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Edelweiss Asset Management Limited

Edelweiss Diversified Growth Equity Top 100 Fund Presentation

Internal Circulation Only

Equities – Asset Class Selection Process

Equities as an asset class

Source: Edelweiss Research, CMIE Prowess

Return of Various Asset Classes

Gold FDs Equities

1997 -49% 11% 20%

1998 -14% 12% -18%

1999 -1% 12% 67%

2000 -33% 11% -15%

2001 34% 10% -16%

2002 55% 10% 3%

2003 45% 8% 72%

2004 -4% 6% 11%

2005 38% 6% 36%

2006 23% 6% 40%

2007 19% 7% 55%

2008 -24% 9% -52%

2009 48% 9% 76%

Investors have access to several choices, which one is best suited for me?

Evaluate each investment on the basis of

1. Returns

2. Volatility

3. Investment Horizon

4. Liquidity

5. Cost – Management and Transaction

6. Ease of transacting

7. Tax efficiency

8. Monitoring and Performance checks

Increasing opportunities with increasing complexities.

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In the highlighted years, equities beat both competing classes

Rs 100 invested in 3 popular choices – Gold, Bonds & Equities

INR 100 invested in equities in Jan 1996 would have grown to INR 578 in equities in Dec 2009, compared to INR 194 in gold and INR 299 in bonds.

Source: Edelweiss Research, CMIE Prowess

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Equities - Rs 578

Bonds – Rs 299

Gold – Rs 194

Initial Rs 100

Equities: One of India’s Best Asset Classes

Superior return

Convenient transactions

Tax benefits

Ease of ownership

Importance of Investment

Horizon

Diminishing Probability of

Negative Return

Equities: One of India’s Best Asset Classes

Most of our mutual fund investments are for our long term needs.

Equities outperform other asset classes such as FDs

and gold.

Most Mutual Funds require just a simple one page form with basic KYC details.

Capital gains tax, which is applicable for mutual funds, may be less than the tax

applicable for other investments.

Mutual Funds are a simple and easy way to achieve

equity exposure.

The longer you stay invested the higher the chances of

making money

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Equities investments: Time in the market v/s timing the market

The facts which emerge:

You tend to be in the money the longer you stay invested

Equities frequently outperform other asset classes in both – short and long term

Over the long term there is higher predictability of returns

1Percent of periods that have negative return, daily rolling from Jan 1990 to Jan 2010; Source: Edelweiss Research, CMIE Prowess

BSE Sensex: Negative Periods

Rolling Time Period

One Year

Five Years

Ten Years

Fifteen Years

36% 14% 3% 0%

Period of the study: January 1990 to January 2010

Key Takeaways:

1. If one stays invested for any one year period from 1990 to 2010, there would be a 64/100 chance of a making money.

2. In 5 years that number rises to 86/100

3. Also, the consistency of returns grows with the investment horizon

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Why Edelweiss Mutual Fund?

Why Edelweiss Mutual Fund?

Strong Parentage – Built on Edelweiss Equities Franchise

A house focused on continuous innovation

Commitment to Consistent Investment Management Performance

Robust risk management systems – House and AMC level

Team and state of the art systems dedicated to investor/distributor service

ISC Presence across locations resulting in better distributor & customer service

People and Processes dedicated to customer delight

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The Process is the Edge

Edelweiss Process

Sector- Focused

Growth-Oriented

Process-Based

Diversified

Sectoral focus is key differentiator from most other funds which focus on bottom up stock picking only

Sector Focus

Focus on real and implied growth in stock valuations. Select stocks that score well along both parameters

Growth-Oriented

Rigorous process driven investment approach and diversified portfolio construction provide consistency

Diversified

No star dependency; systems are an output of organisational processes

Clear focus on testing and research rather than intuition and gut-feel

Process-Based

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Edelweiss E.D.G.E Top 100 Fund Fund Summary

EDGE Top 100 has beaten the Nifty consistently

Scheme Name 1 Month 3 Months 6 Months ITD* Nifty ITD Outperformance (ITD)

Inception Date

EDGE Top 100 2.5% 12.34% 17.4% 35.8% 28.1% 12.5% 20-May-09

EDGE Top 100 has outperformed Nifty in 13 of the past 18 months

* ITD Values are Compounded Annual Growth Rate since the Scheme has been operational for more than a year

Data as on October 29, 2010, Source: MFI explorer

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155.5

142.9

90

100

110

120

130

140

150

160

170

May- 09 J ul- 09 Sep- 09 Nov- 09 J an- 10 Mar- 10 May- 10 J ul- 10 Sep- 10

EDGE Top 100 Nifty

Summary - What makes E.D.G.E. unique?

