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Mutual fund investments are subject to market risks,
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THE TIGER ROARS
India, meanwhile, continues to shine.
The massive explosion of the BPO and software industries
over the last few years have been the key drivers of this
country's growth. These two industries alone are set to
contribute a whopping US$ 60 billion in exports to India's
economy in 2010 - up from US$ 24 billion in 2005.
Net borrowing levels among Indian corporates have comedown significantly. ROEs have improved from 16% in FY99
to 21 5% in FY06 Healthy balance sheets and a promise of
55
45
35
25
151965 1980 1991 1994 1997 2000 2003
(% of GDP) Agriculture Industry Services
India GDP - Services constitute over 50%
Two economies are roaring their presence louder than any
other in today's global economy. Together, India and China
have taken the world by storm - and by surprise - with
how rapidly their economies are advancing. Now, for the
first time ever, you as an investor can take advantage of
the opportunities presented by these exciting economies
with the introduction of the ABN AMRO China-India Fund.
ENTER THE DRAGON
Let's start with China.
Over the last thirty-six years, the Oriental giant has surged
ahead at a 9.60% annual GDP growth rate and over the last
15 years, this figure has jumped to 12.5%. Goldman Sachs
has even revised its 2007 growth estimate for China upwards
to 12.8% from the earlier predicted 10.8%.
This growth owes a lot to the country's rapidly changing outlook.
China has evolved from a net importer (-4% of GDP) into a net
exporter (+4% of GDP). Trade and investment form a 47%
chunk of the economy. And substantial investments in
infrastructure and manufacturing have boosted their GDP growth.
The people of China are leading this economy ahead as well.
The country's burgeoning young, urban and highly
Source: CLSA Asia-Pacific Markets
An Open-Ended Equity Scheme NFO Closes October 1, 2007
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THE 'CHINA-INDIA' PHENOMENON
YOUR CHANCE TO GO ROARING ALL THE WAY TO THE BANK
There is clearly a new world economic order.
According to World Bank data, China is the world's fastestrd
growing economy and will soon become the world's 3
largest economy in terms of GDP.
thIndia, meanwhile, will be the 9 largest world economy in
GDP terms by the year 2010.
Introducing ABN AMRO China-India Fund -an actively
managed fund that aims to give you the benefit of reducing
risks of investing in the local economy through
diversification, and retains the flexibility to invest in other
economies as well under exceptional circumstances.
According to sources, by 2020, China-India will be the
new financial world superpower with an astounding#estimated combined GDP of US$ 16 trillion.
Disclaimer:The material contained herein has been obtained from sources believed to be reliable, but ABN AMRO Asset Management (India) Limited (AAAMIL) makes no representation that it is accurate or complete. AAAMIL haobligation to tell the recipient when opinions or information given herein change. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Except for the historical informcontained herein, statements in this Publication, which contain words or phrases such as 'will', 'would', etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-lostatements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. AAAMIL undertakes no obligation to update forlooking statements to reflect events or circumstances afte r the date thereof. The words like believe/ belief are independent perception of Fund Manager and should not be construed as opinion or advise.Name & Type of Scheme: ABN AMRO China- India Fund (An Open-Ended Equity Scheme). Investment Objective: To provide long-term capital appreciation by primarily investing in equity & equity related securities of India and CThe fund may also invest a limited proportion in other international equity and equity related securities and also debt and money market instruments. Asset Allocation: Indian Equities & Equity related securities: 65-75%; ChEquities & Equity related securities: 25-35%; Domestic Debt, Money Market instruments & Other international equity & equity related securities: 0-10%. Expenses: The sales, marketing & other such expenses connected with saledistribution of the Scheme will be met from the entry load. The maximum recurring expenses will be 2.50% of average daily net assets.
