HDFC Equity Savings Fund(An open ended equity scheme)

1December 16, 2015

RiskometerThis product is suitable for investors who are seeking*:

• Capital appreciation while generating income over medium tolong 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

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

Table of Contents

• An Overview

• Scheme Dynamics – The Best of Three

• Equity Taxation

• Fund Positioning – Risk Quotient

• Equity Market Outlook

• Debt Market Outlook

• Why HDFC Equity Savings Scheme?

• Investment Strategy

• Product Features and Asset Allocation

2

Equity Savings Fund – An Overview

• Asset allocation is key to financial success.

• Investors need exposure to both Equity & Debt markets.

Equity Savings

Fund

Equity

DebtArbitrage

A Stable Trio

3

Characteristics of an Equity Savings Fund

Volatility < Equity FundsPotential Returns >Debt Funds

Taxation = Equity Funds

Lower unhedged Equity exposure ensures lower volatility while the combined exposure of Equity + Arbitrage offers the tax efficiency of equity oriented funds while offering higher

potential returns as compared to debt funds.

HDFC Mutual Fund/AMC is not guaranteeing return investments made in the Scheme

Scheme Dynamics – The Best Of Three

• Flexible Asset allocation fund with equity fund like taxation (Refer Next Slide 5 & 6)

• Aim for optimum tax free returns through Dividends and long term capital appreciation

4

• Focus on long term growth.

• Invest in companies which trade below their intrinsic values while maintaining a balanced market outlook.

• Accrual Income.

• Capture benefits of Capital appreciation in a falling interest rate environment.

• Maximizing income while maintaining an optimum balance of yield, safety & liquidity.

• Generate income through arbitrage opportunities arising out of implied cost of carry and mis-pricing across the spot, futures and options markets.

Equity Taxation

@ Short Term Capital gains will be considered for equity assets held for a period of up to 12 months and up to 36 months in case of debt assets@@ Assets not falling under short term assets will be treated as long term assets.

$- Surcharge at the rate of 12% is levied in case of individual/HUF unit holders where their income exceeds Rs. 1 Crore

^ - Assuming the investor falls into highest tax bracket.

The information set out is neither a complete disclosure of every material fact of Income-tax Act 1961 nor does it constitute tax or legal advice. In view of theindividual nature of the tax consequences, each investor is advised to consult his/her own professional tax advisor.

For Resident Individuals/HUF$

Taxes Applicable Equity FundsLiquid Funds/

Debt Funds

Dividend Distribution Tax Nil 28.840%

Short Term Capital Gains@ 17.304% 34.608%^

Long Term Capital Gains@@ Nil 23.072%

5

Equity Taxation

@ Short Term Capital gains will be considered for equity assets held for a period of upto 12 months and upto 36 months in case of debt assets@@ Assets not falling under short term assets will be treated as long term assets.

$- Surcharge at the rate of 7% is levied for domestic corporate unit holders where the income exceeds Rs 1 crore but less than Rs 10 crores and at the rate of 12%where income exceeds Rs 10 crores.

The information set out is neither a complete disclosure of every material fact of Income-tax Act 1961 nor does it constitute tax or legal advice. In view of theindividual nature of the tax consequences, each investor is advised to consult his/her own professional tax advisor.

For Domestic Companies$

Taxes Applicable Equity FundsLiquid Funds/

Debt Funds

Dividend Distribution Tax Nil 34.608%

Short Term Capital Gains@ 17.304%/16.5315% 33.063%/34.608%

Long Term Capital Gains@@ Nil 22.042%/23.072%

6

Liquid Funds

Arbitrage Funds

Debt Funds

HDFC Equity Savings Fund

Balanced Funds

Diversified Equity Funds

Sectoral Funds/ Thematic Funds

Fund Positioning – Risk Quotient

• Aims to provide returns while managing risks efficiently.

• Equity Taxation# – No capital gains taxes after 1 year. No DDT on any dividends paid.

7

• HDFC Equity Savings fund is much less volatilethan diversified equity/balanced funds (equity≥ 65%) since it has only a limited exposure tounhedged equity (max up to 40%)

• Suitable for conservative investors.

Pro

du

ct R

etu

rn

Product Risk# Provided the scheme meets the criteria as an equity oriented scheme as per prevalent Income tax laws. HDFC Mutual Fund/AMC is not guaranteeingreturn investments made in the scheme

3 in 1 – The Golden Goose

• Reduce the risk of timing the markets.

• Benefit from investments in the derivative markets.

• Advantage You – Optimally take part in the Equity & Debtstories with a single product.

• Flexible asset allocation enhances the potential for investing inthe best-performing asset class and reduces the impact of theworst-performing asset class across market cycles.

• Investment horizon of 18-24 months or more.

