HSBC Global Asset Management - Addendums 1
HSBC Global Asset Management, India Addendums to SID, SAI and KIM 26 September 2016 18 October 2016 03 November 2016 19 December 2016 31 January 2017 23 February 2017 27 February 2017 03 April 2017 28 April 2017 23 May 2017 27 July 2017 21 September 2017 13 October 2017 24 November 2017 29 December 2017 19 January 2018 02 February 2018 01 March 2018 07 March 2018
NOTICE CUM ADDENDUM HSBC MUTUAL FUND In accordance with Para B titled "Enhancing Scheme Related Disclosures" under Circular no. SEBI/HO/IMD/DF2/CIR/P/2016/42 dated March 18, 2016 issued by Securities and Exchange Board of India (SEBI), a new section titled "Additional Scheme Related Disclosures" stands inserted/updated under the Scheme Information Document ("SID") / Key Information Memorandum ("KIM") (as applicable) in the following schemes of HSBC Mutual Fund : ADDITIONAL SCHEME RELATED DISCLOSURES: 1. HSBC Fixed Term Series 94 (a closed ended debt scheme) A. Name of the Fund Manager and tenure of managing the scheme Name of the Fund Manager Tenure of Managing the scheme Kapil Punjabi 0.27 B. Portfolio Related Disclosures (as on March 31, 2017) Portfolio - Top 10 Holdings (Issuer-wise) Sr. No Issuer % of Net Assets 1 Power Grid Corporation of (I) Ltd 11.20 2 National Bank for Agriculture and Rural Development 11.15 3 EXIM 11.14 4 Power Finance Corporation Limited 10.49 5 Small Industries Development Bank of India 10.36 6 Rural Electrification Corporation 10.35 7 Cash And Cash Equivalents 9.14 8 Tata Capital Housing Finance Ltd 8.73 9 Cholamandalam Investment and Finance Co.Ltd 8.73 10 LIC Housing Finance Limited 8.71 Sector Allocation (% of Net Assets) Sr. No Issuer % of Net Assets 1 Financial Services 79.66 2 Energy 11.20 3 Cash And Cash Equivalents 9.14 Portfolio Turnover Ratio (Portfolio turnover is defined as lesser of purchases and sales as a percentage of the average corpus of the Scheme(s) during a specified period of time.) - The Portfolio Turnover Ratio in case of debt fund is not applicable. Kindly refer the Fund s website, www.assetmanagement.hsbc.com/in for monthly portfolio disclosures. C. Aggregate investment in the Plan/Scheme by directors, fund manager s and key managerial personnel of the AMC as on March 31, 2017
Scheme Name HSBC Fixed Term Series 94 AMC s Board of Directors AuM in INR Fund Manager(s) Nil Other Key Managerial Personnel of AMC Note: The above investments are based on holdings as of March 31, 2017 and sourced from the Fund s Registrars records, on the basis of PAN of the above persons. The investments have been aggregated at a scheme level, irrespective of the date of investment into the scheme. The CEO of the AMC being a Director has been included under AMC Directors and not under Key Managerial Personnel. 2. HSBC Fixed Term Series 96 (a closed ended debt scheme) A. Name of the Fund Manager and tenure of managing the scheme Name of the Fund Manager Tenure of Managing the scheme Kapil Punjabi 0.27 B. Portfolio Related Disclosures (as on March 31, 2017) Portfolio - Top 10 Holdings (Issuer-wise) Sr. No Issuer % of Net Assets 1 Cash And Cash Equivalents 29.65 2 Power Finance Corporation Limited 7.92 3 Power Grid Corporation Of (I) Ltd 7.84 4 Small Industries Development Bank Of India 7.82 5 National Bank For Agriculture And Rural 7.81 Development 6 Rural Electrification Corporation 7.81 7 EXIM 7.80 8 Tata Capital Housing Finance Ltd 7.79 9 Cholamandalam Investment And Finance Co.Ltd 7.79 10 LIC Housing Finance Limited 7.77 Sector Allocation (% of Net Assets) Sr. No Issuer % of Net Assets 1 Financial Services 62.51 2 Cash And Cash Equivalents 29.65 3 Energy 7.84 Portfolio Turnover Ratio (Portfolio turnover is defined as lesser of purchases and sales as a percentage of the average corpus of the Scheme(s) during a specified period of time.) - The Portfolio Turnover Ratio in case of debt fund is not applicable. Kindly refer the Fund s website, www.assetmanagement.hsbc.com/in for monthly portfolio disclosures.
