Apr’15 – Jun’15

April’ 2015 to June’ 2015: Samedh Dynamic Mutual Fund Portfolio

Target Return Samedh Dynamic Mutual Fund Portfolio for April to June quarter of 2015 (FY 2015-16 Q1), is shown in the pie-chart below. New investment based on advice should be made for the part of investor’s portfolio that is intended to be invested for longer than 3-years. First time investors are recommended to visit Why Samedh? , Asset Allocation Approach , and Value Investing Philosophy pages before making investment based on the advice.

Samedh Financial Investment Portfolio India April to June 2015

The table below shows comparative performance of Advisory’s Dynamic Mutual Fund Portfolio and other Financial Investment Assets, since the start of quarter:

Samedh Dynamic Mutual Fund Portfolio Period Nifty Gold (USD) * USDINR 3-Year FD @ SBI SMFIP Period’s Return
Nifty Gold 3-Year FD SMFIP
Quarter’s Start 1st Apr’ 15 8,491 23,794 8.75% 131.99 N.A. N.A. N.A. N.A.
FY 15-16 Q1 Apr-15 8,181 24,105 8.75% 131.02 -3.7% 1.3% 0.7% -0.7%
May-15 8,434 24,391 8.75% 132.19 3.1% 1.2% 0.7% 0.9%
Jun-15 8,369 23,927 8.75% 130.68 -0.8% -1.9% 0.7% -1.1%
Overall Return during the Quarter (Apr’15 – Jun’15) -1.4% 0.6% 2.2% -1.0%

Portfolio Explanation

Asset Allocation suggested for Samedh Dynamic Mutual Fund Portfolio for April to June quarter of 2015 (FY 2015-16 Q1) is as below. It has been derived using long-term pricing trends of the various asset classes and consequent return expected from them in future.

 

Samedh Asset Allocation April to June 2015 - FY 16 Q1

Asset Allocation Group 1: Growth Assets (GROWTH)

Allocation for quarter in Samedh Dynamic Mutual Fund Portfolio: 44%

44% of Samedh Dynamic Mutual Fund Portfolio value is allocated to Growth Asset Allocation Group during April to June quarter of 2015. This is further sub-allocated into two Asset Classes that are grouped under Growth Assets so that the sum of their sub-allocations adds up to 44%.

Growth Assets – Asset Class 1: Equity (GROWTH-EQUITY)

Allocation for quarter in Samedh Dynamic Mutual Fund Portfolio: 32%

32% of Samedh Dynamic Mutual Fund Portfolio value is allocated to Equity Asset Class during April to June quarter of 2015. This allocated portfolio value is to be invested in Asset Class Categories corresponding to Equity Asset Class.

Sixteen market-capitalization and sector based equity indices in India have sufficiently long data series available for them to analyze market cycles. These have been identified as the Asset Class Categories falling under Equity Asset Class for SDMFP. The various investment parameters corresponding to these Asset Class Categories, for April to June quarter of 2015, are mentioned in the table below. Current index levels can be viewed at NSE Live Indices Watch page for comparison.

