Indian Mutual Fund Monthly Report July 2012

1

Mutual Fund Monthly Report July 30, 2012
Overview: The Assets Under Management (AUM) of Indian Mutual Fund industry fell by 1.5% M-o-M in June 2012
.

on the back of large outflows of funds from liquid funds (Source: AMFI Monthly data). The overall mutual fund
industry witnessed outflows of Rs. 23,969 crore in June. Within the categories, maximum growth during the
month was observed in the AUM of Other ETFs category by 6.23%, while the AUM of Liquid category dropped the
most by 13.1%. The month end AUM of the industry for June 2012 stood at Rs. 6.89 lakh crore, down from Rs.
6.99 lakh crore in May 2012. The Average Assets Under Management (AAUM) of mutual fund industry which is
declared on quarterly basis witnessed a 4% increase to Rs 6.92 lakh crore.

* Approx. Source: AMFI

Equity Markets: Indian equity benchmarks closed at a two-month high on the last trading day of the month as
global markets rallied quite sharply after European leaders agreed to take emergency action to bring down Italy's
and Spain's spiraling borrowing costs at European Summit. Markets made their biggest monthly gains since
January 2012, after European leaders unveiled a plan to address Europe’s distressed banking sector, easing some
of the concerns about the region. BSE Sensex and Nifty ended the month higher by 7.5% and 7.2% respectively.
The world markets ended the month of June 2012 on a positive note with India (Sensex), Japan and UK being the
top three gainers, which rose by 7.5%, 5.4% and 4.7% respectively. China and Brazil were the only losers, which
fell by 6.7% and 0.2% respectively.

July 2012 Retail Research

2

Mutual Fund Monthly Report contd…
Debt Markets: The Indian debt markets witnessed yields moderating over the month of June. Factors that
influenced the market sentiments negatively during the month included fear on expectation of aggressive
response from the RBI due to weaker IIP numbers and higher WPI inflation, disappointment in the wake of policy
rates that were kept unchanged by the RBI in the monetary policy review, lesser hope on further OMO operation
and depreciation in rupee value. The other factors such as risk aversion in the overseas financial markets, fall in
crude oil prices, a deteriorating outlook on global economy, improvement in liquidity and an increase in FII
investment limit in domestic debt helped the market sentiments during the month. The RBI launched the new 10
Year benchmark G Sec and set cut off yield at 8.15%. The benchmark, ‘G Sec 8.15% GS 2022’ bond yield closed
the month at 8.18%, down 20 bps over the month.
The banking system witnessed easing liquidity conditions over the course the month. The daily average LAF
infusion during June was at Rs. 91,700 crore as compared to Rs. 98,975 crore in May. WPI Inflation for May 12
was at 7.55 % y-o-y as compared to 7.23% in Apr 12. In the Mid-Quarter Monetary Policy Review held on June 18,
the Central Bank left all policy rates unchanged.
The yields of government securities are likely to trade in the same range or ease further given the improved
liquidity condition in the system. Expectation on further OMO operations by the RBI (instead of cutting policy
rates or CRR) will further support the liquidity.
Net injection through RBI’s LAF window (Rs. Cr.):
250000 9.00
200000 Net injectio n (LHS) 8.50
150000 1 Yr Yeild (RHS)
0
8.00
100000
7.50
50000
7.00
0
6.50
-50000
-100000 6.00

-150000 5.50
-200000 5.00
Jan-09

Oct-09

Feb-10

Nov-10

Apr-11

Aug-11

Jan-12
May-09

Jul-10

May-12

3

Month end AUM:
.

The AUM for equity category rose by 5.45% (value led) MoM to Rs 1,56,389 crore during the month despite the
fact that the category witnessed outflows of Rs. 186 crore. The increase in the AUM of the category was mainly
due to mark-to-market gains. The equity market represented by the benchmark Nifty and Sensex rose around
7.5% & 7.2% respectively in June due to a rally in the global markets after European leaders agreed to take
emergency action to bring down Italy's and Spain's spiraling borrowing costs at European Summit. The category
accounts for 23% of the industry’s total asset base.
The category ‘Other ETFs’ witnessed most rise in the AUM during the month mainly due to positive equity
markets. Better performance of banking and infra stocks in the month was also one of the reasons for the
increase in the AUM of the category. The other ETFs category witnessed net inflows of Rs. 15 crore during the
month and the AUM stood at Rs. 1,603 crore. The AUM of the ELSS category also witnessed an increase of 5.16%
(value led) to Rs. 23,229 crore during the month. Meanwhile, the category witnessed net outflows of Rs 100 crore
during the month.
The categories - Balanced saw net inflows of Rs. 19 crore and the AUM stood at Rs. 16,231 crore.
Net Flow in Equity Schemes Vs. Volatility Index:
8000

