ADVICE for the WISE

Newsletter –July’11

2

Economic Update 4

Equity Outlook 8

Debt Outlook 13

Forex 16

Commodities 17

Index Page No.

Contents

Real Estate 18

Dear Investor,

A welcome respite in softening of commodity prices providedsome much-needed positive sentiment to the Indian equitymarkets last month. Most benchmarks recovered quite well fromtheir early lows and are showing definite signs of positive nearterm movement. With global concerns reducing on the back ofGreek Government agreeing to a tough austerity measures andthus tiding over the short term liquidity concerns in managing itsdebt, risk appetite seems to have returned amongst globalinvestors. Domestic investors have also taken a cue from themildly positive sentiment and are cautiously entering the equitymarkets.

A recent study shows that by various measures, India is one of themost overheated emerging markets. In concrete terms, this meansthat the economy is operating at or above its productive capacity.In such a case it cannot grow faster unless there are capacityimprovements through aggressive investments in infrastructureand capital formation..

On account of these concerns, our short term outlook continues toremain cautious while in the medium to long term we maintainour bullish outlook. Investors would do well to continue investingin smaller amounts now.

This is because if the global outlook improves sharply we maysee a smart rally thereby creating concerns of over-valuationin the medium term. Curiously hence the global investors maychoose to increase their allocation to Indian equities amidst ascenario which by domestic standards may not count as avery positive one. Hence it is prudent to not sit on thesidelines in this market

Debt markets continue to expect a further rate hike in light ofthe persistently high inflation. The price hike in diesel is likelyto make it worse still – at least in the short term. We maintainour negative outlook on long term debt and positive outlookon short term debt as well as short term credit.

In the current market scenario, structured products thatsignificantly add to the portfolio returns for a mildly bullishmarket in the medium term are likely to be quite useful. Inline with our view on Indian equities, we are proposing onesuch option. The idea is generate additional returns for amildly positive performance of the markets while capping theupside if the markets grow aggressively. This is a valuableaddition to one’s portfolio since the rest of the equityportfolio should do well if the markets rally sharply while ifthey remain subdued a well-designed structured productwould boost overall returns.

3

From the Desk of the CIO…

“Advisory services are provided through Karvy Stock Broking Ltd. (PMS) having SEBI Registration No: INP000001512. Investments are subject to market risks. Please read the disclaimer on slide no.23”

4

As on 30th

June 2011 Change over last month

Change over last year

Equity markets

BSE Sensex 18846 1.9% 6.5%

S&P Nifty 5647 1.6% 6.3%

S&P 500 1321 (1.8%) 28.1%

Nikkei 225 9816 1.3% 4.6%

Debt Markets

10-yr G-Sec Yield 8.33% (9 bps) 77 bps

Call Markets 7.75% 35 bps 350 bps

Fixed Deposit* 8.25% 0 bps 225 bps

Commodity markets

RICI Index 3941 (5.6%) 33.6%

Gold (`/10gm) 21942 (2.5%) 16.7%

Crude Oil ($/bbl) 112 (4.7%) 49.1%

Forex

markets

Rupee/Dollar 44.72 0.7% 4.2%

Yen/Dollar 80.85 (0.2%) 9.5%

Economic Update - Snapshot of Key

Markets

10 yr Gsec

Gold

* Indicates SBI one-year FD

80

90

100

110

120

130

140Sensex Nifty

S&P 500 Nikkei 225

6.80

7.30

7.80

8.30

8.80

30/J

un

/10

31

/Ju

l/1

0

31/A

ug/

10

30/S

ep/1

0

31/O

ct/1

0

30

/No

v/1

0

31/D

ec/1

0

31/J

an/1

1

28/F

eb/1

1

31/M

ar/1

1

30/A

pr/

11

31/M

ay/1

1

30/J

un

/11

15000

16000

17000

18000

19000

20000

21000

22000

23000

42.00

43.00

44.00

45.00

46.00

47.00

48.00

30/J

un

/10

31/J

ul/

10

31/A

ug/

10

30/S

ep/1

0

31/O

ct/1

0

30/N

ov/

10

31/D

ec/1

0

31/J

an/1

1

28/F

eb/1

1

31/M

ar/1

1

30/A

pr/

11

31

/May

/11

30/J

un

/11

`/$

5

US

Europe

Japan

Emerging economies

• The HSBC China Manufacturing Purchasing Managers Index is down to 11month low at 50.7 in June from 51.6 in May.

