Tarakki Times English April-June 2020

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. A COMPILATION OF ICICI PRUDENTIAL AMC MEDIA VIEWS Professional Views MUMBAI | APRIL-JUNE 2020 | PAGES 16 Pg. 3 Consider SIP/STP into value, Markets may remain volatile in focused, dividend yield or near term small cap funds The Economic Times | May 22, 2020 Pg. 5 Wizards of Dalal Street CNBC TV18 | May 05, 2020 S Naren ED & CIO ICICI Prudential Mutual Fund Pg. 8 Nimesh Shah The Economic Times | June 26, 2020 time periods for the investor, MD & CEO ranging from the short-term to How ‘Core 4’ Framework helps in ICICI Prudential Mutual Fund more money than all the short medium and long-term. picking winners sellers and created one of the Mutual fund investors are facing sharpest rallies in equity market Investors and advisors must do a Moneycontrol| June 23, 2020 a crisis of confidence. It is history. From 23rd March lows till careful evaluation of the fund increasingly becoming difficult date, the benchmark indices houses and the schemes. Fund Parag Thakker for them to make sense of a such as the BSE Sensex and houses which have a volatile stock market, and the Nifty surged 36 percent and 37.2 demonstrated track record of not Portfolio Manager happenings in the debt mutual percent, respectively. The role of facing any defaults or portfolio fund space. Shivani Bazaz of global central banks in equity separation would be an ideal ICICI Prudential PMS ETMutuaFunds.com spoke to markets has been understated. choice for investments. While Nimesh Shah, MD & CEO, ICICI choosing schemes, it would be Tarakki Corner Prudential Mutual Fund, to find That said, no one knows how advisable to consider the risk Pg. 10 out how he views the current long the pandemic related appetite and liquidity needs of Pranjal Wagh & Abhinandan Honale situation. situation will continue and hence the investor too. the fallout from this and the Samarth Wealth Management “No one knows how long the magnitude of economic impact ICICI Prudential has a solid pandemic related situation will remains hazy. So, in the near track record of more than two Pg. 11 continue and hence the fallout term, it is best for investors to decades in managing debt from this and the magnitude of bear in mind that the equity investments. There has been no Sameet Chaudhary economic impact remains hazy. markets are likely to remain defaults, nor has there been any Samsang Financial Consultants So, in the near term, it is best for volatile. They could consider delay in interest payments in our investors to bear in mind that the products like dynamically- debt fund holdings. Our fixed- Fund Review equity markets are likely to managed asset allocation funds, income schemes did not have Pg. 12 remain volatile,\" says Shah. which can help make the most of any exposure to names, which Edited interview such challenging times and have been under stress over the ICICI Prudential Bluechip Fund choose to continue with their past two years. This is largely Good record outshines low bouts systematic investment plans due to the robust processes, (SIPs). which have so far helped in Pg. 13 making discerning decisions On the debt side, a recent study with no risk of negative ICICI Prudential Corporate Bond Fund by one of India’s foremost rating developments in the portfolio. Low risk, steady returns agencies CRISIL Ltd. is relevant. It states that the closure of six Reflecting the mood of Pg. 14 Mutual fund investors are debt fund schemes by a certain investors, the inflows into facing a crisis of confidence. fund house has frayed investor equity mutual funds have fallen ICICI Prudential Short Term Fund Prospects of the equity markets sentiment. But the study for the second consecutive are bleak due to the economic concludes that things aren’t all month. What are your Pg. 15 disruptions caused by the bad. “Indeed, dive a little deeper thoughts? List of ICICI Prudential Funds Covid-19 pandemic. Debt and there are streaks of silver - in Mint mutual fund space is rocked by options among various Inflows into equity mutual funds t h e F r a n k l i n Te m p l e t o n categories of debt mutual funds have been subdued for the last ETW Funds 100 episode. The space was already that can help ride over the two months largely on account hit by downgrades and challenges being posed by the of market volatility and uncertain Pg. 16 defaults. What would you tell pandemic's economic blow,” it economic environment, arising List of ICICI Prudential Funds investors at this juncture? explains. Indeed, debt markets from the Covid-19 pandemic. in Star Track Mutual Fund offer attractive investment In March, we had comm- opportunities across varied unicated to investors that it was the right time to invest in equities. Over the past few months, the global central banks have displayed that they had

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. 2 TARAKKI TIMES, APRIL-JUNE 2020 Interview However, the silver lining is that liquidity risk and not chasing as a category of hybrid funds in investor interest. all equity fund categories Yield-to-Maturity (YTM) are all Indian MF industry post the SEBI registered net inflows in the factors that have helped the Scheme re-categorization Many investors are actively month of May. This indicates credit risk fund to deliver a exercise. The core idea behind considering multi asset improving investor sentiment. positive investment experience. the balanced advantage allocation funds at this point. Going forward, we believe that category of schemes is that the What is your view on them? as the uncertainties wane and Investors should be mindful of allocation between asset classes the economy rebounds, the the fact that the key to better is dynamically managed. At ICICI Prudential, we focus a lot equity market sentiment too investment experience lies in on asset allocation because we would improve, leading to fresh selecting a well-managed fund However, within this category believe that if one gets market inflows into equity markets. that matches one’s goals and there is a wide variation in the cycles right, then one can risk appetite. To identify such asset allocation practices outperform the average gains. Currently, an individual investor funds requires certain skill sets, followed by various fund What asset allocation does is is well poised to gain from which retail investors may not houses. Some fund house may that it gives primary investments committed at this necessarily have. Here, financial follow market metrics such as importance to market cycles. juncture. Barring the top few advisors play a very important price-to-earnings (P/E) ratio, This is why we are very focused names where the valuations are role in the value chain by guiding while some others may use a on market cycles/asset expensive, the others are investors to choose the right combination of P/E and price-to- allocation. available at relatively cheap funds. book (PB) to decide on their valuations, many of which are equity allocation. In some other If an asset class is at the top of a sustainable dividend yield ICICI Prudential Mutual Fund cases it is trailing P/E of a market cycle, then it makes stocks. has been votaries of hybrid particular index or in-house sense to stay away from it. funds, especially dynamic asset propriety model which helps Conversely, if the asset class is at Credit risk funds continue to be allocation funds or balanced decide on the allocation to equity the bottom of a cycle, then it is under pressure. The category advantage funds. The entire and debt. In our case, we time to invest into that asset has seen massive outflows hybrid category is facing predominantly decide the class. For example: real estate once again. Do you think there outflows. What is happening? allocations based on a P/B cycle was at its peak during is a future for this category? Does it change your view on model. 2011-2013. Any investor who dynamic asset allocation sold real estate anywhere in In April, credit as an asset class funds? As a result, the performance of urban metro during these years was very attractive, but that the funds in this category too made huge gains. Post 2013, real segment saw huge outflows The common behavioural vary. In this backdrop therefore, it estate sector has not delivered mainly due to the panic around pattern seen among the is not meaningful to have a near- returns. Similarly, in 2007 the winding up of debt schemes investors is to invest in equities term performance comparison. equity cycle was at its peak. incident. However, investors when the market rallies even at Funds, which have more equity have realized that the trouble in higher valuations and stop/pause exposure in a rising market, will In 2012, when we launched ICICI debt markets is not systemic in their investments when the tend to do well and vice versa. Prudential US Bluechip Fund, nature. All funds in the category market corrects. This tends to The performance and consis- investors were very skeptical were able to honour redemption hurt an investor in the long run tency of a fund in this category about making gains from requests from investors. and minimises the returns made can only be judged across a investing in US markets. Today, on the investment. During such complete market cycle. So, after an eight-year bull run in US Hence, it is business as usual times, it pays to have a counter- making an investment equities, investors are opting for for fund houses where the cyclical approach. decisions or reviewing a fund international funds. Similarly, in quality of the underlying debt solely based on near term January 2018, one of the biggest paper is good. We believe credit In order to address this performance may prove to be a decisions we took was to return as a category is here to stay. investment flaw, we launched sub-optimal approach to money to small-cap investors in From a cycle perspective, the balanced advantage scheme investing. the portfolio management Indian credit is going through a more than a decade back; a fund schemes (PMS), which turned burst phase. If one invests in this which invests in a counter- Going forward, we believe the out to be an excellent investment period, we believe it is difficult to cyclical manner. The investing balanced advantage category decision. Post that, small-caps lose money making it an strategy also takes care of one’s has the potential to reach the have underperformed large-caps opportune time to invest in this asset allocation needs. Our scale of the present equity by a wide margin. asset class. objective while launching this assets under management fund 10 years back was to get (AUM) of the industry. With the Each of these decisions was At ICICI Prudential, the focus on investors invested in a product, increased awareness around based on where we were placed client selection, keeping away which will deliver a good risk- mutual funds and the importance in a market cycle. from concentration risk, using adjusted experience of investing of asset allocation for long term our own due diligence instead of even in volatile equity markets. wealth creation, we believe Do you think investors should relying only on credit rating as balanced advantage category of play it safe at this point? Do you the selection tool, managing Balanced advantage got finalized funds stands to attract larger think tactical bets are a good We focus a lot on asset allocation because we believe that if one gets market cycles right, then one can outperform the average gains. What asset allocation does is that it gives primary importance to market cycles. Contd. on page 4

