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Systematic Investment Plan
DSP BlackRock Mutual Fund
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When they say time is money, they mustmeanSystematic Investment Planning
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Life is a roller coaster ride....Full of ups and downs. Wknow we have to save for
responsibilities life brings with it.But no matter how much youIts Never Enough!
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Introduction
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Did You Know?
If your current monthly expenses are Rs. 30,000/- per month, theafter 20 years you will require Rs. 80,000/- a month to just mainta
the same lifestyle!
An education degree for your child which currently costs Rs. 2lakh could cost over Rs. 34 lakh after 11 years!
At ination of 5%
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Every individual has one or more of the above goals
Individual Investor Needs: Investment Goals
All individuals need to save for
Retirement
Childs education / marriage
Medical emergency
Other family obligations
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All individuals have a nite period to save for their investment goals
Earnings (Consumption + Savings)
Consumption
Savings
60Retirement
27Young Married
22Young Independent
40Middle Age
Individual Investor: Life Stages
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30,000
38,288
62,368
79,599
Today 5 years 15 years 20 years
100,000
78,353
37,689
Today 5 years 15 years 20 years
48,102
Investors need to beat ination
Impact of ination on monthly expensesof `30,000 today
Value of `100,000 over time
Value of Money Over Time
All gures in Rs.; The above charts are only for illustration purposes and are based on an assumed rate of ination of 5% p.a.
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Equities outperform other asset classes over the long term
Performance of Various Asset Classes
6.8%
8.9%
1.9%
15.7%
8.3%
WPI Inflation Bank FDs* BSE Sensex^
Growth Real Growth
Cumulative annualised returns:1982 to 2012
Source: IIFL, Internal; *1-3 year deposit rate; ^excluding dividends; data as at end FY2012
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Individual investors are scared of
The Downside Risk in Equities The Risk of Market Volatility The Risk of Market Timing
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What else makes a material
impact on investmentsin equity?
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Market timing does not matter over the long term
Investing in the BSE Sensex
15.52%
Fixed investment on
1st day of every month
14.82%16.18%
Fixed investment at
lowest sensex value
every year
Fixed investment at
highest sensex value
every year
Returns* are from Jan 1980-Mar 2012
Source: Internal; *XIRR, time period considered Jan 2, 1980 to Mar 30, 2012
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Saving a small sum of money regularly in equity mutual funds can make your money work witgreater power and can have a signicant impact on wealth accumulation.
Even a seemingly small 5 year delay can cost you the CROREPATI tag
The Power of Compounding
Investment Scenario A Investment Scenario B
Number of years 15 20
Monthly investment `5000 `5000
Total investment `9 lakh `12 lakh
Assumed annualised return 18% 18%
Final corpus `45.96 lakh `1.17 crore
The above illustration above is merely indicative in nature and does not in any manner indicate the performanof any of the schemes of DSP BlackRock Mutual Fund. Please read the SID and SAI carefully before investing
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Summary
Long Term Systematic MonthlyInvestment In equity schemes
is ideal for this !
Investors needs to saveregularly and invest those
savings in higherreturn assets to create wealth
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How Do You Achieve Your
Financial Goals?
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Retirement Planning
Monthly investment needed to achieve thiscorpus in 21 years
at 12%* `12,583
at 15%* `8,083
at 18%* `5,090Today At the timeof retirement
`30,000
`83,579
21 Yrs
Inflation 5%
Corpus required
per month
Retirement corpus required to meet post retiremeexpenses (if invested at 7%) : `1.4 cr
Monthly HouseholdExpenses
*Assumed rate of annualised return
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Planning for Childs Education
Monthly investment needed to achieve this corpuin 11 years
at 12%* `12,456
at 15%* `10,166
at 18%* `8,237
Present When your Child actually
goes for this degree
`20,00,000
`34,20,000
11 Yrs
Inflation 5%
Corpus required
Educational Degreefor Child
*Assumed rate of annualised return
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Planning for Childs Marriage
Monthly investment needed to achieve this corpuin 16 years
at 12%* `7,509
at 15%* `5,466
at 18%* `3,925
Present When your Child actuallygets married
`20,00,000
`43,70,000
16 Yrs
Inflation 5%
Corpus required
Childs Marriage
*Assumed rate of annualised return
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What Are The BenetsOf Investing Through
Systematic Investment Plan?
