S M A R T Canara Robeco

I nvestment P lan Equity Diversified

A smarter way to invest in the India growth story

August 2010
 The Income Punctures – rising expenses & falling value of money

Monthly Expenses Savings

90,000 120000

st s
80,178
80,000
Co Th
100,000 eT
ng im
isi
100000
70,000 R eV
o alu
d st 59,914 eo
60,000 l ea 80000 73,390 fM
ion on
at ey
50,000
Infl 44,771 at
Pla
s ing 60000 53,862 y..
40,000 Ri 33,456
.
39,529
30,000 25,000 40000
29,011
20,000
20000
10,000

0 0
Present 5 Years 10 Years 15 Years 20 Years Present 5 Years 10 Years 15 Years 20 Years

Present 5 Years 10 Years 15 Years 20 Years Present 5 Years 10 Years 15 Years 20 Years

Inflation – The Invisible Killer!!!

Rate of Inflation assumed at 6%. Analysis: CRAMC 1 of 22

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 The Income Punctures – the shift from Luxury to NEED…

Items 2000 2010 2020

Internet Connectivity   
Personal Desktop   
Cable / Satellite TV   
Owning a Car   
Mobile   
Laptop   
Global Positioning System (GPS)   
International Vacation   
Home Security Solutions   

Lifestyle Inflation...Am I ready for the needs of the future???

The above table is for illustration purposes only. 2 of 22

1
 The Income Punctures – ballooning costs (educational expenses)

IIM Ahmedabad Fees

12,50,000 for Two

Years

6,000 for Two

Years
CAGR of
21.85%
in the last 27 Years

1983 2010

Some Expenses are deflating my Income!!!

Source: www.iimahd.ernet.in, www.india-server.com, Analysis :CRAMC 3 of 22

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 How can I beat Inflation?

My Future Goals…Will they be met?

How do I make ends meet in these volatile environment?

“SAVINGS” is the only answer to these questions

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 Income » Savings » Expenses – the chain change (rearranging priorities…)

Saving Expense

Expense Saving

Income Income

Income Savings Expenses

The Changed Equation : Income – Savings = Expenses

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 Need to revisit the Asset Class selection
Where do all the savings go?

– Savings Bank Account

The Most
– Fixed Deposits Common Avenue
for Savings
– PPF

– Life Insurance
The More Common
– Postal & Other Small Saving Schemes Avenue for Savings

– Gold
Common Avenue
– Equities (Direct Equity & Mutual Funds) for Savings

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 Asset Class Returns (post tax)

21.00%

18.00%

15.00%

12.00%

9.00%

6.00%

3.00%

0.00%
7 Years 10 Years 15 Years 20 Years 25 Years

Gold Equity Debt Inflation

Taxing Times Ahead!

Equity helps you to have Relaxing Times Ahead!!!

Long Term Taxation Methodology: Equity – Nil, Debt (Bank FD) – 30.90% & Gold – 20.60%. 7 of 22 Data as on 30th June, 10
Source: Bloomberg, Analysis: CRAMC.
 The Power of Compounding

Below is the value of Rs. 60,000 invested at different rate of growth at the end of 30 years

Value of Investment (Rs. In lacs)

150 142.43

130

100

90

70

50 39.73

30
10.47
3.45 6.04
10

-10
6% 8% 10% 15% 20%

Value of Investment (Rs. In lacs)

The Power of Compounding benefits as the return on investment goes up for the same invested amount

Analysis: CRAMC. 8 of 22
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 The Expense of Timing the Market

Annualised Return of BSE Sensex from 2000-2010

20%

15% 14.06%

10%

5.75%
5%
0.29%

Missed 30 Best Days Missed 40 Best Days

0%
Investing at all days Missed 10 Best Days Missed 20 Best Days

-5%
-4.24%

-10 -7.99%

It’s not about timing the market, its TIME in the market!!
Timing the Market is a High Risk Strategy...Timeless investing is the Mantra

Source: Bloomberg, Analysis: CRAMC. Data from June 2000 to June 2010 9 of 22
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 Be the First to take the First Step (Start Early)

Mr. Ram Mr. Shyam

Invests at the Age – 25 Yrs. Invests at the Age – 40 Yrs.
Investment Period – 10 Yrs. Investment Period – 20 Yrs.
Stops Investing at the Age – 35 Yrs. Stops Investing at the Age – 60 Yrs.
Investment Amt. (p.m.) – 5,000 Investment Amt. (p.m.) – 15,000

Investor Investment Amount Value of Investment at Age 60 Yrs.

Mr. Ram 660,000 48,093,160
Mr. Shyam 3,780,000 21,385,822

Higher Investment Amount cannot compensate for the Growth Potential of Starting Early!!!

