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July 2011

The Indian equity markets bounced back in the month of June as the BSE Sensex and S&P Nifty both posted decent gains of 1.85% and 2.03% respectively. The small and midcap indices however ended in the negative zone. Drop in crude oil prices is one of the prime reasons for the recovery. More so, heavy FII inflow in the last few days of the month also helped markets to march ahead. Among the sectors which did well are BSE Capital Goods and BSE FMCG, gaining 6.21% and 4.85% respectively. 

We saw RBI yet again taking the anti inflationary stance in its monetary policy stance and raised repo and reverse repo by 25 bps points to 7.50% and 6.50% respectively in its policy setting meeting on June 16, 2011, making it the 10th rate hike since last year. RBI is likely to increase policy rate by another 25 bps in its next policy setting meeting this month, and we believe we are getting closer to the end of this tightening cycle.

While the Indian Meteorological Department (IMD) revised their forecast and announced that rainfall during the current South-West monsoon would be ‘below normal’ – the markets might react adversely to an already high inflationary situation. 

The average Assets under Management of the Indian Mutual Fund industry grew from 700589 crores in January – March 2011 quarter to Rs. 742874 crores for the April – June 2011 quarter. The industry average assets grew at 6.1% while SBI Mutual Fund saw a growth of 15% in its AUM for the quarter April – June 2011. The average AuM grew from Rs. 41672 crores in the previous quarter to Rs. 47874 crores in this quarter. I would like to thank all the investors for their continued patronage with SBI Mutual Fund.

I am glad to share with you that MSFU – Emerging Businesses Fund is one of the top performing equity diversified fund from SBI Mutual Fund. This fund invests predominantly in small and midcap stocks and can act as a diversifier in your portfolio. You may consider investing in this scheme from a long term horizon perspective for wealth creation. Besides you may also consider starting an SIP (Systematic Investment Plan) in MSFU – Emerging Businesses Fund and some of our other equity schemes like Magnum Equity Fund and Magnum Multiplier Plus Scheme, which have helped create wealth for many investors.


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