April 2022

SALES
HANDBOOK
for Partners
PREFACE

It is no secret that over the past few years, Mutual Funds have emerged as an investment
avenue of choice for Indian investors across the length and breadth of the country and
across different demographic segments. Infact, the AUM of the Indian Mutual Fund
Industry has grown more than 5 times over in the last 10 years. Yet, MFs have barely
scratched the surface. There are approximately 3.3 Crore unique Mutual Fund investors
from a population of ~ 140 Crore. With financial literacy and financialisation of savings,
we see a huge potential going forward.

Mutual Fund intermediaries have played a vital role in increasing awareness of Mutual
Funds over the past couple of decades. Their role will get even more pivotal going
forward, as India and her financial markets gear up for next leg of opportunities and
challenges. Further, with increasing adoption of technology in financial services MFDs
are better equipped than ever before when it comes to adding value to investors. We do
believe that the personal connect between financial intermediaries and investors
coupled with relevant lucid communication of key financial aspects and technology is a
winning combination.

With an objective of helping our partners have more meaningful interactions and
impactful meetings with investors, we had earlier published our Sales Handbook for
Partners. Owing to the overwhelming response to the first edition, we are pleased to
bring to you an updated version of the Sales Handbook, with several new thoughts
based on your feedback and our internal brainstorming. We hope this book helps you
convey key financial concepts powerfully and that it becomes your trusted companion
whenever you meet your investors.

Happy Investing

2
INDEX
Why Mutual Funds? 4
Why Invest In Equities? 5-6
Understanding Markets 7
Decadal Growth Rates Of India 8
Power Of Compounding 9-10
Difficulty In Timing The Market 11
Understanding Inflation 12
Real Returns In Fixed Deposits 13
Debt MFs vs Fixed Deposits 14
Guidelines For New Earners 15
Emerging Investment Fads NEW 16
ELSS – Comparison With Other Investments Eligible For Tax Deductions 17
Traditional Tax Saving Avenues v/s ELSS (Category Average) 18
Small Sacrifices Can Make A Huge Difference! 19
SIP vs SIP Top Up 20
Starting Early And Cost Of Delay 21-22
Repay Your Home Loan Smartly 23-24
SIP And SIP Top Up Ready Reckoner 25
Guidelines For A Married Investor With Kids 26
Asset Allocation 27 28
-

Equity Allocation And Risk Appetite 29

Equity Schemes - Our Offerings 29
Hybrid Schemes – Our Offerings 30
Equity And Debt Cycles 31
Guidelines For An Investor At Pre-Retirement Stage 32
SWP vs IDCW 32
SWP 34-35
Avenues for Investment For Retirement 36-37
Debt Schemes – Our Offerings 38
Invest with peace of mind 39-40
How to invest in a rising Interest Rates cycle?NEW 41
Should you PAUSE your SIP? 42
Direct Stocks vs Mutual Funds 43
My Financial Organizer 44
Need for an Insurance 45
Health Insurance 46
Conversations with Clients NEW 47-51
Performance 52-56
Product Labeling 57-62

3
Investing in various asset classes like Gold, Debt and Equity with the help of
mutual funds can help eliminate many drawbacks of investing through
other routes.

Asset Classes
Gold and Silver Debt Equity
Routes of Physical Gold/Silver Fixed Deposits/ Direct Equity
investment and Gold Bonds Corporate Bonds

Drawbacks Physical Medium to Low Requires time and

Gold / Silver – liquidity expertise
Safety and purity
Inefficient taxation Relatively riskier
Gold Bonds – in FDs
Buying limits, lock-in
of 5 years, low Penalty for premature
liquidity withdrawal

Here’s how mutual fund route can help overcome the above drawbacks

Mutual Gold Exchange Debt Mutual Fund Equity Mutual Fund

Fund Route Traded Fund (ETF) &
Gold Fund,
Silver Exchange
Traded Fund (ETF)
& Silver Fund
Benefits of Buying limits – Different schemes Professional
investing in Min.1 unit through for different management
mutual funds stock exchange and investment horizon
no upper limit Diversification/robust
High liquidity risk management
High liquidity
Tax efficient returns High liquidity
No lock-in if held for 3 years
and above

Questions on every investor’s mind -

• What are the different avenues for investing?
• What are the drawbacks in different investing avenues?
• How are equity mutual funds better than direct stocks?
• How can mutual funds overcome these drawbacks?

4
It is normally seen that entrepreneurs create
wealth for themselves and their shareholders
by running good, growing businesses.

How can an individual learn and benefit from

these business stalwarts?

Either by starting a business (which may not

be as easy to scale up)
Or, by investing in an established growing
business

Long Term Wealth Creation

Investing in stock markets could help you create
wealth over the long term

Become a Part-Owner
When you buy a stock of a company, you become a
part owner and could make money as the
company’s profit increases

Real Returns
Investing in equities could help you beat inflation
as it generates positive real returns over the long
term
E.g. Let us assume the rate of return on an investment is 12% and inflation is 4%.
The real return in this case is 8% (12% - 4%).

Philip Fisher said that, The stock market is filled with

individuals who know the price of everything, but the
value of nothing.

5
 EQUITIES –
A long term asset for wealth creation
Equity markets do not move up in a linear fashion. Various news and events, both
domestic and global, drive the market in the short run. However, in the long term,
returns could be in line with the growth of the underlying economy.
As shown in Chart 1 below, markets have given positive returns in some years and
negative in others. However, if you observe Chart 2, in the long term, S&P BSE
SENSEX has delivered 15.68% CAGR between Mar 80 and Mar 22; which is
approximately 10% higher than the average inflation rate during that period.

Chart 1

Equity returns - NIFTY 50

100%
81%
80% 74% 71%
67%
60%
42%
40% 27%
24%
15% 18% 19% 19%
20% 12% 11% 7% 10% 15%

0%
-3% -2%
-20% -13% -9% -9%
-25% -26%
-40%
-36%
-60%

FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: MFI

Chart 2 (March 31, 1980 till March 31, 2022)

Equity (S&P
BSE SENSEX)
15.68%
Despite the risk and volatility in
the short term, over the long
Gold 8.85%
term, equity as an asset class
Bank FD 8.08% has outperformed others.
It has beaten inflation by the
Avg Inflation# 7.63% highest margin.
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Data source: World Bank

Questions on every investor’s mind -

Why are equities volatile?
Have equities given positive real returns over the long run?
How have equities performed compared to other asset classes?
CAGR – Compounded Annual Growth Rate
Source: Bloomberg, RBI Handbook of statistics on Indian Economy, World Gold Council, SBI
#Average Inflation is shown for comparison with returns from various asset classes.
*Data is of CAGR returns of various asset classes (Equity, Fold, Bank FD) for the period March 31, 1980 till March 31, 2022,
Average Inflation - Data as on January 31, 2022 (Provisional Figure for Feb-22 considered)
Equities are a volatile asset class. However, volatility in returns reduces as holding period increases.
Above asset classes are not strictly comparable. Above chart is for illustration purposes only.
Past performance may or may not be sustained in the future.
6
Understanding MARKETS
ROLLING 1 YR ROLLING 3 YR ROLLING 5 YR ROLLING 10 YR ROLLING 15 YR ROLLING 20 YR
YEAR END (1) SENSEX (2) GROWTH (3) GROWTH (4) GROWTH (5) GROWTH (6) GROWTH (7) GROWTH (8)
Mar-79 100
Mar-80 129 29%
Mar-81 173 35%
Mar-82 218 26% 30%
Mar-83 212 -3% 18%
Mar-84 245 16% 12% 20%
Mar-85 354 44% 18% 22%
Mar-86 574 62% 39% 27%
Mar-87 510 -11% 28% 19%
Mar-88 398 - 22% 4% 13%
Mar-89 714 79% 8% 24% 22%
Mar-90 781 9% 15% 17% 20%
Mar-91 1168 50% 43% 15% 21%
Mar-92 4285 267% 82% 53% 35%
Mar-93 2281 - 47% 43% 42% 27%
Mar-94 3779 66% 48% 40% 31% 27%
Mar-95 3261 -14% -9% 33% 25% 24%
Mar-96 3367 3% 14% 24% 19% 22%
Mar-97 3361 0% -4% -5% 21% 20%
Mar-98 3893 16% 6% 11% 26% 21%
Mar-99 3740 -4% 4% 0% 18% 20% 20%
Mar-00 5001 34% 14% 9% 20% 19% 20%
Mar-01 3604 -28% -3% 1% 12% 13% 16%
Mar-02 3469 - 4% -2% 1% -2% 14% 15%
Mar-03 3049 -12% -15% -5% 3% 15% 14%
Mar-04 5591 83% 16% 8% 4% 15% 17%
Mar-05 6493 16% 23% 5% 7% 15% 16%
Mar-06 11280 74% 55% 26% 13% 16% 16%
Mar-07 13072 16% 33% 30% 15% 8% 18%
Mar-08 15644 20% 34% 39% 15% 14% 20%
Mar-09 9709 -38% -5% 12% 10% 6% 14%
Mar-10 17528 81% 10% 22% 13% 12% 17%
Mar-11 19445 11% 8% 12% 18% 12% 15%
Mar-12 17404 - 10% 21% 6% 18% 12% 7%
Mar-13 18836 8% 2% 4% 20% 11% 11%
Mar-14 22386 19% 5% 18% 15% 13% 9%
Mar-15 27957 25% 17% 10% 16% 12% 11%
Mar-16 25342 -9% 10% 5% 8% 14% 11%
Mar-17 29621 17% 10% 11% 9% 15% 11%
Mar-18 32969 11% 6% 12% 8% 17% 11%
Mar-19 38673 17% 15% 12% 15% 14% 12%
Mar-20 29468 -24% 0% 1% 5% 11% 9%
Mar-21 49509 68% 15% 14% 10% 10% 14%
Mar-22 58569 18% 15% 15% 13% 11% 15%
Probability
29/43 34/41 36/39 33/34 29/29 24/24
Of Gain

Markets are volatile in the short term.

As the investment horizon increases, probability of loss reduces. E.g. the table shows that, in the last 43 years of SENSEX,
the likelihood of losing money for periods of 15 years or more has been NIL.
From Mar 1979 to Mar 2022, markets have given a CAGR of 15.96%. Equity returns have been more than the nominal GDP.
SENSEX has compounded wealth at 15.96% over the long run. At this rate, an investment in the stock market has
historically doubled approximately every 4.5 Years.

Questions on every investor’s mind -

Are equity markets volatile in the short term?
What is the probability of gain from equities in the long run?

Past performance may or may not be sustained in the future. The above is just an illustration. SENSEX returns are
computed for 1 ,3, 5, 10, 15 & 20 years from the date of investment. Source: BSE Ltd, Returns for 1 year are absolute and
above 1 year CAGR. CAGR – Compounded Annual Growth Rate: The rate at which an investment grows annually over a
specified period of time. Column 2: shows the value of S&P BSE SENSEX at the end of month of the respective period.
Probability of gains is the number of times the investor would have made positive returns. Column 3 to 8: Represents the
return earned on the investment for the referred period. For e.g. If you invested in Mar-79 when SENSEX Index was 100, then
1 year returns (in Mar-80) would have been 29%, 3 years returns (in Mar-82) would have been 30%, 5 years returns (in
Mar-84) would have been 20%, 10 year returns (in Mar-89) would have been 22%, 15 year returns (in Mar-94) would have
been 27%, and 20 year returns (in Mar-99) would have been 20%.
7
Decadal GROWTH
RATES of India
16.0
14.2 14.7
13.9
14.0
12.0 11.6
6.4
10.0 8.6 9.1

8.0 6.3
6.0
4.0 7.5 5.3
5.6 5.6
2.0
-
CY: 1981-1990 CY: 1991-2000 CY: 2001-2010 CY: 2011-2020

Decadal Real GDP Growth Inflation

1981-90 1991-00 2001-10 2011-20

• Indira Gandhi Assassination • Global Oil Crisis - Gulf War • Violence in Gujarat post Godhra • Coal, 2G etc, scandals
• Rajiv Gandhi Government • BoP Crisis, Reforms commence • 9/11, Dotcom Bubble • QE Tapering, PIGS, Greece
• Birth of IT Industry • Asian Crisis, Era of coalitions • Growth of Indian Generics Cos. • High FD & CAD, high inflation
• Rise of BJP in Indian Politics • 1st BJP govt., Kargil Conflict • 10 year Congress rule • BJP Government with full majority
• Advent of TV, Maruti Car • Growth of IT, Satellite TV, Mobiles • Lehman Crisis, • Demonetisation, GST,
QE - Quantitative Easing Make in India
• Crude Oil
• Currency Crisis
• Rate hike by Fed
The graph depicts the growth of the Indian economy over the past decades. • COVID-19
The nominal growth of the economy (real growth plus inflation) is a good proxy
for the average growth in businesses of a country.

Equities over time grow in line with the growth of underlying businesses/economy.
This is evident in the fact that the Indian economy has grown at a nominal growth of
~ 14% p.a., while SENSEX has grown at a CAGR of 15.96%. (From Mar 1979 to Mar 2022)
which is more than the nominal GDP growth.

Warren Buffet said that, If you aren't willing to own a stock for 10 years, don't even think about owning
it for 10 minutes.

Source: World Bank, Bloomberg; CAGR – Compounded Annual Growth Rate, GDP - Gross Domestic Product

8
How big an impact can power of
compounding have?
If you want to walk towards the moon, and start with 1 step on the first day and double
the steps every day, How long do you think it will take to reach the moon? 2 years? 20
years? Let’s find out!

Within 31 days, you will cover over 6.5 lakh km. and cross the moon.
Yes, it will just take 31 days.

But what if you delay by 15 days? You will cover only 10 km.

That’s the Power of Compounding.

POWER OF COMPOUNDING –
can make a huge difference to your wealth
The graph depicts how much an amount of ₹25,000 would grow to
if invested each year, at various rates of return across time.

