Group 12

Financial Planning for the Age Group 22-25 years

What is Financial Planning?

A process of determining an individual's financial goals, purposes in life and life's priorities, and after considering his resources, risk taking ability and current lifestyle, to detail a balanced and realistic plan on 'what needs to be done' to meet those goals

It varies from person to person and should be updated from time to time

Why should youngsters do Financial Planning

• To work towards achieving short and long term goals

• To ensure a secure future• To provide for unforeseen circumstances• To earn better returns on their funds, which

would otherwise be idle

What constitutes Financial Planning

• Making a detailed budget of incomes and expenses

• Start by allocating a fixed amount to save every month

• Adjust budget as per execution• Invest the saved money in Financial

Instruments

What Financial Instruments?

• Equity Markets• Mutual Funds• Systematic Investment Plans• Fixed Income Instruments• Insurance• Commodities Market

What determines where one invests?

• Financial Objectives• Priorities• Risk Taking Ability• Ability to Monitor Investments• Idleness of Funds

Thumb Rules• Common sense approach to managing your finances. It cannot change

your situation overnight, it is a lifelong process • Events beyond your control will affect your financial planning results• Set measurable financial goals• Be realistic in your expectations • Understand the effects of each financial decision• Re-evaluate your financial situation periodically• Start planning as soon as you can• Realise that you are in charge

STOCK MARKET CRASHES

The Wheels of FortuneThe Wheels of Fortune

+12% -30%

+10%

+50%

-3%+3%

-10%

-50%

+12% -4%

+10%

+35%

-11%+9%

+18%

+4%

WHEEL 1 WHEEL 2

Mutual FundsRecent Schemes and Past

performance

Basics of Mutual FundsBasics of Mutual Funds

Evolution of Mutual Funds• Growth of Unit Trust of India (1964-87)

• Entry of Public Sector (1987-93)

• Emergence of Private Funds (1993-96)

• Growth and SEBI Regulations (1996-99)

• Emergence of a large and uniform industry (1999-2004)

• Consolidation and Growth (From 2004 onwards)

Investors

Securities

Returns

Fund Manager

Pool their Money with

Invest in

Creates

Passes back to

Mutual Fund Operation Mutual Fund Operation FlowchartFlowchart

Managed by a board of trustees

Asset management company

Custodian

Bankers

Registrars & Transfer AgentsAppointed by AMC

Appointed by AMC

Sponsor Company

Mutual Fund

Appointed by trustees

Appointed by trustees

Constituents of Mutual Fund Constituents of Mutual Fund

Why Mutual Funds?

• Portfolio Diversification

• Reduction of Risk

• Professional Management

• Liquidity

• Reduction in Transaction Cost

• Transparency

• Favorable Returns

Why Mutual Funds?

Net Asset Value

• NAV = (Market value of the assets) – • (its liabilities)

• NAV/UNIT = Net Asset Value

Number of Units Outstanding

Scheme Type Previous NAV

Latest NAV

Change (Rs.)

% Annual Return

Standard Char Prem

Open 13.5978 23.2253 9.6275 70.80

Reliance R S -Equi

Open 15.0668 25.5302 10.4634 69.45

DBS Chola Opportunit

y

Open 26.4500 44.0400 17.5900 66.50

DWS Investmen

t Opp

Open 22.9300 37.9600 15.0300 65.55

SBI Magnum Comma

Open 15.2800 24.6200 9.3400 61.13

(as on 26/02/2008)

Top Performers- Equity Diversified FundTop Performers- Equity Diversified Fund

Premier Equity Fund

AMCStandard Chartered Asset Management Co. Pvt. Ltd

Category Equity – Diversified

Scheme Type Open Ended

Net Asset SizeRs. 690.70 cr.(as on

31/01/2008)

Dividend No Dividends Declared Yet

Premier Equity Fund

About the FundAbout the Fund

1Week 1Month3Months

6Months

9Months

1 Year

0.47 % -5.13 % 0.65 %34.92 %

45.13% 70.80%

Absolute Return (as on 26/2/2008)

Premier Equity Fund

NAV Performance

Assets Break-up (as on 31-01-2008)

%

Equity 86.95

Non Convertible Debentures 9.09

Others 2.17

Current Assets 1.23

Cash 0.55

Asset Allocation PortfolioPremier Equity Fund

52-week High 28.33 (Jan 07, 08) 52-week Low 12.33 (Mar 07, 07)

Premier Equity Fund

NAV ChartNAV Chart

ICICIICICI FUSION FUNDFUSION FUND

Structure 5 year Close Ended Equity Diversified Scheme

Investment Objective

Generate long-term capital appreciation by investing predominantly in equity and equity related instruments of companies across large, mid and small market capitalization

Options Growth optionDividend option

Benchmark Index Nifty Junior

Net Assets 7207.9 million (January 31, 2008 )

Expense Ratio 2.17%

ICICIICICI FUSION FUNDFUSION FUND

About the FundAbout the Fund

Asset Allocation Portfolio

Type of Instruments

Minimum Allocation

(% of Net Assets)

Maximum Allocation (% of Net Assets)

Risk Profile of the

instrument

Equity and equity-related securities

70% 100% Medium to High

Debt, money market instruments and call money

0% 30% Low to Medium

ICICIICICI FUSION FUNDFUSION FUND

• NAV Return % (Growth)1 week 1 mth 3 mths 6 mths 1 year

NAV Growth

0.20% -5.54%

-2.32% 7.81% 24.63%

NAV Return % (Dividend)

1 week 1 mth 3 mths 6 mths 1 year

NAV Growth

0.21% -5.55% -2.16% 7.99% 24.84%

December 17, 2007

Dividend

10%

ICICIICICI FUSION FUNDFUSION FUND

NAV Performance

Fund PerformanceICICIICICI FUSION FUNDFUSION FUND

Performance of Indian Mutual Fund Industry

Assets Under Management

Funds Mobilized by Private SectorNet Resources Mobilised by Private Sector Mutual Funds

0100002000030000400005000060000700008000090000

1993

-94

1995

-96

1997

-98

1999

-00

2001

-02

2003

-04

2005

-06

Years

Funds

mobilis

ed R

s. c

rore

Funds Mobilised(Rs. Crore)

An Overview

Growth of Assets under Management

1238.23 4158.26 6481.67

15006.43 14961.54

21550.17

28345.35

48560.6

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2001 2002 2003 2004 2005 2006 2007 2008

Growth of Assets under Management

Rs. crore

A “No” Surprise FundFunds

Period HDFC Growth Fund (%)

HDFC Equity Fund (%)

HDFC Top 200 Fund

HDFC Capital Builder Fund (%)

HDFC Long term Advantage Fund (%)

HDFC Taxsaver (%)

Last 5 years

56.15 57.81 57.99 58.19 56.46 60.90

Value of Rs. 1 lac invested on 01/01/03

926693.50

975213.97

978076.04

981012.89

933441.89

1070670.86

As on 31/12/2007

BE IT SMALL, BE IT BE IT SMALL, BE IT BIG,BIG,INVEST EARLY, INVEST INVEST EARLY, INVEST REGULARLY,REGULARLY,BUT INVEST SMARTBUT INVEST SMART

Happy Investing In Mutual Funds

Compiled by

• Kinjal Mehta 87

• Nirav Patel 97

• Rashmi Soni 112

• Minal Thakkar 113