Tarakki Times English June 2017

A COMPILATION OF ICICI PRUDENTIAL MUTUAL FUND MEDIA VIEWS MUMBAI | JUNE 2017 | PAGES 10 Professional Views Invest prudently through Dynamic Asset AllocationPg. 2 FundsInfrastructure andbalanced funds arepockets of valueright now S Naren, ED & CIO ICICI Prudential Mutual FundPg. 5A category whichcan become aslarge as EquityAUM in 5 years Manish Gunwani, Deputy CIO - Equity Nimesh Shah ET Wealth | May 22, 2017 the Goods and Service Tax may ICICI Prudential Mutual Fund MD & CEO result in positive gains going ICICI Prudential Mutual Fund aligned to historical valuations, forward.Pg. 6 as and when earnings growth materializes. Realign your portfolioLeading by examplefor a mature Indian We expect strong earnings As equity prices are hitting all-funds industry growth going forward. However, time highs, investors often tend when stocks are trading at a PE to become greedy. But it is time Raghav Iyengar, Executive Vice President and Indian equity markets are trading of 40-60, the growth in the to rebalance portfolios. Head of Institutional and Retail Business around their lifetime highs, immediate years is not that ICICI Prudential Mutual Fund propelled by strong liquidity important, what matters is During this interesting and flows. However, this jubilation whether the company can dynamic environment, productsPg. 7 has led to some frenzied buying sustain high earnings growth for such as dynamic asset allo- in select stocks. We would an extended period. cation/ balanced funds needLife at Sensex 31k: advise exercising caution now attention and consideration, toMusings of an than be sorry later. Earnings lag expectations help investors navigate through aace CIO volatile terrain. The earnings growth expec- S Naren, ED & CIO Warren Buffett, one of the tations have not been in-line over Dynamic asset allocation funds ICICI Prudential Mutual Fund world's richest men and legen- the past three years due to a host provide exposure to both debt dary investor says: \"Be fearful of factors, including a slowdown and equity. These funds are very Fund Reviews when others are greedy and in discretionary consumption dynamically managed: ThePg. 8 greedy when others are fearful.\" and lack of credit off-take exposure to either of the asset following stringent asset quality class is based on its relativeICICI Prudential Multicap Fund Equity prices are soaring to all- review by banks. attractiveness at any given time.Good returns, well diversified time highs, driven by strong However, there's optimism that it The markets have mostlyPg. 9 flows and we have experienced may rebound strongly going factored in this year's earnings that flow-based markets often forward, due to positive macro- growth, so from a short-term economic factors and a steady perspective, market valuationsOne Fund Review be-come volatile in the short recovery in the economy. Many may appear expensive. term. large companies have spareICICI Prudential Dynamic Plan capacities which are yet to be However, for long-term inves- utilised. tors, these are times to remainICICI Prudential Value Valuation appears expensive invested, as Indian economicDiscovery Fund This can enhance tremendous growth soars to robust 7%-plus,ICICI Prudential Focused The trailing price-to-earnings operating leverage in the making it the fastest growingBluechip Equity Fund (PE) multiple for S&P BSE 500 economy, without incurring emerging market globally. A Index is currently at 26 and more much capital expenditure in the wide political mandate has given Tarakki Corner than a quarter of stocks are immediate term. scope for bold economic Pg. 10 trading at over 40-times trailing reforms, setting the stage right 12-months earnings-the highest The single digit Returns on for good times in Indian equity. ever. Equity (RoE) are at their lowest in decades and can only rise from P. Someshwararao To get a perspective, in De- the current levels. Reforms like ARN - 85562 cember 2007, the median PE for Vishakapatnam the S&P BSE 500 was 21, and 24% of the stocks were trading at a PE of over 40.Santosh Joseph However, we are strongly convin-ARN - 112748 ced that current equity market valuations can soon get re- BengaluruThe 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, JUNE 2017 Interview Infrastructure and balanced funds are pockets of value right now BloombergQuint | May 25, 2017 S Naren advantage. From the mid cycle to effort has been made by the market and some of the ETF ED & CIO the end cycle there are poss- industry to try to see the mutual products are products where you ICICI Prudential Mutual Fund ibilities of decent returns and fund industry as both debt and do not have any cash in theThe last 12 months have shown that’s how we are looking at it. equity and a combination of both portfolio. Our own view is thatthe resilience of the Indian equity like dynamic asset allocation. over the next 10-20 years ETFsmarkets. Stocks have been hit Q: The question on a lot of will become pretty popular, but inby demonetisation, the U.S. people’s mind is that whether it Q: So a balanced fund must be the near term, till maybe ourpresidential elections and a few is the right time to invest in a good idea at this time? industry doubles in size orother events but the markets mutual funds, forget equity something there is still scope forhave bounced back almost every markets. Is that the right way to A: Yes, we have been advising active management.single time. invest in mutual funds? people to look at the gamut of products which invest in both So, I would say that ETF is a 10-On BloombergQuint’s special A: Certainly not because mutual debt and equity, like equity year story, and it ’ll keepseries, The Mutual Fund Show, funds are not just equities. If you income, balance advantage, improving and keep increasingICICI Prudential Asset were to sell only equity mutual balanced and not choose only as a percentage of the marketManagement Company’s funds, then the market is pure equity products. That has over the next 10 years. But at thisExecutive Director and Chief definitely very risky. But any been a clear message for over a point, we are arguing that we areInvestment Officer S Naren says mutual fund, say ICICI Mutual month or so. much better off being inwhile the market is no longer Fund, we have products which products