HDFC Prudence Fund (An Open Ended Balanced Scheme)

Rs 10,000 has become Rs 5.4 lacs (54 times) in 22 years CAGR of 19.2% for over 22 years since inception HDFC Prudence Fund (An Open Ended Balanced Scheme) Prudence Yatra is Prudent Yatra Over 2 Decades of experience now with Tax Free Monthly Dividend Option This product is suitable for investors who are seeking*: Periodic income with capital appreciation and prevention of capital erosion over long term Investment predominantly in equity and equity related instruments with balance exposure to debt and money market instruments. * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Riskometer October 2016

The journey so far Launched as Centurion Prudence Fund in January 1994, it was renamed as Zurich India Prudence Fund and finally HDFC Prudence Fund in June 2003. HDFC Prudence Fund is today one of the largest* balanced Fund in India with a AUM of ~ INR 12,670 crores as on 30th September, 2016. In this journey of over 22 years, Rs 10,000 has grown to ~Rs 5.37 lacs (~54 times) at CAGR of ~19.20%** A special thanks to ~2,200 investors who have stayed with us right through this 22 year journey Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn't... pays it. Albert Einstein *Source: AMFI. **Past performance may or may not be sustained in the future. Refer slide No 14 for complete performance details. 2

Prudence Yatra...Prudent Yatra...Profitable Yatra for the Patient Investor! HDFC Prudence Fund Rs 5.36 lacs S&P BSE SENSEX Rs 0.7 lacs CRISIL BALANCED Rs 0.56 lacs Reference made to S&P BSE SENSEX is only for easy understanding of market movement. The benchmark for this Fund is CRISIL balanced fund index. Past performance may or may not be sustained in the future. Refer slide No 14 for complete performance details. 3

Salient features of HDFC Prudence Fund Prudence being a balanced fund, invests in both equities and in debt Asset Allocation between equities/debt is a function of valuations, growth outlook, interest rates etc. Equity strategy Clear long term focus Multi cap strategy, flexibility to invest in small/ mid / large cap stocks Sound quality companies Effective diversification of portfolio Debt Strategy Portfolio duration is actively managed based on outlook for interest rates with a 2-3 year view Strong preference for good credit quality One Fund that offers the best of both asset classes For detailed investment strategy refer SID. 4

HDFC Prudence Fund Positive Outlook of both equity and fixed income Economic outlook for India is improving (refer slide 8) Equity valuations are attractive (refer slide 9) Real yields are higher than RBI target, thus indicating lower rates (refer slide 10) Recent trend of reforms is very encouraging (refer slide 11) In view of above, outlook for both equities and bonds is positive HDFC Prudence Fund, offers a simple solution to benefit from both equities and bonds Simplicity is the ultimate sophistication - Leonardo da Vinci HDFC Mutual Fund/HDFC AMC is not guaranteeing returns on investments made in this scheme 5

Consistent Dividends across bull and bear markets and across cycles The Fund has paid dividends in each of last 18 years (since 1999 when fund turned open ended) Total dividends paid in last 18 years aggregate to Rs 58.6 per unit The dividend frequency has been changed to monthly dividend since January 2016 In last 18 years 1999 2000 2001 2002 2003 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Dividend per unit (Rs) (A) 2.0 1.5 0.9 1.0 2.0 3.0 1.5 5.0 5.0 5.0 5.0 2.5 3.5 3.5 3.5 3.0 3.0 3.5 NAV (Record Date) (B) 17.7 15.2 12.7 13.9 18.7 23.7 20.2 25.3 30.5 32.5 33.5 17.4 31.2 31.3 29.5 27.5 25.7 35.4 Dividend Yield (%) ( A / B ) 11 10 7 7 11 13 7 20 16 15 15 14 11 11 12 11 12 10 Tax Free Monthly Dividend Option since Jan 2016 Monthly Dividend Since Jan 2016 Jan-16 Feb-16 Feb-16* Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Dividend Per Unit Rs. (A) 0.3 0.3 1.8 0.3 0.3 0.3 0.3 0.3 0.3 0.3 NAV (Record Date) (B) 29.3 24.6 24.6 26.9 28.2 27.4 28.4 30.0 30.1 30.8 Dividend Yield (%) (A/B) 1% 1% 7% 1% 1% 1% 1% 1% 1% 1% * Special Dividend ^Past performance may or may not be sustained in the future. There is no assurance or guarantee to the unit holders as to the rate/quantum of dividend distribution nor that the dividends will be paid regularly. All dividends are on face value of 10 per Unit. After payment of the dividend, the per Unit NAV falls to the extent of the payout and statutory levy, if any. Please log on to www.hdfcfund.com for Record Date-wise listing of dividends declared. 6

