SIZE DOES MATTER!

Large cap companies are huge players in the market and flag bearers of the economy with a long term track record. Due to their size they tend to be comparatively unaffected by rough economic times and investments in large cap companies lend credibility to any investment portfolio as they are bought more for actual performance rather than a potential future. Large cap companies also can venture into non-core businesses as they have the resources to commit to new businesses and such non-core businesses thus add the high growth potential to large caps which is generally associated with mid caps.

A Larger Role to Play

Large caps are a valuable part of portfolio diversification and provide stability and long term investing protection, neither growing too rapidly nor falling too dramatically based on daily stock market news. This makes them fairly liquid instruments and a preferred investment option for many investors, mainly institutional. FIIs seeking to invest in Indian markets usually make their first investment in large cap stocks. Their role in the portfolio is to provide steady returns with comparatively lower risk so that investors can invest (speculate) in other type of stocks to increase their earnings potential. They lend credibility to any investment portfolio, as they are bought more for actual performance rather than a potential future.

Introducing Principal Large Cap Fund – Benefit from Size

Large Cap ‘based’ Mutual Funds are an ideal investment tool for investors as they capture this essence of large cap companies while providing the benefits of investing in mutual funds, diversification and facility to invest in small amounts. Defining the right market cap is fundamental to realize the real potential, and Principal Large Cap Fund, a frontrunner in this category, is a true large cap fund that seeks to invest in fundamentally strong companies with large market capitalization equal to or greater than Rs 3500 crores (subject to periodic review in line with the market levels), with a small amount of the portfolio having a lower market capitalization of not less than Rs 2000 crores.

The fund, a relatively unknown in its category with no blue-chip or opportunities tagline, has a smaller corpus of Rs 414.32 crores and relies on a focused investment strategy of only 25 - 30 stocks to deliver a solid performance. At present, the top five holdings account for 29 percent of the corpus with the portfolio well diversified at the sector level as well with investments across 16 sectors. Currently, banking is the top sector holding accounting for 18.58 percent, followed by industrial capital goods (13.95 percent), finance (13.32 percent) and construction (9.35 percent).

Fund Performance (as on February 29, 2008)

Note: Past performance may or may not be sustained in the future

Returns are calculated on compounded annualized basis ^ Growth Option

This 2 year old fund has proven to be a solid performer and a front runner in the large cap category, being rated CPR 1 by Crisil and ranked among the World’s 100 Top Performing Equity Schemes (Ranked # 96) by Lipper. Much of this success can be attributed to the investment philosophy and style at Principal, a combination of picking fundamentally strong companies and disciplined risk management.

On a final note, there is still a lot of steam left in the large cap companies which will play a major role in India’s future growth. The stellar performance of Principal Large Cap Fund since inception cannot be ignored making it an ideal pick and a ‘new favorite’ among large cap funds. Invest now and you will find Principal Large Cap Fund as a rewarding long-term investment.

For more details about investing in mutual funds, tax saving mutual funds best mutual funds in India to invest in and to learn how to invest in mutual funds log on to http://www.principalindia.com/ or mail campaign@principalindia.com

