Fixed Income Presentation. December 2012

Transcription

1 Fixed Income Presentation December 2012

2 Index 1 Domestic Environment 2 Bond market outlook 3 Products in Focus 2

3 Domestic Macro November inflation at 7.2% surprised on the downside supported by a falling core and fuel inflation. Core has been falling for the past few months as demand remains weak. CPI however remains elevated explained by the higher weightage of food articles in this index at close to 50%. CPI has consistently printed over 9% in the last few months. IIP for October was a positive printing well above consensus estimates at 8.2%. The uptick was driven by the festive season demand. However IIP trend of the past few months underlines the sub-par investment trend. Weak growth numbers and lower level of economic activity have translated into weaker growth in advances. Source: *Bloomberg dated December 31,

4 Inflation has declined...though short term upside risks exist Source: Bloomberg dated December 31,

5 IIP remains lacklustre Index of Industrial Production (IIP) Source: Bloomberg dated December 31,

6 Rate cut cycle has paused after April Repo Rate Source: Bloomberg dated December 31,

7 Index 1 Domestic Environment 2 Bond market outlook 3 Products in Focus 7

8 Market outlook Money Market (MM) curve normalized in FY13 on the back of improved liquidity and expectation of monetary easing. Bonds rallied strongly in the month on a build-up of rate cut expectations based on RBI s policy guidance. Improving data on both inflation and IIP has led to a positive momentum in yields. Yields retain a positive bias, given rate easing expectation. We expect inflation data to improve in the coming months on the back of lower demand conditions and supportive base effect. Liquidity conditions will however remain a monitorable in the quarter being the last quarter of the fiscal. In this context, RBI s resolve to improve liquidity conditions is yield supportive effectively capping widening in yields. Source: *Bloomberg dated December 31, The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary.

9 Risk-reward attractive for duration... With the yield curve having normalized, duration products looking attractive Risk-reward is now favorable for open-ended duration funds Medium duration segment (upto 5Y) is benefitting from limited supply and remains stable. At the long end we find value in State Development Loans (SDLs) given that PSU bonds are now trading close to SDL levels and finer in some cases. SDLs have no credit risk and are more liquid than Corporate bonds of a similar tenor. The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary. 9

10 Index 1 Domestic Environment 2 Way Forward 3 Products in Focus 10

11 Return Potential Average Maturity Product Landscape DWS Twin Advantage Fund DWS Money Plus Advantage Fund DWS Gilt Fund DWS Premier Bond Fund DWS Short Maturity Fund DWS Cash Opportunities Fund DWS Treasury Investment Plan DWS Money Plus Fund DWS Ultra Short Term Fund DWS Treasury Fund Cash Plan DWS Insta Cash Plus Fund Risk Probability Investment Horizon

12 DWS Premier Bond Fund Actively managed portfolio of mostly AAA rated Corporate/PSU bonds Highly diversified portfolio mix mainly comprising PSU names No exposure to G Secs currently Average maturity of the portfolio as on 31 st December,2012 is 3.94 years; Credit quality as on 31 st December,2012: AAA/A1+ compromise 93.22% Ideally suited for investors with an investment horizon of 1 year & longer The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary. 12

13 DWS Premier Bond Fund (An open ended debt fund) Asset Allocation* Credit Quality* Average Portfolio Maturity * : 3.94 yrs Portfolio (Top 10 Holdings*) AUM * : Crs./ Mn Instruments % to Net Assets NABARD 9.83 RURAL ELECTRIFICATION CORPORATION LIMITED 9.81 POWER GRID CORPORATION OF INDIA LTD 9.78 POWER FINANCE CORPORATION 8.89 EXPORT IMPORT BANK OF INDIA 8.81 HOUSING AND URBAN DEVELOPMENT CORPORATION LTD 6.78 LIC HOUSING FINANCE LTD HDB FINANCIAL SERVICES LTD TATA SONS LIMITED 4.40 STATE BANK OF INDIA 4.10 * Source: Fund factsheet as of 31st December Holdings are subject to change.

