Prudent Corporate Advisory Services Limited · NSE:PRUDENT
Prudent Corporate Advisory Services — Tata Mutual Fund — Investor Presentation (October 2011)
60 slides from Prudent Corporate Advisory Services's investor presentation, October 2011
Slide 1: Tata Retirement Savings Fund
<p TATA TATA RETIREMENT SAVINGS (An open-ended fund comprising three plans) FUND TATA MUTUAL FUND
Slide 2: 2
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Slide 3: A Look at Retirement in Two Different Decades
A LOOK AT RETIREMENT IN TWO DIFFERENT DECADES Retiring in 1980’s Retiring in 2011’s Higher interest on Bank Deposits Bank Interest rates are market linked and volatile Existence of Joint Family System Nuclear Family set-up ( 3 out of 5 households in India are nuclear )* Lower aspirations i
Slide 4: Why Retirement Planning?
«ip TATA WHY RETIREMENT PLANNING? TATA MUTUAL FUND
Slide 5: Retirement Planning a Necessity
RETIREMENT PLANNING A NECESSITY Inflation Increased Medicare exigencies Life expectancy on the rise 5
Slide 6: Inflation – The Silent Killer
INFLATION – THE SILENT KILLER Inflation 6
Slide 7: Their Price Today
THEIR PRICE TODAY Rs 69 Rs 425 Rs 100 Rs 10 lacs per year 7
Slide 8: How Much Do You Think It May Cost After 30 Yrs?
HOW MUCH DO YOU THINK IT MAY COST AFTER 30 YRS? Rs 525 Rs 3235 Rs 76 lacs per year Rs 760 8 Assuming inflation @7p.a
Slide 9: Inflation – Impact on Your Expenses
INFLATION – IMPACT ON YOUR EXPENSES Inflation keeps increasing your monthly expenses 190,306 135,686 96,742 68,976 49,179 35,064 25,000 Today 5 10 15 20 25 30 9 Inflation assumed @ 7% p.a.
Slide 10: Medical Exigencies – Are You Prepared?
Ko TATA @ MUTUAL TATA FUND /RAEDICAL EXIGENCIES /ARE YOU PREPARED?
Slide 11: Health Cost
HEALTH COST Medical cost rising year on year basis at more than 10% for last four years 78% of total health expenditure in India is Privately funded by patients In 2004 around 30% in rural and 20% in urban India didn’t go for any treatment purely for financial reasons Around 47% of hospital
Slide 12: How Long Do You Think We Will Live?
Ko TATA @ MUTUAL T. ‘ATA FUND | HOW LONG / DO YOU THINK | WE WILL LIVE? 12
Slide 13: Life Expectancy Since Birth – North America
LIFE EXPECTANCY SINCE BIRTH – NORTH AMERICA 70.96 years 81.37 years 78.37 years 76.47 years 13 CIA world fact-book as on 1.1.2011
Slide 14: Life Expectancy Since Birth – Asia
LIFE EXPECTANCY SINCE BIRTH – ASIA 66.29 years 68.51 years 82.25 years 70.06 years 66.00 years 74.68 years 66.80 years 75.73 years 82.14 years 71.33 years 14 CIA world fact-book as on 1.1.2011
Slide 15: Projected Life Expectancy in India
PROJECTED LIFE EXPECTANCY IN INDIA LIFE EXPECTANCY - YEARS 84.00 82.00 82.00 80.70 80.00 79.20 78.00 77.40 76.00 75.20 74.00 72.70 72.00 70.00 69.70 68.00 66.00 64.00 62.00 2021-26 2031-36 2041-46 2051-56 2061-66 2071-76 2081-86 15 Source – prb.org
Slide 16: The Rise in the Old Age Population
THE RISE IN THE OLD AGE POPULATION In millions Age Group 2000 2015 2025 2030 2035 2040 2050 0–14 years 347 345 337 327 313 300 285 % 34.14% 27.68% 24.63% 23.08% 21.53% 20.2% 18.6% 15–59 years 593 782 865 895 919 937 938 % 58.31% 62.76% 63.15% 63.16% 63.17% 63.1% 61.26% => 60 years 77 119 167 195 223
Slide 17: The Rise of Elderly Population - Impact
THE RISE OF ELDERLY POPULATION - IMPACT 17
Slide 18: Are You Ready for the 30-30 Challenge?