6% 9% 12%
8000000
₹67 Lacs
7000000

6000000

5000000
₹37 Lacs
4000000

3000000
₹21 Lacs
2000000

1000000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Assumptions: Asset Class 1 returns: 6%; Asset Class 2 returns: 9%; Asset Class 3 returns: 12%

The difference in the rate of returns between Asset class 3 and 2 is only 3%. However,
when invested over the long term, the difference in terms of value is huge.
E.g., at the end of 30 years the amount of money accumulated from Asset Class 2 is just
₹37 Lakhs, while that of Asset Class 3 is ~₹67 lakhs.

Questions on every investor’s mind.

Does 1% or 2% difference in returns really make a huge difference in the long term?

Disclaimer: This is just an illustration with assumed rates to explain the power of compounding.
Returns are neither indicative nor guaranteed.

9
POWER OF
COMPOUNDING –
How it works
Let's see how much money can be accumulated through an SIP investment of ₹1000/month.

Tenure Investment Amount (in ₹) Appreciation (in ₹) Market Value (in ₹)

3 years 36,000 7,508 43,508
5 years 60,000 22,487 82,487
10 years 1,20,000 1,12,340 2,32,340
15 years 1,80,000 3,24,576 5,04,576
20 years 2,40,000 7,59,148 9,99,148
25 years 3,00,000 15,97,636 18,97,636

20,00,000
18,00,000
Appreciation Investment Amount
16,00,000
(in ₹) (in ₹)
14,00,000
12,00,000
10,00,000
8,00,000
6,00,000
4,00,000
2,00,000
0
3 years 5 years 10 years 15 years 20 years 25 years

Assuming an SIP amount of ₹1000 growing at 12% CAGR. This is just an illustration with assumed rates to explain the power of compounding.

It is evident from the graph that as the number of years increase, the money compounds
at a much higher rate.
Even though the original investment is very low, the capital appreciation is much higher.

This is the Power of Compounding.

Sam Altman said that, Compounding in all ways, is a very powerful force. Long term outlooks and
long term commitments are the easisest way to outperform other people.

SIP - Systematic Investment Plan

10
Difficulty in
TIMING THE MARKET

CAGR
15% 13.71%

12%
10.20%

9% 8.36%

6.32%
6% 4.50%

3%

0%
All days Missed 10 Missed 20 Missed 30 Missed 40
invested best days best days best days best days

Daily returns from January 1, 1990 to March 31, 2022

Source: Source: Internal calculations based on data procured from www.bseindia.com

The above chart shows that if you had stayed fully invested in stocks (as measured by the
S&P BSE Sensex) from January 1, 1990 to March 31, 2022, you would have earned
compounded annual returns of 13.71%.

However, if you had tried to time the ups and downs of the market, you would have risked
missing out on days that registered some of the biggest gains, and the CAGR would have
dropped drastically: 10.20% if you missed 10 best days, 8.36% if you missed 20 best days,
6.32% if you missed 30 best days and 4.50% if you missed 40 best days during this
period.

"It's time, not timing, that makes money in the market." - Unknown

Best days means the days on which the markets have given highest returns.
Daily returns are considered for determining best days.

11
UNDERSTANDING
INFLATION
Inflation erodes purchasing power of money
120
100 100

80
Rupees

60
Value at
40 the end of
30 years
20 11.34
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Time (in years)

Real Value of ₹100 will become ₹11.34 in 30 years at inflation of 7% p.a.

Price Movement
120 107
101.81
100
80
60
40 27
20 9.84 8
2.35
0
Petrol (per litre) Wheat (per kg) Toor Daal (per kg)
1990 2022
Source: Petrol costs are as on March 20, 1990 in Delhi (Source: www.in.reuters.com), and on March 31, 2022 in Delhi (Source: Ministry of Petroleum and
Natural Gas). The price of wheat grains is as sold as wholesale in Mumbai in April, 1990 (Source: Ministry of Agriculture) and on March 31, 2022 (Source:
Source: Ministry of Consumer Affairs, Food & Public Distribution). The prices of toor daal are as sold as retail in Mumbai in April 1990 (Source: Ministry of
Agriculture), and on March 31, 2022 (Source: Ministry of Consumer Affairs, Food & Public Distribution).

Inflation reduces your purchasing power.

Hence, today’s money will not buy you the same things tomorrow.
E.g. 1 Litre of petrol which used to cost ₹9.84 in 1990, costs ₹101.81 (2022)
Over the last 4 decades CPI Inflation in India has averaged at ~7% per year.*
A few specific examples above show how small increases over time end up
increasing costs dramatically.

Investing in equities can help you beat inflation better than other asset
classes and provides positive real returns over the long term.#

Will Roggers said that, Invest in inflation. It's the only thing going up.

Questions on every investor’s mind -

How does inflation affect your day-to-day life?
CPI - Consumer Price Index
*Source: RBI;
https://cacp.dacnet.nic.in/ViewReports.aspx?Input=2&PageId=63&KeyId=330
https://dir.indiamart.com/impcat/toor-dal.html?biz=30
https://in.reuters.com/article/india-fuel-reforms/table-fuel-prices-in-indias-capital-since-1989-idINSGE65209520100625
#Investments must be tailored to investor’s individual situation and objectives and therefore, investors should consult
their financial advisors to ascertain whether the products are suitable for them.
12
Real Returns in
Fixed Deposits
(FDs)
The graph hypothetically illustrates how
much real returns you can get by putting
your money in FDs.

8.00 7.50%
7.00

6.00

5.00 4.50%
4.00

3.00
2.34%
2.00

1.00 0.66%
0.00
Interest Inflation Tax on Interest Real Return

Assuming a tax bracket of 31.2% and a FD Rate of 7.5%.

Even though FDs offer guaranteed returns, after deduction of inflation

and tax, the real returns amount to hardly 0.66% of your principal.

Equity mutual funds, on the other hand, have the potential to

beat inflation and give higher returns over the long term.*
As of 31st March 2022, retail inflation (Consumer Price Index) was ~ 7%, Interest on Bank Term Deposit for a period between
3 to 5 years was 5.45%. Consequently, tax on interest would be ~ Rs 1.7 and with a real return of - 3.25%.

Questions on every investor's mind -

Why should I not invest in a Fixed Deposit when it is giving me guaranteed returns?

* Long term capital gains upto ₹1 lakh p.a. are tax exempt. Long-term capital gains tax applicable for gains above
₹1 lakh p.a. at 10% + surcharge (as applicable) + 4% cess, if units are redeemed after a year, as per prevailing tax laws,
which are subject to change from time to time. In view of individual nature of tax consequences, please consult
your tax advisor.

13
Debt MFs vs Fixed Deposits
AUM of Debt MF shows the dominance of institutional
investors in the category. Retail investors AUM as a
percentage of Total Debt AUM is minuscule. The primary
reason behind the under penetration of Debt MFs among Fixed

retail investors has been lack of understanding and Debt

awareness. Over the years, retail investors have favored Bank ₹ ₹

FDs due to their inherent nature of providing fixed return on
investments. However, Debt MFs tend to score over Banks FDs
on other parameters which are mentioned below:

Tax Efficient - Investment held for more than 3 years in Debt MFs is eligible for indexation
benefit. (refer table below)
Interest income is taxed on accrual basis in FDs while in Debt MFs income is taxed only when
dividend is received or units are redeemed
Diversification - The portfolio of Debt MF is generally spread across various issuers and
securities, thus reducing the single issuer risk
Debt MFs provide wide array of investment opportunities.

An illustration:
Particulars Fixed Deposits Taxation on Debt Fund
investments (with Indexation)

Amount Invested (in ₹) 100,000 100,000

Assumed Annualized Rate of Interest (%) 5% 6% 7% 5% 6% 7%
Gross value at Maturity (in ₹) 115,778 119,121 122,527 115,778 119,121 122,527
Indexed Cost of Acquisition (in ₹)# NA NA NA 110,679 110,679 110,679
Capital Gains/Interest on investments (in ₹) 15,778 19,121 22,527 5,099 8,442 11,848
Applicable Tax Rate (%) 42.74% 42.74% 42.74% 28.50% 28.50% 28.50%
Taxable Income (in ₹) 15,778 19,121 22,527 5,099 8,442 11,848
Tax Liability (in ₹) 6,744 8,173 9,629 1,453 2,406 3,376
Post Tax value at Maturity (in ₹) 109,034 110,948 112,898 114,325 116,715 119,151
Post Tax Gain (in ₹) 9,034 10,948 12,898 14,325 16,715 19,151
Post Tax Gain (CAGR%) 2.92% 3.52% 4.12% 4.56% 5.28% 6.01%

This is a hypothetical illustration to explain the concept of indexation and its benefit and actual figures would vary. The Scheme is not providing any
assured or guaranteed returns, neither forecasting any returns. HDFC Mutual Fund/HDFC AMC is not guaranteeing/offering/ communicating any
indicative yield on investments for the said Scheme. The features of fixed deposit investments and Debt Funds are not comparable. The comparison is
limited to tax efficiency, which is subject to changes in prevailing tax laws. Changes in tax structure may affect post tax returns. Interest calculation is
assumed on yearly cumulative basis. In view of individual nature of tax consequences, each investor is advised to consult his/her own professional tax
advisor.

Note: The tax rate assumed is the highest rate based on the current tax slabs for Individuals/HUFs with income above ₹5 crore. For domestic
corporate, corresponding tax rate applicable would be 34.94% for interest on term deposits and 23.30% for long term capital gains for open ended
debt funds. #Indexation assumed @3.44% p.a.

14
Term Insurance
Buy a Term Insurance policy as the
premium is low when you are in your early
20s. Sum assured should ideally be 10x of
your initial annual salary.
(Please consult your financial advisor before investing)

Tax Savings
Investors can save tax and create wealth by
investing in Equity Linked Savings Scheme
(ELSS) and Notified Retirement Funds.

SIP for Wealth Creation

Start an SIP when you are young as it is
rightly said that an early bird catches the
worm.

Invest in yourself or no one else will.

SIP – Systematic Investment Plan

15
A look at the emerging
Investment Fads
In the past few months following the pandemic investors have been introduced to a wide range of popular
new-age investment instruments, often categorized under the umbrella of Virtual Digital Assets (VDAs). Allured
by the stories of life changing gains, the uninformed investor has jumped right onto this hype-driven bandwagon.
With minimum barrier to entry and having little to no regulation (or regulatory recourse in the event of a major
loss) – these VDA’s have time and again proven to be an investment where majority of investors may lose their
hard earned money. While some investors find it hard to contend with the hyper volatile nature of VDAs, others
due to lack of awareness may become vulnerable to elaborate scams or sham ICOs (initial coin offerings).

Breaking down these Investment Fads

Investment Fad Volatility Regulatory Principle of Valuation

Cryptocurrency Highly Not regulated Varies. For instance Most Cryptos

Volatile with but taxed. operate on Speculation (hype)
Crypto assets can be mined or
unpredictable and Scarcity Value, whereas
created by anyone, by solving
price All profits from Stablecoins; another type of
complex problems.
movement. cryptocurrency cryptocurrency have their value
The coins are stored on open
trading in the pegged to a real world fiat
digital ledgers that are
country is subject currency or commodity. Eg.
maintained by the public. It can
to a 30 percent There is a cryptocurrency that is
be bought or sold on online
tax. Furthermore, designed in such a way that it's
market places (exchanges).
no deductions, value is always 1 USD.
set-offs, or
NFTs (Non-Fungible Tokens) carryovers are NFTs like any other
permitted. speculative asset are assessed
Are one of a kind tokens (digital
based on perceived value.
art, music etc.) that cannot be
Some NFTs are more rare and
replicated. Most NFTs are
‘collectible’ than others –
usually located on the ETH or
often value is driven up by
SOL blockchain, and can store
bidders on NFT marketplaces.
extra information like
proof/chain of ownership.

Digital Gold Usually stable, Lack of regulatory Traded on the exchange,

reflective of clarity. hence value corresponds to
Is bought online and it is stored
actual gold NSE and BSE have last closing price.
in insured vaults by the seller
price asked brokers to
on behalf of the buyer. One can
movement. desist from
also choose to redeem it as
physical gold in the form of offering digital
jewellery, coins and bullion. gold on their
platforms. This
There's no upper limit on was followed up
purchase of digital gold. in October 2021
However, the maximum limit to with SEBI barring
buy gold in a single day is INR RIAs from offering
2 lakh, with a one-time levy of digital gold as an
3% GST. investment option
to investors.

Conclusion
Even though blockchain technology at large does have scope of utility in the future.
It is important to understand that we are still at a very nascent stage of this innovation.
Without any regulatory clarity or oversight – the future of these VDAs remains uncertain
and it may be advisable for investors to steer clear of such erratic investments.

16
Equity Linked Savings Scheme (ELSS) –
Comparison with other investments eligible
for tax deductions

ELSS

Invests Lowest Tax efficient Deduction

primarily in lock-in period returns under Income-tax
equities of 3 years Act,1961

Investment Options Minimum Lock-in Returns Tax

under Sec 80C Investment (in ₹) years (%) Treatment

Public Provident Fund (PPF) 500 15 7.1% Interest

tax free
National Saving 100 5 6.8% Interest
Certificate (NSC) income taxable
Interest
Bank FD 1000 5 5.10% income taxable

Equity-Linked Saving Market IDCW taxed

500 3 at marginal rate
Scheme (ELSS) Linked
and capital gains
taxed at 10%^
(IDCW: Income Distribution
cum Capital Withdrawal)

Past performance may or may not be sustained in the future. Returns are not assured or guaranteed. Information
herein is as per prevailing tax laws, which are subject to change. In view of individual nature of circumstances,
please consult your professional tax / financial advisors before taking any investment decisions.

