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India - Asset Management Industry
June 2011
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
India: The Opportunity
Strong GDP growth
• IMF projects Indian GDP growth at 9.7% & 8.4% for 2010 & 2011
Favorable demographics
• One of the youngest population bases (median age - 25 yrs)  Dependency
ratio set to fall over next 20 yrs
Thrust on Infrastructure
• India will spend 1378 bn US$ over the next decade only to build infrastructure
Rising rural demand to augment urban demand
• Reformist economic policies targeting inclusive growth is helping improve rural
incomes & create a huge consumption base
Under-penetration to drive growth
• Under-penetration in various financial service & other sectors opens up
immense opportunity for growth
Political stability with consensus on reforms
• Higher probability of pro-growth reforms with stable govt with experienced
hands at the helm despite challenges
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Financial Services:
Under Leveraged & Less Penetrated
80%
Retail Loans / GDP Ratio
70%
68%
65%
60%
60%
56%
50%
38%
40%
30%
24%
19%
20%
11%
10%
8%
0%
Financial inclusion & improving income profile will significantly expand market for financial products
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Source: Kotak; Morgan Stanley (2010)
Indian Capital Markets Overview
Equity Market Statistics
Yield Advantage – India
• More than 5000 listed
companies
• 22 stock exchanges
• Daily Turnover
• ~ US 5 bn Cash (Equity)
• ~ US 14 bn Derivatives
(Equity)
• Over 1700 FIIs regd with 5000+
sub accounts
• FII holding in Indian equities
~18%
• Active onshore FX market with
daily volumes > US$ 15 bn
• Proven long term potential of
Indian Equities
• 1 – 5 year yields ranging in
9.50 – 10.10% p.a. (vis-àvis) US yields ~2.50%)
• Sovereign rating is BBB(investment grade)
• Strong banking system &
supportive tax environment
• Depth of papers available in
sovereign & corporate
segments
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4
Asset Management Industry in India
Indian Asset Management Industry
May 9, 2011
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
MF Structure in India
A mutual fund in India has a 3-tier structure
Sponsor
Trustee
Trust
AMC
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Industry Structure
AMC
Savings
Trust
Units
Unitholders
Registrar
SEBI
Trust
Custodian
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AMC
Investments
Indian MF Industry – Key Statistics
No. of Players
41
No. of Schemes
727
No. of Folios
47.32 mlln
No. of Licenced Distributors
105,000 approx.
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Size of Indian Mutual Fund Industry
Amt. in USD Millions
Category
A
B
C
Bank Sponsored
Institutions
Private Sector & Joint Venture :
Indian
Foreign
Predominantly Indian
Predominantly Foreign
Grand Total (A+B+C)
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Avg. Aum as on
March 31, 2011
27,288.44
2,487.78
53,566.22
12,150.89
56,454.44
3,727.33
1,55,675.10
Industry profitability trend
PBT bps (% of Avg AUM)
30
25
22
25
17
20
16
12
15
10
5
FY 05-06
FY 06-07
FY 07-08
FY 08-09
FY 09-10
After dip in profitability in last few years its recovering again backed up by
volume growth & market action in FY 10 as well good margin on Fixed Income
products.
Birla Sun Life Asset Management Company Ltd.
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10
Regulator
ESTABLISHMENT OF SEBI
The Securities and Exchange Board of India was established on April 12, 1992 in
accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
PURPOSE
“…..to protect the interests of investors in securities and to promote the development of,
and to regulate the securities market and for matters connected therewith or incidental
thereto”
Birla Sun Life Asset Management Company Ltd.
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Regulatory Framework
Ministry of
Finance
Supervisor of both SEBI & RBI
Securities
Appellate Tribunal
Provide
apex
mechanism for
taken by SEBI
Office of Public
Trustee
Registration of Trust
Board
of
Trustees
is
accountable to the OPT
Complaints against individual
trustees
appeal
actions
Department of
Company Affairs
Registration of AMC and Trustee
Company
RoC for Compliance & supervised
by DCA
CLB is the interface for
prosecution and penalties
Self Regulated
Organisations
Derive
powers
regulator
from
Ability to make bye-laws
Regulate own members in
a limited way
Example : Stock exchanges
– NSE, BSE etc.
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Financial
Intelligence Unit
Implementation
Rules
Industry
Association
Collective industry opinion
Guidelines & recommendations
Example: Association of Mutual
Funds in India (AMFI)
of AML
Key Constituents
Custodian &
Depository
Banker
Securities Dealer /
Broker
• Custody of MF securities
• Investment back-office
• Providing bank accounts & remittance services
• Purchase and sale of securities
R&T Agent
• Investor records and transactions
Distributor
• Selling & Distributing schemes
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Types of Funds in India
Existing funds
• Open-ended (OEF) & Closeended (CEF)
• Growth, Income and Hybrid
• Equity, Debt and Balance
• Load & No-Load
• Guaranteed & Non-Guaranteed
• Tax-exempt & Non tax-exempt
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New Gen Mutual Funds
• Fund of Fund
• Commodity fund
• Real Estate fund
• Asset Allocation fund
• Exchange-traded fund
• Derivative fund
• Capital Protection Oriented Fund.
Client Segments
Retail
Institutional
• Resident Investors
• Non Resident Investors
• HUF
•
•
•
•
Corporates
Trusts
FIIs
Banks / Financial Institutions
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Access to Indian opportunity
Portfolio
Investment
(FII)
Registration with
SEBI
FDI
Registration as
an FDI investor
Listed Equity &
Debt – applicable
limits
Repatriation
available
Venture
Capital
Registration as a
VC - FII
Long term
investments in
unlisted space
Real estate,
manufacturing &
strategic areas
Repatriation
available
Recently Foreign Individual Investors have also been proposed to be allowed to access Indian
markets through Indian Mutual Funds
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Portfolio Investments (through FII)

