Tarakki Times English August 2018

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 MUTUAL FUND MEDIA VIEWS Professional Views MUMBAI | AUGUST 2018 | PAGES 10Pg. 2 MF distribution shouldCoffee Can Investing be made a viable careerBetting his house on path for new entrantsa real estate crash S Naren, ED & CIO ICICI Prudential Mutual FundPg. 5Expecting highervolatility Mrinal Singh, Deputy - CIO ICICI Prudential Mutual FundPg. 6 DNA | July 30, 2018Be cautious, don't Nimesh Shah past few years has been pheno- robust inflow every month,lose your money, MD & CEO menal, to say the least. The Indian equity market couldunderstand basics ICICI Prudential Mutual Fund overall industry AUM grew at absorb the adverse impact of FIIbefore investing around 25% from Rs 7 lakh crore outflows from the market. India, historically, has been a in March 2013 to Rs 21.40 lakh Nimesh Shah, MD & CEO nation of savers and hence crore in March 2018. As for the Innovation ICICI Prudential Mutual Fund household savings had been retail segment, the growth was flowing into traditional savings even higher as the AUM of the Over the past decade, the MFICICI Prudential Bluechip Fund instruments. However, over the individual investors grew by industry has evolved in tandem last five years there has been a around 31% annually over the with the changing investor needsPg. 7 shift in the investment pattern i.e. past four years to reach 11.67 and market scenarios. From the retail investors have been largely lakh crore. change in load structure, to the25 years of pvt opting for financial assets over introduction of Riskometers forsector mutual funds: physical assets. This trend got Owing to the overall efforts by easy assessment of risk in aDistribution still not bolstered, especially, post de- the regulator, AMCs and the mutual fund scheme, the regu-a viable business monetisation making mutual distributor community, retail lations have been aiming to make funds a sought after long-term the investment process more S Naren, ED & CIO investment instrument among ICICI Prudential Mutual Fund the retail investor. At the same A financial advisor becomes time, the industry in general have as important as a familyA safe haven market? been reaching out to the masses doctor to keep the family’s through innovative campaign like financial health in check. Fund Review 'Mutual Funds Sahi Hai' which has further helped the cause ofPg. 8 increasing awareness about investors have started recog- transparent and straightforward mutual funds as a suitable invest- nizing mutual funds as a tool for for the investors. Further, we areICICI Prudential Multicap Fund ment vehicle. wealth creation through regular witnessing the emergence of and consistent savings. Conse- new product categories likeLarge-cap tilt pays off Over the last two decades, the quently, Systematic Investment Credit Risk Funds, Balanced mutual fund industry, too, was on Plans (SIP) has become popular Advantage Funds, etc. which arePg. 9 a learning curve through many across households and is widely catering to the needs of a retailList of ICICI Prudential Funds lessons learnt the hard way with understood as a concept, just investor.in Mint the bust of IT boom in 2000, like the benefits of yoga. AroundSIP Top UP infrastructure bubble in 2008 and 41% and 26% of the total equity As we move forward, Tech- the recent mid & small-cap fund flows in the FY 2016-17, and nology is expected to play aPg. 10 boom in 2017. Further, a robust FY 2017-18 respectively came critical role in the growth of the regulatory framework and from SIPs. In congruence, the mutual fund industry to reach theETW Funds 100 supervision has kept the investor SIP book size more than doubled untapped geographies in aSystematic Investment Plans interest protected, at all times, from Rs. 3,120 crores in April cost-effective and commercially thereby making it one of the most 2016 to approx. Rs. 7,120 crores viable manner. With e -KYC Tarakki Corner transparent investment products in March 2018. As a result of this procedures already in place for Pg. 11 available for the retail investors. Contd. on page 5 Amit Rathi Industry growth Amit Rathi The growth witnessed by the Consultancy mutual fund industry over the ARN - 86389 Kolkata

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, AUGUST 2018 Interview Coffee Can Investing Betting his house on a real estate crash MoneyControl | August 06, 2018 In the inaugural episode of Coffee Can Investing series, Saurabh Mukherjea talks to Sankaran Naren, Chief Investment Officer of ICICI Prudential Mutual.S Naren and stock market? finance and stock markets. out of that is the realisation thatED & CIO in investing, you sometimes goICICI Prudential Mutual Fund A: Stock market is something Q: So, if my memory serves me wrong, sometimes get it right. which was always very dear to right, around 1989, 90, 91…inIn the inaugural episode of me. Actually, my mother passed those days, working for SBI or When you go wrong, you needCoffee Can Investing series, away when I was 14. And it was a SBI Caps (SBI Capital Markets) the equivalent of supportSankaran Naren, Chief two-person household because I was seen as sort of the big system. A formal organizationInvestment Officer of ICICI did not have any brothers and finance job in our country. Is provides such a support systemPrudential Mutual takes Saurabh sisters. So, somehow, cricket that the path you also wanted by the virtue of the number ofMukherjea through his journey in and stock market were the two to take? people in the team, but when youthe world of financial markets, conversation points between me are investing on your own, youhis investment style, hits and and my father in those days and A: Yeah, I actually wanted to go don’t get that. So, a group reallymisses, and the investors he my father would make some back to Chennai and SBI Caps works. So, it’s like some kind of alooks up to. small investments in stock was a Bombay-head quartered psychiatric help which is markets. Actually the whole entity. So, I actually picked what required to... or a coaching, youMukherjea is author of the process was pretty fascinating was my dream job; ICICI in 1989. can call it either which will helpbestsellers Gurus of Chaos, and and that got me very interested. I got project finance, which to you to make very good invest-The Unusual Billionaires, and is We are talking about 80s here. At me was the closest to equity ments decisions over a period ofan independent market expert. that point of time, very few research in retrospect. What time. people invested in equities. So, people don’t realize in 1989,The idea of the Coffee Can making money in equities was there was nothing called equity Q: So, after that, you didn’t getportfolio traces its roots back to actually much easier, particularly research. There was nothing caught out by the dotcomthe American Old West, when in public issues in those days and called FII (foreign institutional bubble or the 2008 bubble?people would put all their that’s how I got started. investors). There was nothingvaluables in a coffee can and called research report. There A: No. See, in each bubble, whatthen forget about them for a long Q: So, this is well before you was nothing called