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| Dear KUNDAPUR GOVARDHANA KINI, |
| Anantha Subramanium, one of our customers, had a simple problem. |
| That there are over 2000 mutual fund schemes available at ICICIdirect.com across 7 categories and more than 25 sub categories. And that is clearly a problem of plenty. |
| Now, even though Anantha by virtue of being our customer, benefits from our research which helps him to choose, but this too covers as many as 250 schemes. So what Anantha really wants is just the topmost couple of recommendations each month. |
| It's for customers like Anantha (and there are many like him) that we have created this monthly mail. |
| Now, while Anantha needs very few funds recommended in a given month, he needs an exhaustive and detailed analysis on them. So, these two funds must really be gems, handpicked by our research team from over 2000 schemes on offer. Naturally you would appreciate that this is a very intensive and exhaustive exercise. Accordingly you really must make the most of it. We are certain that it will pay off handsomely. Do take out time to read it at length, or save it on your desktop immediately on receipt. |
| This new initiative, which we have undertaken for you, will always have the same subject line as this mail - 'Now cherry pick the Topmost mutual funds of this month'. Going forward, please expect this mail in the beginning of the month. But there is one more mail on this subject that you must also expect. This one would be about exiting an earlier fund we recommended, should our analysis say so. This mail would simply be titled 'Time to exit xyz'. In case you have bought the fund, the exit recommendation will also reflect on the 'Research Recommendation' on your Mutual Funds Portfolio page. |
| Now, let me share the criteria for selecting these funds. Well, we first look at the fund vintage, and consider only those funds which have been around for a substantial period of time. We then evaluate the shortlisted funds on a host of parameters like past performance of the fund, growth potential, the fund manager - background and performance, size of AUM (Assets Under Management) and key technical ratios. All these are part of the report of the chosen funds. |
| Given the expected future earnings of the banking sector this month, we have selected the first fund of the month as Reliance Banking Fund and the second fund as UTI Banking Sector Fund. Yes, these are sectoral funds which means that you must not put all your money here. But because this sector is clearly expected to outperform a few others, you may wish to invest a planned sum for the month or exit from funds in your existing portfolio which are not performing as well. |
| Even while you read the detailed report on these two funds (click here for the report), here's the gist about why we recommend the banking sector. With the economy on a rebound, the banking sector, which lubricates the economy is likely to be a big beneficiary. The credit growth is expected to pick up. Further, the negative yield movements of the past have already been built into the current prices. Besides, the government is working towards increasing the capital adequacy ratio of PSU banks targetting 20% plus growth rates. Many PSU banking stocks are trading below their book value at the moment. Picking right stocks within the sector requires skilled and frequent monitoring and hence the role of able fund managers, and therefore a good reason to take the mutual fund route. |
| The Reliance Banking Fund has been a consistent performer with a solid track record. It has a good mix of large and mid cap stocks (both are crucial, especially this time round). It also has the largest equity corpus in percentage as well as in absolute terms. The fund manager Sunil Singhania has shown consistent out performance as well. |
| The UTI Banking Sector Fund has been a good performer with more than 2 years proven performance track record. Its portfolio mix is well positioned to capture the potential upside going forward. Further, the fund managers Anoop Bhaskar and Arun Khurana are known for their excellent stock selection ideas. | | We suggest that you choose one of the two and not both, since afterall they cover the same sector. Do monitor our live recommendations on these investments through your portfolio page. This is how it appears. | |  | | Should you wish to purchase either of these funds right away, just click here to log in. | | See you next month with more opportunities for investments. Do let us have your feedback on this initiative at feedback@icicidirect.com. This will help us understand your requirements better. | | |
| Best regards, |
Vineet Arora
Head - Products and Distribution |
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