COMBINED SCHEME INFORMA TION DOCUMENT (EQUITY …1 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017 COMBINED SCHEME INFORMA TION DOCUMENT (EQUITY ORIENTED SCHEMES & FUND OF FUNDS SCHEME)

1 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017

COMBINED SCHEME INFORMATION DOCUMENT(EQUITY ORIENTED SCHEMES & FUND OF FUNDS SCHEME)

The particulars of the Scheme(s) have been prepared in accordance with the Securities and Exchange Board of

India (Mutual Funds) Regulations, 1996, (herein after referred to as SEBI (MF) Regulations) as amended till date,

and filed with SEBI, along with a Due Diligence Certificate from the AMC. The units being offered for public

subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy

of the Scheme Information Document.

The Scheme Information Document sets forth concisely the information about the Scheme(s) that a prospective investor

ought to know before investing. Before investing, investors should also ascertain about any further changes to this Scheme

Information Document after the date of this Document from the Mutual Fund / Investor Service Centres (ISCs) / Website /

Distributors or Brokers.

The investors are advised to refer to the Statement of Additional Information (SAI) for details of HDFC Mutual

Fund, Tax and Legal issues and general information on www.hdfcfund.com

SAI is incorporated by reference (is legally a part of the Scheme Information Document). For a free

copy of the current SAI, please contact your nearest Investor Service Centre or log on to our

website - www.hdfcfund.com

The Scheme Information Document should be read in conjunction with the SAI and not in isolation.

This Combined Scheme Information Document is dated April 30, 2017.

Name of Mutual Fund : HDFC Mutual Fund

Name of Asset Management Company : HDFC Asset Management Company Limited

Name of Trustee Company : HDFC Trustee Company Limited

Addresses, Website of the entities:

Address:

Asset Management Company (AMC) :HDFC Asset Management Company LimitedA Joint Venture with Standard Life Investments

Registered Office :HDFC House, 2nd Floor, H.T. Parekh Marg, 165-166,Backbay Reclamation, Churchgate, Mumbai - 400 020.

CIN No: U65991MH1999PLC123027

Trustee Company :HDFC Trustee Company Limited

Registered Office :HDFC House, 2nd Floor, H.T. Parekh Marg, 165-166,Backbay Reclamation, Churchgate, Mumbai - 400 020.

CIN No. U65991MH1999PLC123026

Website:

www.hdfcfund.com

Continuous Offer of Units at Applicable NAV

Product Labeling

2HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017

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

PRODUCT LABELING:

To provide investors an easy understanding of the kind of product /scheme they are investing in and its suitabilityto them, the product labeling for the following schemes is as under:

NAME OF SCHEME

Moderate

Low

High

Mode

ratel

y

Low

ModeratelyHigh

Investors understand that their principal will be atmoderately high risk

LOW HIGH

THIS PRODUCT IS SUITABLE FOR INVESTORS WHOARE SEEKING*

RISKOMETER

HDFC Growth Fund

Open-ended Growth Scheme

• capital appreciation over long term.

• investment predominantly in equity and equity relatedinstruments

HDFC Equity Fund



• investment predominantly in equity and equity relatedinstruments of medium to large sized companies

HDFC Top 200 FundOpen-ended Growth Scheme

• capital appreciation over long term

• investment in equity and equity linked instruments includingequity derivatives primarily drawn from the companies inthe S&P BSE 200 Index.

HDFC Capital Builder Fund



• investment predominantly in equity and equity relatedinstruments of strong companies.

HDFC Core & SatelliteFund



• investment primarily in equity and equity related instrumentsof companies whose shares are quoting at prices belowtheir true value.

HDFC Premier Multi-CapFund



• investment predominantly in equity and equity relatedinstruments of Mid Cap and Large Cap 'blue chip'companies.

HDFC Large Cap Fund

Open-ended Equity Scheme


• investment in equity and equity related instruments oflarge cap companies

HDFC Index Fund - NiftyPlan

Open-ended Index LinkedScheme

• returns that are commensurate with the performance ofthe NIFTY, subject to tracking errors over long term

• investment in equity securities covered by the NIFTY

HDFC Index Fund - SENSEXPlan


• returns that are commensurate with the performance ofthe SENSEX, subject to tracking errors over long term

• investment in equity securities covered by the SENSEX

HDFC Index Fund - SENSEXPlus Plan



• investment in equity securities of 80% to 90% of the netassets of the Plan in companies whose securities areincluded in SENSEX and between 10% & 20% of the netassets in companies whose securities are not included inthe SENSEX.

HDFC Long TermAdvantage Fund

Open-ended Equity LinkedSavings Scheme with lock-inperiod of 3 years


• investment predominantly in equity and equity relatedinstruments.

HDFC TaxSaver

Open-ended Equity LinkedSavings Scheme with lock-inperiod of 3 years

• growth of capital over long term.

• investment predominantly in equity and equity relatedinstruments.


PRODUCT LABELING:

To provide investors an easy understanding of the kind of product /scheme they are investing in and its suitabilityto them, the product labeling for the following schemes is as under:

NAME OF SCHEME

Moderate

Low

High

Mode

ratel

y

Low

ModeratelyHigh

Investors understand that their principal will be atmoderately high risk

LOW HIGH

THIS PRODUCT IS SUITABLE FOR INVESTORS WHOARE SEEKING*

RISKOMETER

HDFC Balanced Fund

Open-ended Balanced Scheme

• capital appreciation along with current income over longterm.

• investment predominantly in equity and equity relatedinstruments with balance exposure to debt and moneymarket instruments.

HDFC Prudence Fund

Open-ended Balanced Scheme

• periodic income with capital appreciation and preventionof capital erosion over long term.

• investment predominantly in equity and equity relatedinstruments with balance exposure to debt and moneymarket instruments.

HDFC Dynamic PE RatioFund of Funds

Open-ended Fund of FundsScheme


• investment in specified equity and debt schemes of HDFCMutual Fund based on PE Ratios

HDFC Mid-CapOpportunities Fund



• investment predominantly in equity and equity relatedinstruments of Small and Mid Cap companies.

HDFC Small Cap Fund



• investment predominantly in equity and equity relatedinstruments of Small-Cap and Mid-Cap companies

HDFC Equity Savings Fund

An Open-ended Equity Scheme

• Capital appreciation while generating income over mediumto long term.

• Provide capital appreciation and income distribution to theinvestors by using equity and equity related instruments,arbitrage opportunities, and investments in debt and moneymarket instruments.

HDFC Arbitrage Fund

Open-ended Equity Fund

• income over short term.

• income through arbitrage opportunities between cashand derivative market and arbitrage opportunities withinthe derivative segment

Moderate

Low

High

Mode

ratel

y

Low

ModeratelyHigh

Investors understand that their principal will be atmoderately low risk

LOW HIGH

Moderate

Low

Hig

h

Mode

ratel

y

Low

ModeratelyHigh

Investors understand that their principal will be at high risk

LOW HIGH

HDFC Infrastructure Fund



• investment predominantly in equity and equity relatedsecurities of companies engaged in or expected to benefitfrom the growth and development of infrastructure.

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


1. Highlights/Summary of the Scheme(s) ................. 5

I. INTRODUCTION

A. Risk Factors ................................................. 14

B. Requirement of Minimum Investors

in the Scheme(s) .......................................... 20

C. Special Considerations ................................ 20

D. Definitions ................................................... 22

E. Abbreviations .............................................. 26

F. Due Diligence by the Asset Management

Company ..................................................... 27

II. INFORMATION ABOUT THE SCHEME(S)

A. Type of the Scheme(s) ................................. 28

B. What is the Investment Objective of

the Scheme(s)? ............................................ 28

C. How will the Scheme(s) allocate its assets? . 28

D. Where will the Scheme(s) invest? ................ 36

E. What are the Investment Strategies? ........... 43

F. Fundamental Attributes ............................... 57

G. How will the Scheme(s) Benchmark its

Performance? .............................................. 58

H. Who manages the Scheme(s)? ..................... 60

I. What are the Investment Restrictions? ......... 64

J. How has the Scheme(s) Performed? ............ 66

K. Additional Scheme Related Disclosure(s) ..... 76

III. UNITS AND OFFER

A. NEW FUND OFFER (NFO) ...................... 87

B. ONGOING OFFER DETAILS

l Plans / Options offered ....................... 87

l Ongoing Offer Period ......................... 89

l Dividend Policy .................................... 90

l Allotment ............................................. 91

l Who Can Invest ................................... 91

l How to Apply ...................................... 93

l Listing .................................................. 93

l Policy regarding re-issue of

repurchased units ................................ 94

l Restrictions, if any, on the right to freely

retain or dispose of units being offered 94

TABLE OF CONTENTS

Page No. Page No.