like equity income orcheap, investors can still hope are safe debt products, we have Q: It is said when you are at age balanced advantage, or balancedfor decent returns. products which are slightly more 0 -15, which means parents are kind of products, rather than aggressive debt products, and investing for kids, the kind of being in ETFs because they areMutual fund investors, he adds, you have products which are allocation or schemes that you well-suited in the early cycleshould look to keep a mix of debt both in debt and equity like invest in should be different when you would have got mega-and equity in their portfolio and dynamic asset allocation and you than for somebody who has returns. You have to be patient.look at investing in themes that have equity. started earning to what it Now you are clearly in the mid-have not done well in the past should be for somebody who is cycle.like infrastructure. So I think it is very important to nearing retirement, to some- see the mutual fund industry as body who is into retiremen. Do So, in the mid-cycle, we areHere are edited excerpts from just not equity mutual funds but you think it should be that way, believers in dynamic assets.that conversation. see it as a combination of debt, do you come up with products Having said that, in 10 years ETFs equity, mixed like dynamic asset that are focused like that? are going to take off.Q: Markets keep on hitting new allocation.highs, every day people see A: Obviously, you can’t invest in a Q: The profile of the investor,news channels and say, have Q: With so much money very aggressive equity fund if which means age, or riskwe missed out? Whether you coming in, does the equity you are 80 years old. Having said appetite, are not factors whileare a direct equity investor or a market have that much debt for that, I think market levels are also choosing between MFs andmutual fund investor, if you you to allocate the money in an important factor. We are no ETFs? You’re saying the cycle inhave not invested you would optimum fashion, or are you longer in that early cycle. In an which you are in is probablyhave missed out? forced to take some risk to park early cycle, if you invested in any more important to choose your money safely? equity product and just sat on it, between the two?A: You invest in what I call early you would have made money.cycle, mid cycle and end cycle. I A: One big difference is the Now we are in mid-cycle. In the A: Age does play a role. Howthink the early cycle of it is over, amount of money coming in. I mid-cycle, it’s very easy to dependent a person is on theand today you are in the mid would say products which can collect money but it’s not a time return from the investment playscycle, where it’s relatively easy invest in both equity and debt, when valuations are cheap. a role. For example, we haveto get people to invest but the like balance, balance advantage, always argued that if you had amarket is not cheap any longer. equity income, have been a I would say, compared to more fixed deposit and you are movingYou have markets that are either refreshing change. than three to four years ago, you to mutual funds, it should be infair value or above fair value at should have a more conservative products which are on thethis point of time. So once you get money in these investment pattern today. Now conservative side of the equity kind of products, you are not just you are investing after a 3-4 year spectrum, like equity income andSo the safer part of the returns investing in equity, you are bull market, so you are in mid- balanced advantage funds.are over. But we are not in the investing in equity and debt. And cycle. As the cycle becomesend cycle, so that’s an obviously the level of risk of a more and more advanced, you A person who comes from a product which is partially should invest in more defensive fixed deposit mindset, if he/she invested in debt and partially products. invests in a higher-risk product, it invested in equity is definitely is a problem. You cannot have a much better than a product Q: Which brings me to ETFs. A single-sized, single-model which is only invested in equity. lot of people, including me, approach. You have to look at don’t know enough about age, you have to look at asset I think it’s only in pre-2007 phase ETFs. Would you care to allocation. People come and ask that mutual funds were seen as explain? me should I take out money from an equity vehicle. I think a lot of equity? I tell people if you’re A: We have had a continuous bullThe 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, JUNE 2017massively underweight in equity, level, return expectations etc. boom. As the market keeps invest cautiously.you should add to equity. If you’re and that is how we look at going up, there will be more andmassively overweight in equity, investing. more interest. On the other hand, We have a simple principle - in ait’s time to cut equity exposure. if there is a massive correction, boom you invest cautiously and Q: Among ICICI Prudential’s investors are unlikely to be in a bubble try to reduce risk bySo a person’s asset allocation various schemes, which do you interested subsequently. That taking out money from equities,has a role to play in decision- think is slated for better may not be the right behaviour. and in a bust invest aggressively.making. Along with age, de- returns? But George Soros has taught us Clearly we are in a boom, so it’spendence on income from a that this is how investors are better to invest defensively.particular asset class is another A: I always tell people it’s likely to behave. What thatfactor people must consider impossible to predict markets, it means is you have to respect Q: In terms of allocations youwhile investing. is much easier to predict asset allocation. made in your funds - financials valuations because you know about 25 odd percent and ITQ: When it comes to different what the current valuations are If a person respects asset about 10 odd percent andkinds of funds, which themes and where you are in the cycle. allocation, over time they’ll make industrials about 10 oddcurrently find favour? But I don’t think you can ever money. I am a big believer that percent. What’s your stance predict markets. The day after right now we are in a boom right now? What could do well,A: We have been