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Growth Rate assumed @ 15%. Analysis: CRAMC.
 3 Simple Steps for Wealth Creation

S
SMART
• Investing Early is the Key
• The Longer you save, the more you make

I INVESTMENT
• Investing in the Right Asset Class
• Risk Return Balance to optimize growth

P PLAN
• Investing with a Plan
• Consistent & Continuous Investment

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 Indian economy – ready to take off

GDP at current Mkt Price (US$ tln)

n
lio
l
Tri
4.0

h
4t
to
3.6

et
ls
3.2

Al
2.8
nd
e2
2.4
e t o thon
i
Rac Trill
2.0
1.6
97 %
- 14.
1.2 C AG R
0.8 CAGR - 3.89%
0.4
0.0
1989-90
1990-91
1991-92
1992-93

1994-95
1995-96
1993-94

1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

2011-12E
2008-09
2009-10
2010-11E

2012-13E
2013-14E
2014-15E
2015-16E
2016-17E
2017-18E
2018-19E
2019-20E
Slow start: Took 16 years to reach USD 500 billion from 1988,
Acceleration: Took 5 years to reach USD 1st trillion from there,
Take Off: May be 5-6 years for the next trillion
4 trillion dollar economy by 2020

Source: Motilal Oswal Research 12 of 22

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 GDP Growth Drivers – India in a sweet spot

Backbone to
Infra-
the Economy
structure

Savings
Higher Income to
lead to higher savings
Consumption
Lower Dependency
Ratio to boost
Consumption

Consumption + Savings + Infrastructure = GDP Boost

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 Expertise comes
in knowing
what to pick.

Canara Robeco Equity Diversified

(An Open-Ended Equity Scheme)

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 Presenting – Canara Robeco Equity Diversified

• Canara Robeco Equity Diversified follows predominantly bottom-up approach of focusing on well-managed
companies that are likely to deliver superior capital appreciation over the medium-term

• The fund aims to provide an investment opportunity in the “best in class” Indian companies with sustainable
business models to gain from the India growth story

• The fund should form the ‘CORE’ part of an investor’s portfolio as it has a moderate risk profile

Growth Value Blend

Large Cap Mid Cap Small Cap

Diversified Thematic Sector

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 Fund Characteristics

• Investment Objective: To generate capital Inception Date 16-Sep-03

appreciation by investing in equity and equity Fund Manager Anand Shah
related securities
Entry Load Nil
Exit Load (Lump 1% - if redeemed/switched out
Asset Allocation
sum / SIP / STP) within 1 year from the date of
Instruments Minimum (%) Maximum (%) allotment.
Equity and equity AUM (INR crs) 349.88
Minimum SIP Inv. Rs. 1,000 (Monthly SIP) &
related instruments 85 100
Amt (Rs.) Rs. 2,000 (Quarterly SIP) & in
Money Market
multiples of Re.1 thereafter
Instruments 0 15 Benchmark Index BSE 200
Investment Options Growth, Dividend Payout,
Dividend Reinvestment, Bonus

16 of 22 As on 30th July, 2010

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 Portfolio Characteristics
Sector Allocation (%)

Asset Allocation (%) Banks | 20.76%

12.51% 20.76% Pharmaceuticls | 10.68%

12.51 Software | 8.36%

10.68%
Equity & Equity 34.42%
related instruments Petroleum Products | 7.53%

7.53% Media & Entertainment | 5.74%

87.49 Money Market
8.36%
Instruments Other Equity | 34.42%
5.74%
MMI & Others | 12.51%

Name of the Company Industry Classification % of Net Assets

• Top 3 sectors account for 39.80% and Top 5 Bharti Airtel Ltd Telecom - Services 5.37%

sectors account for 53.07% of net assets HDFC Bank Ltd Banks 5.02%
Reliance Industries Ltd Petroleum Products 4.31%
Tata Consultancy Services Ltd Software 4.14%
• Well diversified portfolio with 43 stocks Bharat Heavy Electricals Ltd Industrial Capital Goods 3.73%
accounting for 87.49% of net assets GAIL (India) Ltd Gas 3.46%
State Bank Of India Banks 3.35%
Punjab National Bank Banks 2.99%
• Top 10 holdings of the portfolio account for Oil India Ltd Oil 2.76%
37.87% of net assets Pantaloon Retail (India) Ltd Retailing 2.74%

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 Canara Robeco Equity Diversified – Consistency in Portfolio

Top 5 Sectors Allocation (Q-o-Q)

Sectors
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
Banks        
Pharmaceuticals        
Petroleum Products        
Software        
Oil        
Power        
Media &
Entertainment        
Telecom - Services        

Consistent portfolio indicates lower churn ratio

18 of 22
Analysis: CRAMC.
 Why Invest in Canara Robeco Equity Diversified

• Opportunity to participate in the India Growth Story

• Focused large cap holdings with few high conviction mid cap ideas

• Blend of Growth & Value Style of Investing to provide a well diversified portfolio

• Should form a part of the CORE portfolio for an investor’s equity portfolio

• A 4 Star rated fund by Value Research Online#, Platinum rated fund by ET Investors

Guide# & 4 Star rated fund by Morningstar#

• Outperformance vis-à-vis its Benchmark across various time periods

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# Please refer to the disclaimers at the end of this presentation.
20 of 22
What is Smart Investment Plan?

