31 July, 2012

BNP Paribas Mid Cap Fund

(An open-ended equity scheme)

YOUNG SPARK TODAY. GRANDMASTER TOMORROW.

PRODUCT DETAILS
Fund Type Fund Manager Inception Investment Style Number of Stocks Benchmark Index : : : : : : Mid & Small Cap Equity Diversified Shreyash Devalkar (w.e.f. October 3, 2011) May 02, 2006 Growth 49 (as on July 31, 2012) CNX MIDCAP Index

OUR OUTLOOK
The well known and enduring motto of the Olympic Games is Citius, Altius, Fortius. Our record at the Games has been less than impressive, and unfortunately the same may be said about our recent economic performance as well. Clearly there are several things that we need faster, higher and stronger if we are to improve our record. Citius - Faster action Above all else we need faster action on the policy & decision-making front. Urgent executive action is needed to restart the investment cycle and bring down stubbornly high inflation. In the latest cabinet reshuffle the Prime Minister has given up the finance portfolio in favour of his cabinet colleague who was earlier Minister for Home. The new finance minister brings along strong reformist credentials and we hope he lives upto them. Altius - Higher growth In its latest monetary policy review the RBI reduced Indias growth target for FY13 to 6.5% from an earlier 7.6%. In fact on current evidence, even achieving 6.5% is not going to be easy. But it is absolutely imperative to revive growth. At 5.3% (in Q4FY12) Indias growth is much lower than trend and certainly not enough to create adequate jobs for a burgeoning working age population. Corporate earnings seem to be mirroring the broader economic trends. Even though there is no major negative surprise, overall earnings growth in Q1FY13 remains subdued at about 8-10% for Large Caps and low single digits for Small Caps. We expect this trend to continue till borrowing rates remain high and systemic demand remains subdued. Fortius - Stronger flows To a great extent the picture for flows depends on the global risk appetite. Despite a host of worries foreign flows into India have been surprisingly robust recently after a lull of a few months. July saw equity inflows of about USD 1.8 billion bringing the YTD figure to about USD 11.5 billion. This is noteworthy since there were no major IPOs during the month to attract global capital. It could imply that in a moderately risk-on global environment capital will flow to Indian markets given the attractive valuations (doubly so in foreign currency) from a long-term perspective. We remain optimistic on this front and believe investors coming now are likely to earn strong returns in the longrun. CURRENT PORTFOLIO POSITION (as on July 31, 2012) Currently, the scheme has a well diversified portfolio of 48 stocks spread across 24 sectors like Consumer Non Durables, Software, Banks, Pharmaceuticals, Auto Ancillaries, Engineering Services, Cement and Media and Entertainment. Close to 37% of the portfolio is invested in top 3 sectors. BNP Paribas Mid Cap Fund is a focused portfolio which gives priority to bottom up stock selection. Currently, around 72% of the portfolio is allocated to Mid-Cap stocks. The Large Cap allocation is around 21% and Small Cap allocation is around 7%. As of July 2012 month end, the scheme held approximately 0.39% in cash/equivalent. We believe that taking tactical calls on cash management could be a good source of alpha generation as there could be opportunities to enter value stocks at a lower level. An increase in portfolio allocation towards growth stocks that we expect may do well in future underlines the strategy to focus on alpha generation through stock specific fundamental research. Going forward focus will remain on the sectors identified above, at the same time focused bottom up stock selection may also contribute towards the performance of this scheme.

INVESTMENT PHILOSOPHY
BNP Paribas Mid Cap Fund is a Mid Cap equity scheme. This Mid Cap equity fund gives investors an opportunity to participate in the growth of the emerging companies and sectors of the economy. Although the funds portfolio construction is based on a systematic approach towards investments where the initial sector allocation is determined based on overall macro economic factors, bottom up stock selection carries a high relevance for this fund. We identify stocks which are undervalued and which have not been discovered by the market participants yet but at the same time provide a good growth potential. These are companies which are expected to see a positive turnaround in their business and companies which have the dynamic style of management and entrepreneurial flair to achieve and sustain high growth, which further is reflected in good stock performance. Investments in equities tend to give better returns over a long term horizon and investors should not take decisions based on short term fluctuations in prices.

WHO SHOULD INVEST?

A Mid Cap fund is for aggressive investors, who are confident of the long term secular growth in India and have an investment horizon of more than 18 months.

COMMENTS & OUTLOOK ON MARKETS

Benchmark Nifty fell by 0.95% in July 2012 on the back of news flow from the Eurozone and glaring concerns around the fiscal deficit, interest rates and inflation persisted. The monsoon has also been below the Longer Term Average which may aggrandize the food inflation situation. The Large Cap index outperformed the Mid Cap and Small Cap indices in July 2012. While the Large Cap index was down 1.11%, the Mid Cap index was down 2.30% and Small Cap index was down 1.46%. The sectoral indices were a mixed bag during the month, Health Care, Consumer Durables and FMCG Indices gaining the most with 3.74%, 1.42% and 1.07%, respectively, while all other sector indices ranged between 1.02% and -7.29%. FIIs once again stepped up their investments in Indian equities following the large block deals at the end of the month - they were net buyers to the tune of $1.8bn in July 2012. This took the FII YTD net inflows to $11bn. DIIs on the other hand, turned net sellers - pruning their investments by $958mn in July 2012. YTD, DII are net sellers to the tune of $4.7bn. Within the DIIs, Mutual Funds and Insurance companies both contributed to the outflow of $337mn and $621mn, respectively. Source: BSE, NSE, SEBI

31 July, 2012

Vis-a-vis last months portfolio, the scheme added Zee Entertainment stock to the portfolio whereas it exited from Exide Industries and Jubilant Foodwork.