Patience is the key to good investing! It can be clearly seen, that as holding period increases, return profile improves This is consistent with the belief that equities are a long term asset class and that risk reduces as holding period increases If you think long term, look no further Study based on return distribution of HDFC Prudence Fund over 22 years Following table represents monthly rolling returns over last 22 years of HDFC Prudence Fund distributed among different return brackets, for example returns have been more than 0% CAGR in ~97% of instances for 3 year, more than 10% CAGR in ~96% of instances for 5 year and so on : Time spent in markets is more important than timing the markets Past performance may or may not be sustained in the future. HDFC Mutual Fund/HDFC AMC is not guaranteeing returns on investments made in this scheme(s). Data updated till Sep 30 th 2016 7

Indian Economy : Outlook steadily improving FY13 FY14 FY15 FY16 FY17E FY18E GDP at market price (%YoY) 5.6 6.6 7.2 7.6 7.7 8.2 Centre's fiscal deficit (% GDP) 4.9 4.5 4.1 3.9 3.5 3.0 Current Account Deficit (CAD) (% GDP) 4.8 1.7 1.3 1.1 1.0 NA Net FDI (% of GDP) -3.7-0.6 0.2 0.7 0.5 NA Consumer Price Inflation (CPI) (Avg) 9.9 9.4 5.9 4.9 5.0 NA India 10 year Gsec Yield (at yearend) 8.0 8.8 7.7 7.5 6.8 - Latest NA Growth should continue to accelerate Impact of higher infra allocation to be felt strongly from FY17. Railways, Power T&D, Mining, Urban infrastructure etc. to lead Exports are stabilising. September exports growth was at 4.6% YoY; H1FY17 is (-)1.4 & (-)15.5% in FY16 Outlook for agriculture growth is positive due to good monsoons Source: CEIC, CSO, RBI, Kotak Institutional Equity Research ; E- Kotak Institutional Equity Research Estimates 8

Equity Markets Market cap to GDP near 10 year lows India Market Cap To GDP Ratio - Calendar Year ends 2005-18 (%) 180 160 140 120 100 80 60 40 20 0 13.2 15.1 76 98 22.8 167 10.9 62 16.8 16.3 108 112 Mcap/GDP (%) 12.6 14.2 15.9 69 79 71 P/E 20.0 87 17.5 20.3 18.2 15.2 80 79 74 66 25 20 15 10 5-37% 32% 27% 22% 17% 12% 7% 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 24% 23% 22% 21% 20% 19% 18% 17% 16% 15% 14% Consumer (%) Healthcare (%) S&P BSE Sensex EBIDTA Margin (%) RHS S&P BSE SENSEX EBITDA margins are improving steadily S&P BSE Sensex 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17E 2QFY17E EBIDTA Margin (%) 17.4% 17.0% 17.0% 16.8% 18.2% 18.0% 18.3% 18.7% 18.3% 19.4% Improving EBITDA margins, lower interest rates should lead to improved EPS / Profit growth in coming years Source : Kotak Institutional Equities, Bank Of America Merrill Lynch, Bloomberg. Estimates as on September 2016 9

