IIFL Investor - India Infoline Finance Limited

INVESTOR
Volume 1, Issue 1, Mumbai, June 2012 Publication Price `3 Pages - 4
Have you started investing?
The importance of starting early
Mutual Fund Fundas
A Starter’s Guide
Buying a Home?
Five things to keep in mind
Insurance & Fixed Deposit
Schemes
Page 2 Page 3 Page 4
Page 2
IIFL MF launches
IIFL Dividend Opportunities Index Fund
IIFL Dividend Opportunities Index Fund ('Scheme')
is an open ended index fund which will invest in
stocks which are constituents of CNX Dividend
Opportunities Index ('Dividend Index') in the same
proportion (weightage) as in the Dividend Index,
subject to tracking error.
Key Highlights
• Maiden mutual fund scheme which will replicate
a thematic index (Dividend Index) of high
yielding companies listed on NSE
• Diversified across sectors and market
capitalization (25 sectors and consists of large cap
and mid cap stocks)
• Being an Index Fund - generally lower expenses
are charged as compared to actively managed
equity mutual fund schemes
Dividend Index has generally
outperformed* other key representative
Indices (e.g S&P CNX Nifty,
CNX 100, CNX Midcap)
* Index base date October 2007
About CNX Dividend Opportunities Index
• Dividend Index is a thematic index owned and
managed by India Index Service and Products Ltd
(IISL) -(A Joint Venture between NSE and CRISIL)
• Top 50 companies falling within IISL’s selection
criteria and ranked by annual dividend yield
across 25 sectors form part of Dividend Index
• Companies are selected out of the top 300 by
average free-float market capitalization and
aggregate turnover for the last six months
• Companies should have net profit and positive
net worth as per latest annual audited results
• The weightage of the Dividend Index constituents
is capped at 8% and may increase up to a maximum
of 10% between the rebalancing periods
th
(Source: IISL fact Sheet March 30 2012.
For further details please read Scheme Information document)
IIFL Investor -
Your First Issue
Dear investor,
Insurance - let's get the amount "First-time-Right"
The need for insurance is appreciated by
all. It is important to first understand the
various factors and variables to ensure an
adequate insurance cover. After all, what
you leave behind for your dependents is a
sense of security and financial freedom in
your absence.
Your policy cover should be enough to
cover the monthly expenses of your
family. It should account for unforeseen
emergencies, take care of your children's
higher education and their wedding
expenses.
Before arriving at a number, take a closer
look at the questions you need to ask
yourself before selecting an optimum
insurance plan.
How much money does your family need
in a month to live comfortably or
maintain their present lifestyle?
This is largely based on the number of
dependents at home. More the number of
dependants, higher is the cover required.
How long will it take before your eldest
child starts earning?
The younger your kids are, higher will be
the required policy cover.
How risk prone is your lifestyle?
Performance Comparison of key Indices as
on 30th April 2012
Index/ Period 1 2 3 SI**
Year Years* Years*
CNX Dividend
Opportunities Index
CNX S&P
2.02
-8.72
9.96
-0.28
30.69
14.74
9.77
0.76
Nifty index
CNX Midcap -8.90 -3.73 24.61 1.55
Index
CNX 100 Index -8.96 -0.89 16.13 0.74
*CAGR, ** 1st Oct 2007
Scheme Details:
If you indulge in adventure sports, or
smoke heavily or drink regularly, it will
impact your premium.
Source: NSE/IISL
NFO Opens- 6th June 2012, NFO closes 19th June
2012
Asset Allocation:
Stocks comprising CNX Dividend Opportunities
Index : 95%-100%, Debt and Money Market
Instruments: 0%-5%*
Plans / Options offered:
Growth & Dividend options
Special Facility:
Systematic Investment Plan (SIP)
Minimum Application Amount:
• Rs. 5000 and in multiples of Rs. 100
thereafter and
• If Systematic Investment Plan (SIP) is availed:
• Monthly Option- Rs. 1000 per month for a
minimum period of six months
• Quarterly Option- Rs. 1500 per quarter for
a minimum period of 4 quarters
Load Structure:
• Entry Load: Nil
• Exit Load- 1% for exit (repurchase/ switchout/
SWP/ STP) on or before 1 year from the
date of allotment of units
Have you got assets to your name?
Get the right amount of
Insurance cover with IIFL
Just give us a missed call on
080 300 88 550
The inaugural IIFL Investor is in your hands now. It will
be our constant endeavor to provide you information on
various opportunities perspectives and aspects from the
world of finance.
This issue covers the basics of mutual funds, the
importance of insurance, things to keep in mind before
buying a house and a lot more.
- Editor
If your asset value is huge, you can bring
down the required insurance cover.
Taking these factors into consideration,
will help you choose a better insurance
plan with sufficient cover.
