Why Mutual Fund?

AMFI IAP (Association of Mutual Funds India Investor Awareness Program)

Why Mutual Fund?AMFI IAP (Association of Mutual Funds India Investor Awareness Program)

Your Investment Menu CardInstrument Tax

Benefit Return Duration

EPF √ 8.50% Long Term

PPF √ 8% Long Term

NSC √ 8% Long Term

FD’s – Banks & Post Office

√ 5.70 to 8.50% Short Term

Senoir Citizen Savings Scheme

√ 9% Long Term

Mutual Funds √ Market Linked Long Term & Short Term

ULIP √ Market Linked Long Term

NPS √ Market Linked Long Term

Direct Equity √ Market Linked Long Term

Gold NA Market Linked Short TermReal Estate √ Market Linked Long Term

Cost of money lying idle…

Your investment ought to beat the inflation !!!

Money in savings account + 100000Interest earned in 1 year (@3.5 per annum)

+ 3500

103500Tax on Interest (@30.9%) - 1081Impact of Inflation (@5% per annum) - 5000

Value at the end of year 1 97419

Challenges involved investing directly in Capital Market

Requirement of Capital

Time

Expertise

Lack of Information

Portfolio

Volatility

Key Investment Considerations

SafetyYou get yourmoney back

Liquidity

You get your money back when you want it

Plus Convenience

How easy is it to invest, disinvest

and adjust to your needs? Post-tax Returns

How much is really left for you post tax?

What is Mutual Fund and Why Mutual Fund A mutual fund is the trust that pools the savings of a number of

investors who share a common financial goal.

Anybody with an investible surplus of as little as a few hundred rupees can invest in Mutual Funds.

The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debenture, from Government Bond to money market instruments, depending upon the scheme’s stated objective.

It gives the market returns and not assured returns.

In the long term market returns have the potential to perform better than other assured return products.

Investment in Mutual Fund is the most cost efficient as it offers the lowest charge to the investor

How Mutual Fund works?A vehicle for investing in portfolio of stocks and bonds

Structure of Mutual Fund

Custodian keeps safe custody of the investments (related documents of securities invested).

Types of Mutual Funds

Types of

Mutual Funds

By

Constitution

By

Investment

Objective

Close Ended Open Ended Interval Equity Funds Cash FundDebt Funds

Comparison : Mutual Funds vis-à-vis other asset classes

Advantages of Mutual Funds1.Professional Management

2.Diversification

3.Convenient Administration

4.Return potential

5.Low cost

6.Liquidity

7.Transparency

8.Flexibility

9.Choice of schemes

10.Well regulated

11.Tax benefits

How do I make money from a mutual fund?

1. Capital appreciation:

As the value of securities in the fund increases, the fund's unit price will also increase. You can make a profit by selling the units at a price higher than at which you bought .

2. Income Distribution:

The fund distributes part of the appreciation to the investors as dividend.

Disclaimer

As the value of securities in the fund increases, the fund's unit price will also increase. You can make a profit by selling the units at a price higher than at which you bought. Although Mutual Fund does not guarantee the same.

Mutual Fund- How to invest in Mutual FundsSelection Process- 3 step process

Step 1 Identify your investment needs1. What are my investment objectives and needs?2. How much risk am I willing to take?3. What are my cash flow requirements?

Step 2 Choose the right mutual fund.1. The track record of performance over the last few years in relation to the appropriate Benchmark and similar funds in the same category2. How well the mutual fund is organized to provide efficient, prompt and personalized service.3. Degree of transparency as reflected in frequency an d quality of their communications.

Step 3 Select the ideal mix of schemesInvesting in just 1scheme may not meet all your investment needs. You may consider investing in a combination of schemes to achieve your specific goals.

Please ask your financial advisor for details & advise

Mutual Fund- Which one to buy?Your Investment

goal

Capital

PreservationGenerate Income

Capital

Appreciation

Disclaimer

As the value of securities in the fund increases, the fund's unit price will also increase. You can make a profit by selling the units at a price higher than at which you bought. Although Mutual Fund does not guarantee the same.

