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8/17/2019 HDFC Equity Fund.pdf
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* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
May, 2015 1
HDFC Equity Fund(Open Ended Growth Scheme)
^ The Fund has outperformed benchmark in 18 out of 20 years of existence
Note: Risk is represented as:
Investors understand that their principal will be at:(BLUE) low risk. (YELLOW) medium risk. (BROWN) high risk.
Ÿ Capital appreciation over long termŸ Investment predominantly in equity and equity related instruments
of medium to large sized companies
Ÿ High risk (BROWN)
This product is suitable for investors who are seeking*
^Performing consistently over two decades and several market cycles
The wonders of compounding...
refer pages 4 and 8.
20 YEARS
OF WEALTH
CREATION
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2** Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
¦ Launched in December 1994 as , it was renamed asCenturion Open End Fund ZurichIndia Equity Fund HDFC Equity Fundand finally (‘The Fund’) in June 2003
¦ From a small beginning of ~Rs 52 crores AUM in Jan 1, ’95 is todayHDFC Equity Fund
the largest* Equity Fund in India with an AUM of ~ Rs 18,000 crores and ~ 6.7 lacstinvestors as on 31 March, 2015
¦ In this journey of 20 years, Rs 10,000 has become ~Rs 4.7 lacs(~47 times), CAGR of
~21.0% **
¦ Our sincere thanks to all investors, distributors and well wishers in making this
possible. A special thanks to ~5,000 investors who have stayed with the Fund
right through this 20 year journey
A strong belief in India & its entrepreneurs, a disciplined approach to investing and focus on
long term has made this possible.
Every journey begins with a small step...
* Based on data available on AMFI website @ www.amfiindia.com - Average AUM : Rs 18,721 crs (Jan – Mar 2015),
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3
HDFC Equity Fund - Standing the test of time
Elections, wars, global crises, bubbles, tapering etc.… has seen it allHDFC Equity Fund
Year Elections, wars, scams, global crisis, tapering, etc.
1996 General elections - Congress loses
1997 Asian currency crisis
1998 Pokhran II - Nuclear tests by India, US sanctions; SENSEX down ~20% in next two months
1999 Kargil war; ; 10 yr G Sec yields at 12.3%SENSEX up by 63% in year 1999
2000 Tech Bubble - IT stocks trading at 100 - 200 P/E
2001 9/11; Ketan Parekh scam; UTI Crisis; IT stocks down ~80-90%
2003 BJP India shining campaign; , 10 yr G Sec yields near 5%SENSEX up ~73% in year 2003
2004 General elections - BJP loses; in one daySENSEX down ~12%
2008 Global Financial Crisis; Satyam scam; SENSEX down ~50% in the year; Meltdown in Real Estate stocks, etc.
2009 UPA wins again; on May 18th; 10 yr G Sec yield at 5.3%SENSEX up ~17% in a day
2011 Corruption scandals - 2G, Commonwealth games, Coal Scam; SENSEX down ~25% in 2011
2012 Quantitative Easing 3 (QE3); SENSEX up ~26% in the year
2013 QE taper worry, Slow GDP growth, twin deficits of CAD and FD, high inflation, 10 Yr Gsec yield at ~9%
2014 Stunning BJP win in General Elections; SENSEX up ~ 30% in the year
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HDFC Equity Fund - Adding value across cycles
9695 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5.0
V a l u e o f R s .
1 0 , 0
0 0
i n v e s t e d
i n
1 9 9 5
Asian Crisis
Pokhran II
Tech Bubblebursts
9/11; KP scam;UTI Crises, ITdown ~80%
BJP loses
Lehmancrises,Satyamscam
2nd termfor UPA
2G, CG, CoalScam, etc.