Yields continue to fall, further fall likely 12.0 11.0 CPI 10 Year Gsec Yield Core CPI 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 CPI has fallen from ~10% to ~4.3% in Sep 16, while Yields have fallen from ~8.8% in Dec 13 to ~6.8% RBI has suggested with decline in global real rates the more appropriate real neutral rate for India is around 1.25% Real yields of ~2-2.6% (~2.6% vs. CPI, ~2% vs. Core CPI) still leaves room for further rate cuts Low CAD, rising FDI, falling Fiscal Deficit, weak IIP growth also support lower rates Source : Kotak Institutional Equities, Bloomberg 10

Recent developments GST cleared, roll out by April 2017 likely Rules for speedy redressal of construction sector disputes. ~70,000 crores under arbitration currently Disclosure of ~Rs 65,000 crores under Income Declaration Scheme (IDS), 2016 Telecom auction garners ~65,000 crores, budgeted shortfall compensated by IDS 2016 SUUTI stake sale targeted in 3 years (~Rs 60,000 crores) Monetary policy committee (MPC) in place Merger of SBI and its associates to be completed in FY17, extension granted to SBI chairman More consolidation of banks likely in FY18 India s star shines bright amid global economic challenges IMF chief Christine Lagarde Indian Express date 12 th March 2016 Not an exaggeration to call India sole bright spot JPMorgan Chairman Jamie Dimon ET date 19 th Sep 2016 India s growth that is now at 7.6 per cent is a true bright spot and one of the few bright spots in the global economy World Bank Group President Jim Yong Kim ET date 30 th June 2016 Source : Publicly available information 11

Scheme Performance Summary Discrete Returns in % Value of Scheme Inception Dates NAV as on 30 Sep 2016 30 Sep 2015 to 30 Sep 2016 30 Sep 2014 to 30 Sep 2015 30 Sep 2013 to 30 Sep 2014 Since Inception CAGR (in %) investment of Rs. 10,000 Since Inception (Rs.) HDFC Prudence Fund$@ 1/Feb/94 415.270 11.99 5.66 68.22 19.20 536,725 CRISIL Balanced Fund Index 1 9.68 4.38 28.89 NA NA Nifty 50 Index 2 8.33-0.20 38.87 8.96 70,013 Other Funds Managed by Prashant Jain, Fund Manager of HDFC Prudence Fund HDFC Equity Fund 1/Jan/95 498.473 12.09 0.38 73.17 19.68 498,473 Nifty 500 Index 1 11.27 3.59 46.08 9.63 73,948 Nifty 50 Index 2 8.33-0.20 38.87 NA NA HDFC Top 200 Fund $ 11/Oct/96 365.957 13.19 0.01 60.04 20.93 446,214 S&P BSE 200 1 10.96 3.08 42.50 13.18 118,627 S&P BSE SENSEX 2 6.54-1.79 37.41 11.51 88,169 HDFC Infrastructure Fund# 10/Mar/08 16.401 8.03 1.89 99.04 5.95 16,401 Nifty 500 Index 1 11.27 3.59 46.08 7.67 18,826 Nifty 50 Index 2 8.33-0.20 38.87 7.06 17,938 HDFC MIP Long Term Plan ^+ 26/Dec/03 39.642 12.13 9.91 26.06 11.39 39,642 CRISIL MIP Blended Fund Index 1 11.17 10.72 15.45 8.01 26,751 Nifty 50 Index 2 11.11 13.76 6.85 5.62 20,113 Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR). The above returns are of regular plan - growth option. $All dividends declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be reinvested in the units of the Scheme at the then prevailing NAV (ex-dividend NAV). #The Scheme is co-managed by Prashant Jain and Srinivas Rao Ravuri. +The Scheme is co-managed by Prashant Jain (Equities) and Shobhit Mehrotra (Debt). @Scheme 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. ^Scheme 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. 1. Benchmark 2. Additional Benchmark 12

