Sundaram_Rural_India_Nov2010 by qingyunliuliu

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									                                                            Sundaram
                                                   Select Thematic Funds
                                                         Rural India Fund
                                             Theme :             Rural Prosperity
                                                                    A Multi-cap Portfolio



                                                             - An open end equity scheme

                         Refer Disclaimer on slide: 24
                           November 2010
www.sundarammutual.com                                                   Sundaram Asset Management
                                                                            Sundaram Rural India Fund
                                                                                                    Disclosures

       Mutual Fund Investments are subject to market risks. Please read the Statement of Additional
       Information (SAI) and Scheme Information Document (SID) carefully before investing. Copy of the
       SAI, SID, key information memorandum and application form may also be obtained from the offices / investor
       service centres of Sundaram Asset Management, its distributors and at www.sundarammutual.com


       All mutual funds and securities investments are subject to market risks, and there can be no assurance
       or guarantee that fund's objectives will be achieved. NAV may go up or down, depending on the factors
       and forces affecting the securities market. Main types are market risk, liquidity risk, credit risk and
       systemic risks. At times, liquidity of investments may be impaired. There is uncertainty of dividend
       distribution and risk of capital loss. Past performance of the Sponsor/Asset Management
       Company/Fund does not indicate the future performance. Investors in the schemes are not being offered
       any guaranteed or indicated returns.


       Sundaram Select Thematic Funds Rural India Fund is only the name of the scheme and does not
       in any manner indicate either quality or future prospects and returns.



                          For detailed disclosures on risk factors and disclaimers refer slide 24
www.sundarammutual.com                                      2                                         Sundaram Asset Management
                                                                 Sundaram Rural India Fund
                                                                                   Pointers
  • Rural prosperity is a key pillar of the India growth story along with demographics &
    infrastructure.

  • Rural prosperity is not just about farming; food processing, agriculture related sectors,
    communication, financial services, consumer products and infrastructure have all attracted
    corporate India to Rural India.

  • Despite focussing only on the theme the fund has outpaced the broad market since launch

  • Style integrity of the portfolio tracks the theme completely

  • Track record of a fund house with acclaimed record for several years in a row.

  • Suitability: A high-risk, high-return product that could boost returns of a core portfolio of
    large-cap funds.


                          Past Performance may or may not be sustained in future
www.sundarammutual.com                              3                              Sundaram Asset Management
  Playing on the theme of Rural Prosperity




www.sundarammutual.com   4              Sundaram Asset Management
                                                                        Drivers at a glance

                                                                  Arable Land – Country wise
 •   1/8th of world population lives in Rural India and it has
                                                                          Country              Arable Land
     seen 12% growth in agri income in the past 5 years
                                                                   United States                   174,448,000
 •   Good monsoons in past 4 years ; FY10 saw poor
                                                                   India                           159,650,000
     monsoons but sharp rise in Minimum Support Price offset
                                                                   Russia                          121,781,000
     production losses
                                                                   China                           103,397,000
 •   Government spend on rural programs has been
                                                                   Brazil                            59,000,000
     continuously increasing at a rapid pace
                                                                   Australia                         49,402,000
 •   Non- farm jobs have prospered due to increase in
                                                                   Canada                            45,660,000
     demand for various products.
                                                                   Ukraine                           32,452,000
 •   Non-farming constitutes about 60% of rural economy vs.        Nigeria                           30,500,000
     52% in 2000 and expected to increase to 67% by 2012
                                                                   Argentina                         27,900,000
 •   Consumption pattern changing to higher – value products     Figures in hectares
                                                                 Source: Nationmaster.com
     thereby increasing demand for agricultural goods

www.sundarammutual.com                            5                                         Sundaram Asset Management
                                                                                              Drivers
                                        Split of India's Consumption



                              Urban
                               43%
                                                                 Rural
                                                                 57%


                                 Source: Credit Suisse


    •
                                 Period: FY 10

        With the substantial increase in wealth of rural population, with most of it tax free, consumption
        growth has shot up over the last 2 years.
    •   Rural India consumes about 57% of the goods.
    •   Growth in rural FMCG consumption has been faster than urban areas in April-Sep 2008: +20%
        vs. 17-18%.
    •   FMCG, Telecom, Auto, Financial Products expected to benefit from the increased spending
        power
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                                                                                     Transfer of Wealth
                                                                                   Increase in MSPs