QE3 taper worry
HDFC Equity FundRs. 4.7 lacsHDFC Equity FundCNX 500
Rs. in
Lacs
Sensex Levels ~4,000 ~10,000 ~20,000 ~9,000 ~20,000 ~29,000
S&P BSE
~5,000
CNX 500
Rs. 0.7 lacs
Clear majority for BJP
HDFC Equity Fund : Rs 10,000 invested at inception has become ~Rs 470,000 in ~20 years at a CAGR of 21.0%
CNX 500 : Rs 10,000 invested at inception has become ~Rs 70,000 in ~20 years at a CAGR of 10.1%
** Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
Reference made to S&P BSE SENSEX in this document is only for easy understanding of market movement and must not be construed as futureperformance of S&P BSE SENSEX. The Benchmark for this FUND is CNX 500.
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HDFC Equity Fund - Investment Philosophy
Steadfast adherence to few principles has worked well for over medium to long periodsHDFC Equity Fund
¦ A predominantly large cap portfolio with
limited exposure to mid caps
¦ Preference for strong & growing companies -
Strong companies not only survive, but emerge
stronger in challenging times, reducingpermanent losses
¦ Effective diversification of portfolio – The
portfolio has always been diversified across key
sectors and variables across the economy to
reduce risk
¦ A long term approach to investing and a Low
portfolio turnover
“We don't have to be smarter than the rest. We have to be more disciplined than the rest.”
- Warren Buffett
For latest scheme portfolio visit our website – www.hdfcfund.com
Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
78 75 75 75 82
FY 11 FY 12 FY 13 FY 14 FY 15
44 29 32 37 39
Large Cap (%)
Annual Portfolio turnover ratio (in %)
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Avoiding big mistakes - Key to wealth creation
¦ It takes several years and a 400% return for Rs. 20 to become Rs. 100; the reverse however canhappen much faster and a loss of just 80% makes Rs. 20 of Rs. 100. Thus, one large mistake can
have a big impact in the wealth creation journey
¦ The key to wealth creation over long periods is thus, not aiming for highest returns every year,
but in avoiding big mistakes each year
¦ HDFC Equity Fund has successfully navigated several bubbles / meltdowns i.e. IT, media, realestate, power, cement sector, etc. in this journey of 20 years
HDFC Equity Fund – Focused on not just returns, but also on managing risk by avoiding big mistakes
Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / HDFC Asset Management Company Ltd. HDFC Mutual Fund/AMC
is not guaranteeing any returns on investments made in this Fund. Past performance may or may not be sustained in future.
Bubble / Meltdown Period Indicative % Fall in stock prices
Textile 1995-97 60-70
Cement 1999-00 70
FMCG 1999-09 Near 0 CAGR returns in 10 years
IT 2000-01 90-95
Media 2000-01 80-90
Realty 2007-08 70
Power 2007-08 90
Metals 2008-09 70
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Equities work better over long term
Illustrative Study based on return distribution of HDFC Equity Fund
Following table represents rolling returns of HDFC Equity Fund since inception distributed over different holding periods and
return brackets, e.g., returns have been more than 20% p.a. in ~55% of 1 year holding periods, more than 20% p.a. in ~55% of 3
year holding periods, more than 20% p.a. in ~67% of 5 year holding periods , more than 20% p.a. in ~98% of 10, more than 20%
p.a. in ~100% of 15 & 20 years holding periods (Row 1) etc.
¦ It can be clearly seen, that as the holding period increases, return profile improves
¦ This is consistent with the belief that equities are a long term asset class and that risk
reduces as holding period increases
“Time spent in markets is more important than timing the markets”
Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
CAGR (%) 1 Year 3 Years 5 Years 10 Years 15 Years 20 Years
more than 20 55 55 67 98 100 100
more than 15 62 66 85 100 100 100
more than 10 65 76 92 100 100 100
more than 0 73 88 100 100 100 100
more than -10 80 99 100 100 100 100
more than -20 88 100 100 100 100 100
less than -20 12 0 0 0 0 0
Performance data computed till Mar, 2015. Where NAV as on the end of a particular month is not available, NAV of the nearest date available is considered. Returns are
monthly rolling. The holding periods in the above simulation is purely an assumption and not the actual holding period of investors in the Fund.
