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April 2015

Indian equity indices ended March on a weaker note. The key equity benchmarks CNX Nifty and S&P BSE Sensex fell 4.62% and 4.78%, respectively. The equity market fell mainly due to several disappointing global cues. Release of upbeat US jobs data sparked worries about the earlier-than-expected interest rate hike by the US Federal Reserve (Fed). Markets fell sharply following the reports of the Saudi Arabia-led air strikes on Yemen which also resulted in a surge in oil prices. Back home, heavy profit booking on concerns about future interest rate cuts, as Consumer Price Index (CPI)- based inflation rose more than expected to 5.37% in February, also pulled down the indices. Investors remained cautious and avoided taking bigger bets ahead of the upcoming quarterly earnings season.

Losses were, however, capped to some extent after the RBI unexpectedly cut the repo rate on March 4, 2015 by 25 bps from 7.75% to 7.5% with immediate effect – the second cut in 2015. Investors also cheered passing of the Insurance Bill, which raised foreign direct investment (FDI) in the sector to 49% from 26%, and the Mines and Mineral Development and Regulation Bill in the Rajya Sabha. Markets further gained on reports that the government is making a strong pitch for a sovereign rating upgrade in its meeting with the ratings agency Fitch. Sporadic gains on Wall Street, passing of Budget Vote on Account for 2015-16 in the Lok Sabha and buying in defensive stocks were some of the other factors that augured well for the local indices. Gains in global equities towards the end of the month, owing to hopes of further stimulus by China’s policy makers to boost the economy, also cheered the domestic indices.

FY 2014-15 was a landmark year for the Mutual Fund industry as it added nearly 3 lakh crore to its AUM, mainly driven by a rally in the equity markets, to take it to an all-time high at 12 lakh crore industry AUM. The industry witnessed overwhelming retail participation in the market rally through mutual funds with a record addition of individual equity folios in this period. I remain positive, that with positive market sentiments and improving economic indicators, mutual funds will continue to remain the preferred investment choice for retail investors. However, I urge upon you to remain invested in equities with a long-term perspective and keep investing regularly through a Systematic Investment Plan for your goals in life. Sticking to one’s asset allocation and goals is key in all market scenarios especially now when the equity portion of your portfolio would have shown good gains. Ensure that your portfolio is rebalanced periodically i.e. gains are reinvested in other asset classes to reset your asset allocation to the original/pre-decided ratio, minimise risk and earn optimal returns.

Our new fund, SBI Dynamic Asset Allocation Fund does it automatically for you. It uses an in-house model driven asset allocation process to dynamically allocate between equity, debt and cash based on market conditions. So, there is no emotional bias in making decisions, no timing the market and an optimal asset mix irrespective of market conditions. Movement between asset classes is done without any operational hassles or tax liability to the investor. Look at this fund if you are looking at stable risk adjusted returns over the long term. For those seeking to follow broad-based market indices we launched 3 Exchange Traded Funds: SBI-ETF BSE 100, SBI-ETF Nifty Junior and SBI-ETF Banking which replicate the underlying indices to generate returns at a lower cost as they are passively managed.

To enable you to experience the convenience of investing with SBI Mutual Fund I urge you to visit our site www.sbimf.com which allows KYC compliant investors to invest in any of our schemes and NFOs in a few minutes. Also, m-Easy our mobile based service allows you to complete any mutual fund transaction simply by sending an SMS from your registered mobile number. Please feel free to call on our dedicated customer care numbers 1 800 425 5425 and 044-28881101/044-28881136 from Monday to Saturday (8am to 10pm) or write to us at customer.delight@sbimf.com with your queries. Alternatively, you can also visit your nearest SBI MF Branch for any assistance.

For SBI Fund Management Private Ltd.

Best Regards,
Dinesh Kumar Khara
Managing Director & Chief Executive Officer

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