Tarakki Times English April 2017

A COMPILATION OF ICICI PRUDENTIAL MUTUAL FUND MEDIA VIEWSProfessional Views MUMBAI | APRIL 2017 | PAGES 10Pg. 2 How to best adjust your investment strategy toBest way to be a volatile times in marketscontrarian investoris to always carryyour calculator S Naren, ED & CIO ICICI Prudential Mutual FundPg. 3Getting Personal Manish Gunwani, Deputy CIO - Equity ICICI Prudential Mutual Fund Fund Reviews The Economic Times | March 29, 2017Pg. 5ICICI Prudential Child Nimesh Shah attractive compared to other attention and consideration. TheCare - Study Plan MD & CEO physical assets, while the setting emergence of dynamic assetA safeguard against market ICICI Prudential Mutual Fund appears primed for growth in allocation/ balanced funds hasvolatility financial assets. Hence, it’s helped to dispel fears among the Tame financial markets through always recommended that retail conservative class of investors,One Fund Review two-in-one approach of investing investors should incrementally while navigating them throughICICI Prudential Dynamic Plan in equity and debt market participate in financial assets to capital markets. proportionately, as this allows maximize their return on Events such funds to perform well in all investments. Investors often hear and knowPg. 6 market conditions. that asset allocation is theMorningstar Awards 2017 Nevertheless, the challenge cornerstone for long term wealth Should market volatility be a remains for neophyte investors, creation; however, the average Expert Speak cause for concern to retail who are mostly averse to typical investor finds it difficult to imple-Pg. 7 investors? All major financial market choppiness that’s ment this strategy in theirA Case for Raising assets invariably exhibit a certain encountered almost on a daily personal investments.Inflation Target degree of volatility in due course basis. So, how can such investors of time. navigate market volatility comfor- Dynamic asset allocation fund Anish Tawakley , Head of Research tably, who have conventionally comes in as benediction for such ICICI Prudential Mutual Fund One should always reminisce that enjoyed the protection and safety investors as such funds are no asset class is designed or of traditional investment structurally designed to take careFund Reviews programmed to move in one avenues? of appropriate asset allocation specific direction, say, in a strategies depending on marketPg. 8 straight ascending line. And, More often than not, market conditions. More importantly,List of ICICI Prudential Funds when it comes to financial assets, volatility tends to unnerve or these funds help investors toin Mint the exposition of volatility is more frighten financial asset investors, negate the burden of emotionsPg. 9 pronounced, particularly, when that’s because asset prices swing associated in the investingList of ICICI Prudential Funds there is a slew of events including wildly, while occasionally there’s process. For example, investorsin the Economic Times Wealth political, economic or financial blotch of red on portfolios. Inves- tend to pass opportunities to lined-up, or when things related tors often become fastidious invest in a falling market, owing toTarakki Corner to business world go completely when they look at temporary fear that they may accumulate disarray. losses, while they can become losses, in case market headsPg. 10 vulnerable to making serious further south. But, such funds on For example, election results can mistakes, which can cost their the other hand, will only increase Joseph E. Menezes be a major twister which can take portfolios dearly. For example, allocations to equity, due to its in- ARN - 6083 financial markets by a big investors mostly tend to sell built market strategy, which is Malad (Mumbai) surprise, and send asset prices when equity asset prices start ideally the right thing to do. hurtling north or southward. falling, whereas, actually they Manu Jain should be making purchases in a Retail investors have evolved with ARN - 92017 Warren Buffett, one of the world’s declining market. time, they have highly acknow- richest men and greatest investor ledged the fact that over the long Amritsar said, “Volatility is not the same On the other hand, when equity term, dynamic asset allocation thing as risk, and anyone who prices are stretching to their all- funds aims to benefit out of thinks it is, will cost themselves time highs, investors generally volatility, and it doesn’t matter money.” tend to become greedy expecting whether markets are choppy or further gains, while necessarily outlook remain sanguine. Vijay Rana It’s also proven time and again that may not be the right move. ARN - 92017 that with major shifts in macro- Hence, in these interesting and The upsurge in enthusiasm economic parameters, financial dynamic environment, volatility among the retail investors for this Amritsar assets become relatively suite of products finds the product can be derived from the Contd. on page 2The 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 2017 Interview Best way to be a contrarian investor is to always carry your calculator The Economic Times | March 23, 2017 S Naren When it comes to equity one can to making fixed-income yield offered to fixed income ED & CIO consider PE, PB, market-cap to investments. The point most of investors has gone up. If we ICICI Prudential Mutual Fund GDP and comparison with 10- the investors miss is that a fiscal compare the real yields as the year yield. When it comes to real policy which is counter cyclical is difference between 10-year yieldValue investing, I believe, is one estate, the parameter to look at is never bad for fixed-income and the medium-term inflationof the best long-term