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8
Getting more from Equity Funds - Patience is the keyIllustrative Study based on return distribution of over 20 YearsHDFC Equity Fund
Short term returns in equities
are volatile; hence equity
investments should be made
with a long term horizon
Long term returns are less
volatile; risk in equities reduces
as holding period increases
Benefits of compounding are
bigger over longer periods
For detailed calculation
process & disclaimer
please refer next page
Past performance may or may not be sustained in Future. Returns for periods more than 1 year are shown on a compounded annualized basis.
DateFund
NAV
CNX
500
Returns (%)
1 Year 3 Years 5 Years 10 Years 15 Years 20 Years
Fund CNX 500 Fund CNX 500 Fund CNX 500 Fund CNX 500 Fund CNX 500 Fund CNX 500
Jan 95 10 974
Dec 95 7 647 -29 -34
Dec 96 5 627 -23 -3
Dec 97 7 667 23 6 -13 -12
Dec 98 9 609 38 -9 9 -2
Dec 99 24 1292 156 112 63 27 19 6
Dec 00 19 908 -20 -30 41 11 22 7
Dec 01 18 701 -3 -23 26 5 27 2
Dec 02 23 773 24 10 -1 -16 28 3
Dec 03 52 1531 126 98 40 19 41 20
Dec 04 66 1805 28 18 53 37 23 7 21 6
Dec 05 107 2464 63 37 67 47 41 22 31 14
Dec 06 145 3323 36 35 41 29 51 37 39 18
Dec 07 223 5355 54 61 50 44 58 47 42 23
Dec 08 112 2296 -50 -57 2 -2 17 8 28 14
Dec 09 231 4329 106 89 17 9 29 19 26 13 23 10
Dec 10 299 4941 29 14 10 -3 23 15 32 18 28 15
Dec 11 219 3603 -27 -27 25 16 9 2 28 18 28 12
Dec 12 293 4743 34 32 8 3 6 -2 29 20 29 14
Dec 13 305 4915 4 4 1 0 22 16 19 12 26 15
Dec 14 468 6774 54 38 29 23 15 9 22 14 22 12 21 10
@@HDFC Equity Fund
Ratio of gain14/20 16/18 16/16 11/11 6/6 1/1
@HDFC Equity Fund Ratio
of Outperformance18/20 17/18 16/16 11/11 6/6 1/1
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9
Calculation process & detailed disclaimer of Page 8
Getting more from Equity Fund’s – Patience is the key
Rolling Returns as on 31st December, 2014. Benchmark; CNX 500, Return for 1 year is absolute and above 1 year is CAGR (The rate
at which an investment grows annually over a specified period of time). Values of NAV and Benchmark are as on 31st of every
month of the respective period excluding inception date. Returns column represents the return earned on the investment for the
referred period. For e.g. If you invested in Jan-95 when NAV was Rs10, then 1 year returns (in Dec-95) would have been -27%, 3
years returns (in Dec-97) would have been -13%, 5 years returns (in Dec-99) would have been 20%, 10 year returns (in Dec-04)
would have been 21%, 15 year returns (in Dec-09) would have been 23% and 20 year returns (in Dec-14) would have been 21% .
The above figures are rounded off to the nearest decimals. @ Number of times the scheme has outperformed the benchmark.
@@ Number of times the investor has made positive returns. Past performance may or may not be sustained in the future. The
AMC / Mutual Fund is not guaranteeing or promising or forecasting any returns. # Inception date of HDFC Equity Fund is January
01, 1995. Returns shown are annualised rolling returns with a yearly frequency.
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10
No investment too small, No dream too big
“Compound interest is the eighth wonder of the world.
He who understands it, earns it ... he who doesn't ... pays it.” – Albert Einstein
Past performance may or may not be sustained in the future. The above investment simulation is for illustrative purposes only and should not be construed as a
promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not assure a
profit or guarantee protection against a loss in a declining market. Inception date of HDFC Equity Fund is January 01, 1995. 1. Benchmark 2. Additional
Benchmark. Returns as on March 31, 2015. The above SIP investment is assumed to be invested on the 1st business day of every month over a period of time.