l Ongoing Price for subscription ............ 94

l Ongoing Price for redemption ............. 95

l Cut off timing ...................................... 95

l Where can the applications for

purchase / redemption / switches

be submitted? ...................................... 96

l Minimum amount for purchase /

redemption / switches .......................... 96

l Minimum balance to be maintained .... 97

l Special Products available ................... 97

l Account Statements .............................. 113

l Dividend .............................................. 115

l Redemption ......................................... 115

l Delay in payment of redemption /

repurchase proceeds ............................ 118

C. PERIODIC DISCLOSURES

l Net Asset Value ........................................ 119

l Monthly Portfolio Disclosure ...................... 119

l Monthly Average Asset under Management

(Monthly AAUM) Disclosure ....................... 119

l Half yearly Disclosures .............................. 119

l Annual Report ........................................... 119

l Associate Transactions ............................... 119

l Taxation .................................................... 120

l Investor services ........................................ 121

D. COMPUTATION OF NAV ......................... 121

IV. FEES AND EXPENSES

A. Annual Scheme Recurring Expenses ........... 122

B. Transaction Charges ................................... 127

C. Load Structure ............................................ 127

D. Waiver of Load for Direct Applications ....... 128

V. RIGHTS OF UNITHOLDERS ............................. 128

VI. PENALTIES & PENDING LITIGATIONS ............ 129


HIGHLIGHTS/SUMMARY OF THE SCHEME(S)

Name of theScheme

HDFC Growth Fund(HGF)

HDFC EquityFund (HEF)

HDFC CapitalBuilder Fund (HCBF)

InvestmentObjective

To generate long termcapital appreciation froma portfolio that is investedpredominantly in equityand equity relatedinstruments.

To achieve capitalappreciation.

To achieve capitalappreciation in thelong term.

Benchmark Index

Loads Entry Load: Not Applicable.

Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09 dated June 30, 2009, no entry load willbe charged by the Scheme to the investor.

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.

Exit Load:

l In respect of each purchase / switch-in of Units, an Exit Load of 1.00% is payable if Units are redeemed/switched-out within 1 year from the date of allotment.

l No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment.

No Entry / Exit Load shall be levied on bonus units and units allotted on dividend reinvestment.

In respect of Systematic Transactions such as SIP, GSIP, STP, Flex STP, Swing STP, Flexindex, Exit Load,if any, prevailing on the date of registration / enrolment shall be levied.

For further details on load structure refer to the section 'Load Structure' on Page 127.

S&P BSE SENSEX NIFTY 500 NIFTY 500

Type of Scheme Open-ended GrowthScheme

Open-ended GrowthScheme


HDFC Top 200 Fund(HT200)

To generate long term capitalappreciation from a portfolioof equity and equity linkedinstruments. The investmentportfolio for equity and equitylinked instruments will beprimarily drawn from thecompanies in the S&P BSE200 Index. Further, theScheme may also invest inlisted companies that wouldqualify to be in the top 200by market capitalisation onthe BSE even though they maynot be listed on the BSE. Thisincludes participation in largeIPOs where in the marketcapitalisation of the companybased on issue price wouldmake the company a part ofthe top 200 companies listedon the BSE based on marketcapitalisation.

S&P BSE 200


Plans/Options

• Regular Plan• Direct Plan




MinimumApplicationAmount

Purchase: Rs. 5,000 and any amount thereafter.

Additional Purchase: Rs. 1,000 and any amount thereafter.

The Scheme(s) offers two Plans:

Each Plan offers two Options (i) Growth Option and (ii) Dividend Option with Payout and Reinvestmentfacility.





Name of theScheme

HDFC Core & SatelliteFund (HC&SF)

HDFC PremierMulti-Cap Fund (HPMCF)

HDFC Mid-Cap OpportunitiesFund (HMCOF)

InvestmentObjective

To generate capitalappreciation through equityinvestment in companieswhose shares are quoting atprices below their true value.

To generate capital appreciation inthe long term through equityinvestments by investing in adiversified portfolio of Mid Cap andLarge Cap 'blue chip' companies.

To generate long-term capitalappreciation from a portfolio that issubstantially constituted of equity andequity related securities of Small andMid-Cap companies.

Benchmark Index S&P BSE 200 NIFTY 500 Nifty Free Float Midcap Index




Exit Load:

l In respect of each purchase / switch-in of Units, an Exit Load of 1.00% is payable if Units are redeemed/ switched-out within 1 year from the date of allotment.





HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)

Plans/Options The Scheme(s) offers two Plans:


• Regular Plan

• Direct Plan

• Regular Plan

• Direct Plan

• Regular Plan

• Direct Plan


Open-ended Growth Scheme Open-ended Equity SchemeType of Scheme





Exit Load:

l In respect of each purchase /switch-in of units, an Exit Loadof 0.25% is payable if Unitsare redeemed / switched-outwithin 1 month from the dateof allotment.

l No Exit Load is payable if Unitsare redeemed / switched-outafter 1 month from the date ofallotment.

Exit Load: NIFTY Plan

l In respect of each purchase /switch-in of Units, an Exit Loadof 1.00% is payable if Unitsare redeemed / switched-outwithin 3 months from the dateof allotment.

l No Exit Load is payable if Unitsare redeemed / switched-outafter 3 months from the dateof allotment.

Exit Load:

l In respect of each purchase /switch-in of Units, an Exit Loadof 1.00% is payable if Unitsare redeemed / switched-outwithin 1 year from the date ofallotment.

l No Exit Load is payable if Unitsare redeemed / switched-outafter 1 year from the date ofallotment.

Name of theScheme

InvestmentObjective

Benchmark Index


HDFC Infrastructure Fund(HINF)

To seek long-term capitalappreciation by investingpredominantly in equity and equityrelated securities of companiesengaged in or expected to benefitfrom the growth and developmentof infrastructure.

NIFTY 500

HDFC Index Fund

HDFC Index Fund:

The Scheme offers investors 3Plans, each with its own NAV,namely the:

l Nifty Plan

l SENSEX Plan

l SENSEX Plus Plan

Nifty Plan:

The objective of this Plan is togenerate returns that arecommensurate with theperformance of the NIFTY, subjectto tracking errors.

SENSEX Plan:

The objective of this Plan is togenerate returns that arecommensurate with theperformance of the SENSEX,subject to tracking errors.

SENSEX Plus Plan:

The objective of this Plan is toinvest 80% to 90% of the net assetsof the Plan in companies whosesecurities are included in SENSEXand between 10% & 20% of thenet assets in companies whosesecurities are not included in theSENSEX.

HDFC Arbitrage Fund (HAF)

To generate income througharbitrage opportunities betweencash and derivative market andarbitrage opportunities within thederivative segment and bydeployment of surplus cash in debtsecurities and money marketinstruments.

CRISIL Liquid Fund Index l Nifty Plan:NIFTY 50(Total Returns Index)

l SENSEX Plan:

S&P BSE SENSEX(Total Returns Index)

l SENSEX Plus Plan:S&P BSE SENSEX(Total Returns Index)

Type of Scheme Open-ended Equity Scheme Open-ended Index Linked SchemeOpen-ended Equity Fund




Purchase: Rs. 5,000 and anyamount thereafter.

Additional Purchase: Rs. 1,000and any amount thereafter.

Wholesale Plan - Purchase /Additional Purchase:Rs. 1,00,000 and any amountthereafter.

Name of theScheme

HDFC Index FundHDFC Arbitrage Fund (HAF)HDFC Infrastructure Fund(HINF)

Purchase: Rs. 5,000 and anyamount thereafter.

Additional Purchase:Rs. 1,000 and any amountthereafter.

Plans/Options The Scheme offers two Plans:

• Regular Plan

• Direct Plan

Each Plan offers two Options -(i) Growth Option and (ii)Dividend Option with Payout andReinvestment facility.

The Scheme offers two Plans:

HDFC Arbitrage Fund(Wholesale Plan)

• Regular Plan

• Direct Plan

Each Plan offers two Options -

(i) Growth Option and

(ii) Dividend Option

Dividend Option offers MonthlyDividend Option and NormalDividend Option with Payout andReinvestment facility.

The Scheme offers followingPlans:

HDFC Index Fund - Nifty Plan

• Regular Plan

• Direct Plan

HDFC Index Fund - SENSEX Plan

• Regular Plan

• Direct Plan

HDFC Index Fund - SENSEX PlusPlan

• Regular Plan

• Direct Plan

Each Plan offers Growth Optiononly.




Exit Load: SENSEX ANDSENSEX Plus Plan

l In respect of each purchase /switch-in of Units, an Exit Loadof 1.00% is payable if Unitsare redeemed / switched-outwithin 30 days from the dateof allotment.

l No Exit Load is payable if Unitsare redeemed / switched-outafter 30 days from the date ofallotment.



Purchase/Additional Purchase: Rs. 500 andin multiples of Rs. 500 thereafter.