saying over the Brexit, the entire world thought market in equity and when you what would not do welllast six months, that if people that equity markets will fall, and invest in boom market equityhave to look at a theme, they the market just went up. funds, returns in the long term A: Right now, smallcaps are highshould look at infrastructure. If I will be average. risk, we think midcaps aretell sometime to invest in an So, I think prima facie, it’s much definitely higher risks thaninfrastructure equity fund, the better to look at things from an If you go and look at the kind of largecaps so that part is verywill person say, I had a bad clear. In terms of long termexperience in the last cycle, why Right now the cycle is returns, when you invest in thisshould I invest? In 2013, mid-cap reflexive so the market boom market, technology andfunds and small-cap funds had keeps going up each month pharma should do well becauseno money, but today an investor but the long term results those sectors have becomeor wealth manager says he’s from here will be average. cheaper by the day.willing to invest for the next 20 That’s why we recommendyears in small caps. Why is it that investing in defensive Q: What do you like betweenin 2012-13 they weren’t willing equity funds or in dynamic the two?but in 2017 they are. It is primarily asset allocation funds.the last four years’ returns. A: We like both, but we believe asset allocation lens. And from returns market has given in the that you have to be guarded inSo we believe that if we have to an asset allocation lens I would last five years, it’s not been your investment because at thepick a theme, we have to pick argue that if a person is over- small. It’s very easy for you to end of the day this boom seemsone which has done badly, where invested in equity to cut it to extrapolate last five years’ to be much less a boom for ITperformance from here will be overweight and if a person is returns and say this what you’ll and pharma. If you look at thegood. A lot of people pick underweight in equity to add to get in next five years. But I sector for the last one year or so,themes that have done well. positions in equity albeit believe that you are likely to get these two sectors have doneSmall cap has done very well, but defensively. more moderate returns in the very badly and that’s why weit doesn’t make sense now to long run. think that if you have to investinvest aggressively there. But if Q: I think what is important to slowly in two years, these are theyou look at Infrastructure, highlight is, if people are Right now the cycle is reflexive kind of themes to invest inreturns are next to nothing. investing right now don’t get so the market keeps going up because you are buying cheap. disheartened if the markets each month but the long termSo, we like to invest in themes were to correct a bit because it results from here will be average. Our belief is that if you want towhich have actually not worked is more important to spend That’s why we recommend make big money, you need toin the past, because we believe time in market as opposed to investing in defensive equity have fear and cheap valuations.past returns are not equal to timing the market… funds or in dynamic asset IT and pharma are the only twofuture returns. And that’s how allocation funds. We believe that sectors where you have fear.we picked infrastructure as a A: I have slightly different view. the long term returns when you What will happen with the U.S.theme, large cap relative to small We are, in what we call a reflexive invest in a boom., it’s better to FDA? What will happen to rupee-cap is the theme, dynamic assets dollar? Over the next two yearsallocation fund is a theme, that’s the kind of sector to investbecause these all are kind of in. But in this boom will that bethemes we like in this part of the the sector delivering the biggestcycle at this stage. return? I doubt it.Q: What is your favourite ICICI Q: Infrastructure has a a lot ofPrudential Fund, if you had to large cap presence but stocksname one? have been beaten down so badly in the last cycle that a lotA: I have been telling people who of them, even though they arewant to take more risk to invest in large companies, are midcapsInfrastructure whereas people by market cap. So there youwho want moderate risk can don’t find too much of ainvest in equity, income and problem but it is overvalued.balanced advantage funds. So it But Infra mid caps could be adepends on each person’s risk good idea?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, JUNE 2017 InterviewA: They are not. You look at the residential real estate should redemption. the Nifty 50 or the Sensex butsize of infrastructure funds in become cheap. the entire market?2007, those funds were three Q: For people wanting to parktimes what they are today in We have 5-6 years of no returns money fresh into equity A: Yes, what we think is over theterms of size whereas you look at in real estate and then that could markets or people who have next two years from a cyclicalsome of the mid and small cap become a cheaper asset class. been investors in mutual funds perspective there will be goodfunds they are 15 times what That’s an interesting thought as and equities but want to park benefits. We are in a strangethey were in 2007. well. more money in mutual funds situation. Even before the earn- right now, making an invest- ings came, the markets haveOne of my gurus says you go and Q: What’s the fund available ment in a balanced mutual fund gone up. Which is a reason whyinvest in the themes where there at ICICI Prudential for is probably a better decision we recommend investingis no assets under management infrastructure? rather than having an aggre- defensively in equity because webecause those are the themes ssive equity. still expect earnings to come.where you find it difficult to buy A: We have a fund called ICICI But, this is a strange situationshares. Infrastructure is an area Prudential Infrastructure Fund A: Clearly. We are believers in the where the market has not waitedwhere you have small sized that’s been there for more than entire dynamic asset allocation for earnings to come, the marketfunds and small and mid cap are 10 years actually. space. So equity income, returns have come upfront.areas where you have record- balanced