A SIP of just Rs 2,000 per month (total investment ~Rs 4.8 lacs) in has grown to ~1.01 crores by Mar 15HDFC Equity Fund(refer below table)
Start early, stay invested, Patience pays!!
An illustration of the advantage of SIP investments. This is how a SIP of Rs. 2,000 p.m. would have grown over a period of time.
HDFC Equity Fund - Growth Option Since Inception 15 Year SIP 10 Year SIP 5 Year SIP 3 Year SIP 1 Year SIP
Market Value of HDFC Equity Fund (Rs. in lacs) 1.01 crs 28.83 6.24 1.95 1.09 0.26
Total Amount Invested (Rs. in lacs) 4.8 lacs 3.60 2.40 1.20 0.72 0.24
HDFC Equity Fund Annualised Returns (%) 25.22 24.64 18.17 19.45 29.05 19.44
Market Value of SIP in CNX 500 Index (Rs. in lacs) 25.80 13.71 4.62 1.78 1.01 0.27
1Annualised Returns (%) CNX 500 Index 14.47 16.22 12.57 15.78 23.60 20.67
Market Value of SIP in CNX Nifty Index (Rs. in lacs) 22.92 12.66 4.60 1.73 0.97 0.26
2Annualised Returns (%) of CNX Nifty Index 13.52 15.30 12.48 14.55 20.64 15.75
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11
HDFC Equity Fund - Consistency in performance & dividends
Outperformed benchmark in 18 out of 20 years across cycles
Good years, bad years, dividends each year (for those who prefer cash)
“It's not what we do once in a while that shapes our lives. It's what we do consistently.”
– Anthony Robbins
^Past performance may or may not be sustained in the future. All dividends are on face value of Rs 10 per unit. After payment of the dividend, the per Unit NAV
falls to the extent of the payout and statutory levy (if applicable). There is no assurance or guarantee to Unit holders as to rate/quantum of dividend distribution or
that the dividends will be paid regularly. NAV of the Regular Plan-Dividend Option
Past performance may or may not be sustained in the future.Where NAV as on the end of a particular month is not available, latest released NAV is considered, Year- Calendar Year.
Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Equity Fund -28.8 -23.5 22.6 38.0 156.0 -20.0 -2.8 24.2 126.3 27.5 62.7 35.9 53.6 -49.7 105.6 29.2 -26.7 34.1 3.8 53.8
CNX 500 -33.6 -3.1 6.5 -8.7 112.1 -29.7 -22.8 10.3 98.1 17.9 36.5 34.9 61.1 -57.1 88.6 14.1 -27.1 31.7 3.6 37.8
Excess Return 4.8 -20.3 16.1 46.8 43.9 9.7 20.0 13.9 28.2 9.7 26.2 1.0 -7.5 7.4 17.0 15.1 0.4 2.5 0.2 16.0
Since 1999 1999 1999 2000 2000 2002 2003 2003 2004 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Dividend per unit (Rs) (A) 1.6 2.0 3.0 1.7 1.2 2.0 2.5 1.5 3.0 5.0 5.0 5.5 3.0 4.0 4.0 4.0 4.0 4.0 5.5
NAV (Record Date) (B) 16.0 19.1 21.5 12.7 13.5 17.1 18.8 20.8 23.4 41.9 40.4 45.4 23.3 46.9 49.0 44.0 41.4 43.8 59.8
Dividend Yield (%) (A/B) 10 10 14 13 9 12 13 7 13 12 12 12 13 9 8 9 10 9 9
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Bigger Funds or Smaller - Figures don’t lie!
The above table shows simple average returns of all equity funds arranged in different quartiles basis the descending order of AUM at the beginning of the year.
