HDFC Money Market Fund(An open ended debt scheme investing in money market instruments)

This product is suitable for investors who are seeking*:

• Income over short term.

• to generate income/ capital appreciation by investing in money

market instruments

Riskometer

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

^Refer slide 4-6 for run down strategy

1

A portfolio with run down maturity^

What are Money Market Instruments?

Money Market Instrument Includes:

• Commercial papers

• Commercial bills

• Treasury bills

• Government securities (having an unexpired maturity upto one year)

• Call or notice money

• Certificate of deposit,

• Usance bills and

• Any other like instruments as specified by the RBI / SEBI from time to time.

2

Typically, tenure of money market instruments ranges from 1 day to 1 year

Liquid

Funds

Ultra Short

Term

Funds

Money

Market

Funds

Low

Duration

Funds

Short

Duration

Funds

Medium

Duration

Funds

Long

Duration

Funds

Positioning (Debt Funds)

3

RISK (Maturity)

RE

TU

RN

Upto 91 days$ 3 -6 months^ Upto 1 year$ 6 -12 months^ 1-3 years^ 3-4 years^

(1-4 years in adverse

situation)

4-7 years^

(1-7 years in adverse

situation)

$ - Maximum maturity of a security

^ - Portfolio Macaulay Duration

Macaulay Duration (Duration) measures the price volatility of fixed income securities. It is often used in the comparison of interest

rate risk between securities with different coupons and different maturities. It is defined as the weighted average time to cash flows of

a bond where the weights are nothing but the present value of the cash flows themselves. It is expressed in years. The duration of a

fixed income security is always shorter than its term to maturity, except in the case of zero coupon securities where they are the

same.

In view of the individual circumstances and risk profile, each investor is advised to consult his / her professional advisor before

making a decision to invest.

Investment Strategy

• Currently, the fund intends to follow one of the investment strategies - buy money

market instruments with maturity upto 1 year and adopt a buy and hold (run down)

strategy, thereby, allowing the maturity to reduce over time.

• Consequently, scheme returns are expected to be closely aligned to the prevailing

YTM, irrespective of the movement in interest rates over the run down tenor of the

strategy.

• This strategy is being initiated in January-March quarter (rebalancing period). Hence,

the residual maturity will be less in this quarter every year. The portfolio shall generally

be rebalanced in this period every year.

The current investment strategy is subject to change depending on the market conditions and is subject to risks

such as credit risk, settlement risk, risks arising on account of portfolio adjustments made due to large

inflows/outflows.

HDFC Mutual Fund/AMC is not guaranteeing /offering/communicating any returns/indicative yields on

investments made in the said Scheme.

4

Month 0

Matu

rity

Target Period

Maturity is rebalanced when

Portfolio Maturity is minimal;

reset maturity will be done with the

objective of optimizing returns over

the target duration

5

Run down Portfolio Strategy – Graphical

representation

The current investment strategy is subject to change depending on the market conditions and is subject to risks

such as credit risk, settlement risk, risks arising on account of portfolio adjustments made due to large

inflows/outflows. HDFC Mutual Fund/AMC is not guaranteeing /offering/communicating any returns/indicative

yields on investments made in the said Scheme.

How does Run down Portfolio work?

6

Scenario Investment

Date

Portfolio

Yield at the

time of

Investment

Redemption

Date

Portfolio

Yield at the

time of

redemption

Portfolio Return

^(Annualised)

Remarks

When investor redeemed during rebalancing period

1 1-Mar-15 7% 1-Mar-16 * ~7% It can be seen that the

portfolio return

approximately matched the

portfolio yield available at the

time of investment

2 1-Aug-15 6% 1-Mar-16 * ~6%

3 1-Nov-15 8% 1-Mar-16 * ~8%

When investor redeemed before rebalancing period

4 1-Mar-15 7% 1-Aug-15 6% >~7% As the portfolio yield is lower

than that of Mar-15, there

would be valuation Gains

5 1-Mar-15 7% 1-Nov-15 8% <~7% As the portfolio yield is

higher than that of Mar-15,

there would be valuation

Losses

Scenario Analysis of Run Down Portfolio Strategy assuming the rebalancing is done on 1st

March every year

Disclaimer: Above illustration is purely to explain the concept of run down portfolio strategy, The scenario’s provided in the table above does

not consider any risks such as credit risk, settlement risk, risks arising on account of portfolio adjustments made due to large

inflows/outflows. The rate of return/yields shown are assumed figures and not to be construed as actual returns and/or indicative returns.

Any expenses / charges have not been considered in the calculations. HDFC Mutual Fund/AMC is not guaranteeing/offering/communicating

any returns/indicative yields on investments made in this Fund. The recipient should understand that the information provided above may not

contain all the material aspects relevant for making an investment decision. In view of the individual circumstances and risk profile, each

investor is advised to consult his / her professional advisor before making a decision to invest in the Scheme. HTM: Held To Maturity

The current investment strategy is subject to change depending on the market conditions.

