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| Dear KUNDAPUR GOVARDHANA KINI, |
| Firstly, we would like to thank a surprising number of customers who actually found our last month's recommendation (Reliance Banking Fund and UTI Banking Fund) useful enough to actually invest in those schemes immediately! Naturally those who have these schemes must know that they are currently in our 'Buy' category. So, if you already have bought these schemes or are planning to buy soon, then please watch the recommendation column in your portfolio page. As you may know, the last column in your portfolio tracker gives recommendations on each of the schemes you have - either 'Buy More' or 'Sell' or 'Hold'. |
| Now, this time the top three funds recommended for the month of May happen to be all from the Infrastructure sector. That is because this sector is looking up in a really big way. |
| So even while you may click here to get the comprehensive report on the sector and the recommended funds, let me give you the essence of the rationale behind the recommendation. |
| Actually it's really simple. Aren't we all conscious of these few facts . Still to kind of sum up, the fact that the recession is behind us and the growth story seems poised on the spring board. The fact that Infrastructure is at once the cause and the effect of this growth story and to that extent almost the harbinger. The fact that within this sector, there are such a sizeable number of direct and ancillary companies that picking the choicest would mean that a gem has been identified. This also means that a Fund Manager can really choose from a wide basket and therefore make a meaningful selection. Now the fact is also that not only is the government focussed on it, but that the government appears stable as well. Also, just look at the scale of the spending - USD 407 bn in XIth Five Year Plan and USD 716 bn in the XIIth Five Year Plan. When seen in the context of even an 8% GDP growth, the figures can be mind numbing. Do read the report to see the elaboration. Besides, the recent underperformance of this sector only means that the only way to now go, is up. Even so, it is true that Infrastructure funds have in any case outperformed diversified mutual funds. |
| Now this month the recommended topmost funds are: |
 | Canara Robeco Infrastructure Fund | | | Reliance Diversified Power Sector Fund | | | ICICI Prudential Infrastructure Fund | | So why these three? | | |
| As far as Canara Robeco Infrastructure Fund is concerned, this is a small fund with Rs 170 Cr AUM, but gave a solid return of 91% last financial year i.e. 2009 - 2010. The fund manager Aanand Shah manages two other schemes and both are doing well. |
| With Reliance Diversified Power Sector Fund, the story on size is completely different. This is a pioneering large fund in this space managed by Sunil Singhania. This fund has delivered a 74.47% return last financial year and has consistently outperformed. |
| The third one ICICI Prudential Infrastructure Fund has been resorting to aggressive switching between asset classes. This is recommended for conservative investors who are looking at the long term. Sankaran Naren manages this fund, bringing with him a 20 years experience and Nilesh Shah is the CIO who brings his experience and reputation. |
| So these are three different kinds of picks that you may choose from this month. We suggest that you invest only a part of your investible money in one of these funds. If you have bought the fund, do monitor our recommendation that will reflect on the 'Research Recommendation' on your Mutual Funds Portfolio page. |
| Should you wish to purchase any of these funds right away, just click here to log in. |
| To read the last month's recommendation mail, please click here. |
| To give your feedback, please email at feedback@icicidirect.com. |
| A friend of mine once made a statement. He said that he knew very little about Infrastructure and hence only went the mutual fund route while investing in it. Think about it. |
| Best regards, |
Vineet Arora
Head - Products and Distribution |
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