Loads have not been taken into consideration for calculation of returns.The investment objective, asset allocation and investment strategy of the schemes
considered for the above simulation may differ. Where AUM as on the end of a particular month is not available, AUM of the nearest date available is considered.
This simulation is only an illustration should not be construed as a recommendation or an investment advice. 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. Source: Bloomberg, Capitaline, NAV India
Bigger Funds have done better than smaller!!
In reality, there are no large funds in India
i.e. HDFC Equity Fund, the largest equity Fund is just ~0.2% of market capitalization
Choose a Fund by its track record, investment discipline, consistency of performance and not by size.
For those who still value size, bigger Funds have done better !
Year CY 05 CY 06 CY 07 CY 08 CY 09 CY 10 CY 11 CY 12 CY 13 CY 14
Largest Funds / Q1 47.9 38.6 57.7 -53.6 84.3 18.9 -24.6 33.5 3.3 52.5
Q2 48.2 36.2 60.9 -55.5 85.8 17.6 -24.6 33.5 3.7 53.8
Q3 48.1 33.9 55.9 -55.1 83.9 19.4 -22.8 31.4 6.3 51.2
Smallest Funds / Q4 41.8 34.0 60.8 -54.8 81.1 18.1 -25.1 29.4 4.1 45.0
Number of Schemes 107 138 165 200 239 260 278 285 294 308
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Fund Selection - Lane Changing does not work!
¦ The above data illustrates the calendar year performance of 11 largest diversified Equity / Balanced funds
as on Dec 31, 2014 for last 11 years
¦ It is evident that flavor of the season investing does not work. There is merit in sticking with funds that
have a disciplined approach to investments and have performed across cycles
“If investing is entertaining, if you're having fun, you're probably not making any money”
– George Soros
Internal Computation of the above table ^Past performance may or may not be sustained in Future.
RANK 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
1 H H G H E D D E H G I
2 D D A B G H E C A A H
3 F G B A J F F J D J D
4 E F I I F A C B F C E
5 B I C F B J G G J F J
6 C E H D C E J A G D F
7 A B F J A C A F B B A
8 I A D C D I H D E E B
9 G C E E I G B H I I C
10 J J J G H B I I C H G
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14
Economic Outlook & positioning of HDFC Equity Fund
A stable, proactive, long term focussed Government : Coal & telecom auctions, gas pooling, DBT, GST (FY16), MMRDA,
Bankruptcy act likely, diesel deregulation, resolving stalled projects, roads and railway spending increased, etc.
¦ Falling inflation – low commodity prices,
stable INR, improving supplies; Real rates of
3% indicate lower yields going forward
¦ Recent IIP readings are encouraging
¦ CAD – Q4FY15/FY16 likely to be surplus
after 11 years
¦ Steadily improving growth; Capex should
revive in FY16
FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15/E Mar 15
CPI (Avg %) 9.5 7.9 6.7 4.1 5.2 5.2
WPI (Avg %) 5.9 5.8 3.9 0.3 -1.8 -2.3
IIP growth (%) -0.1 4.5 1.3 1.9 3.8 5.0
Trade Deficit ($ bn) 147.6 34.7 38.6 39.2 27.0 NA
Invisibles ($ bn) 115.2 26.8 28.5 30.9 30.9 NA
CAD ($ bn) -32.4 -7.9 -10.1 -8.3 3.9 NA
FY13 FY14 FY15 FY16
GDP Growth (%) 5.1 6.9 7.4 8.1
Fiscal Deficit 4.8 4.6 4.1 3.9
thBy 2020, India is likely to be 5 largest economy in the world and fastest growing as well
Source: Morgan Stanley, Kotak, BOAML
Economy : Ready, set,...go
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15
Equity Markets : A positive outlook
Reasonable P/E’s * despite markets ** run up EBITDA margins bottoming out
¦ Despite the run up in 2014, since 2008 equity markets are up only ~40% vs. nominal GDP growth of ~100%
¦ EBITDA margins to improve from 17 year lows due to improving economy, lower inflation, lower wage growthand lower commodity prices
“Opportunities are like sunrises, if you wait too long you can miss them.”