• Chinese economy is expected to slow down to grow at 9.6% in 2011. The retailsales increased by16.9 percent year-on-year basis in May

• The Conference Board Consumer Confidence Index, which had declined in May to61.7, decreased further in June to 58.5. Inspite of a 0.2% increase in inflation vs.the 0.4% rise last month, the confidence was low due to continuing worriesabout the economy’s strength, high unemployment and stagnating wages.

• The m-o-m unemployment rate remain unchanged at 9.1 per cent in June 11.

• Euro-zone PMI fell to 53.8 in June from 55.8 in May 11. The slowing was due toweakened output growth, lacklustre domestic demand in many countries,especially the austerity –hit periphery & near stagnation of export sales.

• Unemployment rate in the Euro zone remained unchanged in June‘11 at 9.9%.

• The Japan Manufacturing Purchasing Managers Index (PMI) decline to seasonallyadjusted at 50.7 in June down from May’s 51.3, mainly due to stagnation of neworder levels, reflecting subdued client demand from both domestic and externalsources.

• Japan’s unemployment rate fell to 4.5% in June ’11 from 4.7% in May ’11

Economy Update - Global

6

Economy Outlook - Domestic

• The GDP growth rate for Q4 FY11 came in at 7.8% thelowest in the year while the Q1 estimates for Q1 and Q3were revised upwards to 9.3 (from 8.9) and 8.3 (from anearlier 8.2) respectively. The economic growth for the year,is 8.5% for 2010-’11 backed by improved farm output andgrowth in the services sector.

• The slowdown in the rate of growth in the last quarter wasdue to poor performance of the manufacturing sectorwhich grew at 5.5% v/s the 15.2% growth last year. Aslowdown was also seen in the mining, trade and hotelswhile services, including banking and insurance witnessedgrowth in the last quarter.

• The next year growth target is 8% which we believe isachievable.

IIP monthly data

GDP growth

• Industrial output as measured by the Index of IndustrialProduction (IIP) decreased to 6.3% (y-o-y) in April froman upwards revised 7.8% in March ’11. This data wasaccording to the new base year (2004/05), newcomponents and weightings. According to the old series,the figure for the month stands at 4.4%.

• Manufacturing growth slowed from 18% in the sameperiod last year to 4.4% in 2011. Mining also sloweddown from 12% last year to 2.1% this year. According tothe old series, low off-take of capital goods was noticedwith production growth at just 2.5% in April 2011compared with 64.1 % in April 2010 while as per the newseries, capital goods registered a growth of 14.5%

• The IIP figures have been very volatile in the last year.We believe that monthly indicators and IIP in isolationmay not a very efficient way of indicating long termgrowth. We expect the growth to eventually moderateout though high input costs may also be a dampener formanufacturing.

4.0

5.0

6.0

7.0

8.0

9.0

10.0

FY10 (Q1) FY10(Q2) FY10(Q3) FY10(Q4) FY11(Q1) FY11(Q2) FY11(Q3) FY11(Q4)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11

Economic Outlook - Domestic

• Bank credit growth rose to 21.8 percent in May*from 21.2 percent in the month of April whileDeposits grew by 16.6 percent compared to 16.7percent in April 2011.

• Growth of credit demand and tight liquidity had putpressure on the banks to raise their deposit rates.We have seen a rate hike of 25 bps in the June policyreview but high inflationary pressure may lead theRBI to increase rates further in the coming months.This increase may dampen the rate of credit growththough.

• Inflation as measured by WPI decreasedmarginally and was recorded at 9.06% (y-o-y)for the month of May 11 as compared to 8.66%during April 11. The increase was driven byhigher manufactured goods prices. Thesefigures are based on the new base year andWPI list.

