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Systematic Investment Plan
A Reliance Capital company
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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 life style
Assuming inflation rate of 5% Assuming inflation rate of 5% A Reliance Capital company
Assuming inflation rate of 5% A Reliance Capital company .Did you know ? An education degree for your child which currently costs Rs. 10 lakh will cost Rs. 21 lakh after 15 years.
Individual Investor needs: Investment Goals All individuals need to save for • Retirement • Child‟s education / Marriage • Medical emergency • Other family obligations Every individual has one or more of the above goals during some part of their Life Stages A Reliance Capital company .
Life stage planning Emergencies???? Kid 2’s Marriage Kid 1’s Marriage Retirement House Car Kid 2’s College Kid 1’s College Kid 1 Kid 2 Do you want to compromise on your living standard after your retirement ???? Marriage Savings / Investing 0 Birth and Education 25 Earning Life Age 60 Retired Life 75 + A Reliance Capital company .
Individual Investor: Life Stages Earnings Consumption Savings 22 27 Young Independent Young Married 40 Middle age 60 Retirement All individuals have a finite period to save for their investment goals A Reliance Capital company .
353 Today 5 years 15 years 20 years Today 5 years 15 years 20 years At inflation of 5% As investors we need to beat Inflation A Reliance Capital company .288 30. 30.102 38.368 48.000 78.689 Value of Rs.000 over time 100.Value of Money over time Impact of inflation on monthly expenses of Rs.000 today 79.599 62. 100.000 37.
4 Crores 30.000 Inflation 5% Monthly investment needed to meet post retirement expenses 21 Yrs at 12% at 15% 12.579 Retirement corpus required to meet post retirement expenses. (if invested at 7%) 1.090 A Reliance Capital company .Retirement Planning Monthly Household Expenses 83.083 Today At the time of retirement at 18% 5.583 8.
166 8.420.000 2.237 Present A Reliance Capital company .456 at 15% 11 Yrs When your child actually goes for this degree at 18% 10.000 Inflation 5% Monthly investment needed to achieve this goal at 12% 12.Child‟s Education Educational Degree 3.000.
So what should I do? An Ideal investment should • Beat Inflation • Fund my future needs • Meet contingencies • Maintain same standard of living after my retirement A Reliance Capital company .
03.But I do save… (or Do I Save?) Money in Savings Account Interest earned in 1 year (@3.081 5.9%) Impact of Inflation (@5% pa) Value at the end of year 1 - A Reliance Capital company .418 Tax on Interest (@30.000 97.000 3.500 1.500 1.5%pa) + + 100.
. Is not a function of income Is not a function of investment expertise Is really a matter of Regular Savings A Reliance Capital company .Our Perceptions… Mutual Fund perceived as x Meant for Corporates and HNWs/HNIs x x x x x x Short term in nature Investment in Equity Risky in nature Too Complicated Don‟t know how to invest into one Markets are not right to start Whereas creating wealth through Mutual Fund.
So what‟s your KEY to success? Its not the timing but the time in the market which matters Start Early Invest Regularly Invest Long-Term A Reliance Capital company .
45 Geeta wants to catch up with Seeta.52 Geeta 38 5000 8% 58 1200000 29. Isn’t it ?? Past Performance may or may not be sustained in future.12651 Difficult….. She has two choices • Either earn on his investment @17% OR • Save monthly Rs. A Reliance Capital company .Start Early : Cost of Delay Starts investing at the age (in years) Monthly savings (in rupees) Returns Expected from Bank Fixed Deposit Both invest till the age of (in years) Total investment (in rupees) Wealth accumulated (in rupees Lakhs) Seeta 28 5000 8% 58 1800000 74.
1000 every month from July 2009 to Oct 2010 in a diversified equity fund.21 2.43 2.4773 439.17 3. Date NAV Units Cashflow 10-Jul-09 10-Aug-09 10-Sep-09 12-Oct-09 10-Nov-09 10-Dec-09 11-Jan-10 10-Feb-10 10-Mar-10 12-Apr-10 10-May-10 10-Jun-10 12-Jul-10 10-Aug-10 13-Sep-10 11-Oct-10 Total 307. investing Rs.11= Rs.25 2. The NAVs do not in any manner indicate the future NAVs of the any of the schemes of Reliance Mutual Fund.95 1.1187 528.56 392.89 38.69 Average Cost < Average Price Note: The above table considers the actual NAV of Reliance Growth Fund to explain the concept of Rupee Cost Averaging. A Reliance Capital company .15 2.66 2.3015 466.7611 416.419.31 2.11 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 16000 Average Cost= Total Cash Outflow/Total Number of units= Rs. It would be lower than the average NAV of your investment over 12 months.1867 6843.55 2.02 375.92 2.09 1. Past Performance may or may not be sustained in future.40 2.1006 478.26 2.8179 451.8712 Average Price= Sum of all NAVs at which invested/Number of months of investment=Rs.9638 448.23 2.8933 512.427.Invest Systematically (regularly) Benefit of Rupee Cost Averaging Illustration :Say you have opted for Reliance Systematic Investment Plan.17/16= Rs. Now check the average purchase cost per unit of your investments.55 2.16000/38.7852 412.21 343.46 392.6843.27 2.2077 432.3055 445.
