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Systematic Investment Plan (SIP)

Simple
Min Investment of only Rs.500

Intelligent

Benefit from the Power of Compounding

Practical
Link to your Financial Goals

Did you know ?

If your current monthly expenses are Rs. 30,000/- p.m, after 20 years you will require Rs. 80,000/- p.m to maintain the same lifestyle
Assuming inflation rate of 5%

Did you know ?

An education degree for your child which currently costs Rs. 10 lakh will cost Rs. 21 lakh after 15 years.

Assuming inflation rate of 5%

Individual Investor Needs: Investment Goals


All individuals need to save for
Retirement Childs education / marriage Medical emergency Other family obligations

Every individual has one or more of the above goals

Individual Investor: Life Stages


Earnings Savings

Consumption 22 27 Young Independent Young Married 40 Middle Age 60 Retirement

All individuals have a finite period to save for their investment goals

Value of Money over time


Impact of inflation on monthly expenses of Rs. 30,000 today Value of Rs. 100,000 over time
100,000

62,368

38,288 30,000

79,599 Today 5 years 15 years 20 years Today 5 years 15 years 20 years

At inflation of 5%

Investors need to beat inflation

Performance of Various Asset Classes


Cumulative annualised returns 1980-2004
15.6%

10.3% 6.7%

8.9%

5.7% 3.55% -1.1%

Inflation

Gold

Bank FDs

BSE Sensex

Growth

Real Growth

Equities outperform other asset classes over the long term

Individual investors are scared of ..

The Downside The The

in EquitiesRisk

of Market VolatilityRisk of Market TimingRisk

What else makes a material impact on investments in equity ? Investing in the BSE Sensex 25 years
Returns are from 1981- Dec 2005
16.90% 15.07%

16.02%

Fixed investment at highest sensex value every year

Fixed investment at lowest sensex value every year

Fixed investment on
st

1 day of every month

Market timing does not matter over the long term

The Power of Compounding

Debt Instrument

BSE Sensex Scenario A

BSE Sensex Scenario B

Monthly investment Assumed annualised return Final corpus

Rs. 5,000

Rs. 5,000

Rs. 5,000

10% Rs. 43 lakh

15% Rs. 89 lakh

20% Rs. 1.9 crore

From Jan 1, 1984 to Dec 31, 2004 a 21 year period

Summary
Investors needs to save regularly and invest those savings in higher return assets to create wealth

Long Term Systematic Monthly Investment in equity schemes is ideal for this

How Do You Achieve Your Financial Goals


Retirement Childs education - international Family commitments - medical emergency, etc

Retirement Planning

Monthly Household Expenses 83,579

Retirement corpus required to meet post retirement expenses. (if invested at 7%)

1.4 crore
30,000
Inflation 5%

Monthly investment needed to meet post retirement expenses 21 Yrs at 12% at 15% 12,583 8,083 5,090

Today

At the time of retirement

at 18%

Childs Education
Educational Degree

34,20,000 20,00,000
Inflation 5%

Monthly investment needed to achieve this goal at 12% at 15% at 18% 12,456 10,166 8,237

11 Yrs

Present

When your child actually goes


for this degree

Childs Marriage

43,70,000 Monthly investment needed to achieve this goal 20,00,000


Inflation 5%

at 12% at 15% at 18%

7,509 5,466 3,925

16 Yrs

Present

When marriage actually takes place

So What Are The Benefits Of Investing Through A Systematic Investment Plan !


The Benefit of Long Term Equity Investment

Benefit : 1

Equities give superior returns among all asset classes over the long term Mutual Fund has a track record of consistent good performance relative to index.

The Benefits of Systematic Monthly Investment

Benefit : 2

Takes out the risk of market timing Adds the benefits of the power of compounding and rupee cost averaging

Flexibility

Benefit : 3

You can choose from a wide array of schemes You can decide to keep invested amounts in an earlier scheme & invest future SIP instalments into a new scheme

Added Convenience

Benefit : 4

Auto debit facility across major cities in India Regular account statements Redemption request directly credited into your bank account

Make your investment goals a reality Start a S.I.P. today ! A Rupee Saved Is A Rupee Earned - A Long Journey Begins With A Small Step

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