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January 2012

The rather stressful year 2011 ended on a negative note as the markets lost 4.6% during the last month of 2011. In sum, the BSE Sensex and S&P Nifty lost 24.64% and 24.62% respectively during the year 2011. BSE Midcap and BSE Small Cap were even badly hit during the year losing 34.19% and 42.61% respectively. If you factor in the Rupee depreciation, the loss in US Dollar terms looks even worse.

Numerous negative news flows ensured that the sentiment remained weak – be it IIP, GDP Growth Target, or the fiscal deficit. The reversal on the proposed FDI in Retail also created its own share of disappointment. Likewise, the Lokpal fiasco created its problems.


The highlights of 2011 were constantly rising inflation, depreciating rupee and rising interest rates  which eventually led to economic slowdown and a lesser than anticipated growth. However, going forward in 2012, there is a chance and hope that the scenario may change due to various factors like softening of interest rates and a return of the FIIs at some stage, which could help in supporting the rupee. The RBI shifted its stance towards addressing the concerns on growth in its Monetary Policy review in the month of December while indicating that policy actions henceforth could seek to reverse the monetary tightening cycle. However, much would depend on how the inflation numbers pan out in the months to come.

The equity markets are yet again looking attractive for long term investments and investors can look to invest gradually over a period of time in some of our equity schemes like Magnum Equity Scheme, Magnum Global Fund and MSFU – Emerging Businesses Fund. Owing to the volatility shown by the equity markets, the ideal way to approach the equity markets would be through Systematic Investment Plan (SIP).

You would be aware that we have launched SBI Tax Advantage – Series II, which is a 10 year, closed Equity Linked Savings Scheme having a 3 year lock-in period. The New Fund Offer is open from December 22, 2011 and it closes on March 21, 2012. It offers investors an avenue to get potential gains from the equity markets and at the same time helps you save tax under Section 80C. Please feel free to approach your nearest SBI Mutual Fund Investor Center to know more about how to save taxes with SBI Tax Advantage Fund – Series II.

We are absolutely committed to providing unparalleled service to our investors and to cater to your information, investment and servicing needs. Please feel free to call at our dedicated customer care numbers 1-800-425-5425 (MTNL/BSNL users only) and 080-26599420 from Monday to Saturday (8am – 10pm) or write to us at customer.delight@sbimf.com with your queries. Alternatively you can also visit your nearest Investor Service Centre / Investor Service Desk for any assistance.

Wishing you a Happy and Prosperous 2012.

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