Investments

A presentation by and

May 3, 2023 2

Franklin Templeton Worldwide

• More than 50 years of experience in global

investing

• Third largest independent fund management

group in the US.

• First and only mutual fund company added

to the S&P 500

• Over US$ 315 billion assets under

management; over 10 million investor

accounts world-wide

• Winner of Dalbar Award for Service

Excellence in the US, for six out of past ten

years

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Franklin Templeton India

One of the largest Mutual Funds in India with over Rs.14,000 crores in assets^ Close to 8.75 lakh shareholder accounts Fund Managers with combined investment experience of 85 years in the capital markets Healthy asset mix and great choice in equity and fixed- income investment management style Sizeable footprint in the country

- presence in all cities with greater than 1 million population

1 USD = Rs. 48.25^ As on October 31, 2003

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Context of Investing

PROFESSION INVESTMENTS

INCOME

CURRENT EXPENDITUR

ESAVINGS

FUTURE EXPENDITUR

E

Paradigm for Wealth Creation

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Creating Wealth:

Is not a function of income

Is not a function of investment expertise

Is really a matter of Regular Savings

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FV = PV (1 + r)n

FV = Future ValuePV = Present Valuer = Rate of Return/ Coupon Raten = No. of compounding periods

A little bit of mathematics

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FV = PV (1 + r)n

Enhancing Future Value

The more you The more you save, makes save, makes a differencea difference

The The sooner sooner

you start, you start, makes a makes a

differencedifference

PV nr

The more The more you earn, you earn, makes a makes a differencdifferenc

ee

May 3, 2023 9

The more you save, makes a difference

Growth Rate of 6% p.a.

Amount saved per month

5,000 1,200,000 2,278,2253,000 720,000 1,366,9352,000 480,000 911,2901,000 240,000 455,645

Total Amount Saved

Value after 20 years

The Power of Compounding

Past performance may or may not be sustained in future

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The sooner you start, makes a difference

Rs 1000 per month @ 6%

Starting Age

25 420,000 1,380,29030 360,000 979,25035 300,000 679,58040 240,000 455,645

Total Amount Saved

Value at the age of 60

The Power of Compounding

Past performance may or may not be sustained in future

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The more you earn, makes a difference

Rs 1000 p.m.

Growth Rate

6% 455,645 979,2558% 572,660 1,417,61010% 723,990 2,079,29012% 919,860 3,080,970

Value after 20 years

Value after 30 years

The Power of Compounding

Past performance may or may not be sustained in future

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Savings Habits matter much more than the markets!

•If someone started saving at age 30, Rs 5000 per month and got a return of 10% on their investment – the wealth at age 60 would be Rs one crore three lacs.

•If someone delayed savings and started at age 40 and saved Rs 3000 per month and got a return of 8% on their investment – the wealth at age 60 would beRs Seventeen lacs.

Is it not the difference between being wealthy and not being wealthy?

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BENEFITS OF A MUTUAL FUND

Professional ManagementService

Diversification

Affordability

May 3, 2023Source : ENAM Securities

INVESTMENT PYRAMID

Capital PreservationCapital Preservation

IncomeIncome

Capital GrowthCapital GrowthRisk: Medium to HighRisk: Medium to High

Risk: Medium to LowRisk: Medium to Low

Risk: Low to MediumRisk: Low to Medium

Period: 3 to 5 yearsPeriod: 3 to 5 years

Period: 1 to 3 yearsPeriod: 1 to 3 years

Period: Less than 1 yearsPeriod: Less than 1 years

Growth Funds

Stocks

Income/Bond FundsIncome/Bond FundsCompany Fixed DepositsCompany Fixed Deposits

BondsBondsDebenturesDebentures

Cash / Money Market FundsShort-term deposits /Government Paper

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Process of Financial Planning

Set a goal

Prepare an investment plan

Implement the financial plan

Evaluate on a regular basis

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Household ExpensesIn

flatio

n

Higher Life

Expectancy

Household Expenditures

are on the rise

New Products

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Cost of LivingItems 1987

( Rs )1997( Rs. )

Colgate toothpaste( 100 gm tube )

8.05 18.90( 8.91 % )

Hamam Soap 3.05 7.85( 9.92 % )

Masala Dosa 3.50 14.00( 14.87 % )

Petrol( per litre )