14 DWS Short Maturity Fund The Short Maturity fund (SMF) is constructed as a mix of money market instruments and short/medium term bonds The fund invests in a mix of highest rated instruments (A1+) at the short end and AA/AAA category in more than 12 months Average maturity (2.19 years) has moved in the last 12 months in line with the evolving rate environment Money market securities plus cash equivalents constitute % of the portfolio at the end of December 2012 The fund is now positioned for a gradual easing in the rate cycle in coming months The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary. 14

15 DWS Short Maturity Fund (An open ended debt scheme) Asset Allocation * Credit Quality * Average Portfolio Maturity *: 2.19 yrs Portfolio (Top 10 Holdings*) Instruments % to Net Assets AUM *: Crs./ Mn NABARD % GSEC MAT - 11-Jun EDELWEISS HOUSING FINANCE LTD 5.01 EDELWEISS FINANCIAL SERVICES LTD 4.87 ECL FINANCE LTD 4.87 PUNJAB NATIONAL BANK 4.81 ORIENTAL BANK OF COMMERCE 4.76 JAMMU AND KASHMIR BANK 4.71 * Source: Fund factsheet as of 31st December Holdings are subject to change. CORPORATION BANK 4.71 JINDAL STEEL & POWER LTD. 4.67

16 DWS Cash Opportunities Fund The fund aims to identify value in short term credit opportunities assuming low duration risk The relatively short tenor of investment offers good visibility and credit comfort No exposure to unrated credit securities Investment predominantly in highly rated money market securities and high grade short term bonds Combination of higher Commercial Paper exposure and the prevailing attractive credit spreads translates into a higher Yield to Maturity for the fund Marked-to-market exposure levels will remain at nominal levels, limiting return volatility The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary. 16

17 DWS Cash Opportunities Fund (An open ended debt scheme) Asset Allocation * Credit Quality * Average Portfolio Maturity * : 0.41 yrs AUM * : Crs./ Mn Portfolio (Top 10 Holdings*) Instruments % to Net Assets PUNJAB NATIONAL BANK IndiGold Trade and Finance Service Ltd 7.50 SHRIRAM EQUIPMENT FINANCE CO. LTD DEWAN HOUSING FINANCE CORPORATION LTD ORIENT PAPER & INDUSTRIES LTD 5.82 RANBAXY LABORATORIES LTD VODAFONE INDIA LTD STATE BANK OF PATIALA 5.70 * Source: Fund factsheet as of 31st December Holdings are subject to change. SYNDICATE BANK 5.69 EDELWEISS FINANCIAL SERVICES LTD 5.65

18 DWS Treasury Fund - Investment Plan The Investment Plan aims to deliver steady returns by investing in money market securities - predominantly bank CDs Fund follows an accrual strategy Investors in the fund to benefit from roll-down effect The product is designed for investors with an investment horizon of at least 3-6 months Portfolio is predominantly invested in Certificate of Deposits of March 2013 maturity The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary. 18

19 DWS Treasury Fund Investment Plan (An open ended debt plan) Asset Allocation * Credit Quality * Average Portfolio Maturity * : 0.21 yrs AUM * : Crs./ Mn Portfolio (Top 10 Holdings*) Instruments % to Net Assets INDIAN BANK CENTRAL BANK OF INDIA CORPORATION BANK 8.85 INDIAN OVERSEAS BANK 8.84 HOUSING DEVELOPMENT FINANCE CORPORATION LTD VIJAYA BANK 6.63 CANARA BANK 6.62 ICICI BANK LTD * Source: Fund factsheet as of 31st December Holdings are subject to change. ALLAHABAD BANK 4.45 IDBI BANK LTD. 4.43

20 DWS Ultra Short Term Fund Predominantly invested in a mix of Commercial Papers and Certificate of Deposits High credit quality product - Investment mainly in A1+ instruments Strict control on average maturity, limits return volatility The fund has been maintaining a judicious mix of near liquid and short term securities to deliver steady returns with lower volatility. The fund does not take duration calls, and maintains Mark To Market exposure at nominal levels in order to moderate return volatility. The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary. 20