^Plus applicable surcharge and cess. ₹1 lakh exemption available for capital gains.
Source: https://www.indiapost.gov.in/Financial/Pages/Content/Post-Office-Saving-Schemes.aspx
https://www.sbi.co.in/web/interest-rates/deposit-rates/retail-domestic-term-deposits?inheritRedirect=true,
as on 31-3-2022.

17
Traditional
Tax Saving Avenues
v/s
ELSS (Category Average)
Let’s see how an annual investment of ₹1,00,000 in March every year
since 1996 would have performed till date.

Investment NIFTY 50 Investment Investment

Period Amount PPF Interest
value in ELSS
invested (₹) Rates Value in PPF @ TRI Level value in NIFTY 50
Ended (Category
Average)
Mar-96 1,00,000 12.00% 100,000 1,042 100,000 100,000
Mar-97 1,00,000 12.00% 212,000 1,024 198,275 190,580
Mar-98 1,00,000 12.00% 337,440 1,181 328,703 329,716
Mar-99 1,00,000 12.00% 477,933 1,140 417,269 633,389
Mar-00 1,00,000 11.00% 634,289 1,624 694,040 1,580,611
Mar-01 1,00,000 9.50% 803,268 1,230 626,030 1,014,652
Mar-02 1,00,000 9.00% 979,244 1,229 725,246 1,244,241
Mar-03 1,00,000 8.00% 1,166,560 1,085 740,084 1,295,987
Mar-04 1,00,000 8.00% 1,359,884 2,020 1,478,480 2,832,095
Mar-05 1,00,000 8.00% 1,568,675 2,370 1,834,210 4,373,528
Mar-06 1,00,000 8.00% 1,794,169 4,029 3,218,426 7,807,190
Mar-07 1,00,000 8.00% 2,037,703 4,606 3,779,419 8,033,979
Mar-08 1,00,000 8.00% 2,300,719 5,763 4,828,801 9,796,040
Mar-09 1,00,000 8.00% 2,584,776 3,721 3,217,470 6,165,512
Mar-10 1,00,000 8.00% 2,891,559 6,522 5,739,788 11,856,127
Mar-11 1,00,000 8.00% 3,222,883 7,328 6,549,417 12,990,163
Mar-12 1,00,000 8.60% 3,587,160 6,728 6,113,716 12,500,110
Mar-13 1,00,000 8.80% 4,002,830 7,315 6,746,985 13,535,720
Mar-14 1,00,000 8.70% 4,451,076 8,740 8,160,864 16,651,328
Mar-15 1,00,000 8.70% 4,938,320 11,202 10,559,824 24,872,419
Mar-16 1,00,000 8.70% 5,467,953 10,326 9,833,579 23,256,383
Mar-17 1,00,000 8.10% 6,020,982 12,407 11,915,619 29,307,480
Mar-18 1,00,000 7.60% 6,589,113 13,866 13,416,755 33,094,102
Mar-19 1,00,000 8.00% 7,203,064 16,146 15,723,476 34,773,334
Mar-20 1,00,000 7.90% 7,873,907 12,106 11,888,787 26,573,841
Mar-21 1,00,000 7.10% 8,532,954 20,887 20,612,338 45,343,069
Mar-22 1,00,000 7.10% 9,238,794 25,118 24,888,408 54,570,629

"A fine is a tax for doing something wrong. A tax is a fine for doing something right." - Anonymous

ELSS - Equity Linked Savings Scheme

Past performance may or may not be sustained in the future.
The above simulation is for illustration purpose only. @ Year end balance has been arrived at by adding interest at the
rates notified by the Competent authorities from time to time. Unlike PPF , investments in Mutual Funds are subject to
market risks. Hence, the performances are not strictly comparable. As NIFTY 50 TRI data is not available since 31st March
1996, performance is calculated using composite CAGR of NIFTY 50 PRI values from Mar 29, 96 (Data for March 31, 96 is
not available) to Jun 29, 99 and TRI values since Jun 30, 99.

18
 Can you give up 1 cigarette per day?
Can you drink one pint of beer less over the weekend?
Can you spend less on movies / dinner?

A small sacrifice Skip 1 cigarette Skip 1 beer over Spend less on

per day i.e., 365 weekend i.e., 52 movies / dinner
cigarettes in a year beers over a year

Cost of 1 cigarette - Cost of 1 pint - Spend ₹1500 less

Cost ₹15 ₹200 on movies / dinner
every month

Amount Saved
5,475 10,400 18,000
per year (in ₹)

Invest the amount saved annually for next 35 years

Assumed Rate of
12% 12% 12 %
Return (%)

Accumulated
amount at the end 26,46,961 50,28,016 87,02,336
of 35 years (in ₹)

Robert Arnott said that, In investing, what is comfortable is rarely profitable.

Returns are assumed only to show the power of compounding and neither guaranteed nor indicative of any mutual fund
scheme / other asset class.

19
 SIP vs SIP TOP UP
As per study done on behavioral finance by researchers
Shlomo Benartzi and Richard Thaler, it is difficult to convince
people to cut their spending now and save more, and instead
simply encourage them to save more tomorrow. You can read
about this concept in detail in the book Save More Tomorrow
by Shlomo Benartzi. This concept can be smartly used with the
help of SIP Top Up.

SIP
SIP per month ₹10,000
Assumed Rate of Return 12%
Period of Investment 30 Years
Total Amount Invested ₹36 Lakhs
Corpus at the end of 30 years ₹3.53 Crores

SIP Top Up
SIP per month with Top Up ₹10,000, increased
by 10% per year

Assumed Rate of Return 12%

Period of Investment 30 Years
Total Amount Invested ₹1.97 Crore
Corpus at the end of 30 years ₹8.83 Crore

Topping up / increasing a ₹10,000 SIP by just 10% every year

increases the corpus at the end of 30 years by 150%.

Advantages of SIP Top Up

Adapt your investments / savings to your rising income levels
Reach your financial goals faster
Fight inflation
Ease of transacting on digital platforms

SIP - Systematic Investment Pan

Returns are assumed only to show the power of compounding and neither
guaranteed nor indicative of any mutual fund scheme / other asset class.

20
STARTING EARLY AND
COST OF DELAY
Mr. A started investing ₹10,000
every month at the age of 25; while
Mr. B started investing ₹15,000
every month at the age of 35. Both
invested ₹36 lakhs till the age of 55.
Mr. A Mr. B

Starts investing at the age of (in years) 25 35

Monthly SIP instalment (in ₹) 10000 15,000

Assumed rate of return (p. a.) 12% 12%

Investment till the age of (in years) 55 55

Total Investment (₹ in Lakhs) 36 36

Accumulated value at the end (₹ in Crs) 3.53 1.50

At the end of the investment period, Mr. A’s investments grew to 3.53 Cr; while that of
Mr. B grew to 1.5 Cr - a difference of more than 2 Cr.
This is what starting to invest early in your life can do to your wealth.

Monthly Instalment required for

Mr. B to catch up with Mr. A
₹35,329.24

If Mr.B wants to accumulate similar wealth as Mr. A, he will have to invest ₹35,329 every
month, i.e. More than 3 times the monthly instalment amount of Mr. A.
So, start early and avoid the cost of delay.

Questions on every investor’s mind -

Why is starting to invest early so critical?
What will be the cost of delaying investment by few years?

This is only an illustration to explain the concept of power of compounding and

not indicative / assuring of returns by any asset class.

21
REPAY YOUR HOME
LOAN SMARTLY!!
Assume you have taken a home loan of ₹25 lakh at the rate of 7%^. The EMI payable for
20 year period would be ₹19,382. However, if you extend the loan period to 30 years, the
same EMI would reduce to ₹16,632.
So rather than taking a shorter loan period, opt for 30 year loan period and start an SIP of
the differential amount i.e. ₹2,750 in an Equity Mutual Fund scheme of your choice.

Who is smarter at
repaying a home loan
of ₹25 Lakhs? Mr. X Mr. Y
Loan repayment term 20 years 30 years
EMI per month* (in ₹) 19,382 (A) 16,632 (B)
SIP per month (in ₹) - 2,750 (A-B)
After 17 years
Total EMI paid (in ₹) 39,54,025 33,93,043
Total SIP Investment NIL 5,60,982
Total Outflow 39,54,025 39,54,025
Principal outstanding (in ₹) 6,27,730 17,00,542
Total SIP Corpus (in ₹) #
- 18,36,723
SIP corpus left after paying 1,36,181
O/S principal (in ₹)
#Assumed rate of return for SIP - 12% CAGR

Mr. X continues to pay his EMI till the end of the loan repayment term (for 3 more years).
while Mr. Y repays his loan from his returns from SIP.
Total savings of Mr. Y
EMI for remaining 3 years SIP corpus left after paying Total Savings (in ₹)
(in ₹) (A) O/S principal (in ₹) (B) (A+B)

6,97,769.04 (19,382 x 36) 1,36,181 8,33,950

Effects of taxation have not been considered in the above illustration.
*Calculation - https://www.hdfc.com/home-loan-emi-calculator. Calculations are for illustrative purposes only.
Mutual fund investments are subject to market risks and returns are not guaranteed or assured.
^7% is an assumed median floating rate of interest over the tenure of the loan. The actual rate of interest might move up or down
throughout the tenure of the loan due to the floating nature of interest rates, and thereby changing the overall calculations.

22
Alternatively, if you cannot opt
for a 30 year home loan due to
any reason, you can choose to
set aside a marginal amount
(0.1% of principal) from your
savings to start an SIP with an
aim to recover
the interest on your loan.

Principal (in ₹) 25,00,000

EMI (in ₹) 19,382*
Total EMI to be paid over 20 years (in ₹) 46,51,794
Hence, total interest to be paid (in ₹) 21,51,794

Start an SIP which is 0.1 % of loan amount

Return on SIP 12%
Minimum SIP required to match return on SIP with 3,750
Interest on loan (Monthly SIP as a % of Loan Principal)

Total SIPs over 20 years (in ₹) 9,00,000

Final value of SIP after 20 years (in ₹) 37,09,708#
Capital Appreciation (in ₹)
(greater than the interest component of home loan) 28,09,708
Difference (SIP Appreciation-Interest on Loan) 6,57,914

Effects of taxation have not been considered in the above illustration.

*Calculation - https://www.hdfc.com/home-loan-emi-calculator
#Assumed rate of return on the SIP - 12% p.a. Calculations are for illustrative purposes only.
Mutual fund investments are subject to market risks and returns are not guaranteed or assured.

23
SYSTEMATIC INVESTMENT PLAN -
Ready Reckoner

Monthly SIP amount based on assumed rate of return on investment and

corresponding tenure in years
^Example - To accumulate ₹1 Crore in 10 years time, a monthly SIP of ₹45,700 is required, if the assumed rate of return is 11% p.a.

All the above figures are rounded off to the nearest 100.

Estimated investment value (₹ in Lacs) based on assumed rate of return

on investment and corresponding tenure in years

*Example - A monthly SIP of ₹10,000 for 15 years will accumulate to ₹45.9 Lakhs, if the assumed rate of return is 11% p.a.
All the above figures are rounded off to the nearest Lac.

The above investment simulations, based on assumed rate of return(s) is for illustration purposes only and should not be
construed as a promise/forecast on minimum returns and safeguard of capital. Loads & expenses have not been considered
in the calculations. For the purpose of calculations, we have assumed monthly compounding convention for the tenure of the
SIP at the assumed rate of return.

24
SIP Top Up - Ready Reckoner
SIP with 10% annual Top Up

Monthly SIP amount in Rupees (rounded off to the nearest 100s) based
on assumed rate of return on investment and corresponding tenure in

*Illustration
Initial installment of ₹11,500 will increase over the tenure (say 5 years)
@10% p.a. (as illustrated alongside) to accumulate ₹10 Lacs in 5 years, if the
assumed rate of return is 7% p.a.

(Amount in Rs. Lakhs)

Estimated investment value (rounded off to the nearest 10,000s) based on assumed
rate of return on investment and corresponding tenure in years.
^Illustration
Initial installment of ₹1,000 will increase over the tenure (say 5 years) @10%
p.a. (as illustrated alongside) to accumulate ₹1 Lac in 5 years, if the assumed
rate of return is 11% p.a.
The above investment simulation, based on assumed rate of return(s) is for
illustration purposes only and should not be construed as a promise/forecast
on minimum returns and safeguard of capital. Loads & expenses have not
been considered in the calculations. For the purpose of calculations, we have
assumed monthly compounding convention for the tenure of the SIP at the
assumed rate of return.
SIP - Systematic Investment Plan

25
Guidelines for
a MARRIED
INVESTOR WITH
KIDS
Term Insurance and Mediclaim
Buy a Term Insurance policy that may help
the surviving family members in case of an
eventuality. Buy a Medical Floater Policy to
cover medical expenses for the entire
family.

Goal Based Investments through

Lumpsum or SIP
Start investing for your Children's Education
and your own Retirement through Goal
Based Funds. These funds create wealth
and also maintain discipline. You should
also consider Topping up your existing SIPs.

Contingency fund
Invest a reasonable amount in Liquid fund
for any near-term contingencies (should
ideally be 3-4x of Monthly Income).

Ensure Disciplined Spending

and maintain Asset Allocation
by diversifying your investments.

SIP – Systematic Investment Plan

26
Asset Allocation
“Don’t put all your eggs in one basket”.
It’s an age old saying and applies to investments as well.

Asset Allocation is one of the important steps in one's investment strategy.

It means to diversify investment portfolio among different asset categories such as:

Equity – Equity represents Debt – Debt represents fixed Income/bonds

shares of ownership in a which means loan given to a borrower for a
company. They have a potential specified time period in return of regular
for capital growth with high interest payments. They have a potential for
volatility. stable growth with low volatility.

Cash - Cash is suitable for very Gold - Gold is a hedge against

short term needs such as inflation and currency risk.
parking money for emergency
needs or for surplus fund where
the investment is undecided.

