Presenting HDFC Balanced Fund (An Open-Ended Balanced ) August 2012 1
Table of Contents Balanced Fund- Basics Product Rationale and Asset Allocation Pattern Investment Strategy Portfolio Composition Performance and Dividend History Fund Suitability Disclaimer 2
Balanced Funds - Basics A balanced fund is a portfolio generally comprising debt instruments, convertible securities, preference and equity shares Assets are generally held in predefined proportion of debt / money market securities and equities Broadly, balanced funds target returns greater than debt schemes with lower volatility than equity schemes Balanced funds provide investors the growth of equity with the stability of debt Equity Funds Sectoral Funds RETURN Monthly Income Plans Balanced Funds Index Funds Gilt Funds Liquid Funds Income Funds RISK 3
Product Rationale Hassle free investing Investors save time, effort and costs. No need to constantly monitor the portfolio to maintain the target asset allocation Buy low Sell High A consistent asset allocation results in buying more equities when markets fall (selling bonds) and selling equities when markets rally (buying bonds) HDFC Balanced Fund has further flexibility to take advantage of market movement due to the range of 48-72% in equities and balance in debt. Cost effective Lower transaction cost and tax efficient* alternative for individuals to maintain constant asset allocation * Income of mutual fund is exempt from tax u/s 10 (23D) of the Income Tax Act, 1961 4
Investment Strategy (Equities) Asset Allocation is a function of: Bottom up approach based on fundamental research Tactical Allocation between Equities and Fixed Income based on relative attractiveness Maintain an effectively diversified portfolio No cap / style bias. Combination of Large, Mid & Small Cap Stocks (Please refer to the Market Cap table on slide no: 7) Focus is on Companies / businesses with superior growth prospects available at a reasonable price 5
Investment Strategy (Fixed Income) Actively managed debt portfolio based on interest rate outlook; investment opportunity is assessed with regard to credit, interest rate and liquidity risk The scheme would invest in debt instruments such as government securities, securitised debts, corporate debentures and bonds, preference shares, quasi government bonds and money market instruments Preference for high quality assets of short term maturities 6
Portfolio Composition (As on July 31, 2012) % to NAV Top 10 equity holdings 21.43% Total Equity & Equity Related Holdings 66.82% Equity Portfolio statistics as on July 31, 2012: Market Cap % to NAV Large Cap* 34.6% Money Market Instruments & Other Credit Exposure 20.77% Mid Cap$ 31.2% Small Cap# 1.0% Cash, Cash Equivalents and Net Current Assets 12.41% Grand Total 100 % Net Assets (` In Crores) 630.44** Fixed Income Portfolio statistics as on July 31, 2012: Average Maturity Modified Duration 2.42 Years 1.69 Years For reference : #Small Cap Stocks : Stocks having a market cap upto Rs. 500 crores. $Mid Cap Stocks : Stocks having a market cap above Rs. 500 crores, but lower than that of the 25 th largest stock by market capitalisation in the CNX Midcap Index. *Large Cap Stocks :Stocks having a market cap greater than or equal to that of the 25 th largest stock by market capitalisation in the CNX Midcap Index. ** Average AUM for the quarter ended June 30, 2012 7
Equity Portfolio Composition Industry Allocation Industry+ Select Companies % to NAV (As on July 31, 2012) ( % to NAV) Banks BOB, Allahabad Bank, Axis, ICICI, SBI. 15.67 Software TCS, NIIT Technologies Ltd, eclerx Services Ltd. 9.49 Pharmaceuticals Lupin, IPCA, Divi's 6.83 Laboratories Ltd. Industrial Products Carborundum Universal Ltd, Supreme Industries Ltd. 3.97 Consumer Durables Non Bata India Ltd, VST Industries Ltd. 3.93 Total (Top 5) 39.89 + Industry Classification as recommended by AMFI. 8