Asset Class Category Benchmark Index Sub Limit Index Fair Value (1st Apr) Index Start Level (1st Apr) Future Prospect Premium Investment Phase Portfolio Allocation Buy Threshold for Index (Qtr) Sell Threshold for Index(Qtr) Investment Option(s)
Smallcap Equity CNX Smallcap 5% 2,600 5,623 +116% Sell 0% 1,800 3,400 Reliance Smallcap Fund
Auto Sector Equity CNX Auto 30% 4,500 8,622 +92% Sell 0% 2,700 6,300 UTI Transp. & Log. Fund
PSU Bank Equity CNX PSU Bank 5% 2,130 3,410 +60% Sell 0% 1,500 2,800 Goldman Sachs / Kotak PSU Bank ETF
Banking Sector Equity CNX Bank Nifty 40% 11,700 18,207 +56% Sell 0% 7,000 16,400 GS Bank. ETF / Reliance Bank. Fund
Media Sector Equity CNX Media 2% 1,700 2,189 +29% Sell 0% 1,000 2,400 Reliance Media & Ent. Fund
Largecap Equity CNX NIFTY 35% 6,700 8,491 +26% Wait 0% 4,700 8,700 HDFC Index Fund Nifty / Sensex
Finance Sector Equity CNX Finance 60% 6,100 7,549 +24% Sell 0% 4,900 7,300 Birla SL Bank. & Fin. Svc. Fund
Infrastructure Equity CNX Infrastructure 10% 2,750 3,250 +18% Wait 0% 1,900 3,600 GS Infra. ETF / UTI Infra. Fund
Pharma Sector Equity CNX Pharma 15% 10,900 12,845 +18% Hold 0% 8,700 13,100 SBI Pharma Fund
Midcap Equity CNX Midcap 20% 11,200 13,001 +16% Hold 0% 8,960 13,440 ICICI Value Disc. Fund
FMCG Sector Equity CNX FMCG 10% 17,600 19,880 +13% Hold 0% 12,320 22,880 SBI FMCG Fund
Realty Sector Equity CNX Realty 2% 224 216 -4% Wait 1% 112 336 DLF, Unitech
Public Sector Equity CNX PSE 10% 3,600 3,460 -5% Hold 5% 2,500 4,700 Baroda Pio. PSU Equity Fund
Energy Sector Equity CNX Energy 10% 8,800 8,264 -6% Hold 6% 6,200 11,500 UTI Energy Fund
IT Sector Equity CNX IT 20% 13,600 12,083 -11% Hold 16% 8,200 19,000 SBI IT Fund
Metal Sector Equity CNX Metal 5% 3,100 2,324 -25% Hold 5% 1,900 4,300 SBI Mag. Comma Fund

None of the Equity Asset Class Category is in Buy phase during April to June quarter of 2015. Six Equity Asset Class Categories are in Sell investment phase as their market pricing is substantially higher than their value. Prior investments in these should be liquidated during the current quarter.

Equity portfolio should be allocated as per the Portfolio Allocation percentage mentioned in the table above. The allocation percentages have been derived based on following factors:

  1. A maximum of 100% of sub-limits should be allocated to Metal Sector Equity. This comes to a maximum of 5% (100%*5%) for Metal Sector Equity.
  2. A maximum of 80% of sub-limit should then be allocated to IT Sector Equity. This comes to a maximum of 16% (20%*80%) for IT Sector Equity.
  3. A maximum of 60% of sub-limit should then be allocated to Energy Sector Equity. This comes to a maximum of 6% (10%*60%) for Energy Sector Equity.
  4. A maximum of 50% of sub-limit should then be allocated to Public Sector Equity and Realty Sector Equity. This comes to a maximum of 5% (10%*50%) for Public Sector Equity and 1% (2%*50%) for Realty Sector Equity. However since there is no Real Estate Mutual Fund available for investment, the 1% would instead be parked in Liquid Funds.

 

Growth Assets – Asset Class 2: Other (GROWTH-OTHER)

Allocation for quarter in Samedh Dynamic Mutual Fund Portfolio: 12%

Growth Asset Class Categories other than Equity are broadly grouped as below:

  1. Precious Metals: Metals like Gold, Silver, Platinum etc that are used for investments. Gold has been identified as lead Asset Class Category for the Asset Class. Gold ETFs are available in India which are categorized as financial assets unlike physical Gold. However ETFs are not yet available for other precious metals and hence they cannot be treated as a financial asset.
  2. International Equity: Equity indices outside India that can be taken exposure of through International Equity Mutual Funds available in India, which are categorized as financial assets.
  3. Commodities: Commodities are primarily used for consumption. Investment exposure can be taken to these by investing in International Equity Funds linked to Commodities which are categorized as financial assets

Currently seven Asset Class Categories have been identified under Other Asset Class for SDMFP. The various investment parameters corresponding to these Asset Class Categories, for April to June quarter of 2015, are mentioned in the table below.

