A joint venture between SBI and Société Genéralé Asset Management

SBI MUTUAL FUND WELCOMES

COLLEAGUESFROM

SBI

A joint venture between SBI and Société Genéralé Asset Management

CROSS SELLING

BENEFITS

A tool to generate other income for the Bank.

Customer Retention

Additional Income for the Staff

The customer gets all Financial Needs under one roof.

A joint venture between SBI and Société Genéralé Asset Management

What is a Mutual Fund?What is a Mutual Fund?

A trust which pools the savings of a number of investors who share a common financial goal.

Professional investment managers invest these funds in a way that helps investors to achieve their goals.

A joint venture between SBI and Société Genéralé Asset Management

Your Savings

Professional Fund Manager

AMC

Investment in Securities - Bonds / Equity

Returns - Growth or Dividend

How does a Mutual Fund work ?

A joint venture between SBI and Société Genéralé Asset Management

Advantages of Investing through Mutual Funds

Choice of schemes to meet a variety of investment objectives

Tax-Efficient Returns

LOW FEE CHARGED

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Bonds & Debentures: Fixed Income

Bank Deposits/Money-market: short-term liquidity

Balanced: Growth + Current Income

Equity: Long term growth

DEBT

EQUITY

Risk

Return

Varied Range of Investment & Saving Products

A joint venture between SBI and Société Genéralé Asset Management

Types of Products

•Underlying Asset classes – Equity, Debt & Money Market instruments•Five Categories of Funds

-Liquid Funds-Debt Funds-Balanced Funds-Equity Funds-Special Funds

•Investment Objective–Defines the universe of asset classes where the investments will be made

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NAV Calculations• Net Assets = Assets - Liabilities

• Assets = Market value of Investments + Receivables + Accrued income

+ Other Assets

• Liabilities = Accrued expenses + Payables + Liabilities

• NAV of a Unit = Net Assets of the Scheme Number of units outstanding

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Assume Investment made on the Face value @Rs 10/- ON 01.01.2007

GROWTH DIVIDEND PAYOUT

DIVIDENT REINVESTMENT

AMOUNT INVESTED(Rs)

10000 10000 10000

UNITS ALLOTTED 1000 1000 1000

NAV ON 01.01.08 15 15 15

DIVIDEND@20% ON 01.01.08

- Rs 2 /unit Rs 2 /unit

DIVIDEND RECEIVED

- 2000 2000

EX-DIVIDEND NAV - 13 13

UNITS ALLOTTED (DIV. REINV.)

- - 1153.85(1000+153.85)

VALUE OF INVESTMENT(Rs)

15000 13000 15000

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Tax issues

related to

Mutual Funds

A joint venture between SBI and Société Genéralé Asset Management

EQUITY SCHEMES..Capital Gains• Capital Gains Tax is payable as follows on sale of

Equity MF units.

• Short Term Capital Gains Tax - @ 15% this FY

(Less than 1 year )

• Long Term Capital Gains Tax - NIL

( 1 year or more )• Tax Laws allow capital gain to be set off against capital

loss.

DIVIDEND IS TAX FREE

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Working out Tax liability

• Rebate under section 80 C

• Individuals can invest up to Rs.1.00 Lac in specified instruments and reduce their tax liability by 10% to 30%.

• The Equity Linked Savings Scheme, 2005 has been notified vide S.O. No. 1563(E) dated 03.11.2005. The Central Board of Direct Taxes has clarified that investments made on or after 1st April, 2005, in plans, which are in accordance with ELSS 1992 or ELSS 1992 as amended in 1998 are also eligible for tax benefit under section 80C of the Income-tax Act, 1961.

• Magnum Tax Gain Scheme 1993 has been approved by CBDT for this purpose.

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ILLUSTRATIONAt the

Endof year

Savingsat the end of each

yr

Cumulative Amount at the End of Each year Assuming Rate of Return

-- -- 10% 12% 15% 18% 20% 25% 1 12000 12600 12720 12900 13080 13200 13500 2 24000 26460 26966 27735 28514 29040 30375 3 36000 41706 42922 44795 46727 48048 51469 4 48000 58477 60793 64415 68218 70858 77836 5 60000 76924 80808 86977 93577 98229 110795 10 120000 200812 223220 261918 307659 342655 448914 15 180000 400333 474198 613787 797426 950863 1480772 20 240000 721665 916507 1321522 1917894 2464282 4629753 25 300000 1239173 1696007 2745030 4481254 6230150 14239681 30 360000 2072625 3069752 5608212 10345600 15600837 43566853

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Investments ?

What does one look for………..

