ELSS. Tax savings plus equity investment. MF Update. ICICI Securities Ltd Retail Mutual Fund Research. January 13, 2015

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1 MF Update January 13, 215 Tax savings plus equity investment ELSS Equity linked savings schemes (ELSS) are equity diversified schemes that are eligible for tax benefits under Section 8C of the Income Tax Act. In the Union Budget 214, the investment limit for individuals in financial instruments was enhanced to 1.5 lakh from the earlier 1 lakh. We believe with the enhanced limit, the additional 5 can be invested in ELSS as it is the only tax saving instrument that invests purely in equities that have the potential to earn higher return. The lock-in period of three years is also the lowest among other investment options available under section 8C of the Income Tax Act. Three year rolling annualised returns since inception Fund/Index Median Return () ICICI Pru Tax Plan-Reg(G) 18.7 Axis LT Equity Fund(G) 13.7 Franklin India Taxshield(G) 19.9 Source: Ace MF Note: Three year rolling returns calculated on a daily basis since inception of individual funds Advantages of ELSS Investment in ELSS is eligible for tax benefits under section 8C. Maximum tax saved can be up to 4,25 ELSS invest in equity stocks, which leads to capital appreciation over the long term Capital gains at the end of the lock-in period are completely tax free The lock-in period of three years curtails panic selling in case of interim volatility in the equity markets. Hence, investments reap the benefit of long term investing in equities Highly professional and experienced fund managers handle the equity exposure of one s overall portfolio allocation Systematic mode of investment (regular monthly investment) available Equity market outlook Recommended funds Axis Long Term Equity, Franklin India Tax shield, ICICI Prudential Tax Plan (Refer attached fact sheet for fund performance) Formation of a reform oriented single party majority government at the Centre turned around broader growth perceptions. The initial measures taken by the government seem to have created the perception that doing business in India is now easier and the investment environment has improved. From tax policy, environment approvals, labour laws to land acquisition issues, the new government is slowly putting in place the building blocks to ensure India regains the confidence of investors. With the change in perception, foreign flows into equity markets gained traction pulling domestic equity market to new highs. Foreign institutional investors (FIIs) were buyers of equities for the seventh straight month. Macroeconomic variables have also started improving with Q2 GDP growth at to 5.3 from below 5 earlier. The Q2FY15 earnings growth of companies has also seen some traction. The RBI in its Fifth monetary policy has said if the current inflation momentum and changes in inflationary expectations continue and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle indicating that interest rates are bound to be lower providing a further fillip to growth alongside moderating inflation and, consequently, improved margins. We believe the positive momentum will further gain traction as earnings growth starts showing a further improvement. For a three year period, equities are expected to have the potential to rally, especially with turnaround in the economy. ICICI Securities Ltd Retail

2 ICICI Prudential Tax Plan Fund Objective The Scheme seeks to generate long-term capital appreciation through investments made primarily in equity and equity related securities of companies. Accordingly, the NAV of the Scheme is linked to performance of such companies. However, there can be no assurance that the investment objective of the Scheme will be realized. Key Information NAV as on January 1, 215 ( ) Inception Date August 19, 1999 Fund Manager Chintan Haria Minimum Investment ( ) Lumpsum 5 SIP 5 Expense Ratio () 2.13 Exit Load Nil Last declared Quarterly AAUM( cr) 2412 Return Performance vs Month 1 Year 3 Year 5 Year Fund Calendar Year-wise Performance Last Three Years Performance NAV as on Dec 31 ( ) Return () Fund () Net Assets ( Cr) CNX Nifty Top 1 Holdings HDFC Bank Ltd. Reliance Industries Ltd. ICICI Bank Ltd. Canara Bank (15-Jan-15) Infosys Ltd. Housing Development Finance Corpor ING Vysya Bank Ltd. Wipro Ltd. Cipla Ltd. The Great Eastern Shipping Company Certificate of Deposit SIP Performance (Value if invested 5 per month (in')) Yr 3Yrs 5Yrs 1Yrs Total Investment Fund Value Value Top 1 Sectors Bank - Private IT - Software Refineries Power Generation/Distribution Pharmaceuticals & Drugs Finance - Housing Engineering - Construction Shipping Automobiles-Trucks/Lcv Oil Exploration Whats In 9.3 Balrampur Chini Mills Ltd Whats out Risk Parameters Portfolio Attributes Standard Deviation () Total Stocks 51. Beta.87 Top 1 Holdings () 46.3 Sharpe ratio.19 Fund P/E Ratio 2. R Squared.88 P/E Ratio -- Alpha () 3.77 Fund P/BV Ratio 3.3 Market Capitalisation () Asset Allocation Large 78.3 Equity 95. Mid 15. Debt Small 1.7 Cash.9 Data as on January 1,215 ;Portfolio details as on Dec-214