CNBC. So, it’s happens is because of thetime. went to IIT. In your school days a very different world. So, in that mistakes of 94, 95 you are you were actually an active world for me, project finance trained to be cautious ahead. So,Naren tells Mukherjea that one of investor in the market along- was the closest to equity instead of losing money after thehis big contrarian calls he got side your father. research. bubble, you tend to miss oppor-right was outside of the stock tunities. So, in 99, you askedmarket. And that making money A: I would say I was more an Q: One of the most fascinating yourself, why did you missin the stock market was relatively advisor to him when I was in 11th aspects your career, especially Himachal Global, DSQ, Penta-easier in the late 80s and 90s or 12th. When I cleared the IIT in mid 90s is this Chennai club media, and said that’s part of itwhen information on companies entrance, my father told me, “You that you have mentioned in and you have to agree that youwas scarce. have to join IIT” and he didn’t give several of your interviews. And can’t make all the money. me any choice. recently I took the pleasure toEdited excerpts of the interview: meet Mr. Chaddha who ran the But in 2001, you were just And it’s very interesting, JEE in club in the 90s. Could you just laughing all the way because youHi there, welcome to Coffee Can those days was a test of take us through what role the had not made any mistakes. So,Investing. My name is Saurabh mathematics and not the test of club played in the evolution of what I learned out of it is, you willMukherjea and it’s my privilege engineering at all. And I got in and you as an investor? be earning, you will then find thattoday to be able to interview one my father said, “This ensures you have lost some money-of the leading fund managers of your middle-class status. So, go A: It was very important because making opportunities but afterour generation, the CIO of ICICI in and join.” and it was not we had made a number of big the cycle ends, you find that youPrudential Mutual Fund, something which I wanted to do. investing mistakes in 94, 95. are actually a big winner.Sankaran Naren. But I ended up getting (an When the bear market arrived in admission in IIT) which was then 98, all our investing mistakes Q: One of the striking thingsQ: So when someone sees a very good. So, I said OK, let’s showed up clearly. What was about your career is you bothfund manager from Chennai, join. interesting was you realize that before you joined the fundthe immediate curiosity is that you were not the only person managing profession and sincetypically, the superstars of Q: So I presume that from IIT, making the mistakes and that you joined, you were veryChennai go to IIT and then you were very clear. After you there were many others who had willing to take contrarian calls,pursue a career in engineering finished IIT, you wanted a made similar mistakes. and you were willing to talkeither in India or abroad. From career in finance and that’s how about it publicly. Once youthat world, how did you get IIM Kolkata came about, right? So, what I guess Mr. Kamal have made visible, high-profilepulled into the world of stocks Chaddha did was he got together contrarian calls, doesn’t that A: Absolutely. I was very keen to a set of people like alcoholics exert a fair degree of pressure move out of engineering to anonymous. These were all on you? What role does the rest finance right from those days and people who made mistakes in of your support system say, that process and getting MBA investing. And it was anonymous people at home, how do they from IIM Calcutta was actually at that point of time and got us to help you deal with that best way to get myself into what I discuss our sorrows of losing pressure which arises running always wanted to do, which was money. What interestingly came this sort of amount of money

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, AUGUST 2018and with taking contrarian judge value investing. But I have went to buy tea plantation stock real estate prices have gonecalls? seen for example, there was a big and I have been waiting for nowhere, and people ask meA: See, it’s very interesting that real estate bull market, how returns from it for 5 years. My how did you come to themy family doesn’t know much many people had the ability to colleague said how many more conclusion. I said I used a simpleabout stock markets. And my say that this bull market is very years will you wait, I said it is still equity technique for valuation.son is a special child who very extended and real estate the cheapest way to buy land indoesn’t understand what is fund won’t do well for many years? India, I don't think land in India No one understands the valua-management or anything to do Very few. So, what I believe is that has become cheaper, but there is tion of real estate. So I looked atwith money. So, I think when I go the time to judge value investing no sign of returns. What worries rental yields and at mortgagehome and talk to them, I don’t is not in the middle of a bull me after looking at it is maybe it interest rates. In the US, at therealize anything on the stock market, it’s to judge when you is the fate of lots of farmers in same time when Indian propertymarket. So, that’s a very different are in the midst of a bear market. India. Because if I am not able prices were high, rental yield waskind of an environment. Actually, to make money out of a tea much higher than the mortgagein this whole contrarian style That’s why I would say that the plantation stock, that’s the state interest rate. Whereas in Indiawhat I have seen is when you do process that we have followed is of the farmers of India as well. there was a 7 percent gap. Thatit the first time, you go through by trying to train people into fund So, that was interesting case of a means the mortgage interestintense pressure. management and not recruiting failure. rate was nine and a half percent, experienced fund managers rental yield was 2 percent. I saidWhen you do it the second time, because the moment you recruit Q: Why do you think the market the seven and a half percent gapyou go through even the same experienced fund managers, hasn't seen the logic? Tea can't continue.kind, but as you keep doing it and they always come with the view, plantation is giving you soas you have successes, you will “I know how to create alpha”, much land and the land is not So, that was a fairly goodfind that it’s part of your daily whereas our model has always reflected in the share price and contrarian call because it was aroutine. Of course, taking pain is been we are trying to teach hence the share price should scale call. Because the numbernot easy but that has to be part of people how to create alpha, how get rerated. Any reasons why of people who made mistakes ina contrarian style. to take pain, how to stay out of a the market is not seeing the India in real estate, in that period bubble, how to make money over logic? is not smallAnd you get used to it. So, that’s a cycle. These are things that wehow I have actually learnt it and are continuously learning. A: Somehow the tea plantations Q: Yeah, it is very interesting, ifthere are people also