Almost all sectors (barring a few sectors & stocks like banking and Oil & Gas) have blanket approval for portfolio
investment in listed equity by foreigners with no limits

Access to Indian Bond Market is restricted to foreigners
o Foreign Institutional Investor (FII) needs to apply for a debt limit from Securities Exchange Board of India(SEBI)
are issued from time to time
o Current limits assigned by the ministry of Finance are as follows:
 US$ 15 billion for Corporate Bonds
 US $ 10 billion for Government Securities
 US $ 5 billion for Government Securities with maturity of more than 5 years.
 US 20 billion for bonds issued by Infrastructure Companies. These bonds should have residual maturity of
more than 5 years.

Limits that are auctioned under the bidding process & have to be utilized in 45 days for Government securities and
90 days for corporate bonds
While institutions can access the markets through the route above, foreign individual investors will
be able to access even the restricted sectors through Mutual Fund route
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Investment Process
Idea Generation
(Fund Managers, Analyst, Brokers)
Macro monitoring &
Recycling of Ideas
Rejected
Change in
Recommendation
Team Discussion
& Scrutiny
Proprietary Research
Process actively covers over 500
companies.
Approximately 50% own
proprietary investment ideas.
Investment
Universe
3rd Party Research
Regular Monitoring
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18
The Process of Investing
1. Offer Document
a) Legal offer from AMC to investor
b) Contains vital information about fund and schemes
c) SEBI approved format.
2. KIM / SID / SAI
a) Abridged OD
b) Is mandatory to provide along with every application form.
3. Application and form of holding
4. Distribution channels
5. Investors rights
6. Investors obligations
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Distribution Models
Retail
Distribution
Banks
National
Distributors
Regional
Distributors
IFAs
Institutional
Distribution
Banks
National
Distributors
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Regional
Distributors
Tied Agents
Equity Funds – Positioning
Value
Multi Cap
Growth
Blend
BSL Dividend Yield
BSL Equity
BSL Pure Value
BSL Tax Plan
BSL Buy India
BSL Tax Relief '96
BSL Infrastructure
BSL Frontline Equity
BSL Basic Industries
Large Cap
BSL Advantage
Thematic
India Advantage Fund
(Offshore Fund)
Excel India Fund
(Offshore Fund)
BSL Gennext
BSL India Reforms
BSL MNC
BSL Top 100
BSL India Opportunities
BSL Midcap
BSL New Millennium
BSL Small & Midcap
BSL International Equity
Mid Cap
BSL '95
BSL Special Situations
BSL Freedom
BSL Commodity Equities
Hybrid
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Copyright: Birla Sun Life Asset Management Company Ltd. 2008
21
Fixed Income Funds – Positioning
Credit Quality
High
Medium
Low
BSL Income
Interest Rate Sensitivity
High
BSL Income Plus
BSL Gilt Plus
BSL Govt Securities Fund
BSL Ultra Short Term
BSL Dynamic Bond
Medium
BSL Medium Term Plan
BSL MIP
BSL Short Term
Opportunities
BSL Asset Allocation
BSL Capital Protection Series
BSL Cash Plus
Low
BSL Cash Manager
BSL Savings Fund
BSL Floating Rate
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22
Asset Management Company
1. Required to be registered with SEBI
2. Appointed as Investment Manager of the mutual fund
3. Appointed by the trustees via an Investment Management
Agreement
4. Responsible for operational aspects of the mutual fund
5. Net Worth of at least Rs.10 Cr at all times
6. At least 1/2 of the board members must be independent
7. Mostly, structured as a private limited company where Sponsor and
associates hold capital
8. Quarterly reporting to Trustees
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Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Role Restrictions
 Sponsor of a fund cannot be its custodian
 Sponsor of a fund can be a distributor
 Trustee of one mutual fund cannot be trustee of another mutual fund
 Exception is Independent trustees provided they obtain approval of both the board of trustees