21 DWS Ultra Short Term Fund (An open ended debt scheme) Asset Allocation * Credit Quality * Average Portfolio Maturity * : 0.28 yrs AUM * : Crs./ Mn Portfolio (Top 10 Holdings*) Instruments % to Net Assets SYNDICATE BANK 8.71 STATE BANK OF BIKANER & JAIPUR 7.95 INDIAN OIL CORPORATION LTD STATE BANK OF HYDERABAD 7.19 RELIGARE FINVEST LTD 6.45 STATE BANK OF TRAVANCORE 5.52 HINDUSTAN PETROLEUM CORPORATION LTD POWER FINANCE CORPORATION 4.71 * Source: Fund factsheet as of 31st December Holdings are subject to change. JINDAL POWER LTD 4.26 AXIS BANK LTD. 4.01

22 DWS Money Plus Fund Predominantly (closed to 70%) invested in highest rated bank and financial institution papers (CDs/CPs) The residual portion to be invested in 2-3 year high quality bonds (Corporate / PSU Bonds) The fund will not have exposure to G secs The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding suitability of the funds based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary. 22

23 DWS Money Plus Fund (An open ended debt fund) Asset Allocation * Credit Quality * Average Portfolio Maturity * : 1.12 yrs Portfolio (Top 10 Holdings*) Instruments % to Net Assets AUM * : Rs Crs./ Mn PUNJAB NATIONAL BANK STATE BANK OF PATIALA 9.14 NABARD 4.89 SYNDICATE BANK 4.66 ORIENTAL BANK OF COMMERCE 4.57 BANK OF MAHARASHTRA 4.56 STATE BANK OF MYSORE 4.53 BANK OF BARODA 4.46 * Source: Fund factsheet as of 31st December Holdings are subject to change. TATA SONS LIMITED 4.10 LIC HOUSING FINANCE LTD. 3.91

24 Fund Management Debt Team Fund Manager Designation Qualifications Experience Kumaresh Ramakrishnan Head Fixed Income BE, MBA Over 16 years of experience in the Indian Fixed Income market. Deutsche Asset Management (India) Pvt. Ltd. - Head - Fixed Income (January 2011 onwards) - Fund Manager & Credit Risk Analyst (April 2007 to December 2010) - Credit Analyst (October 2005 to March 2007), Societe Generale (SG) - Sr. Credit Analyst Corporate Banking (2000 to 2005) Credit Analysis and Research Ltd. (CARE) - Sr. Rating Analyst (1996 to 2000) Nitish Gupta Fund Manager Fixed Income Rakesh Suri Fund Manager Fixed Income 24 B.E, MBA B.Sc, B.Ed., PGDBM (Finance) Over 17 years of experience in Fixed Income Debt Market. Deutsche Asset Management (India) Pvt. Ltd.- Fund Manager- Fixed Income (May 2008 till date) Allahabad Bank - Sr. Manager - Treasury (July 2003 to April 2008) - Treasury (March 1997 to July 2003) RR Financial Consultant Ltd.- Manager- Research (July 1995 to February 1997) Over 14 years of experience in Fixed Income Market : Deutsche Asset Management (India) Private Limited - Fund Manager Fixed Income(January 2011 to present) - Fixed Income Trader (November 2010 to December 2010) Samba Financial Group, Riyadh, KSA - Fixed Income Trader (September 2008 to October 2010) ICICI Bank Ltd. - Sr. Manager - Treasury (Dec.2005 to Aug. 2008) Derivium Capital Pvt. Ltd - Sr. Trader - Fixed Income (December 2002 to November 2005) SREI International Securities Limited - Dealer - Fixed Income (May 2001 to November 2002 ) RR Financial Limited - Manager - Debt (June 1998 to April 2001)