Safety of Capital Returns Liquidity Tax BenefitsDue to changing market trend, only Mutual Funds fulfill these objectives

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Evaluating Financial Products

PRODUCT SAFETY/CONVINENCE

LIQUIDITY RETURN VOLATILITY

Equity Low High/low High-Mod.

High

FI Bonds High Moderate Mod.-High

Moderate

Debentures Moderate Low Mod.-Low Moderate

Corp. FD Low Low Moderate Low

Bank Dep. High High Low-High Low

PPF High Moderate Moderate Low

Life Ins. High Low Low-Mod Low

Gold High Moderate Mod.-Low Moderate

Real Estate Moderate Low High-Low High

MF High High High Moderate

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Systematic Investment Planning

- Best Investment Practice

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• Encourages Regular and Disciplined Investments

• A Convenient way to invest regularly

• Long term perspective

• Rupee Cost Averaging Benefit to counter volatility

• Compounding Benefits

• No timing the market!!

• SIMPLE & CONVENIENT

• A larger target segment due to lower initial investment

Advantages of SIP

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SIP Return as of 30th Nov 2010

SIP Return

Scheme One Year Three Year Five Year Ten Year

Magnum Equity Fund 19.71% 24.31% 18.12% 25.77%

Magnum Global Fund 94 18.82% 28.57% 16.31% 30.97%

Magnum Multiplier Plus 93 21.82% 26.15% 18.83% 30.31%

Magnum Sector Umbrella - Contra 8.77% 20.19% 16.12% 34.89%

Magnum Tax Gain Scheme 93 14.73% 20.81% 14.93% 33.05%

BSE100 5.27% 13.82% 13.08% 21.74%

A joint venture between SBI and Société Genéralé Asset Management

What does one need for a SIP ?

Just these 4• Bank account

• K Y C Compliant

(For Micro SIPs) PAN / ID Proof ( DL/ Election ID Card/ Passport/ Bank Pass

Book

• Mutual fund scheme which offers SIP facility

• Rs 500/1000/2000….. per month

A joint venture between SBI and Société Genéralé Asset Management

SIP – Easy Pay Facility *

• Opt for the SIP EASYPAY Auto debit Facility

• Choose the Amount ( minimum Rs 500/- p.m)

• Choose one Day of the month ( 5th / 10th /15th / 20th / 25th/ 30th )

• Make First Investment by Cheque drawn in favor of the scheme. E.g SBIMF -Magnum TaxGain Scheme

And Relax…….. Every month the said amount will be debited from your bank account and units will allocated to you.

Register for Statement Of Account (SOA) by mail*

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To Whom? Which scheme to sell?

A joint venture between SBI and Société Genéralé Asset Management

Who can invest in a Mutual Fund Scheme

• Residents– Resident Individuals / HUF– Indian companies– Partnership Firms– Indian Trusts / Charitable Institutions– Insurance Companies– Banks – Financial Institutions– NBFCs– Provident Funds– Mutual Funds

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Who can invest in a Mutual Fund Scheme

• Non Residents– NRI’s & Persons of Indian Origin– Overseas Corporate Bodies (OCBs)

• Foreign Entities– FII’s registered with SEBI

• Foreign nationals can also invest in MF

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Investment Decision Influencers

• Age• Risk appetite (ability to bear capital

losses) • Returns frequency (regular/capital

appreciation)• Time horizon of investment• Liquidity • Need to save tax

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Steps in selection of an Equity fund

• Fund age Older funds with track record of

performance or new ones.

• Experience fund managers or new ones

• Costs of Investing Funds expense ratios

• Understand the portfolio characteristics of the scheme

A joint venture between SBI and Société Genéralé Asset Management

How to sell Mutual Funds Effectively• Do not create over expectation.

• Suggest diversification.• • Encourage regular investment – SIP.

• Explain benefits of Rupee cost averaging.

• Build Relationships through Superior Service.

• Personalized after Sales service ensures your clients comes back to you again resulting in increase in business.

A joint venture between SBI and Société Genéralé Asset Management

SUGGESTED SCHEMES

• EQUITY SCHEMES

i) Magnum Equity Fund

ii) Magnum Global Fund

iii) Magnum Emerging Business Fund

• DEBT SCHEMES

i) SBI Gold Fund

ii) SBI Debt Fund Series (SDFS)

iii) SBI Dynamic Bond Fund

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SERVICE PROVIDER

• CAMS is the Service provider for all our Schemes.

• The entire processing of all service requests is done by Cams

A joint venture between SBI and Société Genéralé Asset Management

Risks in a Mutual Fund

Mutual Fund investments are not risk free

However, through Mutual Fund, Risk can

be minimized.

A joint venture between SBI and Société Genéralé Asset Management

Thank you