Performance (As on June 29, 2012) 9
SCHEME PERFORMANCE SUMMARY HDFC Balanced Fund- Growth Option NAV as at June 29, 2012 ` 58.211 A. Cumulative Performance NAV Per Unit (`) Returns (%) ^ * CRISIL Balanced Fund Index (%) # NIFTY (%) Value of Investment of `10,000@ CRISIL (`) Balanced Fund Index (`) # NIFTY (`) Date Period B. Discrete 12 Month Returns (%) CRISIL Balanced Fund Index 29-Jun-11 Last 1 Year 57.405 1.40-0.44-5.74 10,140 9,956 9,426 Period ^ * # NIFTY 29-Jun-10 Last 2 Years 50.541 7.31 2.82 0.22 11,518 10,574 10,043 Jun 29, 11 to Jun 29, 12 1.40-0.44-5.74 29-Jun-09 Last 3 Years 36.395 16.93 6.68 6.33 15,994 12,144 12,022 Jun 29, 10 to Jun 29, 11 13.58 6.21 6.55 11-Sep-00 Since Inception 10.000 16.09 N.A. 11.53 58,211 N.A. 36,247 Jun 29, 09 to Jun 29, 10 38.87 14.86 19.70 ^ Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR) # Benchmark of the. Additional Benchmark of the. N.A : Not Availalble @ shows the current value of ` 10,000/- invested at the beginning of a given period. Performance of dividend option under the schemes for the investors would be net of distribution tax applicable. * performance may not strictly be comparable with that of its Additional Benchmark in view of Balanced nature of the scheme where a portion of scheme s investments are made in debt instruments. 10
SCHEME PERFORMANCE SUMMARY of other schemes managed by Chirag Setalvad HDFC Mid-Cap Opportunities Fund- Growth Option NAV as at June 29, 2012 ` 16.104 A. Cumulative Performance Value of Investment of `10,000@ NAV Per Unit (`) Returns (%) ^ CNX MIdcap (%) # NIFTY (%) (`) CNX MIdcap (`) # NIFTY (`) Date Period B. Discrete 12 Month Returns (%) CNX 29-Jun-11 Last 1 Year 16.129-0.16-7.72-5.74 9,985 9,228 9,426 Period ^ MIdcap # NIFTY 29-Jun-10 Last 2 Years 14.187 6.53-4.70 0.22 11,351 9,081 10,043 Jun 29, 11 to Jun 29, 12-0.16-7.72-5.74 29-Jun-09 Last 3 Years 9.074 21.05 9.67 6.33 17,747 13,195 12,022 Jun 29, 10 to Jun 29, 11 13.69-1.60 6.55 25-Jun-07 Since Inception 10.000 9.96 4.74 4.37 16,104 12,617 12,394 Jun 29, 09 to Jun 29, 10 56.35 45.31 19.70 HDFC Long Term Advantage Fund- Growth Option @@ NAV as at June 29, 2012 ` 131.509 A. Cumulative Performance Value of Investment of `10,000@ NAV Per Unit (`) Returns (%) ^ SENSEX (%) # NIFTY (%) (`) SENSEX (`) # NIFTY(`) Date Period B. Discrete 12 Month Returns (%) 29-Jun-11 Last 1 Year 138.862-5.30-6.76-5.74 9,470 9,324 9,426 Period ^ SENSEX # NIFTY 29-Jun-10 Last 2 Years 125.950 2.18-0.30 0.22 10,441 9,941 10,043 Jun 29, 11 to Jun 29, 12-5.30-6.76-5.74 29-Jun-09 Last 3 Years 91.729 12.75 5.63 6.33 14,337 11,788 12,022 Jun 29, 10 to Jun 29, 11 10.25 6.61 6.55 02-Jan-01 Since Inception 10.000 25.12 13.61 13.18 131,509 43,370 41,507 Jun 29, 09 to Jun 29, 10 37.31 18.59 19.70 ^ Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR). # Benchmark of the. Additional Benchmark of the @ shows the current value of ` 10,000/- invested at the beginning of a given period. Performance of dividend option under the schemes for the investors would be net of distribution tax applicable. @@ Open Ended Equity Linked Savings with a lock-in period of 3 years. 11
SCHEME PERFORMANCE SUMMARY of other schemes managed by Chirag Setalvad HDFC Capital Builder Fund- Growth Option NAV as at June 29, 2012 ` 105.226 A. Cumulative Performance Value of Investment of `10,000@ NAV Per Unit (`) Returns (%) ^ 500 (%) # NIFTY (%) (`) 500 (`) # NIFTY (`) Date Period B. Discrete 12 Month Returns (%) 29-Jun-11 Last 1 Year 111.599-5.71-7.16-5.74 9,429 9,284 9,426 Period ^ 500 # NIFTY 29-Jun-10 Last 2 Years 102.907 1.12-2.46 0.22 10,225 9,514 10,043 Jun 29, 11 to Jun 29, 12-5.71-7.16-5.74 29-Jun-09 Last 3 Years 70.422 14.31 5.46 6.33 14,942 11,731 12,022 Jun 29, 10 to Jun 29, 11 8.45 2.48 6.55 01-Feb-94 Since Inception 10.000 13.63 7.70 8.23 105,226 39,242 42,920 Jun 29, 09 to Jun 29, 10 46.13 23.30 19.70 The scheme is co-managed by Chirag Setalvad and Miten