Disclaimer: CRISIL CPR 1 - The composite performance of Principal Large Cap Fund in the Large Cap-oriented equity scheme category (31 schemes) is “Very Good” and ranks within the top 10% of the schemes ranked in the category. The criteria used in computing the CRISIL Composite Performance Rank are Superior Return Score, based on NAVs over the 2-year period ended December 31, 2007, concentration and liquidity of the scheme. The methodology does not take into account the entry and exit loads levied by the scheme. The CRISIL CPR is no indication of the performance that can be expected from the scheme in future. A detailed methodology of the CRISIL CPR is available at www.crisil.com Rankings and Award Source: CRISIL FundServices, CRISIL Ltd. Lipper Disclaimer - Principal Large Cap Fund-Growth has secured a rank of 96 among the 100 top performing equity funds in the world during the year 2007, as per Lipper data. The customized report, highlighting the 100 top performing equity funds in the world during the year 2007, is based on the study of all funds under the equity asset class tracked by Lipper, and having a minimum track record of at least one year as of December 2007 end. In total 24,887 equity funds (primary) qualified for the study. All returns are denominated in INR for the period ending on 31st December 2007. Data source: Lipper, a Reuters Company www.lipperweb.com Statutory Details: Principal Mutual Fund has been constituted as a trust with Principal Financial Group (Mauritius) Limited, Punjab National Bank and Vijaya Bank as the co-settlors. Sponsor: Principal Financial Services Inc., USA. Trustee: Principal Trustee Company Private Limited. Investment Manager: Principal Pnb Asset Management Company Private Limited. Risk Factors: Mutual funds and securities investments are subject to market risks and there can be no assurance and no guarantee that the objectives of Principal Mutual Fund can be achieved. As with any investment in securities, the NAV of the units issued under the scheme(s) can go up or down, depending upon the factors and forces affecting the capital markets. Past performance of the Sponsor/ AMC/ Principal Mutual Fund/ Punjab National Bank/ Vijaya Bank does not indicate or guarantee the future performance of the Schemes of Principal Mutual Fund. Principal Large Cap Fund (An open-ended Equity Scheme; Investment Objective: To provide capital appreciation and /or dividend distribution by predominantly investing in companies having a large market capitalization. For the purpose of this Fund, Large Cap Companies are defined as those having market capitalization greater than Rs.750 crore as on the date of investment (or any such amount as may be specified by India Index Services Ltd (IISL) from time to time) being the upper limit of market capitalisation as a criteria for inclusion of a company in CNX Midcap 200 Index. However, should IISL come out with a definition of ‘Large Cap companies’, the same will be utilized. Load Structure: Entry Load: For Direct Investment - Nil. For investments less than Rs. 3 crores - 2.25%. For investments of Rs. 3 crores and above - Nil. Exit Load: For Investments less than 3 crores - 1.5% if redeemed on or before 180 days from the date of allotment, 1% if redeemed after 180 days but on or before 365 days from the date of allotment, Nil if redeemed after 365 days from the date of allotment. For investments of Rs.3 crores and above - 0.50% if redeemed on or before 180 days from the date of allotment, Nil if redeemed after 180 days from the date of allotment.), is only the name of the Scheme and does not in any manner indicate either the quality of the Scheme or its future prospects or returns. The Sponsor is not responsible or liable for any loss resulting from the operations of the Mutual Fund beyond the contribution of an amount of Rs. 25 Lakhs towards setting up Principal Mutual Fund. Investors in the scheme(s) are not being offered a guaranteed or assured rate of return or monthly or regular/periodical income distribution, and the actual returns and/or periodical income distribution of an investor will be based on the distributable surplus. For scheme specific risk factors, terms of issue etc. investors are urged to read the Offer Document carefully and consult with their legal/tax/investment advisor before they invest the Scheme. Copy of offer document of the scheme(s) can be obtained at the investor service centers of AMC and our Toll Fee No.: 1800 22 5600 and Website: www.principalindia.com

When was the last time you asked for or invested in a Monthly Income Plan (MIP)? Equity oriented funds are always in the limelight and tend to get majority of the investments however equity markets are unpredictable by nature, and as a result your asset allocation is exposed to potentially higher risk. Investments are, after all, all about optimising returns to meet your needs and aspirations, based on your risk appetite.

Not all investments appreciate, or depreciate in the same proportion, at the same time, and asset allocation helps reduce risk and improves return potential. Tax efficient returns and diversification of assets are some of the reasons why debt funds are a must for every portfolio.Over a longer time frame it is asset allocation which can help you to not only safeguard your portfolios from the downside, but also create wealth.

For a moderate risk-taking investor, MIPs offer the opportunity to give higher returns compared to debt fund investments, and for a high risk-taking investor, MIPs offer the opportunity to incorporate a degree of stability in an equity portfolio. Sadly, a product that can add value to your portfolio is now a forgotten lot.

So what exactly are MIPs or Monthly Income Plans?

• MonthlyIncome Plans (MIPs) are mutual funds designed with the objective to give a regular return (in the form of income) to investors with monthly, quarterly, half-yearly and annual options (or such other periodicity introduced by fund houses from time to time). Investors who choose the growth option get a return
  in the form of capital appreciation.

• Primarily meant for those investors looking for an alternate source of regular income, people who have opted for VRS, and also parents looking for a convenient option to meet their child’s education and monthly allowance.

• MIPs can manage to provide the monthly income as they can invest in equities which give a boost to the returns and is also ideal for investors with a modest risk appetite who do not want to miss out on the Bull Run.