• We expect WPI inflation numbers to moderateout due to the expected decrease in foodinflation (on the back of a good monsoon) andthe monetary tightening stance by RBI, butincreasing fuel prices may be a cause of worry.

Growth in credit & deposits of SCBs

7

Wholesale Price Index

* End of period figures

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%Bank Credit Aggregate Deposits

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

May

/10

Jun

/10

Jul/

10

Au

g/1

0

Sep

/10

Oct

/10

No

v/1

0

Dec

/10

Jan

/11

Feb

/11

Mar

/11

Ap

r/1

1

May

/11

8

Equity Outlook

Looking back at June, the equity markets were flooded with negative news flow on account of high inflation, global turmoil & high

interest rates. We saw RBI raising interest rates by 25bps. Globally, we saw a scare due to solvency issues present in Greece. A crisis was

averted by some deft measures taken by the European and Greek authorities. The month end saw relief rally with a FII’s pumping in

5000 crores in Indian Equity. Global markets also posted the biggest weekly rally in two years driven by easing Greece turmoil. We are

positive on the long term Indian growth story and we consider any short term panic as excellent entry opportunity for equity clients.

The government has hiked fuel prices indicating its intention to take a few politically unpopular but economically sound decisions.

Global Crude oil prices have also come down and have been hovering around 110$/barrel for brent crude. While Inflation would stay at

9% plus levels for next few months, going forward we would expect some respite due to cooling off of food and energy prices. We would

expect interest rates to peak after rising another 25-50bps. An earlier than expected peaking of the inflation numbers would help RBI

reach the end of the tightening cycle earlier than expected. Monsoons are expected to be around 95% of the long term average which

would be sufficient for the Kharif crop.

The short term concerns like inflation, interest rates and high crude prices have largely been discounted by the market. The markets are

trading at a very reasonable valuation of 14 times FY12 earnings. We will have the earning season beginning soon and we expect

Q1FY12 (Y-o-Y) earnings growth to be in the range of 15%-20%. The corporate advance tax numbers have shown a growth of 22% over

last year. We expect the earnings to be led by the banking space. The earnings growth for leading private sector banks is expected to be

between 20%-25% and hence we continue to be bullish on private banks. We also expect IT and Pharma to post good numbers. The

monsoon session of Parliament, also starting in August, could see some reform measures in sectors like Insurance and retail being

announced. We expect the earnings growth and reform action to drive equity market returns in the medium to long term .

9

Sector Outlook

Sector Stance Remarks

Healthcare Overweight

We believe in a large sized opportunity presented by Pharma sector in India. India’s strength in

generics is difficult to replicate due to quality and quantity of available skilled manpower. With the

developed world keen to cut healthcare costs, and a vast pipeline of drugs going off-patent, Indian

pharma players are at the cusp of rapid growth. We would bet on the opportunity in Generics and

CRAMS space

E&C Equalweight

The USD 1 trillion Infra opportunity is hard to ignore. We believe Power sector to be a better play over

other sub sectors such as ports, roads and telecom infrastructure, because of favorable economics

under PPP model. Within power, we like the engineering companies over utilities, T&D and other

infrastructure owners because of their superior profitability and better competitive dynamics.

BFSI Equalweight

Financial sector is undeniably the lubricant for economic growth. Whether the growth comes from

consumption or investments, credit growth is inevitable. Being a well regulated sector, BFSI in India

has good asset quality and capital adequacy ratios. Despite the increasing in interest rates, we believe

banks will be able to pass on higher cost of funds to clients as demand remains strong

FMCG EqualweightWe prefer “discretionary consumption” beneficiaries such as Cigarettes and branded garments, as the

growth in this segment will be disproportionately higher vis-à-vis the increase in disposable incomes.

Metals Equal weightCommodity prices have moved up significantly I last six months due to easy monetary environment.

Positive on the producers of Steel, Copper and Aluminium.