345 … just like a rolling snowball gathers snow & grows. compounded return instrument every month for… Power of Compounding Amount after compunding 700. 73.947 Amount 348.000 500. A Reliance Capital company .000 300.000 200.967 184.000 400.000 0 5 yrs 10 yrs 20 yrs Period 15 yrs This is an hypothetical illustration taking example of a recurring deposit to explain the concept of “Power of Compounding”.000 600.a.166 592. Assuming investment made in a recurring deposit with a return of 8% p. Past Performance may or may not be sustained in future.000 100.Invest Long term… Money grows over a period of time… Rs 1000 invested at 8% p.a.
compounded returns.000 1086767 862711 Rajesh makes a return of 4. Since they start at varying ages they have varying maturity terms Name Amar Start Age 25 Maturity Age Invested Amount Maturity value 58 100. A Reliance Capital company . Learning :.Time for which one is invested “matters” Past Performance may or may not be sustained in future.Power of Compounding . Hence just a difference of 5 years results in him making 47% less returns than his younger brother.a.Learnings 3 brothers invest the same amount in a fixed deposit instrument with 8% p.894 less than Amar.000 1267605 Shyam Rajesh 27 30 58 58 100.000 100.04.
018 2.00. compounded recurring investment plans offered by the banks and other institutions Name Amar Shyam Rajesh Start Age 25 27 30 Maturity Age 58 58 58 Monthly Invested Maturity value Amount 10. Learning :.000 12.5. Effectively speaking a small difference of 5 years results in Rajesh having to incur an additional investment of 55% higher than his younger brother Amar to reach the same objective.000 Hence to achieve the same outcome Rajesh will have to make an investment of Rs.296 2.675 per month higher than his youngest brother Amar.00.Learnings 3 brothers starting at varying ages plan to achieve the same amount of money at their respective retirements by investing in 8%p.Power of Compounding .00.00. A Reliance Capital company .Cost to achieve the desired result increases with reduction in time for which the investment is made Past Performance may or may not be sustained in future.a.000 16.343 2.00.00.
a.if the annualized returns vary within 4 – 10%.to Rs.Small rate differential has a BIG impact over time Past Performance may or may not be sustained in future. Learning :. (compounded) is shown below Interest Year 1 5 10 15 25 4% 104 122 148 180 267 6% 106 134 179 240 429 8% 108 147 216 317 685 10% 110 161 259 418 1083 Hence the returns we generate on our investments makes a major impact on the accumulated amount.invested in bank deposit instruments of different returns p.Power of Compounding . 1. Rs.043/.Learnings • We always need to monitor our investments regularly & aim at the best • possible returns at the given level of risk. A Reliance Capital company .100/.100/.over 25 years would vary between Rs. Return of Rs. 267/.
Simple. judiciously Follow markets very closely Time your entry and exit very well The choice side Put time on your is yours Invest systematically Don‟t worry about market timing A tried & tested method And hope that you get it right more often than not! Past Performance may or may not be sustained in future. A Reliance Capital company .Make the right choice…. straightforward way to create long term wealth The alternative is to : Invest in instruments which Understand and embrace risk might not beat Inflation Select your stocks to make………..
72.AUM source www.. 2010) High on Trust : Trusted by over 72 lakh account holders Best Process & Risk : CRISIL Level 1 Fund House Good culture of SIPs : More than 10 Lakh active SIPs Source: . . Data as on September 30. . 2010 and includes investors across all the schemes of Reliance Mutual Fund.Choose the Right Partner –Reliance Mutual Fund Largest AUM : More than 1.20 lakh investor accounts is calculated on the basis of live folios as on October 31.amfiindia.com. Please refer methodology provided at the end A Reliance Capital company . 2010.SIP count from internal sources Past Performance is no guarantee of future results.Crisil Rating methodology given at the end for perusal .07 Lakh Crores (Sep 30.
