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1 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 1 www.sundarambnpparibas.in Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in.

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Presentation on theme: "1 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 1 www.sundarambnpparibas.in Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in."— Presentation transcript:

1 1 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 1 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP E quity M arket I nsights Sundaram SKORe Sundaram Keys to Optimum Returns An Investor Education Initiative

2 2 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 2 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Annual returns 17.6% for equity index Figures as of July 2008; Data Source: Bloomberg; Analysis: In house First Major Bull Market 22% one-day decline in US, no linkage then Harshad Mehta Scam Asian Crisis; Unaffected Tech bull market & bust Start of five-year bull market All time high & correction begins BSE Sensitive Index Deep corrections do not matter for long-term investors

3 3 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 3 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Average Sensex levels for five-year blocks Figures as of July 2008; Data Source: Bloomberg; Analysis: In house 1979–1984: –1989: –1994: –99: –2004: –2008 YTD: 11,078 Average index level over years: 3640 Almost 25 years of close to or below long-term average Index Levels

4 4 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 4 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Build up of annual returns over the years Figures as of July 2008; Data Source: Bloomberg; Analysis: In house Lowest level of annual returns over 25 years: 14.6% Long-term average over 29 years: 17.6%

5 5 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 5 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Volatility of returns reduces over time Height of each bar shows the range of returns. Smaller the range shown by the bar, the better for investors Longer the time frame, the greater is the reduction in risk without an impact on returns High Low Average Data Source: Bloomberg; Analysis: In house using SKORe as of July 31, 2008 Effective Annual Returns % Returns %

6 6 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 6 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Benefit of discipline long-term investing Value now of Re 1 invested in SENSEX over a 29-year period Significant gains only if you had remained invested at all times Daily Returns since launch to July 2008 Data Source: Bloomberg; Analysis: In house using SKORe as of July 31, 2008 Rs POWER OF COMPOUNDING ON BEST DAYS

7 7 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 7 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Emphatic NO to market timing Figures as of July 2008; Data Source: Bloomberg; Analysis: In house Average annual return: 17.35% Average annual return: 17.27% No Market Timing Market Timing More certain outcome Low risk Average Annual Returns provided based on the analysis given in the next slide Close-to-impossible outcome High risk

8 8 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 8 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Certain outcome over the past 29.3 years Risk only in line with the market and no more Practical approach for every investor Time matters, not timing Figures as of July 2008; Data Source: Bloomberg; Analysis: In house One-timed investment every year (Rs 12000) Amount Invested in Sensex: 3,52,000 Periodic investment every month (Rs 1000) Amount Invested in Sensex: 3,52,000 One market-timed investment every year CAGR % Investment every month on specific dates CAGR % Value Rs Lakh No Market Timing Market Timing Date Day Probability of predicting each day every year successfully is.0040 and over 29 years, almost no chance – only more risk

9 9 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 9 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Equity is the superior asset class to beat inflation Asset ClassYears Sensex Gold FD Bond yield Inflation Compounded annual returns based on investing Rs 1000-a-month Figures as of July 2008 Data Source: Bloomberg; Analysis: In house Returns in % Only equity outpaces inflation comfortably across time periods

10 10 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 10 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Wealth creation in different asset classes Asset ClassYears Investment Equity Gold FD Bond yield Value in Rs lakh Rs 1000-a-month invested over different time periods is now worth Figures as of July 2008 Even after the deep correction in 2008, wealth creation in equity is significantly superior to other asset classes Data Source: Bloomberg; Analysis: In house; Rs 1000-a-month invested n Equity is an investment made in Sensex

11 11 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 11 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Rs 1000 a-month investment till age 55 Portfolio value reckoned at age 60 Asset Allocation: Equity 70% and Fixed Income 30% Returns based on historical average. In the equity, based on the Sensex and in the Fixed income, based on the government bond yield Returns assumed 15.3% Start early to reap maximum benefits Data Source & Analysis: In house Starting age of investing Value in Rs lakh From age 25, Rs 1000-a-month could deliver Rs 1.55 crore at age 60 Amount Invested at Rs lakh

12 12 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 12 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Early start also means more by way of gains Starting Age Year of investing Amount Invested Value of investment Share Cost Share Gain Years Rs Lakh % Data Source & Analysis: In house The returns and values are indicated and not assured Early Start Late Start

13 13 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 13 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP SIP period in months % of SIP with positive returns % of SIP with negative returns Average annual returns Multiple benefits for longer SIP periods Data Source: Bloomberg; Analysis: In house using SKORe as of July 31, 2008 Risk-return profile for SIPs over different periods in Sensex

14 14 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 14 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Importance of investing in difficult phases Analysis based on Rs 1000-a-month SIP between Daily Returns since launch to July 2008 PeriodNature of MarketShare in Wealth (%) Average Sensex 1997 Lackluster, Poor Depth Lackluster, Poor Depth Lackluster, tech boom starts Tech-led boom & bust Lackluster, Poor Depth Lackluster, Poor Depth Lackluster First Half Bull market continues More strength to bullish phase Bullish Phase Data Source: Bloomberg; Analysis: In house About 75% of wealth creation attributable to investing during tuff times

15 15 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 15 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Periodic Table of Investment Returns 1 Diversified Fund CNX Mid Cap BSE BSE MSCI India Nifty 17.2 Figures as of July 2008; Data Source: Bloomberg; Analysis: In house Diversified equity funds outpace indices comfortably over ten years 7 Sensex Nifty Junior CNX MSCI EM Gold I-SEC Bond 10.0 RANKRANK RANKRANK YTD

16 16 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 16 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Periodic Table of Investment Returns Analysis: Sundaram BNP Paribas Asset Management; Methodology: Diversified equity funds: most top quartile presence & absent in 4 th quartile

17 17 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 17 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Periodic Table of Investment Returns Figures as of July 2008; Data Source: Bloomberg; Analysis: In house Diversified equity funds and mid cap stocks dominate top end

18 18 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 18 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Contact us Call: Toll Free: SMS: SFUND to

19 19 Sundaram BNP Paribas Tax Saver Sundaram BNP Paribas Asset Management 19 Sundaram BNP Paribas Asset Managementwww.sundarambnpparibas.in SIP Disclaimer Mutual fund investments are subject to market risks. Please read the offer document carefully before taking an investment decision. Risk Factors: All mutual funds and securities investments are subject to market risks, and there can be no assurance or guarantee that fund's objectives will be achieved. NAV may go up or down, depending on the factors and forces affecting the securities market. There is uncertainty of dividend distribution and risk of capital loss. Statutory: Mutual Fund Sundaram BNP Paribas Mutual Fund is a trust under the Indian Trusts Act, 1882 Sponsors (Collective liability is limited to Rs 1 lakh): Sundaram Finance Limited & BNP Paribas Asset Management. Investment Manager: Sundaram BNP Paribas Asset Management Company Ltd. Trustee: Sundaram BNP Paribas Trustee Company Ltd. Past performance of Sponsors//Asset Management Company/Fund does not indicate or guarantee future performance. General Disclaimer: Equity Market Insights is for information purposes only. Equity Market Insights should not be construed as prospectus, offer document, offer, solicitation for an investment or investment advice. Information in this document has been obtained from reliable sources in the opinion Sundaram BNP Paribas Asset Management. Opinions expressed by authors may not necessarily represent that of the organization. The detailed disclaimer/disclosures/risk factors available at must also be treated as an integral part of this communication.


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