strengthening coverage, services and increasing expenditure by public as well private players. • During 2008-20, the market is expected to record a CAGR of 16.5%. • Sector is also experiencing 22-25% growth in medical tourism and the industry is expected to double its size from US$ 3 billion in April ‘17 yo US$ 6 billion by end of 2018.Source: World Bank, CITI Research. The stocks/sectors mentioned in this Presentation is only for illustration purpose only. The stocks mentioned herein are a part of thescheme benchmark i.e Nifty India Consumption Index. The sector(s)/ stock(s) mentioned in this presentation do not constitute any recommendation of the same and ICICIPrudential Mutual Fund may or may not have any future position in these sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of theScheme Information document of the scheme. Please refer to the SID for investment pattern, strategy and risk factors.WF: Between urban and rural years (2014-17) we go through a for investing in this fund now? dynamic asset allocationconsumption, where would phase of volatility. schemes, second is to invest inyou place larger bets now and Naren: We have for long believed close-ended funds which invest inwhy? WF: For investors who may that there are three ways to invest interesting themes and third is to want to “wait on the sidelines” when the market cycle becomes invest in debt Schemes. TheNaren: Since it is a pre-election for a better entry point amidst advanced. One is investing in launch of this Scheme comes as aphase, we would prefer rural this correction, what is the case Mutual Fund category like part of that belief.consumption theme over urbanconsumption. Also, ruralconsumption hasn’t done well inthe last 3-5 years. Hence, webelieve that there is better scopefor outperformance here.WF: Many investors tend to beinfluenced by near-term marketperformance when investing inequity funds – whether open orclose-ended. In that context,how do you read the currentround of volatility and what isyour prognosis for the coming12 months?Naren: We believe that the The stocks/sectors mentioned in this presentation is only for illustration purpose only. The stocks mentioned herein are a part ofmarket can be volatile over the the scheme benchmark i.e Nifty India Consumption Index. The sector(s)/stock(s) mentioned in this presentation do not constitutenext 12-18 months due to global any recommendation of the same and ICICI Prudential Mutual Fund may or may not have any future position in theseand domestic factors. This is a sector(s)/stock(s).The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document ofregular part of any market cycle, the scheme. Please refer to the SID for investment pattern, strategy and risk factors.where after seeing four goodICICI Prudential MF launches BharatConsumption FundHBL | March 23, 2018ICICI Prudential Mutual Fund on sectors as part of the theme; consumption and related consumption in the next 12-18Thursday launched ICICI contrarian sectors too form part activities. months,” it added. The minimumPrudential Bharat Consumption of the theme. It will primarily application amount is ` 5,000Fund Series 1 (1,300 days), invest in businesses, which It will invest up to 20 per cent and in multiples of ` 10 thereaftertracking the consumption include consumer non-durables, each in equity and equity-related and its performance benchmarktheme. consumer durables, automobile, instruments of companies other is the Nifty India Consumption healthcare services, etc, that are than those benefiting from Index.According to a press release by likely to play out well in its consumption and relatedthe fund house, the close-ended investment horizon of about 3.5 activities, debt and moneyequity scheme will close for years. market instruments.subscription on April 5. The scheme will invest at least “Before elections, consumptionThe Bharat Consumption Fund is 80 per cent of its corpus in equity is a good theme to invest in, anda multi-sectoral fund with both and equity-related instruments now when the government isdefensive and aggressive of companies benefiting from likely to give a big thrust toThe information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

