Value STPNo Need to the market now…..

An introduction - Concept of Value Averaging

• Concept is NOT NEW.

• Harvard Finance Professor and former Nasdaq Chief• Harvard Finance Professor and former Nasdaq ChiefEconomist, Michael E. Edleson first wrote first about it in1988 and published book in 1993.

• According to him, Value Averaging can producehigher investment returns as compared to otherinvestment approachesinvestment approaches.

• Other detailed studies• Professor Paul S Marshall (Journal of Financial and StrategicProfessor Paul S. Marshall (Journal of Financial and Strategic

Decisions, 2000).• Professors Leggio and Lien (Journal of Financial Planning, 2003).

2 Source: www.valueaveraging.ca

What is Value Cost Averaging (VCA)?

• Simply an improved variation of Rupee Cost Averaging (RCA),a concept on which SIP is based.

• Both involve making regular payments and help avoid timingthe market.

• Incase of RCA, the investment amount is fixed.

• However, incase of VCA, the amount invested each timekeeps changing based on achieving a target value.

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Value Averaging as an Investment Strategy

• Since market value of the investment fluctuates, VCA involveschanging your periodic investment contribution in responseto market fluctuationsto market fluctuations.

• When the investment's value rises compared with the targetvalue, a smaller installment is required.

• When the investment's value falls relative to the target value, oneneeds to invest a bigger amount.

• In some ways it follows the Warren Buffett investment• In some ways, it follows the Warren Buffett investmentphilosophy of 'being greedy when others are fearful andbeing fearful when others are greedy'.

• Over the long term, this strategy aims to deliver better risk-adjusted returns compared with a similar SIP structure.

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IntroducingIntroducingICICI Prudential Value STP

No Need to the market now…..

An innovation over the regular STP and an improvisedi f Fl STPversion of Flex STP.

A systematic transfer plan that is aimed at buying morewhen NAVs are low and buy less when NAVs are highto arrive at the Target Investment Value. It also redeemsautomatically once target investment value exceedsautomatically once target investment value exceedstargets.

How does VCA Work?

• Set a predetermined investment target value of your portfolioin each future time period say weekly / monthly / quarterly.

• Th i t th b ll ffi i t it f th• The investor then buys or sells sufficient units of theinvestment such that the predetermined investment targetvalue is achieved at each revaluation point.

• D i i d f k t d li th i t i i d t• During period of market decline, the investor is required topurchase relatively many units to maintain investment targetvalue.

• C l d i i i k t th t h i i th• Conversely, during rising markets the technique requires thepurchase of relatively few units or might even require thatunits be redeemed to maintain investment target value at thedesired leveldesired level.

How does VCA work?Assume you want to grow your portfolio every month from January to NovemberAssume you want to grow your portfolio every month from January to November

VCA ensures steady increase of Rs.1,000Every month in total investment valueirrespective of market movement

VCA mandates investing variable amounts/Redeeming units to help attain aninvestor’s predetermined financial target

This is just an illustration explaining how value cost averaging and rupee cost averaging performs under differentscenarios using assumed figures. The above illustration is merely indicative in nature and should not be construedas an investment advice. It does not in any manner imply or suggest current or future performance of any ICICIPrudential Mutual Fund Schemes.

VCA versus RCA – Different scenarios

This is just an illustration explaining how value cost averaging and rupee costaveraging performs under different scenarios using assumed figures. The above

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g g g gillustration is merely indicative in nature and should not be construed as aninvestment advice. It does not in any manner imply or suggest current or futureperformance of any ICICI Prudential Mutual Fund Schemes.

VCA versus RCA – Different scenarios

This is just an illustration explaining how value cost averaging and rupee costaveraging performs under different scenarios using assumed figures. The above

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g g g gillustration is merely indicative in nature and should not be construed as aninvestment advice. It does not in any manner imply or suggest current or futureperformance of any ICICI Prudential Mutual Fund Schemes.

