Value Averaging Investment Plan (VIP)For

A superior investment discipline available for the first time to Indian Retail Investors

About Benchmark S&P CNX 500 Fund

About S&P CNX 500 Index

Scientifically developed index managed by IISL (Joint Venture of NSE & CRISIL)

Broad based benchmark of the Indian Capital markets

Industry weightages in the index mirror the industry weightages in the universe

Index values are calculated using the market capitalisation weighted method

Market cap weighted index automatically changes, adjusts & rebalances to changing prices, hence there is no need to physically rebalance portfolios on account of change in prices

The base year for S&P CNX 500 index is 1994 with base value being 1000

Represents about 94.49% of total market capitalisation and about 94.43% of the total turnover* on the NSE as on May 29, 2009

* In Rs Crs

About S&P CNX 500 Index

Represents around 72 Industry Indices

Flexibility in the number of Industry Indices & companies within each Industry Index, so as to attain the objective of being a dynamic market indicator

Selection of the stocks is based on criteria such as Industry representation Trading Interest Financial Performance Others

Performance - Indices

Source: MFI Explorer & Internal. Data As On 29th May 09

Rs S&P CNX 500 S&P CNX Nifty BSE Sensex

Initial Investment As On 1st Jan 98

100000 100000 100000

Value As On May 29, 09 529273 411483 395853CAGR(%) 15.72% 13.19% 12.81%

50000

150000

250000

350000

450000

550000

650000

750000

850000

01-J

an-9

8

01-J

an-9

9

01-J

an-0

0

01-J

an-0

1

01-J

an-0

2

01-J

an-0

3

01-J

an-0

4

01-J

an-0

5

01-J

an-0

6

01-J

an-0

7

01-J

an-0

8

01-J

an-0

9

Nor

mal

ised

To

1 La

c A

s O

n Ja

n 01

, 199

8

S&P CNX 500 S&P CNX Nifty BSE Sensex

Performance - Indices

Source: MFI Explorer & Internal. Note: The above performance is CAGR(%)

5 Yrs Rolling, Frequency – Daily,Period – 4th Jan 99 to 29th May 09

3 Yrs Rolling, Frequency – Daily, Period – 2nd Jan 98 to 29th May 09

14

49

-10

45

-7

12

-8

12

48

-20

0

20

40

60

Minimum Maximum Average

(%)

S&P CNX 500 S&P CNX Nifty BSE Sensex

16

66

-23

59

-16

14

-18

14

63

-40

-20

0

20

40

60

80

Minimum Maximum Average

(%)

S&P CNX 500 S&P CNX Nif ty BSE Sensex

The fund which could be held as a core holding in the portfolio

Gives you participation in top 500 companies in India

Includes mid cap as well as small cap companies and hence less likely to miss out on emerging star

An Index fund from Benchmark Mutual Fund, currently the largest Index Fund manager in the country and committed to philosophy of indexing

Benchmark S&P CNX 500 Fund

Benchmark S&P CNX 500 Fund is a ‘Total Stock Market Index Fund’ that eliminates the risk of individual stocks, sectors, individual fund manager

etc i.e all ‘Unsystemic risks’ only the ‘Systemic’ or market riskremains which is common to all equity investments

Does Indexing Work In India ?

Popular Perceptions

Indian markets are inefficient and Indexing does not work

Good Fund Managers will out perform indices consistently

Past performance is useful tool to decide future performance

Let us do some reality check....

All diversified equity schemes with benchmark index as S&P CNX Nifty/BSE Sensex/BSE 100/CNX 100 and having track record of at least 5 calendar years as on Dec 31, 08 (Based on this criteria we have selected 60 schemes)

3 years rolling returns (CAGR %) calculated on daily basis have been considered for each scheme under analysis

Average returns of diversified equity schemes have been considered for calculating out performance over Nifty BeES in absolute terms, also each individual schemes performance is compared vis-à-vis Nifty BeES for calculating no. of funds underperformed(%) on daily basis for the period under analysis

The start date (i.e 22nd Dec 06) of rolling returns is the day when all the schemes under analysis have completed 3 yrs time frame since inception. The last observation date is 19th May 09