ways to the gap between mortgage markets and the government target of the Reserve Bank, theinvest in any asset class -be it interest rates and rental yield. expenditure only and only current markets offer a real yieldequities, fixed income or real Lower the gap, better it is as this substitutes low private sector of almost 3%, which is one of theestate. Seth Klarman, one of the suggests that real estate has activity. The Japanese economy highest offered by the markets inmost famous fund managers in become attractive. The case in is the best example where fiscal this cycle.the United States, who runs a point here is: From 2009 to 2014, deficits have been high for a longBoston-based money manag- the rental yield in America was time without affecting the bond Even if we compare this realement firm named `Baupost', much lower than the mortgage yields. India is undergoing a yields against the real yieldshad once famously said: “Value interest rate, suggesting that real corporate deleveraging cycle offered in other parts of theinvesting is at its core is the estate had become a contrarian and we can afford a higher fiscal world, barring Brazil and Russiamarriage of a contrarian streak asset class. Now, in the current deficit at this point of time. The (both are cyclical commodityand a calculator.\" The idea for this situation, among all the asset fact that the combined deficit of economies) no other fixedcolumn arose from the classes, the most contrarian the Centre and the state income market offers a betteraforementioned quote. Very asset class seems to be fixed government has not gone up real yield. Even the real yield onoften, layman investors think income. only makes the case of fixed US 10 year is only 50 bps. If thethat contrarian investing means income stronger. US real rates were to go upbuying something cheap. But as Investing In Debt: The further, it may not necessarilyKlarman says, the right way to be Contrarian Bet In the past, Richard Koo, the translate into higher real yieldsa contrarian investor is to carry chief economist at the Nomura for India, as well.your calculator all along with you. It is often thought that a hawkish Research, has very eloquently RBI is bad for debt market and presented that no nation can From an equity fund manager'sApplicable Across Asset vice versa. However, history have a scenario whereby people, view point, 91-day Treasury billClasses points to the fact that a hawkish companies and the government, yield is equivalent to a large cap. RBI keeps the debt space lively all save. In India, we are going As on date, the 91-day T-bill yieldThe good thing is contrarian given that the target is to lower through a phase where people has come down to 5.90% whichinvesting can be implemented inflation. On the other hand, a and companies, too, are saving. is much lower than the policyacross asset classes. At some dovish RBI means near term rate even in a month like March.point in time, it can be in equity, easing, but with an inherent risk What this means is that fiscal On the other hand, a product likedebt or real estate. In a rare of spike in inflation thereby deficit is not a very good 10-year State Development Loansituation, when all the asset leading to a short rate cycle. indicator for what is going to (SDL) trades at 7.8% which isclasses are doing well, gold is Given that the RBI has been happen in the fixed-income much higher than the 91-day Tconsidered the best bet (as in dovish in October and November market. In a deleveraging cycle, bill.2007) as the yellow metal 2016, which meant that there fiscal deficit does not play a rolebecomes a contra asset of all was always a fear that the fixed of increasing 10-year yields. So, In effect, we have all the factorsother asset classes. income cycle was in its final the link between fiscal deficit which make debt a contrarian stages. But now, with a more and 10-year yield is valid only in a investment attractive valuation,In order to zero in on a contrarian, hawkish RBI, the fixed income scenario where private sector negative sentiment and anone can use several parameters. cycle looks to have extended. capex and people are aggress- investment scenario where The current upmove in yields, ively investing in physical assets. private sector capex, credit along with change in investor However, we are not in any such growth are all low. This simply sentiments, has taken us back to situation currently , which is why indicates that the time is now to a mid-cycle point in fixed income we think we are in a very invest in debt as the outlook cycle. attractive phase for fixed looks attractive. income. The other aspect which investors most often watch very closely is With RBI's inflation target the fiscal position when it comes moving lower to 4%, the realHow to best adjust your investment strategy to volatile times in markets Contd. from page 1fact that there have been degree of volatility, the other conservative investors find management of mutual fundincreased inflows into dynamic helps to diminish the same. comfort. The experience of long- industry.asset allocation funds, over last term investors has been verytwo years. Auto rebalancing in dynamic positive and encouraging with As the world has become more asset allocation funds depends volatility suite of products. indeterminate than before, yourdynamic asset allocation funds on attractiveness and desirability investment strategy needs tobalance between two important of the certain asset class. The Hence, dynamic asset allocation adjust, and, what can be betterfinancial assets i.e. equity and basic premise of volatility suite of funds - holds the potential to than incremental investment indebt. At times when one asset products is to create long-term become as large as the dynamic asset allocation funds.class tends to exhibit a higher wealth, a feature with which cumulative equity asset underThe 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 2017Getting PersonalMutual Fund Insights | April 2017It took a couple of tries for me to He also thinks that the shift in waiting, but when the correction Manish Gunwaniget the time for a long conver- market shares is a trend that may comes, no one buys! You got a Deputy CIO - Equitysation with Manish Gunwani the wane over the next few quarters. 