now who are not growing 20 percent a someone had, anyone had in ado follow contrarian style and Q: If you look back at your last year; tea demand grows by 1-2 way, sold their Mumbai orthey are also in the same pain. 15 years of your investment percent. indeed Delhi residential realSo, you again take pleasure from management career, I am sure estate in 2013 after the 10 yearparticipating in the pain with you will recall instances where So, while we all think that there is boom and bought the stocksome other people whom you you took a deep contrarian a high food inflation, the reality market in September 2013may know or you may not know. position. I am sure you will be from what I can see from my tea when Raghuram Rajan became able to recall at least one in this investment is tea prices are RBI Governor, that would haveQ: I guess I can see why you episode, where you took a not going up so significantly been the ideal asset allocationkeep visiting Chennai to meet contrarian position and it didn't because the population growth strategy to follow. Given thatthe club again and again. On work out. Could you just talk us is just one and a half percent and you know, at one level it is asthe question of pain and through one example of each then tea is a mature product. So easy as you just explained docontrarian style, one of the type, one where it worked out why should tea demand grow value investing; you have aintriguing developments in the in a contrarian position, in much higher than population look at what is the raginglylast 6, 7 years has been that which you made plenty of growth? popular asset class that every-apparently everybody in India money, and one where it didn't? body and their father, motheror at least majority of the Q: On the converse side, you are buying, and you do yourinvestors I meet now are value A: Let me take an example what took a contrarian position and homework as you become ainvestors, right? They are all hasn't worked out, so you know it worked out like a dream. little sceptical of the asset classequities of Warren Buffett if I there is a big boom in real estate. and you try to find less popularbelieve what they are saying So, I said let's try to see which is A: I think the most contrarian asset class, given the simplicityand value investing seems to the cheapest way to buy a real position I took was actually of it, why is this sort of valuebe proliferating in the country estate. So, I looked and found out outside equities; in real estate. I investing so hard to do, whatand yet we have a stock market that the tea plantation per acre used to see everyone buying real stops people from becomingtrading act at 23 times forward was one of the cheapest ways to estate between 2007 and 2013, investors like?earnings. When you meet other buy land anywhere in this and you know I had seen in 2007investors, when you assess country. most of the infra stocks was A: The problem with the bestfund managers who you are pricing in 2014 earnings. investing decisions is that thetrying to interview, how do you Q: …this is 2003-2004? near term is very painful. Whengauge whether someone’s So, when you approached 2012- Warren Buffett invested inreally a value investor or A: No, 2013 13, I saw a number of people Goldman preference shares orwhether it’s someone who has buying projects under cons- GE preference shares in 2008 theread too many books from the Q: Wow. truction real estate, what could near term was very painful. TheAmerican school of investing? come 4- 5 years later or 7 years long term was very good for him A: So, I went to Assam and later, from builders whose but the fear of the near term is aA: I think one is when you meet happened to see some of antecedents were not clear. big problem. So, recently mypeople in the midst of a bull the fantastic tea plantation company did something inmarket, you can’t judge who a companies, I came to know that I could see there was a rea- December, January of returningvalue investor is, who is not. I land is found for a lakh or two per sonably large bubble in real money in small cap PMS (port-mean Warren Buffet says that it’s acre. So, I said let me now buy a estate and I said I don't need to folio management schemes).only when the tide goes out that tea plantation company. It is after stay in my own house so I endedyou knowing who swimming all the cheapest way to buy tea, I up selling my flat in Chennai and And this was the decision mynaked. So, I think from that point don't think you can manage to get Bombay, and I have been very CEO and head of PMS took. Theyof view, today is not the time to a land in Assam so cheap. So we impressed that in 5 years that the came and asked me, “Can we do

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, AUGUST 2018 Interviewit?” I said,” It's a perfect example Q: Yeah, absolutely. But in that money at the bottom. It is outperformance. How do youof a contrarian in decisions, so I context, basically the mutual impossible for you to take out make that resource allocationwill support you.” fund manager’s job in India is money at the top. So, it is very decision? the opposite of the central imperative that the mutual fundAt the end of the day, small caps bank. In India, the mutual fund has to that job because beha- A: It is very complicated, thehave gone up from 2013 to 2018 manager’s job seems to be to... vioural finance tells you that problem is part of what we areby 200 percent. If you had asked just as the stock market parties everyone can't do it. So if you can measured by is measured on a 1-anyone 3 to 4 months back getting really wild…go to do it, the investor can't do it. So, if year basis, sometimes to takewhether it was easy to believe people and say put even more you do it you can give a very good the right investment decisionssmall caps had peaked, the money in the stock market. You investor experience over the you will have to actually investanswer would be ‘no’. Because said you prefer to recruit talent long-term. with a much longer-term view,everyone was very clear that from scratch rather than hiring and if you are keen on trying tosmall caps are the way to go, so, I experienced hands, as it allows Q: Leaving aside the Chennai deliver alpha in the short run, youwould say that the fear of the you to build an ecosystem in club, any other Gurus any other can't make the best decisions. Idecision going wrong in the near this house of other value- bosses, colleagues from you was lucky with my bets onterm, the inability of the people oriented fund managers. If you have learnt a lot from in the metals in 2015 and telecom into time the market correctly, see that culture, would you say Indian context? 