May 12, 2014Visit us at www.sharekhan.com

Sharekhan’s top equity mutual fund picks

Index

� Top rated equity funds >> Large-cap funds

>> Mid-cap funds

>> Multi-cap funds

>> Tax-saving funds

>> Thematic funds

>> Balanced funds

� Fund focus >> HDFC Balanced Fund

� Fund ranking procedure

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Mutual Funds Mutual Gains

2Sharekhan May 12, 2014

Top rated equity mutual funds

Scheme name Star NAV 6 mths’ Annually compounded returns (%)

rating (Rs) returns 1 yr 3 yrs 5 yrs Since% inception

Large-cap funds

Birla Sun Life Top 100 Fund ���� 30.9 12.1 20.4 10.9 17.9 14.1

Reliance Top 200 Fund ���� 16.3 13.7 14.7 8.0 15.0 7.5

UTI Leadership Equity Fund ����� 19.1 9.3 14.7 8.1 13.9 8.2

UTI Top 100 Fund ����� 35.2 9.1 13.0 7.7 14.1 11.6

UTI Wealth Builder Fund - Series II ���� 23.8 3.5 8.2 7.1 14.1 17.5

Indices

BSE Sensex 22,508.4 7.7 14.4 6.7 13.49 16.5

Mid-cap funds

Mirae Asset Emerging Bluechip Fund ���� 17.6 26.0 32.8 17.6 - 15.9

HDFC Mid-Cap Opportunities Fund ����� 23.7 26.1 33.3 15.6 28.1 13.4

UTI Mid Cap Fund ����� 45.9 29.4 38.4 14.2 25.8 17.4

Reliance Long Term Equity Fund ���� 20.4 28.0 31.6 10.5 19.5 10.2

HSBC Midcap Equity Fund ���� 23.5 35.1 33.2 5.6 14.4 10.0

Indices

BSE MID CAP 7,370.7 17.2 14.3 2.4 14.92 20.9

Multi-cap funds

ICICI Prudential Value Discovery Fund ����� 71.9 22.5 28.9 14.0 28.1 22.5

Tata Ethical Fund - Plan A ����� 89.9 11.3 22.2 11.4 22.3 16.7

Mirae Asset India Opportunities Fund - Reg ����� 22.4 14.5 22.2 11.3 22.7 14.2

Franklin India Flexi Cap Fund ����� 41.8 13.7 22.4 9.1 18.6 16.9

LIC Nomura Equity Fund ����� 30.8 10.9 14.5 5.7 12.4 5.4

Indices

BSE 500 8,372.7 9.6 12.3 5.2 14.07 14.9

Tax-saving funds

Axis Long Term Equity Fund ����� 19.4 19.4 28.4 16.7 - 16.4

ICICI Prudential Taxplan ���� 190.7 15.3 25.4 11.0 23.1 22.2

IDFC Tax Advantage (ELSS) Fund - Reg ����� 26.3 9.5 20.5 10.8 17.7 19.7

HSBC Tax Saver Equity Fund ���� 19.3 16.2 17.5 10.7 18.0 9.4

Franklin India Taxshield ���� 279.9 12.8 19.0 10.7 19.2 24.7

Indices

CNX500 5,273.1 10.2 12.5 5.7 13.67 8.8

Thematic funds

ICICI Prudential Exports and Other Services Fund ����� 28.9 14.0 49.4 18.8 23.4 13.4

Reliance Media & Entet Fund ���� 39.4 5.2 6.3 14.6 20.3 15.4

Franklin Build India Fund ����� 16.3 17.8 23.2 12.4 - 11.1

L&T India Special Situations Fund ����� 24.9 13.9 17.8 10.9 20.7 12.1

Birla Sun Life Special Situations Fund ����� 11.2 15.0 14.4 5.8 12.4 1.8

Indices

S&P Nifty (CNX Nifty) 6,715.3 8.0 12.5 6.5 13.12 14.3

Balanced funds

ICICI Prudential Balanced ����� 67.4 13.2 20.3 13.6 18.0 14.0

HDFC Balanced Fund ���� 77.5 17.6 24.7 11.7 20.9 16.2

Tata Balanced Fund - Plan A ���� 113.8 11.5 16.7 11.6 18.8 15.9

SBI Magnum Balanced Fund ���� 67.9 13.4 19.5 11.0 15.1 15.9

FT India Balanced Fund ��� 63.4 11.1 15.1 9.5 13.7 13.7

Indices

Crisil Balanced Fund Index -- 6.9 9.4 7.2 11.0 12.8

Note: Returns < 1 year - absolute, > 1 year - CAGR (compounded annual growth rate)

Data as on May 6, 2014

Mutual Funds Mutual Gains

3Sharekhan May 12, 2014

HDFC Balanced Fund

With more than thirteen years of experience, the fund has been an outstanding performer in comparison with both benchmark

indexes, Crisil Balanced, and the category average. Despite the volatility and uncertainties in the market, the fund performed

better than its peers, giving returns of 24.7% over one year as against that of 9.4% and 15.6% given by the benchmark index and

the category average, respectively, in the same period. Over the longer time horizon of three years, the fund has grown at an

11.7% compounded annual growth rate (CAGR) while the Crisil Balanced and the category average have grown at 7.2% and 9.5%

respectively. In the recent months the fund has garnered returns of 17.6%, compared with the 6.9% return posted by the

benchmark index and 11.8% returns from the Balanced Funds category average.