Based on your goals and

risk tolerance

Savings Bank Account Fixed Deposits Real EstatePPF Post office Monthly Income Scheme Gold

Cash Funds Debt Funds Equity FundsMutual Funds

Mutual Fund Products – Risk / Return Graph

Lo Med Hi

Liquid fund

Ultra Short Term Funds

Short Term Funds

GILT & Bond Funds

Hybrid & MIP

Lo Med Hi

Index Fund

Arbitrage Funds

Balanced Funds

Diversified Funds (ELSS)

Sectoral FundsDebt Equity

>> Risk << >> Risk <<

>> R

etur

n <<

>> R

etur

n <<

Suggested Portfolio based on Risk tolerance

5%10-15%

10-20%60-70%

10%20%

40-50%

30-40%

10%

50-60%

20-30%

10%

Aggressive Plan Moderate Plan

Conservative Plan

Growth Schemes Income SchemesBalanced SchemesMoney Market Schemes

This plan may suit:• Investors in their prime earning years and

willing to take more risk• Investors seeking growth over a long term

This plan may suit:• Investors seeking income and

moderate growth• Investors looking for growth and

stability with moderate risk

This plan may suit:• Retired and other investors who need

to preserve capital and earn regular income

Select a mutual fund

1. Evaluate past performance

2. Look for consistency

Sample Mutual Fund Comparison Chart. Category: Diversified Equity Funds

Fund C is more consistent in the above chart

Fund Name

1 Year Return in %

1 Year Rank

3 Year Return in %

3 Year Rank

5 Year Return in %

5 Year Rank

A 119.59 42/219 27.7 1/162 10.30 87/96B 12.093 40/219 24.6 2/162 13.45 43/96C 165.72 1/219 21.71 3/162 28.20 3/96D 89.02 130/219 21.48 4/162 23.25 26/96E 113.90 58/219 21.26 5/162 26.26 17/96

Rating Agencies

CRISIL~CPR Rankings and Value Research Star Rating are prominent ones

Role of Rating Agencies

1. Facilitate informed investment decision making

2. Provide independent and reliable opinion of schemes

3. The quality of the Fund’s management and operations

4. Help meet specific investment objective

Taxation Benefit investing in Mutual Funds

Capital Gains Under Indexation, you are allowed by law to inflate the cost of your asset by a

government notified inflation factor.

This factor is called the ‘Cost Inflation Index’, from which the word ‘Indexation’ has been derived.

This inflation index is used to artificially inflate your asset price.

This helps to counter erosion of value in the price of an asset and brings the value of an asset at par with prevailing market price.

This cost inflation index factor is notified by the government every year. This index gradually increases every year due to inflation.

The amount invested in tax-saving funds (ELSS) is eligible for deduction under Section 80C, However the aggregate amount deductible under the said section cannot exceed Rs 100,000 (in a financial year).

Taxation of dividends of mutual fund schemesCategory Tax Rates for IndividualsLiquid Funds 25.75%Other Debt Funds 12.87%Equity Funds Nil

Equity Linked Saving Schemes (ELSS) advantage: all about 80C investments

ELSS Advantage over other tax saving instruments1. Low Lock in period

2. Earn market linked return

3. Tax free returns

Instrument Returns Lock In Period (in Years)

EPF 8.50% Until RetirementPPF 8% 15NSC 8% 6FD’s – Banks & Post office 5.70 to 8.50% 5Senior Citizen Savings Scheme 9% 5Life Insurance Policies 5 to 6% 3ELSS Market Linked 3ULIP Market Linked 3 - 5NPS Market Linked till age 60

Investment in Mutual Fund through SIP

SIP – Systematic Investment Planning…it is a method of investing a fixed sum, at a regular interval, in a mutual fund.

