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Benefit 1
Benefit 3
Most investors want to buy stocks when the prices are low and
sell them when prices are high. But timing the market is timeconsuming and risky. A more successful investment strategy is to
adopt the method called Rupee Cost Averaging. To illustrate this
well compare investing the identical amounts through a SIP and
in one lump sum.
Imagine Suresh invests Rs. 1000 every month in an equity mutual
fund scheme starting in January. His friend, Rajesh, invests
Rs. 12000 in one lump sum in the same scheme. The following
table illustrate how their respective investments would have
performed from Jan to Dec:
Sureshs Investment Rajeshs Investment
Benefit 2
Month
NAV*
(Rs.)
Amount
(Rs.)
Units
Amount
(Rs.)
Units
Jan-04
9.345
1000
107.0091
12000
1284.1091
Feb-04
9.399
1000
106.3943
Mar-04
8.123
1000
123.1072
Apr-04
8.750
1000
114.2857
12000
1284.1091
May-04
8.012
1000
124.8128
Jun-04
8.925
1000
112.0448
Jul-04
9.102
1000
109.8660
Aug-04
8.310
1000
120.3369
Sep-04
7.568
1000
132.1353
Oct-04
6.462
1000
154.7509
Nov-04
6.931
1000
144.2793
Dec-04
7.600
1000
131.5789
12000
1480.6012
Savings
Total amount
per month
invested
(for 15 years) (Rs. in Lacs)
Rate of return
6.0%
8.0%
10.0%
(rupees in lacs, 15 years later)*
5000
9.0
14.6
17.4
20.9
4000
7.2
11.7
13.9
16.7
3000
5.4
8.8
10.4
12.5
2000
3.6
5.8
7.0
8.3
1000
1.8
2.9
3.5
4.2
Total
*NAV as on the 10th every month. These are assumed NAVs in a volatile market.
Disclaimer: The illustration above is merely indicative in nature and should not be
construed as investment advice. It does not in any manner imply or suggest
performance of any HDFC Mutual Fund Scheme(s). Rupee Cost Averaging neither
ensures you profits nor protects you from making a loss in declining markets. Please
read Risk Factors.
10
9.399
RUPEES
5
4
6.462
When the price is highest,
you buy the least number of units
6
106.3943
units
154.7509
units
3
2
Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec04 04 04 04 04 04 04 04 04 04 04 04
When the price is lowest,
you buy the highest
number of units
At the end of the 12 months, Suresh has more units than Rajesh,
even though they invested the same amount. Thats because the
average cost of Sureshs units is much lower than that of Rajesh.
Rajesh made only one investment and that too when the per-unit
price was high.
Sureshs average unit price = 12000/1480.6012 = Rs. 8.105
Rajeshs average unit price = Rs. 9.345
10
RUPEES
Actual Price
Movement
Benefit 5
Rajeshs
Average Cost Price
9
7
Benefit 4
Sureshs
Average
Cost Price
4
Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec04 04 04 04 04 04 04 04 04 04 04 04
To illustrate the advantages of SIP Investments, this is how your investments would have grown if you had invested say Rs. 1,000
systematically in the following schemes, on the first Business Day of Every Month over a period of time.
HDFC Equity Fund
SIP Investments
Since
Inception
5 Year
SIP
3 Year
SIP
1 Year
SIP
Total Amount
Invested (Rs.000)
68.00
60.00
36.00
12.00
Total Amount
Invested (Rs.000)
Market Value as on
Apr 28, 06 (Rs.000)
251.44
213.76
81.25
17.07
Market Value as on
Apr 28, 06 (Rs.000)
Returns
(Annualised)*%
47.50
53.55
61.12
88.57
Benchmark Returns
(Annualised)#%
35.95
40.53
53.51
89.75
Since
Inception
10 Year
SIP
5 Year
SIP
3 Year
SIP
1 Year
SIP
136.00
120.00
60.00
36.00
12.00
1,341.50
1,084.59
246.98
86.79
17.31
Returns
(Annualised)*%
37.17%
41.40%
60.22%
66.84%
93.19%
Benchmark Returns
(Annualised)*%