 Trustee of one fund cannot be AMC of another
 AMC of one fund cannot be Trustee of another
 AMC cannot have any business interest other than fund advisory.
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Birla Sun Life Asset Management Company Limited
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Strong Parentage
A joint venture between Aditya Birla Group and Sun Life Financial of Canada
Aditya Birla Group
• One of the largest Indian conglomerates with operations
in over 27 countries & M Cap of over US$ 31.2 bn
• A dominant player in many commodity & manufacturing
businesses apart from service businesses
• Major presence in Financial Services - Mutual Funds,
Insurance, Distribution, Capital Market Financing,
General Insurance & Private Equity
Sun Life Financial
• More than $ 381 billion assets under management
globally
• Offering diversified range of risk and financial
management products for individuals and corporate
• Large international footprint across continents – major
presence in North America & Asia
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Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Recognition of strengths across market cycles
Constant honing of investment processes & disciplined approach have help the firm in delivering
superior performance during the best of the times (2007) and the worst of the times (2008) for the
Indian markets
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
India: Fact File
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Population (mn), 2010……..............................................................
GDP (US$ bn), FY 10……...............................................................
GDP per capita (US$), 2010............................................................
GDP (PPP) as share of world total, 2010 …..…………………….....
Median age of population………………………………………………
Gross Domestic Savings Rate, FY 10…………………………………
Gross Capital Formation Rate, FY 10…………………………………
Average GDP Growth Rate (%) in last 5 years……..………………..
Companies with a bn US$ revenue, FY10…..………………………..
Large cap companies (> INR 100 bn or 2.17 bn US$), FY11….……
FDI Flows (USD bn), FY 10……………………………………………..
Export to GDP Ratio, 2010…......……………………………………….
Market cap to GDP, 2010 ………………………………………………..
10 year G.Sec, 4th May 11..……………………………………….........
Stimulus required during the 2008 crisis (% to GDP)………………..
Incremental Capital Output Ratio (%), 2008……………………………
Promoter Holdings in Top 200 companies, 2010………………………
1,186.2
1,314.7 (422 in 2000)
1,123 (2,900 in PPP terms)
5.4%
26 years
32.9% (24% in FY 03)
34.9%
8.65% (6.6% since 1991)
124 (104 in FY08)
120 (11 in 2000)
32 (4 in FY 03)
21% (41% in China)
111.49%
8.09%
2%
3.95% (4.2% in China)
~56%
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Sources: Edelweiss India 2020 report, Bloomberg, RBI, Morgan Stanley, Motilal Oswal , IMF
29
History of Mutual Funds in India
a) 1964-1987 (Phase I) – Growth of Unit Trust of India
b) 1987-1993 (Phase II) – Entry of Public Sector Funds
c) 1993-1996 (Phase III) – Emergence of Private Funds
d) 1996-1999 (Phase IV) – Growth and SEBI Regulation
e) 1999-2004 (Phase V) – Emergence of large & uniform
Industry
f) 2004 onwards (Phase VI) – Consolidation and Growth.
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What it means
Investor
Pool their money
with
Passed back
Fund
Manager
Returns
Invest the funds in
Generating
Securities
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Characteristics
1.
Investors own the mutual fund
2.
Everyone else associated with the fund earns a fee
3.
Things which are mutual
a) Pool of money
b) Investment objective
c) Risk and return
4.
Funds are invested in a portfolio of marketable securities reflecting the
investment objective
5.
Value of the portfolio and investors’ holdings change with change in the
market value of investments.
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Trust
1. Mutual funds in India constituted as a Public Trust under Indian
Trust Act, 1882
2. The trust is registered with the Office of Public Trustee
