HSBC SIP Plus HSBC Mutual Fund A little every month can help fulfil your dreams & cover your health...
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Transcript of HSBC SIP Plus HSBC Mutual Fund A little every month can help fulfil your dreams & cover your health...
HSBC SIP Plus
HSBC Mutual Fund
A little every month can help fulfil your dreams & cover your health
Issued by HSBC Asset Management (India) Private Limited
2
Flow of Presentation
Understanding Inflation
Rupee Cost Averaging
What is Systematic Investment Plan (SIP)?
HSBC SIP PLUS
3
Understanding Inflation
Inflation Rate 5.5% *
Rs. 10,000 today will
be worth …Rs. 7,651
after 5 years…
Rs. 5,854 after
10 years… Rs. 3,427after
20 years… Rs. 2,006after
30 years
Inflation - Your
ENEMY!
* 1 year average of inflation rates (July 2007)
4
Inflation and Fixed Income Investments
Consider the 8% taxable RBI Savings Bonds
Interest rate = 8%
YOU ARE LOSING YOUR
CAPITAL!
Less: [email protected]%*
Less: [email protected]%**i.e. 2.72%
Post-tax & inflationInterest =- 0.22%!
Inflation - Your
ENEMY!
* 1 year average of inflation rates (July 2007)
** Assuming highest tax rate
5
Equity Investing to Build Serious Wealth
6.8
7.2
10.4
11.3
17.9
0 5 10 15 20
Inflation
Gold
Bank FD
G Sec
Equity
Source: CLSA
Cumulative Annualized Returns (1985-2006)
Equities could be the best long term bet
6
Regular Investing
Consider the BSE Sensex
as an investmentoption…
Investment overa 3-year period*
One-time investment 44%
42%
Investment overa 5-year period**
39%
Regularinvesting
41%
Source: MFIE. Past performance may or may not be sustained in the future
* Investing Rs 10,000 each month from Jul 2004 to Jun 2007 and computing market value of investments as on 31 Jul 2007
** Investing Rs 10,000 each month from Jul 2002 to Jun 2007 and computing market value of investments as on 31 Jul 2007
7
Regular Investing
Consider the BSE-200
as an investmentoption…
Investment overa 3-year period*
One-time investment 41%
38%
Investment overa 5-year period**
39%
Regularinvesting
40%
Source: MFIE. Past performance may or may not be sustained in the future
* Investing Rs 10,000 each month from Jul 2004 to Jun 2007 and computing market value of investments as on 31 Jul 2007
** Investing Rs 10,000 each month from Jul 2002 to Jun 2007 and computing market value of investments as on 31 Jul 2007
8
Regular Investing
Consider the BSE-500
as an investmentoption…
Investment overa 3-year period*
One-time investment 43%
39%
Investment overa 5-year period**
41%
Regularinvesting
42%
Source: MFIE. Past performance may or may not be sustained in the future
* Investing Rs 10,000 each month from Jul 2004 to Jun 2007 and computing market value of investments as on 31 Jul 2007
** Investing Rs 10,000 each month from Jul 2002 to Jun 2007 and computing market value of investments as on 31 Jul 2007
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Regular Investing – A MUST
Using the concept of Rupee Cost Averaging…
It may help regular additions to your investment kitty
It helps you average out your investment cost…
10
Rupee Cost Averaging
Regular investing works on the principle of rupee-cost averaging
It means buying more units when the prices are low and fewer units when the prices are high
This helps to average out your purchase price
For example:
Month Amount Invested (Rs.) Purchase Price (Rs.) No. of Units Purchased1 2,000 10 2002 2,000 9 222.223 2,000 10 2004 2,000 11 181.82
Total Investment = Rs. 8,000
No. of units purchased = 804.04
Average cost per unit = Rs. 9.95 < 10
Equity investing is not about timing
the market but time in the market…
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Staying in the Market…
Staying invested for 1-year
periods
InvestingIn
Sensex
62%
InvestingIn
BSE-200
Equity investing is not about timing
the market but time in the market…
InvestingIn
BSE-500
64%
64% The best way to use the advantage of disciplined saving and rupee cost
averaging is through a
Systematic Investment Plan
Percentage of positive rolling periods
Consider 1-year, 3-year and 5-year rolling returns for the Sensex, BSE-200 & BSE-500
Staying invested for 3-year
periods
Staying invested for 5-year
periods
59%
61%
61%
As on 31 July 2007
Source: MFIE. Past performance may or may not be sustained in the future
58%
60%
60%
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What is a Systematic Investment Plan (SIP)?