advantage, balancedsized funds. Q: This you are recommending dynamic- we think the entire Q: But you are not bearish? for all tenures? Be it SIP, for basket is a product depending onQ: What within infrastructure three years, five years? what the customer’s risk level is. A: We are not bearish becausethough? Right now we are in a boom and the entire outlook is to actually A: If you are a 10-year SIP we are not in that early phase support financial savings. WeA: You have to buy a big theme, investor, then I think you should where you can say invest in small believe as interest rate goesyou have to buy road cons- choose small and mid caps as a caps, buy and forget. We are not down equity markets will benefit.truction, you can buy telecom, strategy because over the next in that phase. After a long time this week wewe do buy some corporate 10 years it will be so volatile that have seen a rally in fixed income.banks. We believe that capital you will get good returns over a Q: Do you think the markets aregoods sector will improve in the 10-year period. But if you want to fairly-valued or do you think We think interest rates shouldnext two years, power is going to invest in SIPs for the next 3-5 they are expensive or do you also go down because, the entireimprove. If you look at metals it’s years this is the kind of strategy I think they are terribly financial savings which keeponly in the last 18 months that would recommend. expensive and therefore will booming can bring down boththey have delivered returns. Prior correct? What is your prog- interest rates, why should onlyto that there was a 10-year period Q: Is there a new thematic fund nosis on the equity markets equity markets go up? That’swhere they have given negative that is likely to come out of your right now? why we are constructive onreturns. stable? financial savings but we want A: Our view is that on a price-to- investors to focus on their assetQ: Real estate hasn’t done well. A: There is a lot of money on the earnings basis the market is allocation.Is that a theme? sidelines because markets are at expensive. On a cyclical basis we an all-time high. So, what we think that the earnings will go up We believe in this part of theA: It’s not a theme from an equity have been trying to do is launch in the next two years and cycle a lot of investors will forgetpoint of view because first of all closed-end equity funds like decently. For example, you take a the idea of asset allocation andthe addressable universe is ‘Value Series 14’ and things like sector like metal, earnings have that is a big worry from our pointmuch smaller and most of us that. So that investors are shot up in the last two years. We of view. If, you are massivelyknow that it’s very difficult to invested for the next 3-3.5 years. think the earnings for the entire overweight on equities I thinkmake money in that sector in We can always take a decision market is likely to improve. this is the time to book someequities but I think a few years keeping the next 3.5 years in profits particularly in small andfrom now physical real estate, mind because there is no risk of Q: Which means it is not just mid-caps.One of my gurus says you go Q: For people who don’t haveand invest in the themes any equity exposure, if they arewhere there is no assets under starting off with a mutual fundmanagement because those investment do so with aare the themes where you find balanced fund? A: Yes, because you are exposed to equities and what worries me is that in the last 5 years there has not been any sustained drop in the market. So, what happens is people forget that equity markets can give you good corrections and that’s the reason why we are recommending investing defensively.it difficult to buy shares.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, JUNE 2017A category which can become aslarge as Equity AUM in 5 yearsWealthForum | May 13, 2017In a nutshell the E in P/E hasn't really grown the markets are likely to turn Manish Gunwani so far, historical P/E is volatile, investors can consider Deputy CIO - EquityAs investors shift from physical misleading, especially if we investing in this fund. ICICI Prudential Mutual Fundassets to financial and from fixed believe an earnings spurt isincome to equity within financial indeed around the corner. WF: What is the equity fund strategy?assets, advisors often confront What is your sense on this allocation currently in yoursituations where lumpsum allo- debate? Balanced Advantage Fund and Manish: View on Fixed Income:cations are being considered by how has this moved in recent The fixed income market rema-their clients. Should you really Manish: We believe that there is months in response to rising ins supportive for investments,be making lumpsum equity a good chance for capacity valuations? due to favourable macro-allocations at current market utilisation to improve in several economic indicators such asvaluations? sectors over the next 2-3 years Manish: The current equity inflation, Current Account and this portends well for a allocation is around 50% which Deficit, Fiscal deficit and lowManish believes it is far more strong earnings recovery. is based on valuations along with credit growth.prudent to make these lumpsum However part of this is being the macroeconomic parametersallocations into dynamic asset discounted by the market incorporated in the model. We expect yields to moderateallocation funds, which can ride already as valuations on near from the current levels on theout volatility that usually comes term earnings are on the higher WF: How are you managing backdrop of real interest rateswhen markets reach these side. the equity segment in your being higher, weak inflationvaluation levels. Balanced Advantage Fund in an drivers and impact of global WF: Why do you believe environment of rich market inflation receding. With rea-Its not only a tactical call - dynamic asset allocation funds valuations? sonable state and central fiscalManish believes the track record are the best investment deficit, appreciating INR andof this category in managing solution for investors in today's Manish: The equity segment of forecast of a normal monsoonvolatility and yet capturing most market context? Balanced Advantage Fund are also positive triggers forof the equity upside, coupled currently has a bias