Tata Offshore Fund

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Series 3 A 36 months closed ended hybrid scheme
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WHAT ARE INVESTORS ASKING US TODAY?

• What do I do with my savings at these market
  levels?
• How do I meet my key financial goals from here?
• Housing
• Retirement
• Children's education marriage
• Healthcare
• Will the equity market volatility hurt me in the
  future?

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WHY ARE INVESTORS WORRIED?
High Inflation
Market Volatility
The different clouds of doubt
Financial Goals of life
How should I invest?
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Investing is a Long term game
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EQUITY MARKET VOLATILITY
Markets in the short term are extremely volatile
BSE value source www.bseindia.com
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MARKET VOLATILITY OVER THE LONGER TERM
Its not about Timing the market, its about Time
in the Market.
Markets in the long term are less volatile
BSE value source www.bseindia.com
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MARKET VOLATILITY OVER THE LONGER TERM
Source Credit Suisse research
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EXAMPLE OF LONG TERM INVESTMENTS BENEFITS
An analysis of 1,3,5 and 10yrs daily rolling
returns for the period Jan 2000 till 31th Aug 2011
The downside risk is higher in the short term
A study of 1,3,5 and 10yr returns on daily
rolling basis for BSE Sensex. Returns more than 1
yr taken as CAGR return. Daily closing values
were considered as investment and selling price
assumption.
BSE value source www.bseindia.com
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PROOF OF LONG TERM INVESTING BENEFITS

• Analysis of daily returns on 1, 3 , 5 and 10 yrs
  basis since Jan 2000 till 31th Aug 2011 threw
  below given results

Time Periods 1yr 3yr 5yr 10yr
Average returns 19.55 19.33 22.84 15.89
No of times negative returns 820 291 0 0
Total no. of Observations 2663 2164 1657 418
Probability of loss 30.8 13.4 0.0 0.0
Maximum return 114.69 60.81 47.26 19.74
Minimum Return -57.65 -18.12 2.13 10.47
Standard Deviation 34 18 11 2
A study of 1,3,5 and 10yr returns on daily
rolling basis for BSE Sensex. Returns more than 1
yr taken as CAGR return. Daily closing values
were considered as investment and selling price.
BSE Sensex value source www.bseindia.com
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Lumpsum Or SIP ?
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LUMPSUM V/S SIP
A comparison of lumpsum investment of Rs.36,000
in BSE on 01st Jan 2008 and 36 monthly SIP of
Rs.1000 for Jan 2008 till Dec 2010
BSE value source www.bseindia.com
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LUMPSUM V/S SIP

• SIP Investment
• Benefits from both upside and downside in
  markets. Hence, no need of market timing
• Investment grow over a period of time and hence,
  low risk of big losses in short time frame
• Benefits of cost averaging
• Favourable in volatile markets
• Lower volatility of investment value due to
  regular investments and averaging of prices

• Lumpsum Investment
• Requires timing the market
• Risks of losing a big portion of investments
• No benefits of cost averaging
• Not favourable in volatile markets
• Higher volatility of investment value

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Why shouldyou go forSIP
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USE SYSTEMATIC INVESTING TO OVERCOME VOLATILITY

• Systematic investing is a process of investing
  regularly at fixed intervals. This interval could
  be monthly or quarterly

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THE BENEFITS OF SIP
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DISCIPLINED INVESTING

• In an SIP, you invest in a disciplined manner
  irrespective of market conditions.
• This means diversifying investments over
  various time periods
• This means you dont bother about market highs
  and lows
• SIP helps minimise risk associated with volatile
  markets.

AVOID THE TEMPTATION OF TIMING YOUR INVESTMENTS
"MARKET TIMING" IS BEST LEFT TO PROFESSIONALS
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POWER OF COMPOUNDING

• The earlier you start investing, the better it is
  for creating long term wealth.
• The longer you invest the more your money will
  have the opportunity to grow.

