EMI = GOOD EMI =

Instalment Investment
SIP or Systematic Investment Plan
offered by Mutual Funds is like a GOOD EMI
SYSTEMATIC INVESTMENT PLANS (SIPs)
MADE SIMPLE

WHAT are SIPs?

WHY SIPs?
WHERE to invest via SIPs?
WHEN to start a SIP?
WHAT not to do in SIPs
WHAT are SIPs?

Ÿ SIPs are a REGULAR AND DISCIPLINED way of

investing in mutual funds

Ÿ INVESTING PROCESS
similar to a Bank Recurring Deposit
- Regular investment in one or multiple schemes

Ÿ SIPs or Systematic Investment Plans are one of the

BEST WAYS TO INVEST IN A MUTUAL FUND
WHY SIPs?

Ÿ CHEAPER ON THE WALLET

- Can be as low as R 500 per SIP per month

Ÿ REGULAR AND DISCIPLINED INVESTMENT

Ÿ Potential To CREATE WEALTH OVER LONG RUN

Ÿ MAKE MARKET TIMING IRRELEVANT

- Ensures that one invests at all points of time (high as well as low points of the market)
- Benefits from Rupee Cost Averaging

Ÿ Provide BENEFITS OF COMPOUNDING

Let us look at some of the above aspects in detail…..

WHY SIPs?

CREATE WEALTH
OVER LONG RUN
Create Wealth Over The Long Run
(Illustration)

SIP^ of R1000 per month growing @ 10%, 12% & 14% p.a.*

Final Value Final Value Final Value

Principal
Period R lac R lac R lac
R lac
@ 10% p.a. @ 12% p.a. @ 14% p.a.

10 years 1.20 2.07 2.32 2.62

15 years 1.80 4.18 5.05 6.13

20 years 2.40 7.66 9.99 13.16

25 years 3.00 9.57 13.98 27.27

A small difference of even 2% in returns can change the final amount drastically

* For Illustration purposes only. These are assumed returns and actual returns may vary. Also, returns may vary with the type of underlying asset class.
^ Systematic Investment Plan at the beginning of the month.
RUPEE COST
AVERAGING
Rupee Cost Averaging

Receive more units when NAV is lower,

vice versa when NAV is higher

Investment (A) NAV (B) No. of Units (A / B) Remarks

R 10000 20 500 Higher NAV ~ Less Units

R 10000 16 625 Lower NAV ~ More Units

Average Cost per unit 17.78

− The cost is thus averaged out as NAV falls

• Longer the SIP period, better the impact of rupee cost averaging
• Longer SIP period may also help to lower volatility of returns
Rupee Cost Averaging (Illustration)

How cost per unit has dropped over U T

1 7B
long investment horizon 20
35000 1 , Ending Value

c t 3 456 33,213

o n O s.7,
30000 , 2 13 nly R
3 o
t o 3 was
7 d
1 99 erio
25000 , p
t 31 ear
c -y
o n O e 20
20000 03 r th
3,8 t ove
SENSEX VALUE

m
fro a uni
15000
r ose st of
x o
e nse ge c S&P BSE Sensex
S ra
Starting Value e
10000
3,803 Av

Average Value
5000
7,456

0
31-Oct-00

31-Oct-01

31-Oct-02

31-Oct-03

31-Oct-04

31-Oct-05

31-Oct-06

31-Oct-07

31-Oct-08

31-Oct-09

31-Oct-10

31-Oct-11

31-Oct-12

31-Oct-13

31-Oct-14

31-Oct-15

31-Oct-16

31-Oct-17
31-Oct-97

31-Oct-98

31-Oct-99

Past performance may or may not be sustained in future.