 Source: Morgan Stanley                                   Source: Morgan Stanley

  •      Consumption growth has led to lower food stocks globally.
  •      Government has increased Minimum Support Price (MSP) of various crops to ensure higher
         production.
  •      Higher MSP for agricultural products estimated to have transferred USD 40 billion wealth to Rural
         India in 2008-09
  •      MSP’s have increased at a faster pace than costs. Costs have increased 18-20% vs. MSP
         increase of 54% for wheat in Punjab
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                                                                                          Government Spend

                                                                Rural Spending
                           80000                    Total Rural Spending                                 1.40%

                           70000                    Rural expenditure as % of                            1.20%
                                                    GDP
                           60000
                                                                                                         1.00%
                           50000
                                                                                                         0.80%
                           40000
                                                                                                         0.60%
                           30000
                                                                                                         0.40%
                           20000

                           10000                                                                         0.20%

                                  0                                                                      0.00%
                                         BE 2006            BE 2007       BE 2008   BE 2009   BE F2010
                     Source: Ministry of Rural Development, Inhouse

•   Government focusing on Rural infrastructure, thereby providing employment opportunities and better
    facilities
•   Pucca (Permanent) Houses built under Bharat Nirman reduces spend on rebuilding houses every year.
•   Implementation of Sixth Pay commission also led to higher income levels for government employees.

www.sundarammutual.com                                                8                                    Sundaram Asset Management
                                                                            Government Spend
                                                Government Allocation of NREGA
                                                                      391            401
                              450
                              400
                              350
                              300
             Rs Billion




                              250
                                                          160
                              200          120
                              150
                              100
                                50
                                  0
                                        FY 08          FY 09       FY 10         FY 11

                          Source: GoI


    •   Government’s focus on the rural economy via its support and development schemes (Bharat
        Nirman, NREGS, etc.) and substantial increases in minimum support prices of agri commodities
        have aided rural prosperity and improved farmer’s financial health
    •   NREGA has also led to increased wage levels – Rs 52,600 crore as wages in past five years.
    •   Farm Loan Waiver of Rs 73,000 estimated to have benefited 40-50 Million farmers
www.sundarammutual.com                                         9                           Sundaram Asset Management
                                                 Rural Consumption: In pictures
                                                                                  10%
                                                            Motor Cycle                                     Rural Ownership
                                                                                          28%

                                                                             1%                             Urban Ownership
                                                                      Car
                                                                              5%

                                                                                                 43%
                                                             Ceiling Fan
                                                                                                                     85%

                                                               Pressure                 23%
                                                               Cookers                                        71%

                                                                                              35%
                                                                       TV
                                                                                                                 77%
                Domestic Tractor Industry
                         Tractor Volumes                                    0%
     450000                                     30%                   AC
                         Yoy Growth Rates       25%                          3%
     375000
                                                20%
     300000                                     15%             Washing      1%
                                                                Machine             13%
     225000                                     10%
     150000                                     5%
                                                                               5%
                                                0%          Refrigirators
                                                                                            33%
      75000                                     -5%
           0                                    -10%
                                                                         0%         20%     40%       60%      80%      100%
               FY05 FY06 FY07 FY08 FY09 FY10E
                                                            Source: The Marketing Whitebook 2010-11, IRS 2009, R1 Hansa Research
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        Subscriber in million
                                                              Rural Consumption: Services

                                200            Total Rural Subs base                      35




                                                                                               Penetration as %
                                150            Rural subs as % of total subs              30
                                100                                                       25
                                50                                                        20
                                 0                                                        15
                                      Q2FY08   Q4FY08      Q2FY09       Q4FY09   Q2FY10
                       Source: TRAI


   •   Telecom : The rural subscriber base more than tripled in the last 2 years
        • Rural penetration however remains at just 17% vs. 95% in urban, pointing to room for
            growth.
        • Sharing of tower infrastructure helped in bringing down costs/minute enabling speedy
            rollout in rural areas
   •   Media : DTH has been a very successful in rural areas - At 20mn TV homes there is a
       significant growth potential in the coming years

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                                                         Rural Consumption: Services
                                           Micro finance vs Bank loans




                  Source: Noble Equities


   •   Credit : Micro finance industry has been grown to become the world’s largest
   •   Education: Government spend on education has increased from 84,111 Crs in FY05 to 198,842
       Crores in FY10E.