An Example
Investing Rs 2,000 each month in a mutual fund
The investment is done at the applicable NAV of the mutual fund on the date of investment
fixed amounts
at the prevailing NAV+ +
at regular intervals
A ‘Systematic Investment Plan’ is an investment strategy used in mutual fund investing that allows investments of
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Advantages of SIP
Instills discipline – forced saving
Helps avoid investing large sums in volatile and overheated markets
Forces the investor to commit investments in any market scenario
Allows investments of small amounts
Easy to understand and operate
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Performance of SIP
SIP investing in the BSE SENSEX Assume you had Rs 360,000 to invest & you go for an SIP in the Sensex putting in Rs 10,000 every month from Oct 04 to 25 Sep 07 You would have 38.99 units of the Sensex at the end of 25 Sep 07 Taking the Sensex closing of 16899.54 as on 25 Sep 07, the value of your investment would stand at
Rs. 658960 - Return on investment – approx 43.82%
Source: MFIE. Past performance may or may not be sustained in the future. Note: This is a working example only. Load, if any, has not been considered for calculation. The NAVs of the last working day of each month have been used. If the last working day is a non-business day, the NAV of the next business day is taken.
SIP investing in the BSE 200 Index (Benchmark) Assume you had Rs 360,000 to invest & you go for a SIP in the BSE 200 putting in Rs 10,000 every month from Oct 04 to 25 Sep 07 You would have 307.58 units of the BSE 200 at the end of 25 Sep 07 Taking the BSE 200 closing of 2072.91 as on 25 Sep 07, the value of your investment would stand at
Rs. 637576 - Return on investment – approx 41.19%
SIP investing in the HSBC Equity Fund Assume you had Rs 360,000 to invest & you go for a SIP with HSBC Equity Fund (Growth Plan) putting in Rs 10,000 every month from Oct 04 to
25 Sep 07 You would have 7277.21 units of HSBC Equity Fund at the end of 25 Sep 07 Taking the NAV of Rs 87.23 as on 25 Sep 07, the value of your investment would stand at
Rs. 634791 - Return on investment – approx 40.84%
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Who Wants to be a Millionaire?
No. of Years
Amount (In Rs. Lacs)
No. of Years
Amount (In Rs. Lacs)
No. of Years
Amount (In Rs. Lacs)
1 0.32 11 7.34 21 32.91
2 0.69 12 8.68 22 37.78
3 1.11 13 10.19 23 43.31
4 1.58 14 11.92 24 49.62
5 2.12 15 13.89 25 56.79
6 2.73 16 16.13 26 64.95
7 3.43 17 18.68 27 74.23
8 4.23 18 21.58 28 84.80
9 5.14 19 24.88 29 96.83
10 6.17 20 28.64 30
Let’s say you invest Rs. 2500 per month… how will your money grow?
Assuming 13% CAGR and that investments are made at the beginning of each month. All figures cited in the illustration are notional
110.52
1
CRORE!!!
16
Presenting HSBC SIP Plus
A little every month can help fulfil your dreams &
cover your health
Presenting HSBC SIP Plus with
FREE Critical Illness Cover
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Investor Benefits
Free critical illness cover
Accidental death cover
Accidental permanent total disability cover
No medical tests required
Cover available on diagnosis on the specified critical illness*
No additional application i.e., initial documentation required
*Requires survival period of 1 month post first diagnosis
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Why is this important?
The chances of contracting any of the critical illnesses with our current lifestyle is High
The cost of treatment and medical facility is very expensive
Critical Illness will impact our Earning capacity and eat our savings and investments
planned in advance for the future
Critical Illness Cover, protects you with a safety net against financial loss
Source: ICICI Lombard General Insurance
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Scope of Cover*
Critical Illness Cover
– Cancer
– End Stage Renal Failure
– Major Organ Transplant
– Stroke
– Heart Valve Replacement
– Bypass surgery
Additional Cover
– Accidental death
– Accidental permanent total disability
*As designed by ICICI Lombard (IL). For complete details refer addendum to the respective Offer Document
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Product features/coverage
Who is covered?