Purchase: Rs. 5,000 and any amountthereafter.

Additional Purchase: Rs. 1,000 and anyamount thereafter.

Name of theScheme

HDFC LongTerm AdvantageFund* (HLTAF)

HDFC TaxSaver* (HTS) HDFC BalancedFund (HBF)

Benchmark Index S&P BSE SENSEX NIFTY 500

To generate longterm capitalappreciation from aportfolio that isi n v e s t e dpredominantly inequity and equityrelated instruments.

To achieve long termgrowth of capital.

InvestmentObjective

HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)HDFC Prudence Fund

(HPF)

To provide periodic returns andcapital appreciation over a longperiod of time, from a judiciousmix of equity and debtinvestments, with the aim toprevent/ minimise any capitalerosion. Under normalcircumstances, it is envisagedthat the debt : equity mix wouldvary between 25:75 and 40:60respectively. This mix may achievethe investment objective, mayresult in regular income, capitalappreciation and may alsoprevent capital erosion.

CRISIL Balanced FundAggressive Index

To generate capitalappreciation alongwith current incomefrom a combinedportfolio of equity &equity related and debtand money marketinstruments.

CRISIL Balanced FundAggressive Index

Loads Entry Load: Not Applicable



Exit Load: Nil




Exit Load:l In respect of each purchase / switch-in of Units,

upto 15% of the units may be redeemed withoutany exit load from the date of allotment.

l Any redemption in excess of the above limit shallbe subject to the following exit load: Exit load of1.00% is payable if Units are redeemed / switched-out within 1 year from the date of allotment ofunits.

l No Exit Load is payable if Units are redeemed /switched-out after 1 year from the date of allotment.






Open-ended equitylinked savingsscheme with a lock-in period of 3 years

Open-ended equity linkedsavings scheme with a lock-in period of 3 years)

Type of Scheme Open-ended BalancedScheme

Open-ended BalancedScheme

*HDFC TaxSaver and HDFC Long Term Advantage Fund are launched as an open-ended Equity Linked Savings Scheme(s) (ELSS)having a lock-in period of 3 years (with no assured returns) and are formulated as per the Notification dated December 28, 1992as amended on December 22, 1998 and Notification dated November 3, 2005 as amended on December 13, 2005 issued by theDepartment of Economic Affairs, Ministry of Finance, Government of India.

Each Plan offers two Options (i) Growth Option and(ii) Dividend Option with Payout facility.

Each Plan offers two Options (i) Growth Option and(ii) Dividend Option with Payout and Reinvestmentfacility.





Name of theScheme

HDFC Large Cap Fund

(HLCF)

HDFC Small Cap Fund(HSCF)

HDFC Dynamic PE Ratio

Fund of Funds (HDPEFOF)

InvestmentObjective

To provide long-term capitalappreciation by investingpredominantly in large capcompanies.

To provide long-term capitalappreciation by investingpredominantly in Small-Cap andMid-Cap companies

To seek capital appreciation bymanaging the asset allocationbetween specified equity and debtschemes of HDFC Mutual Fund

Benchmark Index NIFTY 50 Index NIFTY Free Float Smallcap100 Index

CRISIL Balanced Fund - AggressiveIndex

Loads Entry Load: Not Applicable.Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09 dated June 30, 2009, no entry load willbe charged by the Scheme to the investor.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.




• Regular Plan

• Direct Plan

• Regular Plan

• Direct Plan

• Regular Plan

• Direct Plan

Type of Scheme An open ended equityscheme

An open ended equity scheme An open ended fund of funds scheme

Exit Load:l In respect of each purchase / switch-in of units, an Exit Load of 1.00% is payable if Units are redeemed /

switched-out within 1 year from the date of allotment.l No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment.

No Entry / Exit Load shall be levied on bonus units and units allotted on dividend reinvestment.In respect of Systematic Transactions such as SIP, GSIP, STP, Flex STP, Swing STP, Flexindex, Exit Load, ifany, prevailing on the date of registration / enrolment shall be levied.



Minimum ApplicationAmount

Purchase: Rs. 5,000 and any amount thereafter.Additional Purchase: Rs. 1,000 and any amount thereafter.

Name of the Scheme HDFC Equity Savings Fund (HESF)

Investment Objective To provide capital appreciation and income distribution to the investors using arbitrage opportunities,investment in equity / equity related instruments and debt / money market instruments.

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

Benchmark Index 40% CRISIL Liquid Fund Index, 30% Crisil Short Term Bond Fund Index and 30% NIFTY 50


Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09 dated June 30, 2009, no entry loadwill be charged by the Scheme to the investor.

Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registeredDistributor) based on the investors' assessment of various factors including the service rendered bythe ARN Holder.

Exit Load:

l In respect of each purchase / switch-in of Units, upto 15% of the units may be redeemed withoutany exit load from the date of allotment.

l Any redemption in excess of the above limit shall be subject to the following exit load:

Exit load of 1.00% is payable if Units are redeemed / switched-out within 1 year from the dateof allotment of units.






• Regular Plan

• Direct Plan

Each Plan offers two Options (i) Growth Option and (ii) Dividend Option with Payout andReinvestment facility.

Type of Scheme Open-ended Equity Scheme


Transparency /NAV Disclosure

The AMC will calculate and disclose the NAV, Sale and Repurchase price of the Scheme at the closeof every Business Day in the following manner:

i) Published in atleast 2 daily Newspapers.

ii) Displayed on the website of the Mutual Fund (www.hdfcfund.com)

iii) Displayed on the website of Association of Mutual Funds in India (AMFI) (www.amfiindia.com).

iv) Displayed at the ISCs

The AMC shall update the NAVs on the website of the Mutual Fund (www.hdfcfund.com) and onthe website of AMFI (www.amfiindia.com) by 9.00 p.m. on every Business Day. In case of any delay,the reasons for such delay would be explained to AMFI in writing. If the NAVs are not available

before commencement of Business Hours on the following day due to any reason, the Mutual Fundshall issue a press release giving reasons and explaining when the Mutual Fund would be ableto publish the NAVs.

The Mutual Fund/ AMC shall disclose portfolio under the Scheme as on the last day of each monthon its website viz. www.hdfcfund.com on or before the tenth day of the succeeding month in theprescribed format. As presently required by the SEBI (MF) Regulations, a complete statement of theportfolio under the Scheme would also be published by the Mutual Fund as an advertisement inone English daily Newspaper circulating in the whole of India and in a newspaper published inthe language of the region where the Head Office of the Mutual Fund is situated within one monthfrom the close of each half year (i.e. March 31 & September 30) or mailed to the Unit holders.


Dematerializationof Units

The Unit holders would have an option to hold the Units in demat form or account statement (non-demat) form. Units held in Demat Form are freely transferable. The Applicant intending to hold Unitsin demat form will be required to have a beneficiary account with a Depository Participant (DP) of theNSDL/CDSL and will be required to mention in the application form DP's Name, DP ID No. and BeneficiaryAccount No. with the DP at the time of purchasing Units.

Transparency /NAV Disclosure

The AMC will calculate and disclose the NAVs, Sale and Repurchase price of the Scheme(s) at the closeof every Business Day and send for publication to atleast 2 daily newspapers.NAVs, Sale and Repurchaseprice will also be displayed on the website of the Mutual Fund and the Association of Mutual Fundsin India (AMFI). In addition, the ISCs would also display the NAVs, Sale and Repurchase price.

The AMC shall update the NAVs on the website of the Mutual Fund (www.hdfcfund.com) and on thewebsite of AMFI (www.amfiindia.com) by 9.00 p.m. on every Business Day. In case of any delay, thereasons for such delay would be explained to AMFI in writing. If the NAVs are not available beforecommencement of Business Hours on the following day due to any reason, the Mutual Fund shallissue a press release giving reasons and explaining when the Mutual Fund would be able to publishthe NAVs.

The Mutual Fund/ AMC shall disclose portfolio under the Scheme(s) as on the last day of each monthon its website viz. www.hdfcfund.com on or before the tenth day of the succeeding month in the prescribedformat. As presently required by the SEBI (MF) Regulations, a complete statement of the portfolio underthe Scheme(s) would also be published by the Mutual Fund as an advertisement in one English dailyNewspaper circulating in the whole of India and in a newspaper published in the language of theregion where the Head Office of the Mutual Fund is situated within one month from the close of eachhalf year (i.e. March 31 & September 30) or mailed to the Unit holders.


