5-6. Wealthwise. The Stock Market performance during May June, Money Management For Newlyweds Q & A. Performance of Select Funds

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1 R.N.I. No.: MAHENG/2007/19802 Postal Regd. No.: MH/MR/N/MBI/72/10-12 Posted at Mumbai Patrika Channel Sorting Office, GPO, Mumbai on 9th & 10th of every month. June, 2012 Volume 6, Issue 6 Price ` 2 A Monthly Publication from Wiseinvest Advisors Private Limited Inside Money Management For Newlyweds Q & A Performance of Select Funds Stay The Course - Portfolio gone awry? Wealthwise Pg No. Wealthwise is a monthly publication brought to you by Wiseinvest Advisors. Wiseinvest Advisors is a quality investment advisory firm that specializes in mutual funds. Though mutual funds are a simple way to invest money, you can get the best only if you get professional advice. Our CEO, Mr. Hemant Rustagi, is a well known mutual fund expert. He brings with him an experience of more than 24 years in this field. He regularly writes articles for major national dailies and business magazines as well as appears as a mutual fund expert on many investments related TV shows. Besides, our team of advisors has professionals who have spent years in the mutual fund industry. In the last seven years, thousands of our clients have benefitted from our quality advice and have made mutual funds as the mainstay of their portfolio. You can benefit too from our expertise for your existing as well as new investments in mutual funds. All you need to do is to just call up any of the branches or e m a i l y o u r r e q u i r e m e n t s a t information@wiseinvestadvisors.com and our professional advisors will do the rest Dear Investor, The Indian stock market continues to be in a consolidation mode. While the Sensex was down by 6.26% during the month of May 2012, the mid cap and small cap indices of the BSE were down by 6.21% and 7.48% respectively. The stock market reacted sharply to disappointing GDP numbers for the quarter January- March India's economy grew 5.3% during January-March (Q4), the eighth successive quarterly decline, and the slowest pace in nine years. For the full year, the economy grew 6.5%. Towards the end of the month, the rupee tumbled to a new all-time low of ` against the US dollar on increased capital outflows and strong demand from importers for the American currency. Besides, capital outflows by foreign funds, strengthening of dollar against the euro, which plunged to a two-year low on continued euro-zone worries and strong month-end demand from importers, particularly oil refiners, put pressure on the rupee. India's inflation accelerated in April 2012 to 7.23 % as price pressure on fuel, food and manufactured items picked up, adding to the woes of the RBI. The Central bank now has limited room to cut monetary policy rates. Besides, considering that inflation is more structural in nature, it could flare up if the RBI eases rates too much. Moreover, the fiscal deficit situation continues to be worrisome. On the positive side, oil is now at USD 103 per barrel and has come off substantially. It is evident that we require certain policy measures that can bring the growth story back into focus. A few measures such as rationalization of diesel prices, review of retail in FDI and the Land acquisition reforms can set the ball rolling. Considering the increasing volatility in the market, investors need to follow goals-based investing as it brings in a fresh perspective in one's investment process. Not only it helps in mitigating irrational behaviour caused by volatile economic climate but also reduces the volatility of most long-term investments. Besides, it helps in ensuring a balance between preservation of capital and pursuit of investment returns. Warm regards, Hemant Rustagi Editor Address to be affixed here The Stock Market performance during May Indices 2nd 31st Change May May in (%) Sensex % MIDCAP % SMLCAP % BSE % BSE % BSE %

2 June 2012 Page No. 2 Money Management For Newlyweds Marriage marks the start of a partnership in all aspects of life, not least of all, the couple's financial decisions. Managing finances together could be a daunting task for those who have just taken the plunge, and taking a few steps together in this direction could help the partners ease into a comfortable financial zone. Having adequate risk cover in the form of life and health insurance is an important aspect of financial planning. While the thumb rule for life insurance is to have a cover equivalent to 10 years of the annual income, the extent of health insurance cover required will depend upon whether the couple's employers offer any such facility or not, and if yes, how much that is. It can be quite a challenge for newly married couples to manage their limited resources with their seemingly unlimited needs. Many young couples get overwhelmed by the thought of saving a large amount of money that they will require to lead a peaceful and happy life. Hence, it is very important