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Wealth Creation for you and your Customers via SIP’s

Wealth Creation for you and your Customers via SIP’s. Where can one invest ??. Postal Savings RBI bonds / GOI bonds ( G secs ) ‏ PSU/ F I bonds - NHAI/ REC/ NABARD/ IDBI / ICICI etc Fixed Deposit - Bank / Co Shares & Stocks , Derivatives Commodities Real Estate. Liquidity. Safety.

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Wealth Creation for you and your Customers via SIP’s

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  1. Wealth Creation for you and your Customers via SIP’s

  2. Where can one invest ?? • Postal Savings • RBI bonds / GOI bonds ( G secs )‏ • PSU/ F I bonds - NHAI/ REC/ NABARD/ IDBI / ICICI etc • Fixed Deposit - Bank / Co • Shares & Stocks , Derivatives • Commodities • Real Estate

  3. Liquidity Safety You get your money back when you want it Your money is managed by experts Plus Convenience How easy is it to invest, disinvest and adjust to your needs? Post-tax Returns How much is really left for you post tax? Key Investment Considerations • For the same liquidity - higher the safety, lower the returns • For the same safety - higher the liquidity, lower the returns Mutual Fund investments are subject to market risks Please read the offer documents carefully before investing.

  4. Liquidity Convenience Risk Diversification Flexibility Transparency Regulated Plus Tax benefits MFs offer all of above Most open ended funds redeem within 1 working day. Easy to invest and easy to redeem Diversified portfolio leads to risk control Most Funds allowing switching between funds. From debt to equity etc. Disclosure of Portfolio NAV declared daily Mutual Funds are regulated by SEBI. Tax benefits Capital Gains Tax-free Dividends

  5. Income Phase I Phase II Phase III Children’sMarriage ChildEducation Housing Children Marriage 38yrs Over25 - 30yrs 22yrs Earning Years Retirement Age Birth & Education 22 yrs 60 yrs Financial Planning for the future……...

  6. Cost of Living Items 1987 1997 ( Rs )‏ ( Rs. )‏ Colgate toothpaste 8.05 18.90 ( 100 gm tube )‏ ( 8.91 % )‏ Hamam Soap 3.05 7.85 ( 9.92 % )‏ Masala Dosa 3.50 14.00 ( 14.87 % )‏ Petrol 7.99 25.48 ( per litre )‏ ( 12.30 % )‏ L P G Cylinder 56.15 137.85 ( 9.40 % )‏ Zodiac men’s shirt 225.00 510.00 ( 8.53 % )‏ Source : Readers Digest – Nov 1997

  7. Cost of Living 2017 Items 1997 ( Rs. )‏ ( Rs )‏ 104.00 Colgate toothpaste 18.90 ( 100 gm tube )‏ 52.00 Hamam Soap 7.85 224.00 Masala Dosa 14.00 259.12 Petrol 25.48 ( per litre )‏ 830.85 L P G Cylinder 137.85 2620.27 Zodiac men’s shirt 510.00 Assuming inflation to grow at the same rate during 1987-97

  8. INFLATION ROBS YOUR PURCHASING POWER(Assuming inflation @ 8% p.a.)‏

  9. Why equities are the best bet for long term. …. Source : RBI Report(1997-98)‏ Analyzed on 15 Year Data

  10. EQUITIES ARE THE BEST LONG TERM BET % OF STUDIED PERIOD IN WHICH Other investment outperformed 14% 37% 44% Stocks outperformed 86% 63% 56% 1 year 3 year 5 year Source : RBI Report on Currency and Finance (1997-98)‏ BSE Sensitive Index of Equity Prices - BSE

  11. EQUITY = LOSS ? SENSEX 1991-2006 IT IS UP 90 TIMES IN 26 YEARS ^ Source : Bloomberg ^ Since BSE Sensex Inception to June 13,2006

  12. EQUITY = WEALTH

  13. EARNINGS DRIVE RETURNS • INVESTING IS SIMPLE • ASK TWO QUESTIONS? • WILL THESE COMPANIES BE THERE TEN YEARS FROM NOW • IF YES,WILL PROFITS THEN BE HIGHER THAN TODAY?

  14. MUTUAL FUND = LOSS ? Prudential ICICI Growth Plan 1999-2006 NAV IS UP 6 TIMES IN 8 YEARS From Jan 1,1999 to June 9,2006 Past performance is not an indicator of future performance. It may or may not be sustained in the future

  15. MUTUAL FUND = LOSS REMEMBER THE TECH FUNDS Prudential ICICI Technology Fund Past performance is not an indicator of future performance. It may or may not be sustained in the future

  16. MUTUAL FUND = LOSS REMEMBER THE TECH FUNDS Prudential ICICI Technology Fund Past performance is not an indicator of future performance. It may or may not be sustained in the future

  17. ICICI Prudential Systematic Investment PlanA recurring deposit account with a mutual fund

  18. What is an SIP? • Investing a fixed sum, regularly in a mutual fund • Allows one to buy units in a particular scheme on a given date every month • Similar to regular savings schemes like a recurring deposit

  19. Benefits of Cost Averaging Past performance may or may not be sustained in future ~Assume a hypothetical investment of Rs.1000 every month in PruICICI Power since inception An SIP reduces the average cost of investment in fluctuating markets The above is for illustration purposes only

  20. Lump sum investment vs. SIP The direction of the markets is unpredictable. Performance of lump sum investment depends on the price at which they are bought Past performance may or may not be sustained in future An SIP reduces these risks by spreading the investments over a longer period of time, at various levels of the market The above is for illustration purposes only

  21. SIP MAKES SENSE FUND RETURN –0.74 % SIP RETURN 36.29 % MAR 7,2000 TO JAN 8,2004 Prudential ICICI Growth Plan Past performance is not an indicator of future performance. It may or may not be sustained in the future

  22. Sensible Equity Investing for Long Term Total amount invested as of Nov ’06 : Rs.3,32,000 Mkt Value of investment as of Nov 01 ’06: Rs.74,56,554

  23. SIP vs Lump Sum Investment Returns on Lump Sum investment Returns on SIP Mutual Fund investments are subject to market risks Please read the offer documents carefully before investing. Past performance may or may not be sustained in future

  24. ICICI Pru Dynamic Plan Inception : Oct 2002 Diversified Equity Scheme Rs 10,000 Invested @ Inception : Today Rs 79,490 Rs 1000 invested as SIP since Inception : 59 Installments : Cost Value Rs 59,000 Today’s Value : Rs . 1,80,534 = 48.90% XIRR Retn

  25. ICICI Pru Emerging Star Fund Inception : Oct 2004 Diversified MID Cap fund Rs 10,000 Invested @ Inception : Today Rs.34,530 Rs 1000 Invested as SIP since Incpetion 36 installments : cost Value Rs 36,000 Today’s Value : Rs 64,418 retn 44.11 % XIRR

  26. ICICI Pru Infrastructure Fund Inception : Aug 2005 Infrastructure Theme Fund Rs 10,000 invested @ inception : Today Rs 27,120 Rs 1000 invested as SIP since Inception : 25 installments : cost Value Rs, 25,000 Today’s Value : Rs 38,093 = 48.10% XIRR Retn

  27. Thank youHappy Investing

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