Universe Watch list Portfolio

Differentiated Stock Selection of the Universe, filters at each level to ensure quality of portfolio construction

Filter stocks based on criteria on Market cap.

Top 200 by M Cap

Watch list created on the basis of performance

attributes such as growth, value, sector theme

Construction: Selected from the watch list on the

basis of consistency and relative ranking

Portfolio Monitoring and Risk Management:Sector and stock specific limits, Market cap based allocations, Portfolio

liquidity considerations

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The Edelweiss E.D.G.E Top 100 Fund

Universe of the Top 200 stocks by market cap

Conviction based on Size, Diversification of business, past performance

Liquidity – minimum traded volume (Top 1-200 Market cap companies)

Basis for Selection of Universe

Basis for Selection of Watch-List

Fundamental Factors Technical Factors

Stock picking from companies in the selected watch-list by applying a proprietary Sectoral Framework

Disciplined Price-Level Management and Portfolio Monitoring

Growth Factors Value Factors Price Performance Factors

Implied Growth Expectations

E.D.G.E – Your window to the Top 200 companies in India

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Large Cap Universe – Top 200

Investment Universe is the Top 200 by Market cap

The Fund would identify companies for investment, based on the following criteria:

Good track record of the company

Potential for future growth

Industry economic scenario

Benefits of investing in Large Cap Companies Lower volatility than the broader market

Better access to credit and cash reserves increases predictability for future performance

Businesses spread across various International and Domestic Markets

Nifty

Large cap companies are resilient in tough market conditions and provide significant upside potential in favorable market cycles

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Edelweiss Diversified Growth Equity (E.D.G.E.) Top 100 Fund

Fund Positioning

Top 200 by Market cap dedicated universe of stocks

80% of AUM invested in Top 100 companies with relatively lower volatility than the broader market

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Nifty

Fund

The aim being consistent out performance with lower volatility.

Alpha Generation based on Edelweiss in house stock and sector selection model – winning stocks from winning sectors

Active portfolio monitoring and risk management to aim for lower than market drawdowns

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Disclaimers

Risk Factors: All Mutual Fund and securities investments are subject to market risk and there can be no assurance that the scheme’s objectives will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Sponsor and their Affiliates/AMC/Mutual Fund & its Scheme(s) does not indicate the future performance of the Scheme and may not necessarily provide a basis of comparison with other investments. Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal. 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. The sponsor is not responsible or liable for any loss resulting from the operation of the scheme beyond the initial contribution of Rs. 1,00,000/- made by it towards setting up Edelweiss Mutual Fund. Investors are not being offered any guaranteed / assured returns under any scheme of Edelweiss Mutual Fund.

Statutory Details: Edelweiss Mutual Fund is set up as a Trust under the Indian Trust Act, 1882 by Edelweiss Capital Limited. Sponsor: Edelweiss Capital Limited (ECL) [liability restricted to initial contribution of Rs. 1 Lac]. Trustee: Edelweiss Trusteeship Company Limited (ETCL), a Company registered under the Companies Act, 1956. Investment Manager: Edelweiss Asset Management Limited (EAML), a Company registered under the Companies Act, 1956. Copy of the Statement of Additional Information (SAI) / Scheme Information Document (SID) and the Key Information Memorandum (KIM) can be obtained from any of our Investor Services Centers as well as from our website www.edelweissmf.com

Mutual Fund Investments are subject to market risks.

Please read SAI & respective SID carefully before investing.

This document is for internal circulation only16

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