KEY FEATURES DOCUMENT (For Resident Indian and NRI customers of the Hongkong and Shanghai Banking Corporation Limited, India (HSBC India)) Product ICICI Prudential Multiple Yield Fund Series 2 Plan F from ICICI Prudential Asset Management Company Limited General Information Full name of the investment product Name of the issuing Group Company. Contact address and phone number, and details of its regulatory status and licences of the company Aim and nature of the product ICICI Prudential Multiple Yield Fund Series 2 Plan F (IPMYF S2 PF) The above will be referred to as the scheme ICICI Prudential Asset Management Company Limited (IPAMCL or AMC) 12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110 001 SEBI vide Registration No. MF/003/93/6 IPMYF S2 PF is an 1100 Day close ended income scheme whose primary investment objective is to generate returns by investing in a portfolio of fixed income securities/ debt instruments. The secondary objective of the Scheme is to generate long term capital appreciation by investing a portion of the Scheme s assets in equity and equity related instruments. Debt Investment Strategy: The Scheme will invest in securities with a view to hold them till the maturity. To that effect the Scheme will follow a buy and hold strategy to investment. Equity Investment Strategy: The AMC intends to invest in stocks, which will be bought, keeping in mind the time horizon of the plan. Depending on overall portfolio considerations and depending on market conditions, the fund manager may also have allocations to equity derivatives. The derivative portfolio will comprise of futures and options on the Nifty Index and will be actively managed by the fund manager within the overall asset allocation of the fund. Page 1 of 10
The asset allocation of IPMYF S2 PF is as follows: IPMYF S2 PF Short term and medium term debt securities/ debt instruments and securitized debt 1 Money Market instruments Equity or equity related securities Asset Allocation Maximum Minimum 100% 65% 10% 0% 35% 0% 1 If the Scheme decides to invest in securitised debt (Single loan and / or Pool loan Securitized debt), it could be upto 50% of the corpus of the Plan. If the Scheme decides to invest in equity derivatives it could be upto 100% of the allocation to equity. If the Scheme decides to invest in foreign securities it could be upto 100% of the allocation to equity. IPMYF S2 PF is benchmarked to the CRISIL MIP Blended Fund Index. Please read the relevant Scheme Information document (SID) available on the AMC website for more details on asset allocation and investment pattern of the scheme. Statements or regular reports issued during the investment period The AMC shall allot units within 5 Business Days from the date of closure of the NFO period. The AMC will calculate and disclose the first NAV within 5 working days from the date of allotment. Applicants under the Scheme will have an option to hold the Units either in physical form (i.e. account statement) or in dematerialized form. Please read the relevant Scheme Information Document (SID) available on the AMC website for more details Page 2 of 10
Any cooling off period (right to cancel investment post sale) Details of charges associated with cancellation during the cooling off period Investment Conditions Minimum and maximum initial investment in the product Permissible frequency and amount(s) of subsequent investments Minimum and maximum term for investment Maturity proceeds to NRI Investors Product Particulars Any guarantee or protection on the capital or income from the investment in this product Details of the organisation providing the guarantee or protection Minimum investment amount is INR 5,000 and INR 10 thereafter, there is no maximum investment limit. The scheme is an 1100 day close ended product and investments in the scheme are permissible only during the fund offering period Customers should consider this as a long term investment (of atleast 1100 days) and should ensure they have sufficient liquid funds available to meet unforeseen circumstances rather than rely on early withdrawal from the product. The scheme will have a duration of 1100 days from the date of allotment. The AMC intends to list the Scheme on the Bombay Stock Exchange Limited (BSE). However the Trustee reserves the right to list the units of the Scheme on any other Stock Exchange. Investors will not be able to redeem their units during the tenor of the Scheme and there will be redemption by the AMC on the maturity of the Scheme. However the units held in dematerialized form can be traded on the Stock Exchange. There is no assurance that the units of the scheme will be traded on the stock exchange on an ongoing/active basis. NRI investors shall submit Foreign Inward Remittance Certificate (FIRC) along with Broker contract note of the respective broker through whom the transaction was effected, for releasing redemption proceeds on maturity as applicable. There is NO guarantee or protection on the capital or income from the investment in this product Page 3 of 10