Interview 5TARAKKI TIMES, APRIL 2018Good debt fund in current interest rate environmentAdvisorkhoj | March 29, 2018Last one year has not been good Scheme’s interest rates are likely maturity profile. What is the maturity of ICICI Prudentialfor debt mutual fund investors. to remain unchanged in the difference? Short term debt Regular Savings Fund is 9.9%Interest rates, after declining for coming quarter. mutual funds have substantial which means that, the NCDs innearly three years bottomed out allocations to Government the scheme portfolio will givein the middle of 2017, have been Low risk free (FD and Bonds, whereas Credit Oppor- 9.9% annualized returns if theon an upward trajectory since Government Small Savings tunities funds invest almost all NCDs are held to maturity - this isthen. While, long term gilt funds, Schemes) interest rates and their assets in Non Convertible significantly higher than whatincome funds etc, which invest bond market volatility affecting Debentures or Corporate Bonds. Government Bonds will yield.in long dated bonds have been debt fund returns is likely to be a ICICI Prudential Regular Savings Please note however that, thethe worst affected; even short cause of concern for fixed Fund is invested entirely in YTM will not be equal to schemeterm debt funds gave income investors. Mutual funds NCDs. returns because expenses willdisappointing returns in the last can provide a solution for have to deducted (ICICIone year. investors looking for higher The corporate bond market in Prudential Regular Savings Fund income at low to moderate risk. India is still underdeveloped and has an expense ratio of 1.7% ofA couple of days back, the bond In the last one year, while long there is not enough supply to assets) and YTM may change, asmarket rallied as the Govern- term debt funds gave 3 to 4.7% meet investor demand; hence the portfolio changes due toment announced reductions in returns, short term debt funds most debt funds invest primarily inflows and redemptions.its borrowing plans, but near to gave around 6% returns and in Government Bonds. However,medium term concerns remain. money market mutual funds this market is growing, as banks Nevertheless, the yields of CreditSo far the Reserve Bank of India (liquid and ultra-short term debt saddled with Non Performing Opportunities Funds will behas maintained status quo on funds) gave 6.3% - 6.7%, credit Assets (NPAs), are wary of significantly higher than Giltinterest rates, as it does not see, opportunities funds were the lending money. In the last fiscal Funds or short term debt fundsrisk to inflation target in the big outperformers - Credit year corporate bond sales which invest primarily in Giltsimmediate term. Opportunities funds on an surged 40%. Though this market (Government Bonds) of similar average gave around 7% or caters primarily to institutional maturity profiles. In our blog, weUnited States Federal Reserve higher returns in the last 1 year. investors, informed retail inves- have often discussed thepolicy decisions will impact all Over the last three years, Credit tors can tap the NCD market fundamental relationshipbond markets in the world, Opportunities Funds were the through Corporate Bond mutual between risk and returns inincluding India. The most best performing debt fund funds or Credit Opportunities investments. So what is theimmediate impact of interest products giving north of 8% fund to get good returns in the nature risk for which we getrate hikes in the US, as far we are compounded annual returns. medium term. Let us now additional returns in Creditconcerned, is on the rupee. We discuss what NCD is. Opportunities fund?are a net an importing economy - In uncertain or adverse interestwhen the rupee depreciates, our rate environments, good Credit What are Non-Convertible Risk in NCDscurrent account deficit and fiscal Opportunities funds can provide Debentures (NCD)?deficit will rise. Rising crude good income solutions to Regular readers of our blog willprices and weakening rupee investors, provided they These are debt securities or know that, debt mutual funds aremake fiscal deficit and inflation a understand the risk factors bonds issued by public sector or subject to interest rate risk – ifconcern. involved in these investments. In private sector companies. De- interest rates go down bond my various interaction with bentures are unsecured bonds, prices rise, debt fund returns areOn the domestic front, it is investors, as well as based on which means that, they are not higher and vice versa. Most ofstill not very clear, how the the queries and comments we by a physical asset or collateral. the discussion of debt fund riskGovernment plans to fund the receive from investors in