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Systematic
Investment
Plan…
An early & regular investment today,
leads to prosperous tomorrow
Content
The India Story
Booming Capital Market
Household Investment Patterns
Equity Investing
Individual’s Earning Lifecycle
Impact of Inflation
Introduction to the Systematic Investing
UTI Mutual Fund
UTI SIP
Benefits
The India Story
GDP Growth
Booming Capital
India Shining Infrastructure
Markets
6.9
6.3
5.6
4.0
3.6
2.9
1.4
India has joined the elite club of 12 countries with a trillion dollar economy, thanks to
more than 8% growth in last four years
Per capita income stood at $797 in 2006/07, nearly double from $460 in 2000/01 thanks
to robust economic growth
Infrastructure
Projected Infrastructure Investment
Sectoral Share of Investment (% )
(in Rs. Crs)
Water
Ports Storage Airports
Supply &
573,004 4% 1% 2%
Sanitation
466,093 Irrigation 10% Gas
11% 1%
383,915
321,610
274,088
Railways
13%
Electricity
Telecommu
Roads & 30%
nication
13% Bridges
2007-08 2008-09 2009-10 2010-11 2011-12 15%
Source: www.infrastructure.gov.in
Story gets bigger and more attractive - Corporates, Pvt Equity ,Venture Funds, MFs,
Banks and or Retail investors are vying for a share of the Infrastructure Pie
Huge spending in Construction, Aviation , Road, Telecom and Power: key drivers for
infrastructure
Infrastructure spending has a multiplier effect (huge employment , consumption
growth)
India Inc. – Globally Competitive
India Inc reported its highest net profit in the last three years in 2006-07
(1,700 companies that declared their results till June reported a 47 percent
increase in net profit)
The overall balance of payments recorded a surplus of US$36.6 billion during
2006-07, as against US$15.1 billion in 2005-06
Forty-four percent of the top 100 Fortune 500 companies have a presence in
India
India has been ranked second in the Asia-Pacific region in outbound mergers
and acquisition deals during the first half of 2007, with outbound deals totaling
US$13.5 billion has the highest number of billionaires in Asia and the fourth
highest in the world
There are 36 billionaires in India, which makes it next only to the US, Russia
and Germany
Source: TOI Oct 07, NSW Business Chapter
The Booming Capital Market
BSE Sensex Movement
Longest bull run in history (since May 2003)
19,978
High, visible, sustainable economic & corporate
19051
profit growth
15,551 15,603
PPF
19%
Life
Life Insurance
Insurance Bank Bank
0.15
10% Deposits Deposits
31% 56%
Note:
• Other Includes deposits with co-op credit societies, small savings etc
• Shares & Debentures Include shares & debentures of credit/non credit societies, PSU Bonds & Investment in MFs
Source: www.rbi.org.in
10.0
8.0 8.0 8.0 7.5 7.2
3.5
Child’s Education
Housing
Child birth
Marriage
100,000
76,513
Inflation Rate 5.5.%*
58,543
44,793
34,273
26,223
20,064
* 1 year average inflation rates (Jul 2007) First Quarter Monetary Review - RBI
Though, it is critical, most of us don’t plan for
the future
Dreaming of Financial Freedom?
Start Early
• X starts investing at the age of 30 Early Investment, Always Pays
yrs
• He invests Rs. 1000 every month till
the age of 60 yrs
• Total Investment: Rs. 3.60 lacs
22.62
• At age 60, X’s investment would have appreciated to Rs. 22.62 L &
Y’s investment would have appreciated to Rs. 11.39 L
• X’s investment would have appreciated to almost double that of Y
Invest Regularly
Investing in the BSE Sensex
The returns from regular investment
yr period)
Source: MFIE
Past Performance may or may note be sustained in the future
Systematic Investing, Builds Future
A Systematic Investment Plan (SIP) is a disciplined approach to
wealth creation. It allows the investor to adopt a systematic and
dedicated approach to financial planning by inculcating a regular
savings habit.
Instead of investing a large amount at one time, the investor can
choose to stagger his investment at regular intervals according to
his convenience and ability
As individuals, our financial goals like obtaining income to meet day-
to-day financial needs, saving for child’s education, marriage or for a
comfortable retirement & a secure financial future can be met by
means of a regular SIP
Consider Mutual Funds
Total AuM: Rs. 549,942 crs (www.amfiindia.com, Dec 2007)
Number of MF Companies in India: 33
774.92
800
700
579.81
600 CAGR: 33.7%
AuM: Rs. '000 crores
500 433.83
400 324.60
300 230.92
200 149.25
134.75
100
0
2004 2005 2006 2007 2008 E 2009 E 2010 E
Systematic Investment Plan
75% of the retail equity business comes through the SIP
route
In 2005, two years ago the industry was adding about
10,000 SIPs a month, today the number is 10 times higher
SIP inflows are estimated over Rs. 400 Cr a month
It's not just the salaried class that's investing, small
corporates and SMEs, are also signing up for SIPs
*Source: www.mutualfundsindia.com
UTI Mutual Fund
First Mutual Fund company in India
One of the largest Mutual Funds in the country
Assets under Management: Rs. 56,854 Crs.
(Dec ’07 – www.amfiindia.com)
60
56.85
50
ed AuM 45.00
ea s
Incr
40 39.03
35.49
Rs. in '000 Cr
30 29.52
20.62 20.74
20
10
0
Mar 2004 Mar 2005 Mar 2006 Mar 2007 'Jun Sep2007 'Dec
2007 2007
UTI Mutual Fund
Wide Range of Schemes for all Needs
– 71 domestic schemes under Various Fund categories
Domestic Schemes & Offshore Schemes to cater to
whole gamut of your investment needs
80 UTI Financial Centres (as on Nov 26, ‘07)
International Representative offices at London, Dubai
& Bahrain
Strategic Marketing tie-up with 22 PSU Banks, select
Private Banks & India Post across the country
UTI Systematic Investment Plan
Mr. A's SIP Investment would have accumulated to approximately 4,383.20 units,
where as B's lumpsum investment would have acquired only 4,235.30 units
The figures of Sale Price used are hypothetical and are for illustrative purposes only.
Benefits of Systematic Investing –
To the Investor
The Power of Compounding
An early investor accumulates more than the one
who comes in later
With fresh capital being invested at periodic intervals,
the accumulated investment increases