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START EARLY
Rs.1000/- invested p.m _at_ Rs 8 p.a till age 60 Total Amount Saved Value at the age of 60
Starting Age Total Amount Saved Value at the age of 60
25 420,000 2,309,175
30 360,000 1,500,295
35 300,000 957,367
40 240,000 592,947
THE AGE FROM WHEN YOU START MAKES A DIFFERENCE
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RUPEE COST AVERAGING

• By investing a fixed sum at fixed intervals we
  can
• Buy fewer shares when the price is higher
• More shares when the price is lower
• It brings down the average cost per unit.
• This is called Rupee Cost Averaging.
• SIP takes care that your average price works out
  to be lower than the price you would have paid at
  the market peak. However in a one way movement,
  the SIP strategy may not benefit investors

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SIP InClosed ended way
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WHY SIP IN CLOSED WAY?
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IMPACT OF DISCONTINUING SIP IN BEAR MARKET
Total SIP done Rs.24,000
Investment value Rs.17,331
An SIP started on 01st Jan 2007 in BSE SENSEX and
if discontinued after the month of December 2008
would have resulted in the investment value of
Rs.17,331/- as on 01st Jan 2009 on a investment
of Rs.24,000/- yielding a negative CAGR of
-15.02
BSE value source www.bseindia.com
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IMPACT OF CONTINUING SIP IN BEAR MARKET
If the same SIP in BSE SENSEX would have been
continued for 3yrs till Dec. 2009 the value of
investments as on 04th Jan 2010 would have been
Rs.46,724/- on the investment of total
Rs.36,000/- resulting in a CAGR return of 9.08.
BSE value source www.bseindia.com
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WHY SIP IN CLOSED WAY?
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THE IMPACT OF TAX BENEFITS ON INVESTMENTS
A comparison of a normal STP from a Crisil Liquid
Fund Index to BSE Sensex vis-à-vis an SIP
Strategy fund shows the impact of taxation on a
Systematic Transfer investment strategy . An
analysis of returns for the period 01st Jan 2007
till 04th Jan 2010 shows that investment in an
closed ended SIP strategy fund yielded a CAGR
return of 12.29 vis-à-vis an normal STP s CAGR
return of 11.29 . Methodology Assumed
Rs.36,000 invested in Crisil Liquid Fund Index
and 36 equal installments being transferred to
BSE Sensex with short term capital gains tax on
first eleven installments from liquid fund index
and last eleven installments of BSE Sensex due
to their redemption before completion of one year
under normal STP strategy. Assuming redemption
after 3yrs on 4th Jan 2010.
Tax rate _at_30.9 on short term
gains on Liquid Fund index and 10.3 tax on gains
thereafter. STCG _at_ 15.45 on last 11
installments in BSE Sensex Please consult your
Tax advisor for more information
Price Source
www.bseindia.com, www.amfiindia.com
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Tax Benefits

• Normal SIP Each instalment must be held for a
  period of more than 12months in order to get the
  benefit of long term capital gains tax.
• STP
• Each transfer from debt to equity where the units
  are held for 12 months or less will be taxed _at_
  30.9 .
• Where units are held for more than 12 months,
  long term capital gains tax _at_ 10.3 (without
  indexation) will be applicable
• If redeemed after 3yrs the last 11 installments
  in equity is subject to short term capital gains
  tax _at_15.45
• SIP 3 On maturity, the long term capital
  gain that may arise, will be tax free in the
  hands of the investors due to it becoming equity
  oriented fund in last year. Further scheme is
  also exempt from paying income tax on its income.
  However redemption on maturity will be subject to
  securities transaction tax.
• Disclosure The information set out above is
  included for general information purposes only
  and does not constitute legal or tax advice.
  Investor is advised to consult his or her own tax
  consultant with respect to specific tax
  implications arising out of their participation
  in the Scheme or investment products.

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WHY SIP IN CLOSED WAY?
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A Smart optionfor you
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INTRODUCING
Series 3 A 36 months closed ended hybrid scheme
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WHAT IS TATA SIP?

• Tata SIP Fund is a 36 months close-ended hybrid
  scheme
• The fund portfolio will convert from a debt
  oriented to an equity oriented portfolio over
  this period
• It is based on the well-known and widely
  understood Systematic Investment Plan concept
• Greatly enhances the convenience of investing
  systematically

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WHAT IS THE DIFFERENCE BETWEEN TATA SIP AND A
REGULAR SIP?
Regular SIP

• Regular SIPs offer investors the facility of
  auto-debit of funds or post-dated cheques at time
  of investment.

