FEBRUARY 2018

CANARA ROBECO MEDIUM TERM OPPORTUNITIES FUND

*Investors should consult their financial advisers if in doubt about whether the product is suitable

• Income/Capital appreciation over medium to long-term • Investment in Debt and Money Market securities with a portfolio weighted average maturity

between 3 to 7 years

This product is suitable for investors who are seeking*

STRONG INDIAN MACROS

CAD 4.8% 1.7% 1.3% 0.8% 0.7%

Fiscal Deficit 4.9% 4.5% 4.1% 3.9% 3.5%

GDP 5.1% 6.6% 7.2% 7.6% 7.1%

2015 2017FI

NA

NCI

AL

YEA

R E

ND 20162014

Inflation 7.88% 5.37% 5.26% 3.65% 5.21%

INR 61.80 63.04 66.15 67.92 63.87

2016 2018

Year

-on-

Year

* 201720152014

2013

Slow and Steady Improvement since 2013….

Source: Bloomberg, Motilal Oswal * Data as of February month end of respective years

KEY MACRO VARIABLES

Source: Bloomberg, IIP & WPI base year considered is 2011-12

4.4

2.48

-8

-6

-4

-2

0

2

4

6

8

10

12

14

May

-13

Jul-1

3

Sep-

13

No

v-13

Dec

-13

Feb-

14

Apr

-14

May

-14

Jul-1

4

Sep-

14

No

v-14

Dec

-14

Feb-

15

Apr

-15

May

-15

Jul-1

5

Sep-

15

No

v-15

Dec

-15

Feb-

16

Apr

-16

May

-16

Jul-1

6

Sep-

16

Oct

-16

Dec

-16

Feb-

17

Apr

-17

May

-17

Jul-1

7

Sep-

17

Oct

-17

Dec

-17

Feb-

18

Inflation

CPI WPI

RBI’s comfort zone (2-6%)

CPI inflation grew at 4.44% year-on-year in Feb’18, below the print of 5.07% in Jan’18. marking it to be the lowest inflation rate in four months and in the comfort zone for inflation & medium-term target of the central bank.

Wholesale prices in India rose by 2.48% year-on-year in Feb’18, after a 2.84% increase in the prior month. It was the lowest wholesale inflation sinceJul’17, as cost of food and fuel rose at softer paces.

CRUDE OIL PRICE MOVEMENT

OPCRTOTL Index (Bloomberg Total OPEC Crude Oil Production Output Data)DOETCRUD Index (United States DOE Crude Oil Total Production Data)CO1 Comdty (Generic 1st 'CO' Future)

Brent Crude was seen trading in a wide range of 62-70 USD/bbl mark and remained volatile during the last month

Geo-political issues in middle east and supply side problems are expected to keep the prices of crude range bound in the comingmonths

Source: Bloomberg. Data as on 20th Mar’18

FPI INVESTMENTS

Source: NSDL, SEBI, ICRA MFI Explorer/ Bloomberg. Data from 1st Jan’17 to 28th Feb’18

344

-5000

0

5000

10000

15000

20000

25000

30000

Jan-

17

Feb-

17

Mar

-17

Apr

-17

May

-17

Jun-

17

Jul-1

7

Aug

-17

Sep-

17

Oct

-17

No

v-17

Dec

'17

Jan'

18

Feb-

18

INR

Cr

FPI's Net Flow in Debt (INR Crs)

RBI to increase FPI limit (in phases) to 5%(G-sec) & 2%(SDL) of outstanding stock by March 2018

During the month of Feb’18, FPIs significantly decreased allocation to Indian debt markets to the tune of Rs. 344 crs in

Feb’18 from Rs.8523 crs in Jan’18

IMPROVED CREDIT QUALITY

Fig. 1: Semi-annual trends in credit ratio and debt-weighted credit ratio

Fig. 2: Semi-annual trends in debt upgrades and downgrades

Credit quality has improved; aided by recent spurt in the government spending & steady growth in private consumption

Sustained recovery (indicated by IIP) is still not certain; Investment linked sectors under pressure

Source: CRISIL Rating Roundup

INVESTMENT GRID

With the current credit environment surrounded by uncertainty, a fund is likely to benefit which endeavors to: Benefit from Interest Rate volatility with Moderate Risk and Aims to capture High Quality Corporate Bond Yields