Asset Allocation Strategies

There are two types of Asset Allocation strategies:

1 Strategic Asset Allocation

Risk profiling – to identify whether you are a conservative investor or an aggressive investor.

Time frame - to identify how much time is there for each of your goals.

Return requirement – Return requirement is expected returns, based on which calculations are made
for desired corpus.

One of the simple examples of Strategic Asset Allocation is Age based asset allocation.
100 minus your age is your equity allocation, as you grow old your equity allocation will decrease
and debt allocation will increase.

2 Tactical Asset Allocation

Tactical asset allocation is view based and decision is made based on the behaviour of the
market.
If you believe that market will move up, you will increase your allocation towards
equity or if you believe the interest rate are going to fall, you will increase your
allocation towards GILT funds (which is part of Debt).

27
Why Asset
Allocation?
Winners Rotate
No single asset classes has consistently delivered highest return year after year
and different asset classes perform differently under different market cycles.
Winner of one year may become loser in the following year and vice-a-versa.

The table below shows importance of diversifying within the asset classes while
creating the portfolio. Schemes should be selected in a way that all schemes
should not go up or fall together thereby reducing overall risk of portfolio.

The table below shows how various indices have performed year-on-year basis:

CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019 CY 2020 CY 2021

41.43% 9.03% 57.87% 9.70% 14.13% 58.73% 8.36% 21.08% 27.56% 60.70%

38.75% 8.78% 56.87% 8.82% 10.90% 49.28% 7.58% 11.83% 23.02% 47.51%

32.51% 7.89% 34.88% 8.37% 10.64% 32.88% 6.85% 10.19% 22.77% 26.45%

11.99% 7.66% 16.52% 8.23% 10.18% 7.49% 6.75% 9.98% 16.08% 7.54%

11.70% 1.45% 11.85% 7.77% 8.31% 6.66% 5.91% 9.24% 12.32% 4.55%

11.49% -3.71% 11.42% 7.60% 7.50% 6.49% 2.57% 6.86% 12.01% 3.60%

11.26% -6.76% 9.21% -1.26% 5.01% 5.95% -14.60% -3.40% 11.44% 2.78%

8.54% -17.96% 2.18% -7.88% 3.24% 2.20% -28.36% -8.54% 4.61% -2.67%

Liquid Corporate Bond Large Cap Small Cap

GILT Credit Risk Midcap Gold

Disclaimer:Past Performance may or may not be sustained in future. Liquid is represented by Crisil Liquid Fund Index, GILT is represented
by Cisil Dynamic Gilt Index, Corporate Bond is represented by Nifty Corporate Bond Index, Credit Risk is represented by Nifty Credit Risk
Bond Index, Large Cap is represented by Nifty 100 TRI, Midcap is represented by Nifty Midcap 100 TRI, small cap is represented by Nifty
Small Cap 100 index and Gold is represented by World Gold Council INR.

Source: www.amfiindia.com and Gold prices from World Gold Council

28
Equity Allocation and
Risk Appetite
How much equity exposure should an individual investor have?
As much as one does not need for a long term (minimum 5 to 7 years)
As much investment wherein one can digest a temporary erosion to the tune
of 25% to 30%
As much equity which keeps one financially and emotionally stable (if one is
temperamentally weak and gets disturbed with any short term volatility then one
needs to have commensurate exposure to equity)
Once an investor is convinced of these points, he/she can start investing based on
his/her asset allocation, irrespective of market valuation.

Investments must be tailored to investor’s individual situation and objectives and therefore, investors should consult their financial advisors to
ascertain whether the products are suitable for them.

EQUITY SCHEMES – Our Offerings

Equity

Active (15 schemes) Passive (10 schemes)

Diversified Thematic ELSS

HDFC Infrastructure Fund HDFC TaxSaver
HDFC Housing Opportunities Fund
HDFC Banking & Financial Services Fund Solution Oriented
HDFC Children's
Gift Fund

Market Cap Based Non Market Cap Based HDFC Retirement

Savings Fund

Large Cap Flexi Cap

HDFC Top 100 Fund HDFC Flexi Cap Fund

Mid Cap Value

HDFC Mid Cap Opportunities Fund HDFC Capital BuilderValue Fund
Small Cap Focused
HDFC Small Cap Fund HDFC Focused 30 Fund
Large & Mid Cap Dividend Yield
HDFC Large and Mid Cap Fund HDFC Dividend Yield Fund

Multi Cap
HDFC Multi Cap Fund Index ETFs
HDFC Index Fund - SENSEX Plan HDFC NIFTY 50 ETF
HDFC SENSEX ETF
HDFC Index Fund - NIFTY 50 Plan HDFC Banking ETF
Additionally:
HDFC NIFTY Next 50 Index Fund HDFC Gold ETF
Our Fund of Funds Offerings HDFC NIFTY50 Equal Weight Index Fund
HDFC Asset Allocator Fof HDFC NIFTY 100 Index Fund
HDFC Developed World Indexes Fof HDFC NIFTY100 Equal Weight Index Fund
HDFC Dynamic PE Ratio Fof

29
 HYBRID SCHEMES – Our Offerings
Aggressive Hybrid
Fund
Expected Return

HDFC Hybrid Equity

Fund
Balanced Advantage
Fund
Multi Asset HDFC Balanced
Allocation Fund Advantage Fund
Asset Allocation HDFC Multi Asset
Fund of Funds Fund
HDFC Asset Allocator
Equity Savings Fund
Fund of Funds
HDFC Equity Savings
Conservative Hybrid Fund
Fund
HDFC Hybrid Debt
Fund

Expected Risk
Equity Oriented Hybrid Scheme Debt Oriented Hybrid Scheme
Disclaimer: In view of the individual circumstances and risk tolerance, each investor is advised to consult his / her professional advisor before making a
decision to invest.*Arbitrage Fund is also classified as hybrid fund but is not considered for potential long term capital appreciation, hence not covered
in this presentation. Risk Return Graph is defined as per equity exposure, as on 31st March 2022.

HYBRID FUNDS
Investor 1 invests ₹100 in equity and debt separately, with 25% of his capital in equity and
rest 75% in debt. Investor 2, on the other hand, invests ₹100 in a Hybrid Debt Fund which
has the same asset allocation. Let’s see what happens in 2 years.
Investor 1 Investor 2
Equity Debt ₹100 invested in
Hybrid Debt Fund
Asset Allocation in 25% (₹25) 75% (₹75) (75% Debt and
the beginning 25% Equity)
Year 1 returns -5% 7% 4.00%
Investor decision Sells due Hold Hold
after year 1 to losses
Asset Allocation (77% Debt and
0% 100%
after Year1 23% Equity)
Year 2 Returns 30% 7% 12.75%
Year 1 + Year 2 Returns
(absolute) 23.5% 14.5% 16.74%
Value of ₹100 invested
after 2 years 111.28 116.74
Investors tend to evaluate each investment separately. Fear of loss leads to irrational
decisions. E.g. Investor 1 is tempted to sell his equity investment after year 1 due to losses.

Hybrid products have lower volatility and thereby reduces panic amongst investors.
The returns mentioned in the above table are assumed and are purely for illustration purpose. For detailed investment
strategy refer SID. HDFC Mutual Fund/HDFC AMC is not guaranteeing returns on investments made in this scheme.

30
Equity and
Debt cycles

100%

77% 78%
80%

60% 57%

42%
39%
40% 33%
28% 29% 30%
27% 26%
23%
19% 16%
20% 13% 13% 13% 11% 8%
15% 15% 13%
7% 7% 4% 9% 9%
5% 4% 5% 4% 3% 5% 6%
0% 1%
0%
-4% -1% -3%
-20% -13% -15% -12%
-24%
-40%

-60% -51%
CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

NIFTY 50 TRI NIFTY 10 Yr G Sec

It is difficult to predict market cycles – hybrid funds provide a solution

The above asset classes are not strictly comparable as different asset classes have different risk profile.

Over the years, it has been observed that performance of various asset
classes keep on changing and no single asset class continues to
outperform or underperform.

As hybrid funds invest in both, equity and debt, it can be an ideal solution
for a retail investor, with low to moderate risk appetite.

Seth Klarman said that, The stock market is the story of cycles and of human behavior that is
responsible for overreaction in both directions.

31
 Guidelines for
an investor at
Pre-Retirement
stage*
Consider moving your investments into low
risk asset class like Debt and opt for
Systematic Withdrawal Plan that can
provide you with monthly cash flows post
retirement in a tax efficient manner.

Consider keeping some investments in

equities as it may provide a hedge against
longevity risk.

SWP vs IDCW (Income Distribution cum Capital Withdrawal)

The below table shows the difference between withdrawing money regularly through
SWP and receiving IDCW.

Systematic Withdrawal Plan IDCW

Withdrawals through SWP is subject to capital IDCW are taxed at marginal income tax rate.
gains tax
Dividend is paid irrespective of market
Tax is paid only when there is a gain
movements, and taxed accordingly.
Exemption of ₹1 lakh available for LTCG No exemption

Monthly cash flow under SWP is assured Cash flow is subject to availability of
distributable surplus in the scheme

It is advisable to choose a SWP amount lower than the expected return. If we opt for a higher amount for
withdrawal, we may end up withdrawing our capital.
Retail investors may be better off opting for SWP under Growth option over IDCW option, as it helps to
provide monthly cash flow in a tax efficient manner.

*Upto 5 years before retirement

SWP - Systematic Withdrawal Plan, LTCG – Long Term Capital Gain
Above is as per prevailing tax law, which are subject to change. Always consult your tax advisor
before taking investment decisions.

32
A tax efficient option - SWP

SWP IN THE FIRST YEAR OF INVESTMENT

SWP IN Short term capital gains tax at 15% only on the
YOUR gains made.
EQUITY
MUTUAL SWP AFTER THE FIRST YEAR OF INVESTMENT
FUNDS LTCG tax @ 10% only on the gains made, subject to
exemption# of ₹1 lakh for the financial year.

SWP IN THE FIRST 3 YEARS OF INVESTMENT

SWP IN Short term capital gains tax at applicable tax slab of the

DEBT
investor only on the gains made.

MUTUAL SWP AFTER 3 YEARS OF INVESTMENT

FUNDS Long term capital gains tax @ 20% only on the gains
made, with indexation benefit.

A careful understanding of SWP brings out the tax efficiency of the facility.
It is important to see how SWP can be beneficial to a particular investor.

SWP - Systematic Withdrawal Plan, LTCG - Long Term Capital Gain

# Exemption of ₹1 lakh includes LTCG on transfer of equity share in a company or a unit of an equity oriented
fund or a unit of a business truzst. The same will be taxed without indexation and without foreign currency
fluctuation benefit. Above is as per prevailing tax laws, which are subject to change. Always consult your tax
advisor before investing.

33
Tax impact explained
Mr. Sharma opts for SWP in the growth option of a equity oriented mutual fund. In SWP,
every withdrawal consists of principal component and gain component. Tax is applicable
only on the gain component. Gain component is smaller as compared to principal
component during initial withdrawals. Hence, tax is lower.
Over time, the principal component of the payout decreases giving way to the gain component.
Let us consider the example below:

Initial Investment: ₹ 1,00,000 SWP amount each month: ₹ 1,000

Total withdrawal over 12 months: ₹ 12,000 Tax Paid: ₹ 305

Taxes paid on gain as percentage of total 30% tax on interest bearing

withdrawal over 12 months : 2.55% VS traditional investments
Income

Refer the table below for detailed calculations:

Date NAV Number Units Units O/s Cashflow Gain Principal Capital Value of Investment
of Units Transacted (₹) Component Component Gains Tax @ in the Fund (₹)
(₹) (₹) 17.472% (₹)

01-01-2021 40.97 - 2,440.82 2,440.82 1,00,000 1,00,000 1,00,000

01-02-2021 43.71 2,440.82 (22.88) 2,417.94 (1,000) 62.65 937 11 1,05,683

01-03-2021 44.23 2,417.94 (22.61) 2,395.33 (1,000) 73.74 926 13 1,05,949

01-04-2021 45.77 2,395.33 (21.85) 2,373.49 (1,000) 104.88 895 18 1,08,634

01-05-2021 46.93 2,373.49 (21.31) 2,352.18 (1,000) 127.04 873 22 1,10,393

01-06-2021 47.66 2,352.18 (20.98) 2,331.20 (1,000) 140.36 860 25 1,11,103

01-07-2021 47.41 2,331.20 (21.09) 2,310.11 (1,000) 135.90 864 24 1,09,530

01-08-2021 49.63 2,310.11 (20.15) 2,289.96 (1,000) 174.49 826 30 1,13,650

01-09-2021 48.76 2,289.96 (20.51) 2,269.45 (1,000) 159.82 840 28 1,10,665

01-10-2021 47.78 2,269.45 (20.93) 2,248.52 (1,000) 142.46 858 25 1,07,425

01-11-2021 51.90 2,248.52 (19.27) 2,229.25 (1,000) 210.64 789 37 1,15,704

01-12-2021 51.22 2,229.25 (19.52) 2,209.73 (1,000) 200.18 800 35 1,13,191

01-01-2022 52.27 2,209.73 (19.13) 2,190.60 (1,000) 216.14 784 38 1,14,495

Total Value Returned Total 305 1,26,495

Tax To Be Paid 305

Post Tax Return 1,26,190

Particulars SWAP Value Principal Taxable Income Tax to be Paid Tax as a % of Units Value of
(₹) Returned (₹) (₹) @ 17.472% (₹) SWAP (%) Outstanding Investment

Amount 12,000 10,252.00 1,748.00 305 2.55^ 2190.60 1,14,495.00

SWP works out to be a tax efficient solution to structuring regular payouts.