Liquidity The Scheme(s) being offered are open-ended scheme(s) and will offer Units for Sale / Switch-in andRedemption / Switch-out (subject to completion of Lock-in Period, if any), on every Business Dayat NAV based prices. As per SEBI (MF) Regulations, the Mutual Fund shall despatch redemption proceedswithin 10 Business Days from the date of redemption. A penal interest of 15% p.a. or such other rateas may be prescribed by SEBI from time to time, will be paid in case the payment of redemption proceedsis not made within 10 Business Days from the date of redemption. However under normal circumstances,the Mutual Fund would endeavour to pay the redemption proceeds within 3-4 Business Days (asapplicable) from the date of redemption. Further, in case of HDPEFOF, the processing of redemptionrequests within 10 Business Days of the Redemption date will be subject to the ability of the Schemeto liquidate units of the underlying Scheme(s) The payment of redemption proceeds under the Schemewill be subject to receipt of redemption proceeds from the underlying Scheme(s).

Units of HDFC Long Term Advantage Fund and HDFC TaxSaver (including units allotted under dividendre-investment) cannot be assigned/ transferred / pledged / redeemed / switched-out until completionof three years from the date of allotment of the respective Units. Please refer to section 'Redemption'on Page 115 for details.

Default Plan Investors should indicate the Plan (viz. Direct plan/ Regular Plan) for which the subscription is made byindicating the choice in the appropriate box provided for this purpose in the application form. In caseof valid applications received without indicating any choice of Plan, the application will be processedfor the Plan as under:

Scenario ARN Code mentioned Plan mentioned Default Plan toby the investor by the investor be captured

1 Not mentioned Not mentioned Direct Plan

2 Not mentioned Direct Direct Plan

3 Not mentioned Regular Direct Plan

4 Mentioned Direct Direct Plan

5 Direct Not Mentioned Direct Plan

6 Direct Regular Direct Plan

7 Mentioned Regular Regular Plan

8 Mentioned Not Mentioned Regular Plan

In cases of wrong/ invalid/ incomplete ARN codes are mentioned on the application form, the applicationshall be processed under Regular Option. The AMC shall contact and obtain the correct ARN codewithin 30 calendar days of the receipt of the application form from the investor/ distributor. In case,the correct code is not received within 30 calendar days, the AMC shall reprocess the transaction underDirect Option from the date of application without any exit load.


TransactionCharges

In accordance with SEBI circular No. Cir/ IMD/ DF/13/ 2011 dated August 22, 2011, as amendedfrom time to time, HDFC Asset Management Company Limited ("the AMC")/Mutual Fund shall deductthe Transaction Charges on purchase / subscription received from the investors investing through avalid ARN Holder i.e. AMFI registered Distributor (provided the distributor has opted-in to receive theTransaction Charges for the scheme type) as under:

(i) First Time Mutual Fund Investor (across Mutual Funds):

Transaction Charge of Rs. 150/- per purchase / subscription of Rs. 10,000/- and above will bededucted from the purchase / subscription amount for payment to the distributor of such investorand the balance shall be invested.

(ii) Investor other than First Time Mutual Fund Investor:

Transaction Charge of Rs. 100/- per purchase / subscription of Rs. 10,000/- and above will bededucted from the purchase/ subscription amount for payment to the distributor of such investorand the balance shall be invested.

TRANSACTION CHARGES IN CASE OF INVESTMENTS THROUGH SIP:

Transaction Charges in case of investments through SIP are deductible only if the total commitmentof investment (i.e. amount per SIP installment x No. of installments) amounts to Rs. 10,000 or more.In such cases, Transaction Charges shall be deducted in 3-4 installments.

Identification of investors as "first time" or "existing" will be based on Permanent Account Number (PAN)/PAN Exempt KYC Reference Number (PEKRN) at the First/ Sole Applicant/ Guardian level. Hence, Unitholders are urged to ensure that their PAN/ PEKRN/ KYC is updated with the Fund. Unit holders mayapproach any of the Official Points of Acceptances of the Fund i.e. Investor Service Centres (ISCs) ofthe Fund/ offices of our Registrar and Transfer Agent, M/s. Computer Age Management Services Pvt.Ltd in this regard.

It may be noted that Transaction Charges shall not be deducted:

(a) where the distributor of the investor has not opted to receive any Transaction Charges;

(b) for purchases / subscriptions / total commitment amount in case of SIP of an amount less thanRs. 10,000/-;

(c) for transactions other than purchases / subscriptions relating to new inflows i.e. through Switches/Systematic Transfers/ Dividend Transfers/ Dividend Reinvestment, etc.;

(d) for purchases / subscriptions made directly with the Fund (i.e. not through any distributor);

(e) for purchases / subscriptions routed through Stock Exchange(s) as applicable.


COMMON PROVISIONS (AS APPLICABLE)

IMPORTANT

Before investing, investors should also ascertain about any further changes pertaining to scheme such as features, loadstructure, etc. made to this Scheme Information Document by issue of addenda / notice after the date of this Documentfrom the AMC / Mutual Fund / Investor Service Centres (ISCs) / Website / Distributors or Brokers.


I. INTRODUCTION

A. RISK FACTORS

n Standard Risk Factors:

l Investment in Mutual Fund Units involves investment riskssuch as trading volumes, settlement risk, liquidity risk,default risk including the possible loss of principal.

l As the price / value / interest rates of the securities in whichthe Scheme(s) invests fluctuates, the value of your investmentin the Scheme(s) may go up or down depending on thevarious factors and forces affecting the capital marketsand money markets.

l Past performance of the Sponsors and their affiliates/AMC/ Mutual Fund does not guarantee future performanceof the Scheme(s) of the Mutual Fund.

l The name of the Scheme(s) do not in any manner indicateeither the quality of the Scheme(s) or their future prospectsand returns.

l The Sponsors are not responsible or liable for any lossresulting from the operation of the Scheme(s) beyond theinitial contribution of Rs. 1 lakh each made by themtowards setting up the Fund.

l The present Scheme(s) are not guaranteed or assuredreturn scheme(s).

n Scheme Specific Risk Factors

Some of the specific risk factors related to the Scheme(s)include, but are not limited to the following:

(i) Risk factors associated with investing in equitiesand equity related instruments

l Equity shares and equity related instruments are volatileand prone to price fluctuations on a daily basis. Investmentsin equity shares and equity related instruments involve adegree of risk and investors should not invest in theScheme(s) unless they can afford to take the risks.

l Securities, which are not quoted on the stock exchanges,are inherently illiquid in nature and carry a larger amountof liquidity risk, in comparison to securities that are listedon the exchanges. Investment in such securities may leadto increase in the scheme portfolio risk.

l While securities that are listed on the stock exchange carrylower liquidity risk, the ability to sell these investments islimited by the overall trading volume on the stock exchangesand may lead to the Scheme(s) incurring losses till thesecurity is finally sold.

(ii) Risk factors associated with investing in FixedIncome Securities

l The Net Asset Value (NAV) of the Scheme(s), to the extentinvested in Debt and Money Market instruments, will beaffected by changes in the general level of interest rates.The NAV of the Scheme(s) is expected to increase from afall in interest rates while it would be adversely affectedby an increase in the level of interest rates.

l Money market instruments, while fairly liquid, lack a welldeveloped secondary market, which may restrict the sellingability of the Scheme(s) and may lead to the Scheme(s)incurring losses till the security is finally sold.

l Investments in money market instruments involve creditrisk commensurate with short term rating of the issuers.

l Investment in Debt instruments are subject to varyingdegree of credit risk or default (i.e. the risk of an issuer'sinability to meet interest or principal payments on itsobligations) or any other issues, which may have theircredit ratings downgraded. Changes in financial conditionsof an issuer, changes in economic and political conditionsin general, or changes in economic or and politicalconditions specific to an issuer, all of which are factorsthat may have an adverse impact on an issuer's creditquality and security values. The Investment Manager willendeavour to manage credit risk through in-house creditanalysis. This may increase the risk of the portfolio. TheInvestment Manager will endeavour to manage credit riskthrough in-house credit analysis.

l Government securities where a fixed return is offered runprice-risk like any other fixed income security. Generally,when interest rates rise, prices of fixed income securitiesfall and when interest rates drop, the prices increase. Theextent of fall or rise in the prices is a function of the existingcoupon, days to maturity and the increase or decreasein the level of interest rates. The new level of interest rateis determined by the rates at which government raises newmoney and/or the price levels at which the market isalready dealing in existing securities. The price-risk is notunique to Government Securities. It exists for all fixedincome securities. However, Government Securities areunique in the sense that their credit risk generally remainszero. Therefore, their prices are influenced only bymovement in interest rates in the financial system.

l Different types of fixed income securities in which theScheme(s) would invest as given in the Scheme InformationDocument carry different levels and types of risk. Accordingly,the Scheme(s) risk may increase or decrease dependingupon its investment pattern. e.g. corporate bonds carrya higher level of risk than Government securities. Furthereven among corporate bonds, AAA rated bonds arecomparatively less risky than AA rated bonds.