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. Interview 3TARAKKI TIMES, APRIL-JUNE 2020 Consider SIP/STP into value, focused, dividend yield or small cap funds The Economic Times | May 22, 2020 The Covid-19 pandemic shows taken in terms of resuming airline class just because there has S Naren no signs of vanishing; the much- services, allowing limited been a negative development in ED & CIO awaited economic package from number of trains to operate and a certain fund house may not be ICICI Prudential Mutual Fund the government hasn’t cheered permitting more economic a wise move. This is especially at the market. d the market. Add to activities, are all measures which a time when debt markets are over. At the same time, we have that the predictions of more are likely to have a positive offering such attractive to be aware that many lockdowns and economic impact. We hope that as the investment opportunities from a individuals’ income stream has disruptions. We reached out to S various economic activities short to medium term been affected due to lockdown. Naren, Executive Director & CIO recommence over the next few perspective. So, the likely pent-up demand of ICICI Prudential MF, to make weeks, there is no major spike in will be visible only in those areas sense of these trying times. the number of cases reported. It How bleak is the economic whose consumer’s wealth is only then we can be sure that scenario. The economic profile has not been affected. Mutual fund investors are we are on the road to recovery. devastation due to the extremely nervous about the coronavirus pandemic is well Senior fund managers like you current state of affairs. The Mutual fund investors are documented. How severe is it have been asking investors to Covid-19 pandemic shows no facing a crisis of confidence. going to be in the coming proceed with utmost caution, signs of vanishing; the much- Equity investors are nervous months? When do you see but many investors seem to awaited economic package from about their investments things settling down and a believe that the market is likely the government hasn’t cheered because of Covid-19 pandemic possible revival in economic to bounce back immediately. the market. Add to that the and a nationwide lockdown. activities? Many new investors are eager predictions of more lockdowns The recent developments in the to invest equity schemes. What and economic disruptions. debt mutual funds are adding Coronavirus is a medical would you tell these Shivani Bazaz of ETMutual to their woes. What would you pandemic and not an economic adventurous investors? Funds.com reached out to S tell these investors? issue. Hence, it is difficult for Naren, Executive Director & CIO finance professionals or Given the lack of clarity in terms of ICICI Prudential MF, to make When it comes to equity economists to predict how the of the economic impact of sense of these trying times. investments, markets are likely economic scenario will play out Coronavirus, it is better to adopt Naren, known for keeping a cool to be volatile owing to the subsequently. We believe that as a cautious approach to investing, head in chaotic situations in the uncertainty related to the and when the medical issue gets especially in equities given that market, offers three special tips Coronavirus pandemic. No one addressed, the economic issue equity is not a risk-free asset to investors to traverse the knows how long the current too will settle. The banking class. An aggressive investment current situation. situation may continue, the full system is awash with liquidity to in the current market would impact of the economic fallout the tune of Rs 8 lakh crore. If this mean that the investor believes Finally, the prime minister has etc. So, in the near term, it is best continues, then it is a clear sign that Coronavirus is getting announced an economic for equity investors to expect that economic disruption too will resolved in a smooth manner pan package to deal with the that markets are likely to remain continue. What is currently India in the short run. economic disruption caused by volatile. Investors can consider desirable is a lower systemic the Covid-19 pandemic. What products like asset allocation surplus which signifies that Existing investors are looking is your quick take on the funds which are dynamically credit growth has started to at the market with trepidation. package and will it be enough managed which can help an normalise. They cannot understand the to tackle the issues? investor to make the most of frequent four-digit upward and even such challenging times and Many investors seem to believe The package aimed at MSMEs is continue with SIPs. that the pent-up demand very helpful. We believe an would spur economic activity economic package coupled with When it comes to the debt once the lockdown is over. How a monetary package is the best market, it is important to under- realistic is this assumption? way to deal with the current stand that the developments are disruption. Today’s monetary largely isolated to a single fund There would be some amount of policy is a step in the right house. The issue is not a pent up demand in specific direction. Recent measures systemic one. Shunning an asset goods once the lockdown is Coronavirus is a medical pandemic and not an economic issue. Hence, it is difficult for finance professionals or economists to predict how the economic scenario will play out subsequently.

