overview

Investments

Creating a bigger impact!

chief investment officer
AK Sridhar
Chief Investment Officer

Market Matters January 2017

Published on: 17th February 2017


In the month of January 2017, US markets ended positive with key indices touching all-time new highs on optimism over President Trump’s focus on infra spending and tax cuts. In Europe as well, markets were positive on account of encouraging macro data. On the domestic front, Indian markets gained 4.6% mom primarily driven by positive global cues, select sectors delivering better than anticipated results in light of demonetisation and on expectations of positive announcements in the Union Budget. Moreover, the rally has also been backed by liquidity mainly from DII’s as FII’s remained net sellers for the month.

In our view, the recently concluded Union Budget this year was high on expectations but a clear disappointment on delivery. The disappointment was on lack of continued action plan to unearth and contain the black money in the system and improving tax adherence. While the Finance Minister listed out plenty of statistics and analysis on how less we as a country are collecting direct taxes, there was no specific proposal in the Budget to address this problem. And this was clearly a missed opportunity. However, the only silver lining in the Budget was containment of fiscal deficit at 3.2%. Other positive aspects were 1) ensuring spending on MNREGA – being a rural support scheme for the needy, 2) initial baby steps taken to cleanse and bring in some transparency in political funding, 3) tax rationalization on debt investments by FIIs/ FPIs and 4) marginally higher allocation and higher spending on some infrastructure / road / low cost housing.

To conclude, in last few months, many events have changed the path and mood of the domestic markets. Post the demonetization event, growth outlook has actually become unpredictable. In addition to this, domestic factors such as outcome of state elections and impending rollout of GST (may delay the process of earnings recovery) could likely keep the markets anxious in the near term. We are keenly looking at the outcome of State election results – especially UP. In our view, UP State election is critical for BJP to win – as it will help the government to take some concrete actions and disprove the critique’s comments who says that the ruling party seems to be losing its plot on fight against black money and in ensuring tax compliance. On the global front, headwinds such as uncertainties relating to President Trump’s policies, US Federal Reserve stance on interest rates, impact of Brexit, global liquidity, crude oil and commodity prices make us even more cautious and we expect market to stay volatile in the near term.



Disclaimer: Linked Insurance Products are different from the traditional insurance products and are subject to risk factors. The Premium paid in unit-linked life insurance policies are subject to investment risks associated with capital markets and NAVs of the units may go up or down, based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. IndiaFirst Life Insurance Company Limited is only name of the Insurance Company and does not in any way indicate the quality of the contract, its future prospects, or returns. Please know the associated risks and the applicable charges from your Insurance Agent or the Intermediary or policy document issued by the Insurance Company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Past performance may or may not be sustained in future and is not a guarantee of future performance. Some of the contents of this document may contain statements / estimates / expectations / predictions, which may be 'forward looking'. The actual outcomes could differ materially from those expressed /implied in this document.These statements, do not intend to provide personal recommendation to any specific individual or any investment needs of an individual. The recommendations / statements / estimates / expectations / predictions are of general in nature and may not take into account the specific investment needs or risk appetite or financial situations of individual policyholder / clients. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Tax benefits are subject to changes in the tax laws.

Whether you are a retail or institutional customer, the first thing you want to know is how well we manage your money? Everyone has two basic expectations - Safety and Returns. Both are opposite goals, but we work hard to achieve both in a balanced way. Your money can be safe if –

  • We choose our investments carefully
  • Watch their performance regularly
  • Take corrective action when needed

We have an institutional policy within the regulations of IRDAI, which is mandated by the Board monitored by Investment Committee and delivered by the team. This is the framework in which we operate. This framework is tight as well as practical enough to allow room for judgmental exceptions which are not taken just by one individual but by the whole team involving the CEO, CFO, CIO and the Appointed Actuary.

Rest assured, our professional Fund Managers, who are experts in the equity and fixed income markets, will take utmost care of your returns.

Equity Investment Strategy

For equity investment we follow both - a top down and a bottom up approach. Looking top down and bottom up we define our investment universe which is a broad basket of stocks we can invest in. Actual stock selection is primarily driven by fundamental analysis.

Once we identify a good stock, we look at analytical and technical factors to see what is the right time to buy or to book profits. Based on technical factors we switch stocks and sectors to enter or reenter the market. We also constantly review our strategies and actively engage in script management. We strive for not only outperforming the benchmark indices but also to deliver superior risk-adjusted returns as compared to peer group over a medium to long term horizon.

Fixed Income Investment Strategy

In a fixed income portfolio, our primary concerns are the safety of investments and consistency of returns. This is why we invest in companies with high credit quality and a track record of good corporate governance. This ensures that the long-term investments are safe while their returns are consistent.

Once we achieve this, we try to improve the returns in our debt portfolio by suitably tuning the portfolio duration. This is based on the expected interest rate movements in the market.

