Taurus Ultra Short Term Bond Fund Outlook & Strategy Dec 2015

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2 Taurus Ultra Short Term Bond Fund Outlook & Strategy Dec

3 Taurus Ultra Short Term Bond Fund 3

4 Product Labeling Name Of Scheme Taurus Ultra Short Term Bond Fund An open end debt scheme. This Product is suitable for investors who are seeking* Short term capital Riskometer appreciation and current income with high liquidity & low volatility. Investment in Debt/Money Market Instruments. Investors understand that their principal will be at moderately low risk * Investors should consult their financial advisers if in doubt about whether the product is suitable for them 4

5 Key Events - Indian Fixed Income Markets RBI kept its key lending rates unchanged on Dec 1. The Reserve Bank will use the space for further accommodation, when available, while keeping the economy anchored to the projected disinflation path that should take inflation down to 5% by March 2017, Rajan said in his statement. India s current account deficit (CAD) narrowed to $8.2 billion (1.6 % of GDP) in the September 2015 quarter from $10.9 billion (2.2% of GDP ) in the year-ago quarter. For the first half of , BoP remained in the positive territory as there was an accretion of $10.6 billion to foreign exchange reserves compared with $18.1 billion in the year-ago period. November CPI came in higher at 5.41% versus 5% month-on-month driven mainly by rise in food inflation. The food inflation came in 6.07% versus 5.25% (M-o-M). WPI came in at -1.99% in November, the highest level since January, compared with -3.81% in the preceding month, mainly on account of higher prices of pulses and onion. Liquidity deficit which started at ~Rs. 400bn rose to ~Rs. 1.6tn by the mid of December primarily on the back of advance tax outflows and subsequent increase in government cash balance. Spread between the Central bank s policy rate and overnight rate remained elevated European Central Bank on Dec 3 cut interest rates by 10 basis points to minus 0.3% and extended its massive bond-buying program (Till March 2017). Inflation across the economic bloc is running at about 0.1% annually. The ECB targets a rate of about 2%. 5

6 Rate and Liquidity Tracker Particulars Dec 15 Nov 15 NSE MIBOR (Avg) FIMMDA 3M CP FIMMDA 12M CP Y Benchmark Gsec Year AAA Bond

7 Indian Fixed Income Markets OUTLOOK: Heavy cash balance of the central government with the Reserve Bank of India has kept the shorter end of the money market curve tight. Liquidity is expected to ease as the system realizes month end spending. Money market rates are expected to remain firm following tight liquidity. Month end spending should not ease money market rates anything more than marginal given the state and central government has lined up its aggressive borrowing program in Jan. Bonds are expected to trade narrow with a positive bias until budget tracking retail prices and RBI s action w.r.t. OMO. 7

8 Interest Rate Movement No change in Monetary Policy Dec-15 : Repo rate is at 6.75%, Reverse Repo at 5.75% and Cash Reserve Ratio (CRR) at 4.00% India Interest Rate Chart Apr-05 Jun-06 Oct-06 Mar-07 Apr-07 May-08 Jul-08 Aug-08 Oct-08 Dec-08 Apr-09 Mar-10 Jul-10 Jan-11 Jun-11 Oct-11 Apr-12 Feb-13 Jun-13 Sept'13 Repo Reverese Repo CRR Dec'13 Mar'14 June'14 Sept'14 Dec'14 Mar'15 June'15 Sept'15 Dec'15 8 Source: Bloomberg

9 Why Taurus Ultra Short Term Bond Fund? AAAmfs rated by CRISIL. Investment strategy made keeping in mind the interest rate scenario and prevailing liquidity condition. Emphasis on superior credit rating & credit quality of the portfolio. The fund would endeavour to offer consistent return. Superior alternative to Fixed deposits of banks as it provides better liquidity and potential for higher post-tax returns. Suitable for investors with investment horizon of 30 days and more. 9

10 Scheme Details (as on 31 st Dec 2015) Particulars Type of Scheme Investment Objective Asset Allocation Pattern Benchmark Index Remarks An open end debt scheme To generate returns with higher liquidity and low volatility from a portfolio of money market and debt instruments. However, there is no assurance that the investment objective of the scheme will be realised. Money market & debt instruments which have residual maturity and re-pricing tenor not exceeding one year : 50%-100% Debt Instruments which have residual and re-pricing tenor exceeding one year : 0%-50% Crisil Liquid Fund Index Date of Inception December 1, 2008 Particulars Remarks Average Maturity (31/12/2015) 0.15 years NAV (31/12/2015)-Regular Growth Plan (Super Inst) NAV (31/12/2015)-Direct Plan (Super Inst) Growth AAUM (Dec'15) Rs Crs AUMas on (31st Dec'15) Rs Crs Modified Duration 0.15 Portfolio Yield 7.79 Expense Ratio (Dec'15) Direct :-0.32% Regular :-0.60% Rating Category Plan Options Dividend Option Minimum Application Amount Rated AAAmfs by CRISIL Schemes with this rating are considered to have the highest degree of safety, regarding timely receipt of payments from the investments that they have made. Liquid plus category Super Institutional Plan-Regular(Existing) & Super Institutional Plan-Direct Growth and Dividend Daily & Weekly Reinvestment and Sweep Growth and Weekly Dividend Reinvestment option : Rs 5000/- and in multiple of Re 1 thereof,daily Dividend Reinvestment option : Rs /- and in multiple of Re 1 thereof 10 Retail and Institutional plans have been discontinued for fresh subscription / additional purchase / switch-in with effect from October 01, 2012