7.99 25.48( 12.30 % )

L P G Cylinder 56.15 137.85( 9.40 % )

Zodiac men’s shirt 225.00 510.00( 8.53 % )

Source : Readers Digest – Nov 1997

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Cost of LivingItems 1997

( Rs )2017( Rs. )

Colgate toothpaste( 100 gm tube )

18.90 104.00

Hamam Soap 7.85 52.00

Masala Dosa 14.00 224.00

Petrol( per litre )

25.48 259.12

L P G Cylinder 137.85 830.85Zodiac men’s shirt 510.00 2620.27

Assuming inflation to grow at the same rate during 1987-97

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INFLATION ROBS YOUR PURCHASING POWER(Assuming inflation @ 8% p.a.)

21,50046,600

100,600

217,200

10 years 20 years 30 years 40 years

Rs. 10,000 today

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17.130.8

56.3

103.9

9% 12% 15% 18%

REGULAR SAVINGSTHE SIMPLEST WAY TO COMBAT INCREASING HOUSEHOLD

EXPENDITURE

Rs. 1000 saved every month for 30 years can grow toa sizeable amount of wealth

depending on the return generated on these savings

Rs.

In L

acs

% Per annum

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Equities are the best long term bet! Cumulative Annualised Returns

(1980-98)

Source : RBI Report on Currency and Finance (1997-98)BSE Sensitive Index of Equity Prices - BSE

9.19%7.62%

9.74%

14.47%

20.16%

Inflation Gold Bank FD Co. FD Equities

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Behaviour of various mutua funds of Frankin Tempeton

5

15

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35

45

55

656/

17/1

998

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/199

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3/17

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9/17

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3

Time

Vaue

(Rs.

)

FIBCF FIPP FIPF TIGF

TIIBA TIIF TITMA TILF

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consider this …..•Sensex was at 3292.85 on December 1, 1993 – the inception date of Bluechip fund•Sensex was at 4906.87 on November 25, 2003•This means, if someone invested Rs. 10,000 in Sensex, the value of his investments is Rs. 14,717

•However, if the investor invested Rs. 10,000 in Bluechip fund on inception …..•The value of holdings is Rs. 1,01,223

Note: Past performance may or may not be sustained in future.

If that is what equities can deliver ….

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What Should the Investor doIf equities consistently give better returns over the long-term, and I’m a long-term investor with no immediate cash flow needs, should I not invest all my money in equities?

Definitely NO

Should do an Asset Allocation

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Asset Allocation is the best way to achieve long-term financial goals

Why?

Different asset classes do well at different points in time

The asset allocation strategy determines more than 90% of your portfolio returns

Resulting Total Portfolio15% Rate of Return – 0% SD

Two Risky Assets With Perfect Negative Correlation Equals ZeroRisk Portfolio

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Issues with Asset Allocation approach

What is the most optimal asset allocation strategy?Market movements make asset allocation go haywire

Constant re-balancing is cumbersome, and may not be tax-efficient

Your suitable

allocation

Market Impact

Your new allocation

Equity 70 40% 98 = 75.2%

Debt 30 8% 32.4 = 24.8%

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How would you ideally invest ?

Understand your Risk Profile

Allocate your assets in a way that best suits your risk profile, given market conditions

Choose funds that have a long-term track-record of consistent performance and are managed by a competent and trustworthy Portfolio Manager

Revisit portfolio and re-balance on the basis of fund performance and market condition

Here’s an investment that does all this… and more

FT India Life Stage Fund of Funds

A convenient solution for all your investment needs

Distributed by:

May 3, 2023 30

FT India Life Stage Fund of Funds

Two stage asset allocation process- Strategic Asset Allocation- Tactical Asset Allocation

Choice of five best funds from the Franklin Templeton stable

Automatic rebalancing

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Underlying funds in FTLFEquity Income

Franklin India Bluechip Fund FIBCF: Large cap focussed, diversified equity fund

Templeton India Income Builder Account TIIBA: Moderately aggressive income fund

Franklin India Prima Fund FIPF: Medium & Small cap focussed, diversified equity fund

Templeton India Income FundTIIF: Conservatively managed income fund

Templeton India Growth Fund TIGF: Large cap, ‘Value’ focus, diversified equity fund

With one investment, you can buy into a portfolio of 5 well-performing funds, each with a distinct investment style

