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Transcript of HDFC Children’s Gift Fund - hdfcfund.com · Parents want their children to have a better life...
HDFC Children’s Gift Fund
Empower and strengthen your child’s future, today. Don’t let �nances get in the way of your child’s dream!
Please refer page 21 for product labelling
(An Open-ended Balanced Scheme)
July, 2017
3Higher education is not the privilege of the elite. Do you agree?
How Much Will It Cost You Tomorrow?
Source: Indian Institute of Management – Ahmedabad, IIT – Guwahati , Manipal University– Mangalore.Costs depicted based on the education costs for the PGDM course at Indian Institute of Management – Ahmedabad, B. Tech 4 year programme at IIT – Guwahati (Fees extrapolated for 4 year course) & MBBS program at Manipal University - Mangalore. 2032 �gures based on In�ation �gures assumed at 10% p.a. Monthly investment needed to build such corpus by 2032 calculated based on a 15 Year SIP investment returning 15% p.a.
MBA 19.5 Lakhs 81.5 Lakhs
Engineering 9.6 Lakhs 40.1 Lakhs
Medical 45.6 Lakhs 1.9 Crore
Rs. 12,200
Rs. 6,000
Rs. 28,500
2017 2032 Monthly savings needed for professional education in 2032?
The above �gures are rounded off to the nearest hundred.
4“The roots of education are bitter, but the fruit is sweet” - Aristotle
How Much is Enough?¦ With rising education costs across all professional degrees,
saving for education becomes even more imperative
¦ Child care costs also include additional costs of housing, transportation, clothing, food, health care, etc.
¦ Long term equity investing is a suitable medium to combat ever increasing costs
The above chart is only an illustrative example to show rising cost of education and not based on actual data.
Cost of Education is rising much faster than in�ation
Cost of education
Inflation
5What If your Child Aspires To Go To Harvard? Are You Prepared?
Prepare For The Best¦ The best professional degree courses in India cost up to
Rs. 19.5 lakh* today
¦ Similar courses abroad can cost signi�cantly more
¦ Premium institutes have the pricing power and in�ation will take these numbers higher year after year
¦ The cost of education should not come as a surprise to you
¦ So, prepare for the best, though you may have options to choose from!
¦ Save regularly with a goal in mind
¦ Finances should not get in the way of your child’s dreams
* Fees for a 2 year program in IIM Ahmedabad. Source - Business Standard
Source: Internal CalculationThe above is an illustration using assumed rate of return of 8% only to explain the concept of Power of Compounding. It does not forecast or guarantee the returns in any mutual fund scheme.
The road to 50 Lakhs!
¦ Anirvan starts early and saves Rs. 14,810/month for 15 years
¦ Nicole and Sachin are late starters and will have to contribute a higher amount on a monthly basis to accumulate the same amount as Anirvan
¡ Nicole: Rs. 27,759/month for 8 years
¡ Sachin: Rs. 68,545/month for 5 years
The later you start, the less your money works for you!
6
The Cost of Procrastination - Don’t delay the inevitable
Anirvan
Nicole
Sachin
` 4,112,711 ` 887,288
` 3,331,034 ` 1,668,966
` 2,665,827 ` 2,334,173
Contributions Earnings
Goal Based Investing
¦ Targets a speci�c amount of corpus for your child’s education
¦ Money is earmarked for a speci�c purpose. For instance, investors do not touch PF corpus for buying a car (as the money is earmarked for retirement)
¦ Investors tend to rationalize their spending on other personal / social requirements
¦ Investing with a goal brings discipline
¦ Balances your current aspirations vs future requirements. A sizeable corpus can be built over time
¦ Mental Accounting is involved, ensuring long-term holding of investments
7
Goal based Investing towards Child’s Education
Build a corpus meant for your Child’s Education!
Investing without a Goal
¦ Savings are kept in a “common savings pool” without any goal in mind
¦ Money gets withdrawn from the “common savings pool” for all �nancial requirements
¦ Tend to overspend on other commitments
¦ What is left after spending gets saved
¦ What is left out of the “common savings pool” may not be adequate to tackle speci�c goals like children’s education
¦ Investors can get irrational in allocation of funds for various purposes and may resort to premature withdrawals
¦ “Mental Accounting” is an economic concept as per which investors divide their current and future savings into separate, non-transferable portions affecting their consumption decisions and other behaviours
¦ Mental accounting leads to long term thinking and �nancial discipline
¦ Since children`s education expenses are substantial and important, a corpus meant for the same needs to be saved separately
¦ Such investments are to be withdrawn only when nearing the goal
8
Mental Accounting
Parents want their children to have a better life than theirs; Education is the foundation for a better life.