• Tata SIP Fund invites lump sum subscription
  amounts during the NFO which will initially be
  invested in debt and money market instruments.
  These funds will then be systematically
  transferred to equities over a period of 36
  months.

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HOW THE FUND WILL WORK?

• The scheme will invest initially in debt and
  money market instruments.
• In a systematic manner, funds will be allocated
  to equities over a close ended period (like 36
  months SIP in equities)
• The process of systematic investing will help the
  scheme to reduce the risk of volatility of equity
  market.
• Investor has the option of redeeming his money or
  switching to Tata Pure Equity Fund

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HOW THE FUND WILL WORK?
YEAR 1
Month end from date of allotment Debt money market () Equity / Equity related instruments ()
1st Month 97.25 2.75
2nd Month 94.50 5.50
3rd Month 91.75 8.25
4th Month 89.00 11.00
5th Month 86.25 13.75
6th Month 83.50 16.50
7th Month 80.75 19.25
8th Month 78.00 22.00
9th Month 75.25 24.75
10th Month 72.50 27.50
11th Month 69.75 30.25
12th Month 67.00 33.00
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HOW THE FUND WILL WORK?
YEAR 2
Month end from date of allotment Debt money market () Equity / Equity related instruments ()
13th Month 64.25 35.75
14th Month 61.50 38.50
15th Month 58.75 41.25
16th Month 56.00 44.00
17th Month 53.25 46.75
18th Month 50.50 49.50
19th Month 47.75 52.25
20th Month 45.00 55.00
21st month 42.25 57.75
22nd Month 39.50 60.50
23rd Month 36.75 63.25
24th Month 34.00 66.00
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HOW THE FUND WILL WORK?
YEAR 3
Month end from date of allotment Debt money market () Equity / Equity related instruments ()
25th Month 31.25 68.75
26th Month 28.50 71.50
27th Month 25.75 74.25
28th Month 23.00 77.00
29th Month 20.25 79.75
30th Month 17.50 82.50
31st Month 14.75 85.25
32nd Month 12.00 88.00
33rd Month 9.25 90.75
34th month 6.50 93.50
35th month 3.75 96.25
36th month 1.00 99.00
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TATA SIP BENEFITS - INVESTOR

• One time investing
• Hassle free SIP administration
• Forced discipline irrespective of markets being
  good or bad
• Smart Tax efficient investment tool due to long
  term capital gains
• Lower expense ratio for debt component may boost
  returns
• Appropriate to current stock market situation
• Debt component may benefit from current peaking
  interest rate scenario
• The investor also has the option of switching to
  Tata Pure Equity Fund at the end of 36 months

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TATA SIP BENEFITS FUND MANAGER

• Disciplined investment
• Not exposing entire investment amount to the risk
  of volatility
• Achieve better results by investing smaller
  amounts regularly
• Avoids Prediction of Uncertain Price Movement
• By investing small amount regularly into
  equities, the fund manager will avoid investing
  larger sums when the markets are at a high and
  smaller sums when the markets are at a low.
• Relatively stable corpus
• Since the fund is closed ended, the fund manager
  will invest keeping in mind certain time horizons.

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TATA ASSET MANAGEMENT - 17 YEAR TRACK RECORD

• The overall philosophy of fund management is to
  look for growth at reasonable valuations.
• A disciplined approach to research with a
  bottom-up bias and active fund management has
  been at the core of our approach.
• A strong risk-management framework.
• Time tested We have stuck to this approach for
  seventeen years

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The ideal solution for our typical investors

• Indias tomorrow is bright
• But markets are in volatile phase
• We have experienced sharp volatility at higher
  levels
• Dont worry. Ride the waves of prosperity of
  Indian Economy systematically through SIP

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Kar lo TATA SIP Fund ka meter on, chahe market up
ho ya down.
The scheme aims to minimise risk associated with
a volatile market by investing systematically
into equities over the close ended period
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Risk Factors