2016 as returns came quickly,makes this decision very very that across equities, you have surprisingly. But good invest-difficult. been able to create a stable of A: In the Indian context, we all ment decisions can take 3 or 5 funds, which is able to give watch everyone, many of them years to show results. Increa-Q: None of us wants to take the an investor steady returns are your peers, your competitors. singly the market is going to bepain in the short run and hence regardless of where we are in It was the 1999 to 2004 cycle, more efficient, making it muchwe like to go with the momen- the cycle. where I got to see what Birla more difficult for people like us,tum strategy and go with the Mutual Fund was. What Alliance which is the reason why I believepopular decisions. So, if you A: Clearly, I have been surprised Mutual Fund was. These were all that multi-asset construct wherehad to take a step back and say, because in 2007, 2008 and 2009, big mutual funds in that phase you are selling equities as theit turned out to be a good I actually went through a heart- and we watched what they did market goes up and buyingprinciple which you used to wrenching process, where right, what they did wrong, equities as the market goesfigure out where we are in the people invested in 2007 lost obviously, you know, the gurus down is a much better way to trystock market cycle or the bond money in 2008, did not invest in like Nemish Shah and Mr to create alpha for the customermarket cycle. How do you 2008 and missed a big rally in Jhunjhunwala, this is where all because it is in pure equity funds,figure out using broad thumb 2009. people again you could track where actually this problem ofrules, where are we in the cycle, their portfolios. Michael Mauboussin calls,is it a question of looking at the So, we end of the day based on efficiency is going to becomeRBI rate policy, do you look at that experience we created two Once they became famous you more and more a problemmy stock market multiple things, one was we created a could track their portfolios thattimes, how do you figure out category called balanced give you additional insights, so, Q: Beyond Mauboussin, anywhere we are in the cycle? advantage, whose job was to these were clear leads and I other gurus in the world of sell as the markets go up and buy think the advent of the date and investing either in India orA: Actually I must tell you how as the markets go down. And I the advent of the data being outside India?flows happen, so, if you look didn't expect it to be successful available, so many companiesback at the last 20 years, which but the company made it and their shareholding patterns A: Clearly, two more, Jameswere the best years to invest in successful, which was some- gives you such valuable insights Montier and Howard Marks and Iequities, it was when both FIIs thing, which was unbelievable. over a period of time but I tell my would say James Montier hasand local mutual funds were The second is, in August, colleagues, in the 1990s, we had written some of the bestsellers. The worst years to invest September 2013 we went out nothing and that's why it was research papers as a researchin equities was when both and told people to invest in easier to make money whereas analyst and we have all learntof them were aggressively close-ended funds and at that today you know what every big from him, … there is a veryinvesting. point of time people said close- investor has done, every quarter famous research report called 10 ended funds can't deliver a good because his shareholding is very tenets of investing, which I thinkGo back in 2002, neither locals investing experience. So, we visible to you. is one of his best pieces andnor FIIs were investing, they have been continuing to raise Howard Marks has completelywere selling. It was one of the money in closed-end funds but Q: So, if you suggest taking demystified investing asbest years to actually invest, in today when we raise money in that construct for the thing something very simple in his2007 both local mutual funds and closed-end funds, we actually Michael Mauboussin came up website called Oaktree Capital.FIIs were investing aggressively put a good part of the money that with, this simple formula that In the 1990s, barring a fewand that was the best year to take we have collected in cash or the amount of alpha a fund Warren Buffett books, there wasout money. So, if you look at it, if hybrid portfolios because at end manager would generate is the nothing available for us to learnyou had to use one metric, I of the day markets are not cheap. fund manager’s ability on investing. Today there is sowould say, look at the scale of multiplied by the efficiency or much information availablelocal inflows and the scale of So, we came up with two models lack thereof, in that part of the freely on the internet. But theforeign inflows. Similarly, look at what I called the closed end market. So say in small caps, if practice is still difficult, so itthe scale of foreign outflows and model and the balanced advan- the fund manager is reasonably appears very easy because youthe scale of local outflows from tage category and we have been able, there is enough in- have access to the resources butmutual funds, which gives you a trying to do the same thing in efficiency in the Indian market to practice good investingperfect indicator and it is a very debt. Truth is that that the market to generate lots of alpha. By techniques is not as easy asdifficult indicator sitting in a is not yet as developed as it is in that same token in BSE 100 the reading about them.mutual fund to follow. Because equity. So, we are trying the efficiency is less, and even if thewhat I am trying to tell you is that same kind of construct as fund manager is skilful, themoney will come to you when balanced advantage fund in debt alpha is presumably modest. Isthe market is extremely expen- as well and we are trying that. In that a framework that you havesive and money will go when the my broad view, it is impossible to used because as a CIO you havemarket is very cheap, that is not change behavioural finance, it is to figure out where to allocatean easy thing. impossible for you to collect scarce re-sources to generate

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, AUGUST 2018Expecting higher volatilityET Wealth | July 25, 2018After a steep rally in the last three of equity investing. That is categorised as midcaps. 65 per Mrinal Singhyears, the returns from the why we always advise equity cent of your assets have to be in Deputy CIOmidcap funds have been falling investors to have a long-term these 150 stocks and remainingfor the last six months. The investment horizon. Please don’t can be other segments. And 150 ICICI Prudential Mutual Fundannual average returns from the expect excellent returns every stocks is not a small number.category was at 0.76 per cent, year. They happen in bunches. I This shouldn’t be impacting the five-year horizons. And if you arewhile the short-term returns are am looking at the midcap performance to that extent. judging the schemes on thein the negative territory. ET.com correction in a healthy way. basis of last six months, it is aMutual Funds spoke to Mrinal Often, the valuations overshoot As experts say, the market is very short time for equities.Singh, fund manager of ICICI because of liquidity. bipolar at the moment. Only Rather than looking ahead forPrudential Midcap Fund and some select stocks are one-year returns, investors needDeputy CIO, ICICI Prudential There are some changes in performing and taking the to be focused on being inves-Mutual Fund, to understand many midcap schemes because indices up. Is it the same story ted for a long-term horizon,what is happening in the midcap of re-categorisation. Did it have in