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MUTUAL FUNDS - Breaking Myths..
A Mutual fund is not an Equity fund in the firstplace.
A Mutual fund is a common pool of money into
which investors place their contribution that are to
be invested in accordance with a stated objective
The ownership of the Mutual Fund is thus joint or
mutual; the fund belongs to all investors
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A single investors ownership of the fund is in the
same proportion as the amount of contribution made
by him or her bears to the total amount of the fund
A mutual fund uses the money collected from
investors to buy those assets which are specificallypermitted by its stated investment objectives, e.g.
Equity fund buys equity assets, Debt funds buys debt
instruments, etc.
MUTUAL FUNDS - Breaking Myths..
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Graphically speaking...
MFStep 1 : Make investments
Investor community
Step 5: Returns provided to investors
Earnings to the
Fund House/ Distributor
Step 4: Expenses
deducted
from the returns
Various Assets
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Mutual Funds: The risk return trade-off..
Risk
Investment horizon
Liquid Funds
Debt Funds
Gilt Funds, Bond Funds, Hi Yield Funds
Balanced FundsRatio of Debt : Equity
Growth FundsIndex,Value, Growth, Aggressive
Sector Funds
Hedge Funds
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Rupee Cost Averaging
It can make youwealthy over time
THE NINTH WONDER OF THE WORLD...
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1-Jan-01
1-Feb-011-Mar-01
1-Apr-011-May-01
8
9
10
11
12
Rupee Cost Averaging by way of
Systematic investment plan (SIP)
Average Price per unit: Rs. 10.00
Average Cost per unit : Rs. 9.83
NAV - 10
Units - 100 NAV - 12
Units - 83.3
NAV - 10
Units - 100
NAV - 8
Units - 125
NAV - 10
Units - 100
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Make the Volati l ity of the Market work for you
By investing a fixed amount at regular intervals, youbuy more units when prices are low and buy less units
when prices are high
Thus your Average Cost could be less than the Average
Price and your chances to gain increase without havingto monitor or predict the markets.
Rupee Cost Averaging
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Systematic Investment Plan
I nvesting could never be more simple
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Here is a simple solution-
Easy & Flexible
Affordable savings
Choice of Debt v/s Equity
Risk reduction through diversification
Liquidity
An SIP with F rankl in Templeton Funds
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Systematic Investing made easy
Minimum investment of Rs. 500 on a monthly or quarterly basis.
Post-dated cheques (dated 1st or 7th of each month) for one year
/ six months accepted
Cheques drawn in favour of Franklin Templeton Fundspayable
anywhere in India Cheques presented on 1st/7th of each month dates mentioned and
allotted units (based on the prices prevalent on that day) added to
the investorsaccount (subject to the realisation of cheques)
Invest into one or more of Franklin Templeton Funds with just
one cheque
A statement of account provided for each transaction
Features of SIP
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SIP in an equity fundVolati le but healthy returns over the long-term
If you had invested in Franklin India Bluechip Fund.
This example is provided for illustrative purposes only and returns are computed on XIRR basis. Loads are
not taken into consideration. The past performance of the mutual fund is not necessarily indicative of
future performance of the scheme.
* The scheme became open-ended in January, 1997.
Monthly investment Rs. 1000
No. of investment periods (Since January 1997) * 71 months
Total investment Rs. 71,000
Value of investment (as of Navember 29, 2002) Rs. 1,28,781
Return on investment 20.05%
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Tax planning
Section 88 of the Income Tax
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The choices from Franklin Templeton
Franklin India Taxshield
An actively managed Equity Linked Savings Scheme
Franklin India Index Tax Fund
A passive (indexed) Equity Linked Savings Scheme
Templeton India Pension Plan
An asset allocation fund to help plan for your retirement
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FRANKLIN INDIA TAXSHIELD
Investment Objective: To provide medium to long term growth of capital along with
income tax rebate
Investment Style: Growth by maintaining a diversified portfolio pf equities across
sectors and market cap ranges
Fund Category :FITRisk: Medium to High
Risk: Medium to Low
Risk: Low to Medium
Section 88 Fund
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FRANKLIN INDIA TAXSHIELDNAV PERFORMANCE
SCHEME
PERFORMANCE
Last 3 months Last 1 year Last 3 years* Since inception*
FIT(G) - 1.01% 9.59% 11.22% 26.49%
S&PCNX 500 0.60% 5.45% -10.66% 1.83%
Fund Size : Rs. 94.80 crores
* Past performance may or may not be sustained in future *Compounded & Annualized
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FRANKLIN INDIA INDEX TAX FUND
Investment Objective: To invest in companies comprising of the NIFTY FIFTY to
attain the results commensurate with S& P CNX Index along with income tax rebate
Investment Style: Passive style of equity investing.
