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Your Trusted Financial Brain RMF & LTF RMF & LTF The tax benefit twins ... worth investing in RMF & LTF RMF & LTF With the Ministry of Finance as Shareholder

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Page 1: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Your Trusted Financial Brain

RMF & LTFRMF & LTFThe tax benefit twins ... worth investing in

RMF & LTFRMF & LTFg

With the Ministry of Finance as Shareholder

Page 2: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

ContentContent

Retirement Mutual Fund (RMF)Retirement Mutual Fund (RMF)( )( )Long Term Equity Fund (LTF)Long Term Equity Fund (LTF)Tax Benefits ofTax Benefits of RMF &RMF & LTFLTF

- 2 -

Page 3: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Your Trusted Financial Brain

RMFRMFRMFRMFRETIREMENT MUTUAL FUNDRETIREMENT MUTUAL FUNDRETIREMENT MUTUAL FUNDRETIREMENT MUTUAL FUND

With the Ministry of Finance as Shareholder

Page 4: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

What is RMF?What is RMF?

RRetirement MMutual FFund

A mutual fund supported by the government to encourage continuous, long term savings , g g

With objective for investors to prepare for retirement

I t ill i t t b fit th i t tInvestors will receive greater tax benefits than investments in general mutual funds

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Page 5: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Characteristics of Characteristics of RMFRMF

d d d fInvestments and redemption proceeds from RMF are exempt from tax, under specified conditions

RMF will not pay any dividends

h h i li hi hInvestors can choose the investment policy which best suits their style, such as fixed income or

iequity

Units of RMF can be transferred to other RMFsUnits of RMF can be transferred to other RMFs among asset management companies

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Page 6: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Tax Benefits of RMFTax Benefits of RMF

Investments in RMF are exempt from tax at face pvalue, but must not be more than 15% of annual income and when combined with PVD or Pension Fund, must not exceed 500,000 Bahtmust not exceed 500,000 Baht

RMF ( f i ) PVD or Pension Fund 500,000 Baht<+

R d ti d f RMF t f t

(< 15% of income) PVD or Pension Fund 500,000 Baht +

Redemption proceeds from RMF are exempt from tax when the investor is no less than 55 years of age and had invested for no less than 5 yearsinvested for no less than 5 years

In the case of redemption due to physical disability or death redemption proceeds from RMF will not be subject

- 6 -

death, redemption proceeds from RMF will not be subject to tax

Page 7: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

RMF Tax Benefit ConditionsRMF Tax Benefit Conditions

Invest continuouslyMust invest continuously, no less than once a year and

Must not stop investing for more than 1 year consecutively ( i h h i i )(except in years where there is no income)

Mi i i t t f 3% f l i 5 000 B htMinimum investment of 3% of annual income or 5,000 Baht (whichever is lower)

Must hold units until the age of 55 years and invested for a period of no less than 5 years

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Page 8: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

NonNon--compliance with RMF conditionscompliance with RMF conditions

Non-compliance with conditions& invest > 5 yearsNon-compliance with conditions

& invest < 5 years

P t ti f thPay tax exemptions for the previous 5 calendar years

Pay all tax exemptions

Pay tax onCapital gains

Payment of tax exemptions Pay by March of the year following the non-compliance: y y y g pno extra charges Late payment after March of the year following the non-compliance: pay an extra 1.5% per month of the taxes to be

- 8 -

compliance: pay an extra 1.5% per month of the taxes to be paid from April onwards

Page 9: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

MFC’s RMFsMFC’s RMFs

MFC’s RMFsMFC’s RMFsMFC s RMFsMFC s RMFs

MFC Capital Protection Retirement Mutual Fund(M-CR)MFC Retirement Saving Fund (M-SAVING)

MFC Retirement Bond Fund (M-BOND)MFC Retirement Fixed Income Fund (M-FIX)

MFC Retirement Value Fund (M-VALUE)

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Page 10: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

MFC’s RMFsMFC’s RMFs

Fund Investment Policy Trading FrequencyFund Investment Policy Trading Frequency

M CR

Aim to invest in Government Bonds Treasury Bills or Corporate

Every last Friday of May and NovemberM-CR Bonds, Treasury Bills or Corporate

Bonds not over 80% for capital protection

May and November

Aim to invest in deposits and Every business dayM-SAVING

Aim to invest in deposits and money market securities

Every business day

Aim to invest in deposits and Every business dayM-BOND

pGovernment securities

y y

M FIXAim to invest in Corporate bonds

hi h h hi h dit tiEvery business day

M-FIX which have higher credit rating and government securities

M VALUEAim to invest in value stocks of Every business day

- 10 -

M-VALUE listed companies

Page 11: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Your Trusted Financial Brain

LTFLTFLTFLTF

LONG TERM EQUITY FUNDLONG TERM EQUITY FUNDLONG TERM EQUITY FUNDLONG TERM EQUITY FUND

With the Ministry of Finance as Shareholder

Page 12: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

What is LTF?What is LTF?