3. The trust or the fund has no independent legal capacity itself
4. Acts in relation to the trusts are taken on its behalf by the trustees
5. Treated as a separate entity and a pass through vehicle
6. Has its own auditors, separate from the AMC
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Sponsor
1. Promoter of the mutual fund
2. Creates a Trust under Indian Trusts Act, 1882 and registers it with
Office of Public Trustee
3. Appoints Board of trustees/trustee company
4. Creates AMC under Indian Companies Act, 1956
5. Fulfills necessary formalities and applies to SEBI for registration of
the Trust as a Mutual Fund.
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Trustee
1. Appointed by sponsor with SEBI approval
2. Have Registered ownership of investments
3. Formed either as Board of Trustees or Trustee Company
4. Power to appoints all other constituents
5. Appoint AMC through the ‘Investment Management Agreement’
and delegate powers.
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Unit Holder Pattern
UNITHOLDING PATTERN OF MUTUAL FUNDS INDUSTRY(as on March 31, 2010)
CATEGORY
NUMBER OF
INVESTORS
ACCOUNTS
Individuals
NRIs
FIIs
Corporates/
Institutions/
Others
TOTAL
% TO TOTAL
INVESTORS
ACCOUNTS
% TO TOTAL
NET ASSETS
46,327,683
97.07%
245,390.28
39.77%
943,482
1.98%
27,428.86
4.45%
216
0.00%
6,335.00
1.03%
452,330
0.95%
337,812.58
54.75%
47,723,711
100.00%
616,966.72
100.00%
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NET ASSETS
(RS.CRORE)
Industry Gross Sales Trends
Equity Gross Sales (Rs. Crs)
160,000
147,113
140,000
• Non-NFO Equity Gross Sales Volumes
are again back to the last 3 year
average volumes level.
•However, Industry –ve Equity Net Sales
suggests higher churning.
120,000
100,000
97,624
80,000
69,408
68,064
FY09-10
YTD FY11
60,000
35,500
40,000
20,000
FY06-07
FY07-08
FY08-09
*Gross sales include NFO volumes of Rs 24K, 44K,
2.5K,6.1K & 3.6K Crs in respective yrs.
Non-Equity Gross Sales (Rs. Crs)
12,000,000
9,949,615
10,000,000
• Non-Equity asset class continue
to see volume growth in last 4-5
years.
• In FY 11 volumes dipped as
Industry declined in 2nd half
8,053,364
8,000,000
6,000,000
5,390,853
4,317,263
4,000,000
2,000,000
1,840,968
FY06-07
FY07-08
FY08-09
FY09-10
YTD FY11
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37
Industry Assets trend
Debt Avg AUM (Rs. Crs)
Equity Avg AUM (Rs. Crs)
250,000
213,258
150,000
227,883
204,755
203,170
194,441
200,000
250,000
227,747
200,000
132,870
150,000
112,984
100,000
100,000
50,000
50,000
146,871
115,095
111,750
133,135
-
Mar-07
Mar-08
Mar-09
Mar-10
Dec-10 Q
Mar-07
Feb-11
Liquid & Liquid Plus Avg AUM (Rs. Crs)
Mar-08
Mar-09
Mar-10
Dec-10 Q
Feb-11
Total Avg AUM (Rs. Crs)
500,000
900,000
747,525
401,131
750,000
400,000
265,207
300,000
242,875
277,866
450,000
189,695
200,000
531,007
600,000
675,377
708,919
Dec-10 Q
Feb-11
493,287
355,078
300,000
110,459
100,000
150,000
-
Mar-07
Mar-08
Mar-09
Mar-10
Dec-10 Q
Feb-11
Mar-07
Mar-08
Mar-09
Mar-10
After witnessing growth in last few years Industry de-grew during FY 11.
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Birla Sun Life Asset Management Company Limited
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Aditya Birla Group
One of the largest & oldest multinational
Aditya Birla Group Revenue
conglomerates from India
30 bn $
Revenues of over US$ 30 bn
50 companies across 6 continents in 25
2 bn $
countries
Over 50 per cent revenues flow from
overseas operations
Anchored by 130,000 employees
belonging to over 30 different
nationalities
Over 1.5 Mn shareholders
India, Australia, China, Thailand, Myanmar, Laos, Indonesia, Philippines, Singapore, Bangladesh, Vietnam, Malaysia, Korea,
UAE, Egypt, UK, Germany, Hungary, Italy, France, Luxembourg, Switzerland, USA, Canada, Brazil, Sweden
Aditya Birla Group:
Business Rankings
| viscose staple fiber | non-ferrous metals | cement | viscose filament yarn | branded apparel |
|carbon black | chemicals | fertilizers | sponge iron | insulators | financial services | telecom | BPO | IT | retail |
The Group position – India:
The Group position – Global:

A premier branded garments player

Largest metals company
One of the 3 biggest producers of primary
aluminium in Asia

Largest cement company
Amongst the World leaders in viscose staple

2nd largest player in viscose filament yarn
fibre

2nd largest in the Chlor-alkali sector

The 3rd largest producer of insulators
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Top 5 player in Asset Management business

The 4th largest producer of carbon black

Top 5 player in Life Insurance business

The 13th largest cement producer

Among the first five mobile telephony players

Among the world’s top 15 Business Process
Outsourcing (BPO) companies

Among the best energy-efficient fertilizer plants

Among the top 3 BPO companies in India

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Hindalco, a non-ferrous metals company of the
Group, is on the threshold of Fortune 500
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ABFSG – a Financial Services powerhouse
Over 5.5 million
customers
Over 200, 000
channel partners
0ver 16000
employees
Manage assets of
over US$ 18 bn
Over 1600
branches
Revenues of over
US$ 1.4 bn
In 7 businesses
Over 500 cities
Our Vision
To be a leader and role model in financial services, with a broad based and integrated
business by leveraging synergies to be more competitive & cost effective
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Overview of BSLAMC
Heritage
• Founded in 1994, one of the oldest in India
• 50:50 JV between Aditya Birla Group & Sun Life Financial Inc.,
since 2001
• Have seen the market evolve across different asset classes over
the years
• Driven by client centric product innovation
Market dominance
• One of the top 5 AMCs in India with Avg AUM of US$ 12 Bln *
• Over 2.5 million investor accounts
• Strengths across different businesses –
– Mutual Funds
– Segregated Managed Accounts (PMS)
– Offshore Advisory
– Real Estate Funds
Best in class management
• Disciplined processes driving investment management process
• Strong emphasis on risk management across functions
• Longevity of experienced investment & other management
personnel with the organization
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Copyright: Birla Sun Life Asset Management Company Ltd. 2008
* As on 31st Mar 2011
Business Verticals
Mutual Fund
Offshore
Advisory
Birla Sun Life
Asset
Management
Company
Limited
Real Estate
Advisory
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Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Portfolio
Management
Awards & Recognitions – 2010
Outlook Money Wealth Creator Awards 2010
* Best Debt Fund House – Winner
* Best Fund House – Runner’s up
NDTV Profit Mutual Fund Awards 2010
* Debt : Income – Winner
* Equity : Mid and Small Cap – Winner
* Monthly Income Plans – Runner’s Up
Wealth Forum AMC Awards 2010
* Best Debt Fund House – Winner
* Best Debt Fund – Winner
* Best Debt Fund Manager – Winner
Lipper Awards, India 2010
* “Best Group – Mixed Assets Category”, second time in a row.
* BSL Asset Allocation Fund – Moderate Plan – the “Best Fund” in its category
Lipper Awards, India 2010
* “Most Innovative Product – India” for BSL Capital Protection Series
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Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Strong focus on quality of growth
AUM Growth (USD Bln)
16
13.7
14
12.0
 Across time horizons, at least 75% of
12
fund assets in top 2 quartiles of
9.7
10
performance vis-à-vis the peer group
7.4
8
