Icici Prudential Target Returns Fund

ICICI Prudential Target Returns Fund

(There is no guarantee or assurance of returns)

NFO Open from April 15, 2009 to May 14, 2009 For distributors only

DISCIPLINED APPROACH TO INVESTING IS THE KEY TO WEALTH BUILDING. ICICI Prudential Target Returns Fund - An Open Ended Diversified Equity Fund (There is no guarantee or assurance of returns) with an in-built tool (TRIGGER) to enable disciplined investment strategy for potential wealth creation. •

‘Investor needs a predefined strategy’. If an investor invests with a pre-set target, he or she knows what they are looking for and hence chances of meeting that target are greatly enhanced. Most investors invest without any identified target and hence when it is realized they lose out on making most of the opportunity. It is extremely important to stay the course once an investment strategy is formulated. The opportunity past - its common bravado to say ‘It’s OK this is anyway a long term investment”. But couldn’t they have been better off being disciplined?

•

‘Take the emotion out of investing’. Sticking to pre-set targets will help an investor avoid getting too greedy when he or she has already made a healthy profit. All of us have a tendency to get greedy on the upside or to chase losses on the downside. To explain this further, let’s read the below two examples. •

‘Avoid Chasing Losses’. Say investor has invested in a fund at Rs.10/- and that currently has NAV of Rs. 20/- He or she decides to hold on to it past Rs. 20/- even though that was one of the targets. Due to market action, the NAV then drops to Rs.15/- Instead of switching the profits to a debt scheme at Rs. 15/- the investor feels he or she should switch only when it hits Rs. 20/- again because that seems possible from recent experience. The NAV then drops to Rs.10/- and then the investor rethinks the current target of Rs.20/- and decides that he or she will switch the fund if it gets back to Rs. 15/- and so on until they have chased the loss all the way down.*

•

‘Avoid Being Greedy’. Say investor invests in a fund that currently has NAV of Rs. 20/- and decides to hold it beyond Rs.20/- though that was one of the targets. The NAV then rises to Rs.25/- Instead of switching at Rs. 25/- to a debt scheme he or she may feel that the switch should be done when the NAV hits Rs.30/- The NAV then rises further to Rs. 35/- The investor still does not switch the profits already made in the greed for making more gains. Suddenly there is a correction like in 2008 and the NAV dips to Rs. 20/- Clearly the investor could have made profits every time the NAV had risen if discipline was maintained rather than looking for outsized gains.

(The scenarios depicted above are for illustrative purpose only and shall not be construed that there is any assured or guaranteed returns under the scheme.)

•

SIPs and STPs are offered in mutual fund schemes to capture the best out of volatile behavior of equity investments. While disinvesting too, there is need to have options which allow investors to exit once their investment objectives are met. An investor will no longer need to track movements in NAV and miss any opportunity of booking profits thus eliminating time and opportunity losses.

•

THE GENIUS IS NOT IN TIMING THE MARKET BUT IN BOOKING PROFITS. WE PRESENT TO YOU ICICI PRUDENTIAL TARGET RETURNS FUND (There is no guarantee or assurance of any Return) – A FUND MOST SUITABLE FOR DISCIPLINED INVESTING IN ALL MARKET CONDITIONS. Market Scenarios: •

Bull market situation: Switch profits to select investment vehicles on achieving pre-set triggers. This is all about climbing up the ladder with smaller steps and reaching the destination in a disciplined manner.

ICICI Prudential Target Returns Fund

(There is no guarantee or assurance of returns)

NFO Open from April 15, 2009 to May 14, 2009 For distributors only • Range bound market situation: Switch both profits and investments on achieving pre-set triggers and re-enter on dips to benefit from further potential upsides. (The scenarios depicted above are for illustrative purpose only to reflect the different market conditions, there is no assurance or guarantee of returns under the scheme)

Investment Objective ICICI Prudential Target Return Fund (There is no guarantee or assurance of returns) is an open-ended diversified equity fund that seeks to generate capital appreciation by investing in large cap equity or equity related securities of companies constituting the BSE 100 index and providing investors with an option to switch the appreciation or investment to pre-selected debt schemes automatically based on triggers for pre-set levels of return (targets) as and when these are achieved. •

Investment Universe - The fund will invest in large market capitalization companies that are part of the BSE 100 index.

•

Investment Style - Blend of Growth and Value style of investing.