Details of any situations in which the protection or guarantee may not apply Charges levied on the customer either initially or during the product life No entry or exit load is charged by the AMC. The AMC has estimated that upto 2.25% of the weekly average net assets of the Scheme will be charged to the Scheme as expenses. (% of Net assets) For actual current expenses being charged by the AMC, the investor should refer to the website of the AMC. Performance fee mechanism if applicable The frequency and basis of calculation for interest / returns payable Any component funds which make up the investment product How can the customer find out the current worth of their investment? Does the customer have voting rights in any underlying stock Law applicable to the investment contract Legal and regulatory status of the product provider (Fund Manager) Methodology for calculating returns for tracker (indexed) products, 1. The AMC shall calculate the Net Asset Value of IPMYF S2 PF on every Business Day and declare on AMFI s website www.amfiindia.com and also at www.icicipruamc.com 2. The Net Asset Value of IPMYF S2 PF shall also be published by the AMC on every business day in two newspaper with all India circulation Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 ICICI Prudential Asset Management Company Limited is a private limited company incorporated under the Companies Act, 1956 and has its registered address at 12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110 001 Page 4 of 10
Early Withdrawal Is it possible to withdraw some or all investment funds? Details of charges or penalties incurred through early withdrawal Procedure for making an early withdrawal Liquidity considerations in the event of early withdrawal No redemption / repurchase of units is allowed by the AMC before the maturity of the scheme. Investors wishing to exit may do so by selling their units through the stock exchange. Investors with an investment horizon of 1100 days or more should consider the product for investment. No redemption / repurchase of units is allowed by the AMC before the maturity of the scheme. Investors wishing to exit may do so by selling their units, post dematerialization (DEMAT) of mutual funds, through the stock exchange. Please refer to the relevant offer documents for all details before investing. No redemption/ repurchase of units is allowed by the AMC before the maturity of the scheme. Units of the scheme are proposed to be listed on stock exchange by the AMC, there can be no assurance that an active secondary market will develop or be maintained. Risk Factors Whether the investment value, or income arising, can rise as well as fall? Whether the customer could get back less than their original investment? Possibility of any currency risk Yes, the investment value or income arising, can rise as well as fall. Yes. As the value of the product is based on the value of the underlying investments, it is possible that the market value maybe below the amount originally invested Investors funds are invested predominantly into Indian securities and the portfolio value is denominated in Indian Rupee (INR). It is AMC s belief that the investment in ADRs/GDRs/overseas securities offer new investment and portfolio diversification opportunities into multi market and multi currency products. Such investment opportunities may be pursued by the AMC provided they are considered appropriate in terms of the overall investment objectives of the schemes. To manage risks Page 5 of 10
associated with foreign currency and interest rate exposure, the Fund may use derivatives for efficient portfolio management including hedging What would happen if the underlying fund provider were to become insolvent? Other key risks in the product Investor funds invested in equity and equity related securities are in turn impacted by the performance of their securities and the businesses of these companies maybe impacted by changes in various currencies. This could in turn impact their market prices and thus the portfolio value of investors investing into the product. The insolvency of the AMC may not have an impact on the value of the investments as the customer s investments are held in a trust by a custodian and the Investment Manager may not have any right or authority to use the customer s funds to meet the latter s financial obligations or liabilities. However, the Investment Manager s ability to manage funds effectively may be significantly impaired in the eventuality of insolvency. 1) Given the nature of this product (i.e. close ended), there exists liquidity risk with respect to investors wanting to go for premature exit from the product. Exiting the investment before maturity will be done through the stock exchange route. No redemption/ repurchase of units is allowed by the AMC before the maturity of the scheme. Units of the scheme are proposed to be listed on stock exchange by the AMC, there can be no assurance that an active secondary market will develop or be maintained. 2) Interest Rate Risk: As with all debt securities, changes in interest rates will affect the Scheme s Net Asset Value as the prices of securities generally increase as interest rates decline and generally decrease as interest rates rise Impact of the investment on the customer s overall tax position 3) Credit Risk: Credit risk or default risk is a risk associated with investing in Bonds and refers to the risk which may arise due to default on the part of the issuer of the fixed income security (i.e. will be unable to make timely principal and interest payments on the security). Investors are advised to seek independent tax opinion. Page 6 of 10
Important Information 1) HSBC is merely facilitating your investments into MF products that are independently managed by the respective product providers. Page 7 of 10