It is very similar to monthly saving schemes like a recurring monthly deposit / post office deposit

Advantages of Systematic Investment Planning Encourages Regular Investments (just like recurring deposit

schemes)

A Convenient way to invest regularly Lower initial investment without cutting into regular expense

Long term perspective

Rupee Cost Averaging Benefit to counter volatility - it brings down the average cost of your Investments

No timing the market!!!

Meet investment objective with investment needs

Helps to match the risk / return profile

SIP: The Power Of Compounding

SIP of Rs. 1000 invested per month @ 8% pa till the age of 60.

Starting Age Total Amount Saved

Value at the age of 60

25 4,20,000 23,09,17530 3,60,000 15,00,29535 3,00,000 9,57,36740 2,40,000 5,92,947

…the sooner you start, makes a difference!

SIP - How Rupee Cost Averaging helps

This example uses assumed figures and is for illustrative purposes only.

Put aside an amount regularly Rupee cost averagingDiscipline is the key Control volatility

Month Amount Rising Market Falling Market Volatile Market

NAV (Rs) Units Allotted NAV (Rs)Units

Allotted NAV (Rs) Units Allotted1 10000 10 1000.00 10 1000.00 10 1000.002 10000 10.5 952.38 9.75 1025.64 10.5 952.383 10000 12 833.33 9 1111.11 9 1111.114 10000 14 714.29 7 1428.57 11 909.095 10000 17 588.24 6.5 1538.46 13 769.236 10000 18 555.56 6 1666.67 11.5 869.57

Total 60000 81.50 4643.79 48.25 7770.45 65.00 5611.38

Avg. Purchase NAV (Total ofNAVs/No. of investments 13.58 8.04 10.83Avg. cost per unit (TotalInvestment /No of units held) 12.92 7.72 10.69

Mutual Fund: How to buy?

Financial Goals

Identify ‘What to Buy’

Evaluate Funds from various Mutual Fund Cos.

Online Offline

Mutual Fund Co. and others Financial Distributor

Fill Up Form

Attach Relevant Documents

Submit

Banks,

Financial Svc. Cos.,

Brokers,

Individual Agents

Mutual Fund: How to redeem?

Fill-up relevant details(You could do partial redemption as well)

Sign the Form(All applicants to the units need to sign)

Submit(Submit the form to the Branch of the specific Mutual Fund Co.)

Money into your Bank Account(Money gets credited to you as per the scheme-specific turnaround time)

Choose ‘redemption’

Download Common Transaction Slip(Download from Mutual Fund Company’s website or get it from the branch)

Demystifying NAV – Net Asset Value

While selecting a fund, the NAV shouldn’t be the criteria, A low NAV need not mean that it’s a good buy ...

Mutual Fund Scheme Name Growth

Jan 1st 2009 Oct 21st 2009A 23.55 38.97 65.5%B 7.44 12.04 61.8%C 19.86 30.23 52.2%D 21.70 31.57 45.5%E 12.10 16.56 36.9%

NAV's on

In the above example during the period under consideration the best growths have been recorded by the funds with the “lowest” (Scheme B Rs 7.44) and the “highest” (Scheme A- Rs 23.55) NAVs respectively.

On the other hand the least growth has been recorded by (Scheme E), a fund with a low NAV.

Clearly the data suggests that there is no correlation between the NAV size and the returns.

Types of risks associated with Mutual Fund Investment

Risk is an inherent aspect of every form of investment. For Mutual Fund investments, risks would include variability, or period-by-period fluctuations in total return. Market risk: At times the prices or yields of all the securities in a particular market rise or fall due to broad outside influences. This change in price is due to 'market risk'.Inflation risk: Sometimes referred to as 'loss of purchasing power'. Whenever the rate of inflation exceeds the earnings on your investment, you run the risk that you'll actually be able to buy less, not more.Credit risk: In short, how stable is the company or entity to which you lend your money when you invest? How certain are you that it will be able to pay the interest you are promised, or repay your principal when the investment matures?Interest rate risk: Interest rate movements in the Indian debt markets can be volatile leading to the possibility of large price movements up or down in debt and money market securities and thereby to possibly large movements in the NAV.Other risks associated are:Investment risks Liquidity risk Changes in the government policy