to develop good saving and spending habits, as well to as learn to budget. Here are a few tips in this regard: Have an open conversation An open conversation is the key for a newly married couple to understand each other's financial standing, i.e. income, expenses, investments, loans and any other assets. By discussing these, the couple can hope to find their risktaking capacity and ascertain how to achieve the perfect synergies required to achieve various financial goals. Create an emergency fund Before starting the investment process, the priority should be to create an emergency fund. An emergency fund is needed not only to take care of anything unexpected that may come along, but also to allow the couple to continue their long-term investment process uninterrupted. Above all, it gives peace of mind to the newlyweds, which is crucial in the early stage of their married life. The size of the emergency fund is something that the couple needs to decide taking into consideration their monthly expenses, the level of liquidity in the investment portfolio and the kind of jobs that they are engaged in. Ideally, an emergency fund should be enough to take care of the couple's monthly expenses for at least six months. Discuss bank accounts The key issue for newly married couples is whether to have separate bank accounts or to have a joint account. This decision needs to be a practical one, as an emotionally driven decision can backfire. For example, having separate accounts is generally a great idea for a working couple. Identify financial goals In today's complex financial environment, investing money judiciously to ensure that one has enough at every stage of one's life is becoming increasingly challenging. Financial planning can play an important role here. Having a financial plan in place and a strategy to implement it would mean that the couple can allocate funds appropriately for all their goals. Goal-based investing can go a long way in ensuring that the couple invests with a clear time horizon and avoids making abrupt changes in their portfolios. The asset allocation process, which is an integral part of financial planning, would largely determine the level of risk and the likely returns from their portfolio. Knowing their goals would also ensure that both take responsibility to achieve them. It is equally important to invest this emergency fund in options that provide the required levels of liquidity, tax efficiency and decent returns. Some of the options that can be considered are bank savings accounts with auto-sweep facility, as well as ultra short-term and short-term debt funds. Manage debt efficiently In today's world, it is practically impossible to live debt free. However, the impact of a loan on a couple's overall financial health would depend on the purpose for which a loan is taken. For example, a housing loan not only helps in buying a house at an early stage in the couple's life but also in saving taxes (greater savings in case of a joint loan). On the other hand, indiscreet use of credit cards may result in a disaster with long lasting financial implications. Therefore, it makes sense to keep credit card usage within reasonable limits. Managing debt efficiently can go a long way in helping young couples stabilise their future. (This article written by our CEO, Mr. Hemant Rustagi was published in Dalal Street Journal-Issue dated May 21, 2012).

3 Page No. 3 June 2012 Q & A Q. I have been investing in mutual funds for quite some time and come across lot of advisors who do not give proper advice. How can one ascertain whether justice is being done to one's hard eared money? A: Once you start working with an advisor, it is very important to periodically evaluate what type of advice and service you're getting and whether it is helping you achieve your financial goals. Here's what you should look for: Q: An investor can invest about ` 15,000 a month. How can he allocate the money? His goal is to achieve ` 4 crore in 30 years and he has some current investments and a couple of mutual funds like HDFC Midcap Fund and the ICICI Focused Bluechip Fund. He has an insurance of ` 50 lakh in HDFC term plan insurance. A: The time horizon is around 30 years and the objective is to build a corpus over a period of time. Systematic investment plan in equity funds will be the right strategy. When you invest for 30 years, you need to focus on an asset class which has a potential to beat inflation. This is where I think equity definitely has a role. It is important that your advisor determines your risk level before suggesting the schemes. Remember, it is the level of risk that provides the guidance about the kind of return you can expect as well as the level of volatility, while achieving it. Ensure that your advisor provides you with a comprehensive, well thought-out plan for your money. Also ensure that the plan has the required flexibility to take care of changes that might take place in your needs. Ensure that your portfolio