Presentation title

Why Mutual Fund?AMFI - Investor Awareness Program (IAP)(Association of Mutual Funds in India)

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Typical Life cycle: Future Dreams

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Earning Life cycle3

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Can my Income meet all my expenses?Will I fulfill my aspirations?Will I complete my dreams?

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The big worry

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InflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services.

So if your money can no longer buy the things it used to, blame it on inflation

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Kinds of InflationInflation reported by Government Wholesale Price Index (WPI) - uses prices of goods and services purchased at the wholesale market.Consumer Price Index (CPI) - tracks the prices of goods and services purchased by the end consumers.Real inflationWhat the consumer actually pays at the end of the dayLinked purely to forces of demand and supply.Individual and corporates are at opposite end

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Inflation what to worry more?Medical treatmentEducationPropertyAspirational goodsDaily expenses

p

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Inflation - MedicalSurvey reveal that demand for Medicare in India is growing at more than 25% annually

20152,00,00020308,35,00010%15yrs201510,00,000203041,35,00010%15yrs

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Inflation - EducationDemand of education is growing exponentially in India given the demographics of the population

20154,00,000203021,90,00010%20154,00,000203017,00,00010%15yrs15yrs

201525,00,00020301,00,45,00010%15yrs

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Inflation - PropertyInflation in property is stubborn no matter how the economy Inflation in property is not as high but even a small rise can set you back given the high ticket size

201550,00,00020301,20,00,0006%15yrs

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Inflation - AspirationalToday our choices are often driven by you peer set, media, family and finally your aspirations

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Inflation Daily Expenses20042014CAGRper kg2401900%1 km132162%Per packet2.258256%Per kg428090% monthly72300317%

Source: Internal

What we buy and use for our daily living has sharp rises from year on year

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The only way We can fulfill our dreams is by saving or investing

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Savings Real IncomeValue of Expenses

SavingsSavings are defined as Money saved from regular income after accounting for all expenditure

However, due to the effect of inflation The value of savings keeps decreasing!

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In most cases the amount saved is not enough to meet current and future needs of self and family. It is important to make their savings work for them.

When savings start generating income, they become Investments!

Savings need to generate the maximum possible returns within the constraint of their risk appetite and time horizon to be able to meet not only their needs, but wants and desires too.

Hence the need to INVEST!

Importance of Investing

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Take small steps for a Good future

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Your Investment Menu CardInstrumentTax Benefit ReturnDurationEPF8.50%Long TermPPF8%Long TermNSC8%Long TermFDs Banks & Post Office5.70 to 8.50%Short TermSenior Citizen Savings Scheme9%Long TermMutual FundsMarket LinkedLong Term & Short TermULIPMarket LinkedLong TermNPSMarket LinkedLong TermDirect Equity Market LinkedLong TermGold NAMarket LinkedShort TermReal EstateMarket LinkedLong Term

The returns mentioned above are indicative and not assured. Past Performance is no guarantee of future results

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Cost of money lying idleYour investment ought to beat the inflation !!!Money in savings account+100,000Interest earned in 1 year (@4.5 per annum)+4,500104,500Tax on Interest (@33.99%)-1,530Impact of Inflation (@5% per annum)-5,000Value at the end of year 197,970

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Challenges involved in investing directly in Capital MarketRequirement of CapitalTimeExpertiseLack of Information PortfolioVolatility

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Key Investment Considerations

SafetyYou get yourmoney backLiquidityYou get your money back when you want itPlus ConvenienceHow easy is it to invest, disinvestand adjust to your needs? Post-tax ReturnsHow much is really left for you post tax?

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What is Mutual Fund and Why Mutual FundA trust that pools the savings of a number of investors who share a common financial goal.Anybody with a little as a few hundred rupees can investThe money collected invested by the fund manager in different types of securities. It gives the market returns and not assured returns.In the long term market returns have the potential to perform better Cost efficient as it offers the lowest charge to the investor

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Advantages of Mutual FundsProfessional ManagementDiversificationConvenient AdministrationReturn potentialLow costLiquidityTransparencyFlexibilityChoice of schemesWell regulatedTax benefits

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How do I make money from a mutual fund?1. Capital appreciation: As the value of securities in the fund increases, the fund's unit price will also increase. You can make a profit by selling the units at a price higher than at which you bought .