20.64%
23.28%
44.16%
51.97%
76.61%
SENSEX
Since
Inception
5 Year
SIP
3 Year
SIP
1 Year
SIP
SIP Investments
Since
Inception
10 Year
SIP
5 Year
SIP
3 Year
SIP
1 Year
SIP
Total Amount
Invested (Rs.000)
115.00
60.00
36.00
12.00
Total Amount
Invested (Rs.000)
147.00
120.00
60.00
36.00
12.00
Market Value as on
Apr 28, 06 (Rs.000)
691.26
242.56
85.09
17.30
Market Value as on
Apr 28, 06 (Rs.000)
879.06
695.44
246.30
91.78
16.94
Returns
(Annualised)*%
35.44
59.38
65.11
93.09
Returns
(Annualised)*%
26.73
33.06
60.09
71.80%
86.21
Benchmark Returns
(Annualised)*%
23.65
42.58
50.69
80.04
Benchmark Returns
(Annualised)*%
18.78
23.28
44.16
51.97
76.61
BSE 200
Since
Inception
Total Amount
Invested (Rs.000)
64.00
Market Value as on
Apr 28, 06 (Rs.000)
316.09
Returns
(Annualised)*%
63.45
Benchmark Returns
(Annualised)#%
38.41
5 Year
SIP
60.00
280.41
66.20
41.15
HDFC TaxSaver
3 Year
SIP
36.00
90.37
70.42
53.51
1 Year
SIP
SIP Investments
12.00
Total Amount
Invested (Rs.000)
16.27
Market Value as on
Apr 28, 06 (Rs.000)
73.55
Returns
(Annualised)*%
89.75
Benchmark Returns
(Annualised)#%
Since
Inception
5 Year
SIP
3 Year
SIP
118.00
60.00
36.00
12.00
1,592.87
302.29
108.29
17.82
50.07
69.80
87.02
103.03
23.68
44.16
51.97
76.61
SENSEX
Since
Inception
Total Amount
Invested (Rs.000)
Market Value as on
Apr 28, 06 (Rs.000)
Returns
(Annualised)*%
Benchmark Returns
(Annualised)#%
3 Year
SIP
1 Year
SIP
1 Year
SIP
147.00
120.00
60.00
36.00
12.00
704.02
181.27
69.10
15.12
132.06
60.21
15.00
Market Value as on
Apr 28, 06 (Rs.000)
980.52
156.03
32.82
46.12
47.60
52.65
32.30
36.66
50.46
Returns
(Annualised)*%
28.31
29.58
N.A.
N.A.
29.48
45.71
N.A.
29.48
45.71
Benchmark Returns
(Annualised)*%
N.A.
N.A.
62.00
87.44
13.31
N.A.
5 Year
SIP
60.00
83.57
13.26
N.A.
3 Year
SIP
36.00
43.25
12.37
29.48
SIP Investments
12.00
Total Amount
Invested (Rs.000)
12.60
Market Value as on
Apr 28, 06 (Rs.000)
9.60
45.71
Since
Inception
Returns
(Annualised)*%
Benchmark Returns
(Annualised)#%
5 Year
SIP
1 Year
SIP
60.00
36.00
12.00
133.14
126.77
58.38
14.27
30.12
30.56
34.28
37.72
N.A.
N.A.
29.48
45.71
3 Year
SIP
62.00
3 Year
SIP
Total Amount
Invested (Rs.000)
Since
Inception
Benchmark Returns
(Annualised)#%
5 Year
SIP
12.00
Returns
(Annualised)*%
10 Year
SIP
36.00
Market Value as on
Apr 28, 06 (Rs.000)
Since
Inception
60.00
Total Amount
Invested (Rs.000)
SIP Investments
68.00
SIP Investments
1 Year
SIP
Total Amount
Invested (Rs.000)
46.00
Market Value as on
Apr 28, 06 (Rs.000)
115.07
Returns
(Annualised)*%
51.82
Benchmark Returns
(Annualised)#%
54.50
3 Year
SIP
36.00
75.35
54.73
58.12
SIP Investments
12.00
Total Amount
Invested (Rs.000)
16.95
Market Value as on
Apr 28, 06 (Rs.000)
86.28
Returns
(Annualised)*%
94.53
Benchmark Returns
(Annualised)#%
Since
Inception
3 Year
SIP
46.00
36.00
12.00
106.33
71.59
16.92
46.94
50.48
85.75
54.50
58.12
94.53
1 Year
SIP
Since
Inception
3 Year
SIP
1 Year
SIP
46.00
36.00
12.00
102.62
68.90
16.85
Returns
(Annualised)*%
44.77
47.36
83.12
Benchmark Returns
(Annualised)#%
48.65
55.60
85.97
*Load is not taken into consideration and the Returns are of Growth Plan. Investors are advised to refer to the Relative Performance table furnished in our monthly newsletter
IntouchMutually also available on our website - www.hdfcfund.com. Past Performance may or may not be sustained in the future. Please refer SIP enrolment form or
contact nearest ISC for SIP load structure.
Disclaimer: The above investment simulation is for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital.