is a well diversified one. Diversification means spreading your investments over a range of different options such as equity schemes, balanced and debt-oriented schemes. While reviewing your investments, if you notice that your investments are consistently losing money, make sure your advisor has the right answer for it. If he recommends sticking with an investment that's on the decline, ask why? Make sure you know the reasons for investing or redeeming any MF investment. Also, you should know how a recommended scheme fits into your personal financial plan. My recommendation for him would be that even if he is a little risk averse, he can take a call on investing in equity given a 30 year time horizon. The fact that he will be investing systematically every month, the volatility over a longer period is automatically taken care of. I think his current investments are in two funds - HDFC Midcap Opportunity and ICICI Focused Bluechip fund. ICICI Focused Bluechip, a quality large cap fund, can be continued. ` 10,000 is being invested in HDFC Midcap Opportunity which is a leader in its own category. It is not always about investing in the top performing funds, it is also about looking at which funds are suitable for you and what kind of risk profile you have. In this case, almost two third of the money is going into midcap fund, which is not the right strategy for someone who is looking to begin investing. Yes, midcap fund has a potential to do well over a longer period. But it's also a fact that they tend to be more volatile compared to well diversified equity funds. My recommendation is that he should make one change in this. He can continue to invest in HDFC Midcap Opportunity maybe, around ` 5000 & the balance ` 5000 should be invested in well diversified multi-cap fund. He can either look at Canara Robeco Equity Diversified Fund or HDFC Equity Fund. With this, he will have three funds in the portfolio - one multi-cap, one midcap and one pure large cap fund. That will create the right balance. If he continues to invest for 30 years assuming a return of around 12%, he should be able to build a corpus of around ` 4.57 crore. The key, of course, is that he should continue the process irrespective of the market condition. (This personal query was answered by our CEO, Mr. Hemant Rustagi in the programme Markets & Macros in CNBC TV18 on May 29, 2012).

4 June 2012 Page No. 4 EQUITY FUNDS Diversified Fund Performance of Select Funds Data as on May 25, 2012 Hybrid: Equity Oriented Launch 1-Month* 3-Month* 6-Month* 1-Year* 2-Year** 3-Year** 5-Year** Fund Launch 1-Month* 3-Month* 6-Month* 1-Year* 2-Year** 3-Year** 5-Year** Birla Sun Life Frontline Equity Aug Canara Robeco Equity Diversified Sep DSPBR Top 100 Equity Reg Mar DSPBR Equity Apr Fidelity Equity May Fidelity India Growth Oct Franklin India Flexi Cap Mar HDFC Equity Jan HDFC Top 200 Oct ICICI Prudential Dynamic Oct ICICI Prudential Focused Bluechip May Kotak 50 Dec Kotak Opportunities Fund Sep Reliance Regular Savings Equity Jun Reliance Equity Opportunities Mar Tata Equity PE Jun Sector, Specialty & Tax Saving ICICI Prudential FMCG Mar Reliance Banking Retail May Reliance Pharma Jun Canara Robeco Equity Tax Saver Mar Fidelity Tax Advantage Feb HDFC Taxsaver Mar Midcap & Smallcap Birla Sun Life Dividend Yield Plus Feb DSPBR Small and Mid Cap Reg Nov HDFC Mid-Cap Opportunities Jun ICICI Prudential Discovery Aug IDFC Premier Equity Sep IDFC Sterling Equity Mar Sundaram Select Midcap Reg Jul UTI Dividend Yield May UTI Master Value Jul Gold: Fund of Funds Kotak Gold Mar Reliance Gold Savings Mar Canara Robeco Balanced Feb HDFC Balanced Sep HDFC Prudence Feb Reliance Regular Savings Balanced Jun Hybrid: Debt Oriented Canara Robeco MIP Apr HDFC MIP LTP Dec L&T MIP Jul Reliance MIP Dec FT India Dynamic PE Ratio FoF Oct Debt Oriented & Ultra Short Term Debt Fund Funds Launch 1 Week* 1 Month* 3 Months*6 Months* 1 Year* 2 year** 3 Year** Birla Sun Life Dynamic Bond Ret Sep BNP Paribas Flexi Debt Reg Sep L&T Select Income-Flexi Debt Ret Oct L&T Ultra Short Term Mar Templeton India Short-term Income Ret Jan Templeton India Income Opportunities Dec BNP Paribas Money Plus Reg Oct Kotak Floater LT Aug *Absolute ** Annualised. Past performance may or may not be sustained in future. Dividends declared by equity and equity-oriented funds during the month of May 2012 Scheme name Date Dividend declared in ` Per unit ICICI Pru Blended Plan - B (MD) 09/05/ ICICI Pru Blended -B Inst. (MD) 09/05/ Tata Balanced Fund (MD) 11/05/ FT India Balanced Fund (D) 18/05/ IDFC Arbitrage Plus-A (D) 21/05/ IDFC Arbitrage Plus-B (D) 21/05/ IDFC Arbitrage Fund (D) 21/05/ Birla SL Advantage Fund (D) 25/05/ Kotak Equity Arbitrage (D) 28/05/ ICICI Pru Blended Plan - B (DD) 28/05/ ICICI Pru Blended -B Inst. (DD) 28/05/ Edelweiss E.D.G.E. Top 100 -C (D) 30/05/ Please check whether you have received dividend for the fund/s that you may have in your portfolio out of this list. In case, you do not maintain any portfolio statement, Wiseinvest Advisors can do that for you free of charge. Once we have the details, we would send your updated statement every month. You can contact our corporate office or any of the branches to avail of this free service. Mutual funds, like securities investments, are subject to market and other risks. As with any investments in securities, the NAV of units can go up or down depending on the factors and forces affecting capital markets.

