BSL EqLinked FMP Presentation

8/14/2019 BSL EqLinked FMP Presentation

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The Great India Story

Page 1Mutual Fund investments are subject to market risks. Please read the Scheme Information Document carefully before investing.

30Jun08


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Oops!!! What happened here



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Confused!!!

Where to invest your hard earned money???



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Structured Products have

SOLUTIONS for You

Structured Products combining


Heat of Equities & Calmness of Debt


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Birla Sun Life Mutual Fund

(A Closed End Structured Debt Scheme)


Mutual Fund investments are subject to market risk. Please read the Scheme Information Document carefully before investing.


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Equity Linked Debenture

BondPrincipal

ro ec on

Equity LinkedDebentures

Call OptionEquity

Participation

Equity linked debentures are non convertible debentures

such as S&P CNX Nifty or any/group of equity shares

Bond: Provides for Principal Protection


Call Option: Provides the Exposure to Equity Index / Stock


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Risk-Return Profile

Returns

ELD

Equity

FMP

Risk

Market Linked Returns


Controlled Level of Risk


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The Advantage

Traffic rules have changed for your investments vehicle

Market Goes Up

Index Linked Returns with NO Downside Risk*

Market Goes Down

You Dont Lose Your Initial Corpus*


* Subject to the credit risk of the issuers of equity linked debentures


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Typical Payoff Scenario

Return of Capital*

if underlying index is below the starting level

Return of Capital + Equity Upside

if underlying index is above the starting level

NiftyELD

Starting Index Level


Profit / Loss* Subject to the credit risk of the issuers of equity linked debentures ; The hypothetical illustration assumes 100% participation in the upside of the equity index


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Typical Payout & Returns Analysis

Hypothetical Illustration

S&P CNX Nifty

Level

Return on

S&P CNX Nifty

Investment

(In Rs.)

Total Payout

(In Rs.)

Return on

ELD

7,500 50% 5,000 7,500 50%

7,000 40% 5,000 7,000 40%

6,500 30% 5,000 6,500 30%

6,000 20% 5,000 6,000 20%

ps e

Linked to

EquityIndex5,500 10% 5,000 5,500 10%

5,000 0% 5,000 5,000 0%

4,500 -10% 5,000 5,000 0%

4,000 -20% 5,000 5,000 0%

3,500 -30% 5,000 5,000 0%

3,000 -40% 5,000 5,000 0%

Lose Your

Initial

Corpus*


2,500 -50% 5,000 5,000 0%

* Subject to the credit risk of the issuers of equity linked debentures; The hypothetical illustration assumes 100% participation in the upside of the S&P CNX Nifty


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Concept of ELD

Participation Ratio:

Participation ratio is the ratio at which ELD participates in the appreciation of the underlying equity index. Eg.

par c pa on ra o o mp es a a ncrease n e un er y ng equ y w resu n a na equ y- n e

coupon of 10%

Knock Out Event / Level:

, , ,

the index starting level, by more than the percentage as mentioned at the time of issuing of the ELD. Eg. If Knock

Out Level mentioned at the time of issue is 100% and Nifty starting level is 5,000. Then Event of Knock Out will

happen, if any time during the tenor of scheme Nifty rises by 100% to 10,000 level.

Knock Out Coupon is a fixed coupon paid in the event of underlying index hitting the Knock Out Level. Eg. Knock

out level is 100% & knock out coupon is 50% then if the index hits the knock out level of 100%, investors would be

paid a fixed coupon of 50%

Closing Value:

Nifty Returns calculated based on the average of last 3 months. Eg. If tenor of the scheme is 36 months then the

Closing Value = (M34 + M35 + M 36)/3; where M34 = Closing Nifty Value at the end of 34 th month, M35 = Closing


y a ue a e en o mon = os ng y a ue a e en o mon .

All observations to be aligned to futures expiry date of the respective months in which the observations are made


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BSL Equity Linked FMP

Investment Strategy:

other Debt Instruments These debentures will be of investment grade and rated by an accredited rating agency

Scheme will mature in line with the maturity of the debentures

Scheme may also invest upto 30% of net assets in Options maturing in line with

maturity of the Plan.