The AMC/Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not assure a profit or guarantee protection against a loss in a declining market.
HDFC Capital Builder Fund, HDFC Equity Fund and HDFC TaxSaver which are benchmarked to S&P CNX 500 Index and HDFC Index Fund-Nifty Plan which is
benchmarked to S&P CNX Nifty Index are not sponsored, endorsed, sold or promoted by India Index Services & Products Limited (IISL). IISL is not responsible for any
errors or omissions or the results obtained from the use of such index and in no event shall IISL have any liability to any party for any damages of whatsoever nature
(including lost profits) resulted to such party due to purchase or sale or otherwise of such product benchmarked to such index.
Risk Factors: All mutual funds and securities investments are subject to market risks and there can be no assurance that the scheme's objectives will be achieved and the
NAV of the schemes may go up or down depending upon the factors and forces affecting the securities market. Past performance of the Sponsors / AMC / Mutual Fund /
Scheme(s) and their affiliates do not indicate the future performance of the Scheme of the Mutual Fund. There is no assurance or guarantee to unit holders as to the rate of
dividend distribution nor that dividends will be paid regularly. Investors in the Scheme are not being offered any guaranteed / assured returns. The NAV of the units issued
under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual
securities. The NAV will inter-alia be exposed to Price / Interest Rate Risk and Credit Risk. HDFC Growth Fund (an open-ended growth scheme; the primary objective of
the scheme is to generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments), HDFC Equity Fund (an
open ended growth scheme; the primary objective of the scheme is to achieve capital appreciation), HDFC Capital Builder Fund (an open ended growth scheme; the
primary objective of the scheme is to achieve capital appreciation in the long term), HDFC Index Fund (an open ended index linked scheme; this scheme has 3 plans viz Nifty Plan the primary objective of this Plan is to generate returns that are commensurate with the performance of the Nifty, subject to tracking error, Sensex Plan the
primary objective of this Plan is to generate returns that are commensurate with the performance of the SENSEX, subject to tracking error, and Sensex Plus Plan the
primary objective of this Plan is to invest 80 to 90% of the net assets of the Plan in companies whose securities are included in SENSEX and between 10% & 20% of the
net assets in companies whose securities are not included in the SENSEX), HDFC Children's Gift Fund (an open ended balanced scheme; the primary objective of both
the Plans under the Scheme is to generate long term capital appreciation), HDFC Balanced Fund (an open ended balanced scheme; the primary objective of the Scheme
is to generate capital appreciation along with current income from a combined portfolio of equity and equity related and debt and money market instruments), HDFC
Prudence Fund (an open ended balanced fund; the primary objective of the scheme is to provide periodic returns and capital appreciation over a long period of time from
a judicious mix of equity and debt instruments with an aim to prevent / minimise any capital erosion), HDFC Long Term Advantage Fund (an open ended equity linked
savings scheme with a lock in period of 3 years; the primary objective of the Scheme is to generate long term capital appreciation from a portfolio that is invested
predominantly in equity and equity related instruments), HDFC TaxSaver (an open ended equity linked savings scheme with a lock in period of 3 years; the primary
objective of the scheme is to achieve long term growth of capital), HDFC Top 200 Fund (an open ended growth scheme; the primary objective of the scheme is to
generate long term capital appreciation from a portfolio of equity and equity linked instruments primarily drawn from the companies in BSE 200 index) are only the names
of the Scheme(s) and do not in any manner indicate either the quality of the Scheme(s), its future prospects and returns. In view of the individual nature of tax
consequences, each investor is advised to consult his/her professional tax advisor. Please read the offer document(s) of the respective Scheme(s) before investing.
Statutory Details: HDFC Mutual Fund has been set up as a trust sponsored by Housing Development Finance Corporation Limited and Standard Life Investments Limited
(liability restricted to their contribution of Rs. 1 lakh each to the corpus) with HDFC Trustee Company Limited as the Trustee (Trustee under the Indian Trusts Act, 1882)
and with HDFC Asset Management Company Limited as the Investment Manager.
FOR MORE INFORMATION OR COPY OF THE OFFER DOCUMENT AND KEY INFORMATION MEMORANDUM ALONG WITH APPLICATION FORM PLEASE CONTACT ANY OF
OUR INVESTOR SERVICE CENTRES (ISCs) AT: WEST: MUMBAI 022-6631 6300, NAGPUR 0712-2554 395, 2522 691. NASHIK 0253-661 9356, 660 6000, PUNE 020-2552
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Tel.: 022-6631 6300 l Fax: 022-2282 1144.
SIP Investments