 Over 90% exposure of assets invested
6
4.5
4
in credits of AAA or sovereign
2
0
Jan/07
Jan/08
Jan/09
Jan/10
Jan/11
Superior fund performance aided AUM growth
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Source: BMF
Wide offering across risk reward spectrum
Thematic
Equity
Mid Cap
Base Equity
Risk
Large Cap
Base Equity
Long Term
Fund
Govt Securities
Fund
Money Market
Fund
Play on the different India
centric investment themes
Play on the valuation gap between
capitalizations & alpha potential (e.g.
BSL Midcap Fund)
Diversified equity fund taking
measured risk (e.g. India Advantage
Fund)
Actively managed emerging
markets bond fund
Play on the interest rate arbitrage &
improving sovereign credit rating
Money market fund for management
of short term surpluses
Returns
Presence across the entire risk reward spectrum allows BSLAMC to tailor make solutions for clients
across the board
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Investment Philosophy
Objective – Outperform the benchmark over full
market cycles while maintaining a consistent style
Philosophy – Investing with Bottom style:
Sustainable above average growth
Prospects not adequately valued
Compounding of high ROCE over longer period
Strategy – Fundamental analysis to:
Find Strong managements with businesses having
sustainable competitive advantages
Invest with a horizon of 24 - 36 months & review
regularly
See whether valuation reflects growth & to what
extent it incorporates risk
Construct portfolio with a view to take measured
risk through active bets
Indian
Growth
Story
Sustainable growth at a reasonable price is the ultimate goal for the
portfolio in line with the Indian Growth Story
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Managed
Portfolios
Corporate Governance – Three Lines of Defence
First Line of Defence - Business Units:
Management


Primary responsibility for the management of risk
Ensures ownership is as close as possible to the activity that creates the risks e.g.
•
•
•
•

Client Mandate adherence in Segregated Managed Account(PMS)
Income tax in Finance
Brokerage payout risks in Operations
Liquidity /Derivative limits adherence in Investments
Ensure that effective action is taken to manage them.
Second Line of Defence - Risk Management:





Facilitate Departments in Risk Management – preventive vs. post mortem
Ensure Policy/Process/Frameworks
Risk and Control Effectiveness
Check Adherence in Key areas
Accountable for Risk Assurance
Third Line of Defence - Internal audit:

Independently verify the effectiveness of controls and the Risk Management process
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008
Investment Risk Framework
Governance Mechanism
•Committee Meetings
•Investment Team Meetings
– Equity & Fixed Income
•Risk Reviews
•Internal Audits
Tracking & Monitoring
•Statutory, Internal & Mandated Limits
through IT infrastructure & reporting
systems
•MSCI Barra – Portfolio & Risk
Analysis
•Benchmarking with Peers & Indices
Policy & Procedure
•Applicable regulatory provisions
•Investment Manuals
– Equity & Fixed Income
•Client Agreements
– Specific mandates for clients
( Managed Accounts)
Statutory Regulations provide a good framework – Supplemented by Internal policies and Governance mechanism
Birla Sun Life Asset Management Company Ltd.
Copyright: Birla Sun Life Asset Management Company Ltd. 2008 Mutual
Fund investments are subject to market risks. Please read the offer document carefully before investing.