Overall strategy would be to Buy & Hold these instruments

BSL Equity Linked FMP has flexible investment plans structured to match the

nves ors r s -rewar o ec ves



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Series A Aviator Plan (36 months plan)

Jet Setting Upside of Equity Market#~ &

No Downside Risks* in case the Markets Go Down


# S&P CNX Nifty Index; ~ Subject to Terms & Conditions; * Subject to the credit risk of the issuers of equity linked debentures.


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Series B Gladiator Plan (21 months plan)

Accelerated Upside of Equity Market#~ &

No Downside Risks* in case the Markets Go Down


# S&P CNX Nifty Index; ~ Subject to Terms & Conditions; * Subject to the credit risk of the issuers of equity linked debentures


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Aviator Plan - Scheme Snapshot

Aviator Plan:For jet setting upside of the equity markets#

Payoff Scenario

An Equity Linked FMP with maturity of 36

months ELP150%

175%

-

For instance, if Nifty rises by 10%, than you

will get a coupon of 14% to 14.50%

Nifty

75%

100%

125%

noc ou eve o o noc

Out Coupon of 57% to 65%

For instance, during the observation period

25%

50%

-25%

Knock Out Level

Knock Out Coupon @ 57%

Index Levels

(monthly) if Nifty rises by 90% & above, than

you will get a fixed coupon of 57% only,

irrespective of the closing level of Nifty at the

Starting Index Level

Profit / Loss / Coupon

-50%


end of the tenor of the schemePlease refer slide no. 16, 24, 26, 27# S&P CNX Nifty Index


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Key Features of ELD

Aviator Plan Series A

a ur y per o : mon s; oupon ayo ase on movemen o y.

Indicative Payoff conditions#:

Participation Ratio (PR): 140% to 145% of the Nifty Returns

If Nift Returns are ne ative:

Coupon = NIL

If Nifty Returns are positive:

Coupon = PR * Nifty Returns[(Closing Value Initial Value) / Initial Value]

Closing value: (M34 + M35 + M36) / 3

Average of the closing Nifty value as on the last Thursday of 34M, 35M, and 36M

Knockout Level: 190% to 200% of the Initial valueObservation Dates for knockout: As on the last Thursday of each month start from the date of

allotment

Coupon on Knockout: 57% to 65%


are made.# Refer slide no. 27


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Scenario Analysis Aviator Plan

Calculations are based on the assumption that Initial Value of Nifty is 5,000.

Nifty

(%)

Event Occurred3,500 -30% NO NIL

4,500 -10% NO NIL

5,000 0% NO NIL6,000 20% NO 28.00%

7,500 50% NO 70.00%

, .

10,500 110% YES 57%


-The scenarios depicted above are for illustration purposes only and actual future market conditions may result in significant variances. Past performance

including such scenarios may not reflect future performance. Source (Nifty Data) www.nseindia.com; Computations Internal.


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Back-Testing Aviator Plan

300%

Structure vs. Nifty(Monthly 3 Years Rolling Returns 179 Instances)

200%

250%

Structure Outperforms Nifty 64%

150%

investors get fixed coupon @ 57%*

50%

100%

0%

Jul-90

Jan-91

Jul-91

Jan-92

Jul-92

Jan-93

Jul-93

Jan-94

Jul-94

Jan-95

Jul-95

Jan-96

Jul-96

Jan-97

Jul-97

Jan-98

Jul-98

Jan-99

Jul-99

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

ELD Nifty


The scenarios depicted above are for illustration purposes only and actual future market conditions may result in significant variances. Past performanceincluding such scenarios may not reflect future performance. * Fixed coupon may vary from 57% to 65%.

Source (Nifty Data) www.nseindia.com; Computations Internal.


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Key Features of ELD

Gladiator Plan Series B

a ur y per o : mon s; oupon ayo ase on movemen o y.