11 Portfolio as on 31 st Dec 2015 SI NO Company Name Industry / Rating % of Scrip (AUM) CERTIFICATE OF DEPOSIT 1 Canara Bank CRISIL A Axis Bank Ltd. [ICRA]A IndusInd Bank Ltd. CRISIL A Oriental Bank of Commerce CRISIL A RBL Bank Ltd. [ICRA]A TOTAL - CERTIFICATE OF DEPOSIT COMMERCIAL PAPER 6 Edelweiss Commodities Services Ltd. CRISIL A Reliance Infrastructure Ltd. IND A Karvy Financial Services Ltd. [ICRA]A TOTAL - COMMERCIAL PAPER 25.6 CBLO 9 The Clearing Corporation of India Ltd. 5.1 TOTAL - CBLO 5.1 TREASURY BILL DAY T-BILL Sovereign DAY T-BILL Sovereign 0.13 TOTAL - TREASURY BILL CASH & CASH RECEIVABLES 0.00 Total Cash Receivable, 0 Sovereign, 0.86 CBLO, 5.1 A1+, A1+ Sovereign Cash Receivable CBLO Rating Chart 11

12 Fund Managers Comments Bank s bid to raise long tenor via money market instrument compelled the curve to steepen whereby the spread between the two extremes widened.. One year CD closed the month at 7.70%, up 5bps from last month s closing. Money market rates are expected to remain firm following tight liquidity. Month end spending should not ease money market rates anything more than marginal given the state and central government has lined up its aggressive borrowing program in January. We have been increasing/decreasing scheme maturity and will continue to do the same as and when we see the direction of the rates turn favorable for capital gains maintaining a judicious balance between bank and non-bank assets. 12

13 Performance of the Fund (as on 31 st Dec 15 Regular Plan- Growth) Name of the Scheme and Benchmarks 31/12/ /12/ /12/ /12/2013 Since Inception 31/12/ /12/2012 Returns Value of Rs Taurus Ultra Short Term Bond Fund-Superinst 9.20% 9.57% 10.00% 8.60% 17,942 Crisil Liquid Fund Index 8.23% 9.21% 9.03% 7.61% 16,814 CRISIL 1 Year T- Bill 8.22% 8.56% 5.86% 6.37% 15,486 Inception Date 1st Dec'08 Fund Managers Fund Manager- Archit shah 13 past performance is no guarantee of future result and may not be sustained in future Mutual Fund Investments are subject to market risks, read all scheme related documents carefully

14 Performance of other Funds Managed by the Fund Managers (as on 31 st Dec 15 Regular Plan-Growth) Name of the Scheme and Benchmarks 31/12/ /12/ /12/ /12/2013 Since Inception 31/12/ /12/2012 Returns Value of Rs Inception Date Taurus Liquid Fund - Superinst 8.50% 9.23% 9.42% 6.74% 16,066 26th Sept'08 Crisil Liquid Fund Index 8.23% 9.21% 9.03% 7.68% 17,121 CRISIL 1 Year T- Bill 8.22% 8.56% 5.86% 6.58% 15,887 Taurus Short Term Income Fund 8.91% 9.80% 10.10% 6.90% 26,109 18th Aug'01 Crisil Short Term Bond Fund Index 8.66% 10.47% 8.27% 6.82% 25,827 CRISIL 1 Year T- Bill 8.22% 8.56% 5.86% 6.01% 23,137 Taurus Dynamic Income Fund 7.54% 8.72% 3.33% 7.90% 14,497 14th Feb'11 Crisil Composite Bond Fund Index 8.63% 14.31% 3.79% 8.73% 15,045 CRISIL 10 Year Gilt Index 7.39% 14.14% -0.68% 6.77% 13,772 Taurus MIP Advantage 1.41% 14.51% 1.14% 7.09% 14,487 75%-Crisil MIP Blended Fund Index & 25% Price Gold 3.34% 13.08% 0.06% 7.82% 15,383 CRISIL 10 Year Gilt Index 7.39% 14.14% -0.68% 6.54% 14,087 6th Aug 10 Fund Managers Fund Manager Archit shah Fund Manger- Archit Shah (Debt).Sadana nd shetty (Equity)& (Gold ETF). 14 past performance is no guarantee of future result and may not be sustained in future Mutual Fund Investments are subject to market risks, read all scheme related documents carefully