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Benets of Investing Systematically
The Benet of Long Term Equity Investment
Equitiesgivesuperiorreturnsamongallassetclassesoverthelongterm
DSPBlackRockMutualFundhasatrackrecordofconsistentperformance
The Benets of Systematic Monthly Investment
Takesouttheriskofmarkettiming
Addsthebenetsoftherupee cost averaging and the power of compounding
RUPEE COST AVERAGING
One doesnt have to worry about when to invest, how much to invest etc considering daily market movementassystematicinvestingreducestheriskssignicantly
Eliminatestheneedtotimeyourinvestmentsinequities
Smoothenstheimpactofmarketuctuationsandhencereducesrisksofinvestinginvolatilemarkets
The risk of market volatility gets negated with more units being purchased when the Price is low anfewer units being bought when the Price is high
B f I i S i ll R C A i
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Average Cost per Unit will always be lesser than the Average NAV per Unit, regardless of the
market movements
Benets of Investing Systematically: Rupee Cost Averaging
Average NAV per Unit over 12 months =
(23+21+22+19+16+17+17+20+21+19+25+24)/12
or `20.34
Average Cost per Unit over 12 months =
12,000/601or `19.96
Time
(Months)Amount
invested
NAV perUnit (`)
Unitspurchased
1 1,000 23 43
2 1,000 21 483 1,000 22 45
4 1,000 19 53
5 1,000 16 63
6 1,000 17 59
7 1,000 17 59
8 1,000 20 50
9 1,000 21 4810 1,000 19 53
11 1,000 25 40
12 1,000 24 42
Total 12,000 601
Source: Internal; Hypothetical numbers meant only for illustration purpose
B t f I ti S t ti ll ( td)
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Benets of Investing Systematically (contd)
Flexibility
Youcanchoosefromawidearrayofschemes
Youcandecidetokeepinvestedamountsinanearlierscheme&investfutureSIPinstallmentsintnew scheme
Added Convenience
Noneedtosubmitpostdatedcheques-AutodebitfacilityavailableacrossmultiplelocationsinInd
Regularaccountstatements
Facilityofdirectcreditofredemption/dividendproceedsintoyourbankaccount
Th Fi t 4 St T P t ti l W lth C ti
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The First 4 Steps To Potential Wealth Creation
Select a mutual fund scheme of
your choice
Select the amount you can
afford to invest every month
Decide on the frequency with
which you will invest
Decide the length of the
investment period
Step 1
Step 2
Step 3
Step 4
The Power of Compounding: Illustration A
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Invest Systematically to Benet from the Power of Compounding
The Power of Compounding: Illustration A
Table Illustrating the power of compounding (Assumed rate of return: 12% p.a
Monthly Investments
`
12% return per annum
5 years 10 years 15 years 20 years 25 years2,000 1.65 Lacs 4.65 Lacs 10.09 Lacs 19.98 Lacs 37.95 Lacs
5,000 4.12 Lacs 11.62 Lacs 25.23 Lacs 49.96 Lacs 94.88 Lacs
10,000 8.25 Lacs 23.23 Lacs 50.46 Lacs 99.91 Lacs 1.90 Crore
15,000 12.37 Lacs 34.85 Lacs 75.69 Lacs 1.50 Crore 2.85 Crore
20,000 16.50 Lacs 46.47 Lacs 1.01 Crore 2.00 Crore 3.80 Crore
25,000 20.62 Lacs 58.08 Lacs 1.26 Crore 2.50 Crore 4.74 Crore50,000 41.24 Lacs 1.16 Crore 2.52 Crore 5.00 Crore 9.49 Crore
The above table is for illustration purpose only and not an indication of the performance of any of the schemes DSP BlackRock Mutual Fund. Calculations are based on assumed rate of return and actual return may be more, or less.
Source: Internal
The Power of Compounding : Illustration B
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Invest Systematically to Benet from the Power of CompoundingInvest Systematically to Benet from the Power of Compounding
The Power of Compounding : Illustration B
Table Illustrating the power of compounding (Assumed rate of return: 15% p.a
Monthly Investments
`
15% return per annum
5 years 10 years 15 years 20 years 25 years2,000 1.79 Lacs 5.57 Lacs 13.54 Lacs 30.32 Lacs 65.68 Lacs
5,000 4.48 Lacs 13.93 Lacs 33.84 Lacs 75.80 Lacs 1.64 Crore
10,000 8.97 Lacs 27.87 Lacs 67.69 Lacs 1.52 Crore 3.28 Crore
15,000 13.45 Lacs 41.80 Lacs 1.02 Crore 2.27 Crore 4.93 Crore
20,000 17.94 Lacs 55.73 Lacs 1.35 Crore 3.03 Crore 6.57 Crore
25,00022.42 Lacs 69.66 Lacs 1.69 Crore 3.79 Crore 8.21 Crore
50,000 44.84 Lacs 1.39 Crore 3.38 Crore 7.58 Crore 16.42 Crore
The above table is for illustration purpose only and not an indication of the performance of any of the schemes DSP BlackRock Mutual Fund. Calculations are based on assumed rate of return and actual return may be more, or less.
Source: Internal
The Power of Compounding : Illustration C
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Invest Systematically to Benet from the Power of Compounding
The Power of Compounding : Illustration C
Table Illustrating the power of compounding (Assumed rate of return: 20% p.a
Monthly Investments
`
20% return per annum
5 years 10 years 15 years 20 years 25 years2,000 2.07 Lacs 7.65 Lacs 22.69 Lacs 63.23 Lacs 1.73 Crore
5,000 5.17 Lacs 19.12 Lacs 56.71 Lacs 1.58 Crore 4.31 Crore
10,000 10.35 Lacs 38.24 Lacs 1.13 Crore 3.16 Crore 8.63 Crore
15,000 15.52 Lacs 57.35 Lacs 1.70 Crore 4.74 Crore 12.94 Crore
20,000 20.69 Lacs 76.47 Lacs 2.27 Crore 6.32 Crore 17.25 Crore
25,000 25.86 Lacs 95.59 Lacs 2.84 Crore 7.90 Crore 21.57 Crore
50,000 51.73 Lacs 1.91 Crore 5.67 Crore 15.81 Crore 43.13 Crore
The above table is for illustration purpose only and not an indication of the performance of any of the schemes DSP BlackRock Mutual Fund. Calculations are based on assumed rate of return and actual return may be more, or less.
Source: Internal
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A Rupee Saved Is A Rupee Earned A Long Journey Begins With A Small St
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Mutual Fund investments are subject to
market risks, read all scheme relateddocuments carefully.
Systematic Investment Plan is only a facility and the Fund/Trustee/AMC/Sponsor do not give any assurance or guarantee that the return will be
achieved and the same is subject to the performance of the Schemes.