Indicative Payoff conditions#:

Minimum Coupon: 12.25% absoluteParticipation Ratio (PR): 97% to 100% of the Nifty Returns

y e urns are nega ve:

Coupon = 12.25%

If Nifty Returns are positive:

Coupon = MAX {12.25%, PR X Nifty Returns[(Closing Value Initial Value) / Initial Value]} n a va ue: verage o o serva ons .e. ar eve .e. y on e a e o nves men n an y

level on the last Thursday of 1st, 2nd and 3rd month, with each reading floored at 95% of the start level.

Closing value: (M16 + M17 + M18) / 3

Average of the Nifty Index as on the last Thursday of 16M, 17M, and 18M

noc ou eve : o o e n a va ue

Observation Dates for knockout: As on the last Thursday of each month starting from the 4th month onwards

Coupon on Knockout: 17% to 19%

All observations to be aligned to futures expiry of the respective months in which the observations are made.


# Refer slide no. 27


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Scenario Analysis Gladiator Plan

Calculations are based on the assumption that Initial Value of Nifty is 5,000.

Nifty

(%)

Event Occurred3,500 -30% NO 12.25%

4,500 -10% NO 12.25%

5,000 0% NO 12.25%5,500 10% NO 12.25%

6,000 20% NO 20.00%

,

7,500 50% YES 17%


-The scenarios depicted above are for illustration purposes only and actual future market conditions may result in significant variances. Past performance

including such scenarios may not reflect future performance. Source (Nifty Data) www.nseindia.com; Computations Internal.


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Back-Testing Gladiator Plan

250%

Structure vs. Nifty(Monthly 21 months Rolling Returns 179 Instances)

200%

Structure Outperforms Nifty 57% times

100%

get fixed coupon @ 17%*

0%

50%

-50%

Jul-90

Jan-91

Jul-91

Jan-92

Jul-92

Jan-93

Jul-93

Jan-94

Jul-94

Jan-95

Jul-95

Jan-96

Jul-96

Jan-97

Jul-97

Jan-98

Jul-98

Jan-99

Jul-99

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

ELD Nifty


The scenarios depicted above are for illustration purposes only and actual future market conditions may result in significant variances. Past performanceincluding such scenarios may not reflect t future performance. * Returns may vary from 19% to 19.50%.

Source (Nifty Data) www.nseindia.com; Computations Internal.


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Equity Linked FMP vs. other Instruments

Features Aviator PlanGladiator

PlanEquity#

Conventional

3 Year FMP

Fixed

De osits

Tenor 36 Months 21 Months 36 Months 36 Months 36 Months

Equity Participation Yes Yes Yes No No

Participation Ratio

o

145%97% to 100% - - -

Nature of Return LTCG LTCG LTCG Income Income

**

Pre Tax Net Indicative Yield

- . . . . . .

- Average 36.63%`` 15.39%`` 30.20% 9.50%* 8.85%^

`` Based on back testing results for the period July 1990 to March 2005

# Returns are based on avera e erformance of e uit diversified schemes as defined b value research as on 31st Ma 08.


* Current 3 Year FMP yields; ^ Current 3 Year FD Rates as offered by State Bank of India

** Subject to Exit Load/Charges

The scenarios depicted above are for illustration purposes only and actual future market conditions may result in significant variances.


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Key Risk Factors

Credit Risk ELDs are issued by NBFCs & are subject to their credit risks

Liquidity Risk Liquidity in ELD is very limited & may not be marketable

Interest Rate Risk If the interest rates move up, investor may be subject to

significant price risk

Market Risk Payoff on ELD is linked to return from underlying equity index. If index

does not appreciate, returns to investor may be negligible.



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Scheme Features

Type of Scheme A Close ended Structured Debt Scheme

Investment Objective The Scheme seeks to invest in short and medium term debt instruments with fixed and/or floating payouts linked to equity indices.

