Sundaram BNP Paribas

Liquid Plus
An open-end income scheme

1
What is Sundaram BNP Paribas Liquid Plus?

Sundaram BNP Paribas Liquid Plus is a fund that seeks to provide consistent income and liquidity through investments made primarily in money market
and debt securities. Moving down the yield curve to generate higher yield and a small marked-to-market component that could pep performance will be
critical factors that may lead to higher returns.

2
Sundaram BNP Paribas Liquid Plus-the investment strategy Expected Interest Credit
Fund Category Return Rate Risk* Risk*
As compared to liquid funds, Liquid Plus would have a maturity and Bond Fund High High High
duration profile that is likely to be higher. The duration would be
maintained at about 7-9 months. The fund would also have a larger Short Term Funds Medium Medium Low
universe of issuers, which offer the flexibility in building a portfolio.
Liquid/Floating Funds Low Low Low
Liquid Plus Medium Low Low

* The above assumptions are relative to each category of funds and are on the basis of the portfolio structure, asset allocation and debt market
environment and are subject to change from time to time.

3 Securities Liquid Liquid

Why Liquid Plus?
with Maturity Fund (in %) Plus (in %)
Short-term surplus funds with investors should be invested in a manner that ensures liquidity Less than 1 year 100
and optimises returns. A traditional liquid fund has high liquidity, access to current yields and Less than or equal
low interest rate risk. As the portfolio maturity and duration is usually between three and six to 370 days 70-100
months, liquid funds do not capture higher yields that are available at most times if one More than 370 days 0-30
elongates the maturity. Short-term plans take advantage of this aspect but score lower on
liquidity and NAV stability. Sundaram BNP Paribas Liquid Plus may attempt to fill this gap by Marked-to-market
component <10
investing at least 70 per cent in `traditional liquid fund' assets and the rest in longer maturity
papers that may provide a boost to the yield. Spreading your surplus funds between a liquid Marked-to-market on a weekly average basis
fund and liquid plus fund will be an ideal way to optimise returns without sacrificing liquidity.

4
Portfolio characteristics in the near term

In the near term, the portfolio may have only a modest marked-to-market component. The yield curve is inverted at the short-end as short-term rates are
significantly higher than long-term rates. To contain and stabilise high inflation, the RBI has adopted a tightening policy that has led to higher interest rates. In
this context, the focus will be on short-term papers with a slightly longer duration relative to liquid funds. The fund would strive to generate approximately
0.25%-0.50% p.a. higher returns than liquid funds. The fund would invest in high investment grade papers with a low marked-to-market component over the
next few months. The marked-to-market component may increase over the longer term once the interest rate environment stabilises.

Interest Rate Outlook Inflation Trend

Domestic inflation has accelerated steeply since December 2006 and is well This has pushed the benchmark 10-year yield to over 8% levels and the
outside the RBI comfort zone of 5%-5.5%. To curb inflation RBI has raised the short-term rates have risen significantly to over 10% plus after a gap of
rates thrice in the past three months, while liquidity situation remained tight. nearly four years. We expect stable or milder inflation figures post March-
Liquidity concerns have continued through end of March due to year-end 07 due to recent import duty cuts and a possible cut in fuel prices.
requirements and advance tax outflows.
9%
Inflation 13 Benchmark 10-year bond yield
8% 12
WPI 11
7% Core
6% 10
9
5% %
8
4%
7
3% 6
2% 5
1% 4
May-01
Nov-01
May-02
Nov-02
May-00
Nov-00

May-04
Nov-04
May-03
Nov-03

May-06
Nov-06
Nov-98
May-99
Nov-99

May-05
Nov-05
Apr-04

Aug-04

Dec-04

Apr-06

Sep-06

Jan-07
Apr-05

Aug-05

Dec-05

Source: OEA Source: Bloomberg

 Liquid Fund
Individual/ Liquid Plus Liquid Plus
5 Corporate Corporate
Tax Advantage Particulars Measure Individuals
Income Taxable As Dividend Dividend Dividend
As compared to liquid funds, investments in Liquid Plus Applicable Tax Rate % 28.33 14.16 22.66
would enjoy a benefit on dividend distribution tax,
which is 14.16% for individuals & HUFs and 22.66% Amount Invested Rs 100,000 100,000 100,000
for corporates and other entities. Dividend distribution
tax for Liquid funds under the proposed taxation Annualised Yield* % 7.50 8.00 8.25
structure in the Union Budget 2007- 08 is at 28.33% for Annual Interest/Earnings Rs 7,500 8,000 8,250
all categories of investors.
Interest/Gains for
Rs 1,849 1,973 2,034
Maturity Period-90 days
Value at Maturity Rs 101,849 101,973 102,034
Taxable Income Rs 1,849 1,973 2,034
Tax Liability Rs 408 245 376
Post-Tax-Return Rs 1,441 1,728 1,658
Post-Tax Yield % 5.84 7.01 6.73
*These are assumed for illustrative purposes only. The fund does not assure or guarantee any returns.