35 13721.31% 17.58 60000.78% 29. Past Performance may or may not be sustained in future.14% 23. Return on SIP in Scheme Return on SIP in Benchmark (BSE 100) 1 Year 01/11/2009 34. A Reliance Capital company .00 57187.57% 23.18 1704. 1000/.57 37.68% 17.59% SIP Return as on Oct 29.18 3998.00 110198.00 14159.29 27.24 104659.38 50439. of units accumulated Total Amount Invested in Rs.5451 181000. Return on SIP in Scheme Return on SIP in Benchmark (BSE 100) 1 Year 01/11/2009 526.19 91768.73% Past Performance may or may not be sustained in future.91 33. Market Value of Scheme if invested in Rs.64% 5 Year 01/11/2005 526. Market Value if invested in Benchmark in Rs. Market Value of Scheme if invested in Rs. Market Value if invested in Benchmark in Rs. guarantee on or a forecast of any minimum returns.35% 3 Year 01/11/2007 526.21% Since inception 08/10/1995 526. This illustration should not be construed as a promise.18 3500. of units accumulated Total Amount Invested in Rs.17 6212.18 413. c) It is assumed that a SIP of Rs.57 36.17 26.17 108.95 50439.00 14137. 2010 Period SIP Start Date Current NAV (As on 29/10/2010) Total No.18% 29.80 65000.35% 3 Year 01/11/2007 34. It may please be noted that load has not been taken into consideration.07 781154.56 91768.84% 17.46 36000. SIP does not guarantee or assure any protection against losses in declining market conditions.94% 17.Choose the Right Partner –Reliance Mutual Fund SIP Return as on Oct 29. d) The amounts invested in SIP and the market values of such investments at respective periodic intervals thereof are simulated for illustrative purposes for understanding the concept of SIP. 2010 Period SIP Start Date Current NAV (As on 29/10/2010) Total No.00 119635.each executed on 10th of every month has been taken into consideration including the first installment.9100 12000. a) Returns on SIP and Benchmark are annualised and cumulative investment return for cash flows resulting out of uniform and regular monthly subscriptions have been worked out on Excel spreadsheet function known as XIRR b) Calculations assume that all payouts during the period have been reinvested in the units of the scheme at then prevailing NAV.48 34.00 136662. The Mutual Fund or the Investment Manager does not assure any safeguard of capital and the illustrated returns are not necessarily indicative of future results and may not necessarily provide a basis for comparison with other investments.17 209.64% 5 Year 01/11/2005 34.21% Since inception 09/06/2005 34.6862 36000.95 28.66 12000.95 24.00 58251.4334 60000.00 3268884.48 33.22 13721.
08 39.91 21.22 0.00 16.Growth Performance as on Oct 29.13 9.00 40.00 25.00 20.62 13.00 10.24 14.Choose the Right Partner –Reliance Growth Fund 45.2010 Past Performance may or may not be sustained in future.07 26.68 27.36 30.00 30.00 Reliance Growth Fund .Retail Plan .00 15.00 5.00 35.93 6 months 1 Year 3 Years 5 Years BSE100 Since Inception 0. Please refer slide22 for details A Reliance Capital company .
Choose the Right Partner – Reliance Regular Savings Fund-Equity 45.54 21.00 30.00 15.73 25.77 14.13 15.00 21.00 26.68 25.82 39.00 35.93 0.00 5.24 20.00 6 months 1 Year 3 yrs 5 Years BSE100 Since Inception 17.Growth Plan Performance as on Oct 29.Equity Option .00 0.12 Reliance Regular Savings Fund . Please refer slide22 for details A Reliance Capital company .00 40.06 27.2010 Past Performance may or may not be sustained in future.00 10.
Choose the Right Partner A Reliance Capital company .