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-JUNE 2020 Interview downward movements in the allocation calls. Would you Balanced Advantage, Multi on the potent gains to be made market. How would you recommend extra allocations Asset Allocation and Equity from a complete market cycle. decode the market for them? to equity if an investor has Savings. Based on the risk surplus cash? If yes, what appetite, an investor can choose 3) Do not ignore debt We continue to believe that should they keep in mind? any of the products available. investments: Post the recent markets are likely to remain The current situation is largely debacle in the debt market, many volatile. As a result, asset Given the deflationary due to the outbreak of the of the investors are having allocation remains the optimal environment, an extra allocation pandemic and the correction second thoughts about investing way of investing. The zero can be made into debt funds, seen thereafter has been very into debt schemes. The point to interest rate scenario existing in especially short and medium sharp. Despite that sharp remember here is that debt as an various developed countries term schemes and asset downturn, hybrid funds were asset class has a definitive role to along with the prevailing allocation schemes, since such successful in limiting the play in an investment portfolio. In economic environment funds stand to gain from market downside and have thus far deflationary times, debt domestically suggests that volatility, from both equity and aided in delivering relatively investments tend to do well. For volatility is likely to prevail. debt allocation. better investor experience when example: Over the past one year, compared to equity schemes. investments across debt At such times categories such as The trigger for equities now is We continue to believe over a categories have delivered robust balanced advantage/dynamic Coronavirus. We are of the view complete market cycle, hybrid returns while the return from asset allocation schemes prove that markets are likely to regain funds are likely to be well placed. equity has not been very to be the optimal way to some of its lost sheen as soon encouraging. approach equity investing in the the pandemic problem is solved. Any special advice to our prevailing market conditions. So, investors who are allocating readers to traverse the current Which are the pockets of extra sums to equities currently scenario? opportunities in the debt fund Many market analysts believe should be mindful of this fact. market currently? that we are going to witness One can consider initiating There are three points which one more round of liquidity- SIP/STP into value, focused, investors should be mindful of: We believe both the duration and driven market. Last time, only a dividend yield or small cap credit offers attractive few stocks benefited from category of funds. Among 1) Maintaining the asset investment opportunities. Given various rallies, and most thematic/sectoral ones, we are allocation discipline is of utmost that the yield curve continues to mutual fund investors did not positive on India opportunities, importance, irrespective of the remain steep due to high risk make any money. Will things be exports and infrastructure. market conditions. aversion, the short and medium different this time? segment of the yield curve is very You are a great fan of erstwhile 2) Do not let short-term attractive, as they provide good An investor who had exposure to balanced schemes - now developments impact long-term risk reward benefit. As a result, debt funds and had focused on classified as aggressive hybrid commitments. This is especially one can invest into products asset allocation has actually schemes. Traditional investors applicable in terms of SIPs. In a such as short, medium duration benefited from market volatility. in these funds are extremely market downturn, investors tend funds. When it comes to credit, However, investors who chose anxious about these schemes. to keep away from systematic the space remains attractive due to solely invest into equities that How do you view the scenario? investing, hoping to return when to valuation comfort owing to the too, not systematically, are the the market stabilises. This high spread between accrual ones who have suboptimal We have been positive on the effectively means that the schemes and repo, which investor experience. entire hybrid categories of investor has lost the opportunity provides a good margin of safety schemes - Conservative Hybrid to accumulate more units at a for investments made. You are known for your timely Fund, Aggressive Hybrid Fund, lower cost, thereby missing out Markets may remain volatile in near term Contd. from page 2 idea at this point since the exactly we are currently, in a divergence between value and aid. valuations in many sectors are market cycle. Mid, small and growth stocks continues to attractive? value themes are in the early prevail. We are recommending Hence, asset allocation stages of the cycle. So, one can investors to take exposure to techniques should be one's Coronavirus is a medical opt for an SIP/STP for investing in schemes with a value bias. mainstay as it is the only way to pandemic. No one knows how these segments. Currently, fundamentally sound protect capital relative to the long the current situation may value stocks are available at market at all points in time. We continue. When the spread of ICICI Prudential Mutual Fund is inexpensive valuations, believe this category is well infection tapers off, it will boost known for identifying a providing good dividend yield placed to make the most out of sentiment in equities. However, category to bet on to create and having strong earnings the volatility prevailing in equity in case a second wave begins in wealth over a long period. visibility. and debt asset classes. India, as is said to be in certain What are you rooting for now? parts of the globe, volatility is The other category we are Any special advice to our bound to stay. Within the debt universe, we positive on is the asset allocator readers? believe credit as a space category of funds. The current Given all these factors, in the remains attractive due to rally seen in equity asset class is Follow all the safety protocols to near-term markets are likely to valuation comfort owing to the largely fuelled by global liquidity. remain safe amidst the covid-19 remain volatile. So, the optimal high spreads between accrual Going forward, whenever the pandemic. In terms of investing, approach to equity investing schemes and repo, which US Fed tapers its accommo- be mindful of the basics and seek would be through asset provides a good margin of safety dative stance, a market advice from a capable financial allocation funds. for investments made. correction across the globe advisor. including India, cannot be ruled That said, with respect to India, it In equity, we are positive on the out. At such times, only asset is difficult to gauge where value theme since the allocation techniques come to

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. Interview 5TARAKKI TIMES, APRIL-JUNE 2020 Wizards of Dalal Street CNBC TV18 | May 05, 2020 S Naren investing opportunity in equity very mixed at this point of time surprised that you are so ED & CIO then there is a panic in debt and because first I would think that bullish on debt because the ICICI Prudential Mutual Fund then there is a big investment debt has to play out then credit issue as I see it is that it is not a opportunity in debt - where are has to play out. After debt and liquidity issue, it is a solvency Damani: I have heard investors, you going to get such years. In credit has to play out then there issue. A lot of industries will go I have heard fund managers use my investing career of being in a has to be a leveraging cycle. In bust, a lot of commercial words like apocalyptic, fund management, this is that leveraging cycle, you will estates will be under a cataclysmic, unprecedented, possibly the first year after - and make very good money in equity problem, a lot of businesses what is the adjective that you this year has turned out to be and you are first dealing with will not be able to survive favour to describe what we are even more challenging than 2008 another problem – you are another lockdown if it happens going through? because all this has happened in dealing with a problem called in next six months, so what a very short span of time. coronavirus which is outside the makes you so bullish on the Naren: I would say as a zone of core competence of debt profile because actually contrarion I have seen it as a Even in 2008, it happened in slow anyone like Mr Naren then you there will be a lot of defaults in great opportunity. The beauty is motion and we did not have legends like Warren Buffet the next six months to one that you thought that you had understand various mistakes, and Charlie Hoover talking that year? one opportunity and we saw that today we understand that we they don’t understand the there were two opportunities. So have something called global problem – who are we to Naren: All the holdings that we in the month of March, we went macro and consequently it has understand the problem. have are for April 30th. In our to town saying that there is a been an amazing year for people credit risk fund, they have massive opportunity to buy who want to buy in panic. So I would say that for people in already displayed it in our equity because as such, we equity – you are in a confused website. thought that when there is panic Damani: You sound optimistic zone for the short run – obviously on the streets, it is a time to buy to me but I know you are after debt and credit works, So what happens is suppose if an asset class and panic and cyclical investor, you are a clearly equity is going to be a you have perpetual bonds of a valuations being cheap is the contrarion investor and you use great asset class. So if you have bank- are the perpetual bonds of time to buy the asset class. a checklist to see whether there the patience to sit through that a bank less risky than equity or is value or not. Can you tell me asset class, it is great which is more risky than equity? Clearly However, I never realized 30 days first of all where do you think why what happens is, as long as they are less risky than equity. later, you will get an even better we are in the cycle of you are willing to practice asset The reality is when you talk about opportunity in a much safer asset investment, are we in a boring allocation in these periods of all these cases, how much of the class: debt. So one month later zone, are we in a boom zone – time and you are willing to handle money is – if you look at any we were doing similar sessions clearly not – but what zone are a situation, you will sell debt as it funds of ours, look at where the telling people to invest in debt we in right now? goes up and buy equities on the money has been given to, you mutual funds at a time when way down because the kind of will find that those companies there was panic. The beauty is Naren: Basically you have to look volatility you see in these are going to go belly up then that in debt, it was even more at it from both the asset classes. periods, you make a lot of money there is no India left. That is the interesting. People started If you look at debt as an asset out of asset allocation then asset beauty of what has been saying debt is an unsafe asset class, we are in an absolutely allocation becomes interesting. invested by the debt mutual class compared to equity. And it phenomenal phase because funds of ICICI Prudential - we is so interesting that the entire what happens in debt is you are So on the whole I would say we don’t believe that a prominent last week, people were having a deflationary period in are in a phenomenally attractive industrial groups of India are redeeming or were thinking of India, you have had seven years period in debt and you are in an going to have a problem and we redeeming from debt last week. of no returns in real estate, you average period in equity but you believe that what we have are all Today, the losses that they have have had no returns in equity for are in a very good period for the survival industrial groups of suffered in equity is unbelievable five years, no returns in oil for six equity provided you are India and therefore we believe compared to what they would years. So you have a massive genuinely long-term and you are that they are going to have a have lost. deflationary period. Then you not bothered about what problem and people believe that have had the situation where happens in the short-run at all in we are the investors in all the That is the beauty of contrarian many companies have not the equity, which many of us are most unsafe companies. investing. Last week, there was survived. So in debt you are but not everyone knows because filing in debt but the losses that possibly in one of the best I believe that many of the people If you look at the kind of credits have happened today is in equity. periods to invest in debt and in a want to see returns on a day-to- that we have in our portfolio, you I don’t think we are going to have deflationary period what I learn day basis and for that this kind of will realize that and compare it a year like this year where you get from watching Japan, Germany, an environment doesn’t suit itself with what others have in the rest an opportunity to panic first in Europe and US is that in deflation because can anyone predict of the financial services system, equity and therefore a big debt turns out to be - debt earnings for 2021? I have told to you will find that mutual funds followed by credit turns out to be all my research colleagues don’t have cherry-picked the most safe the best asset classes to invest focus on predicting earnings for ones and what happens in because when people are 2021, focus on which is the interestingly is in 2008-2010 paying up – first job when people company that you think will be maybe we were taking more have to pay upon debt and credit the best in 2021, which will be riskier credits at that point of is the best asset class at this the second best but don’t predict time but most of them had been point of time. So I would say we the EPS because what is the given us lower units of credits are in a phenomenally attractive logic in predicting EPS when you and many of the credits that we period from a debt point of view. cannot predict it. had given were so low duration that the riskier part of the credits From an equity point of view, it is D a m a n i : I a m g e n u i n e l y have all come back to us long

