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SYSTEMETIC INVESTMENT PLAN

Empowering Beginner
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Agenda

Various Stages of Life Cycle


Preserving the Purchasing Power of your investment
Financial Goals
How to achieve the goals
Sooner the better
Regular Investment is the key
Invest Wisely
Systematic Investment Plan
What is SIP & how does it work?
Patience is the key
Past performance in various market cycle

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Life Stages

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Biggest Challenge In Savings

Fighting consumer inflation


Fighting Lifestyle inflation

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Example of Consumer Inflation

1985
Balcony Ticket : Rs 15/-

2014

Multiplex Ticket : Rs 250/-

Inflation Meter: 10.19%

1985
Hotel Bill : Rs 25/-

1985
Petrol Price : Rs 8 / L
1985
MBA Course : 40,000/-

2014
Hotel Bill : Rs 1000/Inflation Meter: 13.41%
2014
Petrol Price : Rs 72 / L
Inflation Meter: 7.87%
2014
MBA Course : 10,00,000/Inflation Meter: 11.54%
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Real Life Example

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Inflation Robs Your Purchasing Power


Impact of inflation on monthly
expenses of Rs. 30,000 today
96,214

Value of Rs. 100,000 over time

100,000
74,726

71,897
41,727
40,147

31,180

30,000

Today

5 years

15 years

20 years

Today

5 years

15 years

20 years

At inflation of 6%
Investors need to beat inflation
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Yesterdays luxury - Todays necessity


Things which were not in our buying list 10 years before, but
they are common nowadays
Mobile,
LED,LCD television
AC
CAR
Foreign Trips
Electronic Gadgets

With Rise on Income Level and technological advancement many


more such things will get added into the list.

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We All Have To Save

We All Need To Save For


Retirement
Childs Education
Childs Marriage
Medical Emergencies

Buying a House
Buying a Car
Saving for Vacation

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Child Education Planning

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Son/Daughters Marriage Planning

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Retirement Planning

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Brief Look At Our Future Cost


Child Education
Medical

: After 11 Yrs
: Rs. 34 Lac

Wedding of Child : After 16 Yrs


Marriage
: Rs. 43.7 Lac

Retirement
Retirement Kitty

: After 21 yrs
: Rs. 1.4 cr

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3 Mantra For Achieving Your Goals Effectively

Sooner the Better


The longer you save, the more you make

Regular investment is the key


Even a small amount saved regularly,
is good

Invest wisely
This will dictate how much wealth
you create
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Sooner The Better

TIMING THE MARKET IS NOT IMPORTANT GIVING TIME IS IMPORTANT


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Sooner The Better

900

845

800
700
600
500

Amount Invested

400
272

300

Wealth Created

200
100

56

61

Mr Smart

Mr Relaxed

TIMING THE MARKET IS NOT IMPORTANT GIVING TIME IS IMPORTANT


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Regular Investment Discipline Is The Key


350.0
313.0
300.0

250.0

Future Value of Rs
5000/- Invested
monthly

200.0
15 Years
20 Years
150.0

137.8
123.8

25 Years

100.0
66.4
47.8

45.7

50.0
17.0

26.6

30.8

0.0
8%

15%

20%

Amount in Graph is in Lacs


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Invest Wisely

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Helping You Achieve Your Goals In Life


How Much Monthly Investment Need to Achieve Your Goal
@ 8%
Child Education
Medical

: After 11 Yrs
: Rs. 34 Lac

@ 18%

Rs. 16419

Rs. 9051

Wedding of Child : After 16 Yrs


Marriage
: Rs. 43.7 Lac

Rs. 11516

Rs. 4559

Retirement
Retirement Kitty

Rs 22187

Rs. 6122

: After 21 yrs
: Rs. 1.4 cr

Not Investing in to Equity is more Risky


then Investing in to!!!!!!

Investing These much


Amount not possible
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Invest Wisely
39,000

Fixed Deposit

36,000

Sensex

33,000

Sensex cum Dividend

Gold

35,420

If you had invested Rs. 100...

