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Table of Contents
Definition and Fund Positioning Product Rationale Product Features and Asset Allocation Pattern Investment Strategy Portfolio Composition Fund Suitability Glossary and Disclaimer
RETURN
Gilt Funds - LTP Income Funds Short Term Plans Floating Rate - LTP Floating Rate - STP Liquid Funds
RISK
Product Rationale
Conventional fixed interest rate investments are open to interest rate risk and hence volatility of price movements depending on interest rate fluctuations Floating rate instruments are re priced at periodic intervals based on certain accepted benchmarks By virtue of this re pricing, the price movements are minimised due to interest rate fluctuations Substantially minimises the interest rate risk for investors
Product Features
Type of Scheme An Open-ended Income Scheme The scheme offers investors two plans: Short Term Plan Long Term Plan Long Term Plan & Short Term Plan (Retail Option)*: January 16, 2003 Short Term Plan (Wholesale Option): October 23, 2007 To generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments, fixed rate debt / money market instruments swapped for floating rate returns and fixed rate debt securities and money market instruements Entry Load (Short Term Plan & Long Term Plan): Not Applicable. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the service rendered by the ARN Holder. Exit Load Short Term Plan: Nil Long Term Plan: In respect of each purchase / switch-in of units, an Exit load of 2% is payable if units are redeemed / switched-out within 12 months from the date of allotment No exit load is payable if units are redeemed / switched-out after 12 months from the date of allotment No Entry / Exit Load shall be levied on bonus units and units allotted on dividend reinvestment Shobhit Mehrotra (Since February 16, 2004) CRISIL Liquid Fund Index
Load Structure
$ Mr. Rakesh Vyas (Dedicated Fund Manager for Overseas Investments since May 10, 2012) * Fresh subscriptions are not accepted under HDFC Floating Rate Income Fund- Short Term Plan- Retail Option w.e.f. October 1, 2012.
Product Features.(contd)
Short Term Plan (Wholesale Option) Options Growth Option Dividend Option offers daily dividend option (with reinvestment facility only) and Weekly* and Monthly** Dividend Option (with Payout and Reinvestment facility) *Every Monday (or immediately succeeding business day if that day is not a business day) ** Last Monday of the Month (or immediately succeeding business day if that day is not a business day) Minimum Application Amount Under each Option: Purchase: ` 10 lakh and any amount thereafter Additional Purchase: ` 1 and any amount thereafter Under each Option : Purchase: ` 5,000 and any amount thereafter Additional Purchase: `1,000 and any amount thereafter Long Term Plan Growth Option Dividend Option (weekly*) offers reinvestment facility only *Every Monday (or immediately succeeding business day if that day is not a business day)
Fixed Rate Debt Securities (including securitised debt, Money Market Instruments & Floating Rate Debt Instruments swapped for fixed rate returns)
0- 25
0 - 50
Low to Medium
Floating Rate Debt Securities (including securitised debt, Money Market Instruments & Fixed Rate Debt Instruments swapped for floating rate returns)
75 100
50 100
Low to Medium
Under normal circumstances at least 75% of the total portfolio will be invested in floating rate debt securities / money market instruments. This may be by way of direct investment in floating rate assets or fixed rate assets swapped for floating rate returns by using derivatives as described later in this section. Similarly under normal circumstances at least 25% of the total portfolio will be invested in fixed rate debt securities / money market instruments. The investment in securitised debt will not normally exceed 60% of the net assets of the respective plans under the scheme. The respective plans under the scheme may seek investment opportunity in Foreign Debt Securities (max. 60% of net assets of respective plans) subject to SEBI (Mutual Funds) Regulations, 1996. The scheme may use derivatives mainly for the purpose of hedging and portfolio balancing (max. 75% of net assets of respective plans including cash) based on the opportunities available subject to SEBI (Mutual Funds) Regulations, 1996.
Category of Investors
Individuals / HUF
13.519% $
Others
32.445% $
$ Including applicable surcharge, education cess and secondary and higher education cess Investors should be aware that the fiscal rules / tax laws may be changed and there can be no guarantee that the current tax position may continue indefinitely In view of the individual nature of tax consequences, each investor is advised to consult his / her professional tax advisor
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Experience
Collectively over 19 years of work experience in Fixed Income Markets, credit rating etc.
Assignments Held
Feb 16, 2004 till Date HDFC Asset Management Company Limited Feb 1997 to Feb 2004 Templeton Asset Management (India) Pvt. Ltd. Last Position Held AVP and Portfolio Manager (Fixed Income) July 1992 to January 1997 ICRA Ltd. Last Position Held Business / Investment Analyst, Member Executive Rating Committee
$ Mr. Rakesh Vyas (Dedicated Fund Manager for Overseas Investments since May 10, 2012)
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Investment Strategy
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Portfolio will normally be skewed towards maturities higher than liquid schemes Focus on accrual income as the primary source of returns To primarily invest in CP/CDs / Other debt securities with maturity < 1 year, as currently the availability of floaters is limited
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Portfolio Composition
(As on November 30, 2012)
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Portfolio Composition
(As on November 30, 2012)
Short Term Plan Portfolio Classification by Asset Class (%) Long Term Plan Portfolio Classification by Asset Class (%)
79.31
99.72
Credit Exposure
10.36
Average Portfolio Maturity* 78 days Modified Duration*: 71 days Yield to Maturity*: 8.59% Net Assets (` In crores) 1,263.26**
Average Portfolio Maturity * 115 days Modified Duration*: 106 days Yield to Maturity*: 8.50% Net Assets (` In crores) 1,346.75**
** Average AUM for the quarter ended September 30, 2012 * Computed on the invested amount
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Portfolio Composition
(As on November 30, 2012)
100.65
99.72
1.44
Cash, Cash Equivalents and Net Current Assets 0.28
(2.09)
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Fund Suitability
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Glossary
Mark to Market Valuation of an asset (e.g. marketable securities, derivatives and other financial contracts) using a traded price or a derived price from the corresponding yield curve
Duration
Credit Risk
Risk of default
Risk that the price of a bond held in a portfolio will decline if market interest rates rise
Yield Curve
Contract between two parties to exchange, on particular dates in the future, one series of cashflows (fixed interest) for another series of cash flows (floating interest) in the same currency and on the same principle for an agreed period of time An agreement between two counter parties to pay or to receive the difference between an agreed fixed rate and the interest rate prevailing on a stipulated future date, based on a notional amount, for an agreed period
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
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THANK YOU
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