Long Term Equity Fundg q y

A mutual fund supported by the government to encourage long term investment in the stockencourage long term investment in the stock market An equity fundAn equity fundInvestors will receive greater tax benefits than investments in general mutual fundsinvestments in general mutual funds

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Page 13: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Characteristics ofCharacteristics of LTFLTF

I t t d d ti d f LTFInvestments and redemption proceeds from LTF are exempt from tax, under specified conditions

O i t t li hi h i t i tOne investment policy which is to invest on average no less than 65% of NAV in common stocks in any

ti i daccounting period

Units of RMF can be transferred to other RMFs among asset management companies

Open-ended fund which can be redeemed everyOpen ended fund which can be redeemed every business day

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Page 14: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Tax Benefits ofTax Benefits of LTFLTF

Investments in RMF are exempt from tax at face l b t t t b th 15% f lvalue, but must not be more than 15% of annual

income and must not exceed 500,000 Baht

LTF (< 15% of income) 500,000 Baht<

Capital gain from redemption will not be taxed if investment has been no less than 5 calendar yearsIn the case of redemption due to physical disability or death, redemption proceeds from LTF will be exempt from tax

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Page 15: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Conditions of investment in LTF for tax benefitsConditions of investment in LTF for tax benefits

Invest by 2016

Must hold LTF units for no less than 5 years (calendar years)

Year of initial investment

2008

2006

2007

2008

2004

2005

Condition met

. 20

04

. 20

05

. 20

06

. 20

07

. 20

08

. 20

09

. 20

10

. 20

11

. 20

12

- 15 -

Jan

.

Jan

.

Jan

.

Jan

Jan

Jan

.

Jan

Jan

Jan

Page 16: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

NonNon--Compliance withCompliance with LTF conditionsLTF conditions

Pay back tax exemption + extra 1.5% per month of

total tax exemption f A il f th ti

NonNon--compliancecompliance

from April of the year exemption is requested till the month

payment is made

= Invest < 5 calendar

years Include Capital Gain in calculating income tax

(By March of the year following non-compliance)

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Page 17: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

MFC’s LTFsMFC’s LTFs

MFC’s LTFsMFC’s LTFs

MFC Activity Long Term Equity Fund (MA-LTF)

MFC Value Long Term Equity Fund (MV LTF)MFC Value Long Term Equity Fund (MV-LTF)

MFC Global Long Term Equity Fund (MG-LTF)MFC Global Long Term Equity Fund (MG LTF)

MFC Islamic Long Term Equity Fund (MIF-LTF)

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Page 18: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

MFC’s LTFsMFC’s LTFs

Fund Investment Policy Dividend Policy

Trading Frequencyy Policy Frequency

MA-LTF Aim to invest in high growth stocks and value stocks with market price lower than

the intrinsic value as well as other

None

the intrinsic value, as well as other securitiesMV-LTF

MG-LTF Aim to invest up to 65% of NAV in listed stocks on the SET and invest not over 35%

Every Business day

No more than 2 times a year at a rate of no

th

of NAV in the Global Stock Market value stocks and will assess investment in growth stocks, as well as other securities

MIF-LTF Aim to invest in Equity securities that y ymore than

30% of accumulated

profit

MIF-LTF Aim to invest in Equity securities that comply with Islamic principle

- Up to 65% in Listed stocks- Not over 15% in Non-Listed stocks p o t

The rest of the fund will be invested in deposits, financial instruments, debt instruments and other securities that comply with the Islamic principles as well

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Page 19: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Risk Level of MFC RMF & LTFRisk Level of MFC RMF & LTF

Level ofFund’s risk

5Derivatives FundM-A-LTF, MV-LTF,

MG-LTF, MIF-LTF

4Equity fund

3

Fi d i F d

Flexible fund

M-FIX

M-VALUE

2

Short term fixed income fund

Fixed income Fund

M-SAVING

M-BOND

Level of fund’s return

1

0Capital Protected Fund

M-CR

- 19 -

M CR

Page 20: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Your Trusted Financial Brain

Tax Benefits of RMF & LTFTax Benefits of RMF & LTFTax Benefits of RMF & LTFTax Benefits of RMF & LTF

With the Ministry of Finance as Shareholder

Page 21: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

ExampleExample 1 1 –– Monthly salary of Monthly salary of 3030,,000 000 BahtBaht

Tax benefits from investments inTax benefits from investments in RMF andRMF and LTFLTFTax benefits from investments inTax benefits from investments in RMF andRMF and LTFLTF

No investment in RMF or LTF

Invest in RMF Invest in LTF Invest in both RMF + LTF

oTaxable annual income 360,000 360,000 360,000 360,000

Deduct Provident Fund that is over 10,000 Baht

8,000 8,000 8,000 8,000

Total income before tax benefits 352,000 352,000 352,000 352,000Total income before tax benefits 352,000 352,000 352,000 352,000