10

Sector Outlook

Sector Stance Remarks

IT/ITES Equalweight

Robust volume growth led by some uptick in pricing makes IT an attractive investment. Market

share gains led by deeper and wider expansion of global delivery model will drive earnings

growth. Best played through Tier I stocks.

Automobiles Equalweight

Demand outlook remains robust with strong earnings growth despite raw material price hikes

and raging competition. We are more bullish on commercial vehicle and agricultural vehicles

segment due to lesser competition and higher pricing power.

Cement UnderweightCement demand will certainly grow over the next three years. But the issue is on the supply

side. We do see an oversupply situation for the next 3-4 quarters.

Power Utilities Underweight

We like the growth prospects of power sector but believe that value will be created by

engineering services providers. Merchant power rates have been sliding downwards and coal

prices have been on the way up putting pressure on return ratios.

Energy Underweight

The regulatory cap on RoE does not allow a vast value creation opportunity in the

infrastructure owning companies. We would stay away from oil PSUs, due to issues of cross

subsidization distorting the underlying economics of oil exploration and refinering businesses.

Telecom Underweight

The regulatory hurdles, competitive pressures and leverage prevent any return to high

profitability levels in the short to medium term. The huge capex incurred in the rollout of 3G

services will put further stress on the already stretched balance sheets. Remain cautious on

Sector’s prospects.

DELTA Portfolio

• DELTA seeks to invest in a portfolio of mutual funds through a PMS route that aims to would provide higher returns than the

blended benchmark.

• The asset allocation between Debt and Equity would be done on the basis of the risk profile of the investor (conservative,

moderate or aggressive)

• There is further allocation into sub-asset classes depending on our views on the same

• The portfolio would be reviewed and rebalanced regularly to maintain the asset allocation and the right selection of funds

Asset Allocation for DELTA:

Asset Class DELTA Conservative DELTA Moderate DELTA Aggressive

Equity 50% 75% 100%

Debt 50% 25% 0%

11

Asset Class Benchmarks

Market Return Benchmark: Equity BSE 200

Market Return Benchmark: Debt Blended Bond Fund Index

Absolute Return Benchmark SBI 1 year Fixed deposit rate

Portfolio Performance*

12

Portfolios 3 Months (Absolute)1 Year

(Absolute)Since Inception (29/4/09)

CAGR

Conservative 0.42% 3.78% 22.03%

Market Return Benchmark** (0.79%) 3.75% 17.01%

Moderate (0.10%) 2.87% 28.20%

Market Return Benchmark** (1.65%) 3.82% 23.06%

Aggressive (0.31%) 4.15% 35.45%

Market Return Benchmark** (2.62%) 2.99% 28.06%

Absolute Return Benchmark 1.50% 6.00% 8.00%

*(Returns as on 30th June 2011)The performance specified is post expenses.The performance indicated here is based on in-house testing of the portfolio. The portfolio has been offered on the PMS platform since 23rd November 2010**The Market Return Benchmark is based on BSE 200 and Blended Bond Fund index, taken in the same proportion as the asset allocation of that variant

13

Debt Outlook

• The benchmark 10 yr G-sec yield decreased from8.41% in the month of May ‘11 to close ataround 8.33% in June‘11.

• With no respite from the high inflation in spiteof monetary tightening, we may see a few moreinterest rate hikes in the year.

10-yr G-sec yield

Yield curve

• In the last month, we saw tight liquidity in thebeginning of the month on account of theadvance tax outflows but in the second half, asthe money supply increased, a decline was seenin the shorter term yields.

• We expect yields across the yield curve to remainat elevated levels. High inflation, monetarytightening and rising credit growth will keep theyields at the longer end range bound.

(%)

7.20

7.40

7.60

7.80

8.00

8.20

8.40

8.60

7.90

8.00

8.10

8.20

8.30

8.40

8.50

8.60

8.70

8.80

8.90

0.0

2

0.9

8

1.9

4

2.9

0

3.8

5

4.8

1

5.7

7

6.7

3

7.6

9

8.6

5

9.6

1

10

.57

11

.53

12

.48

13

.44

14

.40

15

.36

16

.32

17

.28

18

.24

19

.20

Debt Strategy

OutlookCategory Details

Long Tenure Debt

With tight liquidity and inflationary pressure being high, weexpect more rate hikes in the current year. As the inflationarypressure begins to settle down, these may be attractiveinvestments but currently, we would recommend staying out ofthe longer term investments.