midcaps? particularly in this segment. Wesegment. Edited interview. an adverse impact on the are recommending investors to midcap category? The bipolar term would be consider SIPs with five years plusHow do you see the fall in appropriate for the largecap horizon in mid- and small-capmidcaps after the rally in the I would not attribute it to re- section where some heavy- funds.past few years? categorisation. At the end of weight stocks have done better 2017 calendar year, the valua- than the others. In midcaps, we What is your advice to theIf you look at the broader tions in midcaps looked steep. It have seen a broad selling only. midcap scheme investors?markets, largecap continue to be was just a matter of time for Some have fallen less, somethe strength of the index at least. things to normalise. have fallen more. But, there is a I would ask investors to not stopOn the mid- and small-cap side, fall in the entire segment. their SIPs, particularly in such athere has been a correction. But The universe for midcap funds market. The coming time isthis is not something unusual as has shrunk and there are strict What is your short-term and going to remain volatile and themarket does not keep going up guidelines for the portfolio to be long-term expectation from the SIPs will benefit from thatonly. Volatility is a part and parcel invested in the 150 stocks segment? volatility. But I don’t think this is a good time to invest a lumpsum inThe universe for midcap We would expect volatility to be midcaps.funds has shrunk and there there in midcaps. Crude prices,are strict guidelines for the interest rates, an election yearportfolio to be invested in ahead with the earnings being upthe 150 stocks categorised and down would result in vola-as midcaps. tility. We are actually expecting the volatility to be a tad higher than what we have seen in the past. Investors are anxious about the steep fall in their midcap returns. What do you think they should expect this year? The midcap schemes have given very good returns in the three- toMF distribution should be made a viable career path for new entrants Contd. from page 1most of the fund houses, it is The way ahead At the same time, two pertinent Growing by leaps and boundsbecoming easier for the young issues need to addressed suchinvesting population to invest A recent analysis by CRISIL the industry growth momentum • Overall industry AUM grew atonline in mutual funds. Research estimates that the is maintained. around 25% from Rs 7 lakh industry AUM will grow by crore in 2013 to Rs 21.40 lakhAmidst all this, financial advisors around 19% over the next five First, the distribution space crore in 2018.have played a vital role in the years to reach Rs. 48.40 lakh should be made more lucrative,entire mutual fund value chain. crores. This is likely to be a reality making mutual fund distribution • AUM of individual investorsRetail investors who are not as well owing to increased a viable career path for new grew around 31% over pastfinance savvy should ideally geographical penetration thro- entrants. four years to reach 11.67 lakhconsult a financial advisor when ugh digital means, technology crore.it comes to planning their enabled faster transactions Second, mutual funds should befinancial goals. In fact, a financial coupled with easing investment allowed to accept the bank KYC The writer is managing director &advisor becomes as important as rules. As the industry evolves the thereby cutting down on paper- CEO, ICICI Prudential Asseta family doctor to keep the number of innovative product work and help improve the on- Management Company.family’s financial health in check. offering too is bound to rise. boarding procedure.

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, AUGUST 2018 Interview Be cautious, don't lose your money, understand basics before investing Hindustan Times | July 23, 2018Nimesh Shah now than what it was say three to return product. You can't say that stand that mutual fund is subjectMD & CEO four years ago. We need to it will give 7%, 8% or 10% to volatility and fund managersICICI Prudential Mutual Fund educate more people who are returns for sure. It is not possible. are not magicians. coming into the system. Firstly, Mutual funds are subject toPlanning to invest in mutual understand that mutual fund is market risk and that will remain. In that case. what are the basicfunds? Worried whether it is the not just equity. There is debt and It means that when markets go parameters you should look atright time to invest? Nimesh hybrid as well. Equity mutual up, mutual fund returns will go before investing?Shah, Managing Director and funds invest in stocks of com- up. And when markets go down,Chief Executive Officer, ICICI panies. Debt mutual funds invest mutual funds can go down as Firstly, you should understandPrudential Asset Management in bonds of companies. Basic well. Mutual funds are designed benchmark. You should invest inCo. Ltd, spoke to HTMoney, question for any investor is to beat benchmark by a certain funds that give you returns betterwhere he explains the basic whether he has the appetite for per-centage. Say the target is to than benchmark. Fund managersparameters to consider before volatility. Go for diversified fund beat the benchmark by 300 basis are basically called relative per-investing in mutual funds. to protect against volatility. points. If the fund manager beats formance givers. We have to doExcerpts: Unless you are an expert and you the benchmark by 300 basis better than the benchmark. Next, have a strong view that a points, we will be very happy. you should not look at pastWhat should first-time particular sector will do well, What does it mean? Suppose the returns and invest. You end upinvestors do while investing in don't get into sector funds. benchmark to the fund is Nifty investing in expensive market. Inmutual funds? Rather than taking one sector and it gives 10% returns. Our fact, look at good fund house and fund, it is better to go for fund should give 3% more a good fund with long-trackMutual funds are more popular diversified funds. Right now I return. Similarly, if market falls by record. Past returns are only an would suggest investing in the 10%, my fund will also fall 7%. indication that the fund is run large cap space. Although mid- Nothing is guaranteed. Investors well. It gives credibility, but that cap is getting corrected, we should understand that fund should not be the only reason to believe it is still expensive. managers are looking to give invest. Past return should only be relative and not absolute returns. credibility dip stick. Don't look at How should you look at It is not like a bank FD which says one-year track record. Look at a returns? that it promises to give a certain five-year track record. percentage after one year. We Mutual fund is not a guaranteed don't do that. You should under- ICICI Prudential Bluechip FundThe Economic Times | July 31, 2018The stellar performance of large-sized and peers by a reasonably good margin. 