SWP - Systematic Withdrawal Plan
The above simulation is for illustration purposes only. HDFC Mutual Fund/AMC is not guaranteeing return on investments made in
the scheme. Investors should be aware that the fiscal rules/ tax laws may change and there can be no guarantee that the current
tax position may continue indefinitely. Short Term Capital Gains (STCG) at the rate of 15% plus applicable surcharge and cess.
Investors are advised to consult their tax advisers. As the units redeemed are less than 15% of the units allotted on 01.01.2021, NIL
exit load has been considered. ^This is for illustration purpose only, tax as a % of SWAP could be higher in subsequent years.
Note: Ideally SWP should be started after completion of 1 year so that the gains are taxed under long term capital gains tax.

34
ILLUSTRATION OF SWP -
RETIREMENT PLAN

SIP of "X" amount SIP of "X" amount SIP of "X" amount SIP of "X" amount
for 10 years and for 15 years and for 20 years and for 25 years and
SWP of "2X" for SWP of "4X" for SWP of "9X" for SWP of "18X" for
Illustration the next 20 years the next 20 years the next 20 years the next 20 years

Monthly SIP amount ₹5,000 ₹5,000 ₹5,000 ₹5,000

SIP tenure in years 10 15 20 25

Assumed annual 12% 12% 12% 12%

rate of return
Total amount invested ₹6,00,000 ₹9,00,000 ₹12,00,000 ₹15,00,000
through SIP

Value at the end of SIP ₹11,61,695 ₹25,22,880 ₹49,95,740 ₹94,88,175

SWP starts after the completion of SIP investment

Monthly SWP amount ₹10,000 ₹20,000 ₹45,000 ₹90,000

SWP tenure in Years 20 20 20 20

Total SWP amount (A) ₹24,00,000 ₹48,00,000 ₹1,08,00,000 ₹2,16,00,000

Value at the end ₹27,61,276 ₹76,95,498 ₹98,99,870 ₹1,43,17,477

of SWP years ( B)

Total amount received by

investor by the end of SIP ₹51,61,276 ₹1,24,95,498 ₹2,06,99,870 ₹3,59,17,477
and SWP (A+B)

SWP - Systematic Withdrawal Plan, SIP - Systematic Investment Plan

Disclaimer: This illustration is made available to you as a self help tool for your independent use. It is not guaranteeing or
promising or forecasting any returns. The illustration is not sufficient and should not be used for the development or
implementation of an investment strategy or does not have regard to specific investment objectives, financial situation and
the particular needs of any specific person who may use this illustration. HDFC AMC/ HDFC Mutual Fund/ Sponsors and their
affiliates are not liable for any financial decisions arising out of the use of this illustration and also they do not take the
responsibility, liability, for any error/omission or inaccuracy or for any losses sufffered nor understake the authenticity of the
figures calculated on the basis of this illustration. The user before acting on any information herein should make his/her/their
own investigation and see appropriate professional advice and shall alone be fully responsible/liable for any decision taken on
the basis of information contained herein. In view of individual nature of tax consequences each investor is advised to consult
his/her own professional tax adviser.
Exit load and tax consequences have not been considered in the above illustration.

35
Avenues for
Investment for
Retirement

National Pension HDFC Retirement

Criteria Public Provident Fund Savings Fund
Scheme (Tier I)

Account Holder Individuals Individuals Individuals

Age Eligibility 18-70 years Above the age of 18 Above the age of 18

Where can you Authorized Points At banks or the Any Investor Service Center of
invest? of Presence (PoPs), Post Office, including HDFC Mutual Fund/HDFC MF
i.e., almost all banks their online portals Online/Official Points of
and several other Acceptance for the Scheme
financial institutions

Number of Only one account Only one account No restriction

Accounts per person per person

Rate of returns Market-linked As per Government Market-linked Returns

Returns declarations

Limitation on No limits Rs. 1.5 lakh No limits

contributions per financial year

Minimum Per contribution - Rs. 500 per financial year First purchase - Rs. 5,000,
Investment Rs. 500 Per and any amount thereafter
Financial Year - Additional purchase -
Rs. 1,000 Rs. 1,000, and any amount
thereafter

Penalties for Account will be Account shall be frozen, No

discontinuing frozen. For unfreezing, penalty of Rs. 50 for each
investing pay minimum defaulted year
required amount for reactivation

Nature of holding Financial Financial Financial

Source: NSDL (Central Recordkeeping Agency for National Pension System), Department of Posts
(Ministry of Communications, Government of India), National Pension System Trust

36
 National Pension HDFC Retirement
Criteria Public Provident Fund
Scheme (Tier I) Savings Fund

Storage and Low Low Low

safety risk

Maturity Tenure Attainment of age 60 After 15 financial years, No limits

excluding the financial
year of account
opening; tenure can
then be further
extended in blocks of
5 years, and so on

Lock-in Until the subscriber 5 financial years 5 years or till the attainment
reaches the age of excluding the financial of age 60, whichever is earlier
60 years year of account opening
Withdrawal Partial withdrawal 1 withdrawal during None, post lock-in
restrictions up to 25% after a financial after five
3 years of account years excluding year
opening is permitted of account opening
for specific purposes
Amount of withdrawal
like child's marriage,
can be taken up to
higher education,
50% of balance at the
treatment of critical
credit at the end of
illnesses for self,
4th preceding year or
spouse or parents,
at the end of
buying home etc.
preceding year,
whichever is lower.

Source: NSDL (Central Recordkeeping Agency for National Pension System), Department of Posts (Ministry of Communications, Government of India),
National Pension System Trust

National Pension HDFC Retirement

Criteria Public Provident Fund
Scheme (Tier I) Savings Fund

Liquidity Low Low High, post completion of

lock-in period
5 Year CAGR^ Scheme E - 12.92%~ 7.8% Equity Plan – 14.76%*
Scheme C - 8.41%~ Hybrid Equity Plan – 12.07%*
Scheme G - 8.09%~ Hybrid Debt Plan – 6.89%*
Tax Benefits A maximum A maximum deduction A pension scheme notified u/s
deduction from from taxable income of 80C, providing a maximum
taxable income of up to Rs. 1.5 lakh u/s 80C deduction from taxable
up to Rs. 2 lakh u/s income of up to Rs. 1.5 lakh
80CCD (1) and
80CCD (1b)
Taxation on Lump sum Both interest earned Capital gains applicable to sale
withdrawal/ withdrawal: Up to and amount withdrawn of equity/debt oriented mutual
redemption 60% is exempt from at maturity are exempt funds, depending on the plan
tax from tax
invested in
Annuity income:
Taxed every year
according to Income
Tax slabs
^As on March 31, 2022
~Returns are for Tier I NPS schemes managed by SBI Pension Funds (As on end March 2022)
As on March 31, 2022, Scheme E has invested 96.15% of the portfolio in Equity instruments, Scheme C has invested 93.58% of the
portfolio in PSU/PFI bonds and Private and Infrastructure Corporate Bonds, and Scheme G has invested 94.4% of the portfolio in
Central Government Securities and State Development Loans
Past performance may or may not be sustained in future.
*For complete performance details and scheme and benchmark risk-o-meters, refer slide 36.

37
Debt Schemes – Our Offerings

Debt Schemes (14 Schemes)

Duration Based Theme Based

HDFC Overnight Fund HDFC Gilt Fund

HDFC Liquid Fund HDFC Banking and PSU Debt Fund

HDFC Ultra Short Term Fund HDFC Corporate Bond Fund

HDFC Money Market Fund HDFC Floating Rate Debt Fund

HDFC Low Duration Fund HDFC Credit Risk Debt Fund

HDFC Short Term Debt Fund HDFC Dynamic Debt Fund

HDFC Medium Term Debt Fund

HDFC Income Fund

What are the various debt Investment Options

FD NCD/Covered P2P Invoice Debt Fund
Bond (Peer-to-peer) Discounting
Return 6% p.a. 9-10% p.a. 11-14% p.a. 12-22% p.a. 5-8% p.a.
Risk Low High High High Low- Medium
Cost Nil High High High Low
Diversification No No No No Yes
Liquidity High Low Low Low Low
Capital Gains,
Tax Indexation benefit
At slab At slab At slab At slab available if held
for more than
3 years.

38
Invest with peace of mind
HDFC MF’s Approach to Credit Risk
Credit Philosophy

In order to succeed you must first survive - Warren Buffet

Safety You are defined by your worst day, not your best - Thomas Waschenfelder
Focus on the downside, and the upside will take care of itself - Mark Sellers

Liquidity is only there when you don’t need it - Jason Zweig

Liquidity The market can remain irrational longer than you can remain solvent
- Maynard Keynes

There are many things never worth risking, no matter the pottential gain
- Morgan Housel
Return
It’s not what you buy, it’s what you pay for it that determines whether something
is a good investment - Howard Marks
Focus on SLR, generally in that order

Multi-faceted Credit Process Credit Execution

Independent credit evaluation based on Proprietary Credit Score Model based sizing of
multiple factors. exposure and resultant diversification aims to
add another layer of protection.

Group Diversification and Sizing

Reputation

Covenants Sector
of debt Outlook
Proprietary Factors view on Group,
Credit Scoring Model Relevant financial parameters,
Internal Rating and Outlook.

Collateral Internal External

pledged to View on Credit Scheme Exposure Function of credit score;
secure debt Credit Rating (% of AUM) weaker the score, lower the
percentage limit of issuer

Cumulative Mutual Function of credit score,

Capacity to Fund Exposure balance sheet size, diversity
pay and Business of liabilities, capital market
Financial Moat
Flexibility exposure etc.
Character of
Management

39
Invest with peace of mind
HDFC MF’s Approach to Credit Risk
Results of Disciplined Credit Evaluation Process

The approach toward credit investment has worked well and we have been able to avoid
majority of stress cases experienced by the mutual fund industry over the years. Even in instances
of stress in which HDFC MF had exposure, we recovered major portion of our investment due to
adequate risk mitigating factors highlighted above.

MF Industry has experienced instances of credit stress *

in around 21 companies / Groups.

18

Instances 12
of Stress

0
HDFC MF was not exposed to most Cases where HDFC MF had exposure, Credit costs have been minimal for
such stressed cases but recovered major portion of our HDFC MF (Stressed exposures at ~0.78%
investment due to Covenants, good of AUM of affected schemes
business/Collateral and percentage as on Mar 31, 2022)

No Exposure Past Exposure, but recovered Exposure, underresolution

Deccan Chronicle Group IL&FS SPVs (backed by NHAI annuity) Simplex Infrastructures$
Amtek Auto Limited IDBI Bank
Jindal Steel & Power - Group Jana Small Finance Bank
Ballarpur (BILT) Group Zee Promoter Group
Yes Bank Sadbhav Group
Religare Group
Vodafone Idea Ltd.
Sintex Group
IL&FS Group (other than SPVs)
Altico Capital
Dewan Housing Group
Anil Ambani Group
Cox & Kings Ltd
Cafe Coffee Day Group
Shapoorji Pallonji Group
Future Group

$Market Value of exposure Simplex Infrastructure at the time of credit stress was ~Rs. 134 cr. After the 50% haircut (as per SEBI
guidelines) the market value of the residual exposures was ~Rs. 66 cr or ~0.74% of total AUM of affected scheme as of March 31 2022.
*Stress is defined as companies whose ratings were eventually downgraded to BBB or below rating category during last decade.

40
How to invest in a rising
Interest Rates cycle?

Consensus view is that interest rates are likely to go up even further over the short to medium term
(April 2022). Given this backdrop, how does one play this cycle. Below are few investment options:

1 Invest in Floater Fund or Dynamic Debt Fund or schemes with low maturity and reinvestment risk.

2 Stagger your investments in medium to long duration debt funds.

3 Invest in Fixed Maturity Plans with an aim to lock in the prevailing yield. While yields have
started going up, investors may contemplate waiting for rates to rise further and then invest.
Please refer 2 scenarios below that shows the impact of waiting vs investing now:

Scenario 1 Scenario 2
Wait for interest rate to rise; invest in Liquid Fund Invest now in a 5 year FMP at the current yield
for 1 year and then invest in a 4-year FMP and lock
in at higher yield (Investment amount is Rs. 100) Current FMP yield ~6.35% (assumed)

Investment horizon 5 years

Why Scenario 2 is better?
Invest in Liquid Fund for 1 year @ 3.75%$
1 Wait and invest approach fares lower returns
Value after 1 year 103.75 compared to investing directly for 5 years

Assumed rate hike Higher tax out go while redeeming from

after 1 year (A) 50 bps 2
liquid fund in Scenario 1
Spot 4 year FMP yield (B) 6.25% 3 Miss out 1 year indexation benefit
ROI for 4 year horizon
(1 year from now) (A+B) 6.75%

Value after 5 years 134.73

CAGR for 5 years 6.14%

$ The above is for illustration purposes only. Returns are assumed only and neither guaranteed nor indicative of any mutual
fund scheme / other asset class.

In view of individual nature of circumstances, please consult your professional

tax / financial advisors before taking any investment decisions.

41
Should
you PAUSE
your SIP?
To benefit from SIP, one should invest on periodic basis and not allow
emotions to drive their investment decisions.

Below table shows example of two individuals, Mr. A and Mr. B, both started
their SIP journey in HDFC Flexi Cap Fund on 1st April 2018. During the begin-
ning of COVID 19, Mr A paused his SIP for 6 months (driven by fear of COVID 19
impact on markets) while Mr. B continued with his disciplined approach of
investing regularly. Here are the results:

A B

SIP Start Date 1st April 2018 1st April 2018

SIP Pause Yes No
Pause Period 6 months NA
Amount Invested 3,00,000 3,60,000
Market Value as on
3,71,270 4,62,428
31st March 2021

Difference ~91,000

Lenin said that, There are decades where nothing happens, and there are weeks where
decades happen.