Remember, Government Bonds factors is centered on interestPrime Minister’s ambitious Advisorkhoj, I have seen that come with sovereign guarantee, rate risks because most debtMedicare scheme. Decline in retail investors in general have which means they interest and mutual funds invest primarily invegetable prices may give RBI limited understanding of debt principal re-payment is assured Government Bonds. Interest ratethe space to hold the repo rate in funds. Credit Opportunities by the Government. There is no sensitivity of a bond isits April meeting. But the outlook funds are among the most such guarantee in NCDs, which proportional to the maturity ofin the medium term is uncertain. misunderstood product means there is a risk involved in the bond - longer the maturity, categories within the debt fund such an investment. What do higher is the interest rate risk. ForThe banks have recently raised asset class. In this blog post, we NCD investors get in return for debt mutual funds of shorterfixed rates across various will discuss about Credit taking more risk? NCDs pay a duration e.g. money markettenures. The rates in the 1 to 3 Opportunities funds in general higher rate of interest (coupon) mutual funds, short term debtyear tenures are in the range of and ICICI Prudential Regular compared to Government mutual funds, credit6.5% to 7.2%, which on a post Savings Fund, a good Credit Bonds. If NCDs are held till opportunities funds etc, thetax basis is still lower than what Opportunities fund, in particular. maturity, assuming no default, interest rate risk is limited.retail investors usually expect. they will give higher returns thanWhile the Government Small What are Credit Opportunities Government Bonds of similar The average maturity of ICICISavings Scheme’s interest, are Funds? maturities. Prudential Regular Savings Fundslightly higher than bank FD is 1.91 years. So for 25 bpsrates, they are in the range of Credit Opportunities Funds are a Credit Opportunities fund change in interest rates, the7.3% to 7.6%, which is much type of short term debt mutual managers aim to capture the average price of the NCDs in thelower than average rates over fund. Residual maturities of higher yields of corporate bonds scheme portfolio will change bythe last 5 to 7 years. Further, securities in short term debt fund to give superior returns to 0.48%. If interest rates go up bydespite the banks raising FD portfolios are usually in the range investors, while endeavoring to 25 bps during the year, therates earlier this month, the of 2 - 3 years; Credit Oppor- minimize risks for the investors returns will come down byGovernment Small Savings tunities funds have similar at the same time. The yield to 0.48% during the same periodThe information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

6 TARAKKI TIMES, APRIL 2018 Interviewand vice versa. However, if the securities. than Rs 9,000 Crores of Assets incomes in the current interestNCDs are held till maturity, then under Management. The rate environment. Investorsinterest rate changes are not a I have noticed that, some expense ratio of the scheme is must understand the risk factorsfactor because the investor will investors do not have a good 1.7%. The fund has give 8.81% of the fund, particularly creditget the face value of the NCD at understanding of credit ratings – returns since inception. The risk before investing. Investorsmaturity. Credit Opportunities some investors think that bonds chart below shows the annual should avoid funds, which have afund managers usually employ rated below AAA are risky. You returns of the fund over the last 5 high percentage of papers ratedhold till maturity or accrual can see in the table above that, years. BBB- or lower.strategy. Therefore, if you align AAA denotes highest safety, butyour investment tenure with the NCDs rated BBB to AA also have Conclusion Investors can consult with theirmaturity profile of the fund, then varying degrees of safety. In f i n a n c i a l a d v i s o r, i f I C I C Iinterest rate risk is quite limited. order to get higher yields In this blog post, we have Prudential Regular Savings FundLet us now discuss the other, (returns), fund managers may discussed about how Credit is suitable for their investmentmore relevant, risk factor for invest in slightly lower rated but Opportunities fund can offer needs.Credit Opportunities fund. still investment grade papers - investment solutions for the yield to maturity of