10 per cent decline in five days ICICI Prudential Mutual FundDeputy CIO - Equity of ICICI But in the long term, demone- and still people didn't buy. TheyPrudential AMC. I thought the tisation is just one baby step in a are too scared. You might as well the team about his moreinterview was best done over series of policy moves to push try to conquer your market timing expensive picks?phone. The quiet Manish is quite for a formalisation of the instinct through SIPs”.happy to hover in the back- economy - GST, digitalisation and Manish fields that one neatly. Heground whenever one visits the so on. So listed players will So, what did his funds buy during does not believe in pure growthICICI Prudential AMC head- benefit over the long term. the correction, I ask slyly. investing, but only in growth at aquarters, where other top reasonable price. “I am not a verymanagers are all verbose folk - be For a long time now, the stock He says he didn't buy as conceptual investor who will buyit the exuberant Nimesh Shah or markets have been galloping aggressively as he would have a stock at a 100 PE or some-the articulate Sankaran Naren. while corporate earnings have liked. “We bought consumer thing”, he says with a laugh. grown sluggishly. So, does the discretionary. Not very aggressi-But I found Manish to be a very December quarter signal the vely because valuations corr- But then he explains - “What can Istraight talker when I caught up beginning of an earnings ected from very rich to fair, but say? Every fund manager iswith him, just after the BMC upgrade cycle? not to distress levels. Auto, essentially weighing threeelections. The Nifty was just cement stocks have seen very attributes in a stock - business,short of the 9000 mark, and I Manish is a little cautious on that. sharp PE expansion in the last management and valuation.asked him how come the “I believe so, especially because five years. So even after the Growth or value depends onmarkets had recovered so earnings are coming off a low correction, valuations did not what relative weights you wouldquickly from the demonetisation base for several years. We think come down to distress levels”, give. So, I would give highershock. In fact, December quarter FY18 should see a 15-20 per cent he rues. weights to business and mana-results for the first 1700 com- earnings growth. But this is not gement while my colleaguespanies showed sales growth at 9 unexpected by the market”, he Given that Manish manages the would give a higher weight toper cent and profit growth at says, hinting that valuations are equity portion of ICICI Pru's valuations. Different strategiesnearly 30 per cent. already factoring that in. popular dynamic allocation fund - work at different points in time.” the Balanced Advantaged Fund - So, now that growth investingDefying demonetisation Waiting still I ask him whether the fund has a has had a good run for the last 7 high cash position or is fully or 8 years; so will good times forSo, what contributed to this Many investors waiting on the invested in equities. him last?blockbuster performance?' side-lines have been surprisedManish answers that multiple by the lack of a big correction in “The fund can swing the equity Manish is frank enough to admitfactors were at play. “One, 40-45 the market. Despite FII selling, allocation between 30 per cent the cycle has already beenper cent of the companies in the domestic flows into mutual and 80 per cent, we are roughly turning. “In 2011 to 2015, growthNifty drive their revenues from funds and ULIPs have held up the at the midway point now at about investing really worked. But fromglobal operations and don't markets. So does this mean that 50-55 per cent. Our view on 2016, we have seen a strongstrictly connect to the domestic we are going to see a higher floor valuations is that the markets are revival of value investing. Metals,market. The recovery in commo- for the Sensex in the future? neither too expensive, nor too utilities, oil and gas were thedity prices has helped them. cheap. On a price to book value most-hated sectors at theTw o , m a n y c o m p a n i e s , i n Manish doesn't give the obvious basis, the market remains quite beginning of 2016. They haveconsumer discretionary sector answer, that this is the beginning reasonable.” outperformed globally as well asfor instance, have benefited from of a 'new era' for the Indian stock in India in the past year. Typically,a shift in market share from markets. But Manish does see one change when earnings or GDP growthunorganised to organised in trend. He thinks mid-cap accelerates or deceleratesplayers. Three, October was a “The truth is that these flows stocks may now find it difficult to suddenly, growth stocks take avery good month for consumer tend to be somewhat volatile and beat the Nifty. “In the last three hit. These are periods whenfirms though November and I wouldn't like to bet on them. years, the outperformance of value outperforms.”December were muted and this Yes, structurally, we are moving non-Nifty stocks has been veryhas lifted quarterly results. Some into a lower inflation economy. high relative to Nifty stocks. I He gives the example of retailcompanies have