C. Aggregate investment in the Plan/Scheme by directors, fund manager s and key managerial personnel of the AMC as on March 31, 2017 Scheme Name HSBC Fixed Term Series 96 AMC s Board of Directors AuM in INR Fund Manager(s) NIL Other Key Managerial Personnel of AMC Note: The above investments are based on holdings as of March 31, 2017 and sourced from the Fund s Registrars records, on the basis of PAN of the above persons. The investments have been aggregated at a scheme level, irrespective of the date of investment into the scheme. The CEO of the AMC being a Director has been included under AMC Directors and not under Key Managerial Personnel. 3. HSBC Fixed Term Series 98 (a closed ended debt scheme) A. Name of the Fund Manager and tenure of managing the scheme Name of the Fund Manager Tenure of Managing the scheme Sanjay Shah 0.27 B. Portfolio Related Disclosures (as on March 31, 2017) Portfolio - Top 10 Holdings (Issuer-wise) Sr. No Issuer % of Net Assets 1 Cash And Cash Equivalents 18.8 2 Power Finance Corporation Limited 9.97 3 Power Grid Corporation Of (I) Ltd 9.87 4 Small Industries Development Bank Of India 9.84 5 National Bank For Agriculture And Rural 9.83 Development 6 Rural Electrification Corporation 9.83 7 EXIM 9.82 8 Tata Capital Housing Finance Ltd 7.35 9 Cholamandalam Investment And Finance Co.Ltd 7.35 10 LIC Housing Finance Limited 7.34 Sector Allocation (% of Net Assets) Sr. No Issuer % of Net Assets 1 Financial Services 71.33 2 Cash And Cash Equivalents 18.80 3 Energy 9.87
Portfolio Turnover Ratio (Portfolio turnover is defined as lesser of purchases and sales as a percentage of the average corpus of the Scheme(s) during a specified period of time.) - The Portfolio Turnover Ratio in case of debt fund is not applicable. Kindly refer the Fund s website, www.assetmanagement.hsbc.com/in for monthly portfolio disclosures. C. Aggregate investment in the Plan/Scheme by directors, fund manager s and key managerial personnel of the AMC as on March 31, 2017 Scheme Name HSBC Fixed Term Series 98 AMC s Board of Directors AuM in INR Fund Manager(s) NIL Other Key Managerial Personnel of AMC Note: The above investments are based on holdings as of March 31, 2017 and sourced from the Fund s Registrars records, on the basis of PAN of the above persons. The investments have been aggregated at a scheme level, irrespective of the date of investment into the scheme. The CEO of the AMC being a Director has been included under AMC Directors and not under Key Managerial Personnel. 4. HSBC Fixed Term Series 125 (a closed ended debt scheme) A. Name of the Fund Manager and tenure of managing the scheme Name of the Fund Manager Tenure of Managing the scheme Sanjay Shah 0.27 B. Portfolio Related Disclosures (as on March 31, 2017) Portfolio - Top 10 Holdings (Issuer-wise) Sr. No Issuer % of Net Assets 1 EXIM 11.12 2 Small Industries Development Bank of India 11.01 3 East North Interconnection Company Limited 9.78 (ENICL) 4 Power Finance Corporation Limited 9.62 5 Tata Capital Financial Services Limited 8.87 6 Rural Electrification Corporation 7.92 7 IRFC Limited 7.91 8 National Bank for Agriculture and Rural Development 7.86 9 Tata Capital Housing Finance Ltd 7.84 10 Cash And Cash Equivalents 6.90 Sector Allocation (% of Net Assets)
Sr. No Issuer % of Net Assets 1 Financial Services 83.32 2 Energy 9.78 3 Cash And Cash Equivalents 6.90 Portfolio Turnover Ratio (Portfolio turnover is defined as lesser of purchases and sales as a percentage of the average corpus of the Scheme(s) during a specified period of time.) - The Portfolio Turnover Ratio in case of debt fund is not applicable. Kindly refer the Fund s website, www.assetmanagement.hsbc.com/in for monthly portfolio disclosures. C. Aggregate investment in the Plan/Scheme by directors, fund manager s and key managerial personnel of the AMC as on March 31, 2017 Scheme Name HSBC Fixed Term Series 125 AMC s Board of Directors AuM in INR Fund Manager(s) 16,36,590 NIL Other Key Managerial Personnel of AMC Note: The above investments are based on holdings as of March 31, 2017 and sourced from the Fund s Registrars records, on the basis of PAN of the above persons. The investments have been aggregated at a scheme level, irrespective of the date of investment into the scheme. The CEO of the AMC being a Director has been included under AMC Directors and not under Key Managerial Personnel. 5. HSBC Fixed Term Series 126 (a closed ended debt scheme) A. Name of the Fund Manager and tenure of managing the scheme Name of the Fund Manager Tenure of Managing the scheme Kapil Punjabi 0.27 B. Portfolio Related Disclosures (as on March 31, 2017) Portfolio - Top 10 Holdings (Issuer-wise) Sr. No Issuer % of Net Assets 1 Small Industries Development Bank of India 10.97 2 National Thermal Power Corporation 10.95 3 National Bank For Agriculture And Rural 10.65 Development 4 Rural Electrification Corporation 10.24 5 Bajaj Finance Ltd 9.79 6 Sundaram Bnp Home Finance 9.76 7 Power Grid Corporation Of (I) Ltd 9.37 8 L & T Finance Limited 9.12
9 Power Finance Corporation Limited 9.09 10 Cash And Cash Equivalents 8.85 Sector Allocation (% of Net Assets) Sr. No Issuer % of Net Assets 1 Financial Services 70.83 2 Energy 20.32 3 Cash And Cash Equivalents 8.85 Portfolio Turnover Ratio (Portfolio turnover is defined as lesser of purchases and sales as a percentage of the average corpus of the Scheme(s) during a specified period of time.) - The Portfolio Turnover Ratio in case of debt fund is not applicable. Kindly refer the Fund s website, www.assetmanagement.hsbc.com/in for monthly portfolio disclosures. C. Aggregate investment in the Plan/Scheme by directors, fund manager s and key managerial personnel of the AMC as on March 31, 2017 Scheme Name HSBC Fixed Term Series 126 AMC s Board of Directors AuM in INR Fund Manager(s) NIL Other Key Managerial Personnel of AMC Note: The above investments are based on holdings as of March 31, 2017 and sourced from the Fund s Registrars records, on the basis of PAN of the above persons. The investments have been aggregated at a scheme level, irrespective of the date of investment into the scheme. The CEO of the AMC being a Director has been included under AMC Directors and not under Key Managerial Personnel. 6. HSBC Capital Protection Oriented Fund Series II Plan I (A close ended capital protection oriented scheme) A. Name of the Fund Manager and tenure of managing the scheme Name of the Fund Manager Tenure of Managing the scheme Sanjay Shah 2.1 B. Portfolio Related Disclosures (as on March 31, 2017) Portfolio - Top 10 Holdings (Issuer-wise) Sr. No Issuer % of Net Assets 1 Power Finance Corporation Limited 18.32 2 Small Industries Development Bank Of India 18.08 3 Cash And Cash Equivalents 16.80