16% returns in the same period, respec- companies in the June 2018 quarter Another factor that works in favour of the tively. This scheme has beaten both the indicates that the big boys are better scheme is the presence of ace fund category and benchmark in eight of the nineplaced than mid-sized ones in recording manager S Naren who has a strong record of years since launch. In the past six months,consistent growth in their revenues. This being at the helm of well-performing the scheme's fund managers - S Naren andwarrants enhancing investment exposure to schemes. He is known to be one of the few Rajat Chandak - have bought in companieslarge-sized companies due to their better fund managers who have been conscious of which fall under the value theme. A fewbalance sheet, superior return ratios and investing in companies which may be out of prominent companies the scheme hasdominant market share in their respective favour, but hold promise of visibility of bought in are Bank of Baroda, NHPC, Coalsectors. Among mutual fund schemes that earnings in the long term. In the past three- India and Mahindra & Mahindra.have singular focus on large-sized com- and five-year periods, the scheme haspanies, ICICI Pru Bluechip has distinguished delivered 13% and 18 % returns, while its - Rajesh N Naidu/ ET Intelligence Groupitself by consistently beating its benchmark benchmark, Nifty 50 TRI, has given 12% andPORTFOLIO CHANGE (PAST 6 MONTHS) RETURNS (in %) EQUITY MARKETCAP LARGECAP-AVGNew Entrants Complete Exits Increase In Allocation PERIOD CAGR RETURN SIP CAGR RETURNVedanta Ashok Leyland Idea Cellular ANNUALISED RETURN State Bank of India 1 Year 9.72 8.56Bank of Baroda IndusInd Bank TVS Motor Company 3 Year 11.92 16.32 6.65ICICI Securities JSW Steel ONGC 5 Year 17.77 15.82 9.92NHPC Max Financial Services 17.02RETURNS PEER COMPARISON (in %) Expert Take Harshvardhan Roongta, CFP, Roongta Securities 1-YEAR 3-YEAR 5-YEARAxis Bluechip Fund 22.18 13.36 17.61 Large companies should form the core of an investor's equity portfolio.Invesco India Largecap Fund 13.10 10.95 17.30 This scheme is one of the most consistent performers in its category. ItJM Core 11 Fund 11.47 16.25 22.84 follows a benchmark hugging investment strategy. However, to generate alpha, the sector weightage varies. It is either 5% more or 5% less thanSource: Accord Fintech, Compiled by ETIG Database its benchmark index. Investors looking to invest in an 'all-weather' and 'true-to-its-label' large cap portfolio can consider investing in this scheme.

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, AUGUST 201825 years of pvt sector mutual funds:Distribution still not a viable businessET Wealth | July 28, 2018Private sector mutual funds are year 2004. It was at a time when industry is the nature of the S Narencelebrating silver jubilee this the mutual fund industry was product - transparent and well ED & CIOmonth. ET.com Mutual Funds relatively smaller. The journey regulated - which works well for ICICI Prudential Mutual Fundspoke to S Naren, ED & CIO, ICICI provided various opportunities to the final investor. In terms of thePrudential AMC, and one of the learn several lessons, especially misses - mutual fund distribution returns for the investor by usingforemost value/contra investor in during 2007-2009 phase. It is is not still a viable business cash and debt as well.the country, to find out how he encouraging to see that millions option for new distributors, so ittraversed his stint in the industry. of investors have benefited from has to be made much more The importance of convictionEdited Interview. investing in mutual funds over remunerative. cannot be overstated in both the course of these years. value investing or contrarianPrivate sector mutual funds are You are considered one of the investing. How do you stick tocelebrating silver jubilee this Private sector mutual funds foremost value investors in the your conviction, especiallymonth. What are your thoughts brought a lot of changes. For mutual fund industry. Even when the schemes are suff-on the occasion? example, Kothari Pioneer though you don’t manage ering? Can you give us some Mutual Fund, the first private Value Discovery Fund, most real example?In the period till 2008, mutual sector mutual fund in the investors identify the schemefunds were seen only as equity country, introduced daily NAV, with you? Would you describe In 2007, one of the biggest over-vehicles. However, over the monthly disclosure of portfolio, your journey as a prominent weights in my portfolio wasyears a lot of effort has been etc. What do you think is the value investor in the industry? pharma, which was the timemade to make mutual funds all- most important contributions when infrastructure was thepurpose investment vehicles, of private sector mutual funds? I am a believer of value investing most sought-after theme. Butwhich include low to moderate style and I am of the view that it is from 2007-2015, pharma provi-risk debt funds, dynamic asset The entire mutual fund industry the best way to invest for a long ded one of the best returns.allocation funds and equity has worked alongside media, term. The value investing story, Currently, again valuation diff-funds. We believe there is huge distribution community and Sebi as defined globally, is a long-term erential appears extreme andscope for industry growth over to bring a transparent product to story and periodically there consequently we are a bigthe next decades as investors reach customers through the would be massive booms in believer in reasonably valuedembrace mutual funds as breadth of the country. I see that select parts of the market which stocks which have not done wellinvestment vehicles. We believe as an important contribution. a value investor would have to over the last decade but havethe current trend of investors stay away from. Nevertheless, promising outlook.opting for financial assets Regulations have also under- from a long-term point of viewthrough the mutual fund route is gone dramatic changes in the value investing has proved itselfa healthy sign for the industry. last quarter-century. What are globally in the investing world. the hits and misses on thisWould you please describe front? Some investors believe you areyour personal journey in the contrarian investor? Are youmutual fund space for our In my opinion the regulations one?readers? brought about have helped to make mutual fund a very trans- My investment style is value +My personal journey in the parent and investor-friendly contrarian. Also, the endeavourmutual fund space began in the product. The biggest hit for the is to get good risk-adjustedA safe haven market?Businessworld | August 04, 2018\"While Indian markets are close centrated performance since in the market lagging. The Stocks market appears reasonablyto all-time highs, we are 2015, with select stocks that have done well appear very valued,\" says S. Naren, ED andwitnessing the most con- outperforming and the breadth expensive and the rest of the CIO, ICICI Prudential Mutual Fund.We believe that long-term SIPs in small- The markets are reflecting theand mid-cap funds for tenures of 5 years new-found earnings potential ofor more can work out to be another good companies. The last few yearsinvestment strategy. have lagged because the reforms process undertaken had to take root across the economy. And as demonetisation and GST were firmly taking hold, earnings took time to catch up.