also likely filled This would mean a higher think that may not continue. I versus corporate banks. Bet-their dealer pipeline with proportion of financial assets, as expect some convergence. ween 2011 and now, retail bankinventories.” opposed to real assets. But this stocks hugely outperformed. But does not mean that there will be I think the alpha from mid and Manish thinks that, if creditHe adds that when the times are no blips in MF flows. I think we small cap investing may not be growth in the banking systemtough, that's when India Inc gets would be better off preparing for very high.” comes back faster than peoplegoing. “Corporate India has been some volatility in flows, rathervery good at cost cutting in bad than assuming that everything Value is backtimes. For quite a few com- will be fine”, he cautions.panies, the earnings surprise I decide to get slightly 'personal'came from cost control as much I know many investors who were by asking something I have beenas from sales. Take cement com- waiting for a correction to invest curious about for a long time. Ipanies. It was expected to be and never got that opportunity, I know Manish is a growth-stylesuch a bad quarter for them with comment. That draws a good stock picker. But with valueshrinking despatches, but they laugh from Manish “My expe- stalwarts like Naren around, howhave really cut back on costs”. rience is that people say they are does Manish convince the rest ofThe 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 2017 Interviewthink, say to 15 per cent, then trade at ` 80 a few years ago. His belief is that macro indicators How he allocatesPSU banks and corporate banks Today, it's trailing 12-month EPS like economic growth, oil prices,could outperform retail banks. is nearly ` 40. When we bought a interest rates and rupee are very What's his asset allocation? Well, Hyderabad-based pharma hard to predict. “We try to control Manish says he is an out-and-outGood companies, vs good company in 2010 its stock price the role of these in the scheme's 'equity guy'.stocks wasRs 70 or ` 80. Today, the EPS performance by constraining is already at ` 20.” top-down calls. “Most of my money is ICICI Pru'sBut a good number of Indian equity funds. I do invest quite ainvestors argue that valuations The magic of stock price turning Within each sector, we try to find bit in the funds I manage. Notdon't matter for solid businesses into the EPS can happen with stocks that offer the best risk investing enough in debt has hurtthat deliver steady growth, I growth stocks too, says Manish. reward equation. In the short me in the last two years”, hecomment. I have had this If you buy a growth stock, the term, funds that take a big top- says, “But as a salaried em-argument with many people earnings should compound so down calls do outperform, but ployee, my PF gets invested inmyself. strongly that the current price this is hard to sustain in the long fixed income. I also consider my becomes its EPS. He cites the term”, he observes. real estate investments to beManish says - “I would be example of a prominent financial fixed income investments.sceptical of that argument, services company which has His money Whenever I have a surplus, if thebecause a big correction can lending and insurance busi- market looks frothy, I put it inshake that view. Just because nesses - its stock traded at a Given that Manish has been so Balanced Advantage Fund”. Heyou buy a good company does price of ` 700 a few years ago, frank about everything so far, I hardly ever churns his fundnot mean you will certainly make but now reports an EPS close to ` decide to take the plunge on the portfolio.money. If you go back in history, 150. personal money stuff.if you bought a leading FMCG We chit-chat a bit about Manish'scompany stock in 1994, that But Manish admits that this idea What are the big investing two homes at Mumbai and Iprice never came back until is “highly aspirational and mistakes he has made in the last discover that this fund manager2008. Another FMCG major happens only in rare cases.” That twenty years and what did he is a Madrasi at heart. “I don't looknever made money between evokes some painful memories learn from them? at Mumbai as my home city. I am2003 and 2008. As a growth for me. I have owned some of Sindhi by birth, but thoroughlyinvestor, I have no illusions that these stocks in the past, but have “Too many of them, actually”, South Indian in my habits, I wasgood companies are always lost out on their huge upside says Manish. But he doesn't born and brought up in Hydera-good stocks”, he says, making a because of my hurry to book evade the question. “I think I bad. Studied in Chennai andvalid point. This whole conver- profits, I tell him morosely. made a lot of mistakes in the Bangalore”, he says soundingsation tells me that Manish isn't 2003 to 2007 bull market. I quite wistful about his IIT Madraslike the other growth devotees I Manish agrees- “One does need bought a fertiliser stock hoping and IIM Bangalore days. “Thehave met, who believe that no Warren Buffett kind of investing that pricing in the sector will be best days of my life were inprice is too high to pay for 'good' to wait for a stock's price to decontrolled, but that never Chennai, where I used to playcompanies. become its EPS”. But he qualifies happened. That told me that hockey and football for my hostel that booking profits is not always betting on regulatory changes is and also table tennis andEPS = Price a bad thing. “I am not one of always dicey in India. These cricket”. those people who says you regulated sectors can tire youSo far, I am quite impressed by should stop monitoring your out before you can make money What does he now do toManish's willingness