FUND SYNOPSIS
Structure An open-end income scheme. Entry load & Exit Load Nil
Investment To provide a level of income consistent with the Fund Managers Dheeraj Singh & Rahul Pal
Objective liquidity through investments made primarily in
money market and debt securities. Asset Allocation Money market securities 70% - 100%
and/ or debt securities* with
NFO opens on 05-April-07 residual or average maturity
of less than or equal to 370
NFO closes on 19-April-07 days or put options within a
Unit Price Rs.10/- period not exceeding 370
days
Options Retail Plan: Institutional &
Super-institutional: Debt securities* which have 0% - 30%
Growth Growth residual or average maturity
Dividend reinvestment Dividend payout of more than 370 days.
(Quarterly option only) Dividend reinvestment^
^ Daily, Weekly, Fortnightly, Monthly, Quarterly
Benchmark Index CRISIL Liquid Fund Index

Minimum Retail Plan:

Investment Amount Growth: Rs.10,000
Dividend reinvestment: Rs.50,000 * Debt securities may include securitised debt upto 30% of the net assets.
Institutional Plan: Rs. 1 crore (for all options)
Super Institutional Plan: Rs. 5 crore (for all options)

About Sundaram BNP Paribas Mutual

Sundaram BNP Paribas Asset Management Company Limited is a joint venture between Sundaram Finance Limited and BNP Paribas Asset Management
Company. Sundaram BNP Paribas Mutual is the 8th largest equity fund manager* among private, diversified mutual funds and manages assets of over
Rs.7,789 Crores (as on 28th February, 2007). The Sundaram BNP Paribas Mutual portfolio of funds has something for everyone, no matter what life-stage
you are in or whatever your investment profile.
*Source: Value Research Asset Monitor

www.sundarambnpparibas.in marketing@sundarambnpparibas.in
Ahmedabad: 66613337/ 26440442 Bangalore: 22076707 / 22126850 / 32518022 Baroda: 2320671 /
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3018530/3013530/301531/532 Kolkata: 30580160 / 62 / 63 Lucknow: 3017882/83 Ludhiana: 3018500
Madurai: 4376801/ 7478 /9344466670 Mumbai: 22842878/ 22842879/22842832/33 Nagpur:
2558581/9822832030 Nashik: 9326788990 New Delhi: 41515138/39/54/55 Patna: 9835060944
Pondicherry: 9443090091 Pune: 30280927-30 Raipur: 9893313588 Rajkot: 9825048797 Salem:
9843081847 Shimla: 9318701056 Surat: 2461384/85 Trichy: 2741509/ 4020828/ 9843417478
Trivandrum: 9847089134 Vellore: 2229471/93802 23161 Vijayawada: 2470778 /9848032734
Visakhapatnam: 3209440 / 9848035892
UNEARTHING OPPORTUNITIES
Statutory Details: Sundaram BNP Paribas Mutual Fund has been set up as a Trust under the Indian Trust Act, 1882. Sponsors: Sundaram Finance Limited and BNP Paribas Asset Management, Paris. Trustee: Sundaram BNP Paribas Trustee
Company Limited. Investment Manager: Sundaram BNP Paribas Asset Management Company Limited. Risk Factors: Mutual funds and securities investments are subject to market risks and there is no assurance or guarantee that the
objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the units issued under this Scheme may go up or down depending on the factors and forces affecting capital markets. The NAV of this Scheme may
be affected by settlement periods and transfer procedures. Trading volumes may restrict the liquidity of the Scheme's investments. Investors in the Scheme are not being offered any guaranteed returns. Past performance of the
Sponsor/AMC/Mutual Fund does not indicate the future performance of the Schemes of the Mutual Fund. The Sponsors are not responsible or liable for any loss resulting from the operation of the schemes beyond Rs.1 lakh contributed by
them towards setting up of the Mutual Fund. Sundaram BNP Paribas Liquid Plus is the name of the Scheme and does not in any manner indicate either the quality of the Scheme or its future prospects and returns. Scheme specific risk
factors: Sundaram BNP Paribas Liquid Plus Fund is not a Money Market Scheme. Changes in the prevailing rates of interest is likely to affect the value of the scheme's holdings and consequently the value of the scheme's Units. The scheme
may use derivative instruments like Interest Rate Swaps, Forward Rate Agreements or other derivative instruments for the purpose of hedging and portfolio balancing and trading, as permitted under the Regulations and guidelines. Usage
of derivatives will expose the plans to certain risks inherent to such derivatives.
LP/NFO/30-03-2007