VCA versus RCA – Different scenarios

This is just an illustration explaining how value cost averaging and rupee costaveraging performs under different scenarios using assumed figures. The above

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g g g gillustration is merely indicative in nature and should not be construed as aninvestment advice. It does not in any manner imply or suggest current or futureperformance of any ICICI Prudential Mutual Fund Schemes.

Eligible schemes for this facility

From / Transferor Schemes: All open ended fixed income andmoney market schemes of ICICI Prudential Mutual Fund where STPis allowed.s a o ed

To / Transferee Schemes: All equity oriented and hybrid schemes ofICICI Prudential Mutual Fund where STP is allowed and ICICIPrudential Regular Gold Savings Fund (an open ended fund of fund).

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Key terms and conditions

The minimum amount and number of installments per Value STPwill be as follows:

Weekly & Monthly Interval: Rs. 1,000 and any amount thereafter.Weekly & Monthly Interval: Rs. 1,000 and any amount thereafter.Quarterly Interval: Rs. 3,000 and any amount thereafter.Minimum 6 installments under Weekly / Monthly frequency and 2installments under Quarterly option.

Minimum amount of unit holder’s balance or minimum amount ofapplication at the time of Value STP registration in the Transferorscheme should be Rs. 12,000.The redemption/switch out of units allotted in the Transferee Scheme shallThe redemption/switch-out of units allotted in the Transferee Scheme shallbe processed on the 'First In First Out' (FIFO) basis.In case there is a redemption / switch-out of any units allotted under ValueSTP in the Transferee Scheme by the Unit Holder, the balance installments

d VALUE STP ill b d l STP f th i iunder VALUE STP will be processed as a normal STP for the remaininginstallments by investing the amount indicated as first installment amount, onthe date of each transfer over the balance tenure of the Value STP, subject toavailability of unit balance in the Transferor Scheme.

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Key terms and conditions

Frequency Date of Transfers Default Date

Weekly Interval Monday Monday

Montly IntervalOn the 7th, 10th, 15th, 25th or last business day of each month

Last business day of the month

Quarterly Interval

On the 7th, 10th, 15th, 25th or last business day of each month

Last business day of the month

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Disclaimers

Mutual Fund investments are subject to market risks, read all Scheme relateddocuments carefully.ICICI Prudential Regular Gold Savings Fund (the Scheme) is a fund of funds scheme with the primary objective tog g ( ) p y jgenerate returns by investing in units of ICICI Prudential Gold Exchange Traded Fund (IPru Gold ETF). Theinvestments into underlying funds under the Scheme would, inter alia, be governed by: (a) The investmentmanagement style of such scheme. (b)The tolerance and the risk profile of such schemes. (c) The assetallocation (such as equity or debt) of such Schemes.All figures and other data given in this document is dated. The same may or may not be relevant at a future date.Prospective investors are therefore advised to consult their own legal tax and financial advisors to determineProspective investors are therefore advised to consult their own legal, tax and financial advisors to determinepossible tax, legal and other financial implication or consequence of subscribing to the units of ICICI PrudentialMutual Fund.In preparation of the material contained in this document, the AMC has used information that is publiclyavailable, including information developed in-house. Some of the material used in the document may have beenobtained from members/persons other than the AMC and/or its affiliates and which may have been madeavailable to the AMC and/or to its affiliates. Information gathered and material used in this document is believedto be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / orcompleteness of any information. We have included statements / opinions / recommendations in this documentwhich contain words document, words, or phrases such as “will”, “expect”, “should”, “believe” and similarexpressions or variations of such expressions, that are “forward looking statements”. Actual results may differmaterially from those suggested by the forward looking statements due to risk or uncertainties associated withy gg y gour expectations with respect to, but not limited to, exposure to market risks, general economic and politicalconditions in India and other countries globally, which have an impact on our services and / or investments, themonetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreignexchange rates, equity prices or other rates or prices etc.The AMC (including its affiliates), the Mutual Fund, the trust and any of its officers, directors, personnel andemployees shall not liable for any loss damage of any nature including but not limited to direct indirectemployees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect,punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of thismaterial in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on thismaterial.

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Thank You.

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