4 National Bank For Agriculture And Rural 13.27 Development 5 Power Grid Corporation Of (I) Ltd 13.22 6 Kotak Mahindra Prime Limited 8.64 7 LIC Housing Finance Limited 6.63 8 EXIM 5.04 Sector Allocation (% of Net Assets) Sr. No Issuer % of Net Assets 1 Financial Services 69.98 2 Cash And Cash Equivalents 16.80 3 Energy 13.22 Portfolio Turnover Ratio (Portfolio turnover is defined as lesser of purchases and sales as a percentage of the average corpus of the Scheme(s) during a specified period of time.) - The Portfolio Turnover Ratio in case of debt fund is not applicable. Kindly refer the Fund s website, www.assetmanagement.hsbc.com/in for monthly portfolio disclosures. C. Aggregate investment in the Plan/Scheme by directors, fund manager s and key managerial personnel of the AMC as on March 31, 2017 Scheme Name HSBC Capital Protection Oriented Fund Series II Plan I AMC s Board of Directors AuM in INR Fund Manager(s) 18,21,234.83 NIL Other Key Managerial Personnel of AMC Note: The above investments are based on holdings as of March 31, 2017 and sourced from the Fund s Registrars records, on the basis of PAN of the above persons. The investments have been aggregated at a scheme level, irrespective of the date of investment into the scheme. The CEO of the AMC being a Director has been included under AMC Directors and not under Key Managerial Personnel. 7. HSBC Capital Protection Oriented Fund Series II Plan II (A close ended capital protection oriented scheme) A. Name of the Fund Manager and tenure of managing the scheme Name of the Fund Manager Tenure of Managing the scheme Sanjay Shah 2.04 B. Portfolio Related Disclosures (as on March 31, 2017) Portfolio - Top 10 Holdings (Issuer-wise)
Sr. No Issuer % of Net Assets 1 Power Finance Corporation Limited 17.96 2 Power Grid Corporation Of (I) Ltd 16.50 3 National Bank For Agriculture And Rural 16.30 Development 4 Cash And Cash Equivalents 14.67 5 Kotak Mahindra Prime Limited 10.84 6 LIC Housing Finance Limited 8.14 7 IRFC Limited 7.60 8 EXIM 5.38 9 Small Industries Development Bank of India 2.61 Repo) Sector Allocation (% of Net Assets) Sr. No Issuer % of Net Assets 1 Financial Services 68.83 2 Energy 16.50 3 Cash And Cash Equivalents 14.67 Note: Cash and Cash Equivalents includes Overnight Investments (CBLO/Reverse Portfolio Turnover Ratio (Portfolio turnover is defined as lesser of purchases and sales as a percentage of the average corpus of the Scheme(s) during a specified period of time.) - The Portfolio Turnover Ratio in case of debt fund is not applicable. Kindly refer the Fund s website, www.assetmanagement.hsbc.com/in for monthly portfolio disclosures. C. Aggregate investment in the Plan/Scheme by directors, fund manager s and key managerial personnel of the AMC as on March 31, 2017 Scheme Name HSBC Capital Protection Oriented Fund Series II Plan II AMC s Board of Directors AuM in INR Fund Manager(s) NIL Other Key Managerial Personnel of AMC Note: The above investments are based on holdings as of March 31, 2017 and sourced from the Fund s Registrars records, on the basis of PAN of the above persons. The investments have been aggregated at a scheme level, irrespective of the date of investment into the scheme. The CEO of the AMC being a Director has been included under AMC Directors and not under Key Managerial Personnel.
Apart from point A to C as mentioned above, following illustration showing impact of expense ratio on plan/scheme s return is also disclosed in the SID of the above mentioned Plans/Schemes. D. Illustration: Impact of Expense Ratio on Scheme's return: Collections at Day Zero A 100,000,000 Purchase Price per unit B 10 Units allotted to domestic investors A/B C 10,000,000 Amount Invested D 100,000,000 Yield on investment E 6% Expense ratio F 1.65% AUM after one month AUM including Yield (D*E)/12+D G 100,500,000 Expenses (for one month) (INR)- ((A+G)/2 * F)/12 H 137,844 approximated at average of opening and closing AUM AUM after one month G-H I 100,362,156 NAV per unit I/C J 10.0362 Annualized returns (Pre Expenses) % (G-D)/D*100*12 K 6.00 Annualized returns (Post Expenses) % (I-D)/D*100*12 L 4.35 This addendum shall form an integral part of the SID / KIM of the above mentioned Plan(s)/Scheme(s) as amended from time to Time. Applicants(s)/Unit holder(s) may contact our Customer Service Number - 1800 200 2434 or their financial advisor(s), for any additional information/clarifications. You may also visit our website www.assetmanagement.hsbc.com/in or write to us at hsbcmf@camsonline,com for any other related information. For & on behalf of HSBC Asset Management (India) Private Limited (Investment Manager to HSBC Mutual Fund) Sd/- Authorised Signatory Mumbai, April 28, 2017 Mutual Fund investments are subject to market risks, read all scheme related documents carefully HSBC Asset Management (India) Private Limited, 16, V. N. Road, Fort, Mumbai 400001 Email: hsbcmf@camsonline.com, Website: www.assetmanagement.hsbc.com/in Issued by HSBC Asset Management (India) Private Limited CIN U74140MH2001PTC134220
18-0146 HSBC_FA Change Consolidate_Notice AD_Financial Exp Size: 32.9 x 50 cms. Changes in the Fundamental Attributes of various schemes of HSBC Mutual Fund We would like to inform you that in order to bring the uniformity in the practice across Mutual Funds and to standardize the scheme categories and their characteristics, SEBI vide its circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 06, 2017 and SEBI circular SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 04, 2017, has issued guidelines for categorization and rationalization of Mutual Fund schemes. Accordingly, the following changes will be carried out in certain schemes of HSBC Mutual Fund ( HMF ) to align the same with the requirements specified in the aforesaid circulars. The Board of Directors of the HSBC Asset Management (India) Pvt. Ltd. (the AMC) and the Board of Trustees (the Trustees) have approved the following changes, which will be effective from March 14, 2018 and will be effected in the Scheme Information Document (SID) and Key Information Memorandum (KIM) of the respective Schemes. 1. HSBC EQUITY FUND 1. Name of the HSBC Equity Fund HSBC Large Cap Equity Fund Scheme 2. Scheme Large cap equity scheme Large Cap Fund Category 3. Type of An open-ended diversified Equity Large Cap Fund An open ended Scheme Scheme equity scheme predominantly investing in large cap stocks 4. Investment To generate long-term capital growth To generate long-term capital growth Objective from an actively managed portfolio of from an actively managed portfolio of equity and equity related securities. equity and equity related securities of predominantly large cap companies. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. 5. Asset allocation pattern 6. Investment Strategy Equity and 65% 100% High Equity related securities Debt securities 0% 35% Low to & Money Market instruments (including cash & cash equivalents) If the Scheme decides to invest in securitized debt, it is the intention of the investments will not normally exceed 30% of the corpus of the Scheme and if the Scheme decides to invest in ADRs / GDRs issued by Indian Companies and foreign securities in line with SEBI stipulation, it is the intention of the investments will not, normally exceed 30% of the assets of the Scheme. The Scheme shall have derivative exposure as per the SEBI regulations issued from time to time. The Scheme may review the above pattern of investments based on views on the equity markets and asset liability management needs. However, at all times the portfolio will adhere to the overall investment objective of the Scheme. