INVESTMENTS

Why Invest?

Putting Your
Beating Money to Meeting
Inflation Work Goals

Saving for Generates

Retirement alternate
source of
income

Leads to
Investment Creates Wealth
Consumption
Avenues for Investments

Avenues for
Investment

Direct Mutual Fund Real Estate Gold

Debt
Equity
Mutual Funds
Mutual Funds

Mutual Fund (usually called Asset Management Company) manages the pool of money
collected from various investors for investing in various classes of assets to achieve certain
financial goals.
Depending upon risk appetite, Investor can choose to invest purely in Debt Funds or Equity
Funds or a combination of both with the help of Mutual Fund.
Mutual Fund Schemes can be open ended or closed ended in nature.
Each and every fund carries an exit load.
Exit load is a fee or an amount charged from an investor for exiting a scheme before the
specified tenure.
Working of a Mutual Fund
Why Invest in Mutual Funds?

STAY INVESTED FOR WEALTH CREATION

Diversification
 Affordability
 Professional Management
 Liquidity
 Flexibility
 Performance Monitoring
Mutual Funds : Product Basket

 Through MF, you can offer multiple solutions to your customers Equity Funds –
For Long Term Wealth creation

 Gold Funds – Investors can buy Gold through MF route

 Liquid Funds – For short term investment needs (upto 3 months)

 MIP - Low risk hybrid product for medium term investors

 Capital Protection Funds – Capital Protection+ Additional Returns

 FMPs – Tax efficient investment option for FD customer

 ELSS Funds – For Tax Saving needs of customers

 SIP – Appropriate tool for Financial planning

 International Funds – For benefiting from growth in other markets

Systematic Investment Plan
Systematic Investment Plan

What is SIP?
Systematic Investment Plan (SIP) is an approach to investing
small amounts at regular intervals rather than investing lump
sum amount at one time.
Considered to be the safest way to invest into Equity
Markets by going the SIP route, Investor is not trying to
capture the Highs and lows of the market, but trying to
average the cost by investing at regular interval.
Concept is that, When the markets fall investor gets more
units. Likewise investor acquires lesser units when the market
goes up. This means that investor buys less when the price is
high and investor buys more when the price is low. Hence the
average cost per unit falls down over a period of time.
Features

Accumulate Wealth

Build your investment at regular

intervals

Affordability

Build your future

Liquidity

Reduce Risks
Advantages

Rupee Cost Tax Saving

Averaging

Power of
compounding Convenience
Power of Compounding

Systematic Investment Plan

2011 2012 2013 2014 2015

SIP Working

Monthly Number of
NAV
Date Investment Units
(b)
(a) (a)/(b)

Jan 1 Rs. 1,000 46.29 21.603

WORKING OF SIP: Feb 1 Rs. 1,000 48.08 20.799

Mar 1 Rs. 1,000 52.78 18.947

Suppose 'X' decides to invest in a
mutual fund through SIP. He commits Apr 1 Rs. 1,000 56.36 17.743

making a monthly investment of Rs May 1 Rs. 1,000 58.42 17.117

1000 for a period of twelve months Jun 1 Rs. 1,000 56.42 17.724
(starting 1st January 2006) in a fund Jul 1 Rs. 1,000 62.14 16.093
named 'ABC'. The payment can be done
Aug 1 Rs. 1,000 67.58 14.797
by issuing twelve post-dated cheques of
Sep 1 Rs. 1,000 71.70 13.947
Rs 1000 each or through ECS facility (if
Oct 1 Rs. 1,000 76.19 13.125
available).
Nov 1 Rs. 1,000 83.97 11.909

Dec 1 Rs. 1,000 89.92 11.121

SIP Working

Monthly Number of
NAV
Date Investment Units
(b)
(a) (a)/(b)

Jan 1’2006 Rs. 1,000 46.29 21.603

Feb 1’2006 Rs. 1,000 48.08 20.799
Brief Summary:
Mar 1’2006 Rs. 1,000 52.78 18.947
•Monthly Investment: Rs. 1000
Apr 1’2006 Rs. 1,000 56.36 17.743
May 1’2006 Rs. 1,000 58.42 17.117 •Period of investment: 12 months