2. Income Distribution:The fund distributes part of the appreciation to the investors as dividend.

DisclaimerAs the value of securities in which the fund invests fluctuates, the value of your investment in the fund may also go up or down. There is no assurance that the fund will declare dividends(Past Performance is no guarantee of future returns)

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Mutual Fund- Which one to buy?DisclaimerAs the value of securities in which the fund invests fluctuates, the value of your investment in the fund may also go up or down. There is no assurance that the fund will declare dividends(Past Performance is no guarantee of future returns)Based on your goals andrisk tolerance

Mutual FundsSavings Bank AccountFixed DepositsReal EstatePPFPost office monthly Income SchemeGoldLiquid FundsDebt FundsEquity Funds

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Suggested Portfolio based on Risk tolerance

Aggressive PlanModerate PlanConservative Plan

Growth Schemes

Income Schemes

Balanced Schemes

Money Market SchemesThis plan may suit:Investors in their prime earning years and willing to take more riskInvestors seeking growth over a long termThis plan may suit:Investors seeking income and moderate growthInvestors looking for growth and stability with moderate riskThis plan may suit:Retired and other investors who need to preserve capital and earn regular income

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Demystifying NAV Net Asset ValueWhile selecting a fund, the NAV shouldnt be the criteria, A low NAV need not mean that its a good buy ...In the above example during the period under consideration the best growths have been recorded by the funds with the lowest (Scheme B Rs 7.44) and the highest (Scheme A- Rs 23.55) NAVs respectively. On the other hand the least growth has been recorded by (Scheme E), a fund with a low NAV.

Clearly the data suggests that there is no correlation between the NAV size and the returns. Mutual Fund Scheme NameNAVs onGrowthJan 1st 2013Oct 1st 2013A23.5538.9765.5%B7.4412.0461.8%C19.8630.2352.2%D21.7031.5745.5%E12.1016.5636.9%

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Investment in Mutual Fund through SIPSIP Systematic Investment Planningit is a method of investing a fixed sum, at a regular interval, in a mutual fund. It is very similar to monthly saving schemes like a recurring monthly deposit / post office depositAdvantages of Systematic Investment PlanningEncourages Regular Investments (just like recurring deposit schemes)A Convenient way to invest regularly Lower initial investment without cutting into regular expenseLong term perspectiveRupee Cost Averaging Benefit to counter volatility - it brings down the average cost of your InvestmentsNo timing the market!!!Meet investment objective with investment needsHelps to match the risk / return profile

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SIP - How Rupee Cost Averaging helps

Put aside an amount regularly Rupee cost averagingDiscipline is the keyControl volatilityMonth AmountRising MarketFalling MarketVolatile MarketNAV (Rs)Units AllottedNAV (Rs)Units AllottedNAV (Rs)Units Allotted110000101000.00101000.00101000.0021000010.5952.389.751025.6410.5952.3831000012833.3391111.1191111.1141000014714.2971428.5711909.0951000017588.246.51538.4613769.2361000018555.5661666.6711.5869.57Total6000081.504643.7948.257770.4565.005611.38Avg. Purchase NAV (Total of NAVs/No. of investments13.588.0410.83Avg. cost per unit (Total Investment /No of units held)12.927.7210.69

The above table is only for the purpose of illustration. The returns mentioned above are indicative and not assured. Past Performance is no guarantee of future results

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SIP: The Power Of CompoundingSIP of Rs. 1000 invested per month @ 8% pa till the age of 60.Starting AgeTotal Amount SavedValue at the age of 60254,20,00023,09,175303,60,00015,00,295353,00,0009,57,367402,40,0005,92,947

the sooner you start, makes a difference!Sample Mutual Fund Comparison Chart. Category: Diversified Equity FundsIllustration:

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Important InformationThe market information, wherever stated has been sourced from the entities referred in the document. This information is purely for informational purposes and should not be construed as reflecting or indicating the views of Baroda Pioneer Mutual Fund. The value of investments and income from them may go down as well as up and an investor may not get back the amount invested. Please consult your tax advisor before investing.Risk Factors: Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the schemes or that the schemes objectives will be achieved. As with any investment in securities, the NAV of the units issued under the schemes can go up or down depending on various factors and forces affecting capital markets.

Past performance of the Sponsor /the AMC/the Mutual Fund does not indicate the future performance of the schemes.

Mutual fund investments are subject to market risks, read all scheme related documents carefully

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Thank You

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