The Scheme may also undertake to invest in derivative contracts. These instruments will normally mature in line with the time profile

of the Scheme. However, there can be no assurance that the investment objectives of the Scheme will be realized. The Scheme

oes no guaran ee n ca e any re urns

Asset Allocation

Debt instruments, Money MarketInstruments and Securitized Debt

70% to 100%

Derivative Options 0% to 30%

New Fund Offer Price Rs. 10 per unit

Date of opening of NFO Thursday, June 26th , 2008

Date of Closing of NFO Wednesday, July 23, 2008Load Structure

Entry Load

(NIL for direct applications)

Retail Plan: Series A Series B

For Purchase / Switch-in of units less than Rs. 5 crores in value 2.25% 1.50%

For Purchase / Switch-in of units equal to / greater than Rs. 5 crores in value: NIL NIL

Institutional Plan:For Purchase / Switch-in of units: NIL NIL NIL

Exit Load For Retail & Institutional Plan:

If repurchased on or before 365th day from the date of allotment: 2%

If repurchased after 365th day from the date of allotment, but before maturity date: 1%; If repurchased on maturity date: NIL


Benchmark Index CRISIL Balanced Fund Index

NAV Disclosure Once a week; Every Wednesday and on 1st business day of each calendar quarter.

Liquidity 1st Business Day of each calendar quarter (subject to applicable load)


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Statutory Details

Statutory Details: Constitution: Birla Sun Life Mutual Fund has been set up as a Trust under the Indian Trust Act, 1882. Sponsors: Aditya Birla

Nuvo Limited & Sun Life (India) AMC Investments Inc [liability restricted to seed corpus of Rs. 1 Lac]. Trustee: Birla Sun Life Trustee Company Pvt.

Ltd. Investment Manager: Birla Sun Life Asset Management Company Ltd.

Risk Factors: Mutual Funds & securities investments are subject to market risks & 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 dependingon the various factors & forces affecting capital markets & money markets. Past performance of the Sponsor / Investment Manager / Mutual Fund

does not indicate the future performance of the Scheme & may not necessarily provide a basis of comparison with other investments. Birla Sun

e qu y n e s on y e name o e c eme oes no , n any manner, n ca e e er e qua y o e c eme or s u ure prospec s

or returns. Scheme Specific Risk Factors: The Scheme should have a minimum of 20 investors & no single investor should account for more than

25% of its corpus as per SEBI guidelines. The Scheme is subject to credit risk, liquidity risk, interest rate risk & market risks. For further Scheme

Specific Risk Factors & other details please read the Scheme Information Document (SID) carefully before investing.



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Disclaimers

*The back testing results in the previous slides are based on certain features of the structure of Equity Linked Debenture and assumptions. For details of

the same, please refer to slide no.16 & 20. Past performance including such scenarios may not reflect future performance. The back testing results are for

reference onl and a variet of market factors and assum tions ma affect the results and the same do not reflect all ossible scenarios. There is no

certainty that the parameters and assumptions used in the analysis can be duplicated with actual trades. Any reference rates or prices, which appear is

these results are not necessarily indicative of reference rates or prices. Although this information is obtained from sources we consider reliable, we do not

represent that it is accurate or complete.

Key features / Payoff conditions are indicative and are subject to change depending on change in market conditions and the issuers terms. The back

testing results are calculated based on the term sheets received from various issuers / potential issuers. For some reason, if the issuers / potential issuers

cannot issue the Equity Linked Debentures as per the term sheets received from them, the investment allocation, the return payoff or actual results could

be significantly different from the ones mentioned. The results could also vary significantly if there are not adequate number of issuers / instruments in the

market to subscribe to. Key assumptions: 96% investment in equity linked debentures in Series A and 97% in series B. The Fund returns are calculated

net of all expenses.

This document is meant for private circulation only and should not at any point of time be construed to be an invitation to the public for subscribing to the

units of Birla Sun Life Mutual Fund. Birla Sun Life Mutual Fund does not solicit any action based on the information contained in the document and does

not recommend any action based on the same. The information/graphs/charts contained in this document are based on certain assumptions and have

been compiled from sources, which Birla Sun Life Asset Management Company Limited (BSLAMC) believes to be reliable, but cannot guarantee its

accurac or com leteness. O inions ex ressed and facts referred to in this document are sub ect to chan e without notice and BSLAMC is under noobligation to update the same. Please read the SID carefully for scheme specific risk factors and other details before investing.



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BSL EqLinked FMP Presentation

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