• Exit Load (For SIP)- 1% for exit (repurchase/
switch-out/ SWP/ STP) on or before 1 year
from the date of allotment of each installment
Dematerialization:
The units of the Scheme are available in the
Dematerialized (electronic) mode also
Fund Manager:
Mr. Manish Bandi, aged 34 years, is a Science
graduate and a Chartered Accountant with 12 years of
experience in the financial services industry
For SID/SAI and other scheme related information
visit www.iiflmf.com.
Note: Dividend Index is a thematic Index owned and
managed by India Index Service and Products Ltd
(IISL)- (Joint Venture between NSE and CRISIL)
*(The Scheme may take an exposure to equity derivatives (upto 10% of
net assets) of underlying index or constituents of the Underlying Index
when equity shares are unavailable, insufficient or for rebalancing in
case of corporate actions for a temporary period.)
Mutual Fund Investments are subject to market
risks, read all scheme related documents carefully.
NFO Opens- 6th June 2012
NFO closes 19th June 2012
To invest in this Mutual Fund from IIFL
Just give us a missed call on
080 300 88 550
Having an insufficient cover or spending
all of your monthly savings on a cover is
not advisable.
A perfect balance is required to leave
behind a 'I care about you' legacy for your
loved ones.
IIFL Investor - Page 1

INVESTOR
June 2012
Insurance Recommendations
Sampoorn Samridhi (HDFC Life)
Choices of Life: Two unique options for getting policy benefits
a. Endowment + whole life: Here customers get Sum assured and all
bonuses at the end of the term and life cover till 99 years.
b. Enhanced cash option: Customer gets additional bonus or Enhanced
Terminal Bonus with sum assured and other bonuses.
• Inbuilt double sum assured on accidental death.
Additional Bonus Benefits:
• 4 different types of bonuses:
a. Revisionary Bonus b. Terminal Bonus
c. Interim Bonus d. Enhanced Terminal Bonus.
Ease of Payment:
Select term of policy from 5- 40 years as per your financial requirement.
Tax benefits:
Avail tax benefits on premiums paid and benefits received under the policy, as
per the prevailing Income Tax laws.
Guaranteed Savings Insurance Plan
(ICICI Prudential)
Ease of Payment:
Limited premium payment term, longer term of life cover.
Guaranteed Benefits:
• Guaranteed life cover of 10 times of premium
• Guaranteed sum assured of 7 times of premium at the maturity
• Guaranteed regular additions (RA) is based on the G-sec rates. RA would
be 50% of the G-sec rate
Additional Benefits:
• Maturity addition paid at the end of the term as a loyalty addition
• All addition is paid as percentage of sum assured and not premium paid
Tax Benefits:
Avail tax benefits on premiums paid and benefits received under the policy, as
per the prevailing Income Tax laws.
FD Recommendations
Mahindra Finance Limited - CRISIL AA+/FAAA/STABLE
Minimum Amount: `10000 and in multiple of `1000 thereafter (Cumulative).
Remarks: 0.25% extra for Sr. Citizen above 60 years/Employee. Renewal only
principal amount. Interest Compounded Annually.
Interest Rates (%):
Highlights:
• The Crisil rating FAAA indicates a high level of safety
• Cumulative as well as non cumulative options are available
Unitech Limited
Minimum Amount `25000 & in multiple of `1000 thereafter.
Remarks: In Cumulative option, interest compounded monthly on deposits
of one year or more and payable on maturity.
Highlights:
• Fastest Growing in its segment with over 100,000 investors
• Current Mobilization of approx. `600 Cr
• Tie-up with most Credible National Distributors' - PAN India
DHFL - Ashray Deposit (400 Days) - CARE (AA+) & BWR (FAAA)
Minimum Amount `10000 & in multiple of `1000 thereafter.
Remarks: 0.50% extra for Privilege Depositors (Sr. Citizens above 60 yrs,
DHFL Shareholders, DHFL H.L Customers, Armed forces Personnel &
Widows), 0.25% extra on single application deposit 25 Lacs and above.
Interest Compounded Half Yearly.
Highlights:
• Safe, Secure Earnings for Short term investment
• Liquid investment
• Prompt / Timely ECS payment facility for Interest payments
Interest Rates (%)
6 M 1 YR 2YR 3 YR 4 YR 5YR
Mahindra Finance Ltd. 10.00 9.5 10.25 10.5 10 10
Unitech Limited 11.5 11.5 12 12.5 - -
Ashray Deposit (400 Days) 400 Days Cumulative 10.75
Have you started investing?
The Importance of starting Early
If you start investing early in life, you are
bound to reap rich rewards in the long run.
Take the case of two youngsters who start
working at the age of 20.