For a 20-year SIP in S&P BSE Sensex ending on Oct 31, 2017. Investment at the start of the month.
Source-CRISIL Mutual Fund Research Tool
BENEFITS OF
COMPOUNDING
Benefits of Compounding (Illustration)

Longer you stay the wealthier you may be

SIP of R 1000 per month growing @12% p.a.*

Experience the Magic of COMPOUNDING

Principal Final Value Growth of Principal

Period (Compounding Effect)
R lac R lac

10 years 1.20 2.32 almost 2 times

15 years 1.80 5.05 almost 3 times

20 years 2.40 9.99 over 4 times

25 years 3.00 18.98 over 6 times

* For Illustration purposes only. These are assumed returns and actual returns may vary. Monthly investment at the beginning of the month.
WHERE to invest via SIPs?

NO RESTRICTION OF ANY ASSET CLASS

for commencing a SIP

MORE POPULAR FOR EQUITY as an asset class because…

− The asset class is relatively more volatile and
− SIPs help to even out volatility by purchases made across market cycles

EQUITY SIPs ideally should be long term

of 5 years and above

SIPs IN FIXED INCOME

may be for short to medium term
Three Modes to Invest

INTERMEDIARY
FUND HOUSE ONLINE
Bank, Distributor,
and its Through
Independent
Points of Presence investment portals*
Financial Advisor (IFA)
* of Fund House/ Distributors

Key Step is KYC or

Know Your Customer form

KYC form available with mutual fund, distributors,

RTA or KRA (KYC Registration Agency)
WHEN to start a SIP?
WHEN to start a SIP?

NO PARTICULAR TIME TO START A SIP

- Regularity and consistency is more important than timing
- SIPs actually make market timing irrelevant

FREQUENCY OF SIPS
is typically monthly or quarterly
- Monthly SIPs are more popular
- SIP date needs to be predefined
WHAT not to do in SIPs (Illustration)

Delay or discontinue a SIP

Target of R 1 crore at Age 60 @12% p.a.*

Start Age Monthly Investment R

25 years 1,540
An Early Start is Good
30 years 2,833
Every 5 Year Delay
35 years 5,270
Doubles Monthly
40 years 10,009
Investment needed
45 years 19,819

Only R 1,540 p.m. needed if you start at 25 years but R 2,833 p.m.
if you start 5 years later and so on
* For Illustration purposes only. These are assumed returns and actual returns may vary. Monthly investment at the beginning of the month.
Start your
GOOD EMI
today!
Disclaimer
An investor education and awareness initiative by Franklin Templeton Mutual Fund

1. One-time KYC (Know Your Customer) : One-time KYC registration is mandatory to invest in mutual funds. You can complete the same by submitting the
following at any of our branches or collection centres: a) Duly filled and signed Central-KYC application form. b) Proof of Identity: Any document notified by the
central government. c) Proof of Address: Same as identity proof (except PAN). d) Recent Passport Size Photograph. Copies of all documents submitted must be
self-attested by the applicant and accompanied by originals for verification. You may also avail our Online KYC Registration facility while opening an online
account with us, for more details please visit our website www.franklintempletonindia.com. In case you are KYC verified and want to update any information,
please submit a completed KYC details change form with the required self-attested documents as proof to our nearest branch or collection centre.
2. Details of SEBI registered Mutual Funds: Investors must deal/ invest only with SEBI registered Mutual Funds. Details available on the SEBI website
www.sebi.gov.in.
3. Complaint Redressal: Investors can reach us on our toll-free helpline 1800 425 4255 OR write to us at grievanceredressal@franklintempleton.com. For
escalation, write to us at headofcustomerservice@franklintempleton.com; president@franklintempleton.com or lodge your grievance with SEBI through their
SCORES (SEBI Complaint Redress System) Portal at https://scores.gov.in

Franklin Templeton Asset Management (India) Pvt. Ltd.

Indiabulls Finance Centre, Tower 2, 12th and 13th floor,
Senapati Bapat Marg, Elphinstone (W), Mumbai 400013
Tel (91-22) 6751 9100 • Fax (91-22) 6639 1281
www.franklintempletonindia.com

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.