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. 6 TARAKKI TIMES, APRIL-JUNE 2020 Interview back then what we are left with is recommending the system. If exceptionally done well in the up. So while we did not gain on a almost most of it, I think 98 you had asked me in March, it last 3-6 months. I would say the relative basis, we gained a lot on percent or a very large was different but from March – other sectors which we had bet the pharma sector because the percentage is in the AA- and 7,500 to 9,200 maybe today it on from a contrarian perspective pharma sector got massively re- above and if AA- are all going to has come down but I would say have yet not done well and I rated in the recent past. So today go bankrupt then there is no there was a clear 20-25 percent would continue to bet on them. if you look at it the aggregate future for equities in India. That is move after that 20-25 percent power sector today the market how I look at it at this point of move this was clearly the view On the other hand, on the quality cap us is so low compared today time. that we have to be massively pack the NBFCs have got to any of the consumer sector overweight debt, massively destroyed, everything else has and today what I look at it in People have this belief that overweight asset allocation become very costly, they remain lockdown which is a period equities will recover and debt will category and through that we costly. But I think if you look at where you are at your lowest not recover – that is not true have to be optimistic on equity some of the consumer numbers consumption, what are the because if you look at the 1995- and be neutral on equity within and the actual valuation of those things that you cannot do 2003 cycle, debt went through a the asset allocations space. stocks compare it with the without in this period, we have downturn but equities also went numbers that they have clearly seen. through a downturn. So I believe Damani: I get that point, delivered their divergence is that equities is an asset class, it massively overweight debt but increasing by the day and in my We cannot do without telecom, is priced for everything at this let me bring you back to equity. contrarian view point these kind we cannot do without power, we point of time and it comes as a You are not only a contrarion, of valuation differentiation cannot do without medicines fabulous asset class in a cyclical investor but also a cannot continue forever. So I am and we cannot do without deflationary period. Look at what checklist investor – you used a great believer in my set of consumer staples and if you look happened in Japan, Europe and the checklist, price to earnings, stocks, but how long my at it in these four, we looked at US – you will find that in price to book, marketcap to patience will be required is and found that which is the deflation, there is no better asset GDP are few of the criteria to something which I am going to sector which has the lowest class than debt but there is no determine how cheap equity see. Luckily out of this pack, two market cap between these four, choice for the government and valuations are. Given the have delivered pharma and we found that power is the the Reserve Bank of India (RBI) signals that you used for many telecom otherwise I would have sector which have the lowest but to cut interest rates and keep years in the past, where do you been in a bigger problem. But I market cap in these four. Today, supporting the system because think equity valuations are in still have a number of sectors frankly we are looking at power it is only through lower interest the spectrum? which have yet not delivered in because the aggregate of all the rates, people will slowly solve this pack. power companies is lower than the problem in the economy, Naren: I think clearly there are the single market cap of one there is nothing else that the two types of stocks – one is a set Damani: I know one method consumer company in India and government and the RBI can do of stocks with the quality, high which I have always admired that is a comparison. at this point of time to solve the ROE, high ROCE in balancesheet the way you use it because you problem of the system. companies, they are trading in are a contrarian, as you crunch We have seen that overall these one different world then you the market caps of the favoured strategies work and it takes I am sure that the government have companies, which are sector as oppose to the some time to work and you will and the RBI will do it slowly, they trading in another world, what unfavoured sector and see have to be a bit patient because have been cutting rates, they will has happened is the global relatively how cheap they are. we are in this entire possibly in do other things like TLTRO and central banks have ensured that Historically, you use that – can this divergence and possibly at LTRO and various other things you have created a very you share with us a historical the end of this divergence and I because they need to bring the conducive element environment example and then a think some amount of patience is economy back and that has been for equities because there is too contemporary example to see required. Just like telecom a long drawn process but at the much debt in the system and where you are finding value? instantly worked and pharma heart of it will be lower interest maybe that is what has led us to instantly worked, we have to be a rates and support to the entire these two different market Naren: Clearly, if you look at it bit patient on this because this system. valuation metrics for these two what worked for us very recently corona was something which hit different types of companies. So if you ask me telecom market us out of the blue. Damani: You talked earlier the result is that you have a set of cap was absurdly cheap relative about asset allocation, so very cheap companies prior to to any other sector in the Today for example aggregate of someone who is in about 30-40 this fall and even now you have a economy and the telecom as a market cap of energy stocks in age group, what is the asset set of costly companies. I would percentage of GDP was very the world is lower than the allocation between debt and say – I would bet on the cheap cheap, and unrelated to the market cap of the leading equity or debt, equity and some companies and in that for importance that telecom had to technology companies. So can other asset class that you example there are sectors, which each of us. So we made our that market cap continue, I don’t propose for someone who is 30 we thought were very cheap telecom one of the largest think it can, but at this point of years old right now? which have recovered very well weightages in almost all our time corona has created such a in this recent correction – one portfolios and it kind of worked lockdown that oil prices crashed Naren: The point is that when an was telecom and second was like magic in the last six months. all over the world and led us to asset class becomes very pharmaceuticals. On the other this. So I think that something it attractive, what happens is you hand I have sectors like power, The second was – you had a will divert in the next few years have to overweight an asset upstream oil and metals, which situation where India’s largest but on the other hand we are all class. So the way we look at it at have shown no major consumer sector company was taking a call that corona is a this point of time is massively improvement. comparable to the pharma transient issue which is what I overweight in all debt - asset sector in terms of market cap. am also taking a call when I am allocation as a category and are So I would be clearly on the set of Now ideally which happened in giving a very good long term call positive on equity through asset the cheaper stocks despite the this whole thing is that India’s on equities. So that is how things allocation as a category and are fact that I have not made money largest consumer sector are and it works, but it does we neutral on equity otherwise? in any of them and except company also went up and the cause its own pain as we have That is how they have been telecom and pharma which have entire pharma sector also went seen from the past.