3 Performance of all the schemes managed by the fund manager ICICI Pru Child Care Plan-Gift Plan Crisil Balanced Fund Index ICICI Pru Tax Plan-Reg(G) Dividend History Date Dividend () Nov Feb Feb Feb Feb Dec Value of investement of 1 since inception Date Fund CNX Nifty Fund name * As on December 31, 214 Product Label This product is suitable for investors seeking*: Long term capital appreciation An Equity Linked Savings Scheme that aims to generate capital long term capital appreciation by primarily investing in equity and related securities High risk *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. (Blue) Investors understand that their principal will be at low risk (Yellow) Investors understand that their principal will be at meduim risk (Brown) Investors understand that their principal will be at high risk Data as on January 1,215 ;Portfolio details as on Dec-214

4 Axis Long Term Equity Fund Fund Objective The investment objective of the scheme is to generate income and long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities. Key Information NAV as on January 1, 215 ( ) 28.8 Inception Date December 29, 29 Fund Manager Jinesh Gopani Minimum Investment ( ) Lumpsum 5 SIP -- Expense Ratio () 2.33 Exit Load Nil S&P BSE 2 Last declared Quarterly AAUM( cr) 3595 Return Performance vs Month 1 Year 3 Year 5 Year Fund Calendar Year-wise Performance Last Three Years Performance NAV as on Dec 31 ( ) Return () Fund () Net Assets ( Cr) CNX Nifty Top 1 Holdings HDFC Bank Ltd. Kotak Mahindra Bank Ltd SIP Performance (Value if invested 5 per month (in')) 8 Larsen & Toubro Ltd. 5. Tata Consultancy Services Ltd Housing Development Finance Corpor TTK Prestige Ltd Tech Mahindra Ltd. 3.8 Sun Pharmaceutical Industries Ltd. 3.7 ICICI Bank Ltd. Pidilite Industries Ltd Yr 3Yrs 5Yrs 1Yrs Total Investment Fund Value Value Top 1 Sectors Bank - Private IT - Software Pharmaceuticals & Drugs Finance - Housing Auto Ancillary Consumer Durables - Domestic Applia Engineering - Construction Chemicals Finance - NBFC Diesel Engines Whats In Whats out 3.1 Lupin Ltd. 3. Risk Parameters Portfolio Attributes Standard Deviation () 12.1 Total Stocks 44. Beta.8 Top 1 Holdings () 48. Sharpe ratio.26 Fund P/E Ratio 38.8 R Squared.82 P/E Ratio -- Alpha () 8.11 Fund P/BV Ratio 8.3 Market Capitalisation () Asset Allocation Large 77.8 Equity 97.2 Mid 17.2 Debt. Small 2.3 Cash 2.8 Data as on January 1,215 ;Portfolio details as on Dec-214