Case 1 (Vijay)
Vijay understands the importance of
investing early. He spends less money on
entertainment and makes sure that he is
investing `50,000 every year.
Assume that Vijay gets 10% return on his
investment every year. At the end of 10
years, he gets `7.96 lakh. However, due to
some financial responsibilities in his family,
Vijay is unable to save money now and
whatever he earns is used for household
expenses. But, he keeps his accumulated of
`7.96 lakh as a fixed deposit in a bank at
10% interest rate till he is 65 years old. Vijay
does not make any fresh investment. But
interest keeps on accumulating on `7.96
Start investing Now!
Just give us a missed call on
080 300 88 550
lakh till 35 years. Thus, when he is 65, he
gets `2.23 crore.
Case 2 (Ajay)
Ajay spends a lot of money and doesn't
believe in investing early. He starts investing
after 15 years when he is 35 years old and
invests for next 30 years. He regularly
invests `50,000 each year till he is 65.
Assume that Ajay also gets a return of 10%
per year. So at the age of 65, he gets a
maturity amount of `82.24 lakh. Vijay
makes regular investment for only 10 years
but Ajay invests regularly for 30 years—20
years more than Vijay. But, Ajay gets `1.41
crore less than Vijay. This is almost 63%
less.
Thus, one needs to start investing as soon as
he/she starts earning. The power of
c o m p o u n d i n g i n c reases returns
exponentially as time passes. What most
people argue is that, they will earn lots of
money later on in their lives but this is not
true. The truth is that, even if you invest
very small amount of money early in your
life in an asset which gives you returns
higher than the inflation, than over the time
your this small amount will multiply into a
big number.
IIFL Investor - Page 2

INVESTOR
June 2012
Mutual Funds
Top Five Recommendations
Understanding the importance of early investing
Franklin India Bluechip (NAV 196.91)
The fund has consistently outperformed its benchmark (BSE
Sensex) and the peer group average in the last 5 years. It has more
than 85% of its holding in large caps and has one of the lowest
expense ratios (1.81) in its category.
This fund is particularly suitable to investors who wish to take
limited risk and generate modest returns.
ICICI Pru Dynamic (NAV 99.97)
This fund aims at providing capital appreciation through
investment in equity and related instruments and for defensive
consideration in debt/money market instruments and
derivatives.
It has consistently outperformed its benchmark (S&P CNX
Nifty) and its peer group average since inception. The fund has
given the highest returns of ~27% CAGR in its category since
inception.
UTI Opportunities (NAV 26.76)
In the last 3 years, this fund has emerged as one of the top 5
funds in its category. About 96.23% of its investments are in
large caps making it one of the safer bets.
Besides, the fund has consistently outperformed its benchmark
and peer group average since inception. In the last three years, it
has given annualized returns of 13.7% as compared to its
category returns of 8% for the same time period.
HDFC Mid-cap Opportunities (NAV 15.48)
The scheme has been ranked 1 in the Small & Mid-cap category
by CRISIL. With CNX Midcap as its benchmark, the fund has
been an outperformer since inception.
For the last 3 years, it has given annualised returns of ~22% vs.
its category returns of ~13% for the same time period.
IDFC Premier Equity (NAV 32.19)
With one of the highest fund sizes of Rs.2560 crores (as on
March'12) in its category; the fund has given its investors
annualized returns of ~20% since its launch in 2005.
Even in the 3 year time frame, the fund has significantly
outperformed its benchmark with returns of ~20% CAGR as
compared to its category returns of ~13% CAGR over the
same time period.
Source: ACE MF
NAVs & Returns are as on May 27, 2012
Mutual Fund Investments are subject to market risks, read all
scheme related documents carefully.
Mutual Fund Fundas
A Starter’s Guide
A mutual fund is a company that pools money
from many investors and invests the money in
stocks, bonds, short-term money-market
instruments, other securities or assets, or some
combination of these investments.
Returns from a Mutual Fund encompass the
following:
• Dividend/ Interest income: The fund may
choose to distribute its surplus income in the
form of dividend (for Equity funds) or
interest (for debt funds)
• Capital Gain: If the value of the Mutual Fund
units increase, the investor witnesses an increase
in his capital invested which is termed as
“capital gain”
Mutual Fund Terminologies
• NFO (New Fund Offer) - Mutual Fund
companies launch new funds in the market
for the first time and offer the general public
to subscribe to the same
• NAV (Net Asset Value) - This denotes the
fund's price per share value and is calculated
by dividing the total value of all assets in the
portfolio less liabilities, by the number of
units (fund shares) outstanding
• Exit Load - This is the charge levied by the
Mutual Fund if the investor chooses to exit
the scheme before a stipulated time period,
Investor Calendar
in most cases 6 months to 1 year. The exit load is
mostly around 1% of the NAV
• Expense Ratio - The ongoing expenses of a fund
are represented by the expense ratio. It is the fee
that Mutual Fund companies subtract from
your investments each year for their service. The
higher the expense ratio, higher the impact on
your returns from investment
Did you Know?