towards bond yields.with investors' low appetite for Manish: When Sensex is at large caps and structurallyvolatility means that the cate- 30,000 level and an investor is strong companies which have BAF debt portion management:gory of dynamic asset allocation looking for investing lumpsum, demonstrated track record over The debt portion is dynamicallyfunds has the potential to grow we believe such an investor time. managed to exploit the variousover the next 5 years to the level should invest in dynamic asset opportunities available in thethat pure equity funds have allocation funds. Even if the rally WF: Some fund managers debt market from time-to-time.reached today. were to continue, by investing in believe that the interest rate dynamic asset allocation funds, reduction cycle has ended and WF: The Indian MF industry'sWF: The Sensex, BSE Midcap one can be assured of equity that one has to be ready for a flagship retail offering hasand BSE SmallCap indices are exposure. gradual rise in interest rates.all trading currently above What is your view on fixedtheir long term averages. The only limitation here could be income and how is the fixedHistory suggests its time for the possibility of the entire rally income segment in yourmean reversion while some not being captured in terms of Balanced Advantage Fundanalysts point out that since market gains. Thereafter, when being managed in terms ofDynamic Asset Allocation Strategy Aims to Create Wealth & Limit DownsideHelps in Limiting Losses Importance of Limiting Downside To Your Portfolio Period ICICI Prudential S&P BSE Balanced Advantage Fund (%) Sensex (%) Assume Your Portfolio is Worth Rs. 100 1st Apr-15 to 31st Mar-16 Limits Downside 1st Apr-14 to 31st Mar-15 0.7 -10.3 Wealth CreationPortfolio Portfolio Value Gain Needed If You Contain Gain Needed 1st Apr-13 to 31st Mar-14 26.6 24.9 Wealth Creation Loss After Loss to Break Even Even 20% of to Break Even 1st Apr-12 to 31st Mar-13 20.3 18.7 Wealth Creation the Loss, Your 1st Apr-11 to 31st Mar-12 13.2 8.3 Limits Downside 10% Rs. 90 11% Portfolio Value 9% 5.7 -10.5 20% Rs. 80 25% 19% Data in absolute % terms. 30% Rs. 70 43% Will Be... 32% 40% Rs. 60 67% 47% Growth of Rs. 100 in ICICI Prudential Balanced Advantage Fund vs. S&P BSE Sensex 50% Rs. 50 100% Rs. 92 67% 190 Rs. 84 Rs. 76 170 Rs. 68 Rs. 60 150 Creates Wealth Limits Downside in a falling market Creates Wealth 130 in a rising market in a rising market 110 90 How Can You Use Dynamic Asset Allocation Strategy To Aug-13 Minimise The Impact of Loss On Your Portfolio? Sep-13 Oct-13The information herein is solely for private circulation and for reading/understanding of registered Advisors/Distributors and should not be circulated to investors/prospective investors. Nov-13Only for illustrative purpose Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 ICICI Ptudential Balanced Advantage Fund - Growth S&P BSE Sensex The information herein is solely for private circulation and for reading/understanding of registered Advisors/Distributors and should not be circulated to investors/prospective investors. Source: MFIE & Internal, NAV and Sensex levels are rebased to 100. Data as of April 30, 2017. Past performance may or may not be sustained in future. Contd. on page 7The 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, JUNE 2017 Interview Leading by example for a mature Indian funds industry Hubbis | May 04, 2017 The hope is that Indian investors will increasingly take a measured approach to their portfolios and ensure a better balance of asset classes, says Raghav Iyengar of ICICI Prudential Asset Management Company.Raghav Iyengar Management, which invests in million customers across offices ence as mobile and versatile asExecutive Vice President and Indian public equity and fixed in over 162 locations. Going possible.Head of Institutional and income markets, and considers it forward, the investmentRetail Business to have a clear understanding of manager aims to have at least Training and EducationICICI Prudential Mutual Fund the needs of retail investors. “We 250 offices by 2018. were among the first few to The firm is increasingly spendingICICI Prudential Asset launch a defensive/volatility suite Meanwhile, the firm clearly its time and energy on bothManagement, India’s largest of products,” he adds. understands that going digital is distributor training and investormoney manager with the the way ahead. Digital in fact education in India. For example,equivalent of approximately One of the firm’s flagship sche- represents the largest invest- it conducted 2,000 programmesUSD39 billion in AUM, sees a mes from this suite - ICICI ment that it has made in its for distributors in FY2016-17,new maturity gradually taking Prudential Balanced Advantage business over the past three training between 40,000-45,000hold among investors in the Fund - has seen significant years. “We have been at the people in the 25 to 30-year agecountry. investor interest over the past forefront of trying to take care for group, estimates Iyengar. The few years and is currently the all our partners, not just the big subjects have ranged from theRather than being in a rush to largest equity scheme in its distributors from the banking basics of mutual funds to yieldmake most of the latest bull-run, category, with a AUM of INR sector. We are stepping up to curves, and more.which has seen the S&P BSE 18,221.41 crore (as of March 31 better our excellence, such thatSENSEX Index cross the 30,000 2017). we are now in sync with the ever- Similarly, in FY2015-16, he saysmark, there are signs that evolving technology,” explains the firm covered betweenindividuals are starting to favour The company has thus far Iyengar, whose professional 150,000 and 160,000 retaila mix of equity and debt in their managed to create consumer- experience includes 19 years in investors across the country viainvestment decisions. centric products, further im- banking and financial services. education camps and various proved by communication “IFAs can transact on behalf of a other modes of communication.The jury is out on whether money based on relevant consumer customer, with a mobile from Even though a part of themanagers will demonstrate insight. This has led to what the anywhere in the world; it’s as expenditure was regulatory-client centrality in the same