Living retirement Kingsize Investing @ 20's

Equity Market

World Markets

• Global equity indices ended on a strong note on account of stimulus measures announced by the US Federal Reserve and European Central Bank (ECB) boosting investor's sentiment.

• The ECB agreed to launch a new and potentially unlimited bond-buying programme in an attempt to lower borrowing costs for Euro-zone countries and also to control spill-over of the debt crisis. The decision can also be considered to indicate its intention of preventing a break-up of euro and also contain spiraling fears amongst the investors. A lot of eyeballs was focused on the measures to be taken up by the agency towards controlling borrowing costs especially of Spain and Italy, after several disagreements among policymakers on the plan.

• US Federal Reserve in its meeting on 13th September 2012 decided on initiating the third round of Quantitative Easing by increasing its holdings of long-term securities through open-ended purchases of $40 billion mortgage debt every month, until there is substantial improvement in the labor market. This would also be coupled with several measures towards maintaining Federal funds rate at near zero levels at least till mid 2015. These measures are expected to provide the much required push to the slowing economy.

• Gold & Oil rallied during the month on speculation of providing stimulus measures by the US Federal Reserve boosting demand for commodities and stocks. Gold closed at $1,769 an ounce on 17th September 2012 up from $1,616 a month earlier. Brent crude gained by 3.44% during the month more on account of increased demand as an inflation hedge.

M F P O I N T E RIssue - 82

September, 2012

For Private Circulation only

Global Indices

Benchmark Closing 17-Aug-12

to 17-Sep-12

DAX 7,404 5.15

Bovespa 61,806 4.61

Hang Seng 20,658 2.69

Dow Jones 13,553 2.09

CAC 40 3,554 1.87

FTSE 100 5,894 0.70

Nikkei 225 9,159 -0.03

Shanghai Composite 2,079 -1.72

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2 September 2012

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Domestic Indices:

• Indian Equity markets closed on a positive note in line with the global markets, much attributed to increased inflows from FIIs and increasing appetite for risky assets. During the month ended 17th September 2012, SENSEX and NIFTY gained 4.81% and 4.54% respectively.

• FIIs were net buyers in the market to the extent of 10,988 crores while Mutual Funds where net sellers to the extent `1,995 crores during the period.

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• After a series on political deadlock in the parliamentary operations, the government came out with a slew of reforms. They hiked domestic fuel prices and cleared FDI reforms by introducing 51% FDI in Multi-brand Retail setups and 49% FDI in Aviation.

• The hike in fuel prices has been reasoned to reduce the ballooning subsidy burden on the economy, however the impact of the hike on the inflation is yet to be seen.

• Rupee strengthened against dollar to close at ` 54.01 to a dollar as against ̀ 55.75 a month earlier. The gains can be attributed to the monetary stimulus announced by the US Federal Reserve and also on the expectation of increased currency inflows on account of introduction of FDI limit into Retail and Aviation sectors.

Bond Market:

• Yields on the 10-year benchmark paper closed at 8.18% as against its previous close of 8.24% a month earlier.

• Yields declined on the back of several long dated GOI bonds and also on account some liquidity crunch being experienced ahead of the advance tax payments.