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Underlying Funds

Please see slide 18 for methodology and other details. All data as on 31.10.2003

Past performance is no guarantee of future results

Annualised Compounded returns based on 31.10.2003 Growth Plan NAVs: Scheme, NAV, 1 year returns, 3 year returns, 5 year returns; Benchmark, 1 year returns, 3 year returns, 5 year returns, Inception returns. FIBCF, Rs.41.12, 103.4%, 25.4%, 36.3%; BSE Sensex, 66.4%, 9.8%, 11.8%, 4.1%; FIPF, Rs.56.93, 116.3%, 43.7%, 39.5%; S&P CNX 500, 76.1%, 12.7%, 16.4%, 3.8%; TIGF, Rs.24.11, 107.6%, 28.9%, 30.6%; BSE Sensex, 66.4%, 9.8%, 11.8%, 5.1%; MSCI India Value, 59.5%, 8.0%, 14.6%, N.A; TIIBA, Rs.23.1152, 13.3%, 15.6%, 13.8%; Crisil Composite Bond Fund Index, 11.1%, N.A, N.A, N.A; TIIF, Rs.23.4241, 12.1%, 14.4%, 13.5%; Dividend/Bonus assumed to be reinvested.

Past performance may or may not be sustained in future.

Scheme Inception Date

Inception Returns

Current AUM

Value Research Ratings*

FIBCF 1.12.1993 25.95% Rs.1143 crs

FIPF 1.12.1993 19.2% Rs.337 crs

TIGF 10.9.1996 14.8% Rs.304 crs

TIIBA 23.6.1997 14.1% Rs.2389 crs

TIIF 5.3.1997 13.6% Rs.1918 crs

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Business Standard – Fund Manager of the Year 2003

• R Sukumar – CIO ( Franklin Equity)

Manages over Rs 3,140 crores across 25 schemes

• Nilesh Shah – Director & CIO (Fixed Income)

Manages over Rs. 10,870 crores across 16 schemes

Please see slide 19 for methodology and other details.

Past performance may or may not be sustained in future.

As on 31.10.2003

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FT India Life Stage Fund of Funds

Choice of four plans makes the scheme suitable for you…whichever risk category you belong to

Each plan offers growth and dividend options Strategic Asset Allocation

Equity DebtThe 20s Plan: Aggressive 80% 20%The 30s Plan: Growth 55% 45%The 40s Plan: Balanced 35% 65%The 50s Plus Plan: Conservative 20% 80%

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Tactical Asset Allocation

Overlays the Strategic Asset Allocation Strategy

Takes care of short term market factors like valuations, market sentiment, fundamental outlook etc.

Re-balanced depending on the fund manager’s call on the factors mentioned above.

Further smoothens the volatility of the portfolio, attempting to deliver superior risk adjusted returns.

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Tactical Asset Allocation

Equity Debt

The 20s Plan 70% to 90% 10% to 30%

The 30s Plan 45% to 65% 35% to 55%

The 40s Plan 25% to 45% 55% to 75%

The 50s Plus Plan 10% to 30% 70% to 90%

Flexibility to make tactical changes to the asset allocation can enhance risk adjusted returns.

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Summing Up

Asset Allocation determines how your portfolio will perform over a period of time.

Asset allocation based on MVO optimises the risk return equation.

FT India Life Stage Fund of Funds offers an easy solution for all asset allocation needs

In-built rebalancing feature enhances return potential, while reducing volatility

Flexibility to make tactical allocation can further reduce the volatility, to ensure a smooth journey towards your financial goals

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RISK FACTORS

All investments in Mutual Funds securities are subject to market risks andthe NAV of the schemes may go up and down depending on the factors and forces affecting the securities market.There can be no assurance that

the scheme’s investment objectives will be achieved.The past performanceof the Mutual Funds is not necessarily indicative of the future performance of the scheme.The sponsor is not responsible or liable for any loss resulting

from the operation of the scheme beyond the initial contribution of an amount of Rs. 1 lac made by it towards setting up of the Mutual Fund.

Franklin India Bluechip Fund, Franklin India Prima Fund are only the namesof the schemes and do not in any manner indicate the quality of the schemes,its future prospects or returns. Please go through the offer document of the

respective Funds before investing.

Thank YouQuestions and Answers