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                                                                           Avenues for Investment
         Food Processing - a long way to go                               Bharat Nirman           Overall Target       Achievement
35%                                                                       Rural water             68287                54477
30%                                                                       supply                  habitations          habitations
25%                                                                       Rural Housing           6 million            4.27 million
20%                                                                       Rural Roads             74335                33567
15%                                                                                               habitations          habitations
10%                                                                       Rural                   1,25,000             118499
                                                                          Electrification         villages             villages
    5%
    0%                                                                    Irrigation              10 Million           7.34 Million
           Foodgrains       Horticulture   Dairy   Fisheries   Livesock                           hectares             hectares
    Source: Credit Suisse                                                 Source: Bharat Nirman

•     Sectors related to agriculture such as agri-processing sectors and micro irrigation have huge potential -
      India’s food wastage is estimated to be at 58000 Crores p.a. thanks to poor storage and transportation
      infrastructure - 72% of India’s production of Fruits and Vegetables get wasted.
•     Development of irrigation, roads and power sectors will create more non-farm job opportunities. Government
      spending on this through Bharat Nirman
•     Huge latent demand in rural areas due to non-availability of infrastructure - Power, Roads, Telecom products
      and financial services

www.sundarammutual.com                                           13                                            Sundaram Asset Management
  Sundaram Rural India Fund




www.sundarammutual.com   14   Sundaram Asset Management
                                                            Sundaram Rural India Fund
                                                               Product Positioning
  • Positioning: A thematic investment option

  • Approach: Dedicated vehicle to play the key themes that will drive India growth over the
       next decade

  • Rural Prosperity though consumption and investment opportunities.

  • Style: Aggressively managed funds with sector, stock, trading and cash calls as well as a
       call to stay outside the theme to the extent permitted if conditions warrant

  • Benchmark: BSE 500 Index

  • Cap Curve: Multi-cap portfolio

  • Enabler: Investment outside the theme shall be only in large cap stocks preferably within S&P
       CNX Nifty Index
www.sundarammutual.com                           15                               Sundaram Asset Management
                                                                                   Sundaram Rural India Fund
                                                                                                         Performance



              Period                   Change in NAV (%)                                           Returns (%)
                                        Fund               BSE 500                 Fund               BSE 500              Excess
        Since Inception                 65.5                  56.6                  11.7                 10.4                 1.3
          Last 3 years                   -8.6                 -1.8                  -3.0                  -0.6               -2.4
          Last 2 years                 128.7                 134.3                  51.2                 53.1                -1.9
           Last 1 year                  24.3                  17.3                  24.3                 17.3                  7




               As of November 30, 2010. Returns in %. Computed on compounded annual basis based on NAV of Growth option.

                                   Past Performance may or may not be sustained in future
www.sundarammutual.com                                            16                                               Sundaram Asset Management
                                                                      Sundaram Rural India Fund
                                                                                  Track-record




                              Returns in %;Performance as on November 30, 2010
                         Past Performance may or may not be sustained in future
www.sundarammutual.com                               17                              Sundaram Asset Management
                                                                                  Sundaram Rural India Fund
                                                                                    Returns since launch

                                                              Rural India




                         Fund                                                                                     11.7




                 Benchmark                                                                                10.4




               S&P CNX 500                                                                          9.7




                                0.0                  3.0                   6.0                9.0                12.0




                                           Returns in %;Performance as on November 30, 2010
                                      Past Performance may or may not be sustained in future
www.sundarammutual.com                                            18                                       Sundaram Asset Management
                                                                             Sundaram Rural India Fund
                                                                                       Portfolio Snapshot
                    Portfolio Profile (%)                                                    Sector Profile(%)

                                    Cash, 3.9                                                           Cash
                                                                                               Others    3.9
                                                                                                10.7             Consumer Goods
                                                                                      Pharma                          21.4
                                                                                        5.7

                                                                    Media & Entertainment
                                                                             5.7
                                                                                   Telecom                             Fertilisers & Chemicals
                                                                                     6.3                                         18.7

                                                                                  Financial Services
                                                                                        12.5              Auto
                     Thematic, 96.1                                                                       15.1