Sensex CAGR of 14.4% for the period April 1, 1990 to March 31, 2017. Nominal GDP: A gross domestic product (GDP) �gure that has not been adjusted for in�ation.
¦ Have equities beaten in�ation? Equities have beaten in�ation and have compounded faster than other major asset classes over the last 25 years
¦ Aren’t equities risky? Having a short term view or investing directly in equities without adequate knowledge can be risky. Choose the right mutual fund scheme
¦ How do I invest in equities? Start a Systematic Investment Plan with a mutual fund. As your income increases, do a SIP Top Up
¦ Should I put all my money in equities? Not entirely. When you have a lot of time to achieve your goals, invest predominantly into equities. As you near your goals, you need to shift gradually to lesser volatile asset class like debt
9
Equities - A Powerful tool against In�ation
Cumulative annualised returns of different asset classes (1990 - 2017*)
* Returns from April 1, 1990 to March 31, 2017
Source: Bloomberg, World Bank
(% CAGR Returns)
Equity
Gold
Bank FD
Avg Inflation
2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0-
14.4
9.9
8.5
7.8
Professional Fund Management
¡ Expert fund management
¡ In depth research
¡ Conscious portfolio management to optimize returns
10
How Mutual Funds help?
Long term �nancial goal planning
¡ Meet �nancial goals by investing in products catering to a wide array of investment goals
¡ Options to invest regularly in small doses or lump sum
Other bene�ts
¡ Diversi�cation even with a small investment
¡ Liquidity
¡ Tax bene�ts
SIP
¦ Investments at a prede�ned monthly or quarterly frequency
¦ For a salaried individual, the income is monthly and so should be the savings
¦ Ideal way to develop a savings habit
¦ As the income increases, do SIP Top Up
¦ This would inculcate discipline as to spending what is left after saving
11
SIP or Lump Sum?
Can there be a better gift to your child than investing to secure his/her future?
Lump Sum
¦ Lump sum when you receive large �ows like a bonus
¦ Ad hoc investments on special occasions like festivals or your child’s birthday
¦ Have a target corpus in mind
¦ Start early and invest regularly toward the goal - Keep time on your side!
¦ Focus long-term and stay invested
12
Strategy to Smart Investing
Children grow fast; Make sure your Savings do too!
Presenting...
HDFC Children’s Gift Fund(An Open-ended balanced scheme)
13
HDFC Children’s Gift Fund - Weathered it all
Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17
20.00
40.00
60.00
80.00
100.00
120.00
HDFC Children’s Gift Fund - Investment Plan
NIFTY 50
CRISIL Balanced Index
HDFC Children’s Gift Fund - Through the Tough Times
9/11, KP ScamBJP Loses
Lehman Crises,
Satyam Scam
nd2 Term for
UPA
2G Scam,
Coal Scam etc.
Clear majority
for BJP
Demonetization,
GST, Brexit,
Trump becomes US President
US Rate Hike,
Slowdown in US
& Commodity
crash
QE3 Taper
Worry
¦ Meant for all children below the age of 18 years
¦ Balanced strategy with healthy allocation towards equities which is an ideal long-term asset class coupled with debt allocation which provides stable returns
¦ Personal accident insurance for parent/guardian of up to Rs 10 lakhs*
¦ Investments can be made on a lump sum or SIP basis and there is no limit to the number of transactions in any given year. No maximum limit on investment
¦ Easy hassle free withdrawal options
¦ Bene�t from the long term potential of equity while maintaining the stability of debt
14
HDFC Children’s Gift Fund
“Education is the most powerful weapon which you can use to change the world” - Nelson Mandela
*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.
If your child is taking baby steps as he/she explores all that the world has to offer
And
You have time to save up for their expenses for which you need to build a corpus today!
15
Which Option should you choose?
If your child is at the cusp of adulthood ready to prove to the world what they are capable of
And
If you do not have time on your side and your child turns 18 in the near term
16
Asset Allocation
* Investment in Securitized debt, if undertaken, would not exceed 20% of the net assets of the Scheme.The maximum derivative position will be restricted to 20% of the Net Assets (i.e. Net Assets including cash) of each Plan.