30,000

Nominal Value

27,000
24,000

21,165

21,000
18,000
15,000
12,000
9,000

4,085

6,000

Source: Bloomberg, MOAMC Internal Analysis. Data as on 31st October, 2013.

Oct-10

Apr-09

Oct-07

Apr-06

Oct-04

Apr-03

Oct-01

Apr-00

Oct-98

Apr-97

Oct-95

Apr-94

Oct-92

Apr-91

Oct-89

Apr-88

Oct-86

Apr-85

Oct-83

Apr-82

Oct-80

Mar-79

Oct-13

1,619

100

Apr-12

3,000

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Invest Wisely
Equities significantly enhance purchasing power of portfolios
Inflation-adjusted returns of different assets
3,000

Sensex

Sensex cum Dividend

Gold

Fixed Deposit
2,175

If you had invested Rs. 100...

2,000

1,300

1,500

1,000

251

100

99
Apr-12

Oct-10

Apr-09

Oct-07

Apr-06

Oct-04

Apr-03

Oct-01

Apr-00

Oct-98

Apr-97

Oct-95

Apr-94

Oct-92

Apr-91

Oct-89

Apr-88

Oct-86

Apr-85

Oct-83

Apr-82

Oct-80

Oct-13

500

Mar-79

Purchasing Power

2,500

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Invest Wisely

2014

258500

2.85 Crore

In past 35 years BSE Sensex has given approx. 17.53% returns


This is in spite of
Two wars
At least three major financial scandals
US Sub Prime and Recession
Assassination of 2 prime ministers
Subprime Crisis Global slowdown

*November, 2014

At least 3 recessionary periods


Twin Tower 9/11 Attack
10 different governments and
An unfair share of natural disasters
Attach on Parliament

Risk factors: Mutual Fund investments are subject to market risks. Past performance may or may not be repeated in
future. Please read the offer document carefully before investing.
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Challenges While Investing In Equity


CHALLENGES INVOLVED INVESTING
DIRECTLY IN CAPITAL MARKET
Time
Expertise
Lack of Information
Portfolio
Volatility

OR

PEOPLE DO COMMON
MISTAKE.
Believing in Hot Tips !!
Market Timing
Investing for a Short term
Expert Recommendation
Product oriented approach
Decision based on emotions

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Solution

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Benefits of Investing into SIP

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How SIP Works

Time (Month) Amount Invested NAV (Per Unit Rs) Units Purchased
1
1,000
23
43.48
2
1,000
21
47.62
3
1,000
22
45.45
4
1,000
19
52.63
5
1,000
16
62.50
6
1,000
17
58.82
7
1,000
17
58.82
8
1,000
20
50.00
9
1,000
21
47.62
10
1,000
19
52.63
11
1,000
25
40.00
12
1,000
24
41.67
Total
12,000
601

Average NAV Per Unit over 12 months =


(21+21+22+19+16+17+17+20+21+19+25+24)/12
or Rs 20.34

Average Cost per unit over 12 months =


12000/601
or Rs 19.96

Average Cost Per Unit Will always be lesser than the Average NAV per Unit,
regardless of the market movements.
Source: Internal, hypothetical numbers for illustration purpose only

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Equity Investment Is Like Growing A Chinese


Patience
is
the
Key
Bamboo

YEARS

You take a tiny seed, plant it and water it...you get a tiny
sampling.... nothing more

You water it, fertilize it.... the sampling stays as it is....


nothing happens

You continue to water it, take care of it...still nothing


happens

Against your better judgment, you need to continue to


water it, fertilise it... and still nothing will happen

To everyone's surprise, the tree sprouts and grows NINTY


feet in SIX weeks

What was going on in first Few Years?


The tiny sampling was actually developing its root system underground to
sustain its impending over the ground growth fifth year onwards.