The mutual fund industry in India started in
1963 with the formation of Unit Trust of India
(UTI) and Reserve Bank of India (RBI). In 1978,
UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI)
took over the regulatory and administrative
control in place of RBI. The first scheme
launched by UTI was Unit Scheme 1964.
To invest in Mutual Funds
Just give us a missed call on
080 300 88 550
Scheme Name Category Type Open Close
Canara Robeco Gold Savings Gold: Funds Open-end 04-Jun 18-Jun
IIFL Dividend Opportunities Index Fund Equity Fund Open-end 06-Jun 19-Jun
DWS Hybrid FTF Series 7 Hybrid: Debt-oriented Conservative Closed-end 13-Jun 27-Jun
Union KBC Asset Allocation Moderate Hybrid: Others Open-end 04-Jun 18-Jun
IDFC FMP 366 Days Series 80 Debt Closed-end 08-Jun 11-Jun
IDFC FMP 90 Days Series 78 Debt Closed-end 08-Jun 12-Jun
IDFC FMP 90 Days Series 79 Debt Closed-end 19-Jun 21-Jun
HDFC FMP 90D June 2012 (2) Debt Closed-end 08-Jun 13-Jun
HDFC FMP 372D June 2012 (3) Debt Closed-end 13-Jun 18-Jun
HDFC FMP 92D June 2012 (1) Debt Closed-end 15-Jun 20-Jun
Start investing now and secure a bright future for your family.
Choose IIFL as your partner for investing in Mutual Funds,
Fixed Deposits and Life Insurance
Just give us a missed call on 080 300 88 550
IIFL Investor - Page 3

INVESTOR
Buying a Home? Perhaps
your life's biggest Investment
5 things to keep in mind
Purchasing an apartment is a lifetime
investment. Besides the space, style and
location a host of issues have to be
considered. The utmost question initially
may be ‘Will this place ever feel like
home?’ Listed below are a few aspects you
need to take a closer look at before making
your most expensive purchase:
1. Planning Finance: The first factor is
the cost. Here, we are talking of a
lifelong investment (a good number of
your working years) and so the thought
process becomes even more vital.
Before you start scouting for your
home or the place you wish to settle,
you must spend time first on planning
your finance.
3. Clearing doubts: Questions may keep
popping up when you plan to buy a
home. All doubts regarding amenities,
facilities and loans need to be cleared
before making any payment.
4. Managing papers: When it is written it
speaks. You must have valid papers
thoroughly signed by the concerned
person before you make the full
payment for your home. When you
have all the legal documents in your
hand your property is safe and secured.
5. Taking help from a trusted service
provider: It is a tedious job to find out
every little thing related to real estate
but you can't even let it go as a huge
amount will be involved.
IIFL also offers
Loans Against Property
June 2012
Home Loans
Healthcare Equipment Finance
2. Understanding market condition: At
times, the market offers relatively
lower prices and you never know when
it turns around and shoots up. So
conduct proper research, analyze the
information you get and take a call on
whether it is indeed the right time for
investing in real estate. If you need a
house for staying, it will be a different
ball game.
What you can do is take guidance from
an expert. Some companies provide
valuable guidance from the site visit to
the deal confirmation.
www.iiflpropertysolutions.com is one
such company. Its well trained and well
informed professionals make it a point
to provide multiple offers that suit
your requirements and budget.
Loans Against Gold Jewellery
To know more, Just give us a missed call on
080 300 88 550
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Contact Us
Email: iiflinvestor@indiainfoline.com
Just give us a missed call at 080 300 88 550
Printed & Published by: Anil N. Mascarenhas on
behalf of India Infoline Limited and printed at
Creative Printers, 91, Modi Street, Mapla House, 1st
Floor, Fort, Mumbai - 400 001.
Published from IIFL Center, Kamala City, Senapati
Bapat Marg, Lower Parel, Mumbai - 400 013.
Editor: Anil N. Mascarenhas
To,
Disclaimer - Investment in financial instruments carry market risk. We do not assure or guarantee, in any manner whatsoever, timely payment/ repayment of
your investment and income thereon. While we have taken care to obtain information from authentic sources, we are not responsible for any errors/ omissions
in the newsletter. You are requested to kindly obtain all necessary information before choosing your investment. Our offer of incentives is in accordance
with the normal practice in this industry and shall not be construed as inducement to invest in any particular company or scheme.
From: IIFL Investor, IIFL Center, Kamala City, Senapati Bapat Marg,
Lower Parel, Mumbai - 400 013.
IIFL Investor - Page 4