l The AMC may, considering the overall level of risk of theportfolio, invest in lower rated / unrated securities offeringhigher yields as well as zero coupon securities that offerattractive yields. This may increase the absolute level ofrisk of the portfolio.

l As zero coupon securities do not provide periodic interestpayments to the holder of the security, these securities aremore sensitive to changes in interest rates and are subjectto issuer default risk. Therefore, the interest rate risk ofzero coupon securities is higher. The AMC may chooseto invest in zero coupon securities that offer attractiveyields. This may increase the risk of the portfolio. Zerocoupon or deep discount bonds are debt obligations thatdo not entitle the holder to any periodic payment ofinterest prior to maturity or a specified date when thesecurities begin paying current interest and therefore, aregenerally issued and traded at a discount to their facevalues. The discount depends on the time remaining untilmaturity or the date when securities begin paying currentinterest. It also varies depending on the prevailing interestrates, liquidity of the security and the perceived credit riskof the Issuer. The market prices of zero coupon securitiesare generally more volatile than the market prices ofsecurities that pay interest periodically.

l Scheme's performance may differ from the benchmarkindex to the extent of the investments held in the debtsegment, as per the investment pattern indicated undernormal circumstances.


l Prepayment Risk: Certain fixed income securities give anissuer the right to call back its securities before theirmaturity date, in periods of declining interest rates. Thepossibility of such prepayment may force the Scheme toreinvest the proceeds of such investments in securitiesoffering lower yields, resulting in lower interest income forthe Scheme(s).

l Reinvestment Risk: This risk refers to the interest ratelevels at which cash flows received from the securities inthe Schemes are reinvested. The additional income fromreinvestment is the "interest on interest" component. Therisk is that the rate at which interim cash flows can bereinvested may be lower than that originally assumed.

l Settlement risk: Different segments of Indian financialmarkets have different settlement periods and such periodsmay be extended significantly by unforeseen circumstances.Delays or other problems in settlement of transactionscould result in temporary periods when the assets of theScheme are uninvested and no return is earned thereon.The inability of the Scheme to make intended securitiespurchases, due to settlement problems, could cause theScheme to miss certain investment opportunities. Similarly,the inability to sell securities held in the Scheme's portfolio,due to the absence of a well developed and liquid secondarymarket for debt securities, may result at times in potentiallosses to the Scheme in the event of a subsequent declinein the value of securities held in the Scheme's portfolio.

l The Scheme(s) at times may receive large number ofredemption requests, leading to an asset-liability mismatchand therefore, requiring the investment manager to makea distress sale of the securities leading to realignment ofthe portfolio and consequently resulting in investment inlower yield instruments.

(iii) Related to HDFC Long Term Advantage Fundand HDFC TaxSaver

Units of HDFC Long Term Advantage Fund and HDFCTaxSaver (including Units allotted under Dividend Reinvestment)cannot be assigned/transferred/pledged/redeemed/switchedout until completion of three years from the date of allotmentof the respective Units.

(iv) Related to HDFC Mid-Cap Opportunities Fund

While Small & Mid-cap stocks gives one an opportunity to gobeyond the usual large blue chip stocks and present possiblehigher capital appreciation, it is important to note that Small& Mid-cap stocks can be riskier and more volatile on a relativebasis. Therefore, the risk levels of investing in Small & Mid-cap stocks are more than investing in stocks of large well-established companies. It should be noted that over a periodof time, Small, Mid and Large cap stocks have demonstrateddifferent levels of volatility and investment returns. And it isimportant to note that generally, no one class consistentlyoutperforms the others.

(v) Related to HDFC Infrastructure Fund

The investments under the Scheme are predominantly orientedtowards equity/equity related instruments of Companiesengaged in the area of growth and development of infrastructureand hence will be affected by risks associated with suchcompanies. Further, amongst the infrastructure sector as definedunder the investment strategy, the majority of the equity/ equityoriented investments could be under a single sector. Henceif the said sector does not perform positively as expected bythe Fund Manager of the Scheme, the Scheme's performancemay be adversely affected due to a risk associated with non-diversification and thus could affect the value of investments.

Given that the Scheme seeks to invest in equity/ equity relatedinstruments of the Companies belonging to the infrastructuresector and that the investment concentration may be high incertain companies belonging to the said sector, the volatilityand/or performance of the said sector and/or of the scripsbelonging to this sector can have a material adverse bearingon the performance of the Scheme.

Although the Scheme seeks to make investments in equity andequity related instruments of the Infrastructure sector, thisscheme will not be a sector specific scheme for the purposeof monitoring the investment restrictions applicable to theScheme and hence investments per issuer under the Schemewill not exceed 10% (at the time of investment) of the net assetsof the Scheme.

As the Scheme may hold securities that are not in the NIFTY500 Index and may invest in limited number of sectors withhigher concentration to certain sectors and industries, it mayperform differently from the general stock market. FurtherScheme's performance may differ from the benchmark indexto the extent of the investments held in the debt segment, asper the investment pattern indicated under normalcircumstances.

(vi) Related to HDFC Index Fund

Except for the actively managed part of the SENSEX Plus Plan,the Scheme attempts to track the respective indices and it wouldprimarily invest in the securities included in its Underlyingindices regardless of their investment merit. The Scheme maybe affected by a general decline in the Indian markets.

The performance of the SENSEX Plus Plan may not be in linewith S&P BSE SENSEX as 10-20% of the net assets will beinvested in non-index scrips.

Performance of the S&P BSE SENSEX / NIFTY 50 Index will havea direct bearing on the performance of the respective Plans.In the event the S&P BSE SENSEX / NIFTY 50, as the case maybe, is dissolved or is withdrawn or is not published due toany reason whatsoever, the Trustee reserves the right to modifythe respective Plans so as to track a different and suitable indexor to suspend tracking the S&P BSE SENSEX / NIFTY 50 till suchtime it is dissolved / withdrawn or not published and appropriateintimation will be sent to the Unit holders of the respectivePlans. In such a case, the investment pattern will be modifiedsuitably to match the composition of the securities that areincluded in the new index to be tracked and the respective Planswill be subject to tracking errors during the intervening period.

Tracking errors are inherent in any index fund and such errorsmay cause the respective Plans to generate returns which arenot in line with the performance of the S&P BSE SENSEX / NIFTY50 or one or more securities covered by / included in the S&PBSE SENSEX / NIFTY 50 and may arise from a variety of factorsincluding but not limited to:

l Any delay in the purchase or sale of shares due toilliquidity in the market, settlement and realisation of salesproceeds, delay in credit of securities or in receipt andconsequent reinvestment of dividends, etc.

l The Indices reflect the prices of securities at a point in time,which is the price at close of business day on BSE /National Stock Exchange of India Limited (NSE). Therespective Plans, however, may trade these securities atdifferent points in time during the trading session andtherefore the prices at which the respective Plans trade maynot be identical to the closing price of each scrip on thatday on the BSE / NSE. In addition, the respective Plansmay opt to trade the same securities on different exchangesdue to price or liquidity factors, which may also result in


traded prices being at variance, from BSE / NSE closingprices.

l IISL undertakes periodic reviews of the fifty securities thatare represented in the NIFTY 50 and from time to timemay exclude existing securities or include new ones.Similarly, the BSE may exclude existing securities or includenew ones in the S&P BSE SENSEX. In such an event, therespective Plans will endeavor to reallocate its portfolio tomirror the changes. However, the reallocation processmay not occur instantaneously and permit precise mirroringof the S&P BSE SENSEX / NIFTY 50 during this period.

l The potential of trades to fail may result in the respectivePlans not having acquired the security at the price necessaryto mirror the index.

l Transaction and other expenses, such as but not limitedto brokerage, custody, trustee and investment managementfees.

l Being an open-ended scheme, the respective Plans mayhold appropriate levels of cash or cash equivalents tomeet ongoing redemptions.

l The respective Plans may not be able to acquire or sellthe desired number of securities due to conditions prevailingin the securities market, such as, but not restricted to:circuit filters in the securities, liquidity and volatility insecurity prices.

Due to the reasons mentioned above and other reasons thatmay arise, it is expected that the NIFTY Plan and the SENSEXPlan may have a tracking error in the range of 2-3% per annumfrom their respective Benchmarks. However, it needs to beclearly understood that the actual tracking error can be higheror lower than the range given.

In case of investments in derivatives like index futures, the riskreward would be the same as investments in portfolio of sharesrepresenting an index. However, there may be a cost attachedto buying an index future. Further, there could be an elementof settlement risk, which could be different from the risk insettling physical shares and there is a risk attached to theliquidity and the depth of the index futures market as it isrelatively new market.

(vii) Related to HDFC Premier Multi-Cap Fund

While mid cap stocks give one an opportunity to go beyondthe usual large blue chip stocks and present possible highercapital appreciation, it is important to note that mid cap stockscan be riskier and more volatile on a relative basis. Therefore,the risk levels of investing in mid cap stocks is more thaninvesting in stocks of large well-established companies. Itshould be noted that over a time, mid cap and large capstocks have demonstrated different levels of volatility andinvestment returns. And it is important to note that generally,no one class consistently outperforms the others.