• SIP is a strategy whereby an investor commits to invest a fixed amount at specified intervals

• Follows the similar principle of Recurring Deposit with a Bank

• Focus on consistent & continuous investments – Fixed Money for Fixed Period of time to

benefit from market volatility

• Imparts Discipline in investing – The most needed quality for a long term investor

• Simple & Quick – Hassle Free investments with one time instruction

• Law of Averaging at work – Rupee Cost Averaging at its best

• Small Ticket Sizes do not impact the wallet too!

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Statutory Disclosures / Ratings Disclaimers / Risk Factors

• Investment Objective: To generate capital appreciation by investing in equity and equity related securities
• Statutory Details: Canara Robeco Mutual Fund (CRMF) has been set up as a Trust under Indian Trust Act, 1882. Sponsors: Canara Bank, Head Office, 112 J C Road,
Bangalore; Robeco Groep N.V., Coolsingel 120, 3011 Rotterdam, The Netherlands.
• Risk Factors: Mutual Funds and securities investments are subject to market risks and there can be no assurance or guarantee that the objectives of the scheme will
be achieved. As with any investment in securities, the NAV of the units issued under the scheme may go up or down depending on the various factors and forces
affecting capital markets and money markets. Past performance of the sponsors / Investment Manager / Mutual fund does not indicate the future performance of the
scheme and may not necessarily provide a basis of comparison with other investments. Canara Robeco Equity Diversified is the name of the scheme and does not in
any manner indicate the quality of the scheme, its future prospects or returns. The Sponsors of the Fund are not responsible or liable for any loss or shortfall resulting
from the operations of the schemes of CRMF, beyond the initial contribution of a sum of Rs. 10 lacs made towards setting up of CRMF. Investors should read the Scheme
Information Document for Scheme specific risk factors and other details before investing.
• Value Research Rating’s Disclaimer: Value Research Fund Ratings are a composite measure of historical risk-adjusted returns. In the case of equity and hybrid funds
this rating is based on the weighted average monthly returns for the last 3 and 5-year periods. In the case of debt funds this rating is based on the weighted average
weekly returns for the last 18 months and 3-year periods and in case of short-term debt funds - weekly returns for the last 18 months. These ratings do not take into
consideration any entry or exit load. Each category must have a minimum of 10 funds for it to be rated. Effective, July 2008, we have put an additional qualifying
criteria, whereby a fund with less than Rs 5 crore of average AUM in the past six months will not be eligible for rating. Five-stars indicate that a fund is in the top 10%
of its category in terms of historical risk-adjusted returns. Four stars indicate that a fund is in the next 22.5%, middle 35% receive three stars, the next 22.5% are
assigned two stars while the bottom 10% receive one star. The number of schemes in each category is mentioned along side the categories name. Equity Diversified
(182). These Fund Ratings are as on July 31, 2010. The Value Research Ratings are published in Monthly Mutual Fund Performance Report and Mutual Fund Insight.
The Ratings are subject to change every month. The Rating is based on primary data provided by respective funds, Value Research does not guarantee the accuracy.
• ET’s Investor Guide: Rated Platinum and by ET Investor’s Guide, in their Mutual Fund Tracker for the quarter ended March 2010
• Morning Star Rating’s Disclaimer: Morningstar fund rating methodology is based on a fund's risk-adjusted return within a given Morningstar category. Morningstar
rating is calculated every month for the 3 years, 5 years and 10 years period. Within each rating period, the top 10% funds receive a five star rating, the next 22.5%
earn a four star rating, the next 35% get three stars, the next 22.5% receive two stars, and the last 10% get one star. Loads are not considered for the purpose rating.
The number of schemes in each category is mentioned alongside the categories name. Large Cap category(225) were considered for rating. The current fund rating is
for the 3 year period as of June30, 2010. The rating is based on NAV provided by respective funds. Morningstar does not guarantee accuracy of the data.
• Disclaimer: The information used towards formulating the outlook have been obtained from sources published by third parties. While such publications are believed
to be reliable, however, neither the AMC, its officers, the trustees, the Fund nor any of their affiliates or representatives assume any responsibility for the accuracy of
such information.