Investment philosophy

1. Max Life Investment Philosophy
Controlled Fund & ULIP Funds

2. Investment philosophy and strategies
Overall Philosophy
Complying with regulatory (IRDA) guidelines on investment
patterns;
Anticipating and positioning to general economic conditions;
Diversifying investments in terms of asset classes, industry etc.
Addressing and managing risks on account of various factors
like liquidity, credit, market and systemic, interest rate,
inflation, etc.
2
Max Life Insurance

3. Non Linked Fund
(Controlled Fund)
Participating Fund
Non - Participating
Fund
Shareholder’s
Fund
Non linked fund
3
Max Life Insurance

4. Controlled Fund:
 Maintaining a portfolio consistent with the liquidity, safety of funds and investment
pattern as per regulatory and internal guidelines across different funds keeping in
view the obligations under funds, if any;
 Matching liability characteristics i.e. to have Asset Liabilities Management (ALM)
principles for investments in place;
 High weight to safety of investments through robust internal research and
maintaining over 90% of debt portfolio in AAA rated securities
ULIP Fund strategy:
 Generating superior risk adjusted returns for the unit-holders consistent with the
investment pattern opted under different UL funds
 Beating benchmarks of various funds by anticipating market and taking active calls
 Investing primarily in large and mid cap stocks in equity oriented funds
Investment philosophy and strategies
4
Max Life Insurance

5.  Minimum AA rating for classifying debt investment as
approved investment.
 Minimum proportion of AAA rated debt is 75%
 Issuer exposure limited to 10%
 Issuer/Group Limit in Controlled Fund: Up to 10% for
both PSU / Pvt corporate and sectors
 Investment in Liquid Mutual Funds: Investment upto
12.5% of the fund, no per AMC limit
 Equity allocation to Large , Mid cap and small caps: No
such limit
IRDA guidelines for insurer for investment
5
Max Life Insurance

6. IRDA Guideline Max Life Insurance Policy
Min AA rating. Min proportion of AAA
rated debt is 75%.
Min. rating AA+ and very small
allocation to AA (5%). Over 90% in AAA
or equivalent investments.
Issuer exposure 10% In traditional funds, issuer exposure
limited to 4%
Higher allocation to equity, venture
funds and real estate
Equity exposure in traditional funds very
small (less than %5), no venture funds,
no real estate investments.
Issuer/Group Limit in Controlled
Funds: Up to 10% for both PSU / Pvt
corporate and sectors
In Traditional funds, max 3% for private
issuers and 4% for PSU bonds, similar
more stringent sector limits
Max LI insurance investment policy more stringent than
IRDA – 1 of 2
6
Max Life Insurance

7. IRDA Guideline Max Life Insurance Policy
Investment in Liquid Mutual
Funds: Investment upto 12.5% of
the fund, no limit for AMCs
Only upto 5% of fund and not more
than 25% in single AMC
Debt Primary issue: No such limit 10% of proposed issue
Equity allocation to Large , Mid
cap and small caps:
No such limit
No less than 70% in Large caps for
all equity funds
Despite the above restriction, Max Life Insurance investment team has delivered
performance that beats the benchmarks
Max LI insurance investment policy more stringent than
IRDA – 1 of 2
7
Max Life Insurance

8. • A well defined Standard Operating Procedures (SOP) in
place.
• A robust Investment Policy governing investment function
is in place and is reviewed by the Investment Committee of
the Board every half year.
• The Policy and SOP address various risks like credit risk,
market risk, concentration risk etc.
• All transactions are audited on a daily basis by a concurrent
auditor.
• A strong in-house research team aids investment decision
making.
Robust system and process…
8
Max Life Insurance

9. Daily NAV is system calculated and verified by the concurrent auditor
before release thereby mitigating risk on account of in-correct NAV.
Investment function works under the overall supervision of
 (a) Working Investment Committee
 (b) Investment Committee and
 (c) Board.
The investment function is under various audits:
 Concurrent audit (100% transactions are checked and reported to
IRDA)
 Statutory Audit
 Internal Audit
 Risk Audit (Once every 2 years by IRDA)
9
Robust system and process…
9
Max Life Insurance

10. INVESTMENT based on RISK APPETITE OF CUSTOMERS
Risk
Return
Secure
Conservative
Balanced
Growth
Growth Super
Money Market
Secure Fund Conservative
Fund
Balanced
Fund
Growth
Fund
0% Equity
100% Fixed Income
Up to 100% Equity
Growth Super
Fund
Money Market
Fund
Max LI insurance offers a range of investment funds
to suit every risk profile
10
Max Life Insurance

11. Fund
Name
Asset Type (% Distribution)
Government
Securities
Corporate
Bonds
Money Market
Instruments
Equities Potential
Risk/Reward
What the fund can do for you?
Growth
Super
Fund
0% - 20% 0% - 20% 0% - 30% 70% - 100% High The fund can provide potential
capital appreciation through
investment in equities of up to
100% of the assets under
management
Growth
Fund
0%-30% 0%-30% 0%-40% 20%-70% High The fund can provide potential
capital appreciation through
investment in equities of up to 70%
of the assets under management
Balanced
Fund
20%-50% 20%-40% 0%-40% 10%-40% Moderate The balanced fund seeks to provide
a mix of capital appreciation
through investment in equities with
a moderate risk level
Conservati
ve Fund
50%-80% 0%-50% 0%-40% 0%-15% Low Higher potential returns than the
Secure Fund as the fund can also
invest up to 15% of it’s corpus in
equities
Secure
Fund
50%-100% 0%-50% 0%-40% Nil Low Potentially higher returns than
Money Market Fund due to
exposure to corporate bonds in
addition to government securities
Money
Market
Fund
Nil Nil 0% – 100% Nil Capital
Preservation
No capital risk due to exposure only
to short-term money market funds
leading to capital protection
11
Max Life Insurance Fund Options
11
Max Life Insurance

12. Note: Annualized returns (CAGR) as at March 2015
8.3%
10.2%
12.0%
15.2%
12.7%
6.0%
7.3%
8.4%
10.5%
13.3%
9.2%
7.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Secured Fund Conservative
Fund
Balanced Fund Growth Fund Growth Super
Fund
Money Market
Fund
Max Life Performance Since Inception Benchmark Return
12
Max LI Insurance Fund Performance
12
Max Life Insurance

13. As of March 2015
Fund Name
Fund Return Benchmark Return Outperformance
Rolling 1
Year
Since
Inception
Rolling 1
Year
Since
Inception
Rolling 1
Year
Since
Inception
Secured Fund 15.70% 8.29% 14.15% 7.30% 1.55% 1.00%
Conservative
Fund
16.78% 10.23% 15.26% 8.44% 1.52% 1.79%
Balanced Fund 20.29% 12.04% 17.64% 10.48% 2.65% 1.57%
Growth Fund 23.81% 15.19% 21.29% 13.34% 2.52% 1.85%
Growth Super
Fund
32.61% 12.73% 26.65% 9.16% 5.96% 3.57%
13
Max LI ULIP funds have consistently outperformed their
respective benchmarks
13
Max Life Insurance

14. 6
9
12
15
18
21
24
27
30
33
36
39
42
45
48
Sep-04
Dec-04
Mar-05
Jun-05
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Fund perf "Benchmark perf"
Benchmark
Fund
Growth Fund
As of March 2015
14
Growth fund: consistent track record vs. Benchmark
since launch
14
Max Life Insurance

15. Thank you