25 Debt Funds: Particulars DWS Premier Bond Fund DWS Short Maturity Fund DWS Money Plus Fund Investment Objective To provide regular income by investing in debt securities including bonds and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved. To generate steady returns with low volatility by investing in short - medium term debt and money market securities. However, there can be no assurance that the investment objective of the scheme will be achieved. To generate steady return by investing in debt and money market securities across the credit spectrum. However, there can be no assurance that the investment objective of the scheme will be achieved. Date of Inception Regular Plan: 21 st January 2003; Direct Plan: 1 st January 2013 Regular Plan: 21 st January 2003; Direct Plan: 1 st January 2013 Institutional Plan: 10 th November 2010 Direct Plan: 1 st January 2013 Benchmark CRISIL Composite Bond Fund Index CRISIL Short Term Bond Fund Index CRISIL Liquid Fund Index Options for Investment Dividend (Monthly, Quarterly and Annual Payout/Reinvestment), Growth and Bonus Dividend (Weekly, Monthly, Quarterly & Annual Payout/Reinvestment), Growth and Bonus Dividend (Daily Reinvestment, Regular, Weekly, Monthly, Quarterly and Annual - Reinvestment/ Payout), Growth & Bonus Minimum Investment Amount Additional Investment Amount and Minimum Repurchase Amount Investment through SIP, STP and SWP Entry 25 Load Minimum Rs. 5000/- and in multiples of Re. 1/- thereafter; Rs. 1000/- and in multiples of Re. 1/- thereafter; Minimum Redemption Amount (DWS Money Plus Fund) Rs. 1000/- or 100 units or account balance, whichever is lower. SIP: Available only for Regular Plan; STP and SWP: Minimum amount of Rs. 12,000/- divided into 12 installments of Rs. 1000/- each or 6 installments of Rs. 2000/- each or 4 installments of Rs. 3000/- each Nil. In terms of SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor effective August 1, 2009.

26 Debt Funds: Particulars DWS Cash Opportunities Fund DWS Treasury Fund Investment Plan DWS Ultra Short Term Fund Investment Objective Date of Inception Benchmark To generate regular income by investing primarily in investment grade debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved. Regular Plan: 22 nd June 2007 Direct Plan: 1 st January 2013 To provide liquidity and generate stable returns to the investors by investing in a mix of short term debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved. Regular Plan: 9 th October 2009 Direct Plan: 1 st January 2013 CRISIL Liquid Fund Index To provide liquidity and generate stable returns by investing in a mix of short term debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved. Institutional Plan: 18 th Nov 2008 Direct Plan: 1 st January 2013 Options for Investment Dividend (Daily Reinvestment, Regular, Weekly, Fortnightly, Monthly, Quarterly & Annual - Reinvestment/Payout), Growth and Bonus Dividend (Daily Reinvestment, Weekly, Monthly, Quarterly and Annual - Reinvestment / Payout), Growth and Bonus; Daily Dividend Reinvestment, Weekly, Monthly, Quarterly & Annual - Reinvestment/Payout, Dividend Reinvestment/Payout, Growth & Bonus Minimum Investment Amount Rs. 5000/- and in multiples of Re 1/- Additional Investment Amount and Minimum Repurchase Amount Investment through SIP, STP and SWP 26 SIP: Not Available; STP and SWP: Minimum amount of Rs. 12,000/- divided into 12 installments of Rs. 1000/- each or 6 installments of Rs. 2000/- each or 4 installments of Rs. 3000/- each Rs. 1000/- and in multiples of Re. 1/- thereafter Minimum amount of Rs. 12,000/- divided into 12 installments of Rs. 1000/- each or 6 installments of Rs. 2000/- each or 4 installments of Rs. 3000/- each SIP: Not Available; STP and SWP: Minimum amount of Rs. 12,000/- divided into 12 installments of Rs. 1000/- each or 6 installments of Rs. 2000/- each or 4 installments of Rs. 3000/- each Nil. In terms of SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by

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