International Equity

Asset Class Category Benchmark Index Sub Limit Benchmark Index Level (1st Apr) Position in Market Pricing Cycle Investment Phase Portfolio Allocation Buy Threshold for Index (Qtr) Sell Threshold for Index (Qtr) Investment Option(s)
Europe Equity (INR) Euro Stoxx 50 8% 3,697 50% Wait 2% 2,700 4,400 DWS Top Euroland Fund
US Equity (INR) DJIA 30 15% 17,746 80% Wait 0% 10,000 18,500 Franklin US Opportunities Fund
Hong Kong Equity (INR) Hang Seng 6% 24,901 85% Sell 0% 20,000 24,500 Goldman Hang Seng BeES Fund
China Equity (INR) Shanghai Composite 4% 3,748 90% Sell 0% 1,800 2,950 JP Morgan Greater China Fund

Precious Metals & Commodities

Asset Class Category Benchmark Index Sub Limit Benchmark Index Level (1st Jan) Position in Market Pricing Cycle Investment Phase Portfolio Allocation Buy Threshold for Index (Qtr) Sell Threshold for Index (Qtr) Investment Option(s)
Agriculture Commodities S&P Global Agribusiness 2% 1,780 60% Wait 0% 1,350 2,100 DSP BlackRock World Agriculture Fund
Crude Oil / Energy West Texas Intermediate Crude 5% $ 49 5% Buy 5% $ 90 $ 145 DSP BlackRock World Energy Fund
Gold (INR) / 10gm Gold (USD) * INR/USD * 10gm/Ounce 20% 23,794 (1,188 * 62.29 * 0.32) 20% Buy 5% 24,000 36,000 SBI Gold Fund

Gold and Crude Oil are in Buy phase during April to June quarter of 2015. Investment advice for them is as below:

  1. Gold (INR) has artificially inflated value because of 10% duty imposed on Gold imports to India. An investment in Gold (INR) has regulatory environment change risk this continues to be the case. However for need of diversification an amount upto 25% of sub-limit should be allocated to Gold. This comes to a maximum of 5% (100%*25%)
  2. Investment of 100% of sub-limit should be allocated to Crude Oil. This comes to a maximum of 5% (100%*5%).
  3. Investment of 25% of sub-limit should be allocated to Europe Equity. This comes to a maximum of 2% (25%*8%).

 

Asset Allocation Group 2: Income Assets (INCOME)

Allocation for quarter in Samedh Dynamic Mutual Fund Portfolio: 50%

50% of Samedh Dynamic Mutual Fund Portfolio value is allocated to Income Asset Allocation Group during April to June quarter of 2015. This is to be further sub-allocated into two Asset Classes that are grouped under Income Assets so that the sum of their sub-allocations adds up to 50%.

Income Assets – Asset Class 1: Government Income (INCOME-GOVT)

Allocation for quarter in Samedh Dynamic Mutual Fund Portfolio: 38%

Government Income represents fixed-income investments backed by Government of India and carry lowest credit risk for Indian investors. These investment options have highest credit rating of AAA for Indian investors. 38% of Target Return Samedh Model Investment Portfolio value is allocated to Government Income Asset Class during April to June quarter of 2015. This allocated portfolio value is to be invested in Asset Class Categories corresponding to Government Income Asset Class.

Nine Asset Class Categories have been identified under Government Income Asset Class for SDMFP. The various investment parameters corresponding to these Asset Class Categories, for April to June quarter of 2015, are mentioned in the table below. Current benchmark index levels can be viewed at Investing.com for comparison.