All the performance are calculated for growth/dividend reinvestment plan

Analysis Methodology

Indexing Vs Active Management

Data as on 19th May 09. Source: MFI Explorer & Internal

Active Funds Outperformance/Underperformance Over Nifty BeES

-8-6-4-202468

22-D

ec-0

6

22-F

eb-0

7

23-A

pr-0

7

13-J

un-0

7

03-A

ug-0

7

26-S

ep-0

7

29-N

ov-0

7

12-F

eb-0

8

24-A

pr-0

8

16-J

un-0

8

06-A

ug-0

8

29-S

ep-0

8

26-N

ov-0

8

21-J

an-0

9

17-M

ar-0

9

13-M

ay-0

9

(%)

0

20

40

60

80

100

(%)

Absolute % Outperformance - LHS No. of Funds Underperformed (%) - RHS

About Value Averaging

What is Value Averaging?

It is an averaging technique where portfolio balance increases in defined way irrespective of market movement

It was developed by former Harvard University professor Michael E. Edleson

The investment amount for each period is different

Investment amount is calculated based on the following formula Inv. Amt. = Target Port. Value – Actual Port. Value

Target Port Value is calculated based on the long term average return

Value Averaging - Advantages

As a discipline it invests more rupee amount when markets are lower and less when markets are higher

As a discipline, it helps investor overcome emotions

In most cases it generates higher returns than normal SIP which is based on rupee cost averaging technique

It achieves lower cost of acquisition in most scenarios as compared to SIP

The probability of achieving target value for a portfolio is much higher and hence ideal for financial planning

Longer the investor horizon, higher the benefits

VIP - Salient Features

Very powerful combination of an ideal long term investment discipline combined with ideal equity fund for long term core holding

Very simple to understand and operate

Facility of advance SMS intimation of monthly debit amount

No entry load

The investment objective of Benchmark S&P CNX 500 Fund is to generate capital appreciation through equity investments by investing in securities which are constituents of S&P CNX 500 Index in the same proportion as in the Index

No Fund Manager risk

Lower annual expenses

VIP - Salient Features

Nominal Investment AmountTo be intimated by the investor at the time of first investment (Subject to a minimum amount of Rs.2000 and in multiples of Re.1/- thereafter. There is no maximum cap on this amount).

Minimum Investment Amount Per Month = Rs. 0/-

Maximum Monthly Investment AmountTo be intimated by the investor at the time of first investment (There is no upper limit on this amount but the amount should be greater than the nominal amount).

Default target rate of return is 15% p.a. which is close to long term historical return given by S&P CNX 500 Index

Note: Please refer to Scheme Information Document for more details.

VIP - Salient Features

Entry Load = Nil

Exit Load For Investments less than Rs. 2 Crores

• Redeemed within 1 year from date of allotment – 1.50%• Redeemed after 1 year but within 2 years from date of allotment – 1.00%• Redeemed after 2 years but within 3 years from date of allotment – 0.50%• Redeemed after 3 years from date of allotment – Nil

For Investments of Rs. 2 Crores and more• Redeemed within 3 months from date of allotment – 0.50%• Redeemed after 3 months from date of allotment – Nil

Benchmark Index = S&P CNX 500 Index

Note: Please refer to Scheme Information Document for more details.

Value Averaging - Challenges

Classical Value Averaging posses some challenges which has been overcome by introducing some practical modifications

In constantly falling markets the investment amount may increase much beyond the investor’s cash flow

(Addressed by introducing investor defined maximum monthly debit)

In rising market it generates sell which may result in unwarranted short term taxation and transaction charges

(Addressed by avoiding sell / redemption and instead have minimum investment amount as zero)

If left to Individual investors, they may select aspirational rate of target return rather then long term average, which can perpetually result in higher investment amount and strained cash flows

(Addressed by keeping default target rate of return at 15% p.a. which is a long term historical return offered by S&P CNX 500 index)

Distinguishing Features – Value Averaging Vs.Rupee Cost Averaging

Not applicableYes, can be achieved(if mkt. returns are less More

amt. is invested.)