Equity Netflow (LHS) India VIX (RHS)
30
4000

25

0
20

-4000
15

-8000 10
Mar-10

Mar-11

Mar-12
Jan-10

Feb-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Dec-10

Jan-11

Feb-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Dec-11

Jan-12

Feb-12

Apr-12

May-12

Jun-12
Nov-10

Nov-11

4

Total AUM Vs. Liquid category AUM:
1,000,000 250,000

TOTAL AUM (LHS) Liquid AUM (RHS)
200,000

800,000
150,000

100,000
600,000

50,000

400,000 0
Jun-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Apr-11

Jun-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Apr-12

Jun-12
Jul-10

Mar-11

May-11

Jul-11

Mar-12

May-12
The Gold ETF category saw net outflows for the second consecutive month witnessing the fund outflows of Rs.
227 crore during the month of June 2012. On the other hand, the AUM of the category witnessed a fall after five
month period decreasing 2.19% during the month. However, the price of the gold increased by 0.8% during the
month. The decline in the asset value of the Gold ETF category was primarily due to profit booking after the
price of the underlying metal rose sharply in the past one year due to global risk aversion and domestic buying.
The AUM of the category stood at Rs. 10,086 crore.
The AUM of liquid funds declined notably during June due to the huge outflow of Rs. 25,128 crore redeemed by
banks and corpotates to meet their quarter end requirements. The AUM of the category came Rs. 1,58,853 crore,
down from Rs. 1,82,617 crore previous month. The AUM of the income category rose 1.06% to Rs. 3,16,735 crore.
The AUM of Gilt category rose during the month by 4.31% due to an increase the prices of the gilts during the
month.
Funds mobilized from 61 newly launched schemes in June stood at Rs 4,516 crore, out of which Rs 4,070 crore
came from 55 close ended income funds. Baroda Pioneer Banking and Financial Services Fund and IIFL Dividend
Opportunities Index Fund mobilized Rs 73 crore.


5

Average Quarter end AUM:
The Average Assets Under Management (AAUM) of the mutual fund industry climbed up 4.12% (by Rs. 27388.92
crore) to Rs. 6.92 lakh crore during the quarter ended June 2012 as against Rs. 6.64 lakh crore registered during
the quarter ended March 2012. AAUM that was dipping during the previous three quarters, improved during the
latest quarter due to inflows into liquid and income funds and also due to mark-to-market gains.
Of the top five fund house based on AAUM, average assets of Birla Sun Life MF increased the most by 9.92% (by
Rs. 6063.44 crore) to Rs. 67205.95 crore, it was followed by ICICI Prudential MF by 6.30% (by Rs. 4331.17 crore)
to Rs. 73049.66 crore, UTI MF by 3.40% (by Rs. 2000.47 crore) to Rs. 60922.62 crore, Reliance MF by 3.31% (by Rs.
2582.67 crore) to Rs. 80694.47 crore and HDFC MF by 3.05% (by Rs. 2745.78 crore) to Rs. 92624.52 crore. Of the
44 mutual funds, 29 fund houses registered increase in Average AUM while the rest resulted in decline.
Folios: The mutual funds folios of retail investors have witnessed drop during the month of June 2012 due to
profit booking in the recent rise in the equity markets. At the end of June 2012, the total number of folios stood
at 4.59 crore while the equity folio stood at 3.69 crore. During June, around 4.21 lakh equity folios were closed.
The decline in equity folios is also due to a merger of schemes. If two schemes are getting merged, the common
investors get one folio. From April to June 2012, the total industry has seen a decline of 9.22 lakh folios from all
the funds.
Growth of Indian Mutual Fund Industry over a decade (Rs in Crs):
900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000
Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12
Sep-02