way. firm describes as a ‘pleasant simple as that,” he adds. mandated, Iyengar highlights investment experience for that the firm went far beyond justTo do so, they need to remember investors’. With launching applications such spending money on brandthat clients are with them for a as IPRUTOUCH, the aim is to advertising.lifetime – not just for three to five ICICI Prudential Asset ease integration of key proce-years. “I think every three or five Management aptly believes that sses, minimise paper work, Thus far their efforts have beenyears something new comes it is important to create a long- optimise content experience and well received by local distri-along, and then we tend to forget term track record to win the trust streamline sales activities, butors and investors alike. Thisthat a customer is not here only of both investors and distri- among many other features was reflected in the Wealthfor a transaction but for the entire butors. In fact, the firm calls it carved out for the distributor Forum Advisor Confidencejourney of achieving their ‘trust record’ rather than track community. Survey 2016, wherein the firmfinancial goals,” says Raghav record. emerged as the leader in five ofIyengar, executive vice president IFAs, as an example, account for the six parameters, namely:and head of institutional and Building Connectivity roughly one-third of the distri- ability to deliver long-termretail business at ICICI Prudential bution volume to the fund returns; innovate products;Asset Management. Being a part of ICICI Bank, the manager’s target audience. Plus, impactful and relevant investor fund house has the ability to it is a very fragmented channel. education initiatives; an investor-Given the rapid rise in market reach more location at a rapid This explains the concentrated friendly approach; distributorlevels, the fund house is now pace. Currently, ICICI Prudential efforts by the firm on trying to engagement; and support.focusing on getting money into Asset Management has 2.5 make the whole office experi-funds, which are little moredefensive in its investment “We tend to forget that a customerapproach. “A balanced fund is is not here only for a transactionpossibly the most defensive but for the entire journey ofapproach for equities currently achieving their financial goals.”as it allows investors to go up to35% in debt,” says Iyengar.This approach is well-suited toICICI Prudential AssetThe 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, JUNE 2017Life at Sensex 31k: Musings of anace CIOWealthForum | May 27, 2017Indian equities have been on a rally. At this stage, more than the investment. S Narenroll with the benchmark indices rally, what is important to watch ED & CIOsurpassing landmark levels, is the kind of funds one is As markets may edge higher and ICICI Prudential Mutual Fundthanks to strong domestic and allocating money to, such that turn volatile in the days ahead,global cues. Indian retail asset allocation is optimally such funds can provide pleasant remember the basic tenants ofinvestors too taking note of the managed. investment experience. And, for investing.improving fundamentals made a those who have an aggressivebeeline to the equity markets, This is because over long term a risk profile, the theme to In a boom invest cautiously, in amostly through the SIP route, dynamic asset allocation consider remains infrastructure. bubble aim to reduce risk bywhich is a heartening deve- strategy can be the most profit booking and in a bustlopment. However, amidst this important factor for wealth SIPs remain the best mode of invest aggressively. Currently weexuberance it is imperative to creation. investing when it comes to are in a boom and it is time totake stock of the market. wealth creation, so one can consider investing defensively During euphoric times, an continue with their SIPs into core through dynamic assetToday, markets are no longer investor tends to look at the past funds. In case of lump sum allocation funds.cheap. On most market para- returns and tend to extrapolate it. investments, dynamic assetmeters, the market is either fairly This can prove to be a harmful allocation fund remains the ICICI Prudential Mutual fundsvalued or is quoting above fair strategy thereby investors tends preferred choice. offer a variety of dynamicallyvalue. This clearly indicates that to invest in products which may managed funds.the safer part of market return is render an unpleasant investment Keeping in view the currentover. In any investing cycle, there experience. market scenario, we request allare typically three phases - early, the advisors to encourage theirmid and end cycle. As an investor, life at 31K is all respective clients to consider about being prudent, respecting dynamic asset allocation fundsWe are of the view that market is the arithmetic, rather than being when it comes to deploying freshin a mid-cycle - a phase where optimistic. It is time to take a hard cash into the equity markets.people will invest even though look at one's portfolio and This will ensure that whenthe market is no longer cheap. rebalance it if required. For those market turns volatile, investorFrom here on to the end cycle, who are investing for the first interest is protected whilewe believe there can be time in the current market, the delivering better investoropportunities for the market to best category of funds to opt is experience.make decent returns. the dynamic asset allocation category. Given that there have been noHowever, over the years, it has significant corrections in the lastbeen observed that as market By investing in dynamic asset five years, investors may tend tohead higher, the interest in Indian allocation funds, an investor has forget that equity markets canequities too gain traction. the opportunity to take exposure correct at any point in time.Consequently, all the retail to both debt and equity, thereby Therefore, it's best to be stableinvestors who have been second ensuring exposure to equity and not be overweight on anythinking finally enter the market while debt renders the much one particular asset class. Inin order to make the most of the needed cushion to one's such time, it is worthwhile toA category which can become as large as Equity AUM in 5 years Contd. from page 5ICICI Prudential Balanced Advantage Fund always