– William Arthur
Reference made to S&P BSE SENSEX in this document is only for easy understanding of market movement and must not be construed as future performance of
S&P BSE SENSEX. The Benchmark for this FUND is CNX 500.
Roll PE (LHS)
BSE (RHS)
average (LHS)
93 95 97 99 01 03 05 07 09 11 13 15E
14.0
16.0
18.0
20.0
22.0
24.0 % S&P BSE Sensex EBITDA margin (%)
Source: BAMLSource: CLSA
90 141210080604020098969492
**
*
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16
Lower interest rates are good for equities
¦ There is near consensus about lower rates in India in 2015 & beyond
¦ Equities benefit in several ways from lower interest rates:
à Lower rates means lower interest expense & higher profits
à Lower rates lead to higher fair P/E multiples
à Lower rates improves economic growth prospects
“Interest rates are like gravity” – Warren Buffett
This implies, lower rates improve valuations of assets and vice versa
HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. Past performance may or may not be sustained in future.
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17
Time to say bye bye to Gold and buy buy to equities
¦ As can be seen from the table above, long term returns on equities are much higher than returns
on gold
¦ A difference of ~6.3% in CAGR over long term (36 years) resulted in ~8 times higher wealth
¦
Equities over time grow in line with the nominal growth of the economy (real growth plusinflation), while gold returns close to inflation
Equities - The Real Gold?
Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
*Disclaimer: Above referred asset classes are not strictly comparable. The views expressed may hold true in the context of prevailing economicconditions and is subject to change. HDFC Mutual Fund/AMC is not guaranteeing returns on equities.
The table below summarises the returns of Gold and S&P BSE SENSEX (‘Sensex‘) since 1979, when the Sensex commenced with abase value of 100
in last 36 years... Sensex Gold
CAGR (%) 16.9 10.6
Rs. 10,000 has become 27.96 lac 3.7 lac
Source: World Bank, Bloomberg, Data pertains from March 31, ‘79 to Mar 31, ’15
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18
Who is smarter? Indians or FIIs?
¦ FII ownership increased from 0 to 23% in 22 years (~1% per annum)
¦ While, FIIs have invested $154 bn in Indian equities between 2001-14, locals have bought gold worth $245 bn in
same period
¦ Thus, the dollars received by the locals & more have been invested in gold. Gold as was pointed out in previous
page (page 17) has yielded near inflation (9-10%) returns vs ~17% CAGR for the Sensex.
¦ In effect, locals have been exchanging a ~17% CAGR asset for a 9-10% CAGR one. This certainly is not a smart
thing to do.
¦ India offers significantly higher growth than World growth
¦ Favourable demographics, rising affordability, low penetration
of consumer goods, rich natural resources, large size are key
drivers of growth
¦ Barring 2008-09 (Lehman crisis), FIIs have been net buyers of
Indian equities
th¦ By 2020 India is expected to be the 5 largest economy in the
world
Why are FIIs so positive on India:
(FIIs were allowed to invest from September 1992 onwards; shareholding of FII not available from 1992 – 2000) Source: SEBI
stYear ending March 31 1992 ... 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total
FII ownership (%) 0 ... 12 13 13 16 17 19 20 18 15 17 18 19 21 23 -
FII flows ($ bn) 0 ... 2 2 1 10 9 11 6 13 -11 23 25 8 26 29 154
Net Gold Import ($ bn) 0 ... 4 3 3 5 9 9 12 14 17 25 35 49 41 19 245
0
9
87
6
5
4
3
2
1
3.8
5.3
3.8
3.2
5.45.7
3.2 2.8
7.7
5.3
2.52.6
1961-1970 1971-1980 1981-1990 1991-2000 2001-2010 2010-2013
Real India GDP Real World GDP
Source: BOAML