Sep-03

Sep-04

Sep-05

Sep-06

Sep-07

Sep-08

Sep-09

Sep-10

Sep-11

6

FII & MF Activity:
On the equity side, Mutual funds were turned as net buyers for Rs. 295 crore during the month of June 2012 after
being the net sellers of Rs. 397 crore in May 2012. The net inflows during the last month was a result of gross
purchases Rs 9,267 crore and gross sales Rs 8,972 crore.
On the debt side, mutual funds were the net buyers for tenth consecutive month as they bought the debt
securities to the tune of Rs. 78,465 crore. The net inflow during the month was a result of gross purchases of Rs
1,50,700 crore and gross sales of Rs 72,235 crore.
FIIs were reported as net sellers to the tune of Rs. 501 crore in cash markets in June 2012 after being net sellers
of Rs. 347 crore in May 2012.
FIIs were net buyers in the debt side as they bought to the tune of Rs. 1,682 crore during the month of June
2012. The net inflow during the last month was a result of gross purchases Rs 18,723 crore and gross sales Rs
17,042 crore. They were net buyers in the month of May 2012 buying debt securities for Rs. 3,569 crore.
MF’s net investment in Equity and Debt during the month of June 2012 (Rs in Crs):

7500
Equity Debt
5500

3500

1500

-500
1-Jun

4-Jun

5-Jun

6-Jun

7-Jun

8-Jun

11-Jun

12-Jun

13-Jun

14-Jun

15-Jun

18-Jun

19-Jun

20-Jun

21-Jun

22-Jun

25-Jun

26-Jun

27-Jun

28-Jun

29-Jun

-8
-4
0
4
8
12
Shanghai Comp

-6.7
MSCI Bric

July 2012
2.7
MSCI Emerging

3.4
Nasdaq

3.8
Dow Jones

3.9
Hang Seng

4.4
FTSE 100

4.7
MSCI World
4.9
Nikkei 225
5.4

CNX Infra
10.5

BSE BANKEX
9.4

BSE FMCG
9.1

SENSEX
7.5

Nifty
Mutual Fund Monthly Report

7.2

BSE AUTO
6.6

S&P CNX 500
6.6

CNX Midcap
6.6

BSE SMALLCAP
4.3

Retail Research
BSE MIDCAP
4.2

BSE Health C
3.6

CNX Pharma
3.3

BSE IT
1.7

Crisil Liquid
0.7
Indices & asset class returns (%) across the globe for the month of June 2012:

Crisil Comp Bond
0.7

Crisil ST Bond
0.8

Crisil MIP Blend
1.7

Crisil Balanced
4.9

CRB
4.1

Gold-India
1.8

I-Sec Comp Gilt
1.3

USD INR
-0.8

DXY
-2.0

10 Yr Gilt paper
-2.8
contd…
7

8

.

Toppers and Laggards for the month based on simple average basis:
Category: All the mutual fund categories posted positive returns during the month of June 2012. Indian equity
markets reported an increase for June 2012. All the sectoral indices ended in the green last month. Capital
Goods, Power, Bankex and FMCG were the top four gainers, which rose by 13.7%, 9.6%, 9.4% and 9.1%
respectively. Even PSU, Metals, Auto and Oil & Gas witnessed strong performance, rising in the range of 6.4-7.4%
during the month.

Equity Sector- Banking category was the top performer during last month. Bankex rose by 9.4%. Banking stocks
rose on hopes that the RBI would cut interest rates at mid-quarter monetary policy. Bankex rose by 9.4% in June
2012. Gold ETF was the bottom performer which ended flat during the month.
MF Categories returns (%) during the month of June 2012:
10.00 9.4

7.3 7.6

7.00 5.8 5.9
6.4

4.4 4.4
3.8 3.9
4.00 2.7
2.0 2.1 2.3
1.4 1.4 1.5
0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 1.0
1.00 0.0

-2.00
Income Funds

FoF - Debt

ELSS
Infotech

Large Cap

Banking
Gold - ETFs

Liquid Funds

FoF - Equity
Hybrid - Debt

FMCG
FoF - Gold

Pharma

Equity Infra
MIP LT

MIP ST

Mid Cap
Ultra Short Term
Gilt - LT

Gilt - ST

Floating Rate - ST

Floating Rate - LT

Short Term Income

Global - Foreign Eq

MultiCap
Global - Foreign MF
Arbitrage

Hybrid - Equity
Schemes: UTI-Banking Sector, Escorts Power & Energy and Religare Banking were the top performing schemes
in the month. They posted 10.63%, 9.89% and 9.69% of absolute returns respectively. Birla Sun Life CEF - Global
PMP, ING Global Commodities and Mirae Asset China Advantage were the least performers as they registered
negative returns of 2.39%, 0.95% and 0.53% respectively.