• The best part about MIPs is that they can be made suitable to a much broader investor mass in line with their respective risk appetite, for example: conservative MIPs (invest 5-10% in equities), moderate MIPs (invest upto
  15-20% in equities) and the aggressive MIPs (invest upto 25-30% in equities).

• MIPs score over comparable investment avenues in tax efficiency as mutual fund dividends (in case declared by the scheme) are tax-free in the hands of the investor.

Principal Monthly Income Plan (MIP) invests upto 15 percent in equities and Principal Monthly Income Plan – MIP Plus, an aggressive MIP offering, investing upto 25 percent in equities, with the remainder of both the portfolios in high quality debt instruments.

Performance of Principal Monthly Income Plan (MIP) and Principal Monthly Income Plan – MIP Plus (as on Feb 29, 2008)

Both the schemes - Principal MIP and Principal MIP Plus have also won the 5 Star Award at the ICRA Mutual Fund Awards 2008 for their 1 year performance*.

MIPs can add significant value and you must consider making allocations (if regular income is necessary) in line with your risk appetite.

For more details about investing in mutual funds, tax saving mutual funds best mutual funds in India to invest in and to learn how to invest in mutual funds log on to http://www.principalindia.com/ or mail campaign@principalindia.com

Statutory Details:
The Mutual Fund is sponsored by Principal Financial Services Inc. USA through
its wholly owned subsidiary, Principal Financial Group (Mauritius) Limited with
Punjab National Bank (PNB) and Vijaya Bank (VB) as its co-settlors. Sponsor:
Principal Financial Services Inc., USA. Trustee: Principal Trustee
Company Private Limited. Investment Manager: Principal Pnb Asset
Management Company Private Limited. Risk Factors: Mutual funds and
securities are subject to market risks and there can be no assurance and no
guarantee that the objectives of the schemes can be achieved. As with any
investment in securities, the NAV of the units issued under the Scheme(s) can go
up or down, depending upon the factors and forces affecting the capital markets.
Past performance of the Sponsor/AMC/ Principal Mutual Fund/Punjab National Bank/
Vijaya Bank does not indicate or guarantee the future performance of the
Scheme(s) of Principal Mutual Fund. Principal Monthly Income Plan (Investment
Objective: The objective is to generate regular income through investments in
fixed income securities so as to make periodical income distribution to the
Unitholders and also to generate long-term capital appreciation by investing a
portion of the Scheme’s assets in equity and equity related instruments.) and
Principal Monthly Income Plan - MIP Plus (Investment Objective: The objective is
to generate regular income through investments in fixed income securities so as
to make periodical income distribution to the Unitholders and also to generate
long-term capital appreciation by investing a portion of the Scheme’s assets in
equity and equity related instruments and to cater to investors seeking a
slightly more aggressive exposure to equity markets.) are only the names of the
Schemes and do not in any manner indicate either the quality of the Schemes or
their future prospects or returns. The Sponsor is not responsible or liable for
any loss resulting from the operations of the Mutual Fund beyond the
contribution of an amount of Rs. 25 Lakhs towards setting up Principal Mutual
Fund. Investors in the scheme are not being offered a guaranteed or assured rate
of return or monthly or regular/periodical income distribution, and the actual
returns and/or periodical income distribution of an investor will be based on
the distributable surplus. For scheme specific risk factors, terms of issue etc.
investors are urged to read the Offer Document carefully and consult with their
legal/tax/investment advisor before they invest the Scheme. Copy of offer
document can be obtained at the investor service centers of AMC and from our
website www.principalindia.com .

*ICRA
Mutual Fund Awards 2008:
Principal Monthly Income Plan (ICRA - Marginal Equity) and Principal Monthly
Income Plan - MIP Plus - Growth(ICRA - Marginal Equity) have been given the Five
Star Award for their 1 year performance by ICRA Mutual Funds Awards 2008 till
December 31, 2007. These ranks indicate top performance within the specified
category for their 1 year performances. The ranks are an outcome of an objective
and comparative analysis against various parameters, including: risk adjusted
return, fund size, sector concentration, portfolio turnover, liquidity, company
concentration and average maturity. The ranking methodology did not take into
account entry and exit loads imposed by the Fund. The ranks are neither a
certificate of statutory compliance nor any guarantee on the future performance
of the funds mentioned. Ranking Source & Publisher: ICRA Online.