ICICI investors looking for higherIn addition to interest rate risk, Prudential Regular Savings Fundthe other relevant risk factor for is higher than average corporatedebt funds is the credit risk. bond funds. Please note that,Credit risk is the risk of non- NCDs rated BBB and above arepayment of interest or principal considered investment grade.by the bond issuer. Credit risk The average credit rating of ICICIdiffers from NCD to NCD and Prudential Regular Savings Fundfrom one Credit Opportunities portfolio is BBB; so the creditfund to another, depending on rating profile of the fund portfoliothe credit risk strategy of the is definitely investment grade.f u n d m a n a g e r. H o w c a ninvestors know about credit risk? Apart from higher yields and limited interest rate risk, theCredit Risk other advantage of Credit Opportunities fund is that, if theDebt securities, issued by NCD credit rating of a lower rated NCDissuers / companies, are rated by in the fund portfolio getsindependent credit agencies like upgraded then the price of theCRISIL, ICRA etc. Credit rating is NCD will rise and the fund willa measure of credit risk or risk of give higher returns. The flipdefault. Higher the credit rating, side is that, if an NCD getslower the credit risk and vice downgraded then the price ofversa. The interest rate or the NCD will fall. In the media,coupon or yield of the NCD will the focus is more on ratingsbe inversely proportional to the downgrades, but in reality ra-credit rating. If an NCD is rated tings upgrades are as common,lower, it has to offer higher if not more common, thaninterest rate to investors, while ratings downgrades.an NCD which is rate higher, canpay lesser interest rate. The table ICICI Prudential Regular Savingsbelow describes the credit rating Fund was launched in Decemberscale used by CRISIL to rate debt 2010. The scheme has moreThe information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

Learn from the Masters 7TARAKKI TIMES, APRIL 2018A good stock picker must resort to‘critical thinking’Morningstar | March 28, 2018Larissa Fernand an acrimonious battle fought he finds it, goes on to determine So why have his funds hit aWebsite Editor publicly. But he stood vindicated whether it’s cheap. He keeps an turbulent run?Morningstar in 2007, when the SEC eye out for situations where a investigated the firm and found it stock might be misunderstood On January 16, 2018, EinhornThis billionaire has always been guilty of securities fraud. or mispriced, and where sent a quarterly letter to hisvery closely watched on Wall investors have not accurately investors stating that the netStreet, though recently he has Einhorn is a value investor who figured out what’s going on. return (net of fees/expenses) ofbeen garnering attention for the approaches investing with a Think spin-offs, post-bankruptcy, Greenlight Capital funds in 2017wrong reason. David Einhorn’s different bent. His views are well upheaval of a company or even was 1.6%.funds have run into rough articulated during an interview an industry.weather leading him to recently with Value Investor Insight, a The corresponding figure for theconfess that his hedge fund chat with the Oxford Union, and • On analyzing a stock S&P 500 index was 21.8%. HisGreenlight Capital has never his book Fooling some of the shorts on Caterpillar, Amazon,“underperformed like this”. people all of the time. The trick is to avoid losers, Netflix and Tesla (all performed because it takes a success to excellently in the market)But don’t write him off. This is a The below has been taken from offset them just to get back to contributed to his poorman of convictions known for his there and paraphrased. even. His goal is to make money performance.prescient bets. on each investment, or at least • On patience preserve capital. In a missive to his investors lastIn 2007, he emerged as a thorn in year, he sarcastically pondered ifthe side of Lehman Brothers with Equities are long, if not inde- This means securities should be the market has adopted anhis rabble-rousing rhetoric. He finite-duration, assets. When he sufficiently mispriced, so that if alternative paradigm for calcu-lambasted the investment makes an investment, he usually he is right, the fund will do well. lating value: What if equity valuebanker on various media appe- does not have any idea how long But if he is wrong, he will roughly has nothing to do with current orarances and publicly announced he would be