15 About Taurus Mutual Fund 15 15

16 Our Schemes Our Schemes EQUITY DEBT LIQUID Taurus Starshare - Diversified Multi-Cap Fund Taurus Infrastructure Fund - Thematic Fund Taurus Ethical Fund - India's 1st actively managed diversified Equity Fund based on the principles of Shariah Taurus Banking & Financial Services Fund - An Open-Ended Sectoral Equity Scheme Taurus Bonanza Fund - Diversified Large-Cap Focus Fund Taurus Discovery Fund - Mid & Small-Cap Focus Fund Taurus Nifty Index Fund - Investing in securities of the Nifty 50 in the same proportion Taurus Tax Shield - Equity Linked Tax Saving 16 Taurus Short Term Income Fund - Bond Fund Taurus Ultra Short Term Bond Fund - Debt Fund Taurus Dynamic Income Fund - An open ended income scheme Taurus MIP Advantage - Monthly Income Plan with exposure to Debt, Equity & Gold ETF Taurus Liquid Fund - Liquid Fund 16

17 Board of Directors of Taurus AMC Mr. J. P. Kundra - Former MD, State Bank of India Mr. M.G. Gupta - Former Additional Controller General of Accounts, Govt. of India Maharaja Jai Singh Royal family of Jaipur / Hotelier Mr. Lalit Bhasin - Promoter Director Mr. Vijay Sood - Former Chief Executive India, Credit Agricole Indosuez Mr. R K Gupta- MD, Former MD-PNB Mutual Fund 17

18 Senior Management Personnel Mr. Waqar Naqvi : Chief Executive (AICWA, MBA, 24 years exp). Mr. Ramesh Kabra : Vice President Product Development,Marketing & Compliance. (B.Sc., M.A.(Eco), 35 years exp). Mr. Sadanand Shetty: Sr. Fund Manager-Equity (M.Com, PGDFA, 21 years exp). Mr. Archit Shah : 18 Fund Manager- Fixed Income (CFA,PGDBM in Finance, 6.5 year exp). Mr. Amarjeet Singh : Chief Financial Officer (B.Com,Chartered Accountant, 13 Years exp). Mr. Jude Abraham : VP & National Head Institutional Sales (B.A., PGDBM, 15 years exp). Mr. Kamal Mehta : Head Retail Sales (IFAs & NDs) (MBA in Marketing, 15 years exp).

19 Fund Manager s Profile Mr. Archit Shah Fund Manager (CFA,PGDBM in Finance, 6.5 year exp). Prior Joining Taurus Asset Management Co. Ltd on 19/12/2011 Archit had an experience of 2.5 years and was associated with the organization like Crisil and I Peritus Solution & Services Pvt Ltd. as Fixed Income Analyst. Manages Taurus Ultra Short Term Bond Fund, Taurus Liquid Fund, Taurus Dynamic Income Fund, Taurus Short Term Income Fund & Taurus MIP Advantage Fund (Debt Portion) 19

20 Statutory Details Scheme Nature : Taurus Ultra Short Term Bond Fund is an open-end debt scheme. Scheme Objective is to generate returns with higher liquidity and low volatility from a portfolio of money market and debt instruments. Allocation: Money market & Debt instruments which have residual maturity & pricing tenor not exceeding 1 yr : 50%-100% ; Debt Instruments which have residual maturity & pricing tenor exceeding 1 yr: 0% -50% Statutory Details: Taurus Mutual Fund has been constituted as a Trust under the Indian Trust Act, 1882 Sponsor: HB Portfolio Ltd. Trustee: Taurus Investment Trust Company Ltd., (CIN: U65990MH1993PLC072984) Investment Manager: Taurus Asset Management Company Ltd. (CIN: U67190MH1993PLC073154) 20

21 CRISIL Disclaimer A CRISIL credit quality rating on a bond reflects CRISIL s current opinion on the degree of protection offered by the rated instrument from losses related to credit defaults.it does not constitute an audit by CRISIL of the fund house, the scheme, or companies in the scheme s portfolio. CRISIL rating are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL is not a recommendation to buy, sell or hold the rated scheme: it does not comment on the marked price or suitability for a particular investor. All CRISIL ratings are under surveillance. CRISIL reserves the right to suspend, withdraw or revise its rating at any time, on the basis of any new information or unavailability of information or any other circumstances, which CRISIL believes may have an impact on the rating. 21

22 Risk Factors & Disclaimer Any information contained in this presentation does not constitute and shall be deemed not to constitute an advice, an offer to sell / purchase or as an invitation or solicitation to do so for any security of any entity and further, Taurus AMC / sponsors / employees / directors shall not be liable for any loss, damage, liability whatsoever for any direct or indirect loss arising from the use or access of any information that may be displayed in this presentation from time to time. Recipients of the information contained herein should exercise due care and caution and read the offer document (including if necessary, obtaining the advice of tax / legal / accounting / financial / other professionals) prior to taking of any decision, acting or omitting to act, on the basis of the information contained herein. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. 22

23 Thank You 23 23