SIP or Systematic Investment Plan

offered by Mutual Funds is like a GOOD EMI

EMI Instalment

= GOOD EMI Investment

=

SYSTEMATIC INVESTMENT PLANS (SIPs) MADE SIMPLE

WHAT

WHY

WHERE

WHEN

WHAT

are SIPs?

SIPs?

to invest via SIPs?

to start a SIP?

not to do in SIPs

WHAT are SIPs?

Ÿ

investing in mutual funds

Ÿ

similar to a Bank Recurring Deposit- Regular investment in one or multiple schemes

ŸSIPs or Systematic Investment Plans are one of the

SIPs are a way of REGULAR AND DISCIPLINED

INVESTING PROCESS

BEST WAYS TO INVEST IN A MUTUAL FUND

WHY SIPs?

ŸCHEAPER ON THE WALLET

ŸREGULAR AND DISCIPLINED INVESTMENT

Ÿ CREATE WEALTH OVER LONG RUN

ŸMAKE MARKET TIMING IRRELEVANT

Ÿ BENEFITS OF COMPOUNDING

- Can be as low as R 500 per SIP per month

Potential To

- Ensures that one invests at all points of time (high as well as low points of the market)- Benefits from Rupee Cost Averaging

Provide

Let us look at some of the above aspects in detail…..

WHY SIPs?

CREATE WEALTH OVER LONG RUN

Create Wealth Over The Long Run(Illustration)

Period Principal R lac

Final Value R lac

@ 10% p.a.

Final Value R lac

@ 12% p.a.

Final Value R lac

@ 14% p.a.

10 years 1.20 2.07 2.32 2.62

15 years 1.80 4.18 5.05 6.13

20 years 2.40 7.66 9.99 13.16

25 years 3.00 9.57 13.98 27.27

^ *SIP of growing @ 10%, 12% & 14% p.a.R1000 per month

A small difference of even 2% in returns can change the final amount drastically

* For Illustration purposes only. These are assumed returns and actual returns may vary. Also, returns may vary with the type of underlying asset class. ^ Systematic Investment Plan at the beginning of the month.

RUPEE COST AVERAGING

Rupee Cost Averaging

Receive when ,vice versa when NAV is higher

more units NAV is lower

Investment (A) NAV (B) No. of Units (A / B) Remarks

R 10000 20 500 Higher NAV ~ Less Units

R 10000 16 625 Lower NAV ~ More Units

Average Cost per unit 17.78

− The cost is thus averaged out as NAV falls

• Longer the SIP period, better the impact of rupee cost averaging• Longer SIP period may also help to lower volatility of returns

Rupee Cost Averaging (Illustration)

Past performance may or may not be sustained in future.For a 20-year SIP in S&P BSE Sensex ending on Oct 31, 2017. Investment at the start of the month.Source-CRISIL Mutual Fund Research Tool

How cost per unit has dropped over long investment horizon

0

5000

10000

15000

20000

25000

30000

35000

31

-Oct

-97

31

-Oct

-98

31

-Oct

-99

31

-Oct

-00

31

-Oct

-01

31

-Oct

-02

31

-Oct

-03

31

-Oct

-04

31

-Oct

-05

31

-Oct

-06

31

-Oct

-07

31

-Oct

-08

31

-Oct

-09

31

-Oct

-10

31

-Oct

-11

31

-Oct

-12

31

-Oct

-13

31

-Oct

-14

31

-Oct

-15

31

-Oct

-16

31

-Oct

-17

SE

NS

EX

VA

LU

E

Ending Value 33,213

Average Value 7,456

Starting Value 3,803

Sensex rose fr

om 3,803 on Oct 31, 1997 to 33,213 on Oct 31, 2017

Average cost of a unit o

ver the 20-ye

ar period was only R

s.7,456

BUT

S&P BSE Sensex

BENEFITS OF COMPOUNDING

Benefits of Compounding (Illustration)

Longer you stay the wealthier you may be

SIP of R 1000 per month growing @12% p.a.*

Experience the Magic of COMPOUNDING

PeriodPrincipal

R lacFinal Value

R lacGrowth of

Effect)Principal

(Compounding

10 years 1.20 2.32 almost 2 times

15 years 1.80 5.05 almost 3 times

20 years 2.40 9.99 over 4 times

25 years 3.00 18.98 over 6 times

* For Illustration purposes only. These are assumed returns and actual returns may vary. Monthly investment at the beginning of the month.

WHERE to invest via SIPs?

NO RESTRICTION OF ANY ASSET CLASSfor commencing a SIP

MORE POPULAR FOR EQUITY as an asset class because…− The asset class is relatively more volatile and − SIPs help to even out volatility by purchases made across market cycles

EQUITY SIPs ideally should be long term of 5 years and above

SIPs IN FIXED INCOME may be for short to medium term

FUND HOUSEand its

Points of Presence

INTERMEDIARYBank, Distributor,

Independent Financial Advisor (IFA)

ONLINE Through

*investment portals

* of Fund House/ Distributors

Key Step is KYC or Know Your Customer form

KYC form available with mutual fund, distributors, RTA or KRA (KYC Registration Agency)

Three Modes to Invest

WHEN to start a SIP?

WHEN to start a SIP?

NO PARTICULAR TIME TO START A SIP

SIPs actually make market timing irrelevant- Regularity and consistency is more important than timing -

FREQUENCY OF SIPS is typically monthly or quarterly - Monthly SIPs are more popular- SIP date needs to be predefined

WHAT not to do in SIPs (Illustration)

Delay or discontinue a SIP

Target of @12% p.a.*R 1 crore at Age 60

An Early Start is Good

Every Delay 5 Year Doubles Monthly

Investment needed

Start Age Monthly Investment R

25 years 1,540

30 years 2,833

35 years 5,270

40 years 10,009

45 years 19,819

Only needed if you start at 25 years butif you start 5 years later and so on

R 1,540 p.m. R 2,833 p.m.

* For Illustration purposes only. These are assumed returns and actual returns may vary. Monthly investment at the beginning of the month.

Start your GOOD EMI today!

Disclaimer

Information contained in this presentation is not a complete representation of every material fact and is for informational purposes only. It cannot be used or considered to be an offer to sell or buy units of Franklin Templeton Mutual Fund schemes. The recipient is advised to consult his/her advisor/ tax consultant prior to arriving at any investment decision.

An investor education and awareness initiative by Franklin Templeton Mutual Fund.

Franklin Templeton Asset Management (India) Pvt. Ltd.

Indiabulls Finance Centre, Tower 2, 12th and 13th floor, Senapati Bapat Marg, Elphinstone (W), Mumbai 400013

Tel (91-22) 6751 9100 • Fax (91-22) 6639 1281 • www.franklintempletonindia.com

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

For more information, visit www.thegoodemi.com