Prudent Corporate Advisory Services Limited · NSE:PRUDENT
Prudent Corporate Advisory Services — Reliance Mutual Fund — Investor Presentation (February 2011)
52 slides from Prudent Corporate Advisory Services's investor presentation, February 2011
Slide 1: Reliance Mutual Fund presents An Open Ended Fund of Fund Scheme
Reliance Mutual Fund presents An Open Ended Fund of Fund Scheme First gold fund of fund in India Confidential Slide
Slide 2: India's First Fund with SIP in gold
India’s First Fund with SIP in gold NFO Opening Date : 14 February,2011 NFO Closing Date : 28 February,2011 Confidential Slide 2
Slide 3: Index
I d Index Index Where do Indians invest? A journey through India’s fascination for Gold Why do we love gold so much? – It has fundamental strength Why Buy Gold now? Problems with investing in gold in India Introducing g Reliance Gold Savings g Fund Takeaways
Slide 4: Where do Indians invest?
Where do Indians invest?
Slide 5: Where do people save their money?
Wh Where d l save th do people i money? their ? Real Estate,, 5 Chit fund/NBFC, fund/NBFC 9.4 94 Equity market, 1.1 Gold, 5.8 Mutual Fund, 1.2 Life insurance, 32.8 Banks,, 44.9 Postal Savings, 11.6 Nearlyy 5 times more household savings g is invested in Gold than in Equities or Mutual Funds Source
Slide 6: Cross market portfolio composition
C Cross market k t portfolio tf li composition iti Mutual Fund Gold Banks 2.6 8.0 Post 2.9 11.7 Life insurance 3.3 9.3 M t l Fund Mutual F d 100 21.6 21 6 Equity market 32.1 24.2 Real Estate 3.4 12.2 Informal sector 07 0.7 88 8.8 Gold 4.4 100 Market p penetration in Gold is less byy Capital p mark
Slide 7: A journey through India's fascination for Gold
A jjourneyy through g India’s fascination for Gold
Slide 8: Indians Passion for Gold starts before birth
Indians Passion for Gold starts before birth – It is an integral part of our Culture Gold is ancestral and passed down from generation to generation Most of the Gold collection generally begins in an Indian family from the "Godbharai" ceremony itself, to getting bracelet & anklet of black & whit
Slide 9: Significance of Jewellery in the Life of Women in India
Si ifi Significance off Jewellery J ll i the in th Life Lif off Women W i India in I di Gold possession is embedded in the customs and the traditions that carry significant importance to women Ornaments such as mangalsutra, Ornaments, mangalsutra nath (nose ring) and toe rings, quintessential fo
Slide 10: Gold has Traditional Values
G ld has Gold h Traditional T diti l Values V l It is believed that buying & wearing new gold jewellery on Akshaya Tritiya Gudi Padwa & Dhanteras, brings prosperity & success to an individual & his family The festival redefines Gold in all its facets from jewellery adornment to portfolio diversi
Slide 11: India's Gold Offering to God
I di ’ Gold India’s G ld Offering Off i to t God G d Tirumala is the richest religious shrine in the world The Golden Temple with an annual revenue of Rs.1,200 crore and gold main dome is gilded reserves of almost 250kg that with 100 kg of pure are made up of small gold ornaments thrown in the Sourc
Slide 12: Commercial Usage of Gold
C Commercial i l Usage U off Gold G ld The undying fascination towards the yellow metal is evident in its use currently for making watches, medals, shoes, cufflinks, tie pins, pens cars, saries, buttons and so on Collectingg watches is one of the most costly hobbies in the world but very interes
Slide 13: Gold is stored all over the world
G ld is Gold i stored t d allll over the th world… ld Gold was not selected arbitrarily by Coins, Bars, Jewellery governments to be the monetary standard Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary
Slide 14: Gold has Edible and Medicinal Values
G ld has Gold h Edible Edibl and d Medicinal M di i l Values V l Ayurveda gifted us Suvarnaprashan to improve immunity of Child. Child ‘Suvarna’ Suvarna means ‘Gold’ & ‘Prashan’ means ‘to lick’ Lasers incorporating gold coatings are makingg dramatic progress g in the treatment of cancers, sealin
Slide 15: Gold is more than an Asset – It's a Standard
G ld is Gold i more than th an Asset A t – It’s It’ a Standard St d d Great achievements are often rewarded with gold – Olympic Gold Best periods of Prosperity of Civilizations around the world are referred to as Golden Age Best among equals gets Gold – Golden Bat for best batsman, Golden Ball
Slide 16: Why do we love gold so much? It has fundamental strength
Why y do we love g gold so much? – It has fundamental strength
Slide 17: Gold - A Parallel Economy in India
G ld - A Parallel Gold P ll l Economy E i India in I di India runs a parallel Gold economy (gold economy vs. real economy) • India’s gold holdings accounts for 11% of • India’s GDP accounts for 2.1%^ of global above-ground b d stock t k off gold ld in i the th World W ld GDP ini nominal i l dollars
