Mr. Sharma has 20 years of experience in financial services industry. Prior to joining Indiabulls AMC, he has worked with Tata Asset Management Company Ltd as Senior Fund Manager & Head Cash & Hybrid Funds. He was managing various debt fund and hybrid fund schemes with total corpus in excess of Rs 15000 Cr. The debt schemes managed by him have received numerous awards from CNBC CRISIL and ICRA and have been consistently rated top performing by Value Research and Morning Stars India. He has also worked with NBFCs in the field of debt and equity capital markets (DCM & ECM), treasury and corporate finance.

The NFO opens on Feb 12, 2013 and closes on Feb 26, 2013 and the scheme reopens on or before March 12, 2013.

Strategy: The fund shall be managed according to the investment objective as outlined above. Considering the present market conditions and RBI’s recent policy stance, the investment strategy will be as under: Sovereign Bonds – Look to increase the allocation to medium to long end of the curve (5-15 Years) RBI’s monetary policy is increasingly veering towards stimulating growth. It has already cut Repo rate by 25 bps in the Jan-13 Policy. Though the RBI has stated that there is limited scope of monetary easing given the fiscal and current account position, we expect further cuts in the region of 50-75 bps in the rest of the year, given the Governments resolve to contain the fiscal deficit and address issues relating to current account deficit. In this scenario, we expect the medium to long term 5-15 years segment likely to outperform other asset classes. We expect Government Bond yields to decline by 25-50 basis points over the period of next 6-9 months and hence prefer to be overweight on sovereign bonds. Corporate Bonds - Invest in high quality corporate bonds of 3- 10 years maturity On the corporate bonds space, we would be investing in high quality corporate assets maturing between 3- 10 years segment. We expect the credit spreads to compress from the current levels to a certain extent and will try to take advantage of higher spreads in quality corporate bonds. We will continue to remain cautious on the sensitive sectors like Real Estate, Aviation, Media, etc. Money Market Securities – Look to move up the maturity segment, with higher allocation to 6 months to 1 year segment. In the Money Market Segment we will look to reduce allocation to short end of money market assets and add longer dated Certificates of Deposits (CDs) of 6 months to 1 year as they appear attractive from a risk reward perspective, given the policy stance of RBI and tight liquidity conditions on account of year end closure.

2. What is your outlook for the global economy? Is the worst behind us?

Ans.The factors holding back the global economy have begun to subside and overall the economy seems to be in gradual recovery mode led by stronger than expected growth in US and China and other emerging and developing countries. Though Euro area is in recession and so is Japan, the worst seems to be over.

3. What is your opinion on the currency movement? How has it affected the bond market and liquidity in the system?

Ans. We expect the trade deficit to continue to widen as growth in imports outstrips growth in exports and the deterioration in the trade balance could mean that the current account deficit (CAD) is likely to remain elevated. While in the near term, due to on-going global policy reflation (easing) may help rupee to stabilize around 52-54 levels due to strong portfolio flows, in the medium term, market may start focusing on the higher CAD and the concerns about political stability in a run up to 2014 general elections, and as a result may come under a bit of pressure. The currency weakness has adversely affected the bond market and resulted in tight liquidity condition in the system.

4. What is your take on the current Indian debt market scenario? Do you feel that the post tax returns in debt mutual funds can be made more tax efficient?

Ans. Our outlook on the Indian debt market is positive going forward, particularly, in the medium to long duration segment, given the trajectory of the monetary policy, slow growth, moderating inflation and the Government’s resolve to the fiscal deficit and address issues relating to current account deficit. Different scenarios for efficient post tax return in debt mutual fund: - Lower long term capital gain tax if one stays invested for longer period of more than 12 months - Indexation benefits for long term investors - Lower dividend distribution tax (DDT) for individuals and HUFs if opted for dividend option Besides the above tax advantages, the long term investors also benefits from capital appreciation from long duration debt products in a decreasing interest rate scenario.

5. Where do you see the benchmark 10-year G-Sec yield in the next three months?

Ans. We expect the benchmark 10 year G-Sec yield to trade lower than the present level of 7.85%.Though RBI has cut policy rates by 25bps in its recent monetary policy meet but it has signaled that there is less room for aggressive policy rate cuts in the future due to high inflation.

6.What is your view on the near term action by the RBI, especially in light of the recent estimates of GDP growth?

Ans. We expect RBI to continue to support growth by cutting interest rate in the near term in the context of growth inflation dynamics.

7. What are the key factors that a retail investor should keep in mind while investing into a debt fund? At the current juncture, which funds would you recommend to the retail investors?

Ans. Based on the risk profile and investment horizon, the retail investors should allocate his investible surplus across various debt schemes. They should seek an advice from their financial advisors before investing. At the current juncture, we recommend long duration products to the retail investors because we expect interest rates to come down in the next few months. RBI has already indicated that the monetary policy would be supportive of growth going forward, and given the gap between the actual and the potential rate of growth, we expect rate cuts of the magnitude of at-least 50-75 bps during the current year. This may trigger rally in long duration bonds. However, there could be some amount of volatility, for which investors should be prepared for.