Some AA and select A rated securities are very attractive atthe current yields. A similar trend can be seen in the FixedDeposits also. Tight liquidity in the system has alsocontributed to widening of the spreads making entry atcurrent levels attractive.

14

We recommend short term bond funds with a 6-12 monthinvestment horizon as we expect them to deliver superiorreturns due to high YTM. We have seen the short term yieldsharden due to reduced liquidity due to expected advance taxoutflows and consecutive rate hikes prompted by inflationarypressures. Hence, Short term bond funds and FMPs providean interesting investment option.

Short Tenure Debt

Credit

Pegasus I

Nifty Hybrid Product SpecificationsIssuer Karvy Financial Services Limited

Instrument Secured Redeemable Non-Convertible Debenture

Reference Index S&P CNX Nifty Index

Tenor 14 / 15 Months

Initial Level Reference Index as on Trade Date

Final Level Reference Index as on Trade Date + 14M

Knockout Level 120% of Initial Level

Contingent Level 90% of Initial Level

Coupon 13%

Participation Rate 100%

Principal Protection 100%

Objective:

To generate superior payoff with a coupon of 13% amid participation in the market on the upside.

To generate absolute positive return even if the return on reference index is negative (up to ~10%) amid principal protecting below contingent level.

Payoff At Maturity

If Final Level >= Knockout Level Principal * (1 + Coupon )

If Initial Level < Final Level < Knockout Level

Principal * (1 + Coupon + PR * {Final Level /Initial Level – 1})

If Initial Level > Final Level >= Contingent Level

Principal * (1 + Coupon )

If Final Level < Contingent Level

Principal

Note: Graph not to scale and pricing is indicative only-30%

-20%

-10%

0%

10%

20%

30%

40%

-25% -15% -5% 5% 15% 25%

Nifty Return Structure Payoff

Payoff Scenario:

The structures pays a contingent coupon of 13% along with 100% participation on the reference index, subject to a knockout event at 120% of the initial level.

In the event of a knockout event happening, the structures pays a coupon of 13%.

15

16

Forex

• The Rupee appreciated against USD & GBP and depreciatedagainst the Euro & Yen.

• Appreciation was witnessed due to FII inflows on account ofrise in domestic markets coupled with decline in country’sfood inflation. Appreciation against USD was also due tooverall weakness seen in dollar against other currencies.

• The GBP also depreciated against the Euro as thepolicymakers decided to keep the interest rates at record lowfor the month while the Euro appreciated after the GreekParliament approved the Austerity Bill.

Rupee movement vis-à-vis other currencies (M-o-M) Trade balance and export-import data

• Exports for the month of May increased by 56.9% (y-o-y)while imports increased by 54.1% over last year. The tradedeficit increased to USD 14.9 bn.

• Capital account balance was positive throughout FY11 andstands at `273133 Cr. for the fiscal while it was 37,298 Cr.for Q4.

• We expect the capital account balance to remain positiveas higher interest rates would make investment in theIndian markets attractive hence drawing investments intothe market.

-20000-15000-10000-50000

-200

20406080

Export Import Trade Balance (mn $)

-10000

40000

90000

140000

FY 10 (Q1) FY 10 (Q2) FY 10 (Q3) FY 10 (Q4) FY 11 (Q1) FY 11 (Q2) FY 11 (Q3) FY 11 (Q4)

Capital Account Balance-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

USD GBP EURO YEN

17

Commodities

Precious

Metals

Oil & Gas

Gold prices tumbled as Greece progressed in staving off adefault amid US ending QE2, softening the prices of thecommodities. This fall has deteriorated the technical strengththat Gold has been exhibiting for a while. Further, ECB is likelyto hike the benchmark interest rate by 25bps as the Greek riskof default has subsided; which will further put pressure on theyellow metal. On the flip side, the renewed strength in thedollar will keep a lid on the gold prices for some time to come.We expect precious metal to stay subdued in the days to come..

