EMI = GOOD EMI Instalment. Investment. SIP or Systematic Investment Plan offered by Mutual Funds is like a GOOD EMI

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2 EMI = GOOD EMI Instalment Investment = SIP or Systematic Investment Plan offered by Mutual Funds is like a GOOD EMI

3 WHAT are SIPs?

4 SYSTEMATIC INVESTMENT PLANS (SIPs) MADE SIMPLE WHAT are SIPs? WHY SIPs? WHERE to invest via SIPs? WHEN to start a SIP? WHAT not to do in SIPs

5 WHAT are SIPs? Ÿ SIPs are a REGULAR AND DISCIPLINED investing in mutual funds way of Ÿ INVESTING PROCESS similar to a Bank Recurring Deposit - Regular investment in one or multiple schemes Ÿ SIPs or Systematic Investment Plans are one of the BEST WAYS TO INVEST IN A MUTUAL FUND

6 WHY SIPs? ŸCHEAPER ON THE WALLET - Can be as low as R 500 per SIP per month ŸREGULAR AND DISCIPLINED INVESTMENT Ÿ Potential To CREATE WEALTH OVER LONG RUN ŸMAKE MARKET TIMING IRRELEVANT - Ensures that one invests at all points of time (high as well as low points of the market) - Benefits from Rupee Cost Averaging Ÿ Provide BENEFITS OF COMPOUNDING Let us look at some of the above aspects in detail..

7 WHY SIPs? CREATE WEALTH OVER LONG RUN

8 Create Wealth Over The Long Run (Illustration) SIP of R1000 per month 10%, 12% & 14% p.a. ^ * Period Principal R lac Final Value R 10% p.a. Final Value R 12% p.a. Final Value R 14% p.a. 10 years years years years A small difference of even 2% in returns can change the final amount drastically * For Illustration purposes only. These are assumed returns and actual returns may vary. Also, returns may vary with the type of underlying asset class. ^ Systematic Investment Plan at the beginning of the month.

9 RUPEE COST AVERAGING

10 Rupee Cost Averaging Receive more units when NAV is lower, vice versa when NAV is higher Investment (A) NAV (B) No. of Units (A / B) Remarks R Higher NAV ~ Less Units R Lower NAV ~ More Units Average Cost per unit The cost is thus averaged out as NAV falls Longer the SIP period, better the impact of rupee cost averaging Longer SIP period may also help to lower volatility of returns

11 Rupee Cost Averaging (Illustration) SENSEX VALUE How cost per unit has dropped over long investment horizon Starting Value 3382 Sensex rose from 3382 on Jan 31, 1997 to 27,656 on Jan 31, 2017 BUT Average cost of a unit over the 20-year period was only Rs.7011 Ending Value 27,656 S&P BSE Sensex Average Value Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan-17 Past performance may or may not be sustained in future For a 20-year SIP in S&P BSE Sensex ending on Jan 31, Investment at the start of the month Source-CRISIL Mutual Fund Research Tool

12 BENEFITS OF COMPOUNDING

13 Benefits of Compounding (Illustration) Longer you stay the wealthier you may be SIP of R 1000 per month p.a.* Experience the Magic of COMPOUNDING Period Principal R lac Final Value R lac Growth of Principal (Compounding Effect) 10 years almost 2 times 15 years almost 3 times 20 years over 4 times 25 years over 6 times * For Illustration purposes only. These are assumed returns and actual returns may vary. Monthly investment at the beginning of the month.

14 WHERE to invest via SIPs? NO RESTRICTION OF ANY ASSET CLASS for commencing a SIP MORE POPULAR FOR EQUITY as an asset class because The asset class is relatively more volatile and SIPs help to even out volatility by purchases made across market cycles EQUITY SIPs ideally should be long term of 5 years and above SIPs IN FIXED INCOME may be for short to medium term

15 Three Modes to Invest FUND HOUSE and its Points of Presence INTERMEDIARY Bank, Distributor, Independent Financial Advisor (IFA) ONLINE Through investment portals * of Fund House/ Distributors * Key Step is KYC or Know Your Customer form KYC form available with mutual fund, distributors, RTA or KRA (KYC Registration Agency)

16 WHEN to start a SIP?

17 WHEN to start a SIP? NO PARTICULAR TIME TO START A SIP - Regularity and consistency is more important than timing - SIPs actually make market timing irrelevant FREQUENCY OF SIPS is typically monthly or quarterly - Monthly SIPs are more popular - SIP date needs to be predefined

18 WHAT not to do in SIPs (Illustration) Delay or discontinue a SIP Target of R 1 crore at Age p.a.* Start Age Monthly Investment R 25 years years years years years An Early Start is Good Every 5 Year Delay Doubles Monthly Investment needed Only R 1540 p.m. needed if you start at 25 years but if you start 5 years later and so on R 2833 p.m. * For Illustration purposes only. These are assumed returns and actual returns may vary. Monthly investment at the beginning of the month.

19 Start your GOOD EMI today!