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, AUGUST 2018 Fund Review ICICI Prudential Multicap Fund Large-cap tilt pays offThe Hindu Business Line | August 07, 2018The fund continues to outshine the category average and benchmark over the last yearInvestors looking for steady returns in appetite can buy the fund through the healthcare sectors that were not doing well. multi-cap funds can buy units of ICICI systematic investment plan (SIP) route to Prudential Multicap, a consistent long- mitigate risks. That said, the fund began to up its holding interm outperformer. software this January, and subsequent Except for the change in benchmark from recovery in this sector has helped shore upThe fund invests across large-, mid- and the S&P BSE 200 to the BSE 500, there has its NAV.small-cap stocks to generate capital been no major change in the attributes ofappreciation. It has outperformed the new this fund due to SEBI’s new scheme Given the choppy markets, the fund has alsobenchmark index - S&P BSE 500 TRI - over categorisation norms. increased its allocation to pharma andthe long term (five- and 10-year periods). consumer non-durables; the latter is the The fund’s performance over the last one most-preferred sector, followed by banks.Though the fund has under performed year has beaten some of the well-knownslightly over the past three years, it funds - SBI Magnum Multicap, Motilal Bounce-back in stocks such as Sun Pharma,continues to outshine the category average Oswal Multicap 35, and Kotak Standard Torrent Pharmaceuticals, ITC and Daburand benchmark over the last one year. It is Multicap. India will benefit the portfolio.among the top quartile of funds, going byyear-to-date returns. Performance and strategy Further, it is also bullish on auto ancillary and non-ferrous metal. Besides, stocks such asRelying on large-cap stocks has helped the The fund has about 90-97 per cent exposure Mother son Sumi Systems, Bosch andfund’s performance so far this year. to equities currently. Vedanta have entered the portfolio over the last five months.H o w e v e r, c o n s i d e r i n g i t s m u l t i - c a p Following good performance in the calendarapproach, long-term returns can be spiced years - 2015 and 2016 - the fund had under ICICI Prudential Multicap has also increasedup with exposure to mid- and small-caps. performed the benchmark in 2017, as it had stake in the automobile and power sectorsInvestors with a moderately high-risk a slightly higher exposure to software and through stocks such as Maruti Suzuki India, Hero MotoCorp and NTPC.Given the choppy markets, the fund Currently, the fund holds about 31 stocks,has also increased its allocation which are relatively compact compared withto pharma and consumer non- its early holding of 55-60 stocks a year-and-a-durables; the latter is the most- half back. Blue Dart Express and Alembicpreferred sector, followed by banks. Pharmaceuticals are key mid-cap stocks in the kitty. Compared to the benchmark, the fund is underweight in financial, construction and chemicals, while it is overweight in many sectors such as automobile, energy, FMCG and healthcare. Sectoral concentration Annual returns (in %)Assets as of June 30, 2018: `2,753 crore ICICI Prudential Multicap Fund S&P BSE 500TRI 13.3% Consumer non-duarables 12.9% Banks 20.9 Fundas 11.7% Pharma 18.7 10.1% Software Top quartile fund across all 9.1% Automobiles 10.9 10.8 11.2 12.0 time-frames 5.6% Auto Ancillary 37.3% Others 1 year 3 years 5 years Holds a compact portfolio Consumer non-duarables and banks are top sector choices

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 9TARAKKI TIMES, AUGUST 2018mint List of ICICI Prudential Funds in Mint30BESTFUNDSMint | August 2018FUND CORE 3-year return (%) 5-year return (%) 10-year return (%) Fund size (Rs cr)EQUITY-LARGE CAPICICI Prudential Bluechip Fund 11.52 19.10 15.47 18,747.28ICICI Prudential Nifty Next 50 Index Fund 12.08 22.34 NA 265.36ELSSICICI Prudential Long Term Equity Fund 10.18 21.58 15.02 5,522.41(Tax Saving)AGGRESSIVE HYBRID 10.73 19.25 13.91 28,633.37 Fund size (Rs cr)ICICI Prudential Equity & Debt Fund 1-year return (%) 2-year return (%) 3-year return (%)FUND CORE 1.62 2.55 3.87 8,155.06DEBT-ORIENTEDSHORT DURATIONICICI Prudential Short Term FundSIP 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 (%) 11,00,397 44,32,851 Midcap Fund 18.06 18.56ICICI Prudential Return (%) 10,38,954 39,00,743Bluechip Fund 15.13 16.00ICICI Prudential Equity Return (%) 10,09,254 38,54,797 & Debt Fund 14.04 15.78 ICICI Prudential Return (%) 9,64,375 35,03,008Large & Mid Cap Fund 11.97 13.72ICICI Prudential Return (%) 9,82,897 36,57,085Multi-Asset Fund 12.77 14.67ICICI Prudential Return (%) 10,58,667 39,23,341Multicap Fund 16.05 15.95ICICI Prudential Balanced Return (%) 9,52,904 34,65,099 Advantage Fund 11.44 13.53 ICICI Prudential Return (%) 9,76,755 --Focused Equity Fund 12.43 -- ICICI Prudential Return (%) 10,27,826 44,96,264Value Discovery Fund 14.96 19.31ICICI Prudential Long Term Return (%) 10,32,013 40,40,527 Equity Fund (Tax Saving) 14.9 16.84Data in XIRR (%) terms and as of July 31, 2018Past performance may or may not sustain in the future.