Myth: Mutual Funds are for Experts

TRUTH• Quite the reverse• Investors does not have to take the call on when to buy or sell

shares• Specialized Fund Manager will do it for you.• It is his job to track various sectors and companies and decide

where to put the money you and other investors have given him• Remember your goals before Numbers

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Myth: Mutual Funds is an equity product

TRUTH• Mutual Funds have various products – can carry any passenger• Equity Mutual Funds will buy shares off the stock markets and • Debt Mutual Funds will buy into debt products like government

bonds, corporate debentures and treasury bills. • The risk of each kind of fund will depend on the passenger carried

by the bus.

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Myth: Mutual Fund with Rs.10 NAV is better than a MutuaL Fundscheme having a Rs.25 NAVTRUTH• This is by far the most enduring myth that investors continue to

believe. • The fact is that it is the percentage return on invested funds that

matters. remains unnoticed and over looked. • For example. given a similar performance level of 10% appreciation.

a Rs.10 NAV will rise to Rs.11 whereas a Rs.200 NAV will rise to Rs.220. It's a simple truth that is neither told nor heard.

• In fact. due to already demonstrated performance, the chances of the Rs.200 scheme posting the 10% appreciation is far higher than the one which has just started its innings.

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Important Information

The market information, wherever stated has been sourced from the entities referred in the document. This information is purely for informational purposes and should not be construed as reflecting or indicating the views of Baroda Pioneer Mutual FundThe value of investments and income from them may go down as well as up and an investor may not get back the amount invested. Please consult your tax advisor before investing.Risk Factors: ▪Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the schemes or that the schemes objectives will be achieved. ▪As with any investment in securities, the NAV of the units issued under the schemes can go up or down depending on various factors and forces affecting capital markets. ▪Past performance of the Sponsor /the AMC/the Mutual Fund does not indicate the future performance of the schemes.

Please read the scheme information documents of the scheme and the statement of additional information before investing.

Statutory: Kindly incorporate the statutory details related to the constitution of the AMC and the names of the Trustee and AMC.

About Us

• Joint Venture between Bank of Baroda & Pioneer Investments

• Pioneer Investments

– Part of Unicredit Bank, one of the largest in Europe

– Headquartered in Milan, Italy

– Currently manages an AuM of 181 billion Euro

– Present in 25 countries

• Pioneer Investments took a stake in the erstwhile BOB Asset Management Co and company was renamed as Baroda Pioneer Asset Management Company

• Assets under Management at the time of change of control in July 2008 was at INR 60 crores

• Baroda Pioneer Mutual Fund manages assets of about Rs.5,702 Cr. (Quarterly AUM for July-September’ 2012 and operates from more than 50 locations in India

Pioneer Investments

Investment ExperienceSince 1928

Expansionto Latin

America

20072003 2006 2008

Expansion to Indian Market

HVB Asset Management Units’Integration

2010 2011

Acceleration of Organic Growth

Expansion to CEE

Strategic

Review

New Business PlanSuccessful management of financial crisis: liquidity in all mutual funds

A Leading Player Ready to Face New Challenges 2000

The new Pioneer

Investments is born

We Always Look for Quality in the Longer Term

“There is no substitute for buying quality assets and allowing them to compound over the long term. Patience can produce uncommon profits.”

Philip CarretFounder of Pioneer Fund

Mutual Funds Magazine (1995)

Over 80 Years Delivering Value to Clients Pioneer Fund Has Outpaced The Market Since 1928