5 Page No. 5 June 2012 Stay The Course - Portfolio gone awry? A few, simple-to-follow steps can put it back on track Mutual fund investors in India have had a roller-coaster ride. Little wonder then that despite having the potential to fit every investor's portfolio, mutual funds have failed to become the first investment choice. While it cannot be denied that investors' participation in mutual funds has been increasing over the years, issues like mismatch between expectations and reality, misselling, lack of understanding and wrong positioning of products have hampered the growth of the industry time and again. Besides, wrong investment strategies have added to investors' woes. Here is how investor portfolios get affected when they follow wrong strategies, and how they can be rectified: Too many schemes in portfolio Many investors believe that the best way to diversify a mutual fund portfolio is to have a large number of funds. As a result, their portfolios suffer from over-diversification. Moreover, having too many overlapping funds makes portfolio-tracking quite complicated. In fact, a few carefully selected funds can not only provide a higher level of diversification but also improve portfolio returns. While there is nothing like an optimal number of funds that one needs to own to have a sufficiently diverse portfolio, factors like size of the portfolio and asset allocation can play a key role in deciding that number. Abandoning equity funds during downturn The first instinct of investors who invest in equity funds without a defined time horizon is to abandon them during a market downturn. A similar reaction is seen in investors who invest through a systematic investment plan (SIP) without any time commitment. While they happily invest in a rising market, they develop cold feet when the markets are actually presenting great long-term investment opportunities. Clearly, their fetish for catching the market bottom often makes them wary of taking the plunge. On the other hand, someone who invests with a long-term commitment has time on his side and hence is better prepared to handle these situations. Remember, short-term adverse movements in the market do not take away the ability of equity to outperform other asset classes in the long run. By continuing to invest during turbulent times, one can benefit a great deal when the market rebounds. Investing just before dividend payout It is a common belief among a set of investors that investing in an equity fund just before dividend payment is a good strategy. The truth is that they receive a part of their own capital as dividend. Besides, the attraction of dividend often blinds their investment decisions and they end up investing in funds that do not actually merit an investment. Here is an example of why it does not make sense to follow this strategy. First, if a fund declares 100 per cent dividend, it is paid on the face value, which is ` 10 in most cases, and not on the NAV. Second, once the dividend is paid, the fund's NAV gets reduced by the dividend amount. For example, if the NAV of a fund paying 100 per cent dividend is ` 40 on the record date, it will come down to ` 30 post-dividend. Therefore, while an investment of ` 10,000 will get an investor a dividend of ` 2,500, its current value will also come down to ` 7,500. Relying too much on past performance Investors often rely on short-term performance while investing in equity funds. This strategy takes them beyond their risk-taking capacity because investing in top-performing funds, when mid-cap stocks are doing well, would result in a significant amount getting allocated to mid-cap funds. Although mid-cap funds have the potential to do well, it is important to have a restricted exposure to them to maintain the risk-reward balance in the portfolio. No doubt, past performance is an important aspect in the decisionmaking process, but relying too much on it can be disastrous. It is important to know that dividend payment by mutual funds is a process of distributing gains to its unit holders, and only those who remain in the fund for a considerable period benefit from it in the real sense. Compromising long-term growth Investors often lose sight of their long-term goals when they spot an opportunity to make some short-term gains. For example, in a market situation such as now, it can be tempting to either pull money out of equity funds or stop investing in them and instead redirect funds to attractive debt options such as fixed maturity plans (FMP). Cont. on page 6...