For further details, refer SID (Scheme Information Document) / KIM (Key Information Memorandum)
Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows:
Investment Plan
Instruments Minimum
Allocation
Maximum
Allocation
Risk Profile
(% of net assets)
Equities and
Equity linked
Instruments
40 75 High
Debt securities
and Money
Market
Instruments*
25 60 Low to Medium
Savings Plan
Instruments Minimum
Allocation
Maximum
AllocationRisk Profile
(% of net assets)
Equities and Equity linked
Instruments0 20 High
Debt Securities and money
market Instruments
(Including
cash/CBLO/Reverse Repo
and securitised debt)
80 100Low to
Medium
¦ Investment will be made in the name of a minor
¦ Parent/Guardian will operate the folio till the child attains majority
¦ No limit to investing amount
¦ Investment can be made as many times till the minor turns 18
¦ In-built Personal Accident cover up to Rs. 10 lakhs!*
17
Key Features
“Education gives you wings to �y” - APJ Abdul Kalam
Who can invest?
Ÿ ParentsŸ Grand ParentsŸ FriendsŸ Other Relatives
*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.
¦ Covers the Parent / Legal Guardian (up to the age of 80 years) of the Unit holder
¦ Cover equivalent to 10 times the cost value of the outstanding units subject to a maximum of Rs.10 lakh per parent / legal guardian across all folios
¦ Valid from the date of allotment of units till the unit holder attains 18 years of age or date of redemption whichever is earlier
¦ Insurance premium will be borne by HDFC Asset Management Co. Ltd.
18
Free Personal Accident Insurance Cover of up to Rs. 10 Lakh*
For further details on the terms and conditions of the policy, please refer to Scheme Information Document.*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.
$ Dedicated Fund Manager for Overseas Investments: Mr Rakesh Vyas
For further details, please refer to the Scheme Information Document.
Fund Facts
Nature of Scheme Open-ended Balanced Scheme
Inception Date (Date of allotment) March 2, 2001
Investment Objective The primary objective of both the Plans (viz. Savings Plan & Investment Plan) offered under the Scheme is to generate long-term capital
appreciation.
Fund Manager $ Mr. Chirag Setalvad
Investment Plan Investment Plan-Regular Option, Direct Option and Savings Plan-Regular Option, Direct Option
Investment Options Growth Option only available for both schemes
Minimum Application Amount
(Under Each Plan/Option)
Purchase : Rs. 5,000/- and any amount thereafter
Additional Purchase : Rs 1000/- and any amount thereafter
Load Structure Entry Load:
Exit Load:
For Units subject to Lock-in Period: NIL
For Units not subject to Lock-in Period:
Lock in Period If opted: Until the Unit Holder (being the beneficiary child) attains the age of 18 years or until completion of 3 years from date of
allotment, whichever is later
Benchmark HDFC Children's Gift Fund - Investment Plan - CRISIL Balanced Fund - Aggressive Index
HDFC Children's Gift Fund - Savings Plan CRISIL MIP Blended Index
No Exit load shall be levied on bonus units and units allotted on dividend reinvestment.
In case of Systematic Transactions such as Systematic Investment Plan (SIP), Systematic Withdrawal Advantage Plan (SWAP), etc.,
Exit Load, if any, prevailing on the date of registration / enrolment shall be levied.
3% if the Units are redeemed / switched-out within one year from the date of allotment, 2% if the Units are redeemed / switched-out
between the first and second year of the date of allotment, 1% if Units are redeemed /switched-out between the second and third year
of the date of allotment, Nil if the Units are redeemed / switched -out after third year from the date of allotment.
Not Applicable. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on
the investors’ assessment of various factors including the service rendered by the ARN Holder.
19
HDFC Children’s Gift FundInvestment Plan (Equity Oriented)
HDFC Children’s Gift FundSavings Plan (Debt Oriented)
Perf
orm
ance
20
Period Scheme Returns (%)$ Benchmark Returns (%)#Additional Benchmark
Returns (%)##
Value of ` 10,000 invested
Scheme (`) $ Benchmark (`) #Additional Benchmark
(`)##
Last 1 Year 20.53 13.85 14.88 12,053 11,385 11,488
Last 3 Years 14.12 9.08 7.74 14,869 12,981 12,509
Last 5 Years 18.50 11.73 12.50 23,390 17,421 18,036
Since Inception 17.40 N.A. 12.93 137,523 N.A. 72,882
Performance of HDFC Children’s Gift Fund - Investment Plan (Equity - oriented) NAV as on June 30, 2017 ` 105.787
Performance of HDFC Children’s Gift Fund - Savings Plan (Debt - oriented) NAV as on June 30, 2017 ` 43.5433
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR). # CRISIL Balanced Fund - Aggressive Index ## NIFTY 50 Index.