2) The value of the scheme is based on the underlying debt instruments and equity related securities including derivatives; it is possible that the market value of the portfolio maybe below the amount originally invested. 3) The scheme is an 1100 Day close ended product and no redemption/ repurchase is allowed by the AMC before the maturity of the scheme. 4) The scheme may invest into derivative products. Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor 5) The performance of the underlying fund will be affected by a number of risk factors, including Political, Economic and Social risks, Emerging Markets risk, Legal, Tax and Regulatory risk and Currency risk. 6) Investors must note that with regard to investment option, cumulative Option shall be the default option under the Scheme. 7) The investors may refer to the Scheme Information Documents of the scheme for the Scheme Specific Risk Factors and Special Considerations of the respective scheme. The investors are also advised to go through the risks associated with the underlying fund as outlined in the Scheme Information Documents. In view of the above, investment in the Scheme should be regarded as long term in nature. The Scheme is, therefore, only suitable for investors who can afford to take the risks involved. If the investor chooses to invest using the Letter of Instruction route through HSBC India (QNIS route), the units will be held only by way of an Account statement issued by the AMC. If the investor wishes to exit his/her investments prematurely in case of any urgent financial requirement, he/she may sell their units, post demat of mutual funds, through the stock exchange. In such a case, he/she will need to approach the AMC directly. As mentioned in the SID, for conversion of physical holdings into demat form, the unit holders/investors will have to send the demat requests to their Depository Participants. The documentation required for the conversion of holdings to demat and the time taken for the completion of the process would be advised, to the investor by the AMC. In case the investor chooses to invest through Common AMC application form for Mutual funds (Non QNIS route), he/ she may opt for holding the units by way of an Account Statement or in Dematerialized ( Demat ) form. Please refer to the Scheme Information document for more details with regards to the option of investing through Common AMC application form for Mutual funds Based on the above information, I/We opt for the following route of transaction for investing into this product. Letter of Instruction (through HSBC India s QNIS services) AMC Application form Page 8 of 10
Confirmation Mutual Fund investments are subject to market risks, read all scheme related documents carefully. I/ We hereby declare the following: 1. I/We have read and understood this Key Features Document and have fully understood all the features and associated risks of IPMYF S2 PF and have agreed to invest in IPMYF S2 PF, after understanding the Indian equity markets and derivative products. 2. I/We understand and agree that investment of monies in IPMYF S2 PF shall be exclusively at my/our own risk and HSBC India shall not be responsible for any loss, costs or damages that I/we may incur in relation to such investment of monies. 3. I/We also understand and agree that HSBC India does not in any manner warrant, certify or Endorse IPMYF S2 PF or its features Signature Customer s Name Account Number Date For HSBC India office use only I have briefed the above investor on the description, benefits and limitations of the product in the KFD and the above declaration has been signed by the investor in my presence Signature Staff Name: Designation: Date: The Hongkong and Shanghai Banking Corporation Limited, India 2006 52/60 Mahatma Gandhi Road, Mumbai 400 001 This publication has been issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC India) in India, for the information of its customers only. This publication does not constitute investment advice or an offer to sell, or a solicitation of an offer to purchase or subscribe for any investment. The information herein is derived from publicly available sources that HSBC India considers reliable but which has not been independently verified. Whilst every care has been taken in compiling the information, HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of HSBC India only and are subject to change without notice. Opinions expressed herein do not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this publication. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies that may have been discussed in this publication and should understand that the views regarding future prospects may or may not be realized. Past performance is not indicative of future results. This document is for HSBC customers only. HSBC makes no representations that the products or services mentioned in this document are available to persons of any other country or are necessarily suitable for any particular person or appropriate in accordance with their local law. Among other Page 9 of 10
things, this means that the disclosures set forth in this document may not conform to rules of the regulatory bodies of any other country and investment in the products discussed will not afford the protection offered by the local regulatory regime in any other country. HSBC India or its affiliates or their officers, directors and employees may have investments in any of the products mentioned in this publication (or in any related products) and may from time to time, add to or dispose off any such investment. Please read the Scheme Information Document provided by the Portfolio Manager/AMC carefully before investing. For private circulation only. The information contained herein is confidential to the recipients thereof and may not be reproduced or otherwise disseminated. Page 10 of 10