Over time, we try to deliver superior returns as compared to a bank deposit or a typical bond fund in the market. We don’t merely aim to be content with good returns but strive to stay superior at a risk-adjusted level.



Disclaimer: Linked Insurance Products are different from the traditional insurance products and are subject to risk factors. The Premium paid in unit-linked life insurance policies are subject to investment risks associated with capital markets and NAVs of the units may go up or down, based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. IndiaFirst Life Insurance Company Limited is only name of the Insurance Company and does not in any way indicate the quality of the contract, its future prospects, or returns. Please know the associated risks and the applicable charges from your Insurance Agent or the Intermediary or policy document issued by the Insurance Company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Past performance may or may not be sustained in future and is not a guarantee of future performance. Some of the contents of this document may contain statements / estimates / expectations / predictions, which may be 'forward looking'. The actual outcomes could differ materially from those expressed /implied in this document.These statements, do not intend to provide personal recommendation to any specific individual or any investment needs of an individual. The recommendations / statements / estimates / expectations / predictions are of general in nature and may not take into account the specific investment needs or risk appetite or financial situations of individual policyholder / clients. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Tax benefits are subject to changes in the tax laws.

Meet our Investment team

AK Sridhar

Chief Investment Officer

Sridhar is amongst the most experienced investment management professionals from India. His analytical approach to investing and deep market knowledge allows him to stay ahead of changing business dynamics. 

His 30 years’ of experience in the financial industry has made him intimately familiar with the worlds of Corporate Finance, Investment Management, Mutual Funds, Private Equity, Business Strategy & Corporate Restructuring and Insurance & Pension Fund industry. He actively tracks the macro-economic indicators & asset allocation shifts to deliver insight on financial markets at professional forums and academic circles in India, North America and South East Asia.

Sridhar is currently a member of the NSE – IISL Index Policy Committee and Capital Market Committee of the Indian Merchant Chambers (IMC). Additionally, he was a Director on the Board of Association of Mutual Funds in India (AMFI) for over 3 consecutive years.

Previously, Sridhar was the Executive Director and Chief Investment Officer (CIO) of UTI Asset Management Company Ltd managing AUM of USD 10 Billion. Later, he was elevated as the Chief Executive Officer of UTI International Ltd in Singapore, managing multi class, multi country assets for international institutional investors.

Presently, he is the Head of Investment Management, ALM functions at IndiaFirst Life Insurance.

Sridhar is a chartered accountant and also holds a Bachelor of Science degree in Physics.

Sridhar is married to Padma and they have two daughters Manasvi and Esha. He is a voracious reader, loves music and travelling.

Viraj M Nadkarni

Fund Manager-Equity

Viraj is a Company Secretary, MBA (Finance) from Symbiosis, Pune, and he also holds a Master’s degree in commerce from Pune University. He has more than 10 years of experience in the financial sector, mainly in equities. He particularly excels in analytics and understands equity market dynamics. Prior to this stint, he was with Angel Broking, Fortune Financials as a Senior Research Analyst. There he handled fundamental research on the institutional front and was involved in tracking multiple sectors. Here,

Viraj is the Fund Manager for Equity.

Sandeep Shirsat

Fund Manager - Fixed Income

Sandeep is a BCom graduate and qualified Cost accountant (ICWAI). He has worked in the fields of mutual funds, banking, PMS as well as insurance for over 22 years. In the past, he has worked with Multi-Act Equity Research (PMS), Matrix AMC, HSBC (Institutional Fund Services), and UTI AMC Pvt Ltd (UTI MF) . He has valuable experience in Fund management - debt and balanced Funds, Treasury Management, Fund accounting, Investment Operations, Mutual Fund compliance and IT projects relating to Investment Functions as domain expert.

Today, he is a part of our company as a Fund Manager for Fixed Income.

Poonam Tandon

Head of Fixed Income cum Senior Fund Manager

Poonam holds a PGDBM from XLRI Jamshedpur and PhD (in Financial Management) from NMIMS. She has a work experience of over 22 years in the financial services sector. This also includes an aggregate work experience of 19 years with a special focus on treasury. Prior to becoming the Head of Fixed Income as well as a Senior Fund Manager; she worked at Industrial Development Bank of India (IDBI) as Treasury, Securities Trading Corporation of India (STCI) as Chief Dealer, and Metlife Insurance as a Fund Manager for the Fixed Income portfolio.

This section will tell you more about the kind of funds that we invest your money in. Each fund has a different type of risk and return associated with it.

Read through this, it will help you understand and pick a Fund that suits your risk appetite best. As an existing customer, you may choose to shift from one Fund to another to optimise your returns. Always remember, take into account the market condition and changes in your risk profile before making these decisions.