Asset Class Category Current Interest Rate Benchmark Index Benchmark Index Level (1st Apr) Position in Market Pricing Cycle Investment Phase Buy Threshold for Index (Qtr) Sell Threshold for Index (Qtr) Investment Option(s)
Senior Citizens’ Saving Scheme – 5 Yr (AAA) 9.00% G-Sec (5 Yr) 7.75% 50% Buy 8.35% 6.65% SBI SCSS
Post Office Time Deposit – 5 Yr (AAA) 8.50% G-Sec (5 Yr) 7.75% 50% Buy 8.35% 6.65% India Post – Time Deposit
National Savings Certificate – 5 Yr (AAA) 8.50% G-Sec (5 Yr) 7.75% 50% Hold 8.35% 6.65% India Post – NSC
Government Bonds – 10 Yr (AAA) 7.84% G-Sec (10 Yr) 7.84% 50% Hold 8.40% 6.70% ICICI Pru. GILT Fund – PF Option
Inflation Indexed National Saving Securities -10 Yr (AAA) 6.90% Consumer Price Inflation + 1.5% 5.4% (CPI) Floating Wait N.A. N.A. RBI INSS Bond
Public Provident Fund (PPF) – 15 Yr (AAA) 8.70% G-Sec (15 Year) 7.88% Floating Buy N.A. N.A. Any Bank – PPF Account
PSU Bank Fixed Deposit – 3 Yr (AAA) 8.50% G-Sec (3 Yr) 7.79% 35% Buy 8.30% 6.10% SBI Fixed Deposit
PSU Taxable Bonds – 3 Yr (AAA) 8.39% G-Sec (3 Year) 7.79% 35% Buy 8.30% 6.10% Birla SL Short Term Fund
PSU Tax Free Bonds – 15 Yr (AAA) 7.35% G-Sec (15 Year) 7.88% 50% Hold 8.60% 7.40% NHAI, PFC Tax Free Bonds

Some fixed interest saving investment asset class categories are in Buy phase during April to June quarter of 2015. Accordingly new investment up to portfolio allocation for the asset class (38%) can be made in Government Fixed Income Asset Class during the quarter. This investment should be made only at Interest Rates above the Buy Threshold for benchmark index.

Samedh Dynamic Mutual Fund Portfolio allocation of 38% would be divided between 10-Yr Government Bond (27%) and PSU Taxable Bond (11%) investment options.

Income Assets – Asset Class 2: Corporate Income (INCOME-CORP)

Allocation for quarter in Samedh Dynamic Mutual Fund Portfolio: 12%

Corporate Income represents fixed-income investments floated by private Indian companies. They carry higher credit risk than Government Income for Indian investors. These investment options may have various credit ratings but in SDMFP, investment is only considered in instruments with higher than “A” Credit Rating for Indian investors. 12% of Samedh Target Return Mutual Fund Portfolio value is allocated to Corporate Income Asset Class during April to June quarter of 2015. This allocated portfolio value is to be invested in Asset Class Categories corresponding to Corporate Income Asset Class.

Four Asset Class Categories have been identified under Corporate Income Asset Class for SDMFP. The various investment parameters corresponding to these Asset Class Categories, for April to June quarter of 2015, are mentioned in the table below. Current benchmark index levels can be viewed at Investing.com for comparison.

Asset Class Category Current Interest Rate Benchmark Index Benchmark Index Level (1st Apr) Position in Market Pricing Cycle Investment Phase Buy Threshold for Index (Qtr) Sell Threshold for Index (Qtr) Investment Option(s)
Private Bank Fixed Deposit – 3 Yr (AAA) 8.75% G-Sec (3 Yr) 7.79% 35% Buy 8.30% 6.10% Choose from list
Corporate Bonds / Debentures – 3 Yr (A) 10.50% G-Sec (3 Yr) 7.79% 35% Buy 8.30% 6.10% HDFC Short Term Fund
Corporate Fixed Deposit – 3 Yr (AAA) 9.75% G-Sec (3 Yr) 7.79% 35% Buy 8.30% 6.10% Choose from List
Corporate Tax Free Bonds – 15 Yr (AAA) 7.88% G-Sec (15 Year) 7.88% 50% Hold 8.60% 7.40% L&T Inf. Fin. / IDFC Tax Free Bonds

Most Asset Class Categories are in Buy phase during April to June quarter of 2015. Accordingly new investment up to portfolio allocation for the asset class (12%) can be made in Corporate Income Asset Class during the quarter. This investment should be made only at Interest Rates above the Buy Threshold for benchmark index.