(viii) Related to HDFC Equity Savings Fund

An equity oriented fund has been defined under the IncomeTax Act as a scheme of a mutual fund where the investiblefunds are invested in equity shares of domestic companies tothe extent of more than 65 per cent of the total assets of suchfund. The percentage of equity shareholding of the fund shallbe computed with reference to the annual average of themonthly averages of the opening and closing figures.

As per the current Income Tax laws, equity mutual funds areexempt from long term capital gains tax, provided that theequity allocation in the fund is 65% or more. Given that theequity allocation may fall below this threshold and up to 15%in extreme situation, it is possible that the equity allocation

remains below 65 % over a prolonged period.Further indefensive circumstances where the debt/ money marketinstruments offer better returns than the arbitrage opportunitiesavailable in cash and derivatives segments of equity markets,then the investment manager may choose to have a lowerequity exposure for a prolonged period. In such a case, thefund may be regarded as a debt oriented fund as per extantIncome Tax laws and consequently may not enjoy its taxadvantage available to an equity oriented fund and may besubject to tax as a debt oriented fund in that particular financialyear. In such situation, a Unitholder who has redeemed theunits during the respective financial year may end up payinglong term capital gain tax as applicable to a debt fund andconsequently would also not be able to derive any benefit ofSTT paid at the time of redemption. In view of the forgoingand individual nature of tax consequences, each Unit holderis advised to consult his / her own professional tax advisor.

(ix) Related to HDFC Arbitrage Fund

The primary objective of the Fund Manager is to identifyinvestment opportunities and to exploit price discrepancies invarious markets. Identification and exploitation of the strategiesto be pursued by the Fund Manager involve uncertainty. Noassurance can be given that Fund Manager will be able tolocate investment opportunities or to correctly exploit pricediscrepancies in the capital markets. Reduction in mis-pricingopportunities between the cash market and Future and Optionsmarket may lead to lower level of activity affecting the returns.As the Scheme proposes to execute arbitrage transactions invarious markets simultaneously, this may result in highportfolio turnover and, consequently, high transaction cost.

There may be instances, where the price spread between cashand derivative market is insufficient to meet the cost of carry.In such situations, the fund manager due to lack ofopportunities in the derivative market may not be able tooutperform liquid / money market funds.

Though the constituent stocks of most indices are typicallyliquid, liquidity differs across stock. Due to heterogeneity inliquidity in the capital market segment, trades on this segmentdo not get implemented instantly. This often makes arbitrageexpensive, risky and difficult to implement.

(x) Related to HDFC Small Cap Fund

While Small & Mid-cap stocks gives one an opportunity to gobeyond the usual large blue chip stocks and present possiblehigher capital appreciation, it is important to note that Small& Mid-cap stocks can be riskier and more volatile on a relativebasis. Therefore, the risk levels of investing in Small & Mid-cap stocks are more than investing in stocks of large well-established companies. It should be noted that over a periodof time, Small, Mid and Large cap stocks have demonstrateddifferent levels of volatility and investment returns. And it isimportant to note that generally, no one class consistentlyoutperforms the others.

(xi) Related to HDFC Dynamic PE Ratio Fund of Funds(HDPEFOF)

Risk Factors related to Underlying Schemes

a) HDPEFOF will invest primarily in a combination of thespecified equity and debt schemes of HDFC Mutual Fund.Hence, scheme specific risk factors of the UnderlyingSchemes will be applicable. All risks associated withUnderlying Schemes, including performance of theirunderlying stocks, derivative instruments, stock-lending,investments in foreign securities etc., will therefore beapplicable in the case of HDPEFOF. The investors shouldrefer to the Scheme Information Documents and the related


addenda for the scheme specific risk factors of therespective Underlying Schemes. Investors who intend toinvest in HDPEFOF are required to and deemed to haveunderstood the risk factors of the Underlying Schemes.

b) Movements in the Net Asset Value (NAV) of the UnderlyingSchemes may impact the performance of HDPEFOF. Anychange in the investment policies or fundamental attributesof the Underlying Schemes will affect the performance ofHDPEFOF.

c) In a rising market, where PE ratio rises and stays abovehistorical averages, a portfolio constructed based on PEratios may not outperform a fully invested equity portfolio.

d) The investors of HDPEFOF shall bear the recurring expensesof HDPEFOF in addition to the expenses of the UnderlyingSchemes (subject to regulatory limits). Hence the investorunder HDPEFOF may receive lower pre-tax returns thanwhat they may receive if they had invested directly in theUnderlying Schemes in the same proportions.

e) The Portfolio disclosure of HDPEFOF will be limited toproviding the particulars of the allocation to the UnderlyingSchemes where HDPEFOF has invested and will not includethe investments made by the Underlying Schemes.

f) HDPEFOF's investment in any Underlying Scheme shallnot exceed 20% of the net assets of that UnderlyingScheme.

g) Redemptions by HDPEFOF shall not exceed 5% of the netassets of an Underlying Scheme on a Business Day. Theredemptions will be staggered to comply with this limiteven in case portfolio rebalancing is triggered due tochange in PE Ratios.

h) Redemptions by HDPEFOF from the Underlying Schemeswould be subject to applicable exit loads, which mayimpact performance of the Scheme.

i) The processing of redemption requests within 10 BusinessDays of the Redemption date will be subject to the abilityof the Scheme to liquidate units of the underlyingScheme(s). The payment of redemption proceeds underthe Scheme will be subject to receipt of redemptionproceeds from the underlying Scheme(s).

j) Switch-out from an Underlying Scheme and Switch-in toanother Underlying Scheme will be subject to the provisionsof applicability of NAV as also the pay-out and pay-incycles applicable to redemption / purchase under therelevant schemes. In times of extreme volatility, this mayhave impact on the NAV of HDPEFOF, particularly at thetime of portfolio rebalancing.

(xii) General Risk factors

l Trading volumes, settlement periods and transferprocedures may restrict the liquidity of the investmentsmade by the Scheme(s). Different segments of the Indianfinancial markets have different settlement periods andsuch periods may be extended significantly by unforeseencircumstances leading to delays in receipt of proceedsfrom sale of securities. The NAV of the Units of theScheme(s) can go up or down because of various factorsthat affect the capital markets in general.

l As the liquidity of the investments made by the Scheme(s)could, at times, be restricted by trading volumes andsettlement periods, the time taken by the Mutual Fund forredemption of Units may be significant in the event of aninordinately large number of redemption requests orrestructuring of the Scheme(s). In view of the above, the

Trustee has the right, in its sole discretion, to limitredemptions (including suspending redemptions) undercertain circumstances, as described on Page 94 under"Right to Restrict Redemption and/ or SuspendRedemption of the Units".

l At times, due to the forces and factors affecting the capitalmarket, the Scheme(s) may not be able to invest in securitiesfalling within its investment objective resulting in holdingthe monies collected by it in cash or cash equivalent orinvest the same in other permissible securities / investmentsamounting to substantial reduction in the earningcapability of the Scheme(s). The Scheme(s) may retaincertain investments in cash or cash equivalents for its day-to-day liquidity requirements.

l Securities, which are not quoted on the stock exchanges,are inherently illiquid in nature and carry a larger amountof liquidity risk, in comparison to securities that are listedon the exchanges or offer other exit options to the investor,including a put option. The AMC may choose to investin unlisted securities that offer attractive returns. This mayincrease the risk of the portfolio.

l Investment strategy to be adopted by the Scheme(s) maycarry the risk of significant variance between the portfolioallocation of the Scheme(s) and the Benchmark particularlyover a short to medium term period.

l Performance of the Scheme may be affected by political,social, and economic developments, which may includechanges in government policies, diplomatic conditions,and taxation policies.

(xiii) Risk factors associated with investing in ForeignSecurities

l Currency Risk:

Moving from Indian Rupee (INR) to any other currencyentails currency risk. To the extent that the assets of theScheme(s) will be invested in securities denominated inforeign currencies, the Indian Rupee equivalent of the netassets, distributions and income may be adversely affectedby changes in the value of certain foreign currenciesrelative to the Indian Rupee.

l Interest Rate Risk:

The pace and movement of interest rate cycles of variouscountries, though loosely co-related, can differ significantly.Hence by investing in securities of countries other thanIndia, the Scheme(s) stand exposed to their interest ratecycles.

l Credit Risk:

Investment in Foreign Debt Securities are subject to therisk of an issuer's inability to meet interest and principalpayments on its obligations and market perception of thecreditworthiness of the issuer. This is substantially reducedsince the SEBI (MF) Regulations stipulate investments onlyin debt instruments with rating not below investment gradeby accredited/registered credit rating agency.

l Taxation Risk:

In addition to the disclosure related to taxation mentionedunder section “Special Consideration” on Page 20,Investment in Foreign Securities poses additional challengesbased on the tax laws of each respective country orjurisdiction. The scheme may be subject to a higher levelof taxes than originally anticipated and or dual taxation.