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the Scheme would reflect moderate to high volatility in its equity and equity related investments and low to moderate volatility in its debt and money market investments. The aim of HSBC Equity Fund is to deliver above-benchmark returns by providing long-term capital growth from an actively managed portfolio, mainly comprising companies registered in and / or listed on a regulated market of India. Income is not a primary consideration in the investment policies of HEF. The Scheme will invest across a range of market capitalisations with a preference for medium and large companies. A top down and bottom up approach will be used to invest in equity and equity related instruments. Investments will be pursued in select sectors based on the Investment Team s analysis of business cycles, regulatory reforms, competitive advantage etc. Selective stock picking will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. Since investing requires disciplined risk management, the AMC would incorporate adequate safeguards for controlling risks in the portfolio construction process. Stock specific risk will be minimized by investing only in those companies that have been analyzed by the Investment Team at the AMC. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. The Scheme may however, invest in unlisted and / or privately placed and / or unrated debt securities, subject to the limits indicated under Investment Equity and 80% 100% High Equity related securities of large cap companies Equity and 0% 20% High Equity related securities of other than large cap companies Debt securities 0% 20% Low to & Money Market instruments (including cash & cash equivalents) If the Scheme decides to invest in securitized debt, it is the intention of the investments will not normally exceed 20% of the corpus of the Scheme and if the Scheme decides to invest in ADRs / GDRs issued by Indian Companies and foreign securities in line with SEBI stipulation, it is the intention of the investments will not, normally exceed 35% of the assets of the Scheme. The Scheme shall have derivative exposure as per the SEBI regulations issued from time to time. The Scheme may review the above pattern of investments based on views on the equity markets and asset liability management needs. However, at all times the portfolio will adhere to the overall investment objective of the Scheme. The Scheme will adopt the list of large cap companies as defined by SEBI, from time to time. Presently as per SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/ 2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 04, 2017 large cap companies will comprise of companies from 1st to 100th companies in terms of full market capitalization. The Fund would adopt the list of large cap companies prepared by AMFI for this purpose in accordance with the SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/ CIR/P/2017/126 dated December 04, 2017. If there is any updation in the list of large cap companies, the fund would rebalance its portfolio (if required) in line with the updated list, within a period of one month. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the Scheme would reflect high volatility in its equity and equity related investments and low to moderate volatility in its debt and money market investments. The aim of HSBC Large Cap Equity Fund is to deliver above-benchmark returns by providing long-term capital growth from an actively managed portfolio, mainly comprising companies registered in and / or listed on a regulated market of India. The Scheme will invest at least 80% in large cap companies and may also invest in equity and equity related instruments of companies other than large cap companies. A top down and bottom up approach will be used to invest in equity and equity related instruments. Investments will be pursued in select sectors based on the Investment Team s analysis of business cycles, regulatory reforms, competitive advantage etc. Selective stock picking will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. Since investing requires disciplined risk management, the AMC would incorporate adequate safeguards for controlling risks in the portfolio construction process. Stock specific risk will be minimized by investing only in those companies that have been analyzed by the Investment Team at the AMC. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. As per the asset allocation pattern indicated above, for investment in debt securities and money market instruments, the Fund may invest a part HSBC MUTUAL FUND NOTICE CUM ADDENDUM 7. Risk-o-meter This product is suitable for investors who are seeking*: - To create wealth over long term - Investment in equity and equity related securities *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. 2. HSBC MIDCAP EQUITY FUND This product is suitable for investors who are seeking*: - To create wealth over long term - Investment in predominantly large cap equity and equity related securities *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. 1. Name of the HSBC Midcap Equity Fund HSBC Small Cap Equity Fund Scheme 2. Scheme Mid-cap Equity Scheme Small Cap Fund Category 3. Type of An open-ended diversified Equity An open ended equity scheme Fund Scheme predominantly investing in small cap stocks 4. Investment To generate long term capital growth from To generate long term capital growth from Objective an actively managed portfolio of equity and an actively managed portfolio of equity and equity related securities primarily being equity related securities of predominantly Midcap stocks. However, it could move a small cap companies. However, it could move portion of its assets towards fixed income a portion of its assets towards fixed income 5. Asset allocation pattern Restrictions for the Scheme as per this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the Regulations. As per the asset allocation pattern indicated above, for investment in debt securities and money market instruments, the Fund may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state government or supported by GOI / state government in some other way. The Scheme may invest in other Scheme managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the Scheme and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. Riskometer Investors understand that their principal will be at Moderately High risk. securities if the fund manager becomes negative on the Indian equity markets. Equities & equity 65% 100% High related securities of companies whose market capitalization (a) does not exceed the capitalization of the largest constituent and (b) is not less than the market capitalization of the smallest constituent of S&P BSE MID CAP Index Other equity and 0% 35% High equity related securities Debt securities 0% 35% Low to & Money Market instruments (including cash & cash equivalents) Under normal circumstances, the Scheme shall invest at least 65% of the net assets under the Scheme in equity and equity related securities which fall within the definition of midcap companies. The Scheme may review the above pattern of investments based on views on the equity and debt markets and asset liability management needs. The portfolio of the Scheme shall be reviewed on half yearly basis against the stated definition of Midcap Stock/Companies and necessary rebalancing, if any required, will be carried out within 90 days of the half yearly review. However, at all times the portfolio will adhere to the overall investment objective of the Scheme. Midcap stocks will comprise equity stocks of companies whose market capitalization (a) does not exceed the capitalization of the largest constituent and (b) is not less than the market capitalization of the smallest constituent of S&P BSE MID CAP Index. