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Systematic Investment Plan (SIP) |
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Regular Investing is not easy. People make a one time investment and
forget or invest sporadically. This is due to lack of time and other
constraints in daily life. The result? The investment may not give
optimal returns. |
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However, there is simpler solution called the “Systematic Investment
Plan” (SIP) offered by DBS Chola Mutual Fund. SIP simply means
investing a fixed amount of money at regular intervals. It is just
like a recurring deposit with the post office or bank where you put
in a small amount of money each month. The difference here is that
the amount is invested in a mutual fund. The minimum amount to be
invested can be as small as Rs 1000 and the frequency of investment
is usually monthly. |
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The Systematic Investment Plan offered by DBS Chola Mutual Fund is a
smart, sensible and convenient way of investing in the stock market.
Besides disciplining you to invest regularly, SIP also allows you to
take advantage of market ups and downs; thereby minimizing the risk
posed by the stock market and helping you create wealth over the
long term. |
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How an SIP scores? |
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Disciplined Investing in an Unpredictable
Stock Market! |
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Markets are unpredictable, and it's difficult
for most investors to pick the best time to buy or sell. “Time in"
the market is generally regarded as more important than trying to
"Time" the market. A steady approach can take the emotion out of
investing and helps you stick to your long-term investment plan. A
Systematic Investment Plan may be a good way to achieve that
objective. By investing systematically, an investor typically buys
more units when prices are low and fewer units when prices are high,
which over time may lower the average unit cost. The concept is
called “rupee cost averaging” and it helps to build a solid
foundation for your savings over time. |
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Lump sum Investment |
SIP Investment |
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Date |
Amount(Rs) |
NAV |
Units |
Amount(Rs) |
Units |
| 1-Jan-07 |
6000 |
15.00 |
400 |
1000.00 |
66.67 |
| 1-Feb-07 |
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16.73 |
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1000.00 |
59.77 |
| 1-Mar-07 |
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17.95 |
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1000.00 |
55.71 |
| 1-Apr-07 |
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15.35 |
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1000.00 |
65.15 |
| 1-May-07 |
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13.70 |
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1000.00 |
72.99 |
| 1-Jun-07 |
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10.60 |
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1000.00 |
94.34 |
| Total Amount Invested (Rs) |
6000.00 |
6000.00 |
| Average NAV |
15.00 |
14.89 |
| Average Cost (Rs) |
15 |
14.47 |
| Total Units |
400.00 |
414.63 |
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Outcome : Investments through SIP helps you
lower your average unit cost. |
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Benefits of Compounding |
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The longer you invest; chances are that your returns will be
disproportionate. A sum of Rs.1000/- invested each month over
different time periods, offering various rates of returns as
indicated below.
Rs. 1000/- invested per month, |
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Amount in Rs |
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| Rate of
Return |
Value at the
end of 3
yrs |
Value at the
end of 5
yrs |
Value at the
end of 10
yrs |
Value at the
end of 15
yrs |
| 5% |
39,722 |
69,623 |
158,481 |
271,890 |
| 8% |
42,073 |
76,031 |
187,746 |
351,891 |
| 10% |
43,692 |
80,587 |
210,374 |
419,397 |
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Invest with as low as Rs.1000 per month |
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If you don’t want to invest lump sum, you can begin by investing
small amounts through SIP. SIP ensures that you save regularly. You
can use the Auto Debit facility offered by banks to transfer money
to your SIP account. |
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Helps you build for the future |
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Most of us have needs that involve significant amounts of money,
like child’s education, daughter’s marriage, buying a house or a
car. By investing small amounts every month through SIP, you can
build portfolio overtime and have a far better chance of fulfilling
your needs. |
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Actual Experience of SIP of Rs.1000/- per month with DBS Chola
Mutual Funds (As on 29th June 2007) |
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| DBS
Chola Opportunities Fund |
| Period |
Investment( Rs) |
Value of Investment(Rs) |
Annualised Return |
| 1 Year |
12000 |
15139 |
71.44% |
| 2 Year |
24000 |
34490 |
39.56% |
| 3 Year |
36000 |
63048 |
40.20% |
| Since Inception |
42000 |
79402 |
39.13% |
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| DBS
Chola Growth Fund |
| Period |
Investment( Rs) |
Value of Investment(Rs) |
Annualised Return |
| 1 Year |
12000 |
13869 |
30.52% |
| 2 Year |
24000 |
31958 |
30.46% |
| 3 Year |
36000 |
59381 |
35.53% |
| 5 Year |
60000 |
163255 |
41.45% |
| Since Inception |
69000 |
217938 |
40.91% |
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| DBS
Chola Multi-Cap Fund |
| Period |
Investment( Rs) |
Value of Investment(Rs) |
Annualised Return |
| 1 Year |
12000 |
13214 |
19.54% |
| 2 Year |
24000 |
29085 |
19.82% |
| Since Inception |
28000 |
36252 |
25.67% |
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| DBS
Chola Midcap Fund |
| Period |
Investment( Rs) |
Value of Investment(Rs) |
Annualised Return |
| 1 Year |
12000 |
14269 |
37.36% |
| 2 Year |
24000 |
31293 |
28.04% |
| Since Inception |
34000 |
52930 |
34.74% |
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Investment Objective |
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DBS Chola Opportunities Fund: The Scheme will invest mainly
to generate long-term capital appreciation from a diversified
portfolio of equity-related securities |
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DBS Chola Growth Fund: The Scheme
primarily seeks to generate long-term capital appreciation income through
investments in equity and equity related
instruments; the secondary objective is to generate some
current income and distribute dividend. |
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DBS Chola Midcap Fund: To generate
capital appreciation by investing primarily in midcap stocks. The scheme will invest in
companies whose market capitalization falls between
the highest and the lowest constituent of the CNX
Midcap Index. |
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DBS Chola Multi-Cap Fund: To provide
long term capital appreciation by investing in a well diversified
portfolio of equity & equity related instruments
across all ranges of market capitalisation. |
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Risk Factors: "All investments in
Mutual Funds and Securities are subject to market
risks and the NAV of the Scheme may go up or down,
depending upon the factors and forces affecting the securities market. There cannot be
any assurance that the Schemes' Investment Objectives
can be achieved. The past performance of
the AMC, Mutual Fund, the Sponsor or its Group
affiliation is not indicative of the future performance
of the Scheme. DBS Chola Opportunities Fund, DBS Chola Growth Fund, DBS Chola Midcap Fund
and DBS Chola Multi-Cap Fund are only the names of the Schemes and do not in any manner
indicate the quality of the Schemes, their future prospects or returns. The
Schemes do not guarantee any assured returns to the
investors.Investors are requested to refer the offer
document of the respective scheme carefully before making any investments. |
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Statutory Details: DBS Chola
MutualFund has been established as a trust under the
Indian Trust Act, 1882 by Cholamandalam DBS
Finance Limited (liabilityrestricted to the seed
corpus of Rs. 1 lakh) with DBS Cholamandalam
Trustees Limited as the Trustee and DBS Cholamandalam Asset Management Limited as the
Investment Manager. |
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