The Scheme may be subject to withholding or other taxeson income and/or gains arising from its investmentportfolio. Further, such investments are exposed to risksassociated with the changing / evolving tax / regulatoryregimes of all the countries where the Scheme invests. Allthese may entail a higher outgo to the Scheme by wayof taxes, transaction costs, fees etc. thus adversely impactingits NAV; resulting in lower returns to an Investor.

l Legal and Regulatory Risk:

Legal and regulatory changes could occur during the termof the Scheme which may adversely affect it. If any of thelaws and regulations currently in effect should change orany new laws or regulations should be enacted, the legalrequirements to which the Scheme and the investors maybe subject could differ materially from current requirementsand may materially and adversely affect the Scheme andthe investors. Legislation/ Regulatory guidelines couldalso be imposed retrospectively.

l Country Risk:

The Country risk arises from the inability of a country, tomeet its financial obligations. It is the risk encompassingeconomic, social and political conditions in a foreigncountry, which might adversely affect foreign investors'financial interests. In addition, country risks would includeevents such as introduction of extraordinary exchangecontrols, economic deterioration, bi-lateral conflict leadingto immobilisation of the overseas financial assets and theprevalent tax laws of the respective jurisdiction for executionof trades or otherwise.

l To manage risks associated with foreign currency andinterest rate exposure, the Mutual Fund may use derivativesfor efficient portfolio management including hedging andin accordance with conditions as may be stipulated bySEBI/ RBI from time to time.

(xiv) Risk factors associated with investing inDerivatives

l The AMC, on behalf of the Scheme(s) may use variousderivative products, from time to time, in an attempt toprotect the value of the portfolio and enhance Unit holders'interest. Derivative products are specialized instrumentsthat require investment techniques and risk analysis differentfrom those associated with stocks and bonds. The use ofa derivative requires an understanding not only of theunderlying instrument but of the derivative itself. Otherrisks include, the risk of mispricing or improper valuationand the inability of derivatives to correlate perfectly withunderlying assets, rates and indices.

l Derivative products are leveraged instruments and canprovide disproportionate gains as well as disproportionatelosses to the investor. Execution of such strategies dependsupon the ability of the fund manager to identify suchopportunities. Identification and execution of the strategiesto be pursued by the fund manager involve uncertaintyand decision of fund manager may not always be profitable.No assurance can be given that the fund manager willbe able to identify or execute such strategies.

l The risks associated with the use of derivatives are differentfrom or possibly greater than, the risks associated withinvesting directly in securities and other traditionalinvestments.

l Credit Risk:

The credit risk in derivative transaction is the risk that thecounter party will default on its obligations and is generally

low, as there is no exchange of principal amounts in aderivative transaction.

l Illiquidity risk:

This is the risk that a derivative cannot be sold or purchasedquickly enough at a fair price, due to lack of liquidity inthe market.

(xv) Risk factors associated with investing in SecuritisedDebt (except HDFC Index Fund, HLTAF & HGF)

The Risks involved in Securitised Papers described below arethe principal ones and does not represent that the statementof risks set out hereunder is exhaustive.

l Limited Liquidity & Price Risk

There is no assurance that a deep secondary market willdevelop for the Certificates. This could limit the ability ofthe investor to resell them.

l Limited Recourse, Delinquency and Credit Risk

The Credit Enhancement stipulated represents a limitedloss cover to the Investors. These Certificates represent anundivided beneficial interest in the underlying receivablesand do not represent an obligation of either the Issueror the Seller or the originator, or the parent or any affiliateof the Seller, Issuer and Originator. No financial recourseis available to the Certificate Holders against the Investors'Representative. Delinquencies and credit losses may causedepletion of the amount available under the CreditEnhancement and thereby the Investor Payouts to theCertificate Holders may get affected if the amount availablein the Credit Enhancement facility is not enough to coverthe shortfall. On persistent default of a Obligor to repayhis obligation, the Servicer may repossess and sell theAsset. However many factors may affect, delay or preventthe repossession of such Asset or the length of timerequired to realise the sale proceeds on such sales. Inaddition, the price at which such Asset may be sold maybe lower than the amount due from that Obligor.

l Risks due to possible prepayments and ChargeOffs

In the event of prepayments, investors may be exposedto changes in tenor and yield. Also, any Charge Offswould result in the reduction in the tenor of the PassThrough Certificates (PTCs).

l Bankruptcy of the Swap Bank

If the Swap Bank, becomes subject to bankruptcyproceedings then an Investor could experience losses ordelays in the payments due under the Interest Rate SwapAgreement.

l Risk of Co-mingling

With respect to the Certificates, the Servicer will depositall payments received from the Obligors into the CollectionAccount. However, there could be a time gap betweencollection by a Servicer and depositing the same into theCollection account especially considering that some of thecollections may be in the form of cash. In this interimperiod, collections from the Loan Agreements may not besegregated from other funds of originator. If originatorin its capacity as Servicer fails to remit such funds due toInvestors, the Investors may be exposed to a potential loss.

(xvi) Risk factors associated with Securities Lending

As with other modes of extensions of credit, there are risksinherent to securities lending, including the risk of failure of


the other party, in this case the approved intermediary, tocomply with the terms of the agreement entered into betweenthe lender of securities i.e. the Scheme and the approvedintermediary. Such failure can result in the possible loss ofrights to the collateral put up by the borrower of the securities,the inability of the approved intermediary to return the securitiesdeposited by the lender and the possible loss of any corporatebenefits accruing to the lender from the securities depositedwith the approved intermediary.

(xvii)Risk factors associated with processing oftransaction through Stock Exchange Mechanism

The trading mechanism introduced by the stock exchange(s)is configured to accept and process transactions for mutualfund units in both Physical and Demat Form. The allotmentand/or redemption of Units through NSE and/or BSE or anyother recognised stock exchange(s), on any Business Day willdepend upon the modalities of processing viz. collection ofapplication form, order processing/settlement, etc. upon whichthe Fund has no control. Moreover, transactions conductedthrough the stock exchange mechanism shall be governed bythe operating guidelines and directives issued by respectiverecognized stock exchange(s).

(xviii) Disclaimer of indices

S&P BSE 200 Index, S&P BSE SENSEX Index and S&P BSESENSEX (Total Returns) Index (the "S & P BSE Indices") :The S & P BSE Indices is published by Asia Index Private Limited("AIPL"), which is a joint venture among affiliates of S&P DowJones Indices LLC ("SPDJI") and BSE Limited ("BSE"), and hasbeen licensed for use by HDFC Asset Management CompanyLimited (HDFC AMC)/the Scheme(s) of HDFC Mutual Fund("the Schemes"). Standard & Poor's® and S&P® are registeredtrademarks of Standard & Poor's Financial Services LLC ("S&P")and Dow Jones® is a registered trademark of Dow JonesTrademark Holdings LLC ("Dow Jones"). BSE® and SENSEX®are registered trademarks of BSE. The trademarks have beenlicensed to AIPL and have been sublicensed for use for certainpurposes by HDFC AMC / Schemes. The Schemesbenchmarked to S & P BSE Indices are not sponsored,endorsed, sold or promoted by AIPL, SPDJI, Dow Jones, S&P,any of their respective affiliates (collectively, "S&P Dow JonesIndices") or BSE. None of AIPL, S&P Dow Jones Indices or BSEmakes any representation or warranty, express or implied, tothe owners of the Scheme or any member of the publicregarding the advisability of investing in securities generallyor in the Schemes particularly or the ability of the Index totrack general market performance. AIPL's, S&P Dow JonesIndices' and BSE's only relationship to HDFC AMC/the Schemeswith respect to the Indices is the licensing of the Indices andcertain trademarks, service marks and/or trade names of AIPL,S&P Dow Jones Indices, BSE and/or their licensors. The S &P BSE Indices is determined, composed and calculated byAIPL or its agent without regard to HDFC AMC/the Schemes.None of AIPL, S&P Dow Jones Indices or BSE are responsiblefor and have not participated in the determination of the prices,and amount of the Schemes or the timing of the issuance orsale of the Schemes or in the determination or calculation ofthe equation by which the Schemes is to be converted intocash, surrendered or redeemed, as the case may be. AIPL,S&P Dow Jones Indices and BSE have no obligation or liabilityin connection with the administration, marketing or tradingof the Schemes. There is no assurance that investment productsbased on the indices will accurately track index performanceor provide positive investment returns. AIPL and S&P DowJones Indices LLC are not investment advisors. Inclusion of asecurity within an index is not a recommendation by AIPL,S&P Dow Jones Indices or BSE to buy, sell, or hold such security,nor is it considered to be investment advice.

