Download - Fund reviews july 2013
Fund review 22nd July 2013
T I Corporate Bond Opportunities FundT I Corporate Bond Opportunities Fund
Vital Stats◌ःCategory: Income Fund
◌ःBenchmark: Crisil Short-term Bond Index
◌ःStarted: November 2011
◌ःStyle: High credit quality/low interest rate ◌ःStyle: High credit quality/low interest rate
sensitivity.
Assets under management
AUM (Rs-crore)
Templeton India Corporate Bond Opportunities Fund(G) 4,298.12
Maximum-income fund category 16,203.34
Minimum-income fund category 0.83Minimum-income fund category 0.83
Average-income fund category 1,806.58
Median-income fund category 578.88
Fund is 13th-largest within the category
Trailing returns
6.9
7
5.2
4
8.5
2
10.4
0
6.9
3
5.0
8
7.8
0 8.3
6
6.00
8.00
10.00
12.00
Templeton India Corporate Bond Opportunities Fund(G)
-1.3
0
0.2
7
2.8
8
5.2
4
-0.6
7
0.8
4
3.1
3
5.0
8
-0.6
3
-0.5
8
-0.2
5
0.0
4
0.1
6 0.7
2
2.0
4
-2.00
0.00
2.00
4.00
6.00
1 Month 3 Months 6 Months YTD 9 Months 1 Year Since inception
Crisil Short Term Bond Fund Index
Out/under performance
The fund has outperformed its benchmark over longer-term horizons (YTD and higher).
Calendar year return
10.81
9.07
4.00
6.00
8.00
10.00
12.00
2012
1.74
0.00
2.00
4.00
Templeton India Corporate Bond Opportunities Fund(G)
Crisil Short Term Bond Fund Index Out/under performance
In the one complete calendar year for which it has existed, the fund beat its
benchmark by a comfortable margin.
Low-risk fund
0.5
0.6
0.7
0.8
0.4
96904171 0.6
63425153
0.7
09222691
Templeton India Corporate Bond Opportunities Fund(G)
0
0.1
0.2
0.3
0.4
SD Semi SD Beta (Slope)
0.1
30732938
0.1
14171503
0.1
84822356
0.1
48757788
0.1
88607807
0.1
52159951
Opportunities Fund(G)
Average-income fund category
Median-income fund category
Measures of risk calculated over
one-year span
Risk-adjusted return
0.1200
0.1400
0.1600
0.1800
0.2000
0.1
538 0.1
762
0.1
398
0.1
878
0.1
130
0.1
383
Templeton India Corporate Bond Opportunities Fund(G)
0.0000
0.0200
0.0400
0.0600
0.0800
0.1000
Treynor Sharpe Sortino
0.0
405
0.0
459
0.0
297
Average-income fund category
Median-income fund category
Risk-adjusted return
measures calculated
over one-year span
Marginally lower/higher than average; higher than median
A low-duration fund
4
5
62.7
4
5.1
4
3.4
6
Templeton India Corporate Bond
0
1
2
3
Average Maturity (Yrs) Mod Duration (Yrs)
2.7
4
2.4
7
Templeton India Corporate Bond Opportunities Fund(G)
Average-income fund category
Fund does not take duration risk.
Credit risk
Rating Fund allocation (%)Category allocation-income funds (%)
AAA 0.02 30.64
AAA(SO) 0.07 1.71
AA+ 11.71 7.70
AA+(SO) 7.08 0.80
AA 7.66 3.18
AA(SO) 2.17 0.07
AA- 19.96 3.66AA- 19.96 3.66
AA-(SO) 0.67 0.06
A1+ 17.61 9.81
A+ 6.83 0.53
BWR A+(SO) 2.89 0.24
A 16.02 1.35
A(SO) 4.47 0.58
A-(SO) 0.53 0.02
Cash & Equivalent 2.30 11.20
Does invest in sub-AAA bonds in search of yield.
Expense ratio on the higher side
1.40
1.60
1.80
2.00 1.82
1.46
1.67
Expense ratio (%)
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
Templeton India Corporate Bond Opportunities Fund(G)
Average-income fund category
Median-income fund category
Expense ratio (%)
Fund manager
◌ःUmesh Sharma and Sachin Padwal Desai
have been managing this fund since
November 2011.
◌ःThe fund has done well under their watch.◌ःThe fund has done well under their watch.
Bottomline
◌ःThe fund does not have a long track record.
◌ःNot a low-cost fund.
◌ःHas performed well during the limited period ofits existence.
◌ःThe fund does not take duration risk. May◌ःThe fund does not take duration risk. Mayunderperform peers with higher duration in adeclining rate environment.