5 Performance of all the schemes managed by the fund manager Dividend History Date Dividend () Jan Axis LT Equity Fund(G) Aug S&P BSE Sep Axis Hybrid Fund-7-Reg(G) Crisil MIP Blended Index Value of investement of 1 since inception* Date Fund CNX Nifty * As on December 31, 214 Fund Objective This product is suitable for investors seeking*: Capital appreciation & generating income over long term Investment in a diversified portfolio predominantly consisting of equity and equity related instruments High risk *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. (Blue) Investors understand that their principal will be at low risk (Yellow) Investors understand that their principal will be at meduim risk (Brown) Investors understand that their principal will be at high risk Data as on January 1,215 ;Portfolio details as on Dec-214

6 Franklin India Taxshield Fund Objective To provide medium to long term growth of capital along with income tax rebate. Key Information NAV as on January 1, 215 ( ) 43. Inception Date April 1, 1999 Fund Manager Anand Radhakrishnan Minimum Investment ( ) Lumpsum 5 SIP 5 Expense Ratio () 2.36 Exit Load Nil Last declared Quarterly AAUM( cr) 1589 Return Performance vs Month 1 Year 3 Year 5 Year Fund Calendar Year-wise Performance Last Three Years Performance NAV as on Dec 31 ( ) Return () Fund () Net Assets ( Cr) CNX Nifty Top 1 Holdings ICICI Bank Ltd. HDFC Bank Ltd SIP Performance (Value if invested 5 per month (in')) 2 Infosys Ltd. 5.1 Call Money Cash & Cash Equivalents IndusInd Bank Ltd. Yes Bank Ltd Bharti Airtel Ltd. 3.9 Eicher Motors Ltd. 3.3 Torrent Pharmaceuticals Ltd. Kotak Mahindra Bank Ltd Yr 3Yrs 5Yrs 1Yrs Total Investment Fund Value Value Top 1 Sectors Bank - Private Pharmaceuticals & Drugs IT - Software Auto Ancillary Automobiles-Trucks/Lcv Telecommunication - Service Provider Diesel Engines Refineries Chemicals Diversified Whats In 8. Finolex Industries Ltd Havells India Ltd Bank Of Baroda Whats out 3. Zydus Wellness Ltd Risk Parameters Portfolio Attributes Standard Deviation () Total Stocks 6. Beta.82 Top 1 Holdings () 41.9 Sharpe ratio.23 Fund P/E Ratio 29.5 R Squared.9 P/E Ratio -- Alpha () 2.12 Fund P/BV Ratio 5.7 Market Capitalisation () Asset Allocation Large 82.9 Equity 95.6 Mid 12.3 Debt. Small.4 Cash 4.4 Data as on January 1,215 ;Portfolio details as on Dec-214

7 Performance of all the schemes managed by the fund manager Franklin Build India Fund(G) Franklin India Taxshield(G) Franklin India Prima Plus Fund(G) Franklin India Balanced Fund(G) Crisil Balanced Fund Index Franklin India Life Stage FOFs-2(G) Franklin India Bluechip Fund(G) S&P BSE SENSEX Franklin India Pension Plan(G) Franklin India Index Fund-NSE Nifty(G) CNX Nifty Index Franklin India Life Stage FOFs-3(G) Franklin India Dynamic PE Ratio FOFs(G Crisil Balanced Fund Index Franklin India Life Stage FOFs-4(G) Franklin India MIP(G) Crisil MIP Blended Index Franklin India Life Stage FOFs-5(G) Crisil Composite Bond Fund Index Franklin Infotech Fund(G) S&P BSE IT Franklin India Life Stage FOFs-5s +FR Crisil Liquid Fund Index CNX Nifty * As on December 31, Dividend History Date Dividend () Jan Jan Feb Jan Jan Dec Value of investement of 1 since inception Date Fund NA Product Label This product is suitable for investors seeking*: Long term capital appreciation An ELSS fund offering tax benefits under Section 8C of the Income Tax Act High risk *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. (Blue) Investors understand that their principal will be at low risk (Yellow) Investors understand that their principal will be at meduim risk (Brown) Investors understand that their principal will be at high risk Data as on January 1,215 ;Portfolio details as on Dec-214

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