* Jan-Mar quarter (refer slide no.4)

* Yield at the time of redemption would not be relevant for HTM portfolio.

Interest rate/reinvestment risk would be minimal when redemption occurs during rebalancing period

6

Why HDFC Money Market Fund?

Term spreads are high (refer slide 8)

Steep yield curve (refer slide 9)

Low interest rate risk

Yield to Maturity likely to be higher than liquid funds

No lock-in, no entry / exit load

Currently, the fund has highest rated credit quality^

7

^Refer slide no. 11

HDFC Mutual Fund/AMC is not guaranteeing /offering/communicating any returns/ indicative yields on investments made in this

Fund. In view of the individual circumstances and risk profile, each investor is advised to consult his / her professional advisor

before making a decision to invest in the Scheme.

Attractive term spreads -

Spread between CDs and Repo are high

8

Sp

read

(%

)

CD: Certificate of Deposit

Source: Bloomberg (Derivium)

The graph shows term spreads as of a date.

Historical performance indicators and financial market scenarios are not the reliable indicators for current or future performance.

HDFC Mutual Fund/AMC is not guaranteeing/offering/communicating any returns/ indicative yields on investments made in this

Fund. The above should not be construed as an investment advice or a recommendation by HDFC Mutual Fund/HDFC AMC. The

above graph is for general information and illustrative purpose only.

Reasonable term spreads

0.18

0.57

1.23

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19

3m CD - Repo 6m CD - Repo 1Y CD - Repo

Steep yield curve

9

Sp

read

(%

)

CD: Certificate of Deposit

Source: Bloomberg (Derivium)

The graph shows term spreads as of a date.

Historical performance indicators and financial market scenarios are not the reliable indicators for current or future performance.

HDFC Mutual Fund/AMC is not guaranteeing/offering/communicating any returns/ indicative yields on investments made in this

Fund. The above should not be construed as an investment advice or a recommendation by HDFC Mutual Fund/HDFC AMC. The

above graph is for general information and illustrative purpose only.

0.40

1.05

(0.25)

-

0.25

0.50

0.75

1.00

1.25

6m CD - 3m CD 12m CD - 3m CD

Suitability

HDFC Money Market Fund is suitable for investors:

Who want to lock-in the yields at current levels

Have an investment horizon upto 1 year

Who want to minimize the interest/reinvestment rate risk

Investors with a need to park short term surpluses

10

HDFC Mutual Fund/AMC is not guaranteeing/offering/communicating any returns/ indicative yields on investments made in

the said Scheme. In view of the individual circumstances and risk profile, each investor is advised to consult his / her

professional advisor before making a decision to invest in the Scheme.

Portfolio Characteristics

11

Portfolio Classification by Rating Class

(%) ≈

AAA & Equivalent, A1+ &

Equivalent96.97

Cash, Cash Equivalents and

Net Current Assets3.03

AUM as (In Rs. Cr.) 8,276

Portfolio Classification by Asset Class

(%) ≈

Commercial Papers 47.02

Certificate of Deposits 49.95

Cash, Cash Equivalents and

Net Current Assets3.03

For complete portfolio details refer www.hdfcfund.com. Portfolio details provided as on September 30, 2019

Type of Scheme An open ended debt scheme investing in money market instruments

Category of Scheme Money Market Fund

Inception Date 18th

November, 1999

Investment ObjectiveTo generate income / capital appreciation by investing in money market instruments. There is

no assurance that the investment objective of the Scheme will be realized.

Fund Manager $ Anil Bamboli (since July 25th

, 2012)

Investment Plan Regular Plan & Direct Plan

Investment Options

Options under each plan: Growth and Dividend. Dividend Option offers Daily (Reinvestment) and

Weekly (Payout and Reinvestment facility)

Minimum Application

Amount.

Purchase: Under Growth Option and Weekly Dividend Option : Rs. 5,000 and any amount

thereafter. Under Daily Dividend Option : Rs. 10,000 and any amount thereafter

Additional Purchase: Under Growth Option and Weekly Dividend Option : Rs. 1,000 and any

amount thereafter. Under Daily Dividend Option : Rs. 5,000 and any amount thereafter

Benchmark IndexCRISIL Liquid Fund Index

Fund Facts

12

$ Dedicated Fund Manager for Overseas Investments: Mr Chirag Dagli

For further details, please refer to the Scheme Information Document.

Disclaimer & Risk Factors

This presentation dated 15th

October, 2019 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

current investment strategies are subject to change depending on market conditions.

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 may include statements of future expectations and other forward-looking

statements that 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.For complete portfolio/details refer to our website www.hdfcfund.com

Mutual fund investments are subject to market risks, read all scheme

related documents carefully.

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Thank You

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