SIP or Systematic Investment ?· SIP or Systematic Investment Plan ... • Longer the SIP period, ...…

Download SIP or Systematic Investment ?· SIP or Systematic Investment Plan ... • Longer the SIP period, ...…

Post on 22-Aug-2018

216 views

Category:

Documents

4 download

TRANSCRIPT

  • SIP or Systematic Investment Plan offered by Mutual Funds is like a GOOD EMI

    EMI Instalment

    = GOOD EMI Investment

    =

  • WHAT are SIPs?

  • SYSTEMATIC INVESTMENT PLANS (SIPs) MADE SIMPLE

    WHAT WHYWHEREWHENWHAT

    are SIPs? SIPs?

    to invest via SIPs? to start an SIP? not to do in SIPs

  • WHAT are SIPs?

    in Mutual Funds

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

    A way of investing REGULAR AND DISCIPLINED

    INVESTING PROCESS

    ONE OF THE BETTER WAYS TO INVEST IN A MUTUAL FUND

  • WHY SIPs?

    CHEAPER ON THE WALLET

    REGULAR AND DISCIPLINED INVESTMENT

    CREATE WEALTH OVER THE LONG TERM

    MAKES MARKET TIMING IRRELEVANT

    BENEFITS OF POWER OF COMPOUNDING

    - Invest as little as 500 per month

    Potential To

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

    R

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

  • WHY SIPs?

    CREATE WEALTH OVER THE LONG TERM

  • Create Wealth Over The Long Term(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 13.38 27.27

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

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

    * 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 ,and lesser units 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 periods may also help 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 March 31, 2016. Investment at the start of the monthSource-CRISIL Mutual Fund Research Tool

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    35,000

    Se

    ns

    ex

    Va

    lue

    How cost per unit has dropped over long investment horizon

    Ending Value 25,342

    Average Value 6523

    Starting Value 3367

    S&P BSE Sensex

    Sensex

    rose f

    rom 33

    67 on

    Mar 3

    1, 1996

    to 253

    42 on

    Mar 3

    1, 2016

    BUT A

    verage

    cost o

    f a uni

    t over t

    he 20-

    year pe

    riod wa

    s only

    Rs.65

    23

    31-M

    ar-96

    31-M

    ar-97

    31-M

    ar-98

    31-M

    ar-99

    31-

    -00

    Mar

    31-

    -01

    Mar

    31-

    -02

    Mar

    31-

    -03

    Mar

    31-

    -04

    Mar

    31-

    -05

    Mar

    31-

    -06

    Mar

    31-

    -07

    Mar

    31-

    -08

    Mar

    31-

    -09

    Mar

    31-

    -10

    Mar

    31-

    -11

    Mar

    31-

    -12

    Mar

    31-

    -13

    Mar

    31-

    -14

    Mar

    31-

    -15

    Mar

    31-M

    ar-16

  • BENEFITS OF COMPOUNDING

  • Benefits of Compounding (Illustration)

    The longer you stay invested, the higher the potential for growthSIP of R 1000 per month growing @12% p.a.*

    Experience the Magic of COMPOUNDING

    Period Principal R lac

    Final Value R lac

    Growth of Principal (Compounding Effect)

    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 for 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

    The first step is to have your KYC

    (Know Your Customer) done

    KYC form available with Mutual Fund, distributors, RTA or KRA (KYC Registration Agency)

    Three Modes to Invest

  • WHEN to start an SIP?

  • WHEN to start an SIP?

    NO PARTICULAR TIME TO START AN 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)

    Do not delay or discontinue your SIP

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

    Start Early

    Every Delay 5 Year Doubles rhe 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 but if 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

  • Page 1Page 2Page 3Page 4Page 5Page 6Page 7Page 8Page 9Page 10Page 11Page 12Page 13Page 14Page 15Page 16Page 17Page 18Page 19Page 20Page 21Page 22Page 23Page 24

Recommended

View more >