– Age completed as on last birthday is 20yrs to 50 yrs
Sum insured– SIP amount x Total tenure in months
– Example: if an investors takes a monthly SIP of Rs. 15,000 for 60 months, the sum insured is Rs.9,00,000
– Minimum HSBC SIP Plus amount of Rs.2000* monthly for minimum period of 36 months
– Maximum cover of Rs.10 lakhs irrespective of multiple SIPs. Not available to NRI’s
Period of the critical illness cover– Insurance tenure = SIP tenure
– Available in multiples of 1 yr
– Subject to a maximum tenure of 5 yrs
*Investments of lower amounts can be made through our regular HSBC SIP
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SIP Plus available on the following Schemes
HSBC Equity Fund
HSBC India Opportunities Fund
HSBC Midcap Equity Fund*
HSBC Advantage India Fund
HSBC Dynamic Fund
HSBC Tax Saver Equity Fund
*The Trustees/AMC reserve the right to temporarily suspend subscriptions, switches into the Scheme, if the assets under management of the Scheme exceeds Rs 700 Crores. Please read Offer Document for more details.
All STP’s into the above mentioned Schemes that meet the minimum criteria are also eligible for the
cover
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Customer’s nominee to intimate ICICI Lombard Call center in case of any claim. For policy details or for lodging a claim, please
visit the website www.icicilombard.com
ICICI Lombard (IL) intimates the claimant about the documents requirement
IL collects the documents as mentioned from the customer
In case of incomplete forms, ICICI Lombard writes back to Customer asking for the pending documents
ICICI Lombard’s Customer service department to decide the admissibility of any claim after receiving the documents and
investigation report, if applicable
On admissibility, the payment will be made. The payment will be made within 7 days of receipt of all complete documents
In case, the documents are not received form the customer within 3 months of intimation the claim would be closed. However
before closing the claim ICICI Lombard would send a letter to customer that the claim is closed because of non-receipt of
documents
The loss should be reported in writing to the insurance company/call center within 90 days of happening of the event
Any claim due to violation of law or misrepresentation, concealing of facts would not be eligible for any payment
The communication contains only some illustrative elements of the policy. In case of any queries on terms and conditions,
kindly get in touch with ICICI Lombard Call centre
Claims process
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Documents Required for Claims
Accidental death cover– Claim Form – Death Certificate, FIR and Police Report– Doctor’s report and/ or Post-mortem report– No objection and indemnity letter
Accidental permanent total disability cover– Claim Form – FIR and Police Report – Doctor’s disability Report– Investigation reports such as laboratory tests, X-rays & reports essential for confirmation of
injury
Critical illness cover – Claim Form– Doctor’s certificate confirming the nature and medical details of the illness– Other relevant medical reports– Any other document as may be required
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Product Exclusions
Critical illness cover
– Any of the critical illnesses diagnosed within the first 3 months of the inception of the policy
– Pre-existing illness
– Requires survival period of 1 month post first diagnosis
Accidental death cover
– Caused by mental disorder or psychosomatic dysfunction
Accidental permanent total disability cover
– Will not cover any injury, sickness or disease for which medical care, treatment, or advice was
recommended by or received from a Doctor or from which the Insured Person suffered or
which was present before the commencement of the Period of Insurance
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Expiry of the policy
The policy expires on occurrence of any of the following
– Completion of the mandated HSBC SIP Plus tenure
– Stoppage of SIP midway
– Default of SIP installments – 2 subsequent SIPs or 4 defaults totally at different times
– Payment of personal accident or disability or critical illness claims
In case of fraud, misrepresentation, etc.
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Disclaimer
All returns have been sourced from MutualFundsIndia Explorer software unless otherwise stated. With regard to equity schemes (including the equity component of MIPs), Fund performance is calculated on a total return basis (i.e. it includes dividends re-invested) while the benchmark is calculated on a price return basis (i.e. it does not consider dividends re-invested).