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the Scheme would reflect of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state government or supported by Government of India (GOI) / state government in some other way. The Scheme may invest in other Scheme managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the Scheme and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. Riskometer Investors understand that their principal will be at Moderately High risk. securities if the fund manager becomes negative on the Indian equity markets. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved. Equity and Equity 65% 100% High related securities of small cap companies Equity and Equity 0% 35% High related securities of other than small cap companies Debt securities & 0% 35% Low to Money Market instruments (including cash & cash equivalents) The Scheme will adopt the list of small cap companies as defined by SEBI, from time to time. Presently, as per SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/ 2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/ CIR/P/2017/126 dated December 04, 2017, small cap companies will comprise of companies from 251st company onwards in terms of full market capitalization. The Fund would adopt the list of small cap companies prepared by AMFI for this purpose in accordance with the SEBI circular no. SEBI/HO/IMD/DF3/CIR/P/ 2017/114 dated October 06, 2017 and SEBI/HO/IMD/DF3/ CIR/P/2017/126 dated December 04, 2017. If there is any updation in the list of small cap companies, the fund would rebalance its portfolio (if required) in line with the updated list, within a period of one month. Investors may note that securities which provide higher returns, typically display higher volatility. Accordingly, the investment portfolio of the Scheme would reflect high volatility in its equity and equity related investments and low to moderate volatility in its debt and money market investments. If the Scheme decides to invest in securitized debt, it is the intention of the investments will not normally exceed 35% of the corpus of the Scheme and if the Scheme decides to invest in ADRs / GDRs issued by Indian Companies and foreign securities in line with SEBI stipulation, it is the intention of the
18-0146 HSBC_FA Change Consolidate_Notice AD_Financial Exp Size: 32.9 x 50 cms. HSBC MUTUAL FUND NOTICE CUM ADDENDUM 6. Investment Strategy moderate to high volatility in its equity and equity related investments and low to moderate volatility in its debt and money market investments. If the Scheme decides to invest in securitized debt, it is the intention of the investments will not normally exceed 30% of the corpus of the Scheme and if the Scheme decides to invest in ADRs / GDRs issued by Indian Companies and foreign securities in line with SEBI stipulation, it is the intention of the investments will not, normally exceed 30% of the assets of the Scheme. Securitized debt, while relatively illiquid compared to other debt investments provides a higher yield pickup. Hence only if the Fund Manager becomes cautious or negative on the Indian equity markets for a reasonably long period of time would he consider investing in such instruments to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money market instruments. No investments shall be made in foreign securitized debt. For investments in ADRs / GDRs, the Fund Manager would consider the premium / discount to the underlying stock and the possibility of the discount narrowing or the premium expanding, liquidity management of the portfolio, secondary and primary offerings of ADRs / GDRs. The Scheme shall have derivative exposure as per the SEBI regulations issued from time to time. The aim of HSBC Midcap Fund is to deliver above-benchmark returns by providing long-term capital growth from an actively managed portfolio, primarily comprising of midcap stocks. Income is not a primary consideration in the investment policies of HMEF. The Scheme aims to be predominantly invested in midcap equity and equity related securities and also invest in small cap equity and equity related securities. However, it could move a portion of its assets towards fixed income securities if the fund becomes cautious or negative on equity markets. A top down and bottom up approach will be used to invest in equity and equity related instruments. Investments will be pursued in select sectors based on the Investment Team s analysis of business cycles, regulatory reforms, competitive advantage etc. Selective stock picking will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, corporate governance trends, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. Since investing requires disciplined risk management, the AMC would incorporate adequate safeguards for controlling risks in the portfolio construction process. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. The Scheme may however, invest in unlisted and / or privately placed and / or unrated debt securities subject to the limits indicated under Investment Restrictions for the Scheme(s) prescribed in this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the Regulations. As per the asset allocation pattern indicated above, for investment in debt securities and money market instruments, the Fund may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state government or supported by GOI / state government in some other way. With the aim of controlling risks, rigorous in depth credit evaluation of the instruments proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. In addition, the Investment Team of the AMC will study the macro economic conditions, including the political, economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The Scheme may invest in other Schemes managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the Scheme and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. investments will not, normally exceed 35% of the assets of the Scheme. Securitized debt, while relatively illiquid compared to other debt investments provides a higher yield pickup. Hence only if the Fund Manager becomes cautious or negative on the Indian equity markets for a reasonably long period of time would he consider investing in such instruments to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money market instruments. No investments shall be made in foreign securitized debt. For investments in ADRs / GDRs, the Fund Manager would consider the premium / discount to the underlying stock and the possibility of the discount narrowing or the premium expanding, liquidity management of the portfolio, secondary and primary offerings of ADRs / GDRs. The Scheme shall have derivative exposure as per the SEBI regulations issued from time to time. The aim of HSBC Small Cap Equity Fund is to deliver above-benchmark returns by providing long-term capital growth from an actively managed portfolio, primarily comprising of small cap stocks. The Scheme aims to be predominantly invested in small cap equity and equity related securities and may also invest in equity and equity related securities of other than small cap companies. However, it could move a portion of its assets towards fixed income securities if the fund becomes cautious or