RBI not aggressive in changing interest rates

Government closely monitoring Fiscal Deficit

India feeling the impact of global headwinds

Corporate balance sheets loaded with excess debt

Curr

ent

Scen

ario

INVESTMENT STRATEGY

Accrual Income

Capital Appreciati

on & Liquidity

Investment

Strategy

Average Maturity

Predominant allocation to high credit quality corporate bonds

Tactical allocation to G-Sec and money market instruments

Average maturity of the fund would be in the range of 3 to 7 years

Canara Robeco Medium Term Opportunities Fund offers attractive yields generating ‘Regular Accrual’ by investing in only ‘High Quality Debt Instruments’ with ‘Low to Medium Term Duration’ thereby seeming to be a ‘Perfect Fit’ in the current Scenario

WHY INVEST

•Ideal investment horizon of the scheme is 3-5 years, which helps investors mitigate short term volatility

•Fund will actively manage duration within average maturity range of 3 to 7 years based on fund manager's view on interest rates

•Substantial exposure to AAA papers and AA+ papers

•Exposure to lower risk, yield generating SDLs

•Accrual Income: Through Corporate Bond Exposure

•Capital Appreciation: Through G-sec Exposure

Benefit from both Accrual and Duration

Quality Debt Papers

Uncertain Macro-

Economic Factors

Active Management

PORTFOLIO HIGHLIGHT

As per the latest portfolio, a substantial portion of the portfolio was allocated to securitiesrated AA+ & above, Sovereign and Cash & Cash Equivalents with a view to maximize incomewhile maintaining an optimum balance of safety & liquidity.

The fund has optimized returns by keeping its average maturity consistent between 3 to 5years with a stable underlying Corporate Bond holding.

The fund is positioned to benefit from expected downward movements in interest rates owingto the accommodative stance of RBI and expected transmission of rate cuts by the banks.

PORTFOLIO SNAPSHOT

Data as on 28th Feb’18

19.00%

14.67%

66.33%

Asset Allocation

Cblo/Repo/Reverse Repo &Net Current Assets

Treasury Bills/ Sovereign

NCDs/Bonds

19.00%

14.67%

19.54%

46.78%

Rating Allocation

Cblo/Repo/Reverse Repo &Net Current Assets

Treasury Bills/Sovereign

AA+ & Equivaent

AAA & Equivalent

PORTFOLIO SNAPSHOT

Data as on 28th Feb’18

4.21%

14.80%

13.51%

13.62%

53.86%

0% 10% 20% 30% 40% 50% 60%

Net Current Assets

0 to 3 Months

3 to 6 Months

1 -2 years

Greater than 2 Years

Maturity Profile

Average Maturity Yrs 3.21

Modified Duration 2.28

Yield To Maturity 7.76%

PORTFOLIO SNAPSHOT

Data as on 28th Feb’18

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18

Asset Allocation

Cblo/Repo/Reverse Repo & Net Current Assets Commercial Paper NCDs/Bonds Treasury Bills/ Sovereign

PORTFOLIO SNAPSHOT

Data as on 28th Feb’18

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18

Rating Allocation

Cblo/Repo/Reverse Repo & Net Current Assets AAA & Equivalent AA+ & Equivaent A1+ & Equivalent Treasury Bills/Sovereign

FUND FACTS

Data as on 28th Feb’18

Fund Category Open ended debt scheme

Investment ObjectiveThe investment objective of the scheme is to generate income and capital appreciation through a portfolioconstituted of medium term debt instruments and money market instruments. However, there can be noassurance that the investment objective of the Scheme will be realized

Inception Date 7-Feb-14

Asset Allocation GoI & Debt Securities: 60%-100%Money Market Instruments : 0% - 40%.

Plans/Options Regular & Direct Plan:

Options: Growth / Daily, Weekly, Monthly and Quarterly Dividend with payout & Reinvestment

Facilities SIP/ STP/ SWP/ Dividend Transfer Facility

Fund Size Rs. 259.29 Crs (Month End AuM)

Load Structure Exit Load: 1% - If redeemed/switched out within 1 year from the date of allotmentNil - If redeemed/switched out after 1 year from the date of allotment

Benchmark CRISIL Composite Bond Fund Index

Fund Manager Mr. Avnish Jain

The information used towards formulating the outlook have been obtained from sources published by third parties. While suchpublications are believed to be reliable, however, neither the AMC, its officers, the trustees, the Fund nor any of their affiliates orrepresentatives assume any responsibility for the accuracy of such information. CRMF, its sponsors, its trustees, CRAMC, itsemployees, officer, directors, etc assume no financial liability whatsoever to the user of this document. Mutual FundInvestments are subject to market risk. Investors are requested to read the Scheme related documents carefully beforeinvesting.

Mutual Fund investments are subject to market risks, read all Scheme related documents carefully.

DISCLAIMER