Slide 18: Gold - A Parallel Economy in India
G ld - A Parallel Gold P ll l Economy E i India in I di Indian household’s fetish for gold is: S Structural:- Average Annual 10 year growth rates in India (2000-2009)(%) Considered a symbol of security and sign 20.00% of prosperity 15.00% Recognized as a form of a tradable liquid asset 10.00%
Slide 19: Asset Allocation
Asset Allocation Asset Allocation Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 22.16% 8.90% 17.51% 12.76% 1.94% 21.23% 18.02% 41.77% 13.94% 6.87% 3.79% 7.86% 20.99% 0 99% 1.71% % 17.39% 39% 11.86% 86% 1.77% % 19.47% 9 % 17.72% % 29.00% 9 00% 1.80% 80% 1.77% % 2
Slide 20: Diversification
Di Diversification ifi ti Gold is an ideal portfolio diversifier 5 Year weekly return correlation on key asset classes and gold Gold has very low/negative -0.435 DOLLAR INDEX -0.179 YEN correlation with other asset class -0.035 DJIA 0.002 S&P 500 offering diversification benefit 0.172 BSE 500 to
Slide 21: Gold: Hedge against Inflation
G ld Hedge Gold: H d against i t Inflation I fl ti Keeps purchasing power intact 350 300 Gold over centuries has 250 200 maintained its value against 150 inflation 100 50 It preserves the purchasing power 0 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Aug
Slide 22: Gold: A less Volatile Asset
G ld A less Gold: l V l til Asset Volatile A t 40% Over 1, 1 3 and 5 year period Gold 30% has been less volatile than all 20% major equity indices 10% Gold is less volatile than equity as an asset class and 0% Gold Sensex BSE 500 BSE 200 BSE 100 1 year 3 year 5 year thereby helps to stabilize So
Slide 23: Gold - A decade of sparkling glitter
Gold - A decade of sparkling glitter Gold continues to breach its high (YOY) since 2001 till date 1600 1431.25 The graph shows the 1400 1226.56 open, close high and low for a ten 1200 1032.7 year period. i d The Th figure fi i the in th 1000 845.84 730.4 graph indicates the high level of 800 600
Slide 24: Performance
Performance Gold - an “asset class apart” proven as a pure performer 35.00 Gold has been a 30.00 29.52 % consistent performer and 25.00 has given over 17% return 18.29 % 17.41 % 20.00 17.68% 17.04 % across time period for the 15.00 given time period 10.00 Past Performance may or may not be susta
Slide 25: Gold – A safe haven asset
Gold – A safe haven asset Event Period Gold Returns(%) Equity Returns (%) Subprime Mortgage Crisis October 2007-March 2009 15.74 -59.07* Dotcom Bubble/September 11,2001 March 2000 - October , 2002 14.18 -51.43* terrorist attack Asian financial crisis July 1997- 1997 September, 1998 -15.79 15.79 -59.
Slide 26: Why buy gold now?
RELIANCE PRELUANCE y
Slide 27: Fundamental Drivers
Fundamental Drivers Global Gold Holdings Total Gold mined till date is valued at Value @ 1421$/Oz around USD 7.2 trillion Particulars Tones % bn USD Gold consumed in jewellry and industry Jewellery 83700 51% 3,823 rarely flow into investment market (~63%) Industrial 19800 12% 904 Official Se
Slide 28: Gold Imports in India: Surprise on the Upside
Gold Imports in India: Surprise on the Upside 25000 160 Tons (RHS) Price (Rs/10 grams) 140 20000 120 15000 100 80 10000 60 40 5000 20 0 0 Jan-06 Sep-06 Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Mar-06 Jul-06 Mar-07 Jul-07 Mar-08 Jul-08 Mar-09 Jul-09 M
Slide 29: Gold View
Gold View Strong investment demand in major consumption nations - India and China ¾ Per capital consumption of gold in India and China is much lower than developed nations ¾ Rising purchasing power of middle class in India and China may lead to higher gold demand Fundamental weakness in US dolla
Slide 30: Gold View
G ld View Gold Vi Sovereign debt concerns ¾ Risingg debt levels in western economies increases the risk of sovereign g defaults, increase risk aversion and benefits gold Central banks buying spur ¾ Countries with highest forex reserves have less than 2% of their reserves in gold as compared to m
Slide 31: Risks factors impacting gold rally
Risks F t to impacting Factors igold rally ti gold ld rally ll Recycled gold coming to market at higher price levels may limit upside Quick and strong US recovery High interest rates Lower inflation Optimistic expectation of global growth New technology
Slide 32: Problems with investing in gold in India
Problems with investing in gold in India
Slide 33: Purity and Quality
1 Purity and Quality 1. The average purity of the gold sold in the market is 19.43 karat as opposed to 22 karat claimed by most jewellers. Source: TimesofIndia, June 20 , 2006, March 21, 2008. The Telegraph
Slide 34: Storage and Safety
2. Storage and Safety Source: TimesofIndia, Dec 13, 2008
Slide 35: Trust and faith on Jeweller