TOP TEN HOLDINGS

Equity Holdings VA Tech Wabag Ltd Balkrishna Industries Ltd

(as on July 31, 2012) % of Net Assets 4.04% 3.86% 3.29% 3.26% 3.24% 3.19% 3.18% 3.17% 3.00% 2.84%

SECTOR ALLOCATION (as on July 31, 2012)

Banks Pharmaceuticals Consumer Non Durables Cement Auto Ancillaries Media & Entertainment Transportation Engineering Services Finance Fertilisers Software Construction Project Industrial Capital Goods Textile Products Textiles - Cotton Construction Petroleum Products Consumer Durables Gas Chemicals Diversified Consumer Services Power Hotels Telecom - Services 11.77% 9.06% 8.99% 6.88% 6.02% 5.45% 5.20% 4.51% 4.47% 3.81% 3.80% 3.26% 3.13% 2.83% 2.32% 2.05% 2.00% 1.94% 1.52% 1.27% 1.25% 1.01% 1.00% 0.97%

Shriram City Union Finance Ltd Sadbhav Engineering Ltd Jet Airways (India) Ltd Madras Cements Ltd IPCA Laboratories Ltd IndusInd Bank Ltd The Federal Bank Ltd Divi's Laboratories Ltd

Scheme(s) Performance Table (For Scheme(s) in existence for more than 3 years as on June 30, 2012)
ABSOLUTE RETURNS (%) Schemes Managed by Mr. Shreyash Devalkar NAV as on 29 June, 2012 34.74 17.694 14.578 30 June, 2011 - 30 June, 2010 30 June, 2011 29 June, 2012 1.76% -6.53% -1.76% -7.51% 2.42% -7.63% -7.51% 10.076 4.35% -7.77% -6.53% 16.0885 8.63% 6.54% 7.10% 7.36% 6.30% 5.98% 6.47% 4.92% 2.96% 6.47% 4.37% -1.96% 6.30% 2.80% 5.03% 1.79% 30 June, 2009 30 June, 2010 20.27% 23.80% 52.86% 22.13% 31.51% 27.22% 22.13% 54.20% 49.82% 23.80% 2.44% 7.66% 3.43% 23-Sep-04 2-May-06 5-Jan-06 15-Sep-05 Date of Inception of the Scheme 23-Sep-04 Since Inception PTP Returns* (in `) 34,740.00 30,581.93 17,694.00 21,041.15 14,578.00 17,537.05 18,122.74 10,074.13 14,164.50 14,641.45 16,088.50 17,716.87 14,583.15

CAGR (%) 17.38% 15.47% 8.76% 11.58% 5.98% 9.05% 9.60% 0.12% 5.81% 6.38% 6.31% 7.64% 4.98%

NP PARIBAS EQUITY FUND S & P CNX Nifty BNP PARIBAS DIVIDEND YIELD FUND BSE Sensitive Index BNP PARIBAS TAX ADVANTAGE PLAN (ELSS) BSE 200 Additional Benchmark - SENSEX BNP PARIBAS MID CAP FUND CNX MIDCAP Index Additional Benchmark - Nifty BNP PARIBAS MONTHLY INCOME PLAN CRISIL MIP Blended Index CRISIL 10 year Gilt Index

Point to Point (PTP) Returns in INR show the value of 10,000/- invested at the beginning of a 12 month period as at the end of that period

Past Performance may or may not be sustained in future.

Returns mentioned above are for Growth options of the respective schemes. Equity Portion Of Portfolio Managed By Mr. Shreyash Devalkar. Debt Portion Of Portfolio Managed By Mr. Chirag Doshi.

The material contained herein has been obtained from publicly available information, internally developed data and other sources believed to be reliable, but BNPPAMIPL makes no representation that it is accurate or complete. BNPPAMIPL has no obligation to tell the recipient when opinions or information given herein change. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. This information is meant for general reading purpose only and is not meant to serve as a professional guide for the readers. Except for the historical information contained herein, statements in this publication, which contain words or phrases such as 'will', 'would', etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. BNPPAMIPL undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. The words like believe/belief are independent perception of the Portfolio Manager and do not construe as opinion or advise. This information is not intended to be an offer to see or a solicitation for the purchase or sale of any financial product or instrument. The information should not be construed as an investment advice and investors are requested to consult their investment advisor and arrive at an informed investment decision before making any investments. BNPPAMIPL its Directors, officers or its employees shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages arising out of the information contained in this document. BNP PARIBAS ASSET MANAGEMENT INDIA PVT. LTD. Regd. Off.: BNP Paribas House, 1 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 - India BNP Paribas Mid Cap Fund (An open ended equity scheme) : The investment objective of the scheme is to seek to generate long-term capital appreciation by investing primarily in companies with high growthopportunities in the middle and small capitalization segment, defined as 'Future Leaders'. The fund will emphasize on companies that appear to offer opportunities for long-term growth and will be inclined towards companies that are driven by dynamic style of management and entrepreneurial fl air. Load Structure: Entry Load: Nil. Exit Load: 1% if redeemed/ switched out upto 1 year from the date of subscription/ switch in. Nil if redeemed/ switched out after 1 year from the date of subscription/ switch in. Asset Allocation: Equity and Equity related Securities of companies categorized as Future Leaders : 65 - 100%; Equity and Equity related Securities of companies other than Future Leaders : 0 - 35%; Debt & Money Market Instruments (including money at call) : 0 - 35%.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.