Top 5/Bottom 5

Equity Schemes

Top Performers Under Performers

Absolute Absolute Scheme Name Return(%)* Scheme Name Return(%)*

AIG World Gold 15.18 Mirae Asset China Advantage -1.50

DSPBR World Gold 12.67 DWS Global Agribusiness Offshore -1.13

Birla SL CEF-Global Prec Metal 12.14 DSPBR World Agriculture Fund -0.80

Sundaram-STF-Enter Oppor 8.25 Sundaram-STF-CAPEX Oppor -0.51

Kotak PSU Bank ETF 7.78 Sundaram Equity Multiplier -0.43

Debt Schemes

Top Performers Under Performers

Annualised AnnualisedScheme Name Return(%)* Scheme Name Return(%)*

ICICI Pru Advisor-Moderate 33.63 Tata FIPF A1 4.69

ICICI Pru Advisor-Cautious 22.54 Taurus Gilt 5.51

Fidelity Wealth Builder-B 19.31 Religare Gilt-Long Dur 5.69

L&T Gilt - Investment 19.00 Morgan Stanley Active Bond 5.76

IDFC Asset Alloc-Mod 18.97 JM G-Sec 6.01

*Returns as on 17th Sep 2012

Category Returns : For the month ended 17th September 2012, all fund categories delivered a positive returns. Gold gained the most in view of the its increased demand worldwide as hedge against inflation on account of announcement of the Quantitative Easing measures by US Federal Reserve and also on the bond-buying program by the European Central Bank. Gold Funds gained by 6.62% during the month followed by banking funds which gained by 4.33%.

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*Returns as on 17th Sep 2012

You are in your 20's vibrant about stepping into a life with financial independence. For new earners, shopping for clothes & accessories and parties becomes a new routine. While those who have been earning from some time, the tendency is more towards tech savvy products (mobiles; laptops etc.). After all, these lets us enjoy life and make it LARGE... It would not be entirely wrong in saying this is an age when you feel your today is more important than tomorrow. One of the main reason for splurging being that you now do not need to ask your parents about what to do with your money.

However can you afford to overlook your tomorrow? The answer is plain and simple, NO, unless you have a legacy being left behind by someone for you. For majority, “Abhi nahin kiya tho phir kab karoge”. Just start by adhering to a few simple guidelines, and choosing to live within your means, you can begin invest for your financial future in your 20's.

Restrain the urge to spend: In your 20's, when you have just started to earn, suddenly you experience financial freedom and spending without being answerable to anyone is indeed very tempting. Another important factor is that this is the period wherein you have the maximum number of goals which you would want to be fulfilled. And most goals will require money. And if, you do not have to shoulder any major financial responsibility or goals, it is even more difficult to resist spending money on items that do not really have any meaning to you.

Your Motto should be “Income – Investments = Expenditure” and NOT “Earning – Expenditure = Investments”. So you should spend only after you have completed your investments.

Why to Invest: Investing involves taking on risk for the potential of higher returns. Many people do not like this idea. So they save instead of invest. You can stash all your money in a savings account somewhere for 40 years. You will have more than you started with, but will fall far short of your potential as inflation will eat away your returns. That's the difference between hoping to preserve money and building wealth. But for this, it requires time and commitment and work. We believe an ideal combination for an individual at this age would be to have at least 80-90% into equities and related investments and remaining into fixed income products.

When you are investing; aim to beat inflation: The old notion of “a penny saved is a penny earned” does not apply these days thanks to inflation, resulting in that penny being worth less over a period. That's why if you are investing - especially for goals that are years away, such as retirement - you cannot afford to ignore the corrosive effect rising prices can have on the value of your assets. For this, we need to understand 2 more points: (1) We should first calculate our post tax returns and (2) Reduce inflation from post tax return to get real returns. Only if this figure is positive, will it make sense to invest otherwise we would be losing in real terms.

Why Start now: Following are the two main arguments to start early -

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Living retirement Kingsize – Investing @ 20'sLiving retirement Kingsize – Investing @ 20's

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Power of compounding: Consider the following, 2 investors, aged 25 and 35 respectively. Each invests Rs.5,000 p.m. growing at moderate rate of 10%p.a. with an intention to build a corpus for their retirement at 65.

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Investor Number of Total Value at 65Installments investment

Investment started at 25 480 24,00,000 3,18,83,901

Investment started at 35 360 18,00,000 1,13,96,627

The results may surprise, the youngest investor had the maximum growth. His 10 additional years of the investment or additional 1/3 investment than the person who started at 35 years, earned him 2.79 times larger corpus, than the latter. This could also be termed as Cost of Delay that one would have to incur by delaying the investing. Now that's the power of regular investments, the power of compounding, the power of the long term investment.Just imagine, the cost of delay in the above example is nearly Rs 2 crores plus.