Target maturity amt. for meeting financial

goals

Not applicableYes, should be known while starting the investment

Expected growth rate of portfolio

Higher compared to VIPLower compared to SIP Portfolio volatility

FixedVariableMonthly investment amount

Higher as compared to VIP in most scenarios

Lower as compared to SIP in most scenarios

Cost of acquisition of units

Lower compared to VIP in most scenarios

Better compared to SIP in most scenarios

Performance

Rupee Cost Averaging (SIP)*

Value Averaging(VIP)

Parameters

*SIP – Systematic Investment Plan

Performance – VIP Vs SIP

Note: (1) In the above table S&P CNX 500 index is the underlying in which we are investing every month for a particular period. (2) For VIP the nominal amount considered for investment is Rs.2000. The minimum and the maximum amount considered for investment are Rs. 0 and Rs. 20,000 per month and the target rate of return considered is 15% p.a. (3) For SIP a fixed amount of Rs. 2,000 per month is considered for investment. (4) The above data is for illustrative purpose only.

91.97%3.43%14.35%17.79%Average

89.16%5.90%-10.63%-4.72%Apr-09

97.71%4.25%26.26%30.51%Apr-08

96.34%3.55%34.59%38.14%Apr-07

88.26%1.53%53.27%54.80%Apr-06

81.32%5.10%35.02%40.12%Apr-05

87.03%2.14%44.22%46.36%Apr-04

95.68%2.48%-7.36%-4.88%Apr-03

92.33%4.96%-6.85%-1.89%Apr-02

95.57%1.59%-6.25%-4.65%Apr-01

86.44%2.91%24.45%27.36%Apr-00

95.27%3.27%-0.23%3.05%Apr-99

96.09%3.35%5.71%9.06%Apr-98

94.44%3.57%-5.61%-2.04%Apr-97

SIPVIP

VIP average costAs % of SIP Cost

CAGR Outperformanceof VIP over SIP

Returns - CAGR(%)Rolling Three YearPeriod Ending on

VIP - A Dynamic Investment Tool

Note: (1) In the above graph of VIP & SIP, S&P CNX 500 index is the underlying in which we are investing every month for the period between May 2006 to Apr 2009. (2) For VIP the nominal amount considered for investment is Rs.2000. The minimum and the maximum amount considered for investment are Rs. 0 and Rs. 20,000 per month and the target rate of return considered is 15% p.a. (3) For SIP a fixed amount of Rs. 2,000 per month is considered for investment. (4) The above data is for illustrative purpose only.

02000400060008000

10000120001400016000180002000022000

2-M

ay-0

6

1-A

ug-0

6

1-N

ov-0

6

1-Fe

b-07

3-M

ay-0

7

1-A

ug-0

7

1-N

ov-0

7

1-Fe

b-08

2-M

ay-0

8

1-A

ug-0

8

3-N

ov-0

8

2-Fe

b-09

Inve

stm

ent A

mt(R

s.)

0

1000

2000

3000

4000

5000

6000

S&P CN

X 500 Index Value

M onthly Investment-VIP-LHS M onthly Investment-SIP-LHS Index Value-RHS

VIP investment amount reduces to Rs.0/- when index rises as against

Rs.2000 invested in SIP

VIP investment amount increases to Rs.20000/-

when index falls as against Rs.2000 invested in SIP

VIP – An Illustration

Note: (1) The above NAV data is hypothetical. (2) For VIP the nominal amount considered for investment is Rs.2000. The minimum and the maximum amount considered for investment are Rs. 0 and Rs. 20,000 per month and the target rate of return considered is 15% p.a.. (3) For SIP a fixed amount of Rs. 2,000 per month is considered for investment. (4) The above data is for illustrative purpose only. (5) CAGR(%) is based on XIRR calculations.

SIP Amount (Rs.)

Units Bought

VIP Amount (Rs.)