negative on equity markets. A top down and bottom up approach will be used to invest in equity and equity related instruments. Investments will be pursued in select sectors based on the Investment Team s analysis of business cycles, regulatory reforms, competitive advantage etc. Selective stock picking will be done from these sectors. The fund manager in selecting scrips will focus on the fundamentals of the business, the industry structure, the quality of management, corporate governance trends, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. Since investing requires disciplined risk management, the AMC would incorporate adequate safeguards for controlling risks in the portfolio construction process. Risk will also be reduced through adequate diversification of the portfolio. Diversification will be achieved by spreading the investments over a range of industries / sectors. As per the asset allocation pattern indicated above, for investment in debt securities and money market instruments, the Fund may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state government or supported by Government of India (GOI) / state government in some other way. With the aim of controlling risks, rigorous in depth credit evaluation of the instruments proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. In addition, the Investment Team of the AMC will study the macro economic conditions, including the political, economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The Scheme may invest in other Scheme managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the Scheme and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. 7. Benchmark S&P BSE Midcap Index. S&P BSE 250 Small Cap Index 8. Risk-o-meter This product is suitable for investors who are seeking*: - To create wealth over long term - Investment in predominantly mid cap equity and equity related securities 3. HSBC INFRASTRUCTURE EQUITY FUND 1. Name of the Equity scheme Thematic Fund Scheme 2. Type of Fund An open ended equity scheme An open ended equity scheme following Infrastructure theme 3. Asset allocation table Riskometer Investors understand that their principal will be at Moderately High risk. *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Equities & Equity 65% 100% High related securities of companies operating in Infrastructure Sector* Equity and equity 0% 35% High related instruments of other than Infrastructure Sector* Debt securities & 0% 35% Low to Money Market instruments (including cash & cash equivalents) *The fund will seek to invest, though not limited to, in the following sectors that are beneficiaries of the infrastructure growth and economic reforms expected in the country in the coming years viz Banking/Financial Services(Excluding Retail banks, being largely retail lending institutions); Capital Goods; Energy; Materials; Transportation; Utilities; Port & Logistics; Cement & Construction; Infrastructure Asset owners and Turnkey or services providers in infrastructure or any business benefiting from infrastructure investment. 4. HSBC ULTRA SHORT TERM BOND FUND 1. Name of the HSBC Ultra Short Term Bond Fund HSBC Low Duration Fund Scheme 2. Scheme Debt Fund Low Duration Fund Category 3. Type of An open-ended Debt Scheme An open ended low duration debt scheme Fund investing in instruments such that the Macaulay duration of the portfolio is between 6 months to 12 months 4. Investment Seeks to provide liquidity and reasonable To seek to provide liquidity and reasonable Objective returns by investing primarily in a mix of returns by investing primarily in a mix of short term debt and money market debt and money market instruments such instruments. that the Macaulay duration of the portfolio is between 6 months to 12 months. However there can be no assurance or guarantee that the investment objective of the scheme would be achieved. 5. Asset allocation Debt & Money 100% Low to Money Market & 70% 100% Low Debt instruments with maturity/ average maturity /interest rate reset not greater than 1 year Debt instruments 0% 30% Low to with maturity greater than 1 year *If the Scheme decides to invest in foreign securities, it is the intention of the investments will not, normally exceed 30% of the assets of the Scheme. However, the AMC with a view to protecting the interests of the investors, may increase exposure in foreign securities as deemed fi t from time to time. The Scheme shall have derivative exposure as per the SEBI regulations issued from time to time. The portfolio duration will undergo a change according to the expected movement in interest rates. Liquidity conditions and other macroeconomic factors affecting interest rates shall be taken into account for varying the portfolio duration. Under normal circumstances, if the interest rates move down, the duration of the portfolio shall be increased and vice versa. The Scheme may review the above pattern of investments based on views on the debt markets and asset liability management needs and the portfolio shall be reviewed and rebalanced on a regular basis. However, at all times the portfolio will adhere to the overall investment objective of the Scheme. This product is suitable for investors who are seeking*: - To create wealth over long term - Investment in predominantly small cap equity and equity related securities *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Equity and Equity 80% 100% High related securities of companies operating in Infrastructure * Equity and Equity 0% 20% High related instruments of companies operating in other than Infrastructure * Debt securities & 0% 20% Low to Money Market instruments (including cash & cash equivalents) *The fund will seek to invest in the sectors that are beneficiaries of the infrastructure growth and economic reforms expected in the country in the coming years eg. Banking/Financial Services (Excluding Retail banks, being largely retail lending institutions); Capital Goods; Energy; Materials; Transportation; Utilities; Port & Logistics; Cement & Construction; Infrastructure Asset owners and Turnkey or services providers in infrastructure or any business benefiting from infrastructure investment. market Riskometer Investors understand that their principal will be at Moderately High risk. instruments such that Macaulay duration* of the portfolio is between 6 to 12 months *The Macaulay duration is the weighted average term to maturity of the cash flows from a bond/ instrument. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. If the Scheme decides to invest in foreign securities, it is the intention of the investments will not, normally exceed 30% of the assets of the Scheme. However, the AMC with a view to protecting the interests of the investors, may increase exposure in foreign securities as deemed fit from time to time. The Scheme shall have derivative exposure as per the SEBI regulations issued from time to time. Securitized debt, while relatively illiquid compared to other debt investments provides a higher yield pickup. Hence only if the Fund Manager becomes cautious or negative on the Indian markets for a reasonably long period of time he would consider investing in such instruments to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money market instruments upto 50% of net assets of the Scheme. No investments shall be made in foreign securitized debt.