The fund currently has about 48 stocks in its portfolio. It has nearly 70% of its net assets exposed to equity while the rest is

exposed to other money-market instruments. The top-ten stocks form about 24.8% of the portfolio. The fund has invested nearly

15.8% of its funds in the banking sector followed by pharmaceuticals and software services with 11.1% and 11% allocations

respectively

Scheme’s performance

Key features

• Fund category Balanced Funds category

• Launch date September 11, 2000

• Minimum investment Rs5,000

• Load structure Entry load is nil/If redeemed bet. 0 year

to 1 Year exit Load is 1%

• Fund manager Chirag Setalvad

• Latest NAV (gr.) Rs77.5

• Latest NAV (div.) Rs21.3

• Expense Ratio (%) Rs2.29 (30-Sep-13)

• AUM Rs1,227 crore (31-Mar-2014)

• Benchmark index Crisil Balanced Fund Index

Holding by market cap

Particular %

BSE Sensex 16.8

BSE Mid-cap 36.4

BSE Small-cap 5.5

Crisil Balanced Fund index -

Top 5 holdings 13.6

Top 10 holdings 24.8

Top 10 stock holdings (total no. of scrips: 48)

Company name % of net assets

Axis Bank 3.1

ICICI Bank 3.0

Aurobindo Pharma 2.7

IPCA Laboratories 2.5

Persistent Systems 2.4

Larsen & Toubro 2.4

Supreme Industries 2.3

NIIT Technologies 2.2

SKF India 2.2

Mindtree 2.1

Style box analysis

Fact sheet

The balanced product is positioned as a lower risk alternative

to a pure equities scheme, while retaining some of the upside

potential from the equities exposure. The scheme provides

the investment manager with the flexibility to shift allocations

in the event of a change in view regarding an asset class.

Mid-cap

Small-cap

Top 5 sectors

Scheme analysis

Large-cap

Growth blend value

Returns < 1 yr: Absolute, >1yr: CAGR

11.7

16.2

11.8

15.6

9.5

16.914.7

11.012.8

17.6

24.720.9

6.9

9.4

7.2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

6 Months 1 Year 3 Years 5 Years Since Inception

HDFC Balanced Fund Balanced funds Category AverageCrisil Balanced Fund Index

15.8

11.1

11.0

6.8

5.7

0.0 5.0 10.0 15.0 20.0

Banks

Pharmaceuticals & Biotechnology

Softw are and Consultancy Services

Industrial Products

Auto & Auto Ancillaries

Mutual Funds Mutual Gains

4Sharekhan May 12, 2014

Disclaimer

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of SHAREKHAN.”

We have identified the best equity-oriented schemes

available in the market today based on the following five

parameters: the past performance as indicated by the one-

year, two-year and three-year returns, the Sharpe ratio

and the Information ratio.

The Sharpe ratio indicates risk-adjusted returns, ie the

returns earned in excess of the risk-free rate for each

unit of the risk taken. The Sharpe ratio is also indicative

of the consistency of the returns as it takes into account

the volatility in the returns as measured by the standard

deviation.

The Information ratio is one of the most important tools

in active fund management. It is the ratio of active return

(the return over the index return) to active risk annualised.

A higher Information ratio indicates a better fund manager.

We have selected the schemes based upon their ranking

using the above five parameters and then calculated the

maximum value of each of the five parameters. Thereafter,

we have calculated the percentage under-performance

or over-performance of each scheme (relative

Fund ranking procedure

Sharekhan mutual fund ranking scale

Stars Description

����� For top 10 percentile of the eligible schemes

���� Next 22.5 percentile of the eligible schemes

��� Next 35 percentile of the eligible schemes

�� Next 22.5 percentile of the eligible schemes

� Bottom 10 percentile of the eligible schemes

performance) based on each of the five parameters vis-a-

vis the maximum value among them.

For our final selection of schemes, we have generated a

total score for each scheme giving 60% weightage each to

the relative performance as indicated by the one-year,

two-year and three-year returns; 20% weightage to the

relative performance as indicated by the Sharpe ratio;

and the remaining 20% to the relative performance as

indicated by the Information ratio of the scheme.

Disclaimer: Sharekhan provides non-advisory / order execution services for Mutual Funds. Nothing in this report constitutes investment

advice or tax advice in any form and these products may or may not be suitable for you. Investors should make independent judgment

taking into account specific investment objectives, financial situations and needs before taking any investment decision. Mutual fund

investments are subject to market risk. Please read the offer document carefully before investing. Past performance may or may not be

sustained in the future.