Gilt_Nw

8/14/2019 Gilt_Nw

1/21

A joint venture between SBI and Socit Genral Asset Management

MAGNUM GILT FUND

The safety of government securities with the convenience of a

mutual fund

8/14/2019 Gilt_Nw

2/21


Flow of presentation

Macro Outlook

G-Sec Market Outlook

Debt Expertise

What is a Gilt Fund

What does one look for?

Why Gilt Funds - Fund Features

Scheme Performance

8/14/2019 Gilt_Nw

3/21


Macro Outlook

Macro economic outlook worsening, which improves outlook forGovernment securities.

RBI moving to a monetary easing stance by prioritising Growth andFinancial Stability over inflation. Recession in developed economies and sharp growth slowdown expected

in emerging markets including India. Inflationary concerns receding as key commodities prices have fallen from all

time highs Crude futures down around 60% from high of $145 in July 08 to $59 Key Commodity Index (Reuters Jefferies CRB Index) down over 47%

from July 08

Leading indicators point to softening demand outlook

Sharp interest rate reduction already undertaken by the ECB, BoE and othermajor central banks including India and China

8/14/2019 Gilt_Nw

4/21


G-Sec Market Outlook

Leading indicators such as IIP point to growth slowdown across sectors. Reduced credit availability and the lag impact of previous rate hikes exerting

downward pressure on demand growth. Slowdown in commodities and reduced demand pressure likely to result in

inflation coming down significantly over the near term. Policy rates have further room to come down significantly going forward 10yr yield currently at 7.65% from a low of 7.50% and 8.25% before the 1st

CRR cut on 06th Oct.

1 yr Bill cutoff at 7.38% as against a peak of 9.55% in July Increased supply expected going forward which is factored in. Enhanced borrowing would be matched by Buyback of MSS bonds, in order

to avoid a liquidity squeeze

Rates expected to be on an easing mode in the near term due to worseninggrowth outlook, especially in the short to medium segment. SLR cuts in the future being a key negative, but sharp cuts unlikely as GoI

borrowing likely to be negatively impacted

8/14/2019 Gilt_Nw

5/21


10 Year G-Sec Movement

8/14/2019 Gilt_Nw

6/21A joint venture between SBI and Socit Genral Asset Management

Debt expertise..

SBIFM has an extensive experience in managing Debt

Schemes Debt schemes assets currently over Rs. 12600 crores

Liquid & Liquid plus schemes assets currently over Rs.

9200 crores

Magnum Gilt Fund - Assets over Rs. 260 crores

Data as on 31.10.08

8/14/2019 Gilt_Nw

7/21

8/14/2019 Gilt_Nw


Gilt Funds are Low Risk low return funds

Risk High

Risk Low Liquid Funds

Gilt Funds

Debt Funds

Balanced Funds

Index Funds

Diversified Equity FundsSector Funds

Low return High return

8/14/2019 Gilt_Nw


Why invest in a Gilt Fund

Safety of Investments

Liquidity Minimal Risk

Returns commensurate with risk

8/14/2019 Gilt_Nw

10/21

8/14/2019 Gilt_Nw


Fund Features

Dedicated scheme investing only in Government Securities Launched in December 2000 Choice of 2 plans

Short-term plan with monthly dividend option Long-term plan with quarterly dividend option

Gilt PF Plan

Introduced in the Long Term Plan of Magnum Gilt Fund Two options

PF (Regular) option

PF (Fixed Period) option Minimum investment of Rs. 25,000 in growth option and Rs.

100,000 in dividend option

8/14/2019 Gilt_Nw


Fund Features

Average maturity of assets not exceeding 3 years in Short-Term Plan. No capfor Long-Term Plan

Entry Load Nil; Exit Load - Contingent Deferred Sales Charge (CDSC) -0.15% for exit within 15 days from the date of investment for the Short Term

Plan 0.25% for exit within 90 days for the Long Term (Regular) Plan. PF (Regular) Option Entry Load Nil, Exit Load - Nil Exit Load (For PF (Fixed Period) Options only)

PF Fixed Period (1 Year) - 0.50% within 1 year from the date of investment;Nil thereafter

PF Fixed Period (2 Years) - 0.70% within 1 year from the date of investment;0.35% between 1 to 2 years from the date of investment; Nil thereafter

PF Fixed Period (3 Years) - 0.90% within 1 year from the date of investment;0.45% between 1 to 2 years from the date of investment; Nil thereafter

8/14/2019 Gilt_Nw


Investment Strategy

Investments mainly in liquid G Securities

Major emphasis on management of interest rate risk Importance given to sectoral performance- short,

medium and long term

Investment Objective

To provide the investors/unit holders with returnsgenerated through investments in government securities

issued by the central government/or state government.

8/14/2019 Gilt_Nw

14/21


Contd

ASSET ALLOCATION

BENCHMARK

ISEC SI BEX ( Short Term Plan)

ISEC LI BEX ( Long Term Plan)

8/14/2019 Gilt_Nw

15/21


PF (Fixed Period) Option

Enables investors to invest in predetermined investmenthorizon

Investment horizons of 1 year, 2 years and 3 yearsavailable

Automatic Redemption at NAV on completion of pre

specified investment tenure Facility of rollover to other options available

Investors to be intimated at least 7 days before

completion of investment tenure Dividend (quarterly) and Growth available

8/14/2019 Gilt_Nw

16/21

8/14/2019 Gilt_Nw

17/21


Tax Efficiency

Assume a pre-tax return of 9.14%* on gilt investments:

Post tax returns if invested directly 6.03%(assuming corporate taxation @33.99%)

Post tax returns through dividends - 7.45% (after

dividend distribution tax @22.66%)

A clear benefit of 1.42%

*Based on average returns over last 1 year by Gilt Funds as on November 07, 2008, as per Value Research)

8/14/2019 Gilt_Nw

18/21


Tax Efficiency

In case of investors not subject to taxation, Growth

Plan offers an attractive alternative For long-term investments in the growth plan, no tax

deduction at source

Capital gains tax payable

@11.33% without indexation benefit

@22.66% with indexation benefit in the hands ofinvestors.

8/14/2019 Gilt_Nw

19/21


Target Group

Ideal for HNIs wanting to avoid credit risk & stock

markets Corporates

Banks

Provident and gratuity funds

Charitable trusts & religious institutions

8/14/2019 Gilt_Nw

20/21


THANK YOU

8/14/2019 Gilt_Nw

21/21


Disclaimer

Principle Trustee: State Bank of India; Trustees: SBI Mutual Fund TrusteeCompany Private Ltd Asset Management Company: SBI Funds Management Pvt.

Ltd. (A joint venture between SBI and Socit Generale Asset Management) 191

Maker Towers 'E', Cuffe Parade, Mumbai - 400 005. Tel: 91 22 2218 0221-27.

Website: www.sbimf.com Email: [email protected].

Past performance of the schemes of the Sponsor/AMC/Mutual Fund is no

guarantee for the future performance of the scheme.

This presentation is for information purposes only and is not an offer to sell or a

solicitation to buy any mutual fund units/securities. These views alone are not

sufficient and should not be used for the development or implementation of aninvestment strategy. It should not be construed as investment advice to any party.

All opinions and estimates included here constitute our view as of this date and are

subject to change without notice. Neither SBI Funds Management Private Limited,

nor any person connected with it, accepts any liability arising from the use of this

information. The recipient of this material should rely on their investigations and

take their own professional advice

Mutual funds are subject to market risks. Please read the offer document of

the schemes carefully before investing.

Documents

Gilt_Nw