Disclaimers & Risk Factors Investments in Bank Fixed Deposits are relatively safer as they are covered under Deposit Insurance and Credit Guarantee Corporation of India to the extent of Rs. The rating is valid for the period of 12 months from February 2. For detailed methodology. CRISIL. employees. risk evaluation. Methodology . special. punitive or exemplary damages. This document has been prepared on the basis of publicly available information. Whilst no action has been solicited based upon the information provided herein. A Reliance Capital company . The Trustee or any of their respective directors. incidental. a Standard & Poor's company is India's leading Ratings. including lost profits arising in any way from the information contained in this material. Level 3. or warrant the accuracy. 1 lakh per account. affiliates or representatives do not assume any responsibility for. affiliates or representatives shall be liable for any direct. due care has been taken to ensure that the facts are accurate and opinions given fair and reasonable. SIP is a Special Product available only in selected Schemes of Reliance Mutual Fund. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the readers. The Investment Manager. the world's foremost provider of independent credit ratings. indirect. investment research and data. The Rating Agency has also factored inputs from Association of Mutual Funds of India & Securities and Exchange Board of India.“CRISIL Fund House Level 1” rating denotes that RCAM has been judged by CRISIL Limited (Rating Agency) to possess HIGHEST LEVEL OF PROCESS QUALITY AND RISK MANAGEMENT CAPABILITY IN FUND MANAGEMENT PRACTICES. and Level 5 denoting High. Risk and Policy Advisory Company. This information is meant for general reading purpose only and is not meant to serve as a professional guide for the readers. 2010. The rating methodology emphasizes qualitative over quantitative factors. completeness. “CRISIL Fund House Level 1” is a rating and not a ranking. Level 4. internally developed data and other sources believed to be reliable. Below Average and Poor „level of process quality and risk management capability in fund management practices‟. consequential. their respective directors. indices. The Investment Manager. Entry load will be Nil and Exit load as applicable in the respective Scheme at the time of registration will be applicable. None of The Sponsor. The five broad parameters evaluated for assigning this rating were (i) Organization Structure (ii) Investment Decision-making Process and Performance (iii) Operational Policies and Efficiencies (iv) Risk Management (v) Selling & Client Servicing Practices. employees. This information is not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. The parameters which were used to arrive at the rating cover all the critical areas of operation of RCAM and a high score on these parameters which Rating Agency believes. The Sponsor. The other levels of rating are Level 2. Recipients of this information should rely on information/data arising out of their own investigations. Research. have a strong co-relation with good long-term performance by the fund house. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. please visit www.crisil. respectively. CRISIL's majority shareholder is Standard & Poor's. adequacy and reliability of such information. The unit holder is free to discontinue from the SIP facility at any point of time by giving necessary instructions.com>Ratings>Methodology/Criteria> Funds. The Trustee. Average.
interalia. The schemes provide sale / switch – in & repurchase /switch .out facility on all Business Days at NAV based prices.com A Reliance Capital company . The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond their initial contribution of Rs. Off. Reliance Regular Savings Fund (An open ended Scheme) Equity Option: The primary investment objective of this Option is to seek capital appreciation and/or to generate consistent returns by actively investing in equity / equity related securities. Please read the Scheme Information Document (SID) and Statement of Additional Information (SAI) carefully before investing. Debt Instruments & Money Market Instruments: 35 to 0%.G. Distributors and www. Sponsor: Reliance Capital Limited. As with any investment in securities.1%. Exit Load . 1882. by changes in the market conditions. if redeemed or switched out on or before completion of 1 year from the date of allotment of units. Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. Road.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the corpus. Reliance Growth Fund (An Open-ended Equity Growth Scheme): The primary investment objective of the scheme is to achieve long term growth of capital by investing in equity and equity related securities through a research based investment approach. Load for both the Schemes : Entry Load – Nil. Terms of issue: The NAV of the Scheme will be calculated and declared on every Working Day. Asset Allocation: Equity and Equity related Instruments: 100 to 65%. Trustee: Reliance Capital Trustee Company Limited. Mardia Plaza. settlement periods and transfer procedures. interest rates. The Sponsor. its future prospects or returns. Nil thereafter. The Mutual Fund is not assuring that it will make periodical dividend distributions. the Trustee and the Investment Manager are incorporated under the Companies Act 1956. Copies of SID and SAI is available at all the DISC. Ahmedabad 380 006). trading volumes. Debt and Money Market Instruments with an average maturity of 5-10 years: 20 to 0%. Reliance Growth Fund and Reliance Regular Savings Fund is the name of the Scheme and does not in any manner indicates either the quality of the Scheme. Investment Manager: Reliance Capital Asset Management Limited (Registered Office of Trustee & Investment Manager: “Reliance House” Nr. though it has every intention of doing so.reliancemutual. Asset Allocation: Equity & Equity Related Securities: 100 to 80%. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets.Disclaimers & Risk Factors Statutory Details: Reliance Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act. C. All dividend distributions are subject to the availability of distributable surplus in the Scheme. The NAV of the Scheme may be affected.
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