TurningNifty Junior

into

A Share

Junior BeES

Second Exchange Traded Fund (ETF) from Benchmark Asset Management Company Pvt. Ltd.

Combination of a share and a mutual fund unit

Real-time Trading on NSE after the listing

Will be available across 4000 NSE terminals in 400 cities

Tracks the CNX Nifty Junior Index (Currently no other index funds available on this index)

Priced at 1/10th of the CNX Nifty Junior Index

Introduction to Junior BeESN I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B

About BenchmarkFirst AMC in India with focus on passive and quantitative asset management First AMC in Asia (ex Japan) to launch ETF, and only18th in the world Launched the first ETF in India – Nifty BeESRun by a team of professionals with vast experience in companies like Merrill Lynch, CRISIL, Salomon Smith Barney, etc.Directors of Trustee Co.

Dr. S.A. Dave Dr. Pravin P ShahMr. Dakshesh

Dhruv

AMC DirectorsMr.Dhirubhai

MehtaMr. Sevantilal

ParekhMr. Shripad HalbeMs. Susan ThomasMr. T.N.V. Ayyar

FTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYB

About Nifty BeES: India’s First ETFListed on NSE and trading real-time since January 8, 2002Recorded the lowest tracking error since launch (0.12%) amongst all the index funds in the country Maximum Premium/Discount to NAV has been between +&-0.5% (Source: Business Standard)

FTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYB

“Nifty BeES seems the best index fund when it comes to all three parameters; Entry loads, Expense ratios and Tracking Error.It is India’s first and only Exchange Traded Fund or simply put, a next generation index fund.”

- Business World, September 30, 2002

“Investing in Nifty BeES is a comparatively better method of participating in any market rally”

- The Economic Times, December 2, 2002

About CNX Nifty Junior Index

Scientifically developed index managed by IISL (NSE)Consists of the next rung of liquid securities after S&P CNX NiftyCNX Nifty Junior was introduced on Jan. 1, 1997, with base date and base value being November 03, 1996 and 1000 respectivelySelection of the index set is based on two criteria:1. Liquidity (Impact Cost)2. Market CapitalizationNifty Junior often acts as incubator for the stocks eligible for Nifty i.e. most of the stock included in Nifty are from Junior Nifty but this is not true other way around

FTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYB

S&P CNX Nifty Vs. CNX Nifty Junior FTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYB

(As on Nov. 28, 2003) Nifty Junior

Market Cap (in Rs. Crores) 544,756 108,847

P/E Ratio 15.37 12.18

Volatility (of Daily Returns) 1.64% 1.91%

S&P CNX Nifty Vs. CNX Nifty Junior (cont…) FTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYB

Major Industry Weightages Industries Nifty Junior Banking & Finance 12.25% 28.48% Automobile 6.34% 6.43% Pharmaceuticals 8.27% 11.71% Petroleum 13.45% 0.98% Diversified 9.45% 0.62% Computer Software 16.47% 14.52% Others 33.77% 37.26% Total 100% 100%

S&P CNX Nifty Vs. CNX Nifty Junior (cont…) FTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYBEES NIFTYB

Nifty Junior is a ‘higher risk higher return’ index than Nifty

0

1000

2000

3000

4000

5000

6000

Nifty

Junior

First ETF came in 1993 on S&P500 called SPDRsSPDRs and QQQs (ETF on Nasdaq 100) are the most actively traded ETFsGlobally, there are currently 277 ETFs with 361 listings on exchanges around the worldOn November 29 , 2003 the ETF market globally was $190.26 billion (Source: MSDW)ETFs launched across the world include Japan in September 2001 and in Korea and Singapore in 2002Nearly 60% of trading volumes on American Stock Exchange comprises of ETFs

History of ETFsN I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B

Growth of ETFs

Source: Bloomberg, Morgan Stanley Research

N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B

How Junior BeES work

Secondary market

Seller

Buyer

NSE

Junior BeES Cash

Junior BeES Cash

Primary market

Buy / sell

Market making / Arbitrage

Fund

AuthorisedParticipants /

Financial Institutions

Creationin-kind

Redemptionin-kind

N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B

Index tracking – a long term winner

It has been proved that It is not possible to consistently outperform the overall stock market

In the last 20 years, 85% of actively managed funds have under performed the S&P 500 in US

Due to this, approximately 25% of the invested assets in the U.S. is indexed

Index tracking is relatively a cheaper strategy to implement

Indices are dynamic, transparent and have high investor recall

No fund manager risk, but pure equity market exposure

N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B

Junior BeES AdvantagesSimple – Can be bought/ sold on NSE like a share…real-timeEconomical – No load scheme. Annual expense ratio including management fees is a maximum 1% of the daily average net assets. One of the lowest for any mutual fund scheme in India.Diversification – It’s a cost efficient way to invest in a basket of some of the most liquid mid-cap securitiesEquitable Structure – Long term investors insulated from short term trading activityTransparent – Investors have access to information on the portfolio constituents represented represented on a daily basis

N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B

Junior BeES vs. Open ended Index fundsAttribute Junior BeES Traditional Open

Ended Index FundsTraded throughout the day Yes No

Low Expense Ratio Yes NoTrade at any brokerage firm Yes No

Hedging Tool Yes NoAbility to lend units Yes NoTracking Best AverageNAV Indicative Real time DailyLiquidity Fund / Stock market FundStructure Insulates long term

investor from short term trading activity

Does not insulate long term investors

from short term investor activity

N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B E E S J U N I O R B

THANK YOU