      The top ten exposures now account for about 37% of the assets
      The portfolio now has an almost-complete tilt to stocks of companies geared to rural
        spending
      Portfolio stays spread across the cap curve
                                                  Allocation in % of AUM
                                        As on November 30, 2010; Source: Fact Sheet
www.sundarammutual.com                                       19                                                  Sundaram Asset Management
                                                                           Sundaram Rural India Fund
                                                                                      Top ten picks

                          Company                         Allocation (%)             Cap Curve
              Chambal Fertilizers                                 4.3                Small Cap
              Mahindra & Mahindra                                 4.3                Large Cap
              Bharti Airtel                                       4.2                Large Cap
              M&M Financial                                       4.2                Small Cap
              GSFC                                                3.8                Small Cap
              United Phosphorous                                  3.6                Small Cap
              Punjab National Bank                                3.5                Large Cap
              Escorts                                             3.2                Small Cap
              Tata Motors                                         3.1                Large Cap
              Coromandel Fertilizers                              3.1                Small cap
                                                 Allocation in % of AUM
                                       As on November 30, 2010; Source: Fact Sheet
www.sundarammutual.com                                      20                              Sundaram Asset Management
                                                                          Portfolio manager


                                                             A seven-year stint at Canara Bank was
                                                               followed by a shift to the asset management
                                                               industry through Canbank Mutual Fund (now
                                              Experience
                                                               Canara Robeco)
                                                             Over two decades of tracking the financial
                                                               markets

                                              Educational    Cost Accountant

                                              Background     Post -Graduate in Commerce
            J Venkatesan
        Fund Manager – Equity                                To read books and enjoy watching sport
                                              Hobbies


