Systematic Investment Plan Smart Investor’s Choice A presentation by HDFC Mutual Fund 3 August 2018

“If you are born poor, its not your mistake “If you are born poor, its not your mistake. But, if you die poor its your mistake.” - Bill Gates “I think sound investing can make you very wealthy if you’re not in too big of a hurry. And it never makes you poor, which is better.” - Warren Buffet

The Investor

What most investors do… Stock has gone up 5%, a hot tip, should I invest now?

While he was watching… Gone up 15% now should I enter now?

Still waiting for the right time… Stock up 25% since I last looked INVEST now!

And then the rise slows down… See I told you so!

The Big fall… I am a long term investor, it will come up eventually

What now… Get me outta here!!!!

To believe or not to believe… It’s a dead cat bounce

Where the markets are going… People are crazy, the markets are mad!

The Outcome… I give up! Equities are not for me!! They are cruel

Dreams

Human Life Cycle Phase I Phase II Phase III Education Earning Years Child’s Marriage Child’s Education Housing Child birth Marriage 22 yrs 38 yrs 10- 20 yrs Education Earning Years Post Retirement Years Age- 22 yrs Age- 60 yrs

And the list goes on…………………!!!!!!! But Reality Bites…….. Driver’s salary Electricity Bill Servant’s salary Telephone Bill Children’s education Rent Grocery Bill Credit Card Bill And the list goes on…………………!!!!!!!

Yesterday and Today 1985 Balcony Ticket : Rs 15/- 2012 Inflation Meter: 12.24% p.a. Source & Computations - Internal

Yesterday and Today 1985 Hotel Bill: Rs.100/- 2012 Inflation Meter: 10.90% p.a. Source & Computations - Internal

Yesterday and Today 1985 2012 Petrol Price: Rs. 8 / L Inflation Meter: 7.15% p.a Source & Computations - Internal

Yesterday – Today – Tomorrow (in Rs.) ENGINEERING 3.2 lacs 5.0 lacs 2.4 lacs YEAR 2000 MEDICINE MBA 5.7 lacs 8.9 lacs 4.3 lacs ENGINEERING YEAR 2010 MEDICINE MBA 10.9 lacs 17.0 lacs 8.2 lacs ENGINEERING YEAR 2020 MEDICINE MBA Inflation Meter: 6% p.a Source & Computations - Internal

Amount Invested per Month in Rs Consider a situation… Four Investors start investing different amount at different time period Investor Start Date Amount Invested per Month in Rs A April, 1992 5000 B December, 1997 7500 C October, 2000 10000 D August, 2003 15000

On April 30, 2009 they review their portfolios and realize these startling facts …. The more you delay starting your investments …. Investor A Investor B Investor C Investor D SIP Commenced on April, 1992 December,1997 October,2000 August, 2003 Amount per SIP (Rs) 5000 7500 10000 15000 No. of Installments 204 136 102 68 Total Amount Invested (Rs) 10,20,000 Expected Returns (%) 16 20 25 35 Market Value as on April 30, 2009 (Rs) 52,16,217 38,10,887 34,52,196 31,18,442 Analysis: Investor A portfolio is worth 67% more than investor D. This is inspite of D investing three times more per month and earning a return of close to 20% more than investor A. The benefit of investing early (in smaller amounts) and investing regularly far outweigh anything else: coumpound interest indeed a miracle. …. Less is the amount of wealth created, in spite of earning a substantially higher return and investing more per month !!!

The Formula for creating Wealth …. Start Early + Invest Regularly = Create Wealth Make your money work hard for you.

Time in the Market… Equities are volatile in the short-run…In the Long-term they are surprisingly predictable.

Closing Sensex Level on date Sensex from 20812 to 16967 Scheme Name NAV as on 7/01/2008 Date of Same NAV again Closing Sensex Level on date Current NAV % Growth HDFC Equity Fund 227.61 1-Dec-09 17198 252.298 10.85% HDFC Top 200 Fund 173.74 12-Oct-09 17026 194.999 12.24% HDFC Mid Cap Opportunities Fund 13.48 7-Apr-10 17970 15.872 17.72% HDFC Balanced Fund 41.97 16-Oct-09 17322 57.5 36.97% HDFC Prudence Fund 166.48 210.98 26.73%

Snapshot of SIP returns of various schemes as on May 31, 2012 Scheme Name Since Inception 10 yr SIP 5 yr SIP 3 yr SIP 1 yr SIP HDFC Equity Fund 20.83 27.39 9.04 34.81 -7.40 HDFC Top 200 Fund 22.98 27.95 10.28 30.34 -6.12 HDFC Mid – Cap Opportunities Fund 10.90 N.A 41.68 9.02 HDFC Balanced Fund 16.51 18.67 12.31 31.70 7.13 HDFC Tax Saver Fund 28.63 27.03 6.45 32.81 -3.90 HDFC Long Term Advantage Fund 25.94 25.72 5.70 31.88 -2.80 HDFC Growth Fund 20.40 25.29 8.79 30.89 -2.61