to call a stocks. You should monitor them on them!” unwind? I ask. Manish admits - “Ispade a spade and not hide and sell if there is a fundamental like sports a lot. Right now mybehind politically correct state- change in the business. This is His second mistake was owning fad is badminton. My fads keepments. He hasn't thrown a single very important too. You will see a a newspaper stock, which did changing. I am a jack of allpiece of jargon at me yet. number of good companies deliver on earnings, but the stock trades”. reach a price point where further price never appreciated. “TheI ask him what filters he uses to returns will simply fail to accrue” learning for me is that if you bet ICICI Pru's corporate communi-select stocks, fully expecting the he says, making me feel a little on a sector that is not doing well cations Head Adil Bakhshi chipsusual spiel about durable moats, better. globally, you are swimming in - “Don't believe him. He is justROEs, corporate governance against the tide. being humble. He bats very welland managements that treat No macro calls and bowls very well and is part ofshareholders well etc. Even if the EPS materialises, the the ICICI Pru cricket team”, he Okay, getting down to business, re-rating for the sector remains adds immediately WhatsappingBut Manish bowls a bouncer. how has Manish managed a 200- elusive. Because India has such me a picture of Manish holding a“For me, more than screeners, 300 basis point outperformance large investments from foreign trophy.the one aspiration I have is to of the Nifty (5 year alpha is investors, you cannot hope toidentify a business where the roughly 450bps) with such a pure defy global perception about a “By the fairly low standards ofstock price can become the EPS large-cap fund like ICICI Pru sector”, he muses. our in-house tournament, I canmany years later”, he simply Focussed Bluechip? bowl also” laughs Manish. Well,states. “What drives PE is the most flexibility and humility are great Manish says the fund's tight difficult call in stock market qualities to have in the stock“I think this approach converges discipline helps. “In this fund, we investing. Sometimes people are market. That's probably what hasboth growth and value. Some- have constrained top-down calls willing to look ten years down the made Manish's funds adapt andtimes when you buy a stock by saying that we will not deviate line, sometimes they aren't weather every market cycle withwhich is deep value, there is an a lot from the benchmark, on the willing to give the company even such equanimity, I reflect,event which unlocks value and sectors we own. So if banks one year,” he admits, neatly winding down our conversation.the price and EPS can converge. make up 30 per cent in the index, articulating the most frustrating I look at my phone and congra-Just to illustrate, if you look at we will not own less than 25 per problem for most equity tulate myself for making ICICIone of India's largest paper cent or more than 35 per cent in investors. Pru's silent star talk to me for 55companies - the stock used to the sector, in this fund.” minutes!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 Reviews 5TARAKKI TIMES, APRIL 2017 ICICI Prudential Child Care - Study PlanA safeguard against market volatilityHBL | March 12, 2017The fund has deftly managed rate movements across cyclesEquity markets are scaling new highs mid- and small-caps has been 45-65 per cent coming year. The fund also carries a low and could turn volatile. After a of equity portfolio. Since the fund is targeted credit risk, given predominant exposure to stupendous run, debt markets, too, towards providing for children’s education, government securities and AAA ratedare likely to lose steam, with the RBI nearing exit loads are steep, at 3, 2 and 1 per cent for bonds. Up until recently, the fund held 40-45the end of its rate cut cycle. For investors on exits before one, two and three years, per cent of its portfolio in G-Secs.the lookout for a relatively safe fund, ICICI respectively. Investments made in minors’Prudential Child Care - Study Plan may be a names with ‘lock-in’ option will be locked for Over the last couple of months, however, thegood bet at this juncture. The fund has had a three years or till the minor turns 18, fund has upped its exposure to AAA ratedlong track record of outpacing its whichever is later. corporate bonds. It has also taken on somebenchmark and category. exposure to AA rated bond issued by Hindalco, though low at about 7-8 per centOver three and five years, the fund has Deft juggling of total portfolio. The metals player has beenoutperformed its category by around 5 benefiting from recovery in aluminiumpercentage points. Over the last 10 years it The fund has been actively managing its prices and global demand.has delivered annual returns of about 13 per debt portfolio. In the upbeat 2014 market,cent, a healthy return for a debt-oriented when both equity and debt rallied smartly, A bit aggressivebalanced fund. The fund has invested 70-75 the fund’s deft calls in debt helped it rake inper cent of its assets in debt instruments robust 32 per cent returns. The fund had On the equity side, the fund has been a bitover the last two years. This should help upped its maturity from around six years in aggressive, investing mainly in mid andmitigate risk, if equity markets turn volatile. the beginning of that year all the way up to small-caps over the years. This does make itThe fund’s equity exposure, on the other 10 years. a tad riskier than other funds, but helps spicehand, should help it rake in returns if the up returns, too. The fund has considerablyequity market continues to remain upbeat. The fund’s average maturity of 9-11 years trimmed its exposure to mid and small-caps through most of 2016 also helped it make in the last couple of months, which lendsThe fund’s good exposure to mid-cap stocks the most of the sudden rally in bonds. With comfort. From over 45 per cent last year,(market capitalisation below `10,000 crore) rate cuts more or less coming to an end, rally equity holdings in these stocks are down toshould also help boost returns as these in bonds is likely to be limited from hereon. 