Units Bought

1 10 2000 200 2000 2002 11 2000 182 1825 1663 12 2000 167 1684.40 1404 13 2000 154 1569.67 1215 11 2000 182 3355.93 3056 10 2000 200 3060.27 3067 9 2000 222 3392.90 3778 8 2000 250 3796.82 4759 9 2000 222 119.25 1310 8 2000 250 4339.56 54211 9 2000 222 0 012 10 2000 200 0 0

Total Amount Invested (Rs.) 24000 25144Total No. of Units Bought 2451 2645Average Cost Per Unit (Rs.) 9.79 9.50Market Value As on June (Rs.) 24508 26454CAGR(%) 4.95% 10.60%

Month NAV (Rs.)

SIP Investor VIP Investor

About Benchmark

Benchmark - Highlights

Differentiation in Investment Philosophy, Product structures and Product delivery mechanism

Clear Positioning – Indexing and Quantitative Asset Management

Leadership position in indexing and ETF areas (Currently largest index fund manager and ETF manager in India)*

A track record of successfully conceptualizing and launching innovative products with many firsts

Excellent track record in investment performance

* Source: AMFI

Achievement

* Past performance is no guarantee for future results.

Nifty BeES was Awarded Best Performing Mutual Fund of The Year Award In The Index Fund Category at the CNBC – TV18 – CRISIL Mutual Fund of The Year Award 2008*

Best Provider of Structured Products

Eligibility Criteria & Methodology

Schemes present in all four quarterly CRISIL CPRswere considered for the award. The award is based on consistency of the scheme’s performance in the four quarterly CRISIL CPR rankings released during the calendar year 2008. The individual CRISIL CPR parameter scores averaged for the four quarters were further multiplied by the parameter weights as per the CRISIL CPR methodology to arrive at the final scores. A detailed methodology of the CRISIL CPR is available at www.crisil.com. Past performance is no guarantee of future results.

Rankings and Award Source: CRISIL FundServices, CRISIL Ltd.

Private Banking Poll2006

Nifty BeES

Disclaimer

RISK FACTORS

Pertaining To VIP:(1) As the monthly investment amount is variable, it would be difficult for the investors to manage their cash flows. (2) If the market moves in one direction i.e. either up or down, VIP may generate less return compared to SIP. (3) If the NAV of the Scheme continuouslydecreases, the absolute loss to the investor would be more than what the investor would have incurred by investing in SIP.

General:(1) Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal. (2) As the price/value/interest rates of the securities in which the Scheme invests fluctuates, the value of your investment in the Scheme may go up or down depending on the factors and forces affecting the capital markets. (3) Past performance of the Sponsors/Investment Manager/Mutual Fund and its affiliates does not indicate the future performance of the Scheme and may not provide a basis of comparison with other investments. (4) Benchmark S&P CNX 500 Fund & Nifty BeES are the name of the Schemes and does not in any manner indicate either the quality of the Schemes or its future prospects and the returns. Investors are therefore urged to study the terms of offer carefully and consult their Investment Advisor before they invest in the Schemes. (5) The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Scheme beyond the initial contribution made by it of an amount of Rs. 1 Lac towards setting up of the Mutual Fund. (6) The present Scheme is not a guaranteed or assured return Scheme. (7) The Scheme’s NAV will react to the stock market movements. The Investor could lose money over short periods due to fluctuation in the Scheme’s NAV in response to factors such as economic and political developments, changes in interest rates and perceived trends in stock and securities prices, market movements, and over longer periods during market downturns. (8) The Scheme is required to have (i)minimum 20 investors and (ii) no single investor holding>25% of corpus. If the aforesaid point (i) is not fulfilled within the prescribed time, the Scheme will be wound up and in case of breach of the aforesaid point (ii) at the end of the prescribed period, the investor's holding in excess of 25% of the corpus will be redeemed as per SEBI guidelines. (9) “S&P®” and “Standard and Poor’s®” are trademarks of the McGraw-hill Companies, Inc. (“S&P”), and have been licensed for use by India Index Services & Products Limited in connection with the S&P CNX 500 Index. The Product is not sponsored, endorsed, sold or promoted by India Index Services & Products Limited ("IISL") or Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). Neither IISL nor S&P makes any representation or warranty, express or implied, to the owners of the Product or any member of the public regarding the advisability of investing in securities generally or in the Product. Please read the full Disclaimers in relation to the S&P CNX 500 Index in the Scheme Information Document before investing.

Thank You