As you are aware that per guidelines issued by Securities and Exchange Board of India under The Prevention of Money Laundering Act, 2002 (“PMLA”) requires Mutual Funds to follow enhanced know your client (KYC) norms. Keeping this in mind as a customer service initiative, CDSL Ventures Limited (CVL) has introduced a service on their website whereby an investor can verify their KYC status.

For this the investors/distributors need to follow the below mentioned steps:

• Step 1: Visit www.cvlindia.com and click on "Inquiry on KYC",

• Step 2: Enter the PAN number and click on SUBMIT.

• Step 3 (a): If KYC compliant the name of PAN holder appears along with the status of KYC. The investor can take a print out of this and will suffice as document of acknowledgement.

• Step 3 (b): If the PAN number is not KYC compliant then “Invalid Data” will appear.

  We hope this initiative helps you in getting you KYC compliant

Mr.Dhaval Doshi expert investment advisor at Standard Chartered Bank, Andheri(w), JP Road Branch has sent this article about Checking KYC Status over Internet to be share with myinvestmentbuddy readers. On behalf of all readers of MIB we thank Mr. Dhaval Doshi for this article. He can be reach via Dhavaldoshi2@gmail.com or by phone at 9819846985.

ELSS & SIP – A Perfect Match Made in Mutual Funds

One option which gives you twin benefits of tax savings and capital gains. Another option which helps you take advantage of fluctuations in the stock market and averages your cost of investment. What more does one need?

Note: Average Market Linked compounded annualized returns for 3 year period ending 31-January-2008 for the ELSS category ** Rate for a 5 year fixed deposit

As is evident from the table above, ELSS schemes have helped investors generate significantly higher capital appreciation with the lock-in period of 3-years.

Hello Readers,

Satinder.Aggarwal, Branch Manager of Standard Chartered Bank, Andheri (west), JP Road Branch and Manvinder Kaur, Investment Advisor of Standard Chartered Bank have sent this important piece of article to be shared with readers of Myinvestmentbuddy.com readers, Its about SEBI’s new regulations for all mutual fund holders. Below is the complete article.

As per regulations issued by SEBI, KYC formalities are required to be completed for all holders of MF effective 01Feb, 2008. This is applicable to all new / additional purchases of value >=INR 50,000.00. Applications which are not KYC compliant are liable to be rejected from the effective date.

There are 2 ways in which the customer can become KYC certified:

1. Submit attested copies of certificates with each and every investment or
2. Submit a one-time documentation to CVL (CDSL Ventures Ltd.) which is a wholly owned subsidiary of Central Depository Services (India) Ltd. :and obtain an acknowledgement of KYC completion. The copy of this letter can then be submitted with every transaction going ahead.

Request you to please familiarize yourself with the documentation requirements at http://www.amfiindia.com/showhtml.asp?page=kyc. This site has the formats of application forms and required documents along with a comprehensive FAQ on this process.

DOCUMENTS AND INFORMATION TO BE PROVIDED BY INVESTORS:
Investors in mutual fund schemes have to provide:
(1) Proof of Identity
(2) Proof of Address
(3) PAN Card - Mandatory
(4) Photograph

Click Here to download Individual-KYC document
Click Here to download Non Individual-KYC document
Click Here to download Prescribed Documents

On behalf of all MIB readers I would like to thank Mr. Satinder Agarwal and Miss.Manvinder Kaur for sharing this important news with us.

Readers having any mutual fund investment related query or need advise for investing in mutual funds can contact Mr. Satinder Agarwal via Satinder.Aggarwal@in.standardchartered.com and Miss. Manvinder Kaur via Manvinder.Kaur3@in.standardchartered.com

This document is issued by Standard Chartered Bank (SCB). While all reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors of fact or for any opinion expressed herein. Opinions, projections and estimates are subject to change without notice. This document is for information purposes only. It does not constitute any offer, recommendation or solicitation to any person to enter into any transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration. The contents of this document are not made with regard to the specific investment objectives, financial situation or the particular needs of any particular person. Any investments discussed may not be suitable for all investors. Past performance is not necessarily indicative of future performance; the value, price or income from investments may fall as well as rise. SCB, and/or a connected company, may have a position in any of the instruments or currencies mentioned in this document. You are advised to make your own independent judgment with respect to any matter contained herein