Take risk as Time is on your side: Creating wealth requires both, time and money. The longer you stay invested, the higher are the chances of earning good returns, and the lower the risk of losing your money. Young people if starting early would have time on their side to rectify errors in investing and therefore can, in fact should take higher risk and invest into assets like equities and related instruments and aim for higher returns during initial period. It should also be noted that equities over longer tenure tends to have lower risk with higher earning potential. Taking a higher risk does not mean that one should gamble into derivative products. The risk which we refer here is more in terms of a calculated risk.

Just keep three things in mind when you start:

1. Start with a simple portfolio, maybe just 2 large cap funds; understand the working and risks associated before adding up to your investments. Later on these can investments can be made as complex as you wish.

2. Invest in what you understand: Having a thorough understanding about an avenue is very critical for which you have spend time and efforts to learn, research, then take action to grow your money. Not the other way around or else you may miss out the exit options before the tip becomes a pain.

3. Watch your costs: A simple concept that too many people overlook. The more you spend to investing, the less you have to invest. To put it another way, you have to earn back every rupee you spend before you make a profit. The best way of doing this would be look for the cheaper options like a mutual fund or investing into an ETF and limiting the number of trades made; because every rupee saved is equal to every rupee that will be invested.

Conclusion

Time is the biggest advantage a person in their 20's has while investing. The earlier you start, the more financially rewarding it becomes.

Know Your Report

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Table 1 - Portfolio Detail - This report shows the details of all schemes in which investment is being held.

Column heading and descriptions

1. Transaction Type: The column would indicate whether the transaction was a Purchase, SIP or a switch from an earlier investment.

2. Transaction Date: The date on which investment was made.

3. Transaction Price (INR): It is the price of per unit on the transaction date, also referred to as the purchase NAV.

4. No. of units: This field would indicate the number of units allotted on the investments made.

5. Purchase Value: Indicates the investment amount.

6. Current amount: Present value of investment as per the NAV on the last business day.

7. Dividend Payout: Dividends paid to the investor when declared by AMC.

8. Dividend Reinvestment: Represents reinvestment of dividends paid by purchasing additional units

9. Profit/Loss: Shows any gain/loss on the investment at current value(excludes any dividend income received)

10. No. of Days: This option shows numbers of days units held in the portfolio.

11. Net Gain/loss: Represent overall benefit derived from the investment(includes dividend income received)

12. Absolute Return (%): It is the percentage return between the present values of the investment over the amount invested. This is calculated only for those investments which have completed less than one year since investment.

Table 1

In this issue we are focusing on portfolio detail and redemption report. Portfolio detail enables tracking of individual investments being made across funds while redemption reports provides a details of all redemptions made during pre-defined time span.

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13. Annual Return (%): Annual Return is the increase in value of an investment, expressed as a percentage per year.

14. C.A.G.R (%): C.A.G.R is a year-over-year growth rate of an investment over the invested period.

15. XIRR (%): The XIRR function is used to determine the returns when the payments and income are made at different periods.

Table 2

Table 2 - Redemption Report - This Report shows details of all schemes which were sold.

Column heading and descriptions

1. Transaction Type: The column would indicate whether the transaction was a Purchase, SIP or a switch from an earlier investment.

2. Transaction Date: The date on which transaction was made.

3. Purchase Price: Is the price of per unit at which units purchased.

4. Units: The number of units allotted on the transaction.

5. Purchase Amount: Shows Invested amount (SIP/Lump sum).

6. Sell Date: Represents the date when the investment was sold.

7. Sell Type: Sell Type refers to whether the exit transaction was on account of Redemption or switching to another fund.

8. Sell Rate: The price at which the unit was sold/ switched.

9. Sell Amount: This is the redemption rate multiplied by the units of the scheme.

10. Days: This column shows the number of days for which the units were a part of the portfolio.

11. Gain/Loss: Represents any gain or loss on the investment on the sale date, including STT charges as applicable.

12. STT: STT charge on Sell Amount at 0.25%.

13. C.A.G.R (%): C.A.G.R is a year-over-year growth rate of an investment over the invested period.

14. XIRR (%): The XIRR function is used to determine the returns when the payments and income are made at different periods.