Are you ready for the “30-30” Challenge? 18
Slide 19: Are You Ready for 30-30 Challenge?
ARE YOU READY FOR 30-30 CHALLENGE? 30 yrs of working life 30 yrs of retired life 19
Slide 20: Old Age Poverty – Be Careful
OLD AGE POVERTY – BE CAREFUL Successfully prepare for Retirement Failure to prepare for Retirement 20
Slide 21: Shortcomings of Indian Social Security
SHORT COMINGS OF INDIAN SOCIAL SECURITY Inflation Expensive Medicare facility Increasing Life Expectancy Absence of Social Security systems Retirement funds are invested in fixed income securities.
Slide 22: How Can I Plan for Retirement?
Ko TATA @ MUTUAL T. ‘ATA FUND | HOW CAN I PLAN FOR EY RETIREMENT / / / / / 22
Slide 23: Retirement Planning Mantras
Ko TATA @ MUTUAL T. ‘ATA FUND / RETIRERENT | PLANNING MANTRAS | t 23
Slide 24: Mantra: Invest and Invest for Long Term
Ko TATA @ MUTUAL T. ‘ATA FUND / MANTRA 1 / INVEST AND / INIVEST FOR LONG TER™ 24
Slide 25: Example of Long Term Investment Benefits – Lumpsum
EXAMPLE OF LONG TERM INVESTMENTS BENEFITS – LUMPSUM INVESTMENTS An analysis of 1,3,5 and 10yrs daily rolling returns for the period Jan 2000 till 31th Aug 2011 As the investment holding As the investment period increases to 5 yrs horizon increases the As investment horizon there were no instance of
Slide 26: Proof of Long Term Investing Benefits - Lumpsum
PROOF OF LONG TERM INVESTING BENEFITS - LUMPSUM Analysis of daily rolling returns on 1, 3 , 5 and 10 yrs basis since Jan 2000 till 31th Aug 2011 threw below given results: Time Periods 1yr 3yr 5yr 10yr Average returns 19.55% 19.33% 22.84% 15.89% No of times negative returns 820 291 0 0 Total no. of
Slide 27: Some of the Highlights of Last Decade
SOME OF THE HIGHLIGHTS OF LAST DECADE Equity market gave positive returns in last one decade This despite the all the below negative events happening in the last one decade: Year 2000 – Tech bubble bursting Year 2001 – 9/11 in U.S Year 2004 – General Elections and unexpected defeat of BJP
Slide 28: Mantra: Start Early
Ko TATA @ MUTUAL T. ‘ATA FUND | MANTRA 2 [STA RY EARLY
Slide 29: Benefits of Starting Early
BENEFITS OF STARTING EARLY Let’s take a case of 4 friends Amit, Basu, Chandan and Dinesh who started investing at different ages and higher than the person who started earlier than them: Amit Basu Chandan Dinesh Investment start age 25 35 45 55 Invest till age 60 60 60 60 Investment amt per month (R
Slide 30: Benefits of Starting Early
BENEFITS OF STARTING EARLY 4,000,000 Rs.37,96,638 3,500,000 3,000,000 Amit Basu Rs.26,53,667 2,500,000 Chandan Dinesh 2,000,000 Rs.16,57,881 1,500,000 1,000,000 Rs.6,19,497 500,000 0 26 36 AGE 46 56 Rising early in morning and to start investing early both benefit over the long term! 30 Assumed inve
Slide 31: Mantra: Invest in Appropriate Assets
Ko TATA @ MUTUAL T. ‘ATA FUND / MANTRA 3 EMVEST ERS / / APPROPRIATE ASSETS 31
Slide 32: Investing in Appropriate Assets
INVESTING IN APPROPRIATE ASSETS “Diversification is a protection against ignorance” – Warren Buffet Asset classes ( Post-Tax Returns) 5Y CAGR 10Y CAGR 15Y CAGR Gold 17.8% 15.4% 8.6% 10-year treasuries 4.7% 6.0% 6.7% Bank fixed deposit 5.2% 4.6% 5.1% Property (across 7 cities) 16.6% 13.7% 6.5% Equiti
Slide 33: Asset Allocation
ASSET ALLOCATION Asset allocation is the highest contributor to risk reduction in a portfolio which results in a higher risk adjusted return Impact of Asset allocation on return variability ( Risk Reduction) Asset Allocation Strategy 91% Security Selection 5% Market Timing 2% Other Factors 2% *Past
Slide 34: Mantra: Asset Allocation Should Adapt to Your Life Stage
Ko TATA @ MUTUAL T. ‘ATA FUND / MANTRA & / j / ASSET ALLOCATION / SHOULD ADAPT TO YOUR LIFE STAGE 34
Slide 35: The Key to Right Asset Allocation
THE KEY TO RIGHT ASSET ALLOCATION Asset allocation is a risk diversification strategy Different life stage require different asset allocation Share of equity = 100 – Your Age* Share of Debt = Your Age* Right asset allocation is one which adapts to your life stage and risk profile 35 *Thumb
Slide 36: Is This the Right Time to Invest?