                                Funds Managed: Sundaram Growth, Sundaram India Leadership, Sundaram Rural
                                India, Sundaram Select Thematic Fund Financial Services Opportunities and
                                Sundaram Select Thematic Fund PSU Opportunities
www.sundarammutual.com                              21                                    Sundaram Asset Management
                                                                                Sundaram Rural India Fund
                                                                                                      Fund facts
  Allotment Date                                     May 2006
  NAV (November 30, 2010)                            Growth: Rs 16.5462                            Dividend: Rs 15.0696
  Plans / Options                                    Regular & Institutional / Growth, Dividend Payout & Re-investment
                                                Minimum Subscription Amount
  Regular Plan                                       First Investment: Rs 5000                 Subsequent Purchase: Rs 500
  Institutional Plan                                 First Investment: Rs 5000                 Subsequent Purchase: Rs 500
  SIP                                                Rs 250 per month                          Rs 750 per quarter
                                                        Asset allocation
Equity & equity-related securities of companies that are focusing on Rural India (including investment in derivatives): 70%-
100% Other equities (including investment in derivatives): 0%-30% Money market instruments 0%-15%. Exposure in
derivatives shall not exceed 50% of the net assets of the scheme. The Scheme may invest up to 35% of the net assets in
overseas securities.
                                                            Objective
  Seek to generate consistent long-term returns by investing predominantly in equity/equity-related instruments of Companies
  that are focusing on Rural India
                                                          Load Structure
  Entry Load                                   Nil
  Exit Load                                    Redeemed within 12 months: 1 %               Redeemed after 12 months: NIL
                                         Source: Scheme Information Document / Fact Sheet
www.sundarammutual.com                                         22                                        Sundaram Asset Management
                                                                                                                    Sundaram Rural India Fund
                                                                                                                                                      Disclosures
Mutual Fund Investments are subject to market risks. Please read the Statement of Additional Information (SAI) and Scheme Information Document (SID) carefully before investing. Copy of
the SAI, SID, key information memorandum and application form may also be obtained from the offices / investor service centres of Sundaram Asset Management, its distributors and at
www.sundarammutual.com
Fund Facts: Name: Sundaram Select Thematic Funds Rural India Fund; Type: An open-end equity scheme; Investment Objective: The primary investment objective of the scheme is to seek to
generate consistent long-term returns by investing predominantly in equity/equity-related instruments of “Companies that are focussing on Rural India”. Asset Allocation: Equity & equity-related
securities of companies that are focusing on Rural India (including investment in derivatives): 70%-100% Other equities (including investment in derivatives): 0%-30% Money market instruments
0%-15%. Exposure in derivatives shall not exceed 50% of the net assets of the scheme. The Scheme may invest up to 35% of the net assets in overseas securities. The fund may also invest in
equity and equity-related instruments listed in overseas markets as well as overseas funds/ETFs that invest in or track agri-commodity stocks. Benchmark: BSE 500 Minimum Investment
Amount: Rs 5,000. Entry load: There is no entry load. Exit Load: 1% if redeemed within 12 months from date of allotment for Regular Plan & Institutional Plan.. There is no exit load for bonus
units and dividend re-investment. NAV publication/sale/redemption will be done on all business days
Scheme-Specific Risk Factors: Vagaries of of nature such as erratic monsoon, failure of crop & drought, to name a few; cyclical / seasonal factors. If and to the extent, the portfolio includes
overseas stocks, investors will be exposed to country risk, currency risk, geo-political risk, legal restrictions and regulation changes in geography other than India. Change in Government policy in
general and changes in tax benefits applicable to mutual funds may impact the returns to Investors. Tax-free status for long-term capital gains and dividend will depend on the fund investing at
least 65% in equity to qualify in accordance with provisions of the Income-Tax Act. General Risk Factors: All mutual funds and securities investments are subject to market risks, and there can be
no assurance or guarantee that fund's objectives will be achieved. NAV may go up or down, depending on the factors and forces affecting the securities market. Main types are market risk, liquidity
risk, credit risk and systemic risks. At times, liquidity of investments may be impaired. There is uncertainty of dividend distribution and risk of capital loss. Past performance of the Sponsor/Asset
Management Company/Fund does not indicate the future performance. Investors in the schemes are not being offered any guaranteed or indicated returns. Sundaram Select Thematic Funds
Rural India Fund is only the name of the scheme and does not in any manner indicate either quality or future prospects and returns.
General Disclaimer: This document is issued by Sundaram Asset Management; an investment manager registered with the Securities and Exchange Board of India in India and is produced for
information purposes only. It is not a prospectus, scheme information document, offer document, offer and solicitation, to name a few, to buy any securities or other investment.
Information and opinion contained in this document are published for the assistance of the recipient only; they are not to be relied upon as authoritative or taken as a substitution for exercise of
judgment by any recipient. They are subject to change without any notice and not intended to provide the sole basis of any evaluation of the instrument discussed or offer to buy. It is neither a
solicitation to sell nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or be taken as investment advice. The information and opinions
contained in this communication have been obtained from sources that Sundaram Asset Management believes to be reliable; no representation or warranty, express or implied, is made that such
information is accurate or complete and it should not be relied upon as such. Sundaram Asset Management neither guarantees its accuracy and/or completeness nor does it guarantee to update
the information from time to time.This communication is for private circulation only and for the exclusive and confidential use of the intended recipient(s) only. Any other distribution, use or
reproduction of this communication in its entirety or any part thereof is unauthorized and strictly prohibited. By accepting this document you agree to be bound by the foregoing limitations. This
communication is for general information only without regard to specific objectives, financial situations and needs of any particular person who may receive it and Sundaram Asset Management is
not soliciting any action based on this document. Sundaram Asset Management in the discharge of its functions, may use any of the data presented in this document for its decision-making
purpose and is not bound to disclose the same. Copies of the Statement of Additional Information, Scheme Information Document and application form with key information memorandum may be
obtained from the offices of Sundaram Mutual offices and its authorized distributors or downloaded from www.sundarammutual.com . For scheme specific risk factors, asset allocation, load
structure, fund facts and taxation aspects please refer scheme information documents available online and at branches/Investor Service Centres.
Statutory: Mutual Fund: Sundaram Mutual Fund is a trust under Indian Trusts Act, 1882 Sponsor: Sundaram Finance Ltd. Liability for sponsor is limited to Rs 1 lakh.:. Investment Manager:
Sundaram Asset Management Company Ltd. Trustee: Sundaram Trustee Company Ltd.

www.sundarammutual.com                                                                        23                                                               Sundaram Asset Management
                                                     Sundaram Rural India Fund
                                                                 Contact us

                             SMS: SFUND to 56767


                           Toll Free: 1800-425-1000
                                                                   Thank
                         www.sundarammutual.com
                                                                    You
                                Call: 044 28578700


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