Liquidity: Being an Open-Ended Scheme, Units may be purchased or redeemed on every Business Day at NAV based prices, subject to provisions of entry / exit load, iStatutory Details: Sponsor: ABN AMRO Asset Management (Asia) Ltd. Trustees: ABN AMRO Trustee (India) Private Limited. Investment Manager / AMC: ABN AMRO Asset Management (India) Limited. ABN AMRO Mutual(the Fund) was set up as a Trust under the Indian Trusts Act, 1882 by ABN AMRO Bank N.V. in 2004 acting as a Settlor and consequent to the change in controlling interest of the AMC, the Sponsor wou ld act as the Settlor w.e.f. Oc31, 2005. ABN AMRO Trustee (India) Private Limited, a company incorporated under the Companies Act, 1956 with a limited liability, is the Trustee to the Fund. ABN AMRO Asset Management (India) Limited, a company incorporaunder the Companies Act, 1956 with a limited liability, has been appointed as the Investment Manager to the Fund. The Sponsor is not responsible or liable for any loss or shortfall resulting from the operations of the Scheme beyoninitial contribution of Rs. 1 Lakh. Risk Factors: Mutual Funds and securities investments are subject to market risks and there can be no assurance or guarantee that the Scheme's objectives will be achieved. The NAV of Units issunder the Scheme may go up or down depending on the various factors and forces affecting the securities markets. Past performance of the Sponsors and its affiliates / Mutual Fund / AMC does not indicate the future performance
Scheme. ABN AMRO China- India Fund is the name of the Scheme and does not in any manner indicate either the quality of the Scheme or its future prospects and returns. Investors should study Offer Document carefully in its enbefore investing and retain the Offer Document for future references. Unitholders in the Scheme are not being offered any guaranteed / assured returns. To the extent the assets of the scheme are invested in overseas financial assthere may be risks associated with currency movements, restrictions on repatriation and transaction procedures in overseas market, lack of complete or reliable information, market irregularities or high taxation. Further, the repatrof capital to India may also be hampered by changes in regulations or political circumstances as well as the application to it of other restrictions on investment It may be noted that if rupee appreciates it will lead to reduction in yi
No load for switches between equity Schemes of ABN AMRO Mutual Fund and in case of investmade by Fund-of- Funds Schemes, by FIIs & their Sub-Accounts.
ABN AMRO ASSET MANAGEMENT -
GLOBAL PERSPECTIVE AND LOCAL EXPERTISE
ABN AMRO Asset Management is well-qualified to give you
the 'China-India' advantage. It has a firmly-entrenched
presence and strong track record in both countries.
In China, ABN AMRO Asset
Management has US$ 4.50 billi
worth of assets under
management in Chinese equitymarkets, and an expert team wi
a combined experience of nearly
80 years across portfolio
management and research. Our
China Equities Investment Proce
consisting of a Top-Down /
Bottom-Up approach is constant
looking to capture stock
opportunities by understanding t
drivers of stock performance.
In India, ABN AMRO Mutual Fund
offers a wide range of funds acrossasset classes aimed at catering to
different investment needs. It
currently has almost Rs. 7,500
crores (as on July 31, '07) of
assets under management, across
more than 200,000 investor folios,
of which more than Rs. 1,000
crores are in equity schemes.
This thorough local knowledge in China and India is backed by
ABN AMRO Asset Management's 7 decades of global experien
and expertise. A team of over 1,800 professionals across 26
countries manages EUR 211 billion worth of assets (as onJune 30, '07), for institutions, central banks, pension funds,
insurance companies and thousands of retail and private clients
ABN AMRO China-India Fund certainly has the
ingredients in place to make it a smart investment.
Source: ABN AMRO Asset Management(Asia). Performance as on Jun 30, 2007,Gross of Fees & includes the investment ofinterest and other earnings. Actual returns willbe reduced by the advisory fees and otherexpenses. Past performance may or may notbe sustained in the future. The performanceshown above is of ABN AMRO China EquityFund and is not to be construed as a measureof future performance of ABN AMRO China-India Fund.
ABN AMRO FUNDS
CHINA EQUITY
FUND - A
FTSE CHINA INT'L
INDEX (his. CLSA
CHINA; 2005-06)
88.29
45.62
15.3510.42
40.51
77.99
0.00
20.00
40.00
60.00
80.00
100.00
SinceJan 1996
1 Year 3 Years
(%)
New Fund Offer Period September 3, '07 - October 1, '07
New Fund Offer Price Rs. 10/- per unit
Fund Managers Mr. Sameer Narayan &
Mr. Pradeep Kumar
Benchmark Index Custom Benchmark - 65% of BSE 200 +
35% of FTSE China International Index
Minimum Investment Regular Plan: Rs. 5,000/-
Additional Investment Rs. 1,000/- and in multiples of Re.1/-
thereafter
Plans/Options Offered Regular Plan: Growth, Dividend Payout and
Dividend Reinvestment Options
Load Structure Entry Load: For < Rs. 5 crores - 2.5%;
For >= Rs. 5 crores & < Rs. 10 crores -Nil; For >= Rs. 10 crores - Nil
CDSC: For < Rs. 5 crores - 1% if redeemed
/ switched-out within 1 year from date of
allotment; For >= Rs. 5 crores & < Rs. 10
crores - 0.5% if redeemed / switched-out
before March 15, '08; For >= Rs. 10
crores - Nil
ABN AMRO CHINA-INDIA FUND - Fund Features
ABN AMRO
OPPORTUNITIES FU
BSE 20070.81
51.46
42.4048.50
1 Year Since Inception0.00
20.00
40.00
60.00
80.00
(% CAGR)
Period: April 15, 2005 - July 31, 2007.Past performance may or may not besustained in future.