•

Trigger Option - The Fund offers the Trigger Option (available under Growth sub option only) The investor will have the option to select from a set of 4 triggers viz., 12%, 20%, 50% and 100%. On achieving the pre-set trigger target from initial investment level, either the appreciation in NAV per unit or the entire investment (as selected by investor) will be switched into any of the four pre-selected eligible debt schemes (please refer to scheme features for the list of eligible schemes). The scheme for switch can be chosen by the investor at the time of the investment. The default options under trigger option will be trigger at 20% with appreciation in NAV switched into ICICI Prudential Liquid Plan - Growth. The investor can also choose to remain invested in the scheme without any triggers by selecting growth or dividend payout or reinvestment options.

Back testing data analysis on the Equity Markets Case Study 1 – Range bound markets. An analysis on the BSE Sensex explains why it is important to rebalance one’s investments once targets are met. Even in calendar years when the BSE Sensex has given negative returns, on several occasions it has still provided an opportunity to investors to achieve their target by booking profits and rebalancing their portfolios to debt investments. These opportunities are in the form of “bear market rallies” which investors can capture to gain even from bearish equity markets.

Year 1995 1998 2000 2001 2008

Calendar year returns -20.19% -16.50% -19.58% -17.87% -52.48%

Number of times BSE Sensex hit the 12% target in rallies during the year 18 57 46 45 39

Maximum returns during rallies 19.35% 33.38% 26.63% 32.41% 24.93%

Period for which maximum returns achieved 02-May-95 to 06-Oct-95 28-Jan-98 to 21-Apr-98 22-May-00 to 12-Jul-00 21-Sep-01 to 10-Dec-01 27-Oct-08 to 04-Nov-08

Past performance may or may not sustain in future. The above calculation is based on data available on www.bseindia.com and depicts performance of BSE Sensex over a period of time and shall not be construed to be indicative of scheme performance in any manner. A variety of market factors and assumptions may affect this analysis, and this analysis does not reflect all possible loss scenarios. The scenarios depicted herein are for illustrative purpose only. There is no certainty that the parameters and assumptions used in this analysis can be replicated with actual trades. Any returns, which appear above, are not guaranteed future returns.

ICICI Prudential Target Returns Fund

(There is no guarantee or assurance of returns)

NFO Open from April 15, 2009 to May 14, 2009 For distributors only Case Study 2 – Bull and bear market. 23000

In 2008 the fall in BSE Sensex wiped out all gains made since 2006. If investors booked profits in a disciplined manner, they would have made returns despite the huge fall in the markets. Investors who stayed invested have lost all notional gains made in last 3 years.

21000 19000 17000 15000 13000 11000 9000

Source: www.bseindia.com

7000 Jan-06

Jun-06

Nov-06

Apr-07

Sep-07

Feb-08

Jul-08

Dec-08

Past performance may or may not sustain in future. The above calculation is based on data available on www.bseindia.com and depicts performance of BSE Sensex over a period of time and shall not be construed to be indicative of scheme performance in any manner.

In the below illustration, we have taken the example of an investor who has chosen to invest in the Equity Markets in the same composition as that of the Sensex from 1-Jan-06 till 23-Mar-09 with trigger to book profits at 20% appreciation with the appreciation being switched into a Savings Bank account. During the entire period 4 triggers were hit and the investor on 23-Mar09 has a final value of Rs.14.92/- for Rs. 10/- original investment. The asset allocation has been consistently rebalanced and by the time the market starts falling, the allocation stands at less than 20% in equity and about 80% in the Savings Bank account. The second investor who does not rebalance his allocation and does not have any trigger to take profits; starts at value of Rs. 10/- and his final value on 23-Mar-09 stands at Rs. 10.04/The illustration clearly brings out the importance of rebalancing asset allocation and being disciplined in profit booking. SIMULATION ON SENSEX VALUES TRIGGER @ 20% APPRECIATION ONLY MOVED TO SAVINGS BANK 120%

TRIGGER 1 - VALUE 12.04

100%

20

TRIGGER 2 - VALUE 14.05 FINAL VALUE 80% RS. 14.92 15

TRIGGER 3 - VALUE 17.38

60%

10

TRIGGER 4 - VALUE 21.28 40%

FINAL VALUE RS. 10.04

% EXPOSURE TO SENSEX

VALUE OF RS 10 INVESTED ON 01-JAN-2006

25

5 20%

SENSEX EXPOSURE

Jan-09

Mar-09

Nov-08

Jul-08

Sep-08

May-08

Jan-08

Mar-08

Nov-07

Jul-07

SENSEX ONLY

Sep-07

May-07

Jan-07

Mar-07

Nov-06

Jul-06

Sep-06

Mar-06

May-06

0% Jan-06

0

SENSEX WITH TRIGGER ON APPRECIATION

Past performance may or may not sustain in future. There is no certainty that such targets will be achieved by the Scheme. The above shall not be construed to be indicative of scheme performance in any manner. The scenarios depicted herein are for illustrative purpose only. The above mentioned simulation data is for illustration purposes only & do not represent any forecasted performance. The information in the above table and diagram is only for a reference. A variety of market factors and assumptions may affect this analysis, and this analysis does not reflect all possible loss scenarios. There is no certainty that the parameters and assumptions used in this analysis can be replicated with actual trades. Any returns, which appear above, are not guaranteed future returns.