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. Interview 7TARAKKI TIMES, APRIL-JUNE 2020 Damani: Another sector that stocks which can give you unbelievably cheap equity we are still managing money shows up in this contrarian sustainable dividend yield and market relative to debt markets. responsibly, all these are going to screen according to a invest in through a sustainable It is a country which as huge be continuous challenges which presentation you gave a few dividend yield fund because that current account surplus. It is a will remain. Whether Corona months ago was the top would be the kind of strategy country with a huge net comes or goes and what company in India is perhaps which I believe can actually lead international investment position happens due to Corona all those worth more than all the public to a very good investor unlike West, so it is a currency things will continue to be. sector units listed. Would the experience at this point of time which you can safely believe in public sector stocks also because in a low interest rate any market will finally appreciate. Damani: You said about represent a contrarian bet at environment that we think is one- managing public money and it this point? way to actually lock-in lower So I am much bigger believer is a huge burden, you are one of interest rates. Because at some from a contrarian perspective in the largest asset managers in Naren: Certainly, actually we point of time if global yields were Japan over US, because US is a the country, do you feel the have strongly believed it and we to also go up they can actually current account deficit country pressure in times like this when believe that if the companies – lead to bond losses in the other and it has the best companies in the markets are down, negative there have been a lot of dilution parts of the world. But dividend the world. But it requires growth returns are there across all of government holdings in many yields turns out to be a much investing because you have to mutual funds, does the of the public sector entities, I safer way to invest on the equity effectively believe in the pressure get to you think if they were to just focus on side. So I think sustainable technology majors of the US to sometimes? dividends and buybacks over a dividend yield as a theme is actually bet in US because finally year or two I think there is going going to work in most parts of at the end of the day it is the Naren: After 2007-2009 we to be a massive re-rating in many the world including in India at this current account deficit country came to a conclusion that we of them. If you look at that the point of time.” and the currency has massively have to launch and recommend aggregate dividend yield of many appreciated. So I believe very funds which are more defensive. of these stocks given that Damani: As a contrarian strongly in Japan as a contrarian So we came up with this entire dividend distribution tax has also investor, you have not been way at this point of time over US. category which is focused on gone and the kind of dividend afraid to invest overseas. I In our Global Fund of Fund, we asset allocation, as the category yields which are there compare it know you have invested in have the ability to invest in US, which can be sold throughout with FD rates which are being American markets when India Japan, India, Asia, China etc. and the country. That model Nimesh offered by many of the banks – was too costly. At this time you we have taken a position in Japan managed to get the entire sales many of these stocks have think it is better to put money this is a public information. team to market and this category become extremely attractive at into the S&P 500 or the Sensex? has actually given investors a this point of time. Consequently, Damani: Has your investing much better experience than the it has become one of the most Naren: Since this public style changed or after this market in all market declines. attractive themes at this point of information and thanks to SEBI Coronavirus, do you think the Given that most of the investors time to invest in. we have to mention our portfolio world will be different once we want safer market experience on a monthly basis, we launched return back to some sort of and we believe that, that is the I actually believe one of the best an interesting product called normalcy? Will you look at only way forward. You cannot sell themes to invest in at this point Global Advantage Fund of Fund stocks differently or different the most aggressive products of time is the deflationary theme. which can invest in other industries would be winners? both in equity and in debt to Outside the debt side, would be products listed in India. So that everybody because it is not the sustainable dividend yield product is invested for example Naren: I think working from working. simply because of the fact that in Japan and from a contrarian home itself has been a everywhere in the world you perspective I have not found an revelation. Sometime you don’t You have to sell intermediate risk have no choice, but to come out area which is cheaper than Japan know that you have been products to everybody because of this world by reducing interest because there interest rates are working on Saturday from that is the only model which can rates. If you are going to reduce excepted to be Zero indefinitely morning to night and you don’t actually make investors stay with interest rates what is the best and you got dividend yields realise it. I think a lot of things are you through cycles and live with way to invest is identify all the which are 3, 4, 5- 6 percent and going to change but we have to you in the long run. Once they put our thoughts together and stay with you through cycles, There have been a lot of see how we have to look at they are going to make huge dilution of government things differently. I think there is money in Indian asset markets holdings in many of the a lot of activity we have to do and both in equity and debt. That is public sector entities, I think analyse on how to think about the lesson we learnt and that is if they were to just focus on various things differently from how we created categories like dividends and buybacks what we did in the pre-Corona balanced advantage, all seasons over a year or two I think period. What has taught me is at bond like dynamic bond there is going to be a the end of the day you will have categories and those kind of massive re-rating in many euphoria, you will have panic, in categories is what we think will of them. panic people behave in a lead investors to stay with us particular way, in euphoria through cycles and make people will behave in a particular moderate returns in up markets way. At the end of the day we are but deliver huge returns over the managing public money, we long term and give investors a have a responsibility to manage happy framework for long term public money in a responsible investing through mutual funds way, all these challenges will and that is the only way in which remain and will continue to we can manage public money of remain. The ability to a very large order. Choosing the communicate to everybody that high risk, high return products they are managing money won’t work. responsibly, we can also make mistakes but at the same time

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. 8 TARAKKI TIMES, APRIL-JUNE 2020 Interview How ‘Core 4’ Framework helps in picking winners Moneycontrol| June 23, 2020 The Core 4 Framework is an integrated approach that covers the quality of business, valuations, sentiments and themes. Parag Thakker been able to recover faster. outbreak and growth has from the last decade and how Portfolio Manager slowed down across the world. can we relate to the current ICICI Prudential PMS In line with our framework, Did you tweak your portfolio environment? valuations are equally important strategy to minimise the The Core 4 Framework is an because if one does not buy it at impact of volatility? A) One of our key learning’s has integrated approach that covers the right price, the entire analysis been to invest in companies the quality of business, will likely to be futile. Market A) One of the primary reasons for where you understand the valuations, sentiments and events, both domestic and alpha generation in the past few business and its track record of themes, Parag Thakker, Portfolio global, can easily spark a change months is that the portfolio has efficient capital allocation. This Manager, ICICI Prudential PMS, in sentiments. been extremely underweight to can be derived from their says in an interview to banks and finance. business dealings. Moneycontrol’s Kshitij Anand. Thus, one of the best times to Edited excerpts: invest is when the sentiments We had begun reducing In addition, businesses having are considered to be exposure to financials since the low leverage, low CAPEX Q) ICICI Prudential PMS Large- unfavourable or seem to be at a beginning of November 2019, as requirement and low working- cap Strategy, a diversified turning point. Further, portfolios the sector seemed to look capital leakage are generally theme, outperformed other being overweight on dominant overvalued. This has helped limit preferred. This, in turn, may lead PMSes in May, data from themes have the potential to the downside considerably to good operating cash flows PMSBazaar.com shows. What capture a market upside. when the market corrected. and the least possible interest is the core strategy of the cost. theme that helps you pick In the various phases of a market The portfolio has been winners? cycle, investment themes can overweight on pharma, this Businesses having a sizable either be dormant or dominant. helped capture an upside that we market share in their respective A) Our stock selection process Alpha is likely to be created by have seen in pharma stocks. sectors are also an important across all our PMS strategies is riding dominant themes. factor. guided by a Core-4 investment Post the sharp rally, we have framework. The Core 4 The current market environment reduced our exposure to the Based on our experience, we Framework is an integrated has been conducive for all the pharma sector. believe that the best time to buy approach that covers the quality above factors, which is why ICICI such companies is during a bad of business, valuations, Prudential PMS Large-cap We were also overweight on phase of the market or due to a sentiments and themes. Strategy for the month of May telecom and gradually increased big negative external event or 2020 returned 3.62 percent, exposure to select consumer forced non-fundamental selling. This core investment philosophy compared with -2.55 percent of names, which have helped the This is what we believe could be has not only helped to ride the benchmark S&P BSE 100. portfolio in the past few months. a recipe for generating better through turbulent markets in the returns. past but it has also helped to This translates into an alpha of Active sector rotation has helped negotiate the recent market over 5 percent. Not only in the the Strategy not only to limit a Q) Largecap stocks have volatility. one-month period, across the downside but to capture an become slightly more one-year, three-year and five- upside as well. expensive because money is Q) Can you elaborate on the year periods, this strategy has now chasing only those investment framework? been able to outperform the Q) The Strategy, which started companies that have a strong benchmark (refer the table off in March 2009, has given a balance sheet and robust below). stable performance of more growth prospects, especially at Aggregate Performance of ICICI Prudential PMS Largecap Strategy (Strategy) A) In the first part of the Data as on May 31, 2020. Index Data Source: BSE. investment framework, we aim to focus on companies with (Returns less than 1-year are absolute, greater than 1 year are on annualized basis. Past performance may or established business models, may not be sustained in the future. The Strategy performance mentioned above is the aggregate having low leverage and which performance of all clients in the Strategy using the time weighted rate of return (TWRR) methodology and are believed to be able to the performance of an individual client may vary significantly from the above.) generate sustainable cash flows. Q) Markets have turned volatile than 8 percent in CAGR terms. a time when growth has taken a An internal study of past market following the coronavirus What were your key learnings hit amid COVID-19 outbreak. cycles has shown that companies with lower debt have been able to negotiate a crisis better and, in some cases, have