Lathia @@ HDFC CHILDREN'S GIFT FUND - INVESTMENT PLAN NAV as at June 29, 2012 ` 45.228 A. Cumulative Performance Value of Investment of `10,000@ Date Period NAV Per Unit (`) Returns (%) ^ $ * Crisil Balanced Fund (%) # S& P CNX Nifty (%) (`) Crisil Balanced Fund (`) # S& P CNX Nifty (`) B. Discrete 12 Month Returns (%) Crisil ^ $ * Balanced Fund # S& P CNX Nifty 29-Jun-11 Last 1 Year 44.646 1.30-0.44-5.74 10,130 9,956 9,426 Period 29-Jun-10 Last 2 Years 37.140 10.34 2.82 0.22 12,178 10,574 10,043 Jun 29, 11 to Jun 29, 12 1.30-0.44-5.74 29-Jun-09 Last 3 Years 26.931 18.85 6.68 6.33 16,794 12,144 12,022 Jun 29, 10 to Jun 29, 11 20.21 6.21 6.55 02-Mar-01 Since Inception 10.000 16.92 N.A 13.11 58,796 N.A. 40,410 Jun 29, 09 to Jun 29, 10 37.91 14.86 19.70 ^ Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR). N.A: Not Available # Benchmark of the. Additional Benchmark of the. $ Adjusted for bonus units declared under the scheme. @shows the current value of ` 10,000/- invested at the beginning of a given period. Performance of dividend option under the schemes for the investors would be net of distribution tax applicable. * performance may not strictly be comparable with that of its Additional Benchmark in view of Balanced nature of the scheme where a portion of scheme s investments are made in debt instruments. @@ Miten Lathia since May 10, 2012 12
HDFC CHILDREN'S GIFT FUND- SAVINGS PLAN NAV as at June 29, 2012 ` 25.100 A. Cumulative Performance Date Period SCHEME PERFORMANCE SUMMARY of other schemes managed by Chirag Setalvad NAV Per Unit (`) Returns (%) ^ $ ** CRISL MIP Blended Index (%) # Crisl 10 Year Gilt Index (%) Value of Investment of `10,000@ Crisl 10 (`) CRISL MIP Blended Index (`) # Year Gilt Index (`) B. Discrete 12 Month Returns (%) CRISL MIP ^ $ ** Blended Crisil 10 year Gilt Index 29-Jun-11 Last 1 Year 23.321 7.63 6.69 6.83 10,763 10,669 10,683 Period Index # 29-Jun-10 Last 2 Years 21.267 8.63 5.87 4.49 11,802 11,211 10,919 Jun 29, 11 to Jun 29, 12 7.63 6.69 6.83 29-Jun-09 Last 3 Years 17.984 11.74 6.33 4.05 13,957 12,023 11,266 Jun 29, 10 to Jun 29, 11 9.66 5.08 2.20 02-Mar-01 Since Inception 10.000 11.00 N.A N.A 32,630 N.A. N.A Jun 29, 09 to Jun 29, 10 18.26 7.24 3.18 * HDFC MULTIPLE YIELD FUND- PLAN 2005 - Growth Option NAV as at June 29, 2012 ` 18.0659 A. Cumulative Performance Value of Investment of `10,000@ Crisil 1 Crisil 1 NAV CRISL MIP Year T-bill CRISIL MIP Year T-bill Per Returns Blended Index (%) Blended Index (`) Date Period Unit (`) (%) ^ ** Index (%) # (`) Index (`) # B. Discrete 12 Month Returns (%) CRISIL MIP Crisil 1 Blended Year T-bill 29-Jun-11 Last 1 Year 16.7409 7.91 6.69 7.75 10,791 10,669 10,775 Period ^ ** Index # Index 29-Jun-10 Last 2 Years 15.6065 7.58 5.87 5.96 11,576 11,211 11,230 Jun 29, 11 to Jun 29, 12 7.91 6.69 7.75 29-Jun-09 Last 3 Years 13.2446 10.89 6.33 4.68 13,640 12,023 11,472 Jun 29, 10 to Jun 29, 11 7.27 5.08 4.22 17-Aug-05 Since Inception 10.0000 8.99 7.40 5.36 18,066 16,327 14,313 Jun 29, 09 to Jun 29, 10 17.83 7.24 2.16 * The scheme is co-managed by Chirag Setalvad (Equities) and Anil Bamboli (Debt). ^ Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR) # Benchmark of the. Additional Benchmark of the @shows the current value of ` 10,000/- invested at the beginning of a given period. Performance of dividend option under the schemes for the investors would be net of distribution tax applicable. ** performance may not strictly be comparable with that of its Additional Benchmark in view of hybrid nature of the scheme where a portion of scheme s investments are made in equity instruments. 13