18-0146 HSBC_FA Change Consolidate_Notice AD_Financial Exp Size: 32.9 x 50 cms. HSBC MUTUAL FUND NOTICE CUM ADDENDUM Securitised debt, while relatively illiquid compared to other debt investments provides a higher yield pickup. Hence only if the Fund Manager becomes cautious or negative on the Indian markets for a reasonably long period of time he would consider investing in such instruments to improve the yield to the fund and investors as opposed to putting the monies in reverse repo and short term money market instruments upto 50% of net assets of the Scheme. No investments shall be made in foreign securitised debt. 6. Investment Strategy The aim of the Investment Manager will be to allocate the assets of the Scheme between various money market and fixed income securities (predominantly short duration instruments) with the objective of providing liquidity and achieving optimal returns with the surplus funds. Since providing liquidity is of paramount importance, the focus will be to ensure liquidity while seeking to maximize the yield. An appropriate mix of money market and debt instruments will be used to achieve his. The Investment Team of the AMC will carry out rigorous in depth credit evaluation of the money market and debt instruments proposed to be invested in. The credit evaluation includes a study of the operating environment of the issuer, the past track record as well as the future prospects of the issuer and the short term / long term financial health of the issuer. The AMC will study the macro economic conditions, including the political and economic environment and factors affecting liquidity and yields in an attempt to predict the direction of interest rates. Liquidity will be maintained through a combination of cash, reverse repo, daily put/call MIBOR papers and liquid CPs / CDs of strong credits. As compared to a liquid scheme, the higher portfolio maturity would mean higher allocation to 6-12 months instruments and a mix of structured credits in the 1 year segment as well as moving down the credit curve to improve yield. The scheme could run a mark to market component slightly higher than a liquid scheme (whose regulatory maximum is 10%) but sharply lower than an STP (in the region of 40-60%). With the aim of controlling risks, a credit evaluation of the instruments proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. In addition, the Investment Team of the AMC will study the macro economic conditions, including the political, economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The Fund may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the Treasury or supported only by India s sovereign guarantee or of the state government or supported by GOI / state government in some other way. The Scheme may invest in other Schemes managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the schemes and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. 7. Benchmark CRISIL Liquid Fund Index - 90%, CRISIL Short Term Bond Fund Index - 10%. 8. Risk-o-meter This product is suitable for investors who are seeking*: - Liquidity over short term - Investment in Debt / Money Market Instruments Riskometer Investors understand that their principal will be at Moderately High risk. * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. The aim of the Investment Manager will be to allocate the assets of the Scheme between various money market and fixed income securities, such that the Macaulay duration of the portfolio is between 6 to 12 months with the objective of providing liquidity and achieving optimal returns with the surplus funds. Since providing liquidity is of paramount importance, the focus will be to ensure liquidity while seeking to maximize the yield. An appropriate mix of money market and debt instruments will be used to achieve this. The Investment Team of the AMC will carry out rigorous in depth credit evaluation of the money market and debt instruments proposed to be invested in. The credit evaluation includes a study of the operating environment of the issuer, the past track record as well as the future prospects of the issuer and the short term / long term financial health of the issuer. The AMC will study the macro economic conditions, including the political and economic environment and factors affecting liquidity and yields in an attempt to predict the direction of interest rates. Liquidity will be maintained through a combination of cash, reverse repo, daily put/call MIBOR papers and liquid CPs / CDs of strong credits. With the aim of controlling risks, a credit evaluation of the instruments proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The Fund may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the Treasury or supported only by India s sovereign guarantee or of the state government or supported by Government of India (GOI) / state government in some other way. The Scheme may invest in other Schemes managed by the AMC or in the schemes of any other mutual fund, provided it is in conformity with the investment objectives of the schemes and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. CRISIL Ultra Short Term Debt Index This product is suitable for investors who are seeking*: - Liquidity over short term - Investment in a mix of debt and money market instruments such that the Macaulay^ duration of the portfolio is between 6 months to 12 months. Riskometer Investors understand that their principal will be at Moderately High risk. * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. ^ The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. 5. (a) HSBC INCOME FUND - SHORT TERM PLAN 1. Name of the HSBC Income Fund - Short Term Plan HSBC Short Duration Fund Scheme 2. Scheme Short Term Plan Short Duration Fund Category 3. Type of An open-ended Income Scheme An open ended short term debt scheme Fund investing in instruments such that the Macaulay duration of the portfolio is between 1 year to 3 years 4. Investment To provide a reasonable income through a To provide reasonable income through a Objective diversified portfolio of fixed income diversified portfolio of fixed income securities. The AMC s view of interest rate securities such that the Macaulay duration trends will be reflected in the type and of the portfolio is between 1 year to 3 years. maturities of securities in which the Short However, there can be no assurance or Term Plan has invested. guarantee that the investment objective of the scheme would be achieved. 