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. Interview 9TARAKKI TIMES, APRIL-JUNE 2020 What are your views? We also aim to invest in sectors structure. markets will react to a where entry barriers are high, geopolitical event. The ongoing A) Certainly, money is likely to sectors that are in consolidation Given the issues faced by the pandemic has already created a flow to the companies that or companies in special NBFC sector and PSU banks, the lot of uncertainty. It is impossible exhibit the potential to ride out situations. exposure to private sector banks to predict if easy money will the current crisis. While having a seemed to have worked well for continue to drive the market or healthy balance sheet and The Contra Strategy was the Strategy and contributed to whether India-China tensions growth prospects is important, it launched on September 14, the returns. will lead to a correction. is equally important to focus on 2018, and has outperformed the companies that are able to benchmark with an alpha of In August 2019, negative news However, we do believe that the generate sustainable cash flow about 6 percentage points since flows around the consumption healthy fundamentals of the and at the same time have low its inception period as on May sector had led to attractive companies held in our portfolios debt on their balance sheets. No 31, 2020 (refer the table below valuations. This is when we took may help them to emerge less one knows how this pandemic for performance). exposure to a biscuit impacted by such a crisis. will pan out. Aggregate Performance of ICICI Prudential PMS Contra Strategy (Strategy) Thus, the priority shifts towards companies that are in a position Data as on May 31, 2020. Index Data Source: BSE. to survive in case of a prolonged economic slowdown. We prefer (Returns less than 1 year are absolute, greater than 1 year are on annualized basis. Past performance may or companies with a proven may not be sustained in the future. The Strategy performance mentioned above is the aggregate business model, run by effective performance of all clients in the Strategy using the TWRR methodology and the performance of an individual management having a strong client may vary significantly from the above.) competitive edge and which have been able to maintain a Q) What has worked for the manufacturer, that too, helped to Disclaimer: The views and sustainable market share. Contra Strategy in an contribute to returns. investment tips expressed by extremely volatile market experts on Moneycontrol.com Even in our ICICI Prudential PMS environment of the past two Similarly, the strategy took are their own and not those of Contra Strategy, we are now years? exposure in a few insurance the website or its management. focusing on large companies, companies when they had Moneycontrol.com advises where valuations seem to be A) Multiple factors have helped corrected due to non- users to check with certified reasonable, which are likely to the Strategy. To give some fundamental reasons. These are experts before taking any generate cash flows and which examples, in November 2018, some examples of our contrarian investment decisions. are believed to be least impacted the Strategy took a noteworthy calls that helped the Strategy to by the lockdown. exposure to private sector banks. generate alpha. In the past month, this Strategy, too, has managed return 3.24% vs a negative 2.42% over the S&P BSE 200 benchmark. Q) What differentiates the Contra Strategy? A) ICICI Prudential PMS Contra This was at a time when Q) How do you see the India- Strategy is a diversified Strategy domestic cyclicals were facing China standoff impacting that has the flexibility to invest issues mainly due to tight markets in the near term? Do across market caps and is sector liquidity, high crude, falling you think if tensions escalate agnostic. We aim to invest in rupee, rising concerns on fiscal the Nifty can go towards 7,500 companies that are currently not deficit, these private sector despite positive global cues or in favour in the market but are banks stood out with a good liquidity? expected to do well in the long liability franchisee and run. potentially robust capital A) It is difficult to predict how the ICICI Prudential PMS Contra Strategy is a diversified Strategy that has the flexibility to invest across market caps and is sector agnostic. We aim to invest in companies that are currently not in favour in the market but are expected to do well in the long run.

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. 10 TARAKKI TIMES, APRIL-JUNE 2020 Tarakki Corner Your YTouar TraarakkkikCoirnCer orner Pranjal Wagh Abhinandan Honale TARAKKI SUCCESS STORY Samarth Wealth Management, Mumbai Protecting their client's wealth while also building it is the way forward for Pranjal and Abhinandan Educating their clients and Investment Awareness Programs do the trick for successful financial advisory With an ARN in the name of Pranjal Wagh, Abhinandan Honale is the co-founder of the firm called Samarth Wealth Management. Abhinandan started off his career with the ICICI team and was into wealth management while Pranjal was working with HDFC bank. Their friendship from MBA times turned into a partnership with this firm back in 2011, when they discovered the potential in the business and hence, started developing the mutual funds book. Abhinandan says getting clients during the initial period was the toughest part of their journey and so, they started off with their own family members. He went on to reveal how their AUM did not grow much during the first couple of year because they started from scratch and then they went on to brand themselves. Throughout this period, they also worked on a lot of IAPs - Investment Awareness Programs and they continue to do so, and it is open for all. They believe that the pillars on which the entire thing is based on includes financial planning, continuously educating the clients and thirdly, the importance of asset allocation. Their services include Mutual funds, Insurances, broking, bonds, etc., and presently, they managed an advisory portfolio of about ` 175 crores before the market fall in February. They also work with their online portal and that is how the clients are on boarded, while ensuring that they are a one-stop solution. Their clients are always communicated with a mantra in the first meeting, where they say, \"It is not just about building wealth for you but also about the protection of wealth for you.” As a financial advisor, they say that they have realised that the biggest learning is to have diversified assets for all their clients and the second learning is, \"The more we educate our clients, the lesser will be the panic in such market falls and it becomes easier to handle them.” During the volatile times we are in, they have also been doing conference calls with their clients in order to keep them updated and whether the market fall is an opportunity and what we are trying to do is just keep in touch with them. They say, \"In our business, what has worked for us is integrity because there hasn't been a single case where a client was unaware of what he has been told about his investments. While knowledge and the advice you bring are important, if you have client benefit as the key motive behind whatever you do, the clients are likely to stay with you for longer, irrespective of the obstacles.\" ARN - 83700

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 Corner 11TARAKKI TIMES, APRIL-JUNE 2020 Your YTouar TraarakkkikCoirnCer orner TARAKKI SUCCESS STORY Sameet Chaudhary Samsang Financial Consultants, Thane Paving the way forward for his clients with trust and integrity Enabling his clients take on their financial journey with trust and integrity Sameet Chaudhary started his journey in financial advisory back in 2000 as an insurance advisor and eventually, ventured out into mutual funds distribution and then in the advisory space. He says he has always been a part of marketing and sales activities and that is what guided him into the financial advisory space. Co-incidentally, his wife also inspired him into this space since she was a part of the mutual fund industry and he then took things forward for himself after talking to veterans from the field. Recalling his journey in the beginning, he had a difficult start but his database from his college days helped him through and his references worked helped him work things out. While he did get a head start as a financial advisor, the real challenge in acquiring clients was to gain their trust because finances were involved and having conviction in the products was a must. He gained his conviction only after being convinced about the mutual funds himself and integrity came along. Sameet also offers other advisory services including insurance distribution, financial wellness, wealth coaching for his customers, etc and presently manages advisory portfolio of ` 212 crores for his clients. He says, \"Our primary goal is to handhold our investors in their journey of financial goals and to achieve the right kind of money at the right point of time.” As a financial advisor, he has learned that one needs to build a sense of trust and there should be a sense of integrity since this is a relationship that is present between you and your clients and you and your investors. Promoting the idea of flourishing together, he feels as an advisor, one's intention should be towards getting their client the best. Helping his clients to steer through the volatile times, he says, \"During these times we have been handholding the investors because we have planned their investments as per the financial goals and we keep on touching those goals again and again so that they are not distracted by the noises.\" For people who have other stresses including one which involves loss of jobs, they have made arrangements so that they are at ease about the money they have. ARN - 9348