Corporate Office Address : Website :

A1, Kailash Industrial Complex, Park Site, Off LBS Marg, Vikhroli West, Mumbai - 400 079. Tel: +91-22-6754 7000 • E mail : mutualfunds@ventura1.com • www.ventura1.com

This document is solely for private circulation only. Mutual funds like securities investments are subject to market risks and other risks. Investors are advised to read the offer document before investing.

Performing Mutual Fund Plans

Scheme Name Corpus NAV (`) Annualised %

( Crs)# Gr Div 1 mth 3 mths 6 mths 1 yr

Income Funds

Birla SL Dynamic Bond Fund 8,659 18.87 10.58

HDFC High Interest-STP 1,275 22.06 10.60

Ultra Short Term Plan

HDFC Cash Mgmt -TA 15,566 24.12 10.10

Reliance Money Manager 8,407 1,507.74 1,014.72

Tata Floater 3,480 1,679.04 1,065.28

`

10.72 10.34 10.93 10.44

10.29 10.32 10.46 9.59

7.90 8.32 9.28 9.08

8.43 8.80 9.65 9.41

8.84 9.18 9.97 9.80

*Returns for less than 1 year is absolute (in case of MIP, it is annualized) and more than 1 year are compounded annualized as on 17th Sep 2012. #Corpus as on June 2012 as AMFI has mandated for quarterly AUM declaration.

Scheme Name* Corpus NAV (`) 6 mths 1 yr 3 yrs 5 yrs

(` Crs)# Gr Div (%) (%) (%) (%)

Hybrid - Monthly Income Plans(MIPs)Birla SL MIP II-Savings 5 323 20.03 11.69DSPBR MIP 257 21.87 11.35Balanced FundHDFC Prudence 6,041 220.31 26.44Equity - Large CapDSPBR Top 100 Equity 3,338 102.31 20.57Franklin India Bluechip 4,876 219.54 36.12HDFC Top 200 11,190 207.21 40.67ICICI Pru Dynamic 3,999 110.56 18.10ICICI Pru Focused Blue Chip Equity 3,841 17.23 16.44Equity - Multi capBirla SL Dividend Yield Plus 1,224 85.78 12.34HDFC Equity 9,718 266.21 40.88IDFC Premier Equity -A 2,821 34.98 23.05Reliance Equity Oppor 3,473 40.07 24.26UTI Dividend Yield 3,541 32.41 13.50Equity - MidcapDSPBR Small & Mid Cap 1,147 17.57 13.70HDFC Mid-Cap Oppor 2,021 16.97 15.39ICICI Pru Discovery 1,829 51.89 19.80SBI Magnum Emerging Business 641 51.59 16.64Sundaram Select Midcap 1,925 155.48 17.59Equity - ThematicHDFC Infrastructure 682 10.03 10.03Reliance Banking 1,671 100.90 36.61Reliance Pharma 584 64.09 43.38Tax Saving Scheme(ELSS)Fidelity Tax Advt 1,157 22.10 17.30HDFC Taxsaver 3,150 223.12 50.70ICICI Pru Tax Plan 1,295 145.53 18.49Sensex 18,542.31Nifty 5,610.00

10.09 10.30 7.59 10.448.13 12.29 7.64 8.04

2.77 6.73 12.05 11.12

2.02 8.61 6.89 8.413.15 8.39 9.00 7.842.67 7.70 7.54 10.024.63 12.26 10.71 8.895.71 11.81 10.87 -

0.30 3.93 10.88 12.341.66 5.80 9.25 9.316.32 6.55 15.09 13.73

10.63 18.41 16.92 11.082.24 4.95 9.81 11.39

3.58 3.68 11.70 8.055.15 9.67 16.41 10.417.86 17.19 12.80 12.92

18.54 16.54 22.02 7.947.19 6.27 9.72 8.34

-4.41 12.41 12.38 14.88

19.05 16.91 24.84 20.51

4.78 7.05 10.10 8.210.12 4.35 8.19 6.467.65 11.90 11.27 8.626.16 9.50 3.52 3.645.49 10.34 4.15 4.53

-4.29 -2.13 -0.18

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