30 per cent.stocks continue to hog the limelight. Over The fund has trimmed its maturity to aboutthe past two years, the fund’s exposure to four years, shielding investors from a possible volatility in bond markets in theSteady performerAssets as on Feb 28, 2017: ` 100 crore Annual returns (in %) Fundas 22.8% Equity ICICI Prudential Child Care - Study Plan Category 43.1% G-Sec 15.6 17.1 15.5 Active duration calls 12.5 11.7 9.9 Higher mid-cap exposure 29.4% Corporate bonds Category outperformer 1 year 3 years 5 years 4.7% Cash and equivalent ICICI Prudential Dynamic Plan One Fund ReviewMint | March 2017 Return mint How ` 10,000 has grown 50BEST Mint 50 is a curated list of 50 2,60,000 FUNDS investment-worthy funds. 2,10,000 1,60,000ICICI Prudential Dynamic Plan 6263.55 ICICI Prudential Dynamic Plan 2,23,921 Nifty 50 Index 92,976Corpus (` cr) (as on 28 Feb 2017) 8 Mar 2017NAV (as on 8 Mar 2017) 225.10 Source: Value ResearchExpense ratio (as on 31 Jan 2017) 1,10,000 2.21 60,000Category average expense ratio 2.45 10,000 12 Nov 2002(as on 31 Jan 2017)Minimum Investment ` 5,000 Base value taken as 10,000The information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.

6 TARAKKI TIMES, APRIL 2017 EventsMorningstar Awards 2017ICICI Prudential AMC winners all the way ICICI Prudential AMC bags Fund house Category award for Best Fund House- Equity and Best Fund House- Multi Asset and Intermediate Bond fund award for ICICI Prudential Long Term PlanFrom left to right Rahul Goswami - CIO - Fixed Income - ICICI Prudential From left to right Rahul Goswami - CIO - Fixed Income -AMC, Christopher Douglas- Director, Manager Research Ratings, ICICI Prudential AMC, S Naren - ED & CIO ICICI PrudentialAsia - PAC Morningstar Inc, Nimesh Shah - MD & CEO ICICI Prudential AMC, Aditya Agarwal - MD Morningstar India Pvt. Ltd.,AMC, Aditya Agarwal- MD Morningstar India Pvt. Ltd., S Naren - ED & Christopher Douglas - Director, Manager Research Ratings,CIO ICICI Prudential AMC Asia - PAC at Morningstar IncFrom left to right Manish Banthia - Senior Fund ICICI Prudential AMC team at the eventManager with Anuj Tagra- Fund Manager atICICI Prudential AMC accepting award for LongTerm Plan from Kaustubh belapurkar - Director -Fund Research- Morningstar India along withAditya Agarwal- MD Morningstar India Pvt. Ltd.All data/information in this material is specific to a time and may or may not be relevant in future post issuance of this material. ICICI Prudential Asset Management Company (the AMC) takes noresponsibility of updating any data/information in this material time to time. The AMC (including its affiliates), ICICI Prudential Mutual Fund (the Fund), ICICI Prudential Trust Limited (the Trust) andany of its officers, directors, personnel and employees, shall not be 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. Nothing contained in this document shall be construed to be an investment advise or anassurance of benefits of investing in the any of the Schemes of the Fund. Recipient alone shall be fully responsible for any decision taken on the basis of this document.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.

Expert Speak 7TARAKKI TIMES, APRIL 2017A Case for Raising Inflation TargetThe Economics Times | March 01, 2017Given the continuing sluggish- It is important to note that the on the change in demand and Anish Tawakleyness in the economy, particularly GDP deflator for the manufac- supply conditions. If the supply Head of Researchthe low capacity utilisation level turing sector was in negative of food grows relatively slowly ICICI Prudential Mutual Fundin the industrial sector, it is worth territory (deflationary zone) then food would becomeasking whether the current during all of FY16 and has only relatively more expensive than of the reason that food inflationinflation target is appropriate. In moved up to 2.3% by Sep 2016 manufactured products. Now if has moderated is that themy view, current inflation target (data is available with a lag). With we introduce money in this government has supplied theis too low to be consistent with RBI policy rates at 6.25%, the economy , the gap between food market with stocks that had beenoptimal industrial capacity manufacturing sector faces real price inflation and manufacturing built up historically . Stocks, ofutilisation (i.e. full employment interest rates of around 4%. price inflation is a real variable course, can't be depleted beyondof industrial capacity). and, is not affected by the a point. While good harvests It clearly does not make sense to introduction of money (or by the would help, one cannot rule outHistorical Experience Indicates put further downward pricing monetary policy that determines an uptick in food inflation as andA Higher Inflation Target pressure on the pricing environ- how much money is introduced). ment in the manufacturingThere has been a lot of debate sector. So to bring down averagearound whether the RBI should inflation, through monetaryfocus on the Wholesale Price What is important to realise is policy , you have to shift bothIndex (WPI) or the Consumer that it is not possible to bring food and manufactured productsPrice Index (CPI). There has, down overall inflation without inflation downward. In effect youhowever, been relatively little putting