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OVERVIEW

M&M
MAHINDRA
FINANCE
MAHINDRA
FINSMART

PRODUCT BASKET
VEHICLE FINANCE

REFINANCE
REFINNCE
INVESTMENT
ADVISORY SERVICES
INSURANCE
RURAL HOUSING
FINANCE

PERSONAL LOAN

MAHINDRA FINSMART

MAHINDRA FINSMART
MAHINDRA FINSMART INVESTMENT ADVISORY SERVICES

THE ONLY MUTUAL FUND DISTRIBUTOR PAN INDIA

MAHINDRA FINSMART INVESTMENT ADVISORY SERVICES

PROFESSIONAL
ADVICE

PERSONALIZED
SERVICE

REGULAR
PORTFOLIO
STATEMENT

ONLINE
ACCESS TO
PORTFOLIO

MUTUAL FUND DISTRIBUTION


INVEST THROUGH US

SAVING VS INVESTMENT
Savings vs. Investments

Savings is Money saved from regular income after accounting for


all expenditure

but due to the effect of inflation


Real Income

Value of Expenses
Thus the value of savings decreases!

Savings

Saving An Indian Religion

France
11.1%

A Comparison

Household Savings Rate

INDIA
24.3%

Germany
10.7%
Japan
6.3%
UK
5.5%
USA
1.4%

Indians
are
amongst
the
highest
savers
in the
world!

SAVINGS How we are INVESTING.

Total annual household


savings in 2004 was
$145 bn

Source: CMIE,
Nov04

It was invested in this


manner

Inflation.
Actually deflates our savings..

Inflation
Rate

Inflation
Your
ENEMY!

5.05%

Inflation and daily


costs
Actual cost in
May 2001 (Rs)

Actual cost in
May 2005 (Rs)

Expected cost
5 years later
(Rs)

Expected cost
10 years later
(Rs)

16.5

20.5

30.8

43.1

38

52

78.0

109.5

Onion (per kg)

7.5

11.3

15.8

Salt pack (per kg)

12.0

16.8

Petrol# (per litre)

31.73

43.23

64.9

91.0

Commodities
Sugar (per kg)
Groundnut Oil (per kg)

Source: Department of Consumer Affairs


# HPCL Petrol Pump

Understanding Inflation
Inflation
Rate

5.05%*

Inflation Your
ENEMY!
Rs. 10,000 today
will
be worth

* 1 year average of inflation rates (Nov 2007),


RBI

Rs. 7,817
after
5 years

Rs. 6,110
after
10 years

Rs. 3,733
after
20 years

Rs. 2,281
after
30 years

Inflation and Fixed Income


Investments
Consider the 8%
taxable RBI
Savings Bonds

Inflation Your
ENEMY!

Interest
rate = 8%
Less:
inflation
@5.05%*

* 1 year average of inflation rates (Nov 2007),


RBI
** Assuming highest tax rate

Less: tax
@33.99%**
i.e. 2.72%

Post-tax
& inflation
Interest =
0.23%!

Very
negligible
returns!

IMPORTANCE
OF INVESTING
Importance
of Investing
In most cases the amount saved is not enough to meet
current and future needs of self and family
It is important to make our savings work for us

When savings start generating income,


then they are Investments!

We need our savings to generate the maximum possible returns


within the constraint of our risk appetite and time horizon to
be able to meet not only our needs, but wants and desires too
Hence the need to INVEST!
15

INVESTMENT OPTIONS
FIXED DEPOSITS
BONDS
SMALL SAVING SCHEMES

INSURANCE
GOLD
REAL ESTATE
EQUITIES
MUTUAL FUND

RISK - RETURN
RELATIVE RISK

RETURN

LIQUIDITY

EQUITIES

HIGH

HIGH

HIGH

FIXED DEPOSITS

LOW

LOW

LOW

SMALL SAVING
SCHEMES

LOW

LOW

LOW

BONDS

LOW

LOW

VERY LOW

MUTUAL FUNDS

MEDIUM

MEDIUM

HIGH

GOLD

MEDIUM

MEDIUM

HIGH

REAL ESTATE

MEDIUM

MEDIUM

VERY LOW

Which Asset delivers ?


Cumulative Annualized Returns (1985-2006)

17.9

Equity

11.3

G Sec

Bank FD

10.4

7.2

Gold

6.8

Inflation
In %0

10

Equities are the clear winner..


Source: CLSA

15

20

THE EMOTIONS OF
INVESTING

GREED
DENIAL

BUY
CONCERN

CONFIDENCE

CAUTION

LOSS

FEAR

PANIC

DOUBT & SUSPICION

SELL

ALWAYS INVEST
FOR THE LONG
TERM
WARREN BUFFET

HISTORY SHOWS THAT TIME, NOT


TIMING, IS THE KEY TO
INVESTMENT SUCCESS
SIR JOHN TEMPLETON

SELL WHEN
THEY YELL,
BUY WHEN THEY
CRY

So Investments in Equity is the


clear choice
But what are the options to invest.

Investing directly in stocks is risky


needs time to understand and expertise

Here comes the Mutual

Fund

A MUTUAL FUND is a pool of money that is


invested in various securities, professionally
managed by a Fund Manager , with the aim of
maximizing return and diversifying risk.

BENEFITS OF INVESTING IN MUTUAL FUNDS


Professional Management
Choice of schemes
Diversification
Flexibility

Convenient administration
Liquidity
Transparency

Well regulated
Liquidity

MUTUAL FUND BASICS

INVESTORS

INCOME/DIVIDEND
/TOTAL RETURN

PROFESSIONAL
MANAGER

TYPES OF MUTUAL FUNDS


EQUITY

DEBT

BALANCED

DIVERSIFIED

GILT

EQUITY

INDEX

MIP

BALANCED

TAX SAVING

FMP

SECTORAL

TWO WAYS OF
INVESTING

LUMPSUM

SIP

What is a Systematic Investment Plan


(SIP)?
A Systematic Investment Plan is an investment
strategy used in mutual fund investing that allows
investments

at regular
intervals

An Example
Investing Rs 500 each month in a mutual fund
The investment is done at the applicable NAV of the mutual
fund on the date of investment

Mr. X has 10,000


Where can he INVEST ?
S
T
U
D
Y

MUTUAL
FUND

EQUTIES

TIPS

NEWS

MONEY
INVESTED IN
15-20
SECTORS

4 5 SECTORS
2000 EACH

VOLATILE RETURNS

DIVERSIFICATION

PROFESSIONAL
MANAGEMENT

STABILE RETURNS WITH VERY


LOW RISK

THANK YOU