Our way of valuing equity shares is as prescribed by Insurance and Regulatory Development Authority of India (IRDAI) through its circular number IRDA/F&I/INV/CIR/213/10/2013 dated October 30, 2013. It has mandated insurers to select either NSE or BSE as the primary and secondary exchange for valuation of its equity shares.

We have selected NSE as the primary and BSE as the secondary exchange. Accordingly, the equity shares held by us are valued at the closing price of NSE. In case a security is not listed or traded on NSE, we use the closing price of BSE.

Click on any of the links below to read more on different types of Funds we offer and why:

 

  • Life Unit Linked Funds
    Debt Fund SFIN No: ULIF003161109DEBTFUND00143

    To generate a good level of income and prospects for capital growth through diversified investment in corporate debt instruments, government securities and money market investments.

     

    0-00%

    Equity Composition
    Equity Fund SFIN No: ULIF001161109EQUITYFUND143

    To provide high growth opportunities with an objective of long-term capital appreciation through investments primarily in equity and equity-related instruments.

    80-100%

    Equity Composition
    Balanced Fund SFIN No: ULIF005161109BALANCEDFN143

    To provide higher growth with reasonable security, by investing primarily in equity instruments and moderate allocation in debt securities/bonds.

    50-70%

    Equity Composition
    Debt 1 Fund SFIN No: ULIF010010910DEBTO1FUND143

    To generate a good level of income and prospects for capital growth through diversified investments in corporate debt instruments, government securities and money market investments.

    0-00%

    Equity Composition
    Value Fund SFIN No: ULIF013010910VALUEFUND0143

    To provide high growth opportunities with an objective of long-term capital appreciation through investments primarily in equity and equity-related instruments.

    70-100%

    Equity Composition
    Index Tracker Fund SFIN No: ULIF012010910INDTRAFUND143

    To provide high growth opportunities with an objective of long-term capital appreciation through investments primarily in equity and equity-related instruments.

    90-100%

    Equity Composition
    Equity 1 Fund SFIN No: ULIF009010910EQUTY1FUND143

    To provide high growth opportunities with an objective of long-term capital appreciation through investments primarily in equity and equity-related instruments.

    80-100%

    Equity Composition
    Dynamic Asset Allocation Fund SFIN No: ULIF012010910INDTRAFUND143

    To provide long-term capital appreciation with relatively lower volatility by dynamically adjusting the capital allocation between equity and fixed income instruments.

    20-80%

    Equity Composition
    Balanced 1 Fund SFIN No: ULIF011010910BALAN1FUND143

    To provide higher growth with reasonable security, by investing primarily in equity instruments and moderate allocation in debt securities/bonds.

    50-70%

    Equity Composition
    Equity Elite Opportunities Fund

    To provide growth opportunities with an objective of long term capital appreciation through investments primarily in equity and equity related instruments and an active management of asset allocation between Equity and Money Market instruments.

    60%-100%

    Equity Composition
  • Pension Linked Funds
    Debt Fund - Pension SFIN No: ULIF004161109DEBFUNDPEN143

    To generate a good level of income and prospects for capital growth through diversified investment in corporate debt instruments, government securities and money market investments.

    0-00%

    Equity Composition
    Equity Fund - Pension SFIN No: ULIF002161109EQUFUNDPEN143

    To provide high growth opportunities with an objective of long-term capital appreciation through investments primarily in equity and equity-related instruments.

    80-100%

    Equity Composition
    Balanced Fund - Pension SFIN No: ULIF006161109BALFUNDPEN143

    To provide higher growth with reasonable security, by investing primarily in equity instruments and moderate allocation in debt securities/bonds.

    50-70%

    Equity Composition
    Liquid Fund - Pension SFIN No: ULIF008161109LIQFUNDPEN143

    To provide capital protection with growth at short term interest rates while providing a high level of liquidity.

    0-00%

    Equity Composition

Disclaimer: Linked Insurance Products are different from the traditional insurance products and are subject to risk factors. The Premium paid in unit-linked life insurance policies are subject to investment risks associated with capital markets and NAVs of the units may go up or down, based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. IndiaFirst Life Insurance Company Limited is only name of the Insurance Company and does not in any way indicate the quality of the contract, its future prospects, or returns. Please know the associated risks and the applicable charges from your Insurance Agent or the Intermediary or policy document issued by the Insurance Company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Past performance may or may not be sustained in future and is not a guarantee of future performance. Some of the contents of this document may contain statements / estimates / expectations / predictions, which may be 'forward looking'. The actual outcomes could differ materially from those expressed /implied in this document.These statements, do not intend to provide personal recommendation to any specific individual or any investment needs of an individual. The recommendations / statements / estimates / expectations / predictions are of general in nature and may not take into account the specific investment needs or risk appetite or financial situations of individual policyholder / clients. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Tax benefits are subject to changes in the tax laws.