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. 12 TARAKKI TIMES, APRIL-JUNE 2020 Fund Review ICICI Prudential Bluechip Fund Good record outshines low bouts The Economic Times | May 25, 2020 ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals of the fund, its portfolio and performance to help you make an informed investment decision. HOW HAS THE FUND PERFORMED? BASIC Top 5 sectors in portfolio (%) FACTS Point To Point Return (%) Financial 28.94 DATE OF LAUNCH Energy 14.69 FUND BENCHMARK CATEGORY AVERAGE Technology 11.20 23 MAY 2008 Automobile 8.04 1-YEAR 3-YEAR 2.68 2.52 2.07 FMCG 7.31 -2.00 -1.37 -1.47 5-YEAR CATEGORY EQUITY The portfolio is underweight in financials, TYPE I LARGE CAP FMCG and tech, overweight in autos. -19.35 -20.50 -18.87 AUM* Top 5 stocks in portfolio (%) The fund has shed slightly more than AS ON 19 MAY 2020 `21.820.93 CR HDFC Bank 9.26 Infosys 7.25 I BENCHMARK ICICI Bank 6.19 Reliance Ind. 5.89 its peers in the recent past. NIFTY 100 TOTAL Bharti Airtel 5.76 RETURN INDEX Rolling Return (%) FUND BENCHMARK WHAT IT 1-YEAR 13.38 COSTS 10.96 14.71 NAV** The fund’s significant overweight bets are GROWTH OPTION I `33.28 Bharti Airtel, SBI Life and NTPC. DIVIDEND OPTlON 3-YEAR `15.37 11.25 Recent portfolio changes MINIMUM INVESTMENT 14.95 New Entrants `100 5-YEAR Ambuja Cements, Bajaj Auto, Bank of Baroda, MINIMUM SIP AMOUNT Bharat Electronics, Cochin Shipyard, Hindustan 11.41 Zinc, M&M, PVR, Trent, among others (March) `100 The fund has delivered decent outperformance AS ON 19 MAY 2020 Complete Exits EXPENSE RATIO*** (%) I Bajaj Auto, Bajaj Finserv, NBCC India, Zee 2.05 Entertainment Enterprises (April) over index across time frames over the past decade. EXIT LOAD FIGURES DENOTE DAILY ROLLING RETURNS OVER LAST 10 YEARS 1% for redemption BENCHMARK DATA USED S&P BSE 100 TRI within 365 days WHERE DOES THE FUND INVEST? Additions *AS ON 30 APR 2020 Portfolio asset Fund **AS ON 19 MAY 2020 Asian Paints, BPCL, Britannia Inds, Eicher allocation style box ***AS ON 31 MAR 2020 Motors, ICICI Bank, M&M, Maruti Suzuki, TCS, Tata Power Co., Titan Company, Wipro (April) Equity 93.60% Growth Blend Value FUND Large-cap Small Medium Large MANAGERS How risky is it? 88.92% INVESTMENT STYLE Mid-cap CAPITALISATION ANISH TAWAKLEY (IN PIC) Fund Category Index 10.88% AND RAJAT CJANDAK 19.90 20.50 Small-cap Standard Deviation 19.54 0.20% TENURE: 1 YEAR 7 MONTHS / 2 YEARS Debt & Cash 9 MONTHS Sharpe Ratio -0.12 -0.07 -0.05 6.40% Mean Return 3.07 4.09 4.46 BASED ON 3-YEAR PERFORMANCE. I The fund keep some exposure to the larger mid-caps. The fund’s risk profile is reasonably good I even though performance has been average in recent times. SOURCE: VALUE RESEARCH. SHOULD This large-cap fund tries to quality businesses at a premium or sheet strength and ability to impressive, the new fund YOU squeeze alpha through individual cheap value stocks. It avoids the withstand turbulence. Its managers are yet to demonstrate BUY? stock picks rather than deliberately ‘growth at reasonable price’ performance has dipped in the last execution capabilities as a good taking large deviations at sector basket. In the near term, the fund few years, falling down the pick in its category. level. It prefers to pick ideas from managers prefer to stick with pecking order in its category. While two ends of the spectrum-high businesses with inherent balance the fund’s long term track record is

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. Fund Review 13TARAKKI TIMES, APRIL-JUNE 2020 ICICI Prudential Corporate Bond Fund Low risk, steady returns Hindu BusinessLine | May 16, 2020 Over three and five years, the fund has delivered 80 bps higher returns than the category average The Franklin Templeton episode, which fund has delivered 8-8.4 per cent returns, The fund has only one bond rated AA+ in its saw the winding up of six of its debt about 80 bps higher than the category portfolio, which is issued by Daimler funds, has flustered investors. With average. Investors with a two- to three-year Financial Services India; it constitutes about money in these funds locked in for at least horizon can invest in the fund. 0.6 per cent of the scheme’s assets the next 2-3 years, investors have turned currently. wary of parking money in debt mutual funds Relatively low risk altogether. The fund’s top holdings in AAA rated bonds The Franklin episode has brought to light the include marquee names such as LIC While the apprehension and anxiety is illiquidity issue in low-rated bonds, which Housing Finance (10.2 per cent of assets), understandable, it is important not to paint has gotten accentuated amid the market Rural Electrification Corporation (8.4 per all debt funds with the same brush. There turmoil. Hence, if you have a low risk cent), Reliance Industries (7.29 per cent), are 16 categories of debt funds as laid down appetite and are seeking liquidity and HDFC (6.47 per cent) and Power Finance by SEBI. stability in returns, investing in funds that Corporation (4.3 per cent). have high exposure to low-rated bonds can The risks and returns across these cost you dearly. Steady performance categories vary vastly depending on the interest-rate and credit risks they carry. So, select your fund based on your risk ICICI Prudential Corporate Bond Fund has appetite and after going through the fund’s maintained its average maturity between 1.5 For instance, while interest rate-risk is higher portfolio disclosed every month by the fund and 3 years over the past three years. in long-duration gilt funds than in short- or house. low-duration debt funds (long-duration The relatively short maturity helps cap bonds are more sensitive to interest-rate Corporate bond funds, given their inherent interest-rate risk. movements), credit risk is higher in credit- mandate of investing in high-rated bonds, risk funds as a category as they invest a are a good option for conservative investors. Given the gyration in bond yields and minimum of 65 per cent in below highest- But even within these funds, investors uncertainty over government borrowing this rated bonds. should consider the portfolio of the scheme year, a relatively short duration can help limit before investing. the volatility in returns. The scheme On the other hand, corporate bond funds currently has an average maturity of 3.37 invest at least 80 per cent of their assets in Over the past two years, ICICI Prudential years and an yield-to-maturity of 7.1 per highest-rated debt instruments and hence, Corporate Bond has been investing over 90 cent, which is healthy given the falling carry relatively low risk. per cent in government and AAA rated interest rates and the fund’s predominant corporate bonds, on an average, which exposure to highest-rated bonds. Hence, conservative investors can consider lowers the credit risk significantly. In volatile corporate bond funds for a portion of their times such as the present, predominant debt fund investments. Within this category, exposure to highest-rated bonds lends ICICI Prudential Corporate Bond Fund has comfort. been a steady performer. The fund carries four-star rating under BusinessLine Portfolio Currently, the fund holds 18 per cent of its MF Star Track Ratings. assets (as on April 30) in government bonds and about 78 per cent in AAA rated Over three- and five-year time horizons, the corporate bonds.