Jun 1’2006 Rs. 1,000 56.42 17.724 (1st Jan 2006 to 1st Dec 2006)
Jul 1’2006 Rs. 1,000 62.14 16.093
•Total amount invested: Rs. 12,000
Aug 1’2006 Rs. 1,000 67.58 14.797
•Total number of units credited to 'X': 194.925
Sep 1’2006 Rs. 1,000 71.70 13.947
•Average cost/unit:
Oct 1’2006 Rs. 1,000 76.19 13.125
Nov 1’2006 Rs. 1,000 83.97 11.909 Rs. 61.5621 ( Rs.12,000/194.925)

Dec 1’2006 Rs. 1,000 89.92 11.121

About ELSS

 ELSS, an acronym for Equity Linked Savings Scheme, which is a Tax

Saving Mutual Fund Scheme.
 ELSS mutual funds in simple term are mutual fund schemes
maintaining a minimum of 65% of their investments in equity.
 Open-ended scheme.
 Returns from an ELSS fund are market related and has a lock in
period of three years..
 Investors get the Tax Benefit on the amount invested as per the
Income Tax Act’1961.
 Lump sum, Systematic Investment Plan and Systematic Transfer
Plan options are also available.
Benefits of ELSS

• Equity oriented funds are exempt from long term capital gain tax and any capital

appreciation in equity oriented funds after 1 year is tax free.

• Tax Free Dividend in the hands of the investor.

• Shorter lock in period of 3 years as compared to other traditional tax saving vehicle.

• Investors are eligible for claiming Deduction up to Rs. 1.50 Lakh from there Income under

section 80C of the Income Tax Act’1961.

• Potential for Higher Returns.

• Flexibility to invest small amounts through SIP and STP

• Two benefit of Saving Tax and Capital Appreciation.

Tax Saving Investment Comparison

Amount (in Rs.)

Scheme Name ELSS Tax Saving FD PPF

Installment Amount (Every Year) 1,50,000 1,50,000 1,50,000

Number of Installments (in Year) 15 15 15

Total Amount Invested 22.50 Lakhs 22.50 Lakhs 22.50 Lakhs

Fund Value as on (March-2014)

1.17 Crs 47 Lakhs 47 Lakhs
Approx.

CAGR (%) 18.96% 8.70% 8.70%

Tax Implication

What’s the impact on Tax when you invest in ELSS and on the
other side ignore investing in ELSS!

Particulars Without ELSS/80C With ELSS/80C

Tax Saving Investment Tax Saving Investment
Gross Total Income Rs.7,50,000 Rs.7,50,000
Invested under Section 80C Nil Rs.1,50,000
Net Total Income Rs. 7,50,000 Rs. 6,00,000
Tax on Net Total Income Rs.75,000 * Rs. 45,000 *
Tax Saved on Investment Nil Rs. 30,000
* Tax on Net Total Income is excluding cess @ 3%.

ELSS
To Conclude….

 Provides Diversification

 Risk Mitigation

 Most efficient Tax Saving Scheme.

 Provides Long-term Investing discipline.

 Serves the purpose of both Investing Money and Saving Tax .

Disclaimer: Mutual Funds and securities investments are subject to market risk and there can be no assurance or
guarantee that the objectives of the Schemes will be achieved. Please read Offer Documents (OD), Scheme
Information Document(s) (SID) and (SAID) statement of Additional Information Document carefully. This document
is for information only and is meant for the use of the recipient & not for circulation. The information contained in
this document has been taken from publicly available information, trade and statistical services & other sources.
While the information contained herein is from sources believed to be reliable, we do not hold ourselves
responsible for its completeness and accuracy. All opinions and estimates included in this report constitute our
judgment as of this date and are subject to change without notice. Investors are expected to use the information
contained in this report at their own risk. This report is not and should not be construed as an offer or the
solicitation of an offer to buy or sell any securities. M/s Latin Manharlal Securities Pvt. Ltd. and its affiliates may
act as market maker or have assumed an underwriting position in the secure-ties of companies discussed herein
and may sell them to or buy them from customers on a principal basis.

Disciplined Investments Leads To Creation

Of Wealth
 THANK YOU

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