This document has been prepared by HSBC Asset Management (India) Private Limited (HSBC) for information purposes only and should not be construed as an offer or solicitation of an offer for purchase of any of the funds of HSBC Mutual Fund. All information contained in this document (including that sourced from third parties), is obtained from sources HSBC, the third party believes to be reliable but which it has not independently verified and HSBC, the third party makes no guarantee, representation or warranty and accepts no responsibility or liability as to the accuracy or completeness of such information. The information and opinions contained within the document are based upon publicly available information and rates of taxation applicable at the time of publication, which are subject to change from time to time. Expressions of opinion are those of HSBC only and are subject to change without notice. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies that may have been discussed or recommended in this report and should understand that the views regarding future prospects may or may not be realized. Neither this document nor the units of HSBC Mutual Fund have been registered in any jurisdiction. The distribution of this document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions. Mutual fund investments are subject to market risks. Please read the offer documents carefully before investing.
© Copyright. HSBC Asset Management (India) Private Limited 2007, ALL RIGHTS RESERVED.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Asset Management (India) Private Limited.
HSBC Asset Management (India) Private Limited; 314, D. N. Road, Fort, Mumbai 400 001. Tel: 6614 8819.
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Risk Factors
Investors may obtain Offer Documents and Key Information Memorandums along with application forms from the office of HSBC Mutual Fund, 314 D. N. Road, Fort, Mumbai 400 001. Tel: 022-6666 8819.
Statutory Details: HSBC Mutual Fund has been set up as a trust by HSBC Securities and Capital Markets (India) Private Limited (liability restricted to the corpus of Rs 1 lakh). The Sponsor / associates of the Sponsor/ Asset Management Company (AMC) are not responsible or liable for any loss or shortfall resulting from the operation of the Schemes. The Trustees of HSBC Mutual Fund have appointed HSBC Asset Management (India) Private Limited as the Investment Manager.
Risk Factors: All investments in mutual funds and securities are subject to market risks and the Net Asset Value (NAV) of the Scheme(s) may go up or down depending on the factors and forces affecting the securities markets. There can be no assurance that the objectives of the Scheme(s) will be achieved. Past performance of the Sponsor, AMC, Mutual Fund or any associates of the Sponsor/AMC does not indicate the future performance of the Scheme(s) of the Mutual Fund. HSBC Equity Fund (HEF) - an open-ended diversified equity Scheme, HSBC India Opportunities Fund (HIOF) - an open-ended flexi-cap equity Scheme, HSBC Midcap Equity Fund (HMEF) - an open-ended diversified equity Scheme, HSBC Advantage India Fund (HAIF) - an open-ended flexi-theme equity Scheme, HSBC Tax Saver Equity Fund (HTSF) - an open ended Equity Linked Savings Scheme & HSBC Dynamic Fund (HDF) - an open-ended Scheme are the names of the Schemes and do not in any manner indicate the quality of the Schemes or their future prospects or returns.
Terms of Issue: Units of the Scheme(s) are being offered at NAV based prices, subject to prevailing loads. The AMC calculates and publishes NAVs and offers for sale, redemption and switch outs, units of the Scheme(s) on all Business Days, at the Applicable NAV.
Load Structure (includes HSBC SIP Plus/STP): HEF, HIOF, HMEF, HAIF – Entry – 2.25% for investments/switch ins* < Rs 5 crores, otherwise Nil. Exit – 1% for investments < Rs 5 crores, if redeemed/switched out* within 2 years from date of investment, otherwise Nil. HTSF: Entry - 2.25% for investments / switch ins* < Rs 1 crore, otherwise Nil. Exit – Nil. In case of HDF - Entry - 2.50% for investments/ switch in* below Rs 5 crores, otherwise Nil. Exit - 1% for investment below Rs. 5 crores, if redeemed/ switched out* within 2 years from the date of investment, otherwise Nil. *No load in case of switches between equity Schemes of HSBC Mutual Fund. No load in case of investments by Fund-of-Funds, FIIs & their sub-accounts (except HDF). The entry / exit load set forth above is subject to change at the discretion of the AMC and such changes shall be implemented prospectively. For the detailed terms and conditions pertaining to HSBC SIP Plus, particularly, termination of cover, disbursement of insurance claims and how to make insurance claims, please read the addenda to the Offer Document of Eligible Schemes for HSBC SIP Plus. Prior to making investments, investors are requested to carefully read these addenda.
Mutual Fund investments are subject to market risk. Please read the Offer Document carefully before investing.