◌ःIt does invest in sub-AAA bonds but tries tomitigate risk through intensive research intothe companies whose bonds it invests in.
Birla Sun Life Medium Term Plan
Vital Stats
◌ःCategory: Income fund
◌ःStarted in March 2009
◌ःStyle: high credit quality and low interest-
rate sensitivityrate sensitivity
Assets under management
AUM (Rs-crore)
Birla SL Medium Term Fund(G) 825.96
Maximum-income fund category 16,203.3
4
Minimum-income fund category 0.83
Average-income fund category 1,806.58
Median-income fund category 578.88
It is the 36th-largest fund within the income fund category
Trailing returns
5.0
5
7.3
7
5.6
7
10.6
1
9.7
1
5.8
7
4.2
0
8.8
2
8.2
7
6.00
8.00
10.00
12.00
Birla SL Medium Term Fund(G)
-0.7
3
2.1
4
-1.6
9
0.3
9
2.7
9
-4.00
-2.00
0.00
2.00
4.00
1 Month 3 Months 6 Months 9 Months YTD 1 Year 3 Years
Birla SL Medium Term Fund(G)
Category average-income funds
The fund has beaten the category average over most investment horizons
(except 1-month).
Calendar year returns
10.99
9.31
5.90
9.90
8.24
8.00
10.00
12.00
5.90
4.74
0.00
2.00
4.00
6.00
2012 2011 2010
Birla SL Medium Term Fund(G)
Category average-income funds category
The fund has beaten the category average in all three years of its existence.
Low-risk fund
0.5000
0.6000
0.7000
0.8000
0.3
786
0.6
690
0.7
109
Birla SL Medium Term Fund(G)
0.0000
0.1000
0.2000
0.3000
0.4000
SD Semi SD Beta (Slope)
0.0
911
0.0
600
0.3
786
0.1
355
0.1
026
0.1
285
0.1
004
Birla SL Medium Term Fund(G)
Category average-income funds
Category median-income funds
Risk
parameters
calculated over
three years.
High risk-adjusted returns
0.2500
0.3000
0.3500
0.4000
0.4500
0.2
680
0.4
068
0.1
941
0.0000
0.0500
0.1000
0.1500
0.2000
0.2500
Treynor Sharpe Sortino
0.0
645
0.0
284
0.1
538 0.1
941
Birla SL Medium Term Fund(G)
Category median-income funds
Parameters
for risk-
adjusted
returns
calculated
Fund does not take duration risk
2.5
3
3.5
3.42 3.44
Mod Duration (Yrs)
0
0.5
1
1.5
2
2.5
Birla SL Medium Term Fund(G)
Category average-income funds
Category median-income funds
1.64
Mod Duration (Yrs)
Credit risk
Rating Fund (%) Category (%)
AAA 12.25 30.64
AA+ 8.91 7.70
AA+(SO) 8.22 0.80
AA- 4.43 3.66
BWR A+(SO) 0.45 0.24
A1+ 8.73 9.81A1+ 8.73 9.81
A1(SO) 7.64 0.24
A 17.89 1.35
A(SO) 4.96 0.58
BWR A-(SO) 18.91 0.36
Cash & Equivalent 7.61 11.20
The fund does go down the ladder of credit risk in search of higher yields.
Low expense ratio
1.20
1.40
1.60
1.80
1.371.46
1.67
Expense Ratio (%)
0.00
0.20
0.40
0.60
0.80
1.00
1.20
Birla SL Medium Term Fund(G)
Average-income fund category
Median-income fund category
Expense Ratio (%)
Note: all
references to
income fund
category refer to
Value Research’s
categorisation.
Fund manager
◌ःThe fund is now managed by Rohit Murarka
who assumed charged recently in January
2013.
◌ःHe was part of the research team when the◌ःHe was part of the research team when the
fund was earlier managed by Maneesh Dangi
(who has since become the Co-CIO).
Bottomline
◌ःThe fund tries to earn returns by identifying
credit opportunities in medium-term
securities.
◌ःThe fund manager focuses on bottom-up◌ःThe fund manager focuses on bottom-up
selection of bonds.
◌ःThose with a two-three year investment
horizon may invest in this fund.
Bottomline
◌ःOf the two funds, we like Birla SL Medium TermPlan better because of its longer trackrecord, consistent performance, and lowerexpense ratio.
◌ःAfter the recent debacle in the debt market◌ःAfter the recent debacle in the debt market(yields spiked suddenly on 16 July after RBItightened liquidity, causing losses in durationfunds), investors should consider holding a mixof both duration and accrual funds in theirportfolios.