Ko TATA q MUTUAL TATA FUND / iS THIS THE /RIGHT TIRAE TO iNVEST? 36
Slide 37: Market Timing Benefits – An Illusion
MARKET TIMING BENEFITS – AN ILLUSION People looking at the market levels to invest try to time the market People feel if they regularly time their investments in market they will yield better returns than others Now let’s take a case of two friends Lucky and Not So Lucky. Lucky was able to pick
Slide 38: Market Timing Benefits – An Illusion
MARKET TIMING BENEFITS – AN ILLUSION 25000 20000 Worst day investment Rs. 384011 levels 15000 Rs. 341750 Best day investment levels 10000 5000 0 Jan/00 Jan/01 Jan/02 Jan/03 Jan/04 Jan/05 Jan/06 Jan/07 Jan/08 Jan/09 Jan/10 Jan/11 Jul/00 Jul/01 Jul/02 Jul/03 Jul/04 Jul/05 Jul/06 Jul/07 Jul/08 Jul/09 J
Slide 39: Worried How to Save for Retirement?
Ko TATA q MUTUAL TATA FUND /WORRIED HOW TO SAVE ! FOR RETIREMENT? / / 39
Slide 40: The Solution Is Here
Ko TATA @ MUTUAL T. ‘ATA FUND i THE SOLUTION { | | IS HERE 40
Slide 41: NFO Opens 7th October 2011
NFO opens 7th October 2011 NFO closes 21st October 2011 41
Slide 42: About the Fund
ABOUT THE FUND Tata Retirement Savings Fund is a carefully structured suite of Plans designed to meet investment needs for retirement planning. Progressive Plan (an open ended equity scheme) - (TRSFP) Moderate Plan (an open ended equity scheme) – (TRSFM) Conservative Plan (an open ended debt s
Slide 43: A Plan for Every Life Stage: Progressive Plan
A PLAN FOR EVERY LIFE STAGE 3 plans to suit the life stages of investors: Progressive Plan: Ideal for young investors Has high equity allocation to benefit from long investment horizon Ideal age group 25 yrs to 45 yrs Asset Allocation Indicative Allocations (% To Total Assets)** Instruments Risk
Slide 44: A Plan for Every Life Stage: Moderate Plan
A PLAN FOR EVERY LIFE STAGE Moderate Plan: Ideal for middle aged investors Does a balancing act between equity and debt asset class with high debt allocation than Progressive plan Ideal age group 45 to 60yrs Asset Allocation Indicative Allocations (% To Total Assets)** Instruments Risk Profile
Slide 45: A Plan for Every Life Stage: Conservative Plan
A PLAN FOR EVERY LIFE STAGE Conservative Plan: Ideal for retired individuals Has 70% allocation to debt oriented securities while equity can be up to 30% Ideal for people above age 60yrs Asset Allocation Indicative Allocations (% To Total Assets)** Instruments Risk Profile Minimum Maximum Equi
Slide 46: Life Cycle Based Investment Plan on Auto Mode
Ko TATA @ MUTUAL T. ‘ATA FUND / LIFE CYCLE BASED /IRVESTRAENT PLAN / ON AUTO MODE 46
Slide 47: Unique Features of Tata Retirement Fund
UNIQUE FEATURES OF TATA RETIREMENT FUND ‘Auto Switch facility’ based on the predefined age criteria of the investors (optional for investors) Progressive to Moderate – switch happens once the investor attains the age of 45yrs Moderate to Conservative – switch happens once the investor attains th
Slide 48: Systematic Withdrawal on Auto Mode
Ko TATA @ MUTUAL T. ‘ATA FUND SYSTERAATIC VET HI DRAWAL ON AUTO MODE 48
Slide 49: Withdrawal on Auto Mode
WITHDRAWAL ON AUTO MODE ‘Auto SWP facility’ to the investors on attainment of retirement age (60yrs) - optional facility *Monthly – 1% of market value of investment as on date of completion of 60 yrs of age *Quarterly – 3% of market value of investment as on date of completion of 60 yrs of age
Slide 50: Investment Details of TRSF