invested. If the break even. If he is massively future profits and instead isthat he shorted the stock. downside of an opportunity is no wrong, he will lose money. derived from a company’s ability short-term return or “dead to be disruptive, to provide socialThe CEO Dick Fuld complained money”, he is fine with it. In all stocks, there are three basic change, or to advance newto the Securities and Exchange questions to resolve: beneficial technologies, evenCommission, or SEC, that his Sooner or later, the truth wins. If 1) What are the true economics when doing so results in currentcompany was the victim of you know you are right, all you of the business? and future economic loss?shorts because individuals like need is patience, persistence, 2) How do the economicsEinhorn were badmouthing the and discipline to stay the course. compare to the reported In another engagement, hecompany’s accounting. He earnings? noted that investors are begin-locked horns with CFO Erin •On the key to being a 3) How are the interests of the ning to believe that ownership ofCallan and in a private call in May successful equity investor decision makers aligned with the the company is something other2008 asked her to explain investors? than the risk adjusted futurediscrepancies in the firm’s latest Critical Thinking. profits of the company.financial filing and valuations of There are two types of badits assets. Later that year It's the ability to look at a situation outcomes. Sometimes, after Maybe other factors such asLehman declared bankruptcy. and see it for what it is, analyzing the risk and reward, an social disruption, social which is not necessarily what is investment appears attractive, desirability, or the charismaticAnd, his perseverance is awe- presented. When something but the unfortunate or unlikely value of the CEO, are contri-inspiring. makes sense, figure out what. happens. buting to the market’s mind of When something doesn't make the equity value of the company.In 2006, he began researching sense, question it, challenge it, Other times, the analysis is But, he warns, it is not differentFlorida-based real estate look at it from a different way. In simply flawed: The investment is this time.developer St. Joe and shorted doing so, you may often come to poor and the eventual loss isthe stock. He was vindicated the opposite conclusion. inevitable. Have David Einhorn’s calls beenonly in 2015 when the SEC wrong-headed? Maybe. Butcharged the firm with improper • On scouting for winners He avoids “evolving hypo- before you dismiss him, doaccounting of its residential real theses”. If his investment remember that this unapologeticestate developments and The starting point is not: Is this rationale proves false, he would value investor has an amazingoverstating its earnings and cheap? Or, why is it cheap? rather exit the position than track record.assets. Hence, his approach does not create a new justification to hold start with screens (Price-to-Sales on. Since its inception in May 1996,But his initial claim to fame was / Prices-to-Earnings / Price-to- Greenlight Capital has returnedhis tenacious short on Allied Book) which help identify stocks We exit when our analysis is 2,134% cumulatively or 15.4%Capital way back in 2002. He available at a bargain. wrong or we just can’t stand the annualized, both net of fees andaccused the firm of improper use pain, rather than when the expenses. It is not withoutof fair value accounting, which Einhorn sets the ball rolling by market simply disagrees longer reason that Wall Street listensinflated the stock price. Initially, identifying a reason the stock than we had imagined. when he speaks.the price actually climbed amidst could be mispriced, and then ifThe information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