further downward can't just shift food inflationdiscussion about the CPI target pressure on manufacturing down without affectinglevel itself -should it be the sector prices. Let us see why this manufacturing inflation.higher or lower than the original happens.WPI target.It will be worthwhile to note thatthe CPI and WPI are two differentscales for measuring the state ofthe economy just as Centigradeand Fahrenheit are differentscales for measuring tempera-ture. Just as the value of“normal“ body temperature isdifferent in the Centigrade scale(36.8) from the Fahrenheit scale(98.2),the CPI and WPI valuesthat mark overheating of theeconomy can be different.If we look at the long-termhistory, CPI inflation has onaverage, been approximately 2percentage points per annumhigher than WPI inflation.Specifically , if we look at the 22-year period starting 1995, CPIinflation has averaged 7.3% p.a.while WPI inflation has averaged5.2% p.a.Historically , monetary policy In any economy relative prices of Moderation In Food Price when stock levels are stabilisedwas based on WPI and broadly various goods and services (the Inflation: Unlikely To Sustain or rebuilt. The fact that foodworked with a WPI inflation price of one good service relative subsidy sees a significantrange of 5-5.5%p.a. On an to another good service) are a Let us look at the food stock increase (7.5%) in the Budgetequivalent basis, therefore, the real variable (and not a monetary situation and relate it to what has this year also suggests thatCPI norm would be over 7%. One variable). For example, even if we happened to food inflation. minimum support pricecould argue that we want the had a barter economy with no Wheat stocks currently are at 5 increases may be higher thiseconomy to operate at a lower money there would be a certain years lows -stocks in December year. If monetary policy isinflation level than it has rate at which food would be 2016 were 14milliontonnes tightened to restrain such anhistorically, but a shift to a 4% exchanged for bicycles (a down from a peak of 34 million uptick then it could put furthertarget appears a bit too severe. manufactured product). This tonnes in January 2013. Rice strain on the industrial sector. exchange rate would depend on stocks had also declined butBringing Down Overall the physical demand and supply have recovered substantially (Author is Head of Research,Inflation Further Would Mean of food and bicycles respectively. over the last three months. ICICI Prudential AMC.)Pushing Manufacturing Into This exchange rate or relativeNear Deflation price would change depending What this tells us is that the partThe 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 2017 Fund Reviews Pagemint List of ICICI Prudential Funds in Mint50BESTFUNDSMint | April 2017FUND CORE 3-year return (%) 5-year return (%) 10-year return (%) Fund size (Rs cr)LARGE CAPICICI Prudential Focused Bluechip Equity 16.73 15.30 NA 12,535.88MULTI CAP 17.54 16.30 13.82 6,263.55ICICI Prudential Dynamic Plan 23.35 18.90 NA 53.69ICICI Prudential Nifty Next 50 Index Fund 25.33 21.74 18.24ICICI Prudential Value Discovery Fund 16,433.73TAX PLANNING 20.37 18.14 14.40 4,013.80ICICI Prudential Long Term Equity Fund(Tax Saving) 20.44 18.14 13.01 7,412.91EQUITY-ORIENTEDICICI Prudential Balanced FundFUND CORE 3-month return (%) 6-month return (%) 1-year return (%) Fund size (Rs cr)DEBT-ORIENTEDSHORT TERM 0.39 3.29 10.33 9,544.66ICICI Prudential Short Term FundSystematic Investment PlansA monthly SIP of Rs. 10,000 invested in each of these funds has given returns as stated below Scheme Name Present Value (`) 3 Years 5 Years 7 Years 10 Years Return (%) 4,33,205 10,16,435 16,93,971 35,22,368ICICI Prudential Value Discovery Fund 13.1 21.9 20.1 20.7 4,47,730 9,27,876 14,67,625 26,71,746 Present Value (`)ICICI Prudential Dynamic Plan 15.5 18.0 16.0 15.5 4,40,223 9,58,476 15,34,761 28,95,948 Return (%) 14.2 19.4 17.3 17.0ICICI Prudential Long Term Present Value (`) 4,62,498 9,92,173 15,62,218 27,16,843 Equity Fund (Tax Saving) Return (%) 17.9 20.8 17.8 15.8 Present Value (`) 4,31,645 8,89,008 14,11,613 --ICICI Prudential Multicap Fund -- 12.8 16.2 14.9 Return (%) 4,46,024 9,14,587 14,53,605 25,37,918 14.5ICICI Prudential Focused Present Value (`) 15.2 17.4 15.7 Bluechip Equity Fund Return (%) 4,66,542 11,27,405 17,94,414 31,05,243 18.3ICICI Prudential Top 100 Fund Present Value (`) 18.5 26.3 21.7 Return (%)ICICI Prudential Midcap Fund Present Value (`) Return (%)Data in CAGR (%) terms and as of Mar 31, 2017The 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 Reviews Page 9TARAKKI TIMES, APRIL 2017ETW Funds 100List of ICICI Prudential Funds in the Economic Times WealthET Wealth | April 2017FUND Value Research Returns (%) Fund Rating 3-month 6-month 1-year 3-year 5-year 16.06EQUITY: LARGE CAPICICI Focused Bluechip Equity Fund 12.52 2.64 23.68 17.28EQUITY: MULTI CAP 14.29 3.58 27.85 22.39 18.78ICICI Prudential Multicap FundICICI Prudential Value Discovery Fund 10.91 1.65 19.71 25.73 22.1EQUITY: TAX PLANNING 13.25 2.75 23.77 20.7 18.61ICICI Prudential Long Term Equity Fund (Tax Saving)HYBRID: EQUITY-ORIENTED 9.28 4.99 25.59 20.46 18.46ICICI Prudential Balanced FundHYBRID: DEBT -ORIENTED CONSERVATIVE 1.79 4.02 9.54 11.24 9.09ICICI Prudential Regular Income Fund DEBT: INCOME 0.79 3.6 10.83 9.96 9.55 ICICI Prudential Banking & PSU debt Fund DEBT: DYNAMIC BOND -0.07 3.81 12.94 13 11.74 ICICI Prudential Long Term FundSIP Top UPA yearly top of 10% on an existing monthly SIP in these funds has resulted in the following returns Scheme Name Present Value (`) 5 Years 10 Years ICICI Prudential Value Return (%) 11,85,689 48,68,546 Discovery Fund Present Value (`) 21.9 20.7 Return (%) 10,97,894 38,50,084ICICI Prudential Dynamic Plan Present