DAIWA Mutual Funds

Section 2 Group 1
Aditya Ponugonti Aishwarya Pratap Singh Anirudh Verma Debdyuti Datta Gupta Satyaki Das (FT12 201) (FT12 202) (FT12 203) (FT12 208) (FT12 252)

 Liquid Funds - Daiwa Liquid Fund Equity Funds - Daiwa Industry Leaders Fund Debt Funds - Daiwa Treasury Advantage Fund - Daiwa Fixed Maturity Plan 3M Series 1 - Daiwa Fixed Maturity Plan 3M Series 2 Gilt Fund - Daiwa Government Securities Fund Short Term Plan

Section2, Group1 - Daiwa Mutual Funds

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Existing Products

BSE-100 Daiwa Industry Leaders fund

1 mth -0.6 -0.9

3 mth -9.1 -6.7

6 mth -8.8 -6.1

1 yr -15.1 -13.2

2 yr 3.4 4.4

Returns are closely matching the benchmark index funds allocation Underlying instrument similar to the fund in question Only difference invests in industry leaders

Section2, Group1 - Daiwa Mutual Funds

Benchmark BSE 100

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DAIWA Industry Leaders Fund

 Equity Diversified among various sectors - Banking and Financial Services 19.97% - IT 10.86%; Oil and Gas 9.69% ; Engineering and Capital Goods 9.64% - Automative 5.47%; Tobacco 5.2%; Metal and Mining 4.95% - Pharma 4.8% F&B 4.62% Telecom 3.5% Cement 3.19% - Media & Ent 2.52%; Chemicals2.25%; Mfg 1.76%; Conglomerates 1.4%; Consumer Non durables 0.95%

Section2, Group1 - Daiwa Mutual Funds

Asset Allocation Details - Equity 93.55%; - Debt 0.02%; - Money Market 7.22%; - Receivable/Payables -0.79%

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DAIWA Industry Leaders Fund

 Type of scheme : Open Ended Objective : Long Term capital appreciation by investing in diversified portfolio of equities Options : Growth and Dividend (Dividend Payout and Dividend Reinvestment) Default option : Growth Default sub-option : Dividend Reinvestment Exit Load, if funds redeemed/switched within 1 yr 1% Benchmark index : BSE-200 index Actively managed fund

Section2, Group1 - Daiwa Mutual Funds

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DAIWA Equity Fund

Instrument

Minimum Maximum Equity and equity related securities Debt and money market instruments 65 0 100 35 High Low to Medium

% allocation between assets depends on valuation of securities market (SENSEX) relative to other asset classes. For valuation, make use of the one-year forward Price Earnings (P/E) multiple of the SENSEX, the expected one-year forward earnings growth rate for the SENSEX constituents and the SENSEX P/E multiple premium to other emerging markets, as measured by the MSCI Emerging Markets Index P/E multiple, to adjust the equity proportion in the Scheme.

Section2, Group1 - Daiwa Mutual Funds

Asset Allocated (% of net assets)

Risk Profile

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DAIWA Equity Fund

S No. 1 2 3 4 5 6 7 8

Mutual Fund /Absolute Returns SBI Magnum Emerging Business (G) SBI Magnum Equity Fund(G) UTI Wealth Builder Fund - Series II - Retail Plan (G) UTI Opportunities Fund (G) UTI Equity Fund (G) AIG India Equity Fund - Regular Plan (G)

1 week -1.1 -0.3 0.5 0.9 0.4 -0.3 0.2 0.4

1 mth -0.4 0.2 2.5 1.6 0.3 2.3 -0.1 0.1

3mth 2.4 -4.5 2.7 -0.8 -3.4 0.9 -2.8 -2.3

6mth 16.6 -3.4 7.8 2.4 -1.9 7.4 0.1 -0.3

1yr 2.5 -11.2 3.6 -2.4 -6.6 -2.2 -8.7 -3.2

2yr 55.9 12.6 21.3 19.4 17.9 17.8 21.6 -

3 yr 78.3 44.5 75.8 51.8 52.5 65.6 -

5 yr 71 73 93.5 71.9 97.6 -

Canara Robeco Equity Diversified (G)

Canara Robeco Large Cap+ Fund (G)

Section2, Group1 - Daiwa Mutual Funds

SBI Magnum Emerging Business Fund 89.03% equity; 10.58% cash SBI Magnum Equity Fund (G) 90.02% equity; 7.05% cash UTI Wealth Builder Fund - Series II - Retail Plan (G) 74.96% equity; 16.56% MF UTI Opportunities Fund (G) 91.1% equity; 1.76% debt; 7.15% cash UTI Equity Fund (G) 90.67% equity; 2.57% debt; 6.25% cash AIG India Equity Fund - Regular Plan (G) 94.5% equity; 5.5% cash Canara Robeco Equity Diversified (G) 92.1% equity; 7.8% money mkt Canara Robeco Large Cap+ Fund (G) 92.61% equity; 8.18% money mkt

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Competitors

Index \ BSE absolute returns BSE-200

1 wk -2.3

1 mth -0.7

3 mth -9.4

6 mth -8.8

1 yr -16.1

2 yr 4.2

3 yr 25

5 yr 43.4

Section2, Group1 - Daiwa Mutual Funds

Investments in asset backed securities (securitized debt) will not exceed 10% of the net assets of the Scheme. The Scheme will not invest in foreign securitized debt. Investment in foreign securities will not exceed 20% of net assets Revenue generation from Stock Lending Long term returns of benchmark index are good

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Pros

Section2, Group1 - Daiwa Mutual Funds

Minimum 65% invested in equities Heavily exposed to the equity markets Recent 1 year returns have been ve. Strong competition in its category SBI Magnum/ Canara Robeco etc.

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Cons

 With the current Euro crisis and slowdown in Indias GDP growth, the markets have dropped significantly in the last month. A lot depends on the next bailout package to Greece, until then markets will continue to be volatile. With inflation not coming down, and Indias growth been suppressed by the rising interest rates. Key rates hiked 11 times since Mar-10 - cumulative increment of 325 basis pts. This impacts liquidity and hampers industrial/economic growth. GDP growth for FY ending Mar-12 scaled down from 9 to 8%. With all these factors, short term investment in equity markets is not a good idea.

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Section2, Group1 - Daiwa Mutual Funds

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Forecasts

 After analyzing all the pros and cons carefully, these funds do not seem a good investment for short term period, 1-3 years. From a long term >3 years perspective, these can be looked into. At the same time individual must be willing to take high risk. Potential investors can also look at other similar funds available in market, where we can judge their past performance of both the portfolio manager and the benchmark returns. We suggest that only high risk individuals with long term growth ( > 3-5 years) should look to invest in such high equity funds. There too investors should go in for existing funds evaulating them on basis of their past performance.

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Section2, Group1 - Daiwa Mutual Funds

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Suggestions

Section2, Group1 - Daiwa Mutual Funds

THANK YOU
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