42
 vs
Of late, we have seen an emerging trend of millennials
investing directly in stock markets. High equity participation
from retail investors is usually observed during an up
trending market. Similar trend was observed during the bull
run of 03-08, however, after the sharp fall of GFC, such
investors found it difficult to make a re-entry in equity
markets (driven by fear of loss). Below data shows trends in
new demat accounts over the past 10 years.

Number of Demat accounts in India (in millions)

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
20 21 22 23 25 28 32 36 41 53
Source: NSDL, CDSL

Should a new investor invest directly in stocks or should he/she hire a professional?
ABC
Date Stock A Stock B Stock C Stock D Equity Sensex Remarks
Fund

1-Jan-95 1.4 102.3 56.7 21.0 10.0 3,932 HDFC Equity Fund Inception Date

28-Feb-00 3.2 1,609.1 294.8 23.3 27.6 5,741 2000:Tech bubble

12-Sep-01 1.9 37.2 197.6 17.0 15.6 3,033 2001:Ketan Parekh Scam

27-Feb-04 17.2 6.8 168.9 55.2 51.0 5,668 2004:General Elections,NDA loses

31-Mar-08 35.6 6.8 225.5 160.0 165.8 15,644 2008:Global Financial Crisis

31-Mar-09 29.5 1.4 234.0 106.7 108.9 9,709 2009:Second UPA term

31-Mar-11 56.1 1.4 282.9 276.5 283.3 19,445 2011:2G Scam,Coal Scam

28-Mar-13 38.5 0.5 467.0 207.3 271.1 18,836 2013:Taper Tantrum, High twin deficit

30-Dec-16 137.5 0.7 826.4 250.2 476.9 26,626 2016:Demonetisation,Brexit

31-Jul-17 162.7 0.7 1,153.4 312.6 608.0 32,515 Jul 2017:First month of GST Rollout

1-Feb-18 161.9 0.6 1,371.4 305.6 668.6 35,910 Feb 2018: LTCG on Equities

31-Mar-21 125.1 0.3 2,430.8 364.4 797.5 49,509 Jan 2020-21: COVID 19

31-Mar-22 210.9 0.3 2,048.9 493.4 1,011.3 58,569 Third wave COVID-19

CAGR since inception

till 31-Mar-2022 20% -19% 14% 12% 18% 10%

Direct Investing Mutual Fund Route

Time and skill to research companies Fund Manager Expertise

Emotional ups and downs Exposure to basket of securities with
Concentration risk investment as low as Rs. 5000 (Lumpsum)
Tax efficient route
Diversification

Stocks/Sectors referred are illustrative and should not be construed as an investment advice or a research report or a
recommendation by HDFC Mutual Fund (“the Fund”) / HDFC Asset Management Company Limited (HDFC AMC) to buy or
sell the stock or any other security covered under the respective sector/s. The Fund may or may not have any present or
future positions in these sectors.
Past performance may or may not be sustained in the future. Returns are not assured.
Mutual Fund investments are subject to market risks
43
My Financial
Organizer
What is My Financial Organizer?
My Financial Organizer allows investors
tomaintain a record of all their financial
assets in a dossier.

Need for Financial Organizer

Information related to all financial assets
can be stored at one place

Easy reference

Easy to use and store information

Can be of great help during emergencies

and contingencies.

Link to download HDFC MF My Financial

Organizer.
https://www.hdfcfund.com/investor-desk/
downloads/my-financial-organizer

Additionally, MFDs can also get in touch

with the nearest branch to get the
co-branded version of My Financial
Organizer.

44
Need for an Insurance..
Insurance
Benefits

Protection Reduces
Financial A legacy to Income Tax
for you and stress during
Security leave behind benefit
your family difficult times

Term Health Home Loan

Insurance Insurance Insurance

Term Insurance Helps meet Home loan insurance

is a must medical expenses can be considered
while taking a
Sum assured Top-up facility can home loan.
should ideally be help increase the
10x of your sum assured at a Covers the outstanding
annual income lower premium loan amount in a
situation where the
Group medical borrower fails to pay
insurance can also his/her debts.
be considered for
insuring the entire Such situation may
family arise due to
borrowers job
instability or his/her
demise.

45
Health Insurance
Need for Health Insurance

1. Inflation
Retail Inflation Medical Inflation

4.40% 7.74%

2. Uncertainties

COVID type uncertainties

3. Avoid out of pocket expenses

With cashless plans, immediate hospitalization costs can be avoided

Types of Health Insurance Plans

Family Floater Policies Individual Policies

Entire family can be covered Separate coverage for each

with a single premium family member
Cost efficient Premium as per individuals
age and sum assured

*Source: Reserve Bank of India (RBI)

*Data as on March 2022

46
 Conversations
with Clients

Concern over uncertainty of returns

Guaranteed Returns : Investors often prefer certainty over uncertainty when it comes to
investing; hence prefer a fixed return from most investment products and therefore find
it difficult to accept mutual funds, with market determined returns.

Conversation
Guaranteed return products include securities like Fixed Deposits (FD), National
Savings Certificates, etc. where there is certainty in terms of interest and principal.
Although these products may give fixed return, what investors often ignore is the
upside potential that the Indian equity markets offer and real returns after factoring
inflation.
Let’s explain with an example : Assume that an FD pays an interest rate of 5% p.a. and
the inflation rate is 3% p.a. The real rate of return is 2% p.a. i.e. value of investments
has grown only by 2% p.a.

Advisor : Wealth creation happens only when the investment product returns are
higher than inflation and taxes you pay for the income. Let me explain it to you with
a real life example. Refer Page 6

Prospective Investor : I see….but I see risk in equities.

Advisor : With time the volatility and risk of investing in equities reduces. Let me
share this slide with you…Page 7
And so to help you create wealth we could take a calculated risk by investing for a
long term. I will always work in your interest since that is the mission I work for.

47
A meeting discussing poor returns of a scheme
Bad experience and Funds giving negative returns – Some investors may have a bad
experience in terms of returns while investing.

Conversation

Client – XYZ Fund has delivered negative returns over the last 6 months. Should
I redeem?

Advisor - Equity markets are driven by various events and can be risky and
volatile if held for short term and you may see negative returns over the short
term. However over the long term, equity as an asset class has outperformed
other asset classes. It has beaten inflation by the highest margin. (Refer Page 6)
So, we should not get swayed away by short term market movements.

Client – But ABC Fund has given positive returns during the same period. What
could be the reason for that?

Advisor – Different managers have different investment styles and approaches.

Historically, we have seen different styles perform differently during different
time periods. It is usually seen that the Fund that is in the top quartile in a given
year may not be in the top quartile in the subsequent year. So, one should
understand Fund managers’ investment philosophy and keep patience for the
strategy to play out.

Client – So, for how long should I hold an equity fund in my portfolio?

Advisor – Equities as an asset class are known to be the best compounding

machines if held for long term. Historically, we have seen that as the tenure
increases, volatility decreases. Chances of negative returns also reduce as
tenure goes up (Refer Page 7). So, we should invest in equities with a minimum
investment horizon of 5 years.

48
Paradox of Choice -
Difficulty in choosing from wide set of schemes

Conversation

Prospective Investor - There are various categories of Mutual Fund products.

How do I go about it?

Advisor – SEBI has defined various scheme categories under each asset class
i.e. equity, debt, hybrid, solution oriented and others. Depending upon your risk
profile, liquidity needs, goals, etc. you must first choose a category. Next step
will be to choose a scheme within a category. (Refer Pages 29, 30 & 38)

Prospective Investor – How do I choose a scheme? Each Fund House would

generally have a scheme in each category. This further complicates the scheme
selection process. How do I know which is the right scheme?

Advisor – While selecting a scheme, keep the schemes selection process

simple. Look for schemes that have consistent long term track record. Invest in
schemes which are managed by experienced Fund managers. Invest as per
your personal risk return profile. Over diversification does not necessarily add to
the returns.

49
Is Insurance also an Investment product?
Insurance is better – There is a general perception among investors that insurance
products are equivalent/better than investment products, especially mutual funds.
Insurance products offer fixed guaranteed returns.

Conversation

Prospective Investor – Why not invest in insurance products as they are better
than mutual funds and offer guaranteed returns.

Advisor - Insurance products should not be construed as investment products.

Historically these products have delivered returns less than the inflation rate. I
have got a chart with comparable products for you to get a comprehensive
idea of all products. Let us back calculate returns (XIRR ) of the insurance
policies to understand their long term returns. Investments in insurance
products should be made with the objective of risk cover that keeps you and
your family protected in case of an unfortunate event.

Prospective Investor – What about expenses/fees charged by these products?

Advisor – Insurance products are high costs (charges) products that can eat
your returns. Below table shows expenses on various investment products.

Instrument Approx cost Low cost Medium cost High cost

Bank FD Nil
Debt Funds 0.1-1%
Covered Bonds/NCDs 4-10%
NPS 0.01%
Investment Linked Insurance
Equity MF 0.75-2.25%
PMS Foreign Stocks +2% 3-4%
REIT 1.5-2%
P2P (Peer-to-Peer) 4-10%

50
I like to invest in stocks directly

Conversation

Prospective investor – Stocks give higher returns than MFs; then why should I
invest in mutual funds.

Advisor - If you are experienced, have the emotional maturity and can dedicate
time and effort, you could consider direct equity to some extent. However, it
can be risky to stake a substantial chunk of your total assets as tracking
hundreds of companies and their financials is not a job of single person.
Mutual Fund route will be better suited for investors.

Prospective investor – Then, how are MFs better?

Advisor - An asset management company employs team of sectoral analysts

and fund managers, who follow a predefined investment process. Mutual
Funds give you access to professionals, provides exposure to basket of
securities with investment as low as Rs. 5000 (lumpsum), are tax efficient and
are also diversified. (Refer Page 43)

51
 HDFC Flexi Cap Fund
SIP since inception* of Rs.10,000 invested systematically on the first business day of every month (total investment 32.70 lakh) in HDFC Flexi Cap Fund would
have grown to ~11.06 crore by March 31, 2022 (refer below table).

SIP Performance - Regular Plan - Growth Option

15 year 10 year 5 year 3 year 1 year
SIP Investments Since Inception*
SIP SIP SIP SIP SIP
Total Amount Invested (Rs. In 000) 3,270.00 1,800.00 1,200.00 600.00 360.00 120.00
Market Value as on Martch 31, 2022 (Rs.in 000) 110,617.80 5,830.61 2,623.23 921.89 524.30 131.61
Returns (%) 20.84% 14.36% 14.95% 17.22% 26.06% 18.52%
Benchmark Returns (%)# 15.12% 13.58% 15.36% 17.69% 25.03% 12.54%
Additional Benchmark Returns (%)## 14.06% 13.10% 14.70% 17.41% 23.02% 12.95%

CAGR returns are computed after accounting for the cash flow by using XIRR method (investment internal rate of return). The above investment simulation
is for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital. SIP - Systematic Investment
Plan.Since Inception Date = Date of First allotment in the Scheme / Plan.
NAV as at March 31, 2022 ` 1011.296 (per unit)
HDFC Flexi Cap Fund- Performance - Regular plan - Growth Option Value of investment of `10,000@
Period Since Benchmark Additional Since Benchmark Additional
Inception (%) Returns (%)# Benchmark Inception (`) Returns (`)# Benchmark
Returns (%) ## Returns (`) ##
Last 1 year 26.82 22.29 20.26 12,682 12,229 12,026
Last 3 years 14.04 16.75 15.82 14,846 15,934 15,557
Last 5 years 13.20 14.55 15.14 18,598 19,734 20,246
Since Inception* 18.45 12.17 11.63 1,011,296 228,891 200,841
*Inception Date: January 01,1995. The Scheme is managed by Mr. Prashant Jain since June 20, 2003. #NIFTY 500 (Total Returns Index) ##NIFTY 50 (Total Returns
Index). As NIFTY 50 TRI data is not available since inception of the scheme, additional benchmark performance is calculated using composite CAGR of NIFTY
50 PRI values from January 1, 1995 to June 29, 1999 and TRI values since June 30, 1999. Since Inception Date = Date of First allotment in the Scheme / Plan.

Performance of Other Funds Managed By Prashant Jain, Fund Manager of HDFC Flexi Cap Fund
(Erstwhile HDFC Equity Fund) (who manages total 3 schemes)

Scheme Managing Scheme Returns (%) as on January 31, 2022

Since
Last 1 year (%) Last 3 years (%) Last 5 years (%)
HDFC Top 100 Fund 20-Jun-03 20.85 11.31 11.54
Benchmark - NIFTY 100 (Total Returns Index) 20.63 15.68 14.66
HDFC Balanced Advantage Fund~ 20-Jun-03 21.04 12.35 10.91
Benchmark -NIFTY 50 Hybrid Composite Debt 65:35 Index 12.66 12.97 11.84
On account of difference in type of scheme, asset allocation, investment strategy, inception dates, the performance of these schemes is strictly not compara-
ble. ~Benchmark has been changed to NIFTY 50 Hybrid Composite debt 50:50 Index (w.e.f December 01, 2021).
Notes common to all tables:
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR).Load is not taken into
consideration for computation of above performance(s). Different plans viz. Regular Plan and Direct Plan have different expense structures. The expenses of
the Direct Plan under the scheme will be lower to the extent of the distribution expenses/commission charged in the Regular Plan. Returns as on March 31,
2022. The above returns are of Regular Plan- Growth Option. N.A.: Not Available

Performance of Permitted Category FPI Portfolio(s) managed by the Fund Manager (Mr. Prashant Jain)

Managing Returns (%) as on March 31, 2022

Portfolio Since
Last 1 year (%) Last 3 years (%) Last 5 years (%)

Permitted Category FPI Portfolio (managed under a

bilateral agreement under Regulation 24(b) and subject 22-Mar-16 27.04 15.56 14.76
to applicable laws)
Benchmark - MSCI India (Total Returns) 22.69 16.58 14.79
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
computed using the Time Weighted Rate of Return (TWRR) methodology, to make them more comparable with the mutual fund scheme’s returns. FPI
Portfolio: Inception date is 22nd March, 2016. The performance is not comparable with the performance of the aforementioned scheme(s) of HDFC Mutual
Fund due to differing investment objective/s and fundamental differences in asset allocation, investment strategy and the
regulatory environment. The said disclosure is pursuant to SEBI Circular no. Cir/IMD/DF/7/2012 dated 28th February, 2012
pertaining to Regulation 24(b) of SEBI (Mutual Funds) Regulations, 1996. N.A. Not Applicable. FPI - Foreign Portfolio Investor.