6 R.N.I. No.: MAHENG/2007/19802 Postal Regd. No.: MH/MR/N/MBI/72/10-12 Posted at Mumbai Patrika Channel Sorting Office, GPO, Mumbai on 9th & 10th of every month. June 2012 Page No. 6 Date of Publication: 5th of every month. Stay The Course......Cont. from page 5 While this might look like a great investment decision now, investors will still have reinvestment risk to tackle when the FMPs mature. A likely scenario of lower interest rates and improved indices levels might compel the same investors to re-enter the stock market at a higher level. Such strategies can affect the end result for a long-term investor. Ignoring debt portfolio It is quite common to see investors ignore their debt portfolio as they are considered to be safe. It is important for debt fund investors to know that bond prices move inversely to interest rates. When interest rates go up, bond prices go down and when interest rates go down, bond prices go up. Since movements in interest rates can have a significant impact on a debt portfolio, there is a need to monitor it not only to realign it in line with the changing interest rate scenario but also to protect gains. Simply put, the key is to manage credit and duration risk efficiently. Among the debt funds, a major differentiator is the maturity duration of the portfolio. Each category of debt funds has a different risk profile and commensurate return potential. The longer the maturity duration of the portfolio, the greater is the impact of an interest rate change. As is evident, debt fund investors need to tread carefully and keep an eye on the emerging rate scenario. (This article written by our CEO, Mr. Hemant Rustagi was published in Business world Issue dated April 30, 2012). A Note to our esteemed readers Wealthwise is being sent to some of you on a Complimentary basis as a part of our humble effort to ensure that more and more investors benefit from the potential of mutual funds. We sincerely hope that you would like the contents of Wealthwise and in some way benefit from it. However, if you do not wish to receive Wealthwise on a regular basis, please let us know either by sending us a mail on information@wiseinvestadvisors.com or by calling us on (022) /09. You can also write to us at our Corporate Office address mentioned below. Corporate Office: 202, Shalimar Morya Park, New Link Road, Andheri West, Mumbai Tel : / 09 Fax : information@wiseinvestadvisors.com Branches: Fort : 107, Vikas Building, Above Jimmy Boy Restaurant, 11, N.G.N. Vaidya Marg, Fort, Mumbai Tel: / 34, Fax: information3@wiseinvestadvisors.com Thane : Aishwarya Laxmi, Shop No. 4, Opp. Namdeo Wadi Hall, Maharshi Karve Road, Thane (W) Tel : / 52 Fax : information1@wiseinvestadvisors.com WISEINVEST ADVISORS PVT. LTD. DISCLAIMER: All reasonable care has been taken to ensure that the information contained herein is neither misleading nor untrue at the time of publication, but we make no representation as to its accuracy or completeness. All information is provided without any liability whatsoever on the part of Wiseinvest Advisors Private Limited. RISK FACTORS: Mutual funds, like securities investments, are subject to market and other risks and there can be no assurance that the scheme's objectives will be achieved. As with any investments in securities, the NAV of units can go up or down depending on the factors and forces affecting capital markets. Please read the offer document before investing. Edited, Published and Printed by Mr. Hemant Rustagi, on behalf of Wiseinvest Advisors Pvt. Ltd. from 202, Shalimar Morya Park, New Link Road, Andheri West, Mumbai at AdvantEdge Offset Printers, K-7 Rizvi Park, S V Road, Santacruz (W), Mumbai Design by Mosaic Design. Copyright reserved All rights reserved in favour of Wiseinvest Advisors Pvt. Ltd.