been diversified equity traditional fixed income av- funds and SIPs in them. Is it enues, we believe there isNet Equity Levels vis-a-vis Sensex Levels time for us to think of dynamic considerable potential for this asset allocation funds as the category of funds to grow much LHS: Sensex Levels RHS: Net Equity Exposure flagship offering for retail bigger in size. investors?31,000 Sell 78% We are comforted by the29,000 High 73% Manish: Doing SIPs in investor experience these funds27,000 68% diversified equity funds remains have delivered and expect this25,000 Buy 63% the core equity offering. category to grow as much as the23,000 Low 58% However, through dynamic current industry equity AUM21,000 53% asset allocation funds what we over the next five years.19,000 48% are aiming is to offer is a volatility17,000 43% solution.15,000 38% 33% Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Period Period Correlation Given the huge allocation to Last 1 year Jan’16-Dec’16 -0.76 Last 2 year Jan’15-Dec’16 -0.89 Last 3 year Jan’14-Dec’16 -0.85 Last 5 year Jan’12-Dec’16 -0.77 Last 6 year Jan’10-Dec’16 -0.69The information herein is solely for private circulation and for reading/understanding of registered Advisors/Distributors and should not be circulated to investors/prospective investors.Source: MFIE, BSE India. Data as of April 30, 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.

8 TARAKKI TIMES, JUNE 2017 Fund Review ICICI Prudential Multicap FundGood returns, well diversifiedBusiness Standard | May 04, 2017It has outperformed peers and the benchmark during the recent two market phasesLaunched in October 1994, ICICI Prudential AHEAD AT MOST TIMES 30Multicap Fund is classified under the 24diversified equity category of CRISIL Mutual ICICI Prudential Multicap Fund Category BenchmarkFund Ranking. It has been ranked in the top 1830 percentile (CRISIL Fund Rank 1 or 2) in the 28.87 12 Returns (%)past four consecutive quarters ended March 27.272017. The fund's primary objective is to 22.92 6generate capital appreciation through 14.32 0investments in equity and equity related 12.43 10 Yearssecurities in core sectors and associated 9.20feeder industries. The fund is managed by 22.42George Heber Joseph and Atul Patel. Its 21.55quarterly average assets under management 14.97stood at ` 2,155 crore for the March 2017 19.81quarter. 18.78 13.83 13.55 13.27 9.02 11.91 12.98 9.37 1 Year 2 Years 3 Years 5 Years 7 YearsSteady performance SIP Returns Total Amt ICICI Prudential BenchmarkThe fund's returns exceeded those of its 1-year Invested Multicap Fundbenchmark (S&P BSE 200) and the category 3-year(funds ranked under the diversified equity 5-year (Principal `)category in March 2017 CRISIL Mutual Fund 10-yearRanking) in most periods. The fund has Market Returns Market Returnsexperienced several bull and bear phasessince its inception. It has outperformed Value (`) (%) Value (`) (%)peers and the benchmark during the recenttwo market phases. The fund protected itself 12,000 13,634 26,69 13,393 22,64adeptly by limiting its downside to -13.0 percent during the Chinese slowdown, while 36,000 46,372 17.25 42,880 11.76the category and benchmark took a hitof -16.6 per cent and -19.8 per cent, 60,000 99,740 20.51 85,082 13.99respectively. 120,000 272,351 15.67 213,963 11.15An investment of ` 1,000 in the fund on April15, 1998 would have grown to ` 28,949 One year return is absolute, rest annualised; Returns as on Apr 28(compounded annualised returns of 19.32per cent) on April 28, 2017. A similar MARKET PHASE ANALYSISinvestment in the category and thebenchmark would have grown to around ` ICICI Prudential Multicap Fund Category Benchmark 9035,645 (20.74 per cent) and ` 9,737 (12.69per cent), respectively. Similarly, ` 1,000 -47.02 60invested per month in the fund in the past -46.90five years via systematic investment plan -49.18 30 Returns (%)(SIP), totaling ` 60,000, would have grown to` 99,740 by April 28, 2017 at 20.51 per cent 57.47 0annualised returns. In comparison, a similar 62.76amount invested in the benchmark would 57.67have returned ` 85,082 at 13.99 per cent. -2.37 -1.92Portfolio analysis -3.41According to the March 2017 portfolio, the 39.82fund has 57 stocks across 22 sectors. Over 42.98the past few months, the fund has increased 31.54the number of stocks in its portfolio, thereby -13.00providing better diversification. In the past -16.61three years, the top five sectors, on average, -19.76constituted 52.6 per cent of the fund's 38.83portfolio. The top exposure was to the 37.92banking sector (averaging 19.89 per cent), 32.41followed by pharmaceuticals (10.18 percent), software (9.25 per cent), auto (6.77 per -30cent) and finance (6.51 per cent). -60 Sub-prime Post Sub- European Post European Chinese Global crisis prime crisis crisis crisis Slowdown Liquidity (Jan ‘08- (Apr ‘09- Mar ‘09) Dec ‘10) (Jan ‘11- (Jul ‘13- (Mar ‘15- and Domestic Jun ‘13) Feb ‘15) Feb ‘16) Reforms Driven Rally (Mar ‘16- Apr ‘17) High exposure to banking has been fruitful and allocation has been diverted to non- for the fund since banking stocks have banking financial stocks. The fund persists performed particularly well in the past year. with pharmaceutical (7.54 per cent of the Meanwhile, the other top sectors - software portfolio) and software (10.15 per cent) and pharmaceuticals - faced a difficult year, sectors. The fund has displayed proclivity for which limited the fund's performance. proactive fund management. None of the stocks in its current portfolio have been Currently, banking continues to the top consistently held for the past 36 months. sector but its exposure has been trimmedThe 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, JUNE 2017 One Fund Review ICICI Prudential Dynamic PlanMint | May 2017mint Return50BEST Mint 50 is a curated list of 50 How ` 10,000 has grownFUNDS investment-worthy funds.ICICI Prudential Dynamic Plan 6449.65 2,60,000 ICICI Prudential Dynamic Plan 2,33,285 234.51 2,10,000 Nifty 50 Index 99,101Corpus (` cr) (as on 30 Apr 2017) 2.16 1,60,000NAV (as on 16 May 2017) 16 May2017Expense ratio (as on 30 Apr 2017) 2.41 1,10,000Category average expense ratio Source: Value Research(as on 30 Apr 2017) ` 5,000 60,000Minimum Investment 10,000 12 Nov 2002 Base value taken as 10,000 ICICI Prudential Value Discovery FundMint | May 2017mint Return50BEST Mint 50 is a curated list of 50 How ` 10,000 has grownFUNDS investment-worthy funds. 