Why investing with a target is a compelling proposition? Attached below are the results of a study to find that if an investor had invested in the Equity Markets with pre-set targets, then over what time frame the targets would have been met. Most investors invest in equity as they expect equity to outperform other asset classes and hence their return expectations can be anything higher than fixed income. The surprising data that the Sensex performance throws up is that if an investor entered the market anytime in the last 10 years with a return target of 50%, 21% of the times he or she would have attained the target in 12 months. How many investors would have actually taken such gains off the table and rebalanced to safer asset classes?

ICICI Prudential Target Returns Fund

(There is no guarantee or assurance of returns)

NFO Open from April 15, 2009 to May 14, 2009 For distributors only It is important to invest in equity with a long term horizon because markets tend to be cyclical and highly volatile. Additionally but, the data clearly shows that it is important to have a return target and chances are you might meet it before the “long term” really happens!!! SENSEX RETURN / % OF TIMES 12% 3 MONTH RETURNS 6 MONTH RETURNS 12 MONTH RETURNS

OR MORE 20% 33% 41% 56%

OR MORE 50% 13% 31% 49%

OR MORE 100% 0% 4% 21%

OR MORE 0% 0% 0%

Past Performance may or may not sustain in future. The above data shows rolling returns from Jan 1999 till March 23, 2009 and is based on data available on www.bseindia.com and depicts performance of BSE Sensex over a period of time and shall not be construed to be indicative of scheme performance in any manner. The scenarios depicted herein are for illustrative purpose only. The above mentioned simulation data is for illustration purposes only & do not represent any forecasted performance. The information in the above table and diagram is only for a reference. A variety of market factors and assumptions may affect this analysis, and this analysis does not reflect all possible loss scenarios. There is no certainty that the parameters and assumptions used in this analysis can be replicated with actual trades. Any returns, which appear above, are not guaranteed future returns.Source: www.bseindia.com, Mutual Funds India Explorer

Why investing in equity now makes sense? 120% 100%

101%

93%

?

99%

79%

80%

Return (% )

60% 40%

26% 14%

20%

6%

0% -20%

-13% -28%

-40% -60%

-32% -39%

-53%

-80% Jan-93

-56% Jan-95

Jan-97

Jan-99

Jan-01

1 Year Return

Jan-03

Jan-05

Jan-07

Jan-09

After One Year

Actual Sensex returns for last 16 years. Source :MFI Explorer Past Performance may or may not sustain in future. The above data shows rolling returns from Jan 1999 till March 23, 2009 and is based on data available on www.bseindia.com and depicts performance of BSE Sensex over a period of time and shall not be construed to be indicative of scheme performance in any manner. The scenarios depicted herein are for illustrative purpose only. The above mentioned simulation data is for illustration purposes only & do not represent any forecasted performance. The information in the above table and diagram is only for a reference. A variety of market factors and assumptions may affect this analysis, and this analysis does not reflect all possible loss scenarios. There is no certainty that the parameters and assumptions used in this analysis can be replicated with actual trades. Any returns, which appear above, are not guaranteed future returns.

ICICI Prudential Target Returns Fund

(There is no guarantee or assurance of returns)

NFO Open from April 15, 2009 to May 14, 2009 For distributors only Scheme Features ICICI Prudential Target Return Fund 15th April 2009 14th May 2009 Open Ended Diversified Equity

NFO NFO Start Date NFO Close Date Type of Scheme

Institutional Option I* Growth

Retail Options Trigger Switch to Scheme Minimum Application Entry Load

Exit Load

Growth With out Trigger NA

With triggers

12% 20% 50% 100% ICICI Prudential Floating Rate Plan B Switch to ICICI Prudential Income Plan any ICICI Prudential Liquid Plan scheme ICICI Prudential Short Term Plan 5,000 (i) For investments of less than Rs.2 crores:2.25% (ii) For investment of Rs.2 crores and above: Nil

Dividend With out Payout Reinvestment Trigger NA NA Regular NA

(i) For investments of less than Rs.2 crores: - if the amount sought to be redeemed before 6 months fromthe date of allotment : 1.5% of the applicable NAV - if the amount sought to be redeemed after 6 months but before 12 months from the date of allotment : 1% of the applicable NAV - if the amount sought to be redeemed on or after 12 months from the date of allotment : Nil