Oil prices witnessed a downtrend following a surpriseinventory release by the IEA. Nevertheless oil prices are wellsupported on the lower side. Given the economic situationamid recent strong equity performance along with the impliedsummer demand (in the US), oil prices are likely to rule firmerand the trend is positive.

Crude

Gold

15000

16000

17000

18000

19000

20000

21000

22000

23000

60.0

70.0

80.0

90.0

100.0

110.0

120.0

130.0

Jun 10

Jul 10

Aug 10

Sep 10

Oct 10

Nov 10

Dec 10

Jan 11

Feb 11

Mar 11

Apr 11

May 11

Jun 11

Real Estate Outlook - I

18

Asset Classes Tier-1* Tier-II**

Residential

Sales are under pressure as usual, Q2 & Q3 of 2011

would clear clouds on possible correction in this

sector. Lot of developers launching new projects

since the existing ones have hit roadblocks due to

high prices. The loading on actual usable area has

seen a sharp rise in Mumbai, Bangalore & Pune,

from an average 20% to 35%, this is another way to

hedge the realty prices. Investors seem to be

interested in under development, pre-launched

projects which clearly give them appreciation

without any possible speculation. RBI credit rate

increase with tightening of construction finance to

developer is only increasing pressure on

developers.

The demand is keeping the Tier II cities afloat, the

infrastructure development in these cities have

made the residential development spread across the

city limits. On an average price is still affordable. Key

development developer are seeing demand of 3BHK

and luxury development but are only doing well if

the project size is limited to 100-150 units. The

trend seems to be favorable since there is lot of

demand comes from smaller cities closer to these

Tier-II & III cities

Commercial/IT

Still in the shadows of over-supply and cautious

expansion approach by corporate, this segment

has gone through correction. Rates per sqft have

seen almost 30% down-trend and will be stagnant

for the coming 2-3 quarters. Surely, the segment is

at the down-tip of the cycle, and is the best

opportunity for companies looking for long term

holding of real estate office space.

Commercial segment not that significant, but unlike

Tier-I the price differentiation is double favoring

commercial since most of them are in CBD areas.

Real Estate Outlook - II

19

Asset Classes Tier-1* Tier-II**

Retail

The FDI allowance is given lot of impetus to this

sector, its been now almost 3 years since retail has

seen a major transformation on all its business

aspects and have been built to suit Indian way for

consumerism. Low cost, high reach, heavy variety,

less innovation, existence with competition,

maximizing bottom line than top-line approach

have been making the retailers smarter. Revenue

share model with a built in MG is how the deals

are done

Retail is slow in these markets; unorganized markets

are still a hot choice. Most high-street locations are

expensive to own thus have a high lease rental and

have witnesses heavy churn. Investment would

always have capital protected due to dearth of

available space.

Land

Most interesting times, traded now more as

commodity, very fastly getting absorbed, locked.

Non-real estate sector see immense opportunity

since it can be used as tangible and most credible

pledge against business

Still available cheaper, plotted development is a hit

since the trend of standalone homes are prevalent.

International Investing: Superfund

Introduction

• Superfund is a group of investment companies with reach

across 20 countries – predominantly in Europe, followed by US

and Asia. It was founded in 1996.

• Superfund group manages a number of funds – all of which use

exclusively futures contracts in commodities, currencies, stock

indices and bonds across several global exchanges. Hence the

product belongs to the asset class of “Managed Futures”.

• It can be thought of as an alternative investment avenue with

focus on absolute returns – in a manner similar to hedge

funds, but with greater regulatory oversight and restriction to

trading in only highly liquid futures. The investment strategy

used by Superfund Funds is algorithmic trading focused on

trend following.

Product Features

• Superfund A2 is available in Dollar, Euro and Gold

denominations. The minimum ticket size is $5,000 or €5,000.