Decadal GDP (average % change)
Source: IMF
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19
HDFC Equity Fund - Portfolio positioning
¦ Midcaps have outperformed largecaps by highest margin in CY14 in last 10 years
¦ Midcap’s discount to largecap’s is lowest in last 5 years
¦ HDFC Equity Fund has steadily reduced exposure to midcaps
Steady reduction in exposure to midcaps in FY15
(% Return) CY 05 CY 06 CY 07 CY 08 CY 09 CY 10 CY 11 CY 12 CY 13 CY 14
NIFTY 36.3 39.8 54.8 (51.8) 75.8 17.9 (24.6) 27.7 6.8 31.4
CNX Midcap 35.0 29.0 76.9 (59.4) 99.0 19.2 (31.0) 39.2 (5.1) 55.9
Outperformance (1.3) (10.8) 22.2 (7.6) 23.2 1.2 (6.4) 11.5 (11.9) 24.5
HDFC Equity Fund Jun-14 Sep-14 Dec-14 Mar-15
Midcaps (%) 28 27 23 18
Source: Bloomberg, CY- Calendar Year, The current investment strategy is subject to change depending on the market conditions
Given the NIL discount of midcaps vs. largecaps and a predominantly largecap
portfolio, HDFC Equity Fund is well positioned in the current market environment
17.0
9.0
11.0
13.0
15.0
2010 2011 2012 2013 2014 2015
CNX MIDCAP (3M Moving Avg. PE)
NIFTY (3M Moving Avg. PE)
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HDFC Equity Fund - Strongly positioned for improving
economic outlook
Overweight Banks
Overweight Capex
Overweight Oil & Gas
Neutral IT & Pharma
Underweight FMCG
Large Cap exposure
:
:
:
:
:
:
Improving economic outlook, peaking interest rates, improving outlook for asset quality
Early signs of capex recovery
Sharp fall in subsidies
Reasonable valuations, INR appreciation is a key risk
Slowing growth, expensive valuations
Exposure to large caps is ~80%, Fund has reduced exposure to midcaps in 2014
HDFC Equity Fund is well positioned for improving economic outlook and lower interest rates
Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / HDFC Asset Management Company Ltd. The Fund may or maynot have any present or future positions in these sectors. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund.
Past Performance may or may not be sustained in the future
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21
Why HDFC Equity Fund? Whom is it suited for?
¦ HDFC Equity Fund is a good investment vehicle for those who believe in the growthprospects of India and understand the power of compounding
¦ The Fund offers:
à Best in class returns across several economic & market cycles
à Long term oriented, disciplined and consistent approach to investments
à Unbroken dividend track record for last 10 years (7-13% dividend yield) (Refer page 11)
The best time to invest was yesterday, the second best is today !
* Past Performance may or may not be sustained in the future. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in thisFund. 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. Refer page no. 22 for detailed per formance
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22
Scheme Performance Summary
Scheme
Discrete Returns (%)Value of
investment of Rs.
10,000 Since
Inception (Rs.)
NAV/Index
Value as on
31st Mar 15
Mar 31, 14 to
Mar 31, 15
Mar 28, 13 to
Mar 31, 14
Mar 30, 12 to
Mar 28, 13
Since Inception
CAGR (in %)
HDFC Equity Fund 469.724 41.49 22.25 3.61 20.93 469,724
1CNX 500 Index 6978.15 33.56 17.56 5.13 10.07 69,781
2CNX Nifty Index 8491.00 26.65 17.82 7.31 N.A. N.A.
Other Funds managed by Prashant Jain, Fund Manager of HDFC Equity Fund
HDFC Top 200 Fund$ 342.678 35.11 20.31 4.52 22.38 417,830
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S&P BSE 200 3537.55 31.93 17.04 6.03 14.01 112,8232S&P BSE SENSEX 27957.49 24.89 18.68 8.23 12.52 88,459
HDFC Prudence Fund$@ 376.12 41.84 19.03 3.29 20.13 486,125
1CRISIL Balanced Fund Index 5230.30 22.53 13.29 8.18 N.A. N.A.