3 Trust and faith on Jeweller 3. Source: paperarticles.com/2009, 30 Jan , 2009. TimesofIndia, Aug 30 2008
Slide 36: Demat required for gold investment in secure form
4 Demat required for gold investment in secure form 4. As on October 2010 there are only 1.8 crore demat accounts. accounts It is estimated that only 40% are active Gold in one of its purest form is sold in paper form – Gold ETFs which require demat account Total size of the Gold ETF industry
Slide 37: Gold Devaluation Cycle
G ld Devaluation Gold D l ti Cycle C l Buy Gold Coins from Jewellers/ Gold coins re- Redesigning of Banks Sale of Jewellery molded to J Jewellery ll due d tot ( 10 Gms Gold due to monetary Jewellery fashion changes Price+ Vat+ needs Making Charges) At every y stage g cycle y yyou incur a cost for
Slide 38: Introducing Reliance Gold Savings Fund
Introducing Reliance Gold Savings Fund First gold fund of fund in India
Slide 39: Positioning of the Fund
P iti i off the Positioning th Fund F d Introducing the first fund of fund in India which enables you to reap the returns of gold as an asset class in a paper form without the need of a demat account This fund would facilitate you to accumulate gold returns from a long term perspective through l
Slide 40: Benefits of Reliance Gold Savings Fund
Benefits of Reliance Gold Savings Fund • Subsc p o a Subscription d redemption and ede p o a a ab e through available oug Open Door for Non physical mode Demat a/c holders • No need to open demat account • The fund has add on facilities like Systematic Systematic Transfer Plan/ Systematic Withdrawal
Slide 41: SIP in Gold - Systematic Investing
SIP in i Gold- G ldInvesting Systematic A edge An d tot wealth lth creation ti SIP Return as on Dec 30, 2010 84 Period 1 Year 3 Year 5 Year 10 Years modern t l in tola i 10 SIP Start Date 04/01/2010 02/01/2008 03/01/2006 02/01/2001 years Gold Price (Rs/Gm) (As on 30/12/2010) 2031.42 2031.42 2031.42
Slide 42: Product Features
Product Features Investment Objective : The investment objective of the Scheme is to seek to provide returns that closelyy correspond p to returns p provided byy Reliance Gold Exchange g Traded Fund Benchmark: The Scheme’s performance will be benchmarked against the price of physical gold. Fun
Slide 43: Product Features: Asset Allocation Pattern
P d Allocation Product Asset t Features F t Pattern Asset Allocation I t Instruments t IIndicative di ti assett allocation ll ti Ri k Profile Risk P fil (% of total assets) Minimum Maximum Units of Reliance Gold Exchange g Traded 95 100 Medium to High Fund Reverse repo and /or CBLO and/or short- 0
Slide 44: Product Features
P d t Features Product F t Mi i Minimum A li ti Application A Amount: t Rs. R 5,000 5 000 and d in i multiples lti l off Re. R 1 thereafter th ft Additional Purchase Amount : Rs 1000 (plus in the multiple of Re.1) Minimum Purchase Amount through SIP: ¾ Rs.100/- per month and in multiples of Re
Slide 45: Taxation Benefits
T Taxation ti Benefits Taxation Reliance Gold Type of Taxation Gold ETF Jewellers Banks Savings Fund Wealth Tax Nil Nil Applicable Applicable Short T Sh Term Capital C i l Applicable A li bl b before f 1 Applicable A li bl b before f A li bl b Applicable before f 3 Applicable A li bl b before f gain
Slide 46: Summary
Summary Reliance Gold Savings Fund provides an easy and a convenient way for at least 10% allocation as Portfolio Diversification It endeavors to inculcate a regular savings habit to accumulate gold in small amounts through MICRO Systematic Investment Plan and Systematic Investment Plan Opens
Slide 47: For all the Gold Lovers in India
For all the Gold Lovers in India Reliance Gold Savings Fund Benefits Wahi, Tension Nahi
Slide 48: Disclaimer
Di l i Disclaimer The views expressed herein constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. This information is meant for general reading purposes only and is not meant to serve as a professional guide for t
Slide 49: Disclaimer
Di l i Disclaimer None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way fr
Slide 50: Disclaimer
Disclaimer Terms of issue and mode of sale and redemption of units: The units are available at Rs. 10/- per unit during NFO & thereafter at applicable NAV based prices. The Scheme will offer for Subscription/ Switch-in and Redemption / Switch Switch-out out of Units on every Business Day on an ong
Slide 51: Disclaimer
Disclaimer Disclaim Statutory Details: Reliance Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882. Sponsor: Reliance Capital Limited. Trustee: Reliance Capital Trustee Company Limited. Investment Manager: Reliance Capital Asset Management
Slide 52: Thank you
RELIANCE Thank you SAVINGS FUI
Reliance Mutual Fund — Investor Presentation (February 2011) on 6ix