The investment can be made from Indian money taken abroad

in line with the RBI limit of $200,000 per person per year.

Alternately, it can be made from funds available with the

investor in a foreign bank account.

Fund manager/strategy

• Superfund does not employ human fund managers. Its

investment strategy is that of trend following. It focuses on

spotting definitive trends in the markets and entering/exiting

the markets on the basis of pre-determined rules. It is

illustrated in the graph below.

Performance

2011 (YTD) 2010 2009

Superfund Green Gold A SPC 2.3% 38.86% -17.11%

Barclays CTA Index (1.23%) 5.47% -0.10%

20

AEGON Religare Rising Star

21

AEGON Religare Rising Star is unit linked child plan. It helps to build a corpus for child. The parent is life assured and in caseof parent’s death during this tenure all future premiums would be waived off. The company would continue to fund all futurebasic premiums to policy fund value when due. Additionally, amount equal to annualised premium would be payable to childat start of each policy year till maturity. On maturity fund value would also be payable to child.

Some of the key features of the plan are :

•Plan can be bought by parent in the age group of 18-60 years for child aged between 0-15 years .

•Policy term is 25- current age of the child and premium paying term is equal to policy term.

•Inbuilt income benefit option in case of prospers / parent’s death. This option pays amount equal to annualised premium tobeneficiary (child) till maturity of the plan from the date of death of parent without paying any additional premium.

•Low charging structure make it highly competitive when compared to its peers.

•Option to have upto 300% of the minimum basic sum assured as coverage amount providing enhanced protection.

•Option to select Invest Protect Option, in this option it is possible to gain from investment in equity market and alsominimizes the risk to returns as policy nears maturity. In this option money is systematically shifted from Accelerator Fund toSecure Fund during the last 3 policy years.

•Auto-rebalancing - At the end of every policy year, this feature automatically rebalances the allocation of investments invarious funds to the allocation proportions chosen by investor.

Why Karvy Private Wealth?

KARVY is an integrated financial services group, with Karvy Private Wealth being one of its arms. The entiregroup’s strengths are leveraged to provide end-to-end wealth advice to Karvy Private Wealth clients. Forexample, SME clients can receive advice on their personal wealth while also getting investment banking advicefrom the I-banking arm of Karvy.

Leveraging breadth of related businesses that KARVY is in

Maximum choice of products & services

KARVY Private Wealth offers the widest breadth of products and services, providing clients a variety of optionsthrough a single contact. Products and services include equities, debt instruments, commodities, Mutual Funds,Insurance, Structured Products, Financial Planning, real estate advice, etc.

Set to have business in 20 - 25 cities we are poised to cater to families and businesses spread across multiplecities in India providing them with combined and integrated advice. For one-off services, if required, we canalso leverage KARVY Group’s presence in 400 cities.

All-India presence

We ensure that our recommendations are 100% product-neutral and unbiased because unlike other players,we are neither tied up with any one particular insurance company nor do we have our own mutual funds.

Product-neutral advice

22

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Disclaimer

The information and views presented here are prepared by Karvy Private Wealth or other Karvy Group companies. Theinformation contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouchfor the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any lossincurred based upon it.

The investments discussed or recommended here may not be suitable for all investors. Investors must make their owninvestment decisions based on their specific investment objectives and financial position and using such independent advice,as they believe necessary. While acting upon any information or analysis mentioned here, investors may please note thatneither Karvy nor any person connected with any associated companies of Karvy accepts any liability arising from the use ofthis information and views mentioned here.

The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-mentionedcompanies from time to time. Every employee of Karvy and its associated companies are required to disclose their individualstock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investmentrecommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation haseither been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders onlythrough Karvy Stock Broking Ltd.

The information given in this document on tax are for guidance only, and should not be construed as tax advice. Investors areadvised to consult their respective tax advisers to understand the specific tax incidence applicable to them. We also expectsignificant changes in the tax laws once the new Direct Tax Code is in force – this could change the applicability and incidenceof tax on investments

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