group 12. financial planning for the age group 22-25 years
TRANSCRIPT
Group 12
Financial Planning for the Age Group 22-25 years
What is Financial Planning?
A process of determining an individual's financial goals, purposes in life and life's priorities, and after considering his resources, risk taking ability and current lifestyle, to detail a balanced and realistic plan on 'what needs to be done' to meet those goals
It varies from person to person and should be updated from time to time
Why should youngsters do Financial Planning
• To work towards achieving short and long term goals
• To ensure a secure future• To provide for unforeseen circumstances• To earn better returns on their funds, which
would otherwise be idle
What constitutes Financial Planning
• Making a detailed budget of incomes and expenses
• Start by allocating a fixed amount to save every month
• Adjust budget as per execution• Invest the saved money in Financial
Instruments
What Financial Instruments?
• Equity Markets• Mutual Funds• Systematic Investment Plans• Fixed Income Instruments• Insurance• Commodities Market
What determines where one invests?
• Financial Objectives• Priorities• Risk Taking Ability• Ability to Monitor Investments• Idleness of Funds
Thumb Rules• Common sense approach to managing your finances. It cannot change
your situation overnight, it is a lifelong process • Events beyond your control will affect your financial planning results• Set measurable financial goals• Be realistic in your expectations • Understand the effects of each financial decision• Re-evaluate your financial situation periodically• Start planning as soon as you can• Realise that you are in charge
STOCK MARKET CRASHES
The Wheels of FortuneThe Wheels of Fortune
+12% -30%
+10%
+50%
-3%+3%
-10%
-50%
+12% -4%
+10%
+35%
-11%+9%
+18%
+4%
WHEEL 1 WHEEL 2
Mutual FundsRecent Schemes and Past
performance
Basics of Mutual FundsBasics of Mutual Funds
Evolution of Mutual Funds• Growth of Unit Trust of India (1964-87)
• Entry of Public Sector (1987-93)
• Emergence of Private Funds (1993-96)
• Growth and SEBI Regulations (1996-99)
• Emergence of a large and uniform industry (1999-2004)
• Consolidation and Growth (From 2004 onwards)
Investors
Securities
Returns
Fund Manager
Pool their Money with
Invest in
Creates
Passes back to
Mutual Fund Operation Mutual Fund Operation FlowchartFlowchart
Managed by a board of trustees
Asset management company
Custodian
Bankers
Registrars & Transfer AgentsAppointed by AMC
Appointed by AMC
Sponsor Company
Mutual Fund
Appointed by trustees
Appointed by trustees
Constituents of Mutual Fund Constituents of Mutual Fund
Why Mutual Funds?
• Portfolio Diversification
• Reduction of Risk
• Professional Management
• Liquidity
• Reduction in Transaction Cost
• Transparency
• Favorable Returns
Why Mutual Funds?
Net Asset Value
• NAV = (Market value of the assets) – • (its liabilities)
• NAV/UNIT = Net Asset Value
Number of Units Outstanding
Scheme Type Previous NAV
Latest NAV
Change (Rs.)
% Annual Return
Standard Char Prem
Open 13.5978 23.2253 9.6275 70.80
Reliance R S -Equi
Open 15.0668 25.5302 10.4634 69.45
DBS Chola Opportunit
y
Open 26.4500 44.0400 17.5900 66.50
DWS Investmen
t Opp
Open 22.9300 37.9600 15.0300 65.55
SBI Magnum Comma
Open 15.2800 24.6200 9.3400 61.13
(as on 26/02/2008)
Top Performers- Equity Diversified FundTop Performers- Equity Diversified Fund
Premier Equity Fund
AMCStandard Chartered Asset Management Co. Pvt. Ltd
Category Equity – Diversified
Scheme Type Open Ended
Net Asset SizeRs. 690.70 cr.(as on
31/01/2008)
Dividend No Dividends Declared Yet
Premier Equity Fund
About the FundAbout the Fund
1Week 1Month3Months
6Months
9Months
1 Year
0.47 % -5.13 % 0.65 %34.92 %
45.13% 70.80%
Absolute Return (as on 26/2/2008)
Premier Equity Fund
NAV Performance
Assets Break-up (as on 31-01-2008)
%
Equity 86.95
Non Convertible Debentures 9.09
Others 2.17
Current Assets 1.23
Cash 0.55
Asset Allocation PortfolioPremier Equity Fund
52-week High 28.33 (Jan 07, 08) 52-week Low 12.33 (Mar 07, 07)
Premier Equity Fund
NAV ChartNAV Chart
ICICIICICI FUSION FUNDFUSION FUND
Structure 5 year Close Ended Equity Diversified Scheme
Investment Objective
Generate long-term capital appreciation by investing predominantly in equity and equity related instruments of companies across large, mid and small market capitalization
Options Growth optionDividend option
Benchmark Index Nifty Junior
Net Assets 7207.9 million (January 31, 2008 )
Expense Ratio 2.17%
ICICIICICI FUSION FUNDFUSION FUND
About the FundAbout the Fund
Asset Allocation Portfolio
Type of Instruments
Minimum Allocation
(% of Net Assets)
Maximum Allocation (% of Net Assets)
Risk Profile of the
instrument
Equity and equity-related securities
70% 100% Medium to High
Debt, money market instruments and call money
0% 30% Low to Medium
ICICIICICI FUSION FUNDFUSION FUND
• NAV Return % (Growth)1 week 1 mth 3 mths 6 mths 1 year
NAV Growth
0.20% -5.54%
-2.32% 7.81% 24.63%
NAV Return % (Dividend)
1 week 1 mth 3 mths 6 mths 1 year
NAV Growth
0.21% -5.55% -2.16% 7.99% 24.84%
December 17, 2007
Dividend
10%
ICICIICICI FUSION FUNDFUSION FUND
NAV Performance
Fund PerformanceICICIICICI FUSION FUNDFUSION FUND
Performance of Indian Mutual Fund Industry
Assets Under Management
Funds Mobilized by Private SectorNet Resources Mobilised by Private Sector Mutual Funds
0100002000030000400005000060000700008000090000
1993
-94
1995
-96
1997
-98
1999
-00
2001
-02
2003
-04
2005
-06
Years
Funds
mobilis
ed R
s. c
rore
Funds Mobilised(Rs. Crore)
An Overview
Growth of Assets under Management
1238.23 4158.26 6481.67
15006.43 14961.54
21550.17
28345.35
48560.6
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2001 2002 2003 2004 2005 2006 2007 2008
Growth of Assets under Management
Rs. crore
A “No” Surprise FundFunds
Period HDFC Growth Fund (%)
HDFC Equity Fund (%)
HDFC Top 200 Fund
HDFC Capital Builder Fund (%)
HDFC Long term Advantage Fund (%)
HDFC Taxsaver (%)
Last 5 years
56.15 57.81 57.99 58.19 56.46 60.90
Value of Rs. 1 lac invested on 01/01/03
926693.50
975213.97
978076.04
981012.89
933441.89
1070670.86
As on 31/12/2007
BE IT SMALL, BE IT BE IT SMALL, BE IT BIG,BIG,INVEST EARLY, INVEST INVEST EARLY, INVEST REGULARLY,REGULARLY,BUT INVEST SMARTBUT INVEST SMART
Happy Investing In Mutual Funds
Compiled by
• Kinjal Mehta 87
• Nirav Patel 97
• Rashmi Soni 112
• Minal Thakkar 113