8 TARAKKI TIMES, APRIL 2018 Fund Reviewmint List of ICICI Prudential Funds in Mint50BESTFUNDSMint | April 2018FUND CORE 3-year return (%) 5-year return (%) 10-year return (%) Fund size (Rs cr)LARGE CAPICICI Prudential Focused Bluechip Equity Fund 9.26 18.28 NA 16,275.05MULTI CAP 9.63 18.58 13.30 11,016.34ICICI Prudential Dynamic Plan 14.48 22.20 NA 179.64ICICI Prudential Nifty Next 50 Index Fund 5.87 21.83 18.05 16,664.36ICICI Prudential Value Discovery FundTAX PLANNING 8.27 19.90 14.14 5,033.96ICICI Prudential Long Term Equity Fund 10.54 18.90 13.10 27,800.54(Tax Saving)EQUITY-ORIENTEDICICI Prudential Balanced FundFUND CORE 3-month return (%) 6-month return (%) 1-year return (%) Fund size (Rs cr)DEBT-ORIENTEDSHORT TERM 1.94 2.51 6.77 8,812.73ICICI Prudential Short Term PlanSIP Top UpA monthly Systematic Investment Plan (SIP) of Rs.10,000 with an annual Top Up of 10% in these schemes has generated returns as stated below.Scheme Name 5 Years 10 YearsICICI Prudential Return (%) 1,439,528 5,261,691 Midcap Fund 22.14 19.2 ICICI Prudential Return (%) 1,192,595 -Focused Bluechip Equity Fund 14.32 -ICICI Prudential Return (%) 1,227,642 4,496,467Balanced Fund 15.47 15.94ICICI Prudential Return (%) 1,160,055 4,069,205 Top 100 Fund 13.22 13.86ICICI Prudential Return (%) 1,210,972 4,171,618 Dynamic Plan 14.9 15.2ICICI Prudential Return (%) 1,231,467 4,342,900Multicap Fund 15.7 15.22ICICI Prudential Balanced Return (%) 1,137,561 4,044,321 Advantage Fund 12.41 13.7 ICICI Prudential Return (%) 1,100,631 -Select Large Cap Fund 11.08 - ICICI Prudential Return (%) 1,237,110 5,184,366Value Discovery Fund 15.68 19.19ICICI Prudential Long Term Return (%) 1,209,942 4,356,765 Equity Fund (Tax Saving) 14.86 16.28Data in XIRR (%) terms and as of March 28, 2018The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

Fund Review 9TARAKKI TIMES, APRIL 2018ETW Funds 100List of ICICI Prudential Funds in the Economic Times WealthET Wealth | April 2018FUND Value Research Returns (%) Fund Rating 3-month 6-month 1-year 3-year 5-year -5.32 17.45EQUITY: LARGE CAP 2.44 11.97 9.06ICICI Prudential Focused Bluechip Equity FundICICI Prudential Value Discovery Fund -5.82 2.67 5.62 6.31 21.12EQUITY: MULTI CAPICICI Prudential Nifty Next 50 Index Fund -6.66 4.51 15.77 14.42 21.19HYBRID: EQUITY ORIENTEDICICI Prudential Balanced Fund -4.75 3.04 8.93 10.55 18.31HYBRID: DEBT-ORIENTED CONSERVATIVE 1.92 3.18 7.01 8.46 8.79ICICI Prudential Regular Income Fund 2.09 2.16 6.55 8.74 9.08(An open ended income scheme. Income is not assured 2.18 1.65 6.71 8.87 11.18and is subject to the availability of distributable surplus)DEBT: INCOMEICICI Prudential Banking & PSU Debt FundDEBT: DYNAMIC BONDICICI Prudential Long Term PlanSystematic Investment PlansA monthly Systematic Investment Plan (SIP) of Rs. 10,000 in these schemes has generated returns as stated below Scheme Name 3 Years 5 Years 7 Years 10 Years ICICI Prudential Return (%) 4,53,642 10,37,093 18,16,937 32,92,120 Midcap Fund 15.72 22.14 21.72 19.2 ICICI Prudential Return (%) 4,35,046 8,57,492 14,21,502 --Focused Bluechip Equity Fund 12.78 14.32 14.8 -- ICICI Prudential Return (%) 4,34,875 8,82,074 14,97,843 27,61,762 Balanced Fund 12.75 15.47 16.27 15.94 ICICI Prudential Return (%) 4,26,740 8,34,591 13,83,956 24,71,307 Top 100 Fund 11.44 13.22 14.05 13.86 ICICI Prudential Return (%) 4,41,871 8,69,829 14,44,458 26,55,447 Dynamic Plan 13.87 14.9 15.25 15.2 ICICI Prudential Return (%) 4,29,985 8,87,125 14,89,773 26,57,345 Multicap Fund 11.97 15.7 16.12 15.22ICICI Prudential Balanced Return (%) 4,20,337 8,18,152 13,57,101 24,49,716 Advantage Fund 10.4 12.41 13.5 13.7 ICICI Prudential Return (%) 4,11,700 7,91,650 12,87,929 --Select Large Cap Fund 8.98 11.08 12.03 -- ICICI Prudential Return (%) 4,07,010 8,86,570 15,73,332 32,90,522Value Discovery Fund 8.19 15.68 17.66 19.19ICICI Prudential Long Term Return (%) 4,25,386 8,69,076 14,73,949 28,13,072 Equity Fund (Tax Saving) 11.22 14.86 15.82 16.28Data in XIRR (%) terms and as of March 28, 2018The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

10 TARAKKI TIMES, APRIL 2018 Tarakki CornerYour YToaur rTaarakkkki CiornCer orner Hailing from Guwahati, Mrigesh Baruahhad been \"Thanks to fund houses like ICICI Prudential MF that are associated with many mutual fund companies back in July forever willing to help in conducting any number of IAPs.\" 2004 till August 2015. However, he was always interested He said. Appreciating their active efforts, he mentions in working on the advisory side. His experience in the field that ICICI Pru MF regularly conducts distributor and is 11 years old now, having worked with advisors and investor meets, for improving reach and awareness. investors alike. It has been 30 months now, since he has been an IFA and He recalls that his short stint as a banker prior to joining MF holds an AUM of approx 30 Crore with over 300 PAN industry was a big learning experience. All this made him investors. not just an advisor, but an employer of hundreds of people. For a man who had spent 15 years working for others, His golden words of advice to any new entrepreneur would starting something of his own was