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. 14 TARAKKI TIMES, APRIL-JUNE 2020 Fund Review ICICI Prudential Short Term Fund Hindu BusinessLine | June 15, 2020 Manish Banthia Senior Fund Manager, Fixed Inome, ICICI Prudential AMC ICICI Prudential Short Term Fund is one of the top-performing schemes in the short- duration category. Funds under this category invest in debt papers such that the Macaulay duration of the portfolio is 1-3 years, lowering the interest-rate risk. Short- duration funds are all-weather schemes that help strike a good balance between yield, accrual income, safety and liquidity. ICICI Prudential Short Term Fund invests mainly in debt instruments with the highest rating of AAA and AA+. It also holds AA and AA+ rated papers issued by Aditya Birla Fashion, Bharti Airtel, Tata Motors and Tata Power to cash in on credit-spread opportunities. Investors with a medium risk profile can invest a portion of their debt portfolio in the scheme. *Mediocre performance of the category was due to the fact that 11 out of 28 funds in the category were impacted by the recent bond downgrades and defaults. **Average of bank group-wise weighted average domestic term deposit rates (Source: RBI). *** Post re-categorisation. ****Commercial papers (CPs), corporate non-convertible debentures (NCDs) and pass-through certificates (PTCs) are considered.

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. Fund Review 15TARAKKI TIMES, APRIL-JUNE 2020 mint List of ICICI Prudential Funds in Mint 50BEST FUNDS Mint | May 2020 FUND CORE 3-year return (%) 5-year return (%) 10-year return (%) Corpus (Rs cr) EQUITY-LARGE CAP ICICI Prudential Bluechip Fund -1.03 3.47 9.23 21,821 AGGRESSIVE HYBRID ICICI Prudential Equity & Debt Fund -1.19 4.43 10.59 17,696 CONSERVATIVE HYBRID 5.58 7.55 9.01 1,581 ICICI Prudential Regular Savings Fund INTERNATIONAL 5.68 5.20 NA 91 ICICI Prudential Global Stable Equity Fund 15.23 11.63 NA 507 ICICI Prudential US Bluechip Equity Fund 1-year return (%) 3-year return (%) 5-year return (%) Corpus (Rs cr) FUND CORE DEBT-ORIENTED 10.01 7.84 8.27 11,860 CORPORATE BOND ICICI Prudential Corporate Bond Fund ETW Funds 100 List of ICICI Prudential Funds in the Economic Times Wealth ET Wealth | May 2020 FUND Value Research Returns (%) Fund Rating EQUITY: LARGE CAP ICICI Prudential Bluechip Fund 3-month 6-month 1-year 3-year 5-year HYBRID: EQUITY SAVINGS 2.07 ICICI Prudential Equity Savings Fund -25.85 -20.47 -21.14 -1.11 4.83 HYBRID: AGGRESIVE 3.81 ICICI Prudential Equity & Debt Fund -12.1 -7.63 -5.35 2.57 7.17 HYBRID: CONSERVATIVE 7.69 ICICI Prudential Regular Savings Fund -20.72 -14 -16.36 -0.37 8.63 DEBT: MEDIUM- TO LONG-TERM 7.99 ICICI Prudential Bond Fund -4.43 -1.06 1.98 5.76 DEBT: DYNAMIC BOND ICICI Prudential All Seasons Bond Fund 1.38 3.53 9.75 6.98 DEBT: CORPORATE BOND ICICI Prudential Corporate Bond Fund 2.3 4.79 10.26 7.61 1.22 3.37 8.5 7.36

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. 16 TARAKKI TIMES, APRIL-JUNE 2020 Fund Review List of ICICI Prudential Funds in Star Track Mutual Fund HBL | May 2020 Scheme Name BL Rating Trailling Returns (%) 5 Year CAGR YTD Absolute 1 Year CAGR 3 Year CAGR ICICI Prudential Bluechip Fund -23.5 -19.9 -1.2 3.0 ICICI Prudential Large & Mid Cap Fund -24.9 -22.5 -5.8 0.7 ICICI Prudential Multicap Fund -26.6 -25.2 -4.5 1.6 ICICI Prudential Midcap Fund -27.9 -27.3 -8.1 -0.6 ICICI Prudential Smallcap Fund -31.6 -28.9 -11.2 -3.8 ICICI Prudential Focused Equity Fund -10.3 -13.2 -1.1 2.2 ICICI Prudential Value Discovery Fund -13.7 -14.7 -2.9 1.3 ICICI Prudential Long Term Equity Fund -23.8 -21.5 -2.4 2.1 (Tax Saving) -23.7 -27.0 -8.4 0.2 ICICI Prudential Dividend Yield Equity Fund ICICI Prudential FMCG Fund -12.6 -10.7 3.0 6.5 ICICI Prudential Infrastructure Fund -31.2 -32.8 -10.8 -3.5 ICICI Prudential Banking & Financial Services -44.8 -42.5 -10.8 0.9 ICICI Prudential Technology Fund -12.6 -12.0 8.0 4.4 ICICI Prudential P.H.D Fund 19.4 26.6 - - ICICI Prudential Equity & Debt Fund -18.6 -15.1 -0.8 4.3 ICICI Prudential Equity Savings Fund -11.1 -5.7 2.2 4.8 ICICI Prudential Ultra Short Term Fund 2.5 7.7 7.5 8.1 ICICI Prudential Savings Fund 3.2 8.6 7.8 8.1 ICICI Prudential Money Market Fund 3.2 7.9 7.6 7.6 ICICI Prudential Short Term Fund 4.4 10.6 7.8 8.3 ICICI Prudential Medium Term Bond Fund 3.0 9.8 7.0 7.8 ICICI Prudential Bond Fund 5.4 13.1 8.1 8.5 ICICI Prudential Long Term Bond Fund 7.5 16.7 9.7 9.7 ICICI Prudential All Seasons Bond Fund 5.9 13.1 8.5 9.5 ICICI Prudential Corporate Bond Fund 4.5 10.9 8.2 8.5 ICICI Prudential Credit Risk Fund 2.9 9.2 7.7 8.1 ICICI Prudential Banking & PSU Debt Fund 4.0 10.7 7.7 8.5 ICICI Prudential Gilt Fund 8.7 16.9 9.6 9.8 ICICI Prudential Regular Savings Fund -3.0 2.7 5.8 7.5 ICICI Prudential Balanced Advantage Fund -15.5 -9.8 1.5 4.6 ICICI Prudential Child Care Fund (Gift Plan) -18.9 -15.2 -1.2 3.0 Source: NAV India; NAV for the growth option as on 29-05-2020. Past performance may or may not sustain in the future. It is requested to note that in accordance with SEBI Circular No. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 04, 2017, certain Schemes of ICICI Prudential Mutual Fund are undergoing Fundamental Attribute change and mergers, as applicable. These changes will be effective from May 28, 2018. For further information please refer to notices and addendums available on our website in this regard. The 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 and risk factors. 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 of publication 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 in future 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 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. The sector(s)/stock(s) mentioned in this communication 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 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.