NA

With triggers

20% 50% 100% 12% ICICI Prudential Floating Rate Plan B Switch to ICICI Prudential Income Plan any ICICI Prudential Liquid Plan scheme ICICI Prudential Short Term Plan 100,000 Nil

Nil

(ii) For investment of Rs.2 crores and above: Nil * For FIIs and Fund of funds only

Statutory Details: ICICI Prudential Mutual Fund (the Fund) was set up as a Trust sponsored by Prudential plc (through its wholly owned subsidiary namely Prudential Corporation Holdings Ltd) and ICICI Bank Ltd. ICICI Prudential Trust Limited (the Trust Company), a company incorporated under the Companies Act, 1956, is the Trustee to the Fund. ICICI Prudential Asset Management Company Ltd (the AMC). a company incorporated under the Companies Act, 1956, is the Investment Manager to the Fund. ICICI Bank Ltd and Prudential Plc (acting through its wholly owned subsidiary namely Prudential Corporation Holdings Ltd) are the promoters of the AMC and the Trust Company. Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Schemes will be achieved. As with any securities investment, the NAV of the Units issued under the Schemes can go up or down, depending on the factors and forces affecting the capital markets. Past performance of the Sponsors, AMC/Fund does not indicate the future performance of the Schemes of the Fund. The Sponsors are not responsible or liable for any loss resulting from the operation of the Schemes beyond the contribution of an amount of Rs.22.2 lacs, collectively made by them towards setting up the Fund and such other accretions and additions to the corpus set up by the Sponsors. Investment Objective: ICICI Prudential Target Returns Fund (An Open Ended Diversified Equity Fund. There is no guarantee or assurance of returns) is an open-ended diversified equity fund that seeks to generate capital appreciation by investing in equity or equity related securities of large market capitalization companies constituting the BSE 100 index and providing investors with options to withdraw their investment automatically based on triggers for pre-set levels of return as and when they are achieved. Asset Allocation Pattern: Equity & Equity related securities – 65% to 100% (including investment in ADR/GDR up to 50% of allocation to Equity & Equity related securities maximum to the extent permitted under SEBI Regulations, Stock lending upto 30% of the Net Asset of the Scheme and derivatives instruments to the extent of 75% of the Net Assets as permitted under SEBI Guidelines) Terms of Issue: The units of the scheme can be subscribed at Rs. 10/- per unit during the New Fund Offer period. Being open-ended in nature, the Scheme will commence sale and redemption of units not later than 30 days after the close of the New Fund Offer period and will be available for subscription at NAV based prices. Entry Load: (a) Retail Option: (i) For investments of less than Rs.2 crores 2.25% (ii) For investment of Rs.2 crores and above: Nil, (b) Institutional Option I: Nil. Exit Load: (a) Retail Option : (i) For investment less than Rs.2 crores: if the amount sought to be redeemed before 6 months from the date of allotment : 1.5% of the applicable NAV, if the amount sought to be redeemed after 6 months but before 12 months from the date of allotment : 1% of the applicable NAV, if the amount sought to be redeemed on or after 12 months from the date of allotment : Nil, (ii) For investment of Rs 2 crores and above: Nil (b) Institutional Option I: Nil. Scheme Specific Risk Factors: Risk attached with equity • Risk attached with bonds. • Interest Rate Risk • Liquidity or Marketability Risk • Credit Risk • Reinvestment Risk • Settlement risk • Regulatory Risk • Risks associated with investment in unlisted securities • Risks attached with the use of derivatives • ADR/GDR, Short Setting/ Securities lending. For details on the Risk Factors, please refer to the SID. ICICI Prudential Target Returns Fund is only the name of the scheme and does not in any manner indicate either the quality of the scheme, its future prospects or returns. Investors in the scheme are not offered any guaranteed returns. For Scheme Information Document and Key Information Memorandum, contact your financial advisor or log onto www.icicipruamc.com or visit any of the branches of the AMC. Mutual Fund Investments are subject to market risks. Please read the Scheme Information Document carefully before investing. In the preparation of the material contained in this document, ICICI Prudential Asset Management Company Ltd. (the AMC) has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc.

ICICI Prudential Target Returns Fund

(There is no guarantee or assurance of returns)

NFO Open from April 15, 2009 to May 14, 2009 For distributors only ICICI Prudential Asset Management Company Limited (including its affiliates), the Mutual Fund, The Trust and any of its officers, directors, personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on this material. All Distributors should abide by the SEBI/AMFI code of conduct & rules/regulations.