SDMFP Index allocation of 12% would be made in Corporate Bonds / Debentures – 3 Yr.

Asset Allocation Group 3: Liquid Assets (LIQUID)

Weightage for quarter in Samedh Dynamic Mutual Fund Portfolio: 6%

6% of Samedh Dynamic Mutual Fund Portfolio value is allocated to Liquid Asset Allocation Group during April to June quarter of 2015. This portion is invested in the single Asset Class that is available under Liquid Assets. Even though the overall portfolio has 3-year investment horizon, 1% allocation is made to Liquid Asset Class to represent the capital in-between two investment transactions. Further 5% allocation has been transferred from Growth-Other Asset Class due to insufficient investment options in the current quarter.

Liquid Assets – Asset Class 1: INCOME (LIQUID-INCOME)

Allocation for quarter in Samedh Dynamic Mutual Fund Portfolio: 6%

Liquid Income represents fixed-income investments with highest liquidity for Indian investors. 6% of Samedh Target Return Mutual Fund Portfolio value is allocated to Liquid Asset Class during April to June quarter of 2015. This allocated portfolio value is to be invested in Asset Class Categories corresponding to Liquid Income Asset Class.

Two Asset Class Categories have been identified under Liquid Income Asset Class for SDMFP. The various investment parameters corresponding to these Asset Class Categories, for April to June quarter of 2015, are mentioned in the table below:

Asset Class Category Current Interest Rate Benchmark Index Benchmark Index Level (1st Apr) Position in Market Pricing Cycle Investment Phase Buy Threshold for Index (Qtr) Sell Threshold for Index (Qtr) Investment Option(s)
Saving Bank Account 4.00% Govt. Regulation 4.00% N.A. N.A. N.A. N.A. Any Saving Bank Balance
Liquid Mutual Funds 7.88% G-Sec (90 Day) 7.88% N.A. N.A. N.A. N.A. HDFC Liquid Fund
Arbitrage Funds 8.20% N.A. N.A. N.A. N.A. N.A. N.A. Kotak Eq. Arbitrage Fund

Investment Phase is not applicable to Liquid Income Asset Class and transactions can be made in corresponding Asset Class Categories as pre requirement. Accordingly new investment up to portfolio allocation for the asset class (6%) can be made in Liquid Income Asset Class during April to June quarter of 2015. Of this Saving Bank balance should be limited to 1% and 5% should be allocated to Liquid Mutual Funds.

 

SDMFP Index

SDMFP Index tracks the performance of Samedh Dynamic Mutual Fund Portfolio. The starting level of index was 131.99 on 1st April 2015, based on closing value of Investment Products on 31st March 2015.

Find below the SDMFP Index details table for FY 2015-16 Q1:

Asset Class Group / Asset Class / Asset Class Category / Investment Product Benchmark Last Quarter End Quarter Start (1st Apr. 15) Month End (30th Jun. 15)
Updated Allocated Amount Updated Allocation %age Benchmark Level NAV / Interest Rate Alloc. %age Allocated Amount Trans’n During Quarter Benchmark Investment
Level Return NAV / Int. Rate Updated Amount Updated %age Return
Baroda Pio. PSU Equity Fund CNX PSE 4.73 3.6% 3,460 8.33 5.0% 6.60 1.4% 3,521 1.7% 8.39 6.65 5.1% 0.7%
SBI Magnum Comma Fund CNX Metal 3.80 2.9% 2,324 24.27 5.0% 6.60 2.1% 2,787 -1.6% 24.77 6.74 5.2% 2.4%
UTI Energy Fund CNX Energy 5.12 3.9% 8,264 12.17 6.0% 7.92 2.1% 8,893 7.6% 12.41 8.08 6.2% 2.0%
SBI IT Fund CNX IT 16.22 12.3% 12,083 48.49 16.0% 21.12 3.7% 11,037 -8.7% 44.22 19.26 14.7% -8.8%
SBI Pharma Fund CNX Pharma 17.90 13.6% 12,845 139.29 0.0% 0.0 -13.6% 12,203 -5.0% 139.96 0.00 0.0% 0.5%
Growth-Equity CNX Nifty 47.78 36.2% 8,491 N.A. 32.0% 42.24 -4.2% 8,369 -1.4% N.A. 40.72 31.2% -3.6%
SBI Gold Fund Gold (USD) * USD/INR 5.00 3.8% 23,794 8.81 5.0% 6.60 1.2% 23,927 3.0% 8.81 6.60 5.1% 0.0%
DSPBR World Energy Fund WTI Crude 4.84 3.7% 49 13.08 5.0% 6.60 1.3% 58 19.9% 13.07 6.59 5.0% -0.1%
DWS Top Euroland Fund Euro Stoxx 50 0.00 0.0% 3,697 12.40 2.0% 2.64 2.0% 3,424 -7.4% 12.66 2.70 2.1% 2.1%
Growth-Other Gold (USD) * USD/INR 9.84 7.5% 23,794 N.A. 12.0% 15.84 4.5% 23,927 3.0% N.A. 15.89 12.2% 0.3%
Growth N.A. 57.61 43.6% N.A. N.A. 44.0% 58.08 0.4% N.A. N.A. N.A. 56.61 43.3% -2.5%
ICICI Prudential GILT Fund – PF Option G-Sec – 10 Yr 32.73 24.8% 7.83% 27.53 27.0% 35.64 2.2% 7.86% 1.0% 27.10 35.08 26.8% -1.6%
Birla SL Short Term Fund G-Sec -3 Yr 14.33 10.9% 7.79% 52.33 11.0% 14.52 0.% 7.87% 1.1% 53.21 14.76 11.3% 1.7%
Income-Govt G-Sec – 10 Yr 47.05 35.6% 0 N.A. 38.0% 50.16 2.4% 7.86% 1.0% N.A. 49.84 38.1% -0.6%
HDFC Short Term Fund G-Sec -3 Yr 19.55 14.8% 7.79% 27.05 12.0% 15.84 -2.8% 7.87% 1.1% 27.59 16.16 12.4% 2.0%
Income-Corp G-Sec -3 Yr 19.55 14.8% 7.79% N.A. 12.0% 15.84 -2.8% 7.87% 1.1% N.A. 16.16 12.4% 2.0%
Income G-Sec – 10 Yr 66.60 50.5% 7.83% N.A. 50.0% 66.00 -0.5% 7.86% 1.0% N.A. 66.00 50.5% 0.0%
Saving Bank Account Regulation 1.28 1.0% 4.00% 4.00% 1.0% 1.32 0.0% 4.00% 1.0% 4.00% 1.33 1.0% 1.0%
HDFC Liquid Fund G-Sec -90 day 6.49 4.9% 7.88% 27.58 5.0% 6.60 0.1% 7.61% 1.3% 28.16 6.74 5.2% 2.1%
Liquid G-Sec -90 day 7.77 5.9% 7.88% N.A. 6.0% 7.92 0.1% 7.61% 1.3% N.A. 8.07 6.2% 1.9%
SDMFP Index N.A. 131.99 100.0% N.A. N.A. 100.0% 131.99 0.0% N.A. N.A. N.A. 130.68 100.0% -1.0%