INVESTMENT DETAILS OF TRSF FUND HIGHLIGHTS Particulars Minimum Investment Rs. 5000 & in multiples of Re.1 thereafter Additional investments ( Existing Investor ) Rs.1000 & in multiples of Re.1 thereafter Minimum SIP investments Min. 12 installments of Rs.500 each or 6 installments of Monthly SIP Rs.
Slide 51: Other Features of Tata Retirement Savings Fund
OTHER FEATURES OF TATA RETIREMENT SAVINGS FUND Multi-Plan Investment with Single Cheque facility – specify specific % amount to be allocated to respective plan. Online application during NFO Investors can apply online using their distributor’s ARN code Paperless and hassle free transactions
Slide 52: Ideal Investors for Tata Retirement Savings Fund
IDEAL INVESTORS FOR TATA RETIREMENT SAVINGS FUND Investors keen to save for retirement Salaried employees looking for regular savings avenue for retirement Self-employed who usually don’t have post retirement benefits accruing to them 52
Slide 53: Investment Strategy
INVESTMENT STRATEGY Core of the portfolio - qualitatively strong Strong business models Good managements Scalable businesses. Secular growth opportunities. Business having compounding characteristics High capital efficiency. Positive EVA Buy on every dip philosophy Less churn in this p
Slide 54: Investment Focus
INVESTMENT FOCUS The fund to be predominantly large cap, with some well managed mid cap companies as well. In terms of weightages of scrips in the equity portfolio, it would be broadly similar across different plans, even though the weightage of equities in the overall portfolio would be as per
Slide 55: Happy Retirement
ale TATA @ MUTUAL T. ‘AT. ‘A FUND HAPPY RETIREMENT 55
Slide 56: Nature & Investment Objective; Load Structure
Nature & Investment Objective: Tata Retirement Savings Fund (TRSF): An Open Ended Fund comprising of three Plans: (i) Progressive Plan (an open ended equity scheme) - (TRSFP). (ii) Moderate Plan (an open ended equity scheme) – (TRSFM). (iii) Conservative Plan (an open ended debt scheme) – (TRSFC).
Slide 57: Exit Load and Offer Details
(C) For Redemption or switch out of units in other cases (i.e. switch-out other than auto switch-out on trigger event & redemption/switch-out before the attainment of retirement age i.e. 60 years) following exit load will be applicable: (i) If redeemed / switched-out on or before expiry of 1 year fr
Slide 58: NAV Disclosure and Asset Allocation
NAV Disclosure: On all business days after scheme re-opens. Asset Allocation: Progressive Plan: Equity and Equity related instruments 85% to 100%, Debt & Money Market instruments 0% to 15% and Other Securities 0% to 10% of total assets**. Investment by the plan in securitized debt will not norma
Slide 59: Risk Factors
Risk Factors: Mutual Fund and securities are investments subject to market risks and there can be no assurance and no guarantee that the scheme will achieve its objectives. As with any investment in stocks, shares and securities the NAV of the units under the scheme can go up or down, depending
Slide 60: Risk Factors: Overseas and Securitized Investments
Investment in overseas securities and overseas investments are subject to various risks such as currency fluctuations, restriction on repatriation, changes in regulations, political, economic and social instability and prevalent tax laws of respective jurisdictions . Investment in securitized deb
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