AIPL, S&P DOW JONES INDICES, BSE AND THEIR THIRD PARTYLICENSORS DO NOT GUARANTEE THE ADEQUACY,ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OFTHE INDEX OR ANY DATA RELATED THERETO. AIPL, S&PDOW JONES INDICES, BSE AND THEIR THIRD PARTYLICENSORS SHALL NOT BE SUBJECT TO ANY DAMAGES ORLIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN.AIPL, S&P DOW JONES INDICES, BSE AND THEIR THIRD PARTYLICENSORS MAKE NO EXPRESS OR IMPLIED WARRANTIES,AND EXPRESSLY DISCLAIM ALL WARRANTIES, OFMERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSEOR USE OR AS TO RESULTS TO BE OBTAINED BY LICENSEE,OWNERS OF THE PRODUCT, OR ANY OTHER PERSON ORENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TOANY DATA RELATED THERETO. WITHOUT LIMITING ANY OFTHE FOREGOING, IN NO EVENT WHATSOEVER SHALL AIPL,S&P DOW JONES INDICES, BSE OR THEIR THIRD PARTYLICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL,INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGESINCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS,TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEYHAVE BEEN ADVISED OF THE POSSIBLITY OF SUCHDAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY,OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIESOF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN AIPLAND LICENSEE, OTHER THAN THE LICENSORS OF AIPL(INCLUDING S&P DOW JONES INDICES AND/OR BSE)."

NIFTY 500 Index, NIFTY 50 Index, NIFTY 50 (Total ReturnIndex), NIFTY Free Float Midcap 100 Index and NIFTYFree Float Smallcap 100 Index ("the NIFTY Indices"): TheScheme(s) of HDFC Mutual Fund (the "Product(s)") are notsponsored, endorsed, sold or promoted by India Index Services& Products Limited ("IISL"). IISL does not make any representationor warranty, express or implied, to the owners of the Product(s)or any member of the public regarding the advisability ofinvesting in securities generally or in the Product(s) particularlyor the ability of the NIFTY Indices to track general stock marketperformance in India. The relationship of IISL with HDFC AssetManagement Company Limited ("the Issuer/Licensee") is onlyin respect of the licensing of the Indices and certain trademarksand trade names associated with such Indices which isdetermined, composed and calculated by IISL without regardto the Issuer /Licensee or the Product(s). IISL does not haveany obligation to take the needs of the Issuer/Licensee or theowners of the Product(s) into consideration in determining,composing or calculating the NIFTY Indices. IISL is notresponsible for or has participated in the determination of thetiming of, prices at, or quantities of the Product(s) to be issuedor in the determination or calculation of the equation by whichthe Product(s) is to be converted into cash. IISL has no obligationor liability in connection with the administration, marketingor trading of the Product(s).

IISL is engaged in the business of developing, constructing,compiling, computing and maintaining various equity indices.The relationship of IISL to HDFC AMC is only in respect of therights granted to use certain trademarks and trade names ofthe Index in connection with the utilisation of the Index datarelating to such Index. The Index is determined, composedand calculated by IISL without regard to HDFC AMC. IISL hasno obligation to take the needs of HDFC AMC intoconsideration in determining, composing or calculating theNIFTY Indices.

IISL do not guarantee the accuracy and/or the completenessof NIFTY Indices or any data included therein and they shallhave no liability for any errors, omissions, or interruptionstherein. IISL make no warranty, express or implied, as to resultsto be obtained by HDFC AMC or any other person or entityfrom the use of NIFTY Indices or any data included therein.


IISL make no express or implied warranties, and expresslydisclaim all warranties of merchantability or fitness for aparticular purpose or use with respect to the Index or anydata included therein. Without limiting any of the foregoing,IISL expressly disclaim any and all liability for any damagesor losses arising out of the use of NIFTY Indices or any dataincluded therein by any third party, including any and alldirect, special, punitive, indirect, or consequential damages(including lost profits), even if notified of the possibility ofsuch damages.

An investor, by subscribing or purchasing an interest in theProduct(s), will be regarded as having acknowledged,understood and accepted the disclaimer referred to in Clausesabove and will be bound by it.

B. REQUIREMENT OF MINIMUM INVESTORS INTHE SCHEME(S)

The Scheme(s)/Plan(s) shall have a minimum of 20 investorsand no single investor shall account for more than 25% ofthe corpus of the Scheme(s)/Plan(s) (at portfolio level). The twoconditions mentioned above shall be complied within eachsubsequent calendar quarter, on an average basis, as specifiedby SEBI. In case the Scheme / Plan(s) does not have a minimumof 20 investors in the stipulated period, the provisions ofRegulation 39(2)(c) of the SEBI (MF) Regulations would becomeapplicable automatically without any reference from SEBI andaccordingly the Scheme / Plan(s) shall be wound up and theunits would be redeemed at applicable NAV. If there is a breachof the 25% limit by any investor over the quarter, a rebalancingperiod of one month would be allowed and thereafter theinvestor who is in breach of the rule shall be given 15 daysnotice to redeem his exposure over the 25% limit. Failure onthe part of the said investor to redeem his exposure over the25% limit within the aforesaid 15 days would lead to automaticredemption by the Mutual Fund on the applicable Net AssetValue on the 15th day of the notice period. The Fund shalladhere to the requirements prescribed by SEBI from time totime in this regard

C. SPECIAL CONSIDERATIONS

l The information set out in the Scheme Information Document(SID) and Statement of Additional Information (SAI) arefor general purposes only and do not constitute tax orlegal advice. The tax information provided in the SID/SAIdoes not purport to be a complete description of allpotential tax costs, incidence and risks inherent insubscribing to the Units of scheme(s) offered by HDFCMutual Fund. Investors should be aware that the fiscalrules/ tax laws may change and there can be no guaranteethat the current tax position as laid out herein maycontinue indefinitely. The applicability of tax laws, if any,on HDFC Mutual Fund/ Scheme(s)/ investments made bythe Scheme(s) and/or investors and/ or income attributableto or distributions or other payments made to Unitholdersare based on the understanding of the prevailing taxlegislations and are subject to adverse interpretationsadopted by the relevant authorities resulting in tax liabilitybeing imposed on the HDFC Mutual Fund/ Scheme(s)/Unitholders/ Trustee /AMC.

In view of the individual nature of the tax consequences,each investor is advised to consult his/ her own professionaltax advisor to determine possible legal, tax, financial orother considerations for subscribing and/or redeemingthe Units and/or before making a decision to invest/redeem Units. The tax information contained in SID/SAIalone may not be sufficient and should not be used forthe development or implementation of an investmentstrategy or construed as investment advice. Investors alone

shall be fully responsible/ liable for any investment decisiontaken on the basis of this document. Neither the MutualFund nor the AMC nor any person connected with itaccepts any liability arising from the use of this information.

l The Trustee, AMC, Mutual Fund, their directors or theiremployees shall not be liable for any of the tax consequencesthat may arise, in the event that the Schemes are woundup for the reasons and in the manner provided in SAI.

l Redemption by the Unit holder either due to change inthe fundamental attributes of the Scheme(s) or due to anyother reasons may entail tax consequences. The Trustee,AMC, Mutual Fund, their directors or their employeesshall not be liable for any such tax consequences that mayarise.

l Subject to SEBI (Mutual Funds) Regulations, 1996 in theevent of substantial investment by the Sponsors and theirassociates directly or indirectly in the Scheme(s) of theMutual Fund, Redemption of Units by these entities mayhave an adverse impact on the performance of the Scheme(s)because of the timing of any such Redemptions and thismay also impact the ability of other Unit holders to redeemtheir Units.

l The Scheme(s) have not been registered in any jurisdiction.The Scheme(s) may however in future be registered in anyjurisdiction, as and when the Trustee desires. Thedistribution of this SID in certain jurisdictions may berestricted or totally prohibited due to registration or otherrequirements and accordingly, persons who come inpossession of this SID are required to inform themselvesabout and observe any such restrictions and/ or legal,compliance requirements with respect to their eligibility forinvestment in the Units of the Scheme(s). Any personreceiving a copy of this SID, SAI or any accompanyingapplication form in such jurisdiction should not treat thisSID, SAI or such application form as constituting aninvitation to them to subscribe for Units. Such personsshould in no event use any such application form unlessin the relevant jurisdiction such an invitation to subscribecould lawfully be made to them and such application formcould lawfully be used without complying with anyregistration or other legal requirements by the AMC/Mutual Fund/Trustee.

l Any dispute arising out of the Scheme(s) shall be subjectto the non-exclusive jurisdiction of the Courts in India.Statements in this SID are, except where other