Fund Category :
FIITFRisk: Medium to High
Risk: Medium to Low
Risk: Low to Medium
Index & Section 88 Fund
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FRANKLIN INDIA INDEX TAX FUNDNAV PERFORMANCE
SCHEME
PERFORMANCE
Last 3 months Last 6 months Last 1 year Since inception*
FIITF(G) 3.81% 2.39% -0.83% -10.61%
S&PCNX NIFTY 3.91% 1% -1.5*% -11.92%
Fund Size : Rs. 2.58 crores
Tracking error: 0.69%
* Past performance may or may not be sustained in future *Compounded & Annualized
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FRANKLIN INDIA INDEX TAX FUNDNAV MOVEMENT
4
5
6
7
8
9
10
11
Feb-
01
Mar
-01
Apr-0
1
May
-01
Jun-01
Jul-0
1
Aug-01
Sep-01
Oct-0
1
Nov-01
Dec-01
Jan-02
Feb-
02
Mar
-02
Apr-0
2
May
-02
Jun-02
Jul-0
2
Aug-02
Sep-02
Oct-0
2
Nov-02
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TEMPLETON INDIA PENSION PLAN
Investment Objective: Seeks to provide regular income under dividend plan and capital
appreciation under growth plan.
Investment Style: A diversified portfolio of equities & fixed income instruments to
maintain steady capital appreciation & regular income.
Tax Rebate : Investments upto Rs. 70,000 qualify for tax rebate under Section 88 under I.T
Act.
Fund Category :
TIPPRisk: Medium to High
Risk: Medium to Low
Risk: Low to Medium
Hybrid Fund
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TEMPLETON INDIA PENSION PLANCOMPOSITION BY ASSETS
Equity
38%
Debt
51%
Others
8%Gilt
3%
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TEMPLETON INDIA PENSION PLANNAV PERFORMANCE
Fund Size : Rs. 29.71 crores
SCHEMEPERFORMANCE
Last 3 months Last 1 year Last 3 years* Last 5 years* Since inception*
TIPP(G) 1.11% 9.66% 8.91% 11.26% 12.06%
* Past performance may or may not be sustained in future *Compounded & Annualized
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FRANKLIN TEMPLETON INVESTMENTS
# As on 31stOctober, 02 * As on 29 November,02
1 USD = Rs. 48.25
Worldwide
Assets under Management : USD 252.6 Billion#
34 Offices across 29 countries
India
One of the largest Mutual Funds with over
Rs.9,414 crores* in assets.
Close to 1 million shareholder accounts
Healthy asset mix and great choice in equity and fixed- income
investment management style
Sizeable footprint in the country presence in 33 cities
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FRANKLIN TEMPLETON INDIA
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
FY'96 FY'97 FY'98 FY'99 FY'00 FY'01 FY'02 NOV'02
Assets Under Management ( Rs. Cr)
36 145 215 773
2072
3523
9414
8194
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BEST PERFORMING OPEN END FUNDS IN 4 OUT OF 5 CATEGORIES
Equity - Templeton India Growth Fund
Income - Templeton India Income Builder Account
Gilt - Templeton India Government Securities Fund
Liquid - Templeton India Treasury Management Account
Ranking Source:CRIS-RISC (a wholly owned subsidiary of CRISIL); The Crisil awards are for the best performing
open end fund in the category. The awards recognize the consistency of the scheme performance and are based
on CRISIL CPRs (Composite Performance rankings) across four quarters (Sep 01, Dec 01, Mar 02 & Jun 02). The
number of schemes considered for the analysis are: Equity
18; Income
16; Gilt - 6; Liquid
9. The criteria usedfor computing the CRISIL CPR are Superior Return Scorecard based on NAVs, Concentration, Liquidity and Asset
Size of the scheme. Sales load has not been taken into consideration.