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, AUGUST 2018 Fund ReviewETW Funds 100List of ICICI Prudential Funds in the Economic Times WealthET Wealth | August 2018FUND Value Research Returns (%) Fund RatingEQUITY: LARGE CAPICICI Prudential Nifty Next 50 Index Fund 3-month 6-month 1-year 3-year 5-yearICICI Prudential Bluechip Fund 22.46ICICI Prudential Nifty 100 ETF 0.59 0.78 6.5 12.21 19.15HYBRID: AGGRESIVE 4.16ICICI Prudential Equity & Debt Fund 6.28 3.85 11.46 11.38 -HYBRID: CONSERVATIVE 19.33ICICI Prudential Regular Savings Fund 7.62 14.07 11.22DEBT: MEDIUM- TO LONG-TERM 12.43ICICI Prudential Bond Fund 0.94 -0.3 6.37 10.66DEBT: DYNAMIC BOND 8.56ICICI Prudential All Seasons Bond Fund 1.76 3.18 4.84 9.27DEBT: CORPORATE BOND 10.74ICICI Prudential Corporate Bond Fund 1 1.35 1.73 7.09 8.38 1.1 2.74 2.25 9.04 1.57 3 4.82 7.59Systematic Investment PlansA monthly Systematic Investment Plan (SIP) of Rs. 10,000 in these schemes has generated returns as stated belowScheme Name Return (%) 3 Years 5 Years 7 Years 10 Years 435,763 937,139 1,714,660 3,171,325ICICI Prudential 13.03 18.06 Midcap Fund 455,004 872,860 20.16 18.56 16.10 15.13 1,472,626 2,764,173ICICI Prudential Return (%) 430,967 849,927Bluechip Fund 12.25 14.04 15.86 16.00 425,241 808,012 1,462,507 2,732,245ICICI Prudential Equity Return (%) 11.32 11.97 & Debt Fund 431,933 823,981 15.67 15.78 12.41 12.77 1,365,185 2,448,236 ICICI Prudential Return (%) 447,638 892,587Large & Mid Cap Fund 14.94 16.05 13.73 13.72 418,962 797,537 1,401,723 2,574,905ICICI Prudential Return (%) 10.28 11.44Multi-Asset Fund 437,428 817,018 14.47 14.67 13.30 12.43 1,537,876 2,756,761ICICI Prudential Return (%) 423,181 869,330Multicap Fund 10.98 14.96 17.09 15.95 442,313 867,999 1,331,866 2,423,281ICICI Prudential Balanced Return (%) 14.09 Advantage Fund 14.9 13.03 13.53 1,352,671 -- ICICI Prudential Return (%) --Focused Equity Fund 13.47 1,585,892 3,301,561 ICICI Prudential Return (%) 19.31Value Discovery Fund 17.95 1,510,863 2,892,660ICICI Prudential Long Term Return (%) 16.848 Equity Fund (Tax Saving) 16.59Data in XIRR (%) terms and as of July 31, 2018Past performance may or may not sustain in the future.

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, AUGUST 2018Your YToaur rTaarakkkki CiornCer orner Tarakki Success Story August 2018 Amit Rathi Amit Rathi Consultancy ARN - 86389 KolkataA Financial Solutions Expert!An established certified financial planner based out of Kolkata, Amit Rathi has more than 12 years of marketing experience. His journey intoinvesting began with entry into the stockbroking business in 2006. Following the Lehman crisis which affected the financial markets, he decidedto pursue a different line. On the recommendation of a friend, he started the mutual fund advisory in the year 2013.With the help of ICICI Prudential Mutual Fund Business team, he was able to understand the various nuances of the industry. Ever committed tohis clients, Amit continued to support his stock market investors to help them average out their losses during those trying times. Gradually hewas able to build a strong client base by rendering good advice. They gradually sought him out for other areas like health insurance, lifeinsurance, pension management etc. Astute and responsive, Amit was immediately able to seize the opportunity and established tie-ups withvarious companies.Eager to learn about his field, he completed his Certified Financial Planning certification and, gained more expertise and started offering wealthmanagement services. Through referrals from existing clients, he was able to grow his business. To exclusively focus on these services, hestarted a wealth planning consultancy firm in 2017. The main office is in Kolkata and with plans to expand further, the firm has recently opened itssecond office in Siliguri.From simple beginnings, Amit Rathi has come a long way. The biggest learning from his early days in the business is that it is important to onlythink of the client's goals. Many a time, clients are not aware of what they want and here the finesse of the financial advisor comes handy. Duringturbulent times, an advisor is expected to calm their fears and help them focus on the goals. He and his team go the extra mile to explain theimportance of staying committed in an investment.The key to becoming a successful wealth planner, he says is to always guide clients by delivering the best financial solution tailored to suit theirneeds and objectives. \"Sell Solutions, not Products\" is the mantra. Investors no longer have to deal with the hassles of investing by going to AmitRathi, who brings in professional expertise to the whole process. He recommends SIPs as a way of investing for long-term wealth creation. Hebelieves that financial planning is a journey and focus is required to achieve the financial goals at every stage of life.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, certainSchemes 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 referto 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 andrisk 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 excerptsof 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 (theFund) 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 berelevant 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, TheTrust 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 ICICIPrudential 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.