Chinese Bamboo tree


tests your patience

If you had uprooted the sampling to see why it was not growing, it would die.
But if you were patient and had faith, you would witness the miraculous growth
later on

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Equity Investment Is Like Growing A


Returns From Equities Are Not Constant
Chinese Bamboo

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Equity Investment Is Like Growing A


Returns From Equities Are Not Constant
Chinese Bamboo

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Equity
Investment
Is Like To
Growing
A Bamboo
SIP Returns
Similar
Chinese
Chinese Bamboo
Scheme Name
SIP of Rs 5000 per month

Birla Sun Life Equity Fund


Birla Sun Life Mid Cap Fund
DSP BlackRock Equity Fund
DSP BlackRock Small and Midcap Fund
DSP BlackRock Top 100 Equity Fund
HDFC Equity Fund
HDFC Growth Fund
HDFC Top 200
Kotak 50
Reliance Growth
Reliance Vision
Sundaram SMILE Fund
Tata Equity P/E Fund

3 Years Return as on 17th Aug. 13 Return of same till 30th Sept 2015
(SIP continued )
(SIP Stopped)
Total
Investment

180000
180000
180000
180000
180000
180000
180000
180000
180000
180000
180000
180000
180000

Value

171787
164416
166851
159774
179842
164718
165589
168967
176727
163569
153723
150503
163176

Total
Present
CAGR Investment Value(SIP)

-3.17
-6.11
-5.13
-8.00
-0.06
-5.98
-5.63
-4.28
-1.25
-6.45
-10.52
-11.89
-6.61

305000
305000
305000
305000
305000
305000
305000
305000
305000
305000
305000
305000
305000

Normally average Investor stops SIP after 3 or 5 years


if returns are not good or negative

504741
543052
447707
539340
412369
444222
409246
423371
453199
483541
447850
602969
485230

CAGR

19.91
22.88
15.09
22.60
11.82
14.78
11.52
12.86
15.58
18.18
15.10
27.17
18.32

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Equity
Investment
Is Like To
Growing
A Bamboo
SIP
Returns

Similar
Chinese
SIP
Returns
Similar To Chinese Bamboo
Chinese
Bamboo
Scheme Name
SIP of Rs 5000 per month

Birla Sun Life Equity Fund


Birla Sun Life Mid Cap Fund
DSP BlackRock Equity Fund
DSP BlackRock Small and Midcap Fund
DSP BlackRock Top 100 Equity Fund
HDFC Equity Fund
HDFC Growth Fund
HDFC Top 200
Kotak 50
Reliance Growth
Reliance Vision
Sundaram SMILE Fund
Tata Equity P/E Fund

5 Years Return as on 17th Aug.13


(SIP Stopped)
Total
Investment
300000
300000
300000
300000
300000
300000
300000
300000
300000
300000
300000
300000
300000

Value
326814
330158
332700
344293
351504
344709
333513
343043
336806
319006
291942
291401
325948

CAGR
3.49
3.90
4.22
5.62
6.47
5.67
4.32
5.47
4.72
2.50
-1.11
-1.18
3.38

Return of same till 30th Sept


2015 (SIP continued )
Total Invest
ment
425000
425000
425000
425000
425000
425000
425000
425000
425000
425000
425000
425000
425000

Normally average Investor stops SIP after 3 or 5 years


if returns are not good or negative

Present
Value(SIP)
815494
913451
742021
965914
670771
771059
680040
714027
725096
790679
713781
988711
813063

CAGR
18.07
21.22
15.45
22.77
12.66
16.52
13.04
14.39
14.81
17.21
14.38
23.42
17.98

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Equity
Investment
Is Like Growing A
SIP Returns
Summary
Chinese Bamboo
Particulars

15 Years 20 Years

Total Number of Schemes


Highest Return (%)
Lowest Return (%)
Average Return (%)
Schemes with 20% plus CAGR
Schemes with 15% plus CAGR
Schemes with 12% plus CAGR
Schemes with 8% plus CAGR

52
26.05%
8.51%
19.18%
27
42
50
52

19
24.78%
11.16%
18.9%
8
14
18
19

All diversified equity funds which has completed 15 years


and 20 years respectively as on 30th Sep., 2015

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LETS INVEST SYSTEMATICALLY


FOR THE SMOOTH AND WORRY FREE LIFE

THANK YOU

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