Value (`) 18.0 15.5 ICICI Prudential Long Term Return (%) 11,27,575 41,23,953 Equity Fund (Tax Saving) 19.4 17.0ICICI Prudential Multicap Fund Present Value (`) 11,68,104 39,56,599 ICICI Prudential Focused Return (%) 20.8 15.8 Bluechip Equity Fund -- Present Value (`) 10,52,580 --ICICI Prudential Top 100 Fund Return (%) 16.2 36,26,662ICICI Prudential Midcap Fund Present Value (`) 10,83,656 14.5 Return (%) 17.4 45,06,483 Present Value (`) 13,11,955 18.3 Return (%) 26.3Data in CAGR (%) terms and as of Mar 31, 2017 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 2017 Tarakki CornerYour YToaur rTaarakkkki CiornCer ornerJoseph E Menezs Spirituality works wonders for those who believe in it. same. Then they evaluate their options and come backARN - 6083 Such is the story of Joseph E Menezs who has learnt with a decision. This is how the company has grown allMalad (Mumbai) valuable financial lessons more from his life experiences these years. than from his formal degrees. He educates his client base through his quarterly articles in He started out as a Life Insurance Agent in 1990. He a digital format. He claims to have helped his clients earn emphasizes on policies not merely as a wealth creation profits through his investor educative initiatives, which can method but as an income protection tool. Unfortunately, sometimes be as simple as an email. The size of his asset he found this insufficient, as it did not provide all the book is approximately ` 300 Crore. solution to his clients. So he approached other investment vehicles like PPFs, bonds etc., but found these to be He advises budding advisors to first invest in oneself to get inadequate for long term wealth creation. the right education and right financial tools like technology etc. in place. He further asserts to never hurry to get clients In 2005, he began selling financial products and offering on board but create a strong foothold on preaching what need based financial planning. He wanted to use financial you practice. He says “the world needs more people with planning as a solution to meet various financial goals of right value system as against more intelligent people”. individuals as well as companies. Hence, he first set a firm This is what will make you an angel of prosperity as against base of a value system, which is more spiritual in nature an agent of prosperity, he concludes with his 26 years of where money is not treated as a commodity or merely as a experience. business transaction. The company acquires new clients through references. In fact, they take pride in the fact that 'word of mouth' is their only source of client acquisition. They handover the clients a written financial plan and allow them to introspect on theIn the challenging yet complex financial system that India their mind set. They are even known to customize Manu Jainhas, one needs a fine balance of understanding the initiatives based on the client category. ARN - 92017traditional financial habits as well as the knowledge andthe expertise of the mutual fund industry. Vijay Rana & 'Corporate Yatra' is an initiative from their side to acquire AmritsarManu Jain, make a team that just knows the right way. companies as their clients.With a total experience of 16 years in finance industry, Vijay Mutual Cafe and Cafe Connect are targeted initiatives forhas worked with several reputed brands in the Banking young investors to help them with long term financial&Financial services space. His last stint was as a cluster planning. It aims to help young students and professionalshead at a leading Asset Management Company (AMC). become financially responsible and stable. For the retail segment, they undertake several Investor AwarenessIn the year 2013, August, he decided to venture out on his Programs on aperiodic basis. And, the turnover ratio hasown and associated himself with Manu Jain, a graduate in been a reasonably good 60-65 percent.Economics, to start Mutual Cafe. When asked about whatbrought the inspiration and confidence to set up his own Their advice for budding advisors is to work hard andbusiness, Vijay says he has closely observed the industry realize that nothing will ever come easy. One has to do theand understands the retail segment well. His role is to groundwork, build an understanding and acquire newprimarily run the retail segment through distributors. In clients. It is you who will have to seek the clients,Amritsar, the duo has managed to cross `100 crores in understand their needs and create a financial inclusion thatAUM (Asset Under Management) as on 31st March 2017. is profitable for both the parties.They mention that a strong leadership skill is what theyhave mastered with the people they've worked with. Ithelps in reading people's requirement and understanding Vijay Rana ARN - 92017 AmritsarThe information contained herein is solely for private circulation for reading/understanding of registered Advisors/ Distributors and should not be circulated to investors/prospective investors.Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Tarakki Times is compilation of articles published in various newspapers/magazines. Due credit isgiven 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 ICICIPrudential Asset Management Company Limited (the AMC). ICICI Prudential Mutual Fund (the Fund) does not warrant the accuracy, reasonableness and/or completeness of any information. Alldata/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 tak es no responsibility of updating anydata/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. Thesector(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 thesesector(s)/stock(s). The recipient alone shall be fully responsible/are liable for any decision taken on this material.