# Source: World Bank, CLSA Asia-Pacific Markets
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(A Close-ended Fund of Funds Scheme)
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THE NEED
DYNAMIC ASSET ALLOCATION STRATEGY (DAAS)
- AN INTRODUCTION
As an investor, if you have invested in equities you might be concerned about your
money. If you are an investor who has missed the rally, you might want to invest now
but you don't know whether this is the right time to invest. If you are someone who has
made money during the Bull run, you may not know if you should continue to stay
invested.
What you need is an investment option that uses a scientific method to make
investment decisions. An option that has the flexibility to change equity allocations depending on market
movements. Does such an investment option exist?
Presenting the that is
designed to provide participation in the upside of the equity marketswhile reducing equity exposure in falling markets.
Before exploring Dynamic Asset Allocation Strategy and its benefits,
let us understand the benefits of asset allocation.
Asset Allocation is defined as the practice of distributing a certain
percentage of a portfolio between different types of investment
assets, such as stocks, bonds, mutual funds, cash, real estate, etc. By
diversifying your asset base, you can seek to create a favorable
risk/reward ratio for your portfolio.
The first step towards understanding Dynamic Asset Allocation Strategy is to know more about the conceptsinvolved and how they aim to work together for your benefit.
Floor is the target value of the scheme at any given time and it is set with reference to the target value at
maturity. E.g. if 100 is the target value at maturity, the initial floor should be at 84 (discounting @ 6%).
Dynamic Asset Allocation Strategy (DAAS)
Floor:
Dynamic Asset Allocation Strategy
is a flexible quantitative method for
increasing participation in rising
equity markets, while diluting
losses in falling markets by:
! increasing equity allocation when
stock markets are rising
! reducing equity allocation when
stock markets are falling
Multiplier = 4
Floor(discounting@6%)= 84
Cushion(Value invested -
Floor)= 16
Equity Component(Cushion xMultiplier)
= 64
Fixed Income Component(Value invested -
EquityComponent)
= 36
Cushion
Floor
Cushion
XMultiplier
EquityComponent
Fixed IncomeComponent
Dynamic Asset
Allocation of the
two assets
Illustration shown above assumes that the Fund invests Rs. 100/- at inception
How Do
Floor,Cushion &
Multiplier
Work
Together?
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The asset allocation strategy seeks to achieve the objective that the value of the fund stays at or above the
floor at all times.
The excess of the portfolio value over the floor is called the Cushion. It determines the amount of
equity exposure the portfolio is allowed at any point of time.
The Multiplier is chosen based on the estimated downside from equities during a review period. A
multiplier of 4 means the maximum estimated downside of the equities is 25% between any two review
dates.
= Cushion x Multiplier
Cushion:
Multiplier:
Target Equity Allocation
HOW DOES
DYNAMIC ASSET ALLOCATION STRATEGY (DAAS) WORK?
Conversely, if equities fall in value, cushion decreases andallocation to equities is reduced
Appreciation in equity portfolio enables enhanced allocation to equities
ReviewDate
Equity Market
Movement
Portfolio Value
(Rs.) - (A) Floor Cushion
Target Allocation
(Equity) - (B)Cushion x Multiplier (4)
Target Allocation
(Fixed Income)(A) - (B)
Equity as %
of Portfolio
1-Apr-06 100.00 83.96 16.04 64.15 35.85 64.15%
1-May-06 5% 103.21 84.37 18.84 75.35 27.86 73.01%
1-Jun-06 10% 110.74 84.88 25.86 103.44 7.30 93.41%
1-Jul-06 -15% 95.23 85.29 9.94 39.74 55.48 41.74%
1-Aug-06 -10% 91.25 85.70 5.55 22.21 69.04 24.34%
1-Sep-06 -5% 90.14 86.11 4.03 16.13 74.01 17.90%
Basic
Principle:
Aim To
Cut
Losses
Early
& Back
Winners...
PLUS THE BENEFITS OF A FUND OF FUNDS
A Fund of Funds (FoF) is a mutual fund scheme that invests in other mutual fund schemes and does not invest
directly in securities.
A Fund of Funds Scheme offers you several benefits:
! Diversification across fund houses gives you the benefit of several investment managers, all within one
fund.
! Protects you from being over exposed to one investment process or style.
! Lesser Impact Cost (due to waiver of entry / exit loads on funds and brokerage charges in respect to direct
investments)