N.A. Not Available. Inception Date: March 02, 2001. The Scheme is managed by Mr. Chirag Setalvad since April 02, 2007.
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR). # CRISIL MIP Blended Index ## CRISIL 10 year Gilt Index.
N.A. Not Available. Inception Date: March 02, 2001. The Scheme is managed by Mr. Chirag Setalvad since April 02, 2007.
Period Scheme Returns (%)$ Benchmark Returns (%)#Additional Benchmark
Returns (%)##
Value of ` 10,000 invested
Scheme (`) $ Benchmark (`) #Additional Benchmark
(`)##
Last 1 Year 12.96 12.07 11.69 11,296 11,207 11,169
Last 3 Years 11.23 10.56 11.15 13,764 13,519 13,736
Last 5 Years 11.63 10.15 8.46 17,348 16,225 15,017
Since Inception 11.19 N.A. N.A. 56,606 N.A. N.A.
Other funds managed by Chirag Setalvad, Fund Manager of HDFC Children’s Gift Fund - Investment Plan & Savings Plan
Performance of Top 3 schemes by Chirag Setalvad
Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%)
HDFC Retirement Savings Fund - Hybrid Equity Plan+ 25-Feb-16 23.72 N.A. N.A.
1CRISIL Balanced Fund - Aggressive Index 13.85 N.A. N.A.
HDFC Long Term Advantage Fund ~ 02-Apr-07 24.01 12.91 18.41
1S&P BSE SENSEX 14.53 6.75 12.13
HDFC Small Cap Fund * 27-Jun-14 30.99 20.15 22.17
1NIFTY Free Float Smallcap 100 Index 25.76 10.69 16.87
Performance of Bottom 3 schemes by Chirag Setalvad
Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%)
HDFC Retirement Savings Fund - Hybrid Debt Plan+ 26-Feb-16 13.79 N.A. N.A.1CRISIL MIP Blended Index 12.07 N.A. N.A.
HDFC Multiple Yield Fund - Plan 2005 ^ 02-Apr-07 10.45 8.60 10.331CRISIL MIP Blended Index 12.07 10.56 10.15
HDFC Retirement Savings Fund - Equity Plan + 25-Feb-16 24.52 N.A. N.A.1NIFTY 500 Index 19.35 N.A. N.A.
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR). The above returns are of Regular Option - Growth Option. $ Adjusted for
bonus units declared under the scheme. +The Scheme is co-managed by Chirag Setalvad (Equities) and Shobhit Mehrotra (Debt). ^The Scheme is co-managed by Chirag Setalvad (Equities) and Anil Bamboli
(Debt).~Open Ended Equity Linked Savings Scheme with a lock-in period of 3 years. Load is not taken into consideration for computation of performance. 1. Benchmark. NAV at Inception for all the above schemes
was Rs. 10. *Erstwhile HDFC Small and Mid Cap Fund. Data as on June 30, 2017. Top 3 and bottom 3 schemes managed by the Fund Manager have been derived on the basis of since inception returns vis-à-vis the
benchmark. In case the benchmark is not available on the Scheme’s inception date, the returns for the concerned scheme is considered from the date the benchmark is available. On account of difference in the
type of the Scheme, asset allocation, investment strategy, inception dates, the performance of these schemes is strictly not comparable.
Different Options viz. Regular Option and Direct Option have different expense structure. The expenses of the Direct Option under the scheme will be lower to the extent
of the distribution expenses/commission charged in the Regular Option.
* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
HDFC Children’s Gift Fund- Investment Plan (Equity Oriented) is suitable for investors who are seeking*
Ÿ Capital appreciation over long term
Ÿ Investment in equity and equity related instruments as well as debt and money market instruments
HDFC Children’s Gift Fund- Savings Plan (Debt Oriented) is suitable for investors who are seeking*
Ÿ Capital appreciation over medium to long term
Ÿ Investment in debt and money market instruments as well as equity and equity related instruments
Product Labelling
Riskometer
21
Riskometer
Disclaimer & Risk Factors
22
stThe presentation dated 31 July 2017 has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based on
internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations,
meant as guidelines only, which you must confirm before relying on them. The information contained in this document is for
general purposes only. The document is given in summary form and does not purport to be complete. The document does not
have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive
this document. The information/ data herein alone are not sufficient and should not be used for the development or
implementation of an investment strategy. The statements contained herein are based on our current views and involve known
and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those
expressed or implied in such statements. Past performance may or may not be sustained in future. Neither HDFC AMC and HDFC
Mutual Fund nor any person connected with them, accepts any liability arising from the use of this document. The recipient(s)
before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice
and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.