1,50,000ICICI Prudential Value Discovery Fund 1,30,000 ICICI Prudential Value Discovery Fund 1,34,800 1,10,000 S&P BSE 500 IndexCorpus (` cr) (as on 30 Apr 2017) 17,305.79 90,000 63,211 135.07 70,000NAV (as on 18 May 2017) 2.14Expense ratio (as on 30 Apr 2017) 50,000Category average expense ratio 2.39(as on 30 Apr 2017) 30,000Minimum Investment ` 1,000 10,000 19 Aug 2004 18 May2017 Base value taken as 10,000 Source: Value Research ICICI Prudential Focused Bluechip Equity FundMint | May 2017 Return mint How ` 10,000 has grown 50BEST Mint 50 is a curated list of 50 40,000 FUNDS investment-worthy funds. 30,000ICICI Prudential Focused Bluechip Equity Fund ICICI Prudential Focused Bluechip Equity Fund 35,000 Nifty 50 IndexCorpus (` cr) (as on 31 Mar 2017) 12.842.72 20,000 19,085 35.07 10,000NAV (as on 28 Apr 2017) 2.21Expense ratio (as on 31 Mar 2017) 0 28 Apr 2017Category average expense ratio 1.67 26 May 2008(as on 31 Mar 2017) Source: Value ResearchMinimum 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.

10 TARAKKI TIMES, JUNE 2017 Tarakki CornerYour YToaur rTaarakkkki CiornCer ornerP. Someshwararao Lakhs of professionals take up a job after getting their Somesh ended up collecting several cheques amountingARN - 85562 basic education. A few march out to carve a way out by to ` 2.2 Crore. His core focus is the HNI retired segment.Vishakapatnam themselves, for themselves. However, what sets each of Out of 365 clients at present, his AUM as on May 2017, them apart is the journey. Some create remarkable stands at ` 66.6 Crore with a CAGR of ~14.6%. He uses achievements that are revered for years to come. P. asset allocation as the main investing principle for his Someshwararao, a B.Com Graduate has had a sparkling clients. SIP (Systematic Investment Plan), STP (Systematic journey of an IFA. Transfer Plan) and SWP (Systematic Withdrawal Plan) are the various tools he uses. As a graduate, he started off as an executive. He has a total experience of over 15 years in Technical Analysis, with When asked about his advice to aspiring IFA professionals, institutions like Karvy, IndusInd Bank, Bajaj Capital. For he promises a great career as they enter this space Somesh, entrepreneurship was always exciting and hence because there aren’t enough professionals for wealth he ventured out on his own in the year December 2014. management. “One should keep away from making wrong promises of returns to investors.” He advises. When he started his own IFA practice, he was relying on the network he built over 14 years, expecting them to What worked for him was a never-say-die attitude that support as he expanded. But it took 3 months for him to blended well with the clarity of reaching out to his target see the light of the day. In a market where existing audience with the right set of propositions. He thought businessmen could not cross ` 30 crores, Somesh about the Industry as a whole and what drives it. He then promised himself a ` 100 crore deal starting from scratch linked it with investor’s financial lives with an aim to in spite of the 3 month struggle. Somesh considers maximize their returns.“Everyone loves to talk about himself not the one to sell the product but the one to create Investments but selling Investment instrument is an art.” its importance and utility in the client’s financial lives, He concludes. through awareness. His struggle ended in 2015 with a client referral giving him his first break. The client wanted to invest ` 2 lakhs butWhen profession and passion join hands, wonders just have a KYC. There is a need for good advisors who do not Santosh Josephhappen. We all know money but how many of us really look at clients merely for revenue. The idea should be to ARN - 112748know what money means to us? Does money revolve align our interests with the clients' interests, allow thearound you or it is the other way around? Santosh Joseph clients to make money and then make some money on the Bengalurudoes an interesting thing. He helps his clients define what way.money means to them. He comes with an overallexperience of 16 years in the mutual fund industry. After As he starts each day, he is constantly inspired to do goodworking for 7 years, he added an executive management by placing client's interests first. The idea is to look forprogram from IIM Bangalore. transformative steps in helping clients grow wealth. People need to be aware at large about the products. So heSantosh who is a graduate from Bangalore, has learnt leaves no stone unturned to tell people “Before you learnprecious financial lessons on campus as well as from real to earn, learn to invest”.life experiences. He owns Germin8 Financial Advisors witha team of 4 people under him. People are largely hard In a time frame of 11 months, the size of Santosh's assetspressed to think about growing their wealth and that is under management size is nearly ` 15 Crores. He believes,what Germin8 as a team puts its emphasis on - long-term here is to share knowledge and knowledge iswealth . empowerment. The market penetration is extremely low and it is important that his clients make informed choices.Santosh believes in values like simplicity and timely “Having the right exposure to equities is an essentialexecution of strategy for managing money. He believes investment mantra. A right asset allocation is aboutwealth management is beyond a typical advisory model. exploring the options whether you want or no. ClientsThe dynamic changes in lifestyle and the growing should try to stay away from investing in one asset even ifimportance of investing need to blend well with right they find that enough.” He adds.understanding of financial products that ease out yourresponsibilities with time. He welcomes every aspiring advisor and suggests them to stick to what they can do. “Create a niche for yourself toThroughout his professional journey he realized that for see good results. Trying to time short-term investments iswealth managers there is a lot of scope in the market, all not a good idea to rely on.you need is knowledge and good understanding. Hence,he focuses more on people who probably might not evenThe 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. 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