SIP Performance SIP Investments Since Inception 15 year SIP 10 year SIP 7 year SIP 5 year SIP 3 year SIP 1 year SIP Total Amount Invested (Rs.) 2,720,000 1,800,000 1,200,000 840,000 600,000 360,000 120,000 Market Value as on September 30, 2016 (Rs.) 45,909,869.00 9,586,654.47 2,699,357.67 1,424,037.91 916,231.17 454,586.96 134,412.78 Returns (Annualised)*(%) $$ 20.81% 20.03% 15.48% 14.81% 16.96% 15.75% 22.98% Market Value of SIP in Benchmark# (Rs). N.A. N.A. 1,964,321.47 1,186,898.40 789,807.21 416,468.60 129,339.46 Benchmark Returns (Annualised)(%)# N.A. N.A. 9.52% 9.71% 10.94% 9.70% 14.73% Market Value of SIP in Additional Benchmark# # (Rs). 12,576,109.92 5,372,779.05 1,937,071.74 1,170,647.79 787,458.93 407,234.13 129,331.53 Additional Benchmark Returns (Annualised)(%)# # 11.86% 13.41% 9.26% 9.33% 10.82% 8.17% 14.72% Little drops of water, Little grains of sand, Make the mighty ocean Past performance may or may not be sustained in the future. # CRISIL balanced fund - Aggressive Index ## Nifty 50 index. N.A. Not available. Assuming Rs.10,000 invested systematically on the first business day of every month over a period of time. CAGR returns are computed after accounting for the cash flow by using XIRR method (investment internal rate of return) for regular plan-growth option. Load is not taken into consideration for computation of performance. The above investment simulation is for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital. The AMC/ mutual fund is not guaranteeing or promising or forecasting any returns. SIP does not assure a profit or guarantee protection against a loss in a declining market. 13

Product Features Type of Scheme An Open-ended Balanced Scheme Inception Date (Date of allotment) February 1, 1994 Investment Objective Fund Manager $ Prashant Jain (Since June 19, 2003)* Investment Plan Investment Option Minimum Application Amount (Under Each Plan/Option) Load Structure Benchmark To provide periodic returns and capital appreciation over a long period of time from a judicious mix of equity and debt investments with an aim to prevent / minimize any capital erosion Direct Plan, Regular Plan Under Each Plan: Growth & 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, up to 15% of the units may be redeemed without exit load from the date of allotment. Any redemption in excess of the above limit shall be subject to the following exit load. 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. CRISIL Balanced Fund Index * Date of migration from Zurich India Mutual Fund. $ Dedicated Fund Manager for Overseas Investments: Mr. Rakesh Vyas For further details on load structure, please refer to the Scheme Information Document / Key Information Memorandum of the Scheme. 14

Asset Allocation Pattern Under normal circumstances, the asset allocation (% of the net assets) of the Scheme s portfolio will be as follows: Type of the Instruments Minimum (% of Net Assets) Maximum (% of Net Assets) Risk Profile of the Instrument Equity & Equity linked instruments Debt Securities and money market instruments* 40 75 High 25 60 Low to Medium *Investment in Securitized debt, if undertaken, would not exceed 10% of the net assets of the Scheme. The scheme may seek investment opportunity in the ADR / GDR / Foreign Equity and Debt Securities (max. 40% of net assets) subject to SEBI (Mutual Funds) Regulations, 1996. The scheme may use derivatives mainly for the purpose of hedging and portfolio balancing (max 25% of net assets) based on the opportunities available subject to SEBI (Mutual Funds) Regulations, 1996. 15

Disclaimer This presentation dated 24 th October 2016 has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines only, which you must confirm before relying on them. 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 statements contained herein are based on our current views and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Past performance may or may not be sustained in future. Neither HDFC AMC and HDFC Mutual 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. 16

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