Deduct expenses 40 % not over 60,000 Baht

60,000 60,000 60,000 60,000

General exemption 30,000 30,000 30,000 30,000

Provident Fund (5%) 10,000 Baht 10,000 10,000 10,000 10,000

Social Security 9,000 9,000 9,000 9,000

Total expenses/tax benefit deductions 109,000 109,000 109,000 109,000

Net income after expenses/tax benefit deductions

243,000 243,000 243,000 243,000

Subscription of RMF - 54,000 - 54,000Subscription of LTF - - 54,000 54,000Taxable net income 243,000 189,000 189,000 135,000

Taxes due*Income 150,001-500,000 taxed 10%

9,300 3,900 3,900 -

- 21 -

Tax savings from investment - 5,400 5,400 9,300

Save Save 99,,300 300 Baht in taxes per yearBaht in taxes per year !!!!!!

Page 22: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

ExampleExample 2 2 –– Monthly salary of Monthly salary of 300300,,000000 BahtBaht

Tax benefits from investments inTax benefits from investments in RMF andRMF and LTFLTF Tax benefits from investments inTax benefits from investments in RMF andRMF and LTFLTF

No investment in RMF & Invest in RMF Invest in

LTF

Invest in both

RMF LTFt in RMF &

LTF LTF

RMF + LTF

Taxable annual income 3,600,000 3,600,000 3,600,000 3,600,000

Deduct Provident Fund that is over 10,000 Baht

170,000 170,000 170,000 170,000BahtTotal income before tax benefits 3,430,000 3,430,000 3,430,000 3,430,000

Deduct expenses 40 % not over 60,000 Baht 60,000 60,000 60,000 60,000

General exemption 30,000 30,000 30,000 30,000 Provident Fund (5%) 10,000 Baht 10,000 10,000 10,000 10,000

Social Security 9,000 9,000 9,000 9,000Total expenses/tax benefit deductions 109,000 109,000 109,000 109,000Net income after expenses/tax benefit 3 321 000 3 321 000 3 321 000 3 321 000Net income after expenses/tax benefit deductions

3,321,000 3,321,000 3,321,000 3,321,000

Subscription in RMF - 520,000 - 520,000Subscription in LTF - - 700,000 700,000Taxable net income 3,321,000 2,801,000 2,621,000 2,101,000, , , , , , , ,

Taxes due*Income 150,001-500,000 taxed 10%*Income 500,001-1,000,000 taxed 20%*Income1,000,001-4,000,000 taxed 30%

831,300 675,300 621,300 465,300

- 22 -

Tax savings from investment - 156,000 210,000 366,000

SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!!

Page 23: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

DisclaimerDisclaimer

This document is proprietary to MFC Asset Management Public Company Limited (“MFC”) and prepared with the intention to provide information ( ) p p pabout products and services offered by MFC and used for presentation in Thailand only.MFC reserves the right to prohibit reproduction and distribution, or any th t th t lt th i f ti ithi t f thother acts that may alter the information within, or parts of the

document or of the document in its entirety without the prior written consent of MFC.Some information contained within was referenced from reliable sourcesSome information contained within was referenced from reliable sources and MFC does not guarantee the accuracy and completeness of said information as it is subject to change depending on when the information was referenced.Information and views in this document are preliminary views only and are not to be considered as a pledge or guarantee of performance.This document has not been audited or approved by any official agency

d d d f h d h ld b dg

or persons. Any decisions derived from this document should be done with caution and care. If you should have any queries regarding this document, please contact our staff directly for clarification.

- 23 -

Page 24: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

WarningWarning

Past performance of the Fund is not an indication of future performance.Performance measurement is carried out in conformance with thePerformance measurement is carried out in conformance with the standards set by the Association of Investment Management Companies (AIMC).There are certain investment risks involved investors should study theThere are certain investment risks involved, investors should study the available information before making the decision to invest. Investors should study the tax manual of long-term equity funds (LTF) o eti ement m t al f nds (RMF)or retirement mutual funds (RMF).Investment in units is not a cash deposit and has certain risks. Investors should invest in said mutual fund when it is determined that th t l f d it th i t ’ i t t bj ti d ththe mutual fund suits the investors’ investment objectives and the investor is able to accept the risks which may occur from the investment.

h ld h d l f d h h hInvestors should invest in the said mutual fund when they have an understanding of the risks of derivatives. Investors should also consider the suitability of investment

- 24 -

Page 25: RMF & LTF - MFC Asset Management · RMF + LTF Taxable annual income 360,000 360,000 360,000 360,000 ... SaveSave 366366,,0000 00 Baht in taxes per yearBaht in taxes per year !!!!!

Your Trusted Financial BrainYour Trusted Financial Brain

- 25 -With the Ministry of Finance as shareholder