5. Asset allocation 6. Investment Strategy Debt and Money 80% 100% Low to Market Instruments with duration of upto 3 years Debt Instruments 0% 20% Low to with duration of greater than 3 years If the Plan decides to invest in securitized debt, it is the intention of the Investment Manager that such investments will not normally exceed 50% of the corpus of the Plan and if the Plan decides to invest in foreign securities, it is the intention of the investments will not, normally exceed 25% of the assets of the Plan. The Plan shall under normal circumstances not have exposure of more than 50% of its net assets in derivative instruments. Investments in derivatives would be in accordance with the SEBI Regulations. The Plan will endeavour to invest in shorter duration instruments in line with the investment objective. Investments will be in money market instruments and debt instruments depending on prevailing interest rates and a view of the market. The portfolio duration will undergo a change according to the expected movement in interest rates. Liquidity conditions and other macro-economic factors affecting interest rates shall be taken into account for varying the portfolio duration. Under normal circumstances, if the interest rates move down, the duration of the portfolio shall be increased and vice versa. It is expected that the modified duration for the Short Term Plan could range between 1-3 years depending on interest rate views. However, this can undergo a change in case the market conditions warrant and according to the fund manager s view. The Plan may review the above pattern of investments based on views on interest rates and asset liability management needs. However, at all times the portfolio will adhere to the overall investment objectives of the Scheme. The Plan may participate in securities lending as permitted under the Regulations. HIF - Short Term Plan will invest predominantly in debt and money market instruments where interest rate risk is low. The AMC s view of interest rate trends will be reflected in the type and the maturity dates of instruments in which funds are invested. In pursuing such a policy, it should be recognised that the best overall returns are achieved by anticipating or reacting to interest rate changes rather than aiming for the highest possible interest rates at all times. The best resultant overall return is therefore achieved through both capital appreciation and income, which may result in somewhat lower yields than might otherwise normally appear obtainable from the relevant securities. The Scheme aims to provide investors with actively managed portfolios of interest bearing transferable debt and money market instruments. The portfolios may also include liquid assets and other assets permitted from time to time, with a short remaining maturity, especially in times of rising interest rates. In the Short Term Plan, exposure to instruments bearing price risk will be controlled, such that the Plan offers an appropriate mix of liquidity and returns. The Scheme may invest in unlisted and / or privately placed and / or unrated debt securities subject to the limits indicated under Investment Restrictions for the Scheme(s) in this SID, from issuers of repute and sound financial standing. If investment is made in unrated debt securities, the approval of the Board of the AMC and the Trustees or the Investment Management Committee (within the broad parameters approved by the Board of the AMC and the Trustees) shall be obtained, as per the Regulations. With the aim of controlling risks, rigorous in depth credit evaluation of the instruments proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. In addition, the Investment Team of the AMC will study the macro economic conditions, including the political, economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attempt to Debt & Money 100% Low to market instruments such that Macaulay duration* of the portfolio is between 1 year to 3 years *The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. If the Scheme decides to invest in securitized debt, it is the intention of the investments will not normally exceed 50% of the corpus of the Scheme and if the Scheme decides to invest in foreign securities, it is the intention of the investments will not, normally exceed 35% of the assets of the Scheme. The Scheme shall under normal circumstances not have exposure of more than 50% of its net assets in derivative instruments. Investments in derivatives would be in accordance with the SEBI Regulations. The Scheme may participate in securities lending as permitted under the Regulations. The Scheme will invest predominantly in debt and money market instruments such that the Macaulay duration of the portfolio is between 1 year to 3 years. The AMC s view of interest rate trends will be reflected in the type and the maturity dates of instruments in which funds are invested. In pursuing such a policy, it should be recognized that the best overall returns are achieved by anticipating or reacting to interest rate changes rather than aiming for the highest possible interest rates at all times. The best resultant overall return is therefore achieved through both capital appreciation and income, which may result in somewhat lower yields than might otherwise normally appear obtainable from the relevant securities. The Scheme aims to provide investors with actively managed portfolios of interest bearing transferable debt and money market instruments. The portfolios may also include liquid assets and other assets permitted from time to time, with a short remaining maturity, especially in times of rising interest rates. The Scheme exposure to instruments bearing price risk will be controlled, such that the Scheme offers an appropriate mix of liquidity and return. With the aim of controlling risks, rigorous in depth credit evaluation of the instruments proposed to be invested in will be carried out by the Investment Team of the AMC. The credit evaluation includes a study of the operating environment of the company, the past track record as well as the future prospects of the issuer, the short as well as long-term financial health of the issuer. The AMC will also be guided by the ratings of rating agencies such as CRISIL, CARE and ICRA or any other rating agency as approved by the regulators. In addition, the Investment Team of the AMC will study the macro economic conditions, including the political, economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The Fund may invest a part of the portfolio in various debt securities issued by corporates and / or state and central government. Such government securities may include securities which are supported by the ability to borrow from the treasury or supported only by the sovereign guarantee or of the state government or supported by