Source: Towers Data and Ibbotson as of 09/30/12. Pioneer Fund performance is at NAV and does not reflect the 5.75% sales charge for Class A shares. It reinvests all dividends and capital gains gains at NAV. Performance data relates to Pioneer Fund, a US domiciled fund and is provided for illustrative purposes only. This data is not indicative of the performance of Pioneer Funds – U.S. Pioneer Fund, a Luxembourg registered investment fund. Pioneer Funds – U.S. Pioneer Fund and the Pioneer Fund have the same portfolio manager and similar investment objectives and policies. However, the funds are domiciled in different jurisdictions and are subject to different regulatory regimes, which affect the manner in which they are managed. Investment results will vary. There can be no assurances the Pioneer Funds – U.S. Pioneer Fund will achieve similar results due to different inception dates, fund sizes, portfolio holdings and other factors. The units of Pioneer Funds –U.S. Pioneer Fund may not be offered or sold to citizens and residents of the United States, or to any investors while in the United States, whereas the Pioneer Fund is available to citizens and residents of the United States. Pioneer Fund is a US registered investment company which is not made available for offering or subscription outside the United States of America. The S&P 500 data shown combines a number of indices. The 90-stock Composite was calculated from 1926 through February 1957 when S&P introduced the S&P 500 stock average including 425 industrials, 25 rails and 50 utilities, weighting the index substantially in favor of the industrials. S&P did not calculate the 500-stock index prior to March 1957, but used the old 90-share index (as well as the old 50 industrials, 20 rails and 20 utilities indices) to extend the data back to 1928.

Bank of Baroda

Bank of Baroda: Key strengthsBank of Baroda is a 104 years old State-owned Bank with modern & contemporary personality,offering banking products and services to Large Industrial, SME, Retail & Agricultural customersacross India and 24 other countries.

Relatively Strong Presence in Progressive States like

Gujarat & Maharashtra

Uninterrupted Recordin Profit-making and Dividend Payment

Overseas Business Operations extend across

24 countries through 96 Offices

First PSB to receiveCorporate Governance

Rating (CGR-2)

Robust TechnologyPlatform with 100%

CBS in Indian Branches

Pioneer in many Customer-Centric

Initiatives

Strong Domestic Presence through

4,021 Branches

Modern & ContemporaryPersonality

Provides Financial Services to over 47 mln Customers

Globally

A well-accepted &recognised Brand in

Indian banking industry

Baroda Pioneer Mutual Fund

Six Principles Behind Our Investment PhilosophyWorking within a rigorous investment framework comprising three pillars of investment specialists

Emphasising intrinsic valuation measures based on proprietary research

Leveraging career research teams with a global perspective supporting local portfolio management decision-making

Actively managing portfolios to deliver competitive risk-adjusted returns

Maintaining a culture of shared ideas and transparent debate among teams, while encouraging individual innovation and expertise

Playing a leading role within the industry through constant advances to develop new methodologies to provide cutting-edge solutions to investors

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3

4

5

6

2

A Globally Integrated Investment Process

Three Pillars

• Proprietary Research–Over 100 fundamental and quantitative analysts• Scalable Investment Strategy –Over 160 experienced portfolio management investment

professionals • Accountability–Direct responsibility for investment ideas; 80% of compensation driven by long

term performance

Product Strategy: Current scale of products

Equity Debt

Baroda Pioneer Balance Fund Baroda Pioneer Liquid Fund

Baroda Pioneer Growth Fund Baroda Pioneer Treasury Advantage Fund

Baroda Pioneer ELSS 96 Baroda Pioneer PSU Bond Fund

Baroda Pioneer Infrastructure Fund Baroda Pioneer MIP Fund

Baroda Pioneer PSU Equity Fund Baroda Pioneer Income FundBaroda Pioneer Banking and Financial Services Fund Baroda Pioneer Gilt Fund

Baroda Pioneer Short Term Bond Fund

Baroda Pioneer Dynamic Bond Fund

Contact Us

Baroda Pioneer Mutual FundAddress: 501 Titanium, 5th Floor, Western Express HighwayGoregaon (E), Mumbai - 400 063

Phone: 022-3074 1000 / 022-4219 7999Fax: 022-3074 1001 Email :info@barodapioneer.inWebsite: www.BarodaPioneer.inToll Free: 1 800 419 0911

Mutual fund investments are subject to market risks, please read all scheme related documents carefully

Thank You