About Volatility

We appreciate the fact that investors typically look for a stable monthly dividend income from PineBridge India Short Term
Fund (an open ended income scheme). It would be pertinent to mention that since this fund dynamically invests in liquid
instruments in order to take advantage of shifts in yield curves, it would be difficult, if not impossible, to get steady
dividends especially on a monthly basis. The reason for this is that the fund does not value its holdings on a hold to
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maturity basis; these are rather marked to market on a daily basis. Even though instruments in the portfolio do generate
interest income on a daily basis, the principal amount gets marked to market and sometimes offsets the interest income
thus generated.
This reduces the distributable surplus and thus affects the funds ability to pay stable dividends on a monthly basis. This is
also true because most of the securities in the portfolio are highly liquid and get traded frequently.
On the other hand, we believe that such short term volatility is a small price to pay for longer term benefits. This is because
if we are able to exploit market inefficiencies, we can expect to generate capital gains apart from interest income.
The graph below clearly demonstrates that the volatility in dividend tends to reduce as the holding period increases.
Please refer to the calculation methodology in the following page.
Strategy Spotlight
PineBridge India Short Term Fund
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Monthly Rolling quarterly
average
Rolling Half yearly
average
Rolling Annual
average
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Variation in Monthly Dividend
*Available at our Ahmedabad, Bengaluru, Chennai, Mumbai, New Delhi and Pune branches only.
Distributor Care:
(City Code) 60000344*
Email:
india.distributorcare@pinebridge.com
Website:
www.pinebridge.in
Disclaimer - This document is intended solely for the addressee(s). Its content may be legally privileged and/or confidential. The content is based on
information received from sources we consider reliable. Views expressed here in alone are not sufficient and should not be used for the development or
implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions and information included in this
constitute our view as of this date and are subject to change without notice. We are not soliciting or recommending any action based on this material.
Neither PineBridge Investments Asset Management Company (India) Private Limited (AMC), nor any person connected with it, accepts any liability arising
from the use of this information. While utmost care has been exercised while preparing this, the AMC disclaims all liabilities, losses and damages arising
out of the use of this information. Recipients of the information contained herein should exercise due care and caution and read the Scheme Information
Documents (including if necessary, obtaining the advice of tax / legal / accounting / financial / other professionals) prior to taking of any decision, acting or
omitting to act, on the basis of the information contained herein. The scheme does not guarantee or assure any dividend and also does not guarantee or
assure that it will make any dividend distribution though it has every intention to make the same in the dividend option. The dividend distribution is subject
to the investment performance of the scheme.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
PineBridge Investments is a group of international companies that provides investment advice and markets asset management products and services to
clients around the world. PineBridge Investments is a registered trademark proprietary to PineBridge Investments IP Holding Company Limited.
Calculation methodology:

Fund Positioning
We have used the gross dividend / unit in PineBridge India Short Term Fund Standard Plan Monthly Dividend Option for the period
April 2011 to March 2013 (the study period).
Monthly: Maximum & Minimum dividend during the study period
Rolling Quarterly: Maximum & Minimum dividend arrived at by taking the rolling average of monthly dividends on quarterly basis
during the study period
Rolling Half yearly: Maximum & Minimum dividend arrived at by taking the rolling average of monthly dividends on half yearly basis
during the study period
Rolling Annual: Maximum & Minimum dividend arrived at by taking the rolling average of monthly dividends on annual basis during
the study period
While doing the above calculations, we also noted that PineBridge India Short Term Fund - Standard Plan - Monthly
Dividend Option has not missed a single dividend during the study period.
Past performance may or may not be sustained in future.
We would want PineBridge India Short Term Fund to be positioned for a minimum of 3 - 6 months (preferably 6 months) but
not for any period lower than 3 months. We believe there is no upper limit as to how many months the investor would want
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to stay with us. The reason is given the fact that most of the securities in the fund are marked to market on a daily basis, it
may take time to smoothen out short term volatility, as shown in the earlier chart.
An investor who comes in with a longer holding period (greater than 6 months) may experience lesser volatility as
compared to, say, an investor in PineBridge India Total Return Bond Fund (an open ended income scheme) on a daily basis.
The reason is that PineBridge India Short Term Fund will be typically running a shorter maturity than PineBridge India
Total Return Bond Fund and any movement in interest rates is likely to be more amplified in the latter fund than the former.
Rationale for having a No-Load Fund
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We have been running PineBridge India Short Term Fund as a No Load fund since March 2, 2012. The rationale for having
a No-Load fund flows from identifying the hierarchy of various risks embedded in investing into such a product. As a fixed
income product, in our experience, investors typically allocate a substantial sum of money due to the perceived low risk as
compared to an equity product. Hence, they have very little tolerance of losing their principal. Therefore, we endeavor not
to invest in anything other than very high grade / rated instruments. Secondly, given that the investors allocation is
generally so large in a fixed income product, the investor would want the money on call option wherein he has the ability
to withdraw the same at will either for emergencies or for investing in another asset class or for the fact that he has
achieved his objective of playing the interest rate movement. Hence, liquidity for the investor is very important.
We would also like to highlight that the applicability of load is not a signal to investors about the holding period. Rather, it is to
provide liquidity and minimize the risk of being trapped in a locked-in product.
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AMC/ trustees reserves the right to introduce exit load on a future date. April 16, 2013
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Securities greater than 60 days to maturity are marked to market.
Strategy Spotlight
PineBridge India Short Term Fund