52
 HDFC Retirement Savings Fund - Equity Plan
NAV as at March 31, 2022 ` 28.428
A. Cumulative performance
Value of investment of `10,000@
Date Period Scheme Benchmark Additional Benchmark Additional
Benchmark Scheme (`) Benchmark
Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Jan 29, 21 Last 1 year 26.98 22.29 20.26 12,698 12,229 12,026
Jan 31, 19 Last 3 years 17.97 16.75 15.82 16,440 15,934 15,557
Jan 31, 17 Last 5 years 14.76 14.55 15.14 19,916 19,734 20,246
Feb 25, 16 Since Inception 18.69 18.07 17.73 28,428 27,532 27,060
^
Past performance may or may not be sustained in the future. #Nifty 500 TRI ##Nifty 50 TRI

HDFC Retirement Savings Fund - Hybrid- Equity Plan

NAV as at March 31, 2022 ` 24.545
A. Cumulative performance
Value of investment of `10,000@
Date Period Scheme Benchmark Additional Benchmark Additional
Benchmark Scheme (`) Benchmark
Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Jan 29, 21 Last 1 year 14.81 14.93 20.26 11,481 11,493 12,026
Jan 31, 19 Last 3 years 13.25 14.01 15.82 14,542 14,837 15,557
Jan 31, 17 Last 5 years 12.07 12.96 15.14 17,682 18,396 20,246
Feb 25, 16 Since Inception 15.86 14.86 17.73 24,545 23,278 27,060
^
Past performance may or may not be sustained in the future. #NIFTY 50 Hybrid Composite Debt 65:35 Index ##Nifty 50 TRI

HDFC Retirement Savings Fund - Hybrid-Debt Plan

NAV as at March 31, 2022 ` 16.4161
A. Cumulative performance
Value of investment of `10,000@
Date Period Scheme Benchmark Additional Benchmark Additional
Benchmark Scheme (`) Benchmark
Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Jan 29, 21 Last 1 year 6.84 7.37 1.08 10,684 10,737 10,108
Jan 31, 19 Last 3 years 7.77 9.97 6.27 12,525 13,310 12,009
Jan 31, 17 Last 5 years 6.89 8.85 5.02 13,958 15,286 12,776
Feb 25, 16 Since Inception 8.47 9.89 6.53 16,416 17,771 14,709
^ # ##
Past performance may or may not be sustained in the future. NIFTY 50 Hybrid Composite Debt 15:85 Index CRISIL 10 Year Gilt Index

53
 HDFC Retirement Savings Fund
Nos. of schemes managed by SHOBHIT MEHROTRA which have completed 1 year (15 schemes)
Nos. of schemes managed by SRINIVASAN RAMAMURTHY which have completed 1 year (7 schemes)

TOP 3 FUNDS MANAGED BY SHOBHIT MEHROTRA

HDFC Hybrid Debt Fund NAV as at March 31, 2022 ` 59.8351 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 53.9319 10.95 7.37 1.08 11,095 10,737 10,108
Mar 29, 19 Last 3 Years 45.8476 9.25 9.97 6.27 13,051 13,310 12,009
Mar 31, 17 Last 5 Years 41.4235 7.63 8.85 5.02 14,445 15,286 12,776
Mar 30, 12 Last 10 Years 24.2627 9.44 9.54 6.89 24,661 24,893 19,482
Dec 26, 03 Since Inception 10.0000 10.29 8.49 5.55 59,835 44,360 26,831
^Past performance may or may not be sustained in the future. # NIFTY 50 Hybrid Composite Debt 15:85 Index ## CRISIL 10 year Gilt Index
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. Co-Managed By Srinivasan Ramamurthy

HDFC Floating Rate Debt Fund NAV as at March 31, 2022 ` 39.5992 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 37.9118 4.45 4.14 1.08 10,445 10,414 10,108
Mar 29, 19 Last 3 Years 32.5031 6.78 5.90 6.27 12,183 11,882 12,009
Mar 31, 17 Last 5 Years 28.2698 6.97 6.43 5.02 14,008 13,657 12,776
Mar 30, 12 Last 10 Years 18.3028 8.02 7.67 6.89 21,636 20,954 19,482
Oct 23, 07 Since Inception 13.1821 7.91 7.92 6.47 30,040 30,082 24,739

^Past performance may or may not be sustained in the future. # NIFTY Low Duration Debt Index ## CRISIL 10 year Gilt Index
Since inception returns are calculated on ₹ 13.1821 ( allotment price)
Co-Managed By Vikash Agarwal

HDFC Medium Term Debt Fund NAV as at March 31, 2022 ` 45.7536 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 43.3480 5.55 5.68 1.08 10,555 10,568 10,108
Mar 29, 19 Last 3 Years 36.8364 7.47 8.49 6.27 12,421 12,777 12,009
Mar 31, 17 Last 5 Years 32.7085 6.94 7.63 5.02 13,988 14,449 12,776
Mar 30, 12 Last 10 Years 21.0421 8.07 8.61 6.89 21,744 22,860 19,482
Feb 06, 02 Since Inception 10.0000 7.84 7.90 6.49 45,754 46,317 35,551

^Past performance may or may not be sustained in the future. # NIFTY Medium Duration Debt Index ## CRISIL 10 year Gilt Index

BOTTOM 3 FUNDS MANAGED BY SHOBHIT MEHROTRA

HDFC FMP 1120D March 2019 (1) (44) NAV as at March 31, 2022 ` 12.3332 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 11.8583 4.00 4.48 1.08 10,400 10,448 10,108
Mar 29, 19 Last 3 Years 10.0244 7.13 8.21 6.27 12,303 12,678 12,009
Mar 26, 19 Since Inception 10.0000 7.20 8.25 6.27 12,333 12,703 12,013
^Past performance may or may not be sustained in the future. # CRISIL Composite Bond Fund Index ## CRISIL 10 year Gilt Index
Performance of FMP schemes, being close-ended in nature, is not strictly comparable with that of open-ended schemes since
the investment strategy for FMP schemes is primarily buy-and-hold whereas open-ended schemes are actively managed.

54
HDFC FMP 1127D March 2019 (1) (44) NAV as at March 31, 2022 ` 12.3877 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 11.9123 3.99 4.48 1.08 10,399 10,448 10,108
Mar 29, 19 Last 3 Years 10.0517 7.19 8.21 6.27 12,324 12,678 12,009
Mar 19, 19 Since Inception 10.0000 7.31 8.40 6.36 12,388 12,774 12,057
^Past performance may or may not be sustained in the future. # CRISIL Composite Bond Fund Index ## CRISIL 10 year Gilt Index
Performance of FMP schemes, being close-ended in nature, is not strictly comparable with that of open-ended schemes since the investment strategy for
FMP schemes is primarily buy-and-hold whereas open-ended schemes are actively managed.

HDFC FMP 3360D March 2014 (1) NAV as at March 31, 2022 ` 17.4966 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 16.7520 4.44 4.48 1.08 10,444 10,448 10,108
Mar 29, 19 Last 3 Years 14.0958 7.45 8.21 6.27 12,413 12,678 12,009
Mar 31, 17 Last 5 Years 12.3081 7.28 7.29 5.02 14,216 14,217 12,776
Mar 26, 14 Since Inception 10.0000 7.23 8.77 7.36 17,497 19,619 17,676

^Past performance may or may not be sustained in the future. # CRISIL Composite Bond Fund Index ## CRISIL 10 year Gilt Index
Performance of FMP schemes, being close-ended in nature, is not strictly comparable with that of open-ended schemes since the investment strategy
for FMP schemes is primarily buy-and-hold whereas open-ended schemes are actively managed.

OTHER FUNDS MANAGED BY SRINIVASAN RAMAMURTHY

HDFC Hybrid Debt Fund NAV as at March 31, 2022 ` 59.8351 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 53.9319 10.95 7.37 1.08 11,095 10,737 10,108
Mar 29, 19 Last 3 Years 45.8476 9.25 9.97 6.27 13,051 13,310 12,009
Mar 31, 17 Last 5 Years 41.4235 7.63 8.85 5.02 14,445 15,286 12,776
Mar 30, 12 Last 10 Years 24.2627 9.44 9.54 6.89 24,661 24,893 19,482
Dec 26, 03 Since Inception 10.0000 10.29 8.49 5.55 59,835 44,360 26,831
^Past performance may or may not be sustained in the future. # NIFTY 50 Hybrid Composite Debt 15:85 Index ## CRISIL 10 year Gilt Index
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. Co-Managed By Shobhit Mehrotra

HDFC Equity Savings Fund NAV as at March 31, 2022 ` 48.2790 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 42.7150 13.03 9.95 1.08 11,303 10,995 10,108
Mar 29, 19 Last 3 Years 36.7950 9.45 9.88 6.27 13,121 13,275 12,009
Mar 31, 17 Last 5 Years 32.5290 8.21 9.51 5.02 14,842 15,753 12,776
Mar 30, 12 Last 10 Years 19.6843 9.38 9.87 6.89 24,527 25,658 19,482
Sep 17, 04 Since Inception 10.0000 9.39 NA 5.89 48,279 NA 27,311
^^Past performance may or may not be sustained in the future. # NIFTY Equity Savings Index ## CRISIL 10 Year Gilt Index
Scheme performance may not strictly be comparable with that of its Additional Benchmark, since a portion of scheme’s
investments are made in equity instruments. Co-Managed By Arun Agarwal, Anil Bamboli & Krishan Kumar Daga

55
HDFC Multi - Asset Fund NAV as at March 31, 2022 ` 47.4700 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 41.0420 15.66 15.40 20.26 11,566 11,540 12,026
Mar 29, 19 Last 3 Years 32.2770 13.68 14.62 15.82 14,707 15,076 15,557
Mar 31, 17 Last 5 Years 29.0365 10.32 13.09 15.14 16,348 18,508 20,246
Mar 30, 12 Last 10 Years 17.7814 10.31 12.02 14.07 26,696 31,145 37,331
Aug 17, 05 Since Inception 10.0000 9.82 NA 14.05 47,470 NA 88,987
^Past performance may or may not be sustained in the future.
# 90% NIFTY 50 Hybrid Composite Debt 65:35 Index + 10% Domestic Price of Gold ## Nifty 50 TRI
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. Co-Managed By Arun Agarwal, Anil Bamboli, Bhagyesh Kagalkar & Krishan Kumar Daga

HDFC DYNAMIC PE RATIO FUND OF FUNDS NAV as at March 31, 2022 ` 26.4269 (per unit)
A. Cumulative performance Value of investment of `10,000@
Additional Additional
NAV Scheme Benchmark Benchmark
Date Period Benchmark Scheme (`) Benchmark
per Unit (`) Returns (%)^ Returns (%)# Returns (`)#
Returns (%) ## Returns (`) ##
Mar 31, 21 Last 1 Year 22.9435 15.18 14.93 20.26 11,518 11,493 12,026
Mar 29, 19 Last 3 Years 18.8280 11.93 14.01 15.82 14,036 14,837 15,557
Mar 31, 17 Last 5 Years 16.4045 10.00 12.96 15.14 16,110 18,396 20,246
Mar 30, 12 Last 10 Years 10.0604 10.13 12.49 14.07 26,268 32,472 37,331
Feb 06, 12 Since Inception 10.0000 10.04 12.20 13.72 26,427 32,167 36,899

^Past performance may or may not be sustained in the future. # NIFTY 50 Hybrid Composite Debt 65:35 Index ## Nifty 50 TRI
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. Co-Managed By Anil Bamboli

56
PRODUCT LABELING:

THIS PRODUCT IS SUITABLE FOR SCHEME BENCHMARK

NAME OF SCHEME
INVESTORS WHO ARE SEEKING* RISKOMETER RISKOMETER

HDFC Overnight Fund • Regular income over short term CRISIL Overnight Index
that may be in line with the
(An open ended debt scheme overnight call rates
investing in overnight securities.
A Relatively Low Interest Rate Risk • To generate returns by investing
and Relatively Low Credit Risk) in debt and money market
instruments with overnight
maturity

NIFTY 50 Arbitrage Index

HDFC Arbitrage Fund • Income over short term
• Income through arbitrage
(An open ended scheme investing opportunities between cash
in arbitrage opportunities)
and derivative market and
arbitrage opportunities within
the derivative segment

CRISIL Liquid Fund Index

HDFC Liquid Fund • Regular income over short term

• To generate income through a
(An open ended liquid scheme.
A Relatively Low Interest Rate Risk
portfolio comprising money
and Moderate Credit Risk) market and debt instruments

CRISIL Ultra Short Term

Debt Index
HDFC Ultra Short Term • Income over short term
Fund • Income/capital appreciation Moder
oderate Highately
through investment in debt o M
w t erate Hi
(An open ended ultra-short term debt
securities and money market
Mo Lo

gh
d
scheme investing in instruments such
that the Macaulay Duration of the instruments

Very
High
Low

portfolio is between 3 months and 6

months. A Moderate Interest Rate
Risk and Moderate Credit Risk) RISKOMETER

M
rate oHderately
o Mode igh NIFTY Low Duration Debt
HDFC Low Duration • Income over short term w t erate Hi Index
Mo Lo

gh

• To generate income/capital
d

Fund Moder
oderate Highately
appreciation through investment o M
Very

w t erate
High
Low

Hi
(An open ended low duration debt
in debt securities and money
Mo Lo

gh

scheme investing in instruments such

d

RISKOMETER
that the Macaulay Duration of the market instruments Investors understand that their principal will be at
Very
High

portfolio is between 6 months and 12

Low

moderate risk
months. A Relatively High Interest
Rate Risk and Moderate Credit Risk) RISKOMETER