9

Top 3 & Bottom 3 performers from MF categories during the month (based on Simple average returns):

The following charts depict the top three (Sky blue) and the bottom three (Orange) performers in each category
in June 2012.
Equity Diversified – Large Cap: Equity Diversified – Mid Cap:
12 12

9 9

6 6

3 3

0 0
ING Co re P ramerica B aro da SB I M agnum DSP B R To p DSP B R Sundaram Sundaram Taurus ICICI P ru SB I M agnum DSP B R
Equity Equity P io neer Equity 1 Equity
00 Equity Equity Select Disco very M idCap Glo bal Small A nd
Gro wth M ultiplier M idcap M id Cap

Equity Diversified – Multi Cap: ELSS:
12 12

9 9

6 6

3 3

0 0
Esco rts JM Co re 11 Esco rts Edelweiss UTI-M NC Tata Life UTI-Lo ng HSB C Tax B aro da Edelweiss ICICI P ru SB I Tax
P o wer & Leading A bso lute Science & Term Saver Equity P io neer ELSS ELSS R.I.G.H.T. A dvantage
Energy Secto rs Return Tech A dvantage '96 Fund - Sr II

Equity - Infrastructure: Equity - Bank:
12 12

9 9

6
6
3
3
0
0 UTI-B anking Religare Sahara Sundaram Fin ICICI P ru Reliance
SB I UTI- Taurus L&T Franklin B uild P rincipal Secto r B anking B anking & Serv B anking & B anking
Infrastructure Infrastructure Infrastructure Infrastructure India Services Financial Oppo rtunities Financial
Fund - Series I Industries Services Services


10

Hybrid - Equity Oriented: Gilt Funds - Medium & LT:
12 4

9 3

6 2

3 1

0 0
UTI-CCP P rincipal B aro da ICICI P ru DSP B R A XIS Triple Ko tak Gilt - B irla Sun Life M o tilal Oswal M irae A sset Religare Gilt - Taurus Gilt
A dvantage SM A RT P io neer B alanced B alanced A dvantage Invest P lan Gilt P lus - M o st 1 Year Gilt - Savings Lo ng Duratio n
0
Equity B alance Regular Gilt

MIP - LT: Income Funds:
6 2

3 1

0 0
HSB C M IP - LIC NOM URA HDFC M IP - Reliance DWS Twin SB I M agnum L&T Triple Sundaram Canara B irla Sun Life A XIS Dynamic UTI-Dynamic
Savings M F Flo ater LTP M o nthly A dvantage Inco me P lus - A ce - Inco me P lus Dynamic Inco me P lus - B o nd B o nd
M IP Inco me P lan Savings (Cumulative) B o nd Retail

Liquid Funds: Ultra Short Term Funds:
2.0 2.0

1.0 1.0

0.0 0.0
P rincipal Esco rts P ramerica A IG India M irae A sset Templeto n IDFC Ultra DWS IDFC M o ney B OI A XA DWS M irae A sset
Retail M o ney Liquid P lan Liquid Liquid Liquid India Cash Sho rt Term Treasury - M anager - Treasury Treasury Ultra ST B o nd
M anager M anagement Investment Invest - A A dvantage Fund - Cash


11

Weighted average returns (%) for categories over periods:

Note: Weighted returns (in proportion to corpus) are trailing in which up to 1 year are absolute and over 1 year are CAGR. NAV/index values are as on June 30, 2012.


12

Macro Analysis (period between March 2012 and June 2012):
(Source: NAVindia.com- based on month end AUM)
I. AMCs having the largest AUM during the quarter:

II. AMCs showing the largest value change in equity holdings during the quarter:

III. AMCs showing the largest % change in equity holdings during the quarter:


13

I. Sectors attracting most exposure during the quarter:

II. Sectors showing highest % growth in exposure during the quarter:


14

III. Sectors showing highest growth in value terms during the quarter:

IV. Sectors showing highest % de-growth in exposure during the quarter:


15

V. Sectors showing highest de-growth in value terms during the quarter:

Micro Analysis (period between March 2012 and June 2012): (Source: NAVindia.com)