a risk. be to be true to one’s profession and self.Mrigesh Baruah But he has a very practical approach to life and suchARN - 12562 practicality is a must have for all entrepreneurs. He didn’tNorth East build unrealistic expectations out of his venture in the beginning, but managed to draw the same sum he did from his jobs. He understands that the key to a growing investor base is ensure their happiness. Making money is just one aspect of the business, his focus is on customer satisfaction. He has been using Investor Awareness Programs(IAPs) as a tool to reach out to masses and has been increasing the frequency with Guwahati coming under T30 regime.Bharat Bangla’s first job was in a reputed Financial very different world then from what we have now”. Bharat Banglainstitution in the consumer loans department. And while   ARN - 0135interacting with his clients, He realized their lack of However, where there’s a will and hard work, there isfinancial freedom. He understood the importance of always a way. Bangla kept his decisions firm. He would West Bengalfinancial planning and mutual funds and decided that his make random phone calls, back in the days of no socialfuture actions would be aimed towards bringing financial media. He had very few references, but he made the mostfreedom for all.15 years later, Bharat recalls that this of them. Eventually things started to turn around, smalljourney has indeed been monumental in providing that to numbers became huge client bases.his clients. He has made a difference! Bangla prides himself upon assets worth Rs. 350 crores,He recalls that the beginning was challenging. The spread over 750 families. He believes in working withbusiness was very limited and scarce. People didn’t know every individual differently. He understands that everymuch about mutual funds, leave alone financial planning. person has different goals, techniques and above all,The markets were down and not doing well. People would different psychologies. He says his biggest learning hasprefer to invest in debt and where returns were relatively been to understand his clients first. “Today we can oftenattractive. guess the client’s requirements. Thereby giving us the ability to provide them with a more appropriate solution“We had a lot of difficulty in searching for clients who embedded with the essential ingredients that may come inwould agree to meet me and listen to me. We had to take handy in future and be necessary to make it a morebaby steps and hand hold clients from there to eventually efficient strategy” Bharat Bangla remarks.come to a stage where we could discuss financialplanning. SIPs used to be a rare phenomenon. Electronic He still doesn’t let go of his modesty as he believes thatdebits were unheard of. We had to take post dated there is a long way ahead.cheques and that was how SIP used to happen. It was aThe portfolio of the scheme is subject to changes with in the provisions of the Scheme Information Document (SID) of the respective schemes. Please refer to the SID for investment pattern, strategy andrisk factors. The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.Tarakki Times is compilation of articles published in various newspapers/magazines. Due credit is given by disclosing the source for such articles/publication. The articles covered are excerpts ofpublication by an independent agency and is circulated to the empanelled Advisors/Distributors of ICICI Prudential Asset Management Company Limited (the AMC). ICICI Prudential Mutual Fund (the Fund)does not warrant the accuracy, reasonableness and/or completeness of any information. All data/information used in the preparation of this material is specific to a time and may or may not be relevant infuture post issuance of this material. The AMC takes no responsibility of updating any data/information in this material from time to time. The AMC (including its affiliates), the Mutual Fund, The Trust andany 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 anyloss of profit in any way arising from the use of this material in any manner. The sector(s)/stock(s) mentioned in this communication do not constitute any recommendation of the same and ICICI PrudentialMutual Fund may or may not have any future position in these sector(s)/stock(s). The recipient alone shall be fully responsible/are liable for any decision taken on this material.Mutual Fund investments are subject to market risks, read all scheme related documents carefully.