Dividend History ( Since FY 2005-2006) Financial Year Record Date NAV per Unit (`) Cum Dividend * Dividend Per Unit (`) ^ 2005-2006 December 30, 2005 18.272 2.00 2006-2007 December 28, 2006 20.588 2.50 2007-2008 December 27, 2007 22.744 2.50 2008-2009 February 26, 2009 12.326 1.50 2009-2010 March 04, 2010 20.455 2.25 2010-2011 March 03, 2011 20.785 2.25 2011-2012 March 01, 2012 20.353 2.25 The has uninterrupted dividend track record since FY 2005-2006 ^ * After payment of the dividend, the per Unit NAV falls to the extent of the payout and statutory levy (if applicable) ^Past performance may or may not be sustained in the future. Inception Date: September 11, 2000. All dividends are on face value of ` 10 per unit. 14
Fund Suitability 15
HDFC Balanced Fund is suitable for investors Looking for a unique proposition of spreading the investment into two broad divisions Equities and Debt. Looking for tax efficiency in asset allocation. Currently, the has been investing in the range of 65% 72% of its corpus in equity. ( having an equity corpus of 65% and above is considered as an equity-oriented fund for taxation purpose) Looking for exposure to debt which creates the risk buffer that the investors desire Looking for a well diversified portfolio across asset classes: Benefit from the Growth of Equities and the Stability of Debt Markets 16
Product Features Nature of Open-ended Balanced Inception Date (Date of allotment) September 11, 2000 Investment Objective Fund Manager $ Chirag Setalvad (Since April 2, 2007) Options Minimum Application Amount (Under Each Option) Load Structure Benchmark Additional Benchmark To generate capital appreciation along with current income from a combined portfolio of equity and equity-related and debt & money market instruments Growth and Dividend The Dividend Option offers Dividend Payout and Reinvestment facility Purchase: ` 5,000 and any amount thereafter Additional Purchase: ` 1,000 and any amount thereafter Entry Load: 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: In respect of each purchase / switch-in of units, an exit load of 1.00% is payable if units are redeemed / switched out within 1 year from the date of allotment. No exit load is payable if units are redeemed / switched out after 1 year from the date of allotment. Entry / Exit load shall not be levied on bonus units and units allotted on dividend reinvestment. CRISIL Balanced Fund Index S&P CNX Nifty $ Dedicated Fund Manager for Overseas Investments: Mr Rakesh Vyas w.e.f May 10, 2012 17
Asset Allocation Pattern Under normal circumstances, the asset allocation of the s portfolio will be as follows: Types of Instruments Normal Allocation Normal Deviation Risk Profile (% of Net Assets) (% of Normal Allocation) Equities & Equity related instruments 60 20 Medium to High Debt Securities (including securitised debt) and Money Market instruments 40 30 Low to medium The scheme may seek investment opportunity in the ADR / GDR / Foreign Equity and Debt Securities subject to SEBI (Mutual Funds) Regulations, 1996. Maximum exposure to investment in Foreign Debt Securities will be restricted to 40% of the net assets. The scheme may use derivatives mainly for the purpose of hedging and portfolio balancing (max 20% of net assets) based on the opportunities available subject to SEBI (Mutual Funds) Regulations, 1996. The scheme will not invest in Foreign securitised debt. 18
Disclaimer & Risk Factors DISCLAIMER: This presentation has been prepared by HDFC Asset Management Company Limited ( HDFC AMC ) on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only. The document is given in summary form and does not purport to be complete. The document does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. The information/ data herein alone are not sufficient and should not be used for the development or implementation of an investment strategy. The same should not be construed as investment advice to any party. Neither HDFC AMC and HDFC Mutual Fund (the Fund) nor any person connected with them, accepts any liability arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein. MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. 19
Thank You 20