NIFTY Money Market Index

HDFC Money Market • Income over short term Moder

oderate Highately
Fund • To generate income/capital o M
w t erate Hi
appreciation by investing in
Mo Lo

gh
d

(An open-ended debt scheme

investing in money market money market instruments
Very
High
Low

instruments. A Relatively Low Interest

Rate Risk and Moderate Credit Risk)
RISKOMETER

Riskometer as on March 31, 2022

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

57
 THIS PRODUCT IS SUITABLE FOR SCHEME BENCHMARK
NAME OF SCHEME
INVESTORS WHO ARE SEEKING* RISKOMETER RISKOMETER

HDFC Floating Rate • Income over short term NIFTY Low Duration Debt Index
Debt Fund • To generate income / capital Moder
appreciation through investment oderate Highately
o M
[An open ended debt scheme w t erate Hi
predominantly investing in floating in a portfolio comprising

Mo Lo

gh
d
rate instruments (including fixed rate
instruments converted to floating rate substantially of floating rate debt,

Very
High
Low
exposures using swaps / derivatives). fixed rate debt instruments
A Relatively High Interest Rate Risk
and Moderate Credit Risk] swapped for floating rate returns RISKOMETER
and money market instruments

CRISIL Short Term Bond

HDFC Short Term Debt • Income over short term Fund Index
Fund • To generate income/capital M
rate oHderately
appreciation through investments o Mode igh
(An open ended short term debt w t erate Hi
in Debt and Money Market

Mo Lo
scheme investing in instruments

gh
d
such that the Macaulay Duration of Instruments
the portfolio is between 1 year and 3

Very
High
Low
years. A Relatively High Interest Rate
Risk and Moderate Credit Risk) RISKOMETER

NIFTY Corporate Bond Index

HDFC Corporate Bond • Income over short to medium term Moder
Fund • To generate income/capital oderate Highately
o M
w t erate Hi
(An open ended debt scheme appreciation through investments

Mo Lo

gh
d
M
predominantly investing in AA+ and predominantly in AA+ and above rate oHderately
above rated corporate bonds. o Mode igh
w t erate

Very
rated corporate bonds Hi

High
Low
A Relatively High Interest Rate Risk Mo Lo

gh
and Moderate Credit Risk) d
RISKOMETER

Very
High
Low

• Income over short to medium

HDFC Banking and PSU RISKOMETER
term Investors understand that their principal will be at
Debt Fund moderate risk
• To generate income/capital NIFTY Banking & PSU Index
(An open ended debt scheme appreciation through
predominantly investing in debt investments in debt and money Moder
instruments of banks, Public Sector
market instruments consisting oderate Highately
o M
Undertakings, Public Financial w t erate Hi
Institutions and Municipal Bonds. predominantly of securities

Mo Lo

gh
d
A Relatively High Interest Rate Risk issued by entities such as
and Moderate Credit Risk)
Scheduled Commercial Banks

Very
High
(SCBs), Public Sector Low
RISKOMETER
Undertakings (PSUs), Public
Financial Institutions (PFIs),
Municipal Corporations and
such other bodies

• Credit risk free returns over CRISIL Dynamic Gilt Fund

HDFC Gilt Fund
medium to long term M
rate oHderately
(An open ended debt scheme Mode igh
investing in government securities • To generate credit risk-free o
w t erate Hi
across maturities. A Relatively High
returns through investments in
Mo Lo

gh
d

Interest Rate Risk and Relatively

Low Credit Risk) sovereign securities issued by
Very
High
Low

the Central Government and/or

State Government RISKOMETER

HDFC Income Fund • Income over medium to NIFTY Medium to Long Duration
Debt Index
(An open ended medium term debt
long term
Moder
scheme investing in instruments such • To generate income/capital oderate Highately
that the Macaulay Duration of the o M
Portfolio is between 4 years and 7 appreciation through w t erate Hi
Mo Lo

gh

investments in debt and

d

years. A Relatively High Interest Rate

Risk and Moderate Credit Risk)
money market instruments
Very
High
Low

RISKOMETER

Riskometer as on March 31, 2022

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

58
 THIS PRODUCT IS SUITABLE FOR SCHEME BENCHMARK
NAME OF SCHEME
INVESTORS WHO ARE SEEKING* RISKOMETER RISKOMETER

NIFTY Medium Duration

Debt Index
HDFC Medium Term • Income over medium term
Debt Fund • To generate income/capital M
rate oHderately
o Mode igh
appreciation through w t erate Hi
(An open ended medium term debt

Mo Lo
investments in Debt and

gh
d
scheme investing in instruments such
that the Macaulay Duration of the Money Market Instruments

Very
High
Low
portfolio is between 3 years and 4
years. A Relatively High Interest Rate
Risk and Relatively High Credit Risk) RISKOMETER

CRISIL Composite Bond Fund Index

HDFC Dynamic Debt • Income over medium to long term Moder
oderate Highately M
• To generate income/capital o M rate oHderately
Fund w t erate Hi
o Mode igh
appreciation by investing in a w t erate Hi

Mo Lo

gh
d

Mo Lo

gh
d
(An open ended dynamic debt range of debt and money market

Very
High
Low
Scheme investing across duration.
instruments

Very
High
Low
A Relatively High Interest Rate Risk
and Moderate Credit Risk) RISKOMETER
RISKOMETER
Investors understand that their principal will be at
moderate risk

HDFC Equity Savings • Capital appreciation while

generating income over
Fund NIFTY Equity Savings Index
medium to long term
M
(An open ended scheme investing in • Provide capital appreciatio rate oHderately
equity, arbitrage and debt) o Mode igh
and income distribution to the w t erate Hi

Mo Lo

gh
investors by using equity an

d
equity related instruments,

Very
High
Low
arbitrage opportunities, and RISKOMETER
investments in debt and
money market instruments

HDFC Credit Risk • Income over short to medium NIFTY Credit Risk Bond Index

Debt Fund term

M
• To generate income/capital rate oHderately
o Mode igh
[An open ended debt scheme appreciation by investing w t erate Hi

Mo Lo

gh
predominantly investing in AA and

d
below rated corporate bonds predominantly in AA and below
rated corporate debt (excluding

Very
(excluding AA+ rated corporate

High
Low
bonds). A Relatively High Interest Rate
Risk and Relatively High Credit Risk] AA+ rated corporate bonds) RISKOMETER

NIFTY 50 Hybrid Composite Debt

HDFC Hybrid Debt • To generate long-term income / 15:85 Index
Fund capital appreciation
• Investments primarily in debt
(An open ended hybrid scheme
investing predominantly in debt securities, money market
instruments) instruments and moderate
exposure to equities

S&P BSE 250 SmallCap Index

(Total Returns Index)
HDFC Small Cap Fund • To generate long-term capital
(An open ended equity scheme appreciation/income
predominantly investing in small • Investments predominantly in
cap stocks)
Small-Cap companies

Riskometer as on March 31, 2022

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

59
 THIS PRODUCT IS SUITABLE FOR SCHEME BENCHMARK
NAME OF SCHEME
INVESTORS WHO ARE SEEKING* RISKOMETER RISKOMETER

HDFC Capital Builder • To generate long-term capital NIFTY 500 (Total Returns Index)

Value Fund appreciation/income in the

long term
(An open ended equity scheme
following a value investment strategy)
• Investment primarily in
undervalued stocks

HDFC Index • Returns that are commensurate NIFTY 50 (Total Returns Index)

Fund-NIFTY 50 Plan with the performance of the

(An open ended scheme replicating /
NIFTY 50, subject to tracking
tracking NIFTY 50 Index) errors over long term
• Investment in equity securities
covered by the NIFTY 50

HDFC Index • Returns that are commensurate S&P BSE SENSEX (Total Returns Index)

Fund-SENSEX Plan with the performance of the S&P

BSE SENSEX, subject to tracking
(An open-ended scheme replicating /
tracking S&P BSE SENSEX Index) errors over long term
• Investment in equity securitie
covered by the S&P BSE SENSEX

HDFC NIFTY 50 ETF • Returns that are commensurate NIFTY 50 (Total Returns Index)

(An open ended scheme replicating /

with the performance of the
tracking NIFTY 50 Index) NIFTY 50, subject to tracking
errors over long term
• Investment in equity securities
covered by the NIFTY 50

• Returns that are commensurate S&P BSE SENSEX (Total Returns Index)
HDFC SENSEX ETF with the performance of the S&P
(An open ended scheme replicating / BSE SENSEX, subject to tracking
tracking S&P BSE SENSEX Index)
errors over long term
• Investment in equity securities
covered by the S&P BSE SENSEX

NIFTY Large Midcap 250

HDFC Large and Mid • To generate long-term capital (Total Returns Index)
Cap Fund (Erstwhile appreciation/income
HDFC Growth • Investments in predominantly
Opportunities Fund) Large Cap and Mid Cap companies

(An open ended equity scheme

investing in both large cap and mid
cap stocks)

NIFTY 500 (Total Returns Index)

• To generate long-term capital
HDFC Focused 30 Fund
appreciation/income
An open ended equity scheme
investing in maximum 30 stocks in • Investments in equity & equity
large-cap, mid-cap and small-cap related instruments of up to
category (i.e. Multi-Cap)
30 companies

Riskometer as on March 31, 2022

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

60
 THIS PRODUCT IS SUITABLE FOR SCHEME BENCHMARK
NAME OF SCHEME
INVESTORS WHO ARE SEEKING* RISKOMETER RISKOMETER

NIFTY 500 (Total Returns Index)

HDFC Flexi Cap Fund • To generate long-term capital
(An open ended dynamic equity appreciation / income
scheme investing across large cap,
mid cap, small cap stocks) • Investment predominantly in
equity & equity related
instruments

NIFTY 100 (Total Returns Index)

HDFC Top 100 Fund • To generate long-term capital
(An open ended equity scheme
appreciation/income
predominantly investing in large • Investment predominantly in
cap stocks)
Large-Cap companies

NIFTY Midcap 150

HDFC Mid-Cap • To generate long-term capital (Total Returns Index)

Opportunities Fund appreciation/income

(An open ended equity scheme
• Investments predominantly in
predominantly investing in mid cap Mid-Cap companies
stocks)

90% NIFTY 50 Hybrid

HDFC Multi-Asset Fund • To generate long-term capital Composite Debt 65:35 Index +
appreciation/income 10% Domestic Price of Gold
(An open ended scheme investing in
Equity and Equity related • Investments in a diversified Moder
instruments, Debt & Money Market oderate Highately
portfolio of equity & equity o M
Instruments and Gold related w t erate Hi
instruments) related instruments, debt &

Mo Lo

gh
d
money market instruments and

Very
High
Low
Gold related instruments
RISKOMETER

• To generate long-term capital NIFTY 50 Hybrid Composite

HDFC Hybrid Equity Debt 65:35 Index
Fund appreciation / income
• Investments predominantly in M
rate oHderately
(An open ended hybrid scheme
o Mode igh
investing predominantly in equity equity & equity related w t erate Hi
instruments. The scheme will also
Mo Lo

and equity related instruments)

gh
d

invest in debt and money market

Very
High
Low

instruments
RISKOMETER

NIFTY 50 Hybrid Composite

HDFC Balanced • To generate long-term capital Debt 50:50 Index

Advantage Fund appreciation / income M

rate oHderately
• Investments in a mix of equity o Mode igh
(An open ended Balanced w t erate Hi
and debt instruments
Mo Lo

Advantage Fund)
gh
d

Very
High
Low

RISKOMETER

Riskometer as on March 31, 2022

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

61
 THIS PRODUCT IS SUITABLE FOR SCHEME BENCHMARK
NAME OF SCHEME
INVESTORS WHO ARE SEEKING* RISKOMETER RISKOMETER

HDFC Infrastructure • To generate long-term capital

NIFTY 500 (Total Returns Index)
Fund appreciation / income
• Investment predominantly in
(An open ended equity scheme equity and equity related
following infrastructure theme)
securities of companies engaged
in or expected to benefit from the
growth and development of
infrastructure

• Returns that are commensurate NIFTY Bank (Total Returns Index)

HDFC Banking ETF
with the performance of the NIFTY
(An open ended scheme replicating/ Bank Index (Total Returns Index),
tracking NIFTY Bank Index) subject to tracking error, over long
term
• Investment in equity securities
covered by the NIFTY Bank Index

Riskometer as on March 31, 2022

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

Disclaimer
The information herein is based on internal data, publicly available information and other sources believed to be reliable and is for general
purposes only and not an investment advice. Any calculations made are approximations, meant as guidelines only, which you must confirm
before relying on them. Past performance may or may not be sustained in the future. Stocks/Sectors referred are illustrative and should not
be construed as an investment advice or a research report or a recommendation by HDFC Mutual Fund / HDFC Asset Management Company
Limited (HDFC AMC) to buy or sell the stock or any other security covered under the respective sector/s. The Fund may or may not have any
present or future positions in these sectors.

The information provided herein does not have regard to specific investment objectives, financial situation and the particular needs of any
specific person who may receive this information. The information/ data herein alone are not sufficient and should not be used for the
development or implementation of an investment strategy.

HDFC Mutual Fund/HDFC Asset Management Company Limited (HDFC AMC) is not guaranteeing any returns on investments made in
any Scheme. 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.

62
HDFC House, 2nd Floor, H.T. Parekh Marg,
165-166, Backbay Reclamation,
Churchgate, Mumbai - 400020.

Website: www.hdfcfund.com
Toll Free No: 1800 3010 6767 / 1800 419 7676

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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS,

READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.