2CNX Nifty Index 8491.00 26.65 17.82 7.31 9.55 69,036
HDFC Infrastructure Fund# 16.711 58.70 10.91 -8.57 7.54 16,711
1CNX 500 Index 6978.15 33.56 17.56 5.13 8.48 17,766
2CNX Nifty Index 8491.00 26.65 17.82 7.31 8.41 17,688
HDFC MF MIP Long Term Plan +^ 34.5855 21.49 8.50 8.07 11.64 34,586
1CRISIL MIP Blended Index 2936.22 16.45 6.46 9.06 7.84 23,420
2CRISIL 10 Year Gilt Index 2630.54 14.57 -0.95 11.25 5.03 17,385
Past performance may or may not be sustained in the future. $All dividends declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be
reinvested in the units of the Scheme at the then prevailing NAV (ex-dividend NAV). #The Scheme is co-managed by Prashant Jain and Srinivas Rao Ravuri. +The Scheme is co-
managed by Prashant Jain (Equities) and Shobhit Mehrotra (Debt). @Scheme performance may not strictly be comparable with that of its Additional Benchmark in view of the
balanced nature of the scheme where a potion of scheme's investments are made in debt instruments. ^Scheme performance may not strictly be comparable with that of its
Additional Benchmark in view of hybrid nature of the scheme where a portion of scheme's investments are made in equity instruments. 1. Benchmark. 2. Additional Benchmark .
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Product Features
$ Dedicated Fund Manager for Overseas Investments: Mr. Rakesh Vyas.
For complete Scheme details refer SID/KIM.
Ÿ Not Applicable. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) basedon the investors’ assessment of various factors including the service rendered by the ARN Holder.
Ÿ 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
Ÿ No exit load is payable if units are redeemed / switched out after 1 year from the date of allotment.
Type of Scheme Open Ended Growth Scheme
Inception Date (Date of allotment) January 1, 1995
Investment Objective To achieve capital appreciation
Fund Manager $ Prashant Jain
Plans HDFC Equity Fund, HDFC Equity Fund - Direct Plan
Options Under Each Plan: Growth & Dividend. The Dividend Option offers Dividend Payout and Reinvestment facility
Minimum Application Amount
(Under Each Plan/Option)
Purchase: Rs. 5,000/- and any amount thereafter
Additional Purchase : Rs 1000/- and any amount thereafter
Load Structure Entry Load:
Exit Load:
Benchmark Index CNX 500 Index
For further details on load structure, please refer to the Scheme Information Document / Key Information Memorandum of the Scheme
Asset Allocation PatternUnder normal circumstances, the asset allocation of the scheme’s portfolio will be as follows:
Type of Instruments Normal Allocation (% of Net Assets) Risk Profile of the Instrument
Equity & Equity related instruments 80 - 100 Medium to High
Debt and Money Market instruments * 0 - 20 Low to medium
*Investment in Securitised debt, if undertaken, would not exceed 20% of the net assets of the Scheme.
The scheme may seek investment opportunity in the ADR / GDR / Foreign Equity and Debt Securities (max. 40% of net assets) subject to SEBI (Mutual Funds) Regulations, 1996. The scheme may use derivatives
mainly for the purpose of hedging and portfolio balancing (max 25% of net assets) based on the opportunities available subject to SEBI (Mutual Funds) Regulations, 1996.
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Disclaimer
The views expressed herein are based on the basis of internal data, publicly available information and other sources believed to bereliable. 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 and is not an offer to sell or a solicitation to buy/sell any
mutual fund units/securities. 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 same should not be construed as an investment advice to any party. The
statements contained herein are based on our current views and involve known and unknown risks and uncertainties that couldcause actual results, performance or events to differ materially from those expressed or implied in such statements. Neither HDFC
Asset Management Company (HDFC AMC) and HDFC Mutual Fund (the Fund) nor any person connected with them, accepts any
liability arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their
own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on
the basis of information contained herein.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS,
READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
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