• Nature and Investment objective Tata Pure Equity
  Fund An open ended equity scheme. To provide
  income distribution and / or medium to long term
  capital gains while at all times emphasising the
  importance of capital appreciation. Tata SIP Fund
  Scheme Series 3 A 36 months close ended hybrid
  scheme. At the end of 36 months, investors in the
  fund have the option of switching to Tata Pure
  Equity Fund. The Primary Investment Objective of
  the Scheme is to achieve a long term growth. The
  scheme seeks to achieve investment objective by
  investing systematically in the Equity /Equity
  related instruments. However there can be no
  assurance that the investment objective of the
  scheme will be realized, as actual market
  movements may be at variance with anticipated
  trends. The Mutual Fund/AMC and it empanelled
  brokers has not given and shall not give any
  indicative portfolio and indicative yield in any
  communication, in any manner whatsoever.
  Investors are advised not to rely on any
  communication regarding indicative
  yield/portfolio with regard to the scheme. Sale
  at Rs. 10/- per unit for cash at face value
  during the New Fund Offer. Minimum Investment
  Amount Rs. 5000 and in multiples of Re. 1
  thereafter. Two Options for Investment Dividend
  Option and Growth Option. Investment Pattern
  Year 1 - Equity/Equity related instruments
  0-35, Debt and Money Market Instruments 65 -
  100, Year 2 - Equity /Equity related
  instruments 30-70 Debt and money market
  instruments 30- 70, Year 3 - Equity/Equity
  related instruments 65 - 100, Debt and money
  market instruments 0 - 35. Applicable Load
  Structure Entry Load NA, Exit Load Nil.
  Transparency of operation / NAV Disclosure
  Determination of Net Asset Value (NAV) on all
  business days. Liquidity Being a close-ended
  Scheme, the fund does not intend to buy the units
  back till the maturity of the schemes. However,
  in order to provide the liquidity to the
  investors, the schemes are proposed to be listed
  on the BSE. (In principle approval from BSE has
  been obtained vide letter dated March 24, 2011).
  Listing The units of the scheme will be listed
  on BSE. BSE Disclaimer It is to be distinctly
  understood that the permission given by the
  Bombay Stock Exchange Ltd. should not in any way
  be deemed or construed that the Scheme
  Information Document has been cleared or approved
  by BSE nor does it certify the correctness or
  completeness of any of the contents of the Scheme
  Information Document. The investors are advised
  to refer to the Scheme Information Document for
  the full text of Disclaimer Clause of BSE.
  Statutory Details Constitution Tata Mutual Fund
  has been set up as a trust under the Indian Trust
  Act, 1882. Sponsors Settlors Tata Sons Ltd.,
  Tata Investment Corporation Ltd. Investment
  Manager Tata Asset Management Ltd. Trustee Tata
  Trustee Co. Ltd. Risk Factors Mutual Fund and
  securities are investments subject to market
  risks and there can be no assurance and no
  guarantee that the scheme will achieve its
  objectives. As with any investment in stocks,
  shares and securities the NAV of the units under
  the scheme can go up or down, depending upon the
  factors and forces affecting the capital market.
  Past performance of the previous Schemes, the
  Sponsors or its Group affiliates is not
  indicative of and does not guarantee the future
  performance of the Scheme. Tata Pure Equity Fund
  Tata SIP Fund Scheme Series 3 are only the
  names of the schemes and does not in any manner
  indicate either the quality of the scheme, its
  future prospects or the returns. The sponsors are
  not responsible or liable for any loss resulting
  from the operations of the scheme beyond the
  initial contribution of Rs.1 lac made by them
  towards setting up the Mutual Fund. Investment by
  Mutual Fund schemes in fixed income securities is
  subject to interest rate risk, credit risk and
  liquidity risk. Derivatives require the
  maintenance of adequate controls to monitor the
  transactions entered into, the ability to assess
  the risk that a derivative adds to the portfolio.
  Risks in using derivatives include the risk of
  default of counter party, mis-pricing and the
  inability of derivatives to correlate perfectly
  with underlying assets, rates and indices. Scheme
  specific risk factors have been mentioned in the
  Scheme Information document. The scheme is not
  offering any assured/guaranteed returns to
  investors. Please consult your tax advisor
  regarding applicability of prevailing tax laws.
  For scheme specific risk factors and other
  details please read the Scheme Information
  document (SID), Key Information Memorandum (KIM)
  Statement of Additional Information (SAI) of
  the scheme carefully before investing. For Scheme
  Information Document (SID) Application forms,
  please contact your nearest Collection Center /
  AMC Office.