Presenting RETIREMENT SAVINGS FUND (An open-ended retjrement solutjon oriented scheme having a lock-in of 5 years or tjll retjrement age (whichever is earlier)) NFO Period: 29 th Nov - 13 th Dec 2019
What does retirement mean to you? Happy, Healthy & Wealthy 19, F 58, F 35, F Having enough money to do To stay healthy and do what I To be able to shop without the things I want – travel, feel like without worrying checking the price tag. start a new career, etc. about money. 56, M 41, M 25, M To do what I want (travel) To be the master of To be financially free and instead of what I am my own tjme. healthy to enjoy the wealth. supposed to do. Source: Axis MF Internal Research 1
What are the typical retirement fears? 48% people worldwide are scared that their corpus will not suffice Difficulty to meet Feeling isolated and Declining basic financial needs dependent health Financial compromises Being laid off abruptly Source: Transamerica Centre – Retjrement Studies. Data as on Dec 2018. 2
Life expectancy is increasing While people want to retire earlier 75 Life expectancy at birth (years) The 80+ populatjon has nearly 70 tripled globally over the past 30 years and stands at 65 143 million in 2019. 60 55 It is expected to further triple to 426 million by 2050 and double to 881 million by 2100. 50 45 40 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 India World Source: UN World Populatjon Prospects 2019, World Bank. Data as on 31st Mar 2019. 3
Typical challenges are here to stay Manage one’s income in working years for comfortable non-working years 18-29 yrs 30-59 yrs 60+ yrs Young Age Middle Age Old Age Post Retjrement Educatjon Wedding Sustenance Children’s Emergency Medical Savings Educatjon Expense Children’s Wedding 4
You will retire, but inflation won’t! Savings is not investjng Savings does not grow money. Investjng does. Assuming inflatjon at 5%, ` 1 lakh saved today will be worth only ` 61,391 afuer 10 years. What you can buy today for ` 1 lakh will cost ` 1.63 lakhs 10 years later. Above figures and assumptjons are strictly for illustratjon purpose. 5
Cost of living is rising rapidly Are you ready for it? Movie ticket Petrol/Diesel Milk Rice prices have prices have prices have prices have tripled increased 5-10x increased 2-3x doubled over the in last 15 years in last 20 years in 15 years last 5 years Source: Axis MF Internal Research, data.gov.in. Data as on 31st Dec 2018. 6
Maintaining health has become an expensive affair Health Insurance Premium Collection ($ bn) 5.9 63 million people fall into poverty 4.8 each year due to lack of financial 4.1 3.6 protectjon for medical needs 3.5 2.9 2.9 2.8 2.4 50% of beneficiaries travel more than 100 kms to access quality care FY 11 Fy 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19* Source: ibef.org. Data as on 30th Sep 2019 7
Deciding retirement corpus is critical Inflation will impact monthly expenses 6.00 If you were to retire today The earlier you plan to retjre, the 5.00 bigger the size of corpus required Retirement corpus (Rs crs) 4.00 Risk appetjte reduces as you near 3.00 the retjrement age 2.00 Staying financially disciplined post 1.00 retjrement gives more predictability ` 1cr corpus will ` 1.5 crs corpus will ` 2 crs corpus will serve for 20 years serve for 34 years serve for 54 years 0.00 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 Years Corpus @ ` 1crs Corpus @ ` 1.5 crs Corpus @ ` 2 crs Above figures and assumptjons are strictly for illustratjon purpose and does not indicate any future returns. Assumptjons: If you were to retjre today with a set corpus, Monthly expense: ` 50,000 (increasing at an inflatjon rate of 5%) Retjrement Corpus growing at 7% interest rate. 8 The effect of taxation is not considered.