I. Stocks that have the most equity exposure (value terms) during the quarter:


16

II. Stocks that have witnessed the largest change in market value during the quarter:

III. Stocks that have witnessed the highest growth in exposure in quantity during the quarter:


17

IV. Stocks that have witnessed the highest growth in exposure in % quantity terms during the quarter:

V. Stocks that have witnessed the highest de-growth in exposure in % quantity terms during the quarter:


18

MID Cap Fund Analysis:
VI. Stocks that have the most equity exposure (value terms) during the quarter:

VII. Stocks that have witnessed the largest rise in market value during the quarter:


19

VIII. Stocks that have witnessed the highest growth in exposure in quantity during the quarter:

IX. Stocks that have witnessed the highest growth in exposure in % quantity terms during the quarter:


20

X. Stocks that have witnessed the highest de-growth in exposure in % quantity terms during the quarter:

XI. Stocks that have witnessed highest increase in the number of schemes which holding over the quarter:


21

Micro Analysis (period between May 2012 & June 2012):
New stocks bought in from secondary market by more than one mutual fund during June 2012 :

Stocks exited totally by more than one Mutual Fund during June 2012:

Comments on Fund activities:
Funds have bought some stocks belonging to sectors like Banking, Tyres, & Refineries to name a few.
Funds have sold some stocks belonging to Engineering, Textiles, and Telecomm to name a few.


22

IDFC, DSP BR and Birla Mutual Funds did the maximum additions and exit of stocks during the month of June
2012. These funds have made fresh additions and total exits from 38, 19 and 16 stocks respectively.
HSBC, Franklin, and Principal Mutual Funds have done the least churning in terms of making fresh additions and
total exits. These funds made fresh additions and total exits in 6, 7 and 8 stocks each respectively during the
period.
Most common among Top 5 holdings – ICICI Bank, Infosys, ITC, SBI & RIL.
Most common among Top 10 holdings – In addition to the above, Bharti Airtel, HDFC Bank, ITC, Kotak Mahindra
Bank, L&T & ONGC.

Bulk Deals:


23

Asset Allocation:

Diversified Equity category witnessed further reduction in its cash position in the month of June (lowest since Sept
2009) as compared to March month. The increased allocation into equity clearly shows that the fund managers are
inclined towards buying stocks which were available at/near their fair value. The corpus of equity diversified
category declined due to redemptions and mark to market losses as high uncertainty prevailed in the equity
markets during the quarter.
NEWS:
Franklin Templeton MF announced SIP through Stock Exchange: Franklin Templeton Mutual Fund has announced
to enhance the network and service levels for investors from June 21, 2012. Investors can start the SIP (systematic
investment plan) through National Stock Exchange as well as Bombay Stock Exchange.

Fidelity Mutual Fund announced the changes in the fund manager: Fidelity Mutual Fund announced that Mr.
Shriram Ramanathan has been ceased to be the fund manager of Fidelity Wealth Builder, India Children's
Education Plan, India Children's Marriage Plan and all debt schemes effective from June 23, 2012.


24


The Reserve Bank of India allowed Qualified Foreign Investors (QFIs) to invest in those mutual funds (MF)
schemes that hold at least 25% of their assets (either in debt or in equity or both) in infrastructure sector under
the current $3 bn sub-limit for investment in mutual funds related to infrastructure.

Sundaram India Leadership to Merge with Sundaram Growth Fund: Sundaram Mutual Fund announced the
merger of Sundaram India Leadership Fund with Sundaram Growth Fund effective from July 11, 2012. Sundaram
India Leadership fund managed Rs.125.63 crores (as on March 31, 2012). This scheme was launched in June 2004.
Investors of Sundaram India Leadership fund had been given an option of exit without paying any exit load from
June 11, 2012 to July 7, 2012.

Analyst: Dhuraivel Gunasekaran. Data Source: AMFI website, NAVIndia & ACE MF.

HDFC Securities Limited, I Think Techno Campus, Bulding –B, ”Alpha”, Office Floor 8, Near Kanjurmarg Station,
Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone (022) 30753400 Fax: (022) 30753435
Disclaimer: Mutual Fund investments are subject to risk. Past performance is no guarantee for future performance. This document has been
prepared by HDFC Securities Limited and is meant for sole use by the recipient and not for circulation. This document is not to be reported or
copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. The
information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied
upon as such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time
solicit from, or perform investment banking, or other services for, any company mentioned in this document. This report is intended for non-
Institutional Clients.


Indian Mutual Fund Monthly Report July 2012

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Indian Mutual Fund Monthly Report July 2012