CRISIL BEST FUNDS AWARDS 2002
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Source:
CPR :CRIS-RISC (a wholly owned subsidiary of CRISIL); The criteria used for computing the CRISIL CPR are Superior Return Scorecard based o
NAVs, Concentration, Liquidity and Asset Size of the scheme. Sales load has not been taken into consideration.
CPR 1 :Good performance (Top 10 % of the category) CPR 2 : Above average performance (Next 20% of the category)
Star Rat ings: Value Research fund rankings are based on 18 month weekly risk adjustedperformance. For equity funds , a minimum performanchistory of 3 years is required and for debt funds a minimum history of 18 months is required.
FRANKLIN TEMPLETON FUNDS RANKINGS
& RATINGS
CRISIL Composite Performance Ranking
Quarter ended September,02
CPR 1 : PRIMA, FIBF, TGSF, TMA
CPR 2 : IBA , PRIMA PLUS , FTIBF
Value Research Fund Ratings
Month ended October,02
BLUECHIP,PRIMA, PRIMA PLUS
TIGF,Taxshield (Open),Pension Plan,IBA,TILF,TMA
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AWARD WINNING RESULTS
Award Fund Type Fund Category
Moodys Equity TIGF 1 Year
Moodys Equity Bluechip 3 and 5 years
Moodys Debt Monthly Income Plan 1 year
Moodys Liquid Treasury Management Account 1 year
Moodys Fund HouseFranklin Templeton Investments
Moodys - 2001
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AWARD WINNING RESULTS
Award Fund Type Fund
S&P Micropal Equity TIGF ,Bluechip, InfoTech,Tax shield, Tax shield 95
S&P Micropal Debt TIIF
S&P Micropal Fund House Erstwhile Pioneer ITI
S&P Micropal - 2000
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The illustrations provided herein are not intended to reflect the price movements of a particular Franklin Templeton Fund,nor are they meant to represent actual investment performance. All investments in mutual funds and securities are subject
to market risks and the NAV of the schemes may go up or down depending upon the factors and forces affecting thesecurities market including the fluctuations in the interest rates. There can be no assurance that a schemes investmentobjectives will be achieved. The past performance of the mutual funds managed by the Franklin Templeton Group and itsaffiliates is not necessarily indicative of future performance of the schemes. Franklin India Index Fund, Franklin IndiaBalanced Fund, Franklin India Growth Fund, Templeton India Growth Fund, Templeton India Income Fund, TempletonMonthly Income Plan, Templeton India Government Securities Fund and Templeton India Liquid Fund are only the names ofthe schemes and do not in any manner indicate the quality of the schemes, their future prospects or returns. The MutualFund is not guaranteeing or assuring any dividend under any of the schemes. The Mutual Fund is also not assuring that itwill make any dividend distributions under the dividend plans of the schemes though it has every intention of doing so. Alldividend distributions are subject to the investment performance of the schemes. The investments made by the schemesare subject to external risks on transferring, pricing, trading volumes, settlement risks etc. of securities and henceredemptions may be delayed inordinately. The schemes may invest in various derivative instruments including index futureswhich are untested instruments in India Markets and may carry high risk return ratio. In the case of Franklin India IndexFund the existence, accuracy and performance of the S&P CNX Nifty Index will directly affect the scheme performance andtracking errors are inherent in any Index Fund. All subscriptions in Franklin India Index Fund will be subject to a lock-inperiod of 30 business days. In the case of Franklin India Balanced Fund, in the event that the investible funds of more than50% of the total proceeds of the scheme are not invested in equity shares, then tax exemption on income distribution maynot be available to the fund. Please call the Templeton Investor Service Centre numbers to obtain a copy of the offerdocument and go through the same before investing.
Statutory Details: Templeton Mutual Fund in India has been set up as a trust by Templeton International Inc. (liabilityrestricted to the seed corpus of Rs.1 lac) with Templeton Trust Services Pvt. Ltd. as the trustee (Trustee under the IndianTrust Act 1882) and with Templeton Asset Management (India) Pvt. Ltd. as the Investment Manager. The Fund offers NAVs,purchases and redemptions on all business days.
Risk Factors
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THANK YOU!!!