So, how prepared are you for retirement? Key things to consider: PRE-RETIREMENT POST-RETIREMENT Find the right investment product(s) Be aware of your risk appetjte Map your investment goals Decide a reasonable withdrawal rate Stay disciplined Stay disciplined Don’t atuempt to tjme the market Adjust the withdrawal rate based on investment return/real rate Adjust your risk appetjte with age 9
YOU’LL LIVE LONGER THAN YOU THINK. WILL YOUR MONEY LAST AS LONG? Presenting In India, modern medicine has increased life RETIREMENT SAVINGS FUND expectancy by 47% over the last 50 years*. Have you planned your future accordingly? (An open-ended retjrement solutjon oriented scheme having a lock-in of 5 years or tjll retjrement age (whichever is earlier)) *Source: United Natjons Populatjon Fund Report dated April 2019 10
Product Construct The fund aims to help investors with their retirement planning Ideal for young investors Aggressive Plan in the early stages of their careers Ideal for 35-45 year old investors Dynamic Plan with financial responsibilitjes Ideal for investors about to Conservative Plan enter their retjrement years 11
Product Construct Aggressive Plan Dynamic Plan Conservative Plan Equity exposure Equity exposure 65-100, 40-80% debt 65-80%. will be through a exposure in Rest spread across combinatjon of Hedged & high quality other asset classes* Unhedged equity. Rest debt instruments, spread across 20-40% in other asset classes* Equity exposure. Default retjrement age: 58 years. Please refer to SID for detailed investment strategy and asset allocatjon 12 * Other asset classes include Debt & Money Market Instruments, Gold ETF and REITs & InvITs.
Equity Investment Approach Risk return tradeoff is likely to be favourable over the medium term Good ideas can do betuer irrespectjve of their sector/theme/size Focus on fast growing sectors with botuom-up stock picking approach *Investment focus is based on current market outlook and is subject to fund manager discretjon. Investors are advised to refer SID for investment strategy of the scheme 13
Debt Investment Approach The portgolio duratjon and credit exposures will be decided based on thorough research Flexibility to invest in the entjre range of debt instruments across credit/duratjon spectrum Actjve duratjon management *Investment focus is based on current market outlook and is subject to fund manager discretjon. Investors are advised to refer SID for investment strategy of the scheme 14
Apply disciplined approach to investing Trying to pick the top or bottom of markets is notoriously difficult Return (XIRR) Regular investing helps ensure you don’t miss out on the best gains 14.0% Illustration 13.5% 15.9% 12.8% (Last 39 years in Sensex) 12.9% 9.0% 4.6% 0.9% Invested ` 1,000 on Invested ` 1,000 on Invested ` 1,000 on any Fully invested Missed 10 best Missed 30 best Missed 60 best Missed 90 best market high of every year market low of every year random date of every year days days days days (In this case, 1 st Dec) Past performance may or may not be sustained in future. Source of data: Bloomberg. SIP calculatjon are done based on monthly SIP (last day of the month). The returns are in XIRR. XIRR calculates the internal rate of return for series of cash flows. Above chart/figures/data is for illustratjon purpose and does not indicate performance of any scheme. Data as on 31st Mar 2019. Data calculated based on S&P BSE Sensex Index; Source: Bloomberg. Above chart/data is for illustratjon purpose and does not indicate performance of any scheme. In the above chart, missed ‘n’ best days refers to not staying invested to capture ‘n’ best daily gains in the period from Jan 1980 to Mar 2018. Eg: Missed 10 days means Assuming daily return for the best 10 days (as per daily gains) as 0%. Data as on 31st Mar 2019. Data calculated based on S&P BSE Sensex Index. 15
A small delay can cost more Start Early And benefit from the Power of Compounding 200.00 SIP In S&P BSE Sensex for last 20 & 25 years ` 1.7 crs 180.00 I llust r atjon: Cost of 160.00 Mon thly SI P o f ` 10,000 delay: ` 66lacs 140.00 In v e st or A: In v e stj n g si n c e 25 y e a r s In v e st or A In v e st or B 120.00 In v e st or B : In v e stj n g si n c e 20 y e a r s ` 1.1 crs 100.00 80.00 60.00 40.00 20.00 0.00 Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r Ye a r 0 1 2 3 4 5 6 7 8 9 1 0 11 1 2 1 3 14 1 5 1 6 17 1 8 1 9 20 2 1 22 23 2 4 25 Past performance may or may not be sustained in future. Source of data: Bloomberg. SIP calculatjon are done based on monthly SIP (last day of the month). The returns are in XIRR. XIRR calculates the internal rate of return for series of cash flows Above chart/figures/data is for illustratjon purpose and does not indicate performance of any scheme. Data as on 31st Mar 2019. Data calculated based on S&P BSE Sensex Index. 16
SECURE YOUR INVESTMENT GOALS, NO MATTER WHAT. The Axis Retjrement Savings Fund comes with the exclusive provision of iPlus SIP. (An open-ended retjrement solutjon oriented scheme having a lock-in of 5 years or tjll retjrement age (whichever is earlier)) 17
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