• Portfolio Rebalancing between equities and debt based onmarket conditions.

8 8HDFC Mutual Fund/AMC is not guaranteeing return investments made in the scheme

A Back test Analysis

• A mixture of equity, debt & arbitrage to effectively manages risk without hindering growthprospects.

• A 10 year analysis of this model throws up interesting facts.

9

Rolling Returns of the Benchmark Investment Model

Source: Internal Data calculation.To test the efficacy of the above benchmark model strategy in the past, a hypothetical fund is created with NAV of Rs. 10. The above findings are basedon calculations made on a daily analysis of the actual index values of the respective benchmarks by extrapolating in the ratio viz. 30% Nifty 50 + 40%CRISIL Liquid Fund Index + 30% CRISIL Short Term Bond Fund Index for the period from November 1st 2005 to October 31st 2015. The above returnsare annualized without considering fund expenses. The above simulation is for illustrative purposes only. Past performance of the Index is not anindication of future results. Prospective application of the methodology may not result in performance commensurate with the back-test returnsshown. HDFC Mutual Fund/AMC is not guaranteeing return investments made in the scheme

Particulars 1 Yr Rolling 2 Yr Rolling 3 Yr Rolling 5 Yr Rolling

Number Of Observations (A) 2,233 1,996 1,739 1,240

Number of Negative Returns (B) 205 2 NIL NIL

Negative Returns as % Of Total (B/A) 9.18% 0.10% 0.00% 0.00%

Lowest Return Observed -15.94% -0.48% 4.47% 5.54%

Highest Return Observed 30.94% 20.16% 13.33% 11.65%

Average Return Across test period 9.75% 8.95% 8.57% 8.47%

Standard Deviation 7.92% 4.11% 2.18% 1.37%

Equity Market Outlook

• India is one of the biggest beneficiaries of lowercommodity prices especially crude oil.

• Further, low inflation, improving CAD and fiscaloutlook and rising order backlogs in some keyinfrastructure related industries point to asteadily improving growth prospects of theeconomy, especially of the capex cycle.

• The policy direction is right and economy ismaking good progress on most fronts.

• Improving margin outlook of corporates, likelylower interest rates, soft commodity prices andreasonable valuations lead to a positive outlookfor equity markets over the medium to longterm.

• Merit in increasing allocation to equities (forthose with a medium to long term view) in aphased manner and stay invested. 10

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0

5

10

15

20

25

30

35

40

45

Oct

91

Oct

93

Oct

95

Oct

97

Oct

99

Oct

01

Oct

03

Oct

05

Oct

07

Oct

09

Oct

11

Oct

13

Oct

15

Roll PE (LHS) average (LHS)

BSE (RHS)

Source: CLSA

Debt Outlook – Lower Inflation & Interest Rates

• 3% real rates indicates furtherdownside in yields

• Inflation - CPI in Nov 15 was at 5.41%

• Past drivers of inflation – High MSP,weak INR, rising commodity prices,good demand have all reversed

• Record gap of CPI-WPI, points to lowCPI going forward

Source:Bloomberg, BAML* As on Dec 15th 2015The real interest rate is the rate of interest an investor expects to receive after allowing for inflation. 11

Q1 FY 15 Q2 FY 15 Q3 FY 15 Q4 FY 15 Nov 15*

CPI (Avg %) 7.9 6.7 4.1 5.2 5.41

WPI (Avg %) 5.8 3.9 0.3 -1.8 -1.99

Difference 2.1 2.8 3.7 7.0 7.4

0.7

4.2

(3.2)

2.8

(0.1)

(0.7)

0.9

1.2

8.3

9.8

1.5 2.4

(3.0)

(6.0)

(0.3)

(0.6)

(1.4)

(2.8)

4.8 2.4

(7.0)

(5.0)

(3.0)

(1.0)

1.0

3.0

5.0

7.0

9.0

11.0

Nov-06 Nov-07 Oct-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15

Real Rates - WPI Real Rates - CPI

Why HDFC Equity Savings Scheme?

• Optimal Growth – Tactical equity allocation to take advantage of the long term potential in IndianEquities.

• Regular Income – Debt and arbitrage securities held in the portfolio will provide fixed incomeopportunities.

• Efficient Taxation –Tax Efficient Returns with appropriate mix of Equity, Debt and Derivatives.

• Low Fund Volatility – Using Equity Arbitrage Instruments without hindering growth prospects.

• Diversified Asset Allocation – Regular balancing between asset classes based on market conditionsand asset valuations.

12HDFC Mutual Fund/AMC is not guaranteeing return investments made in the scheme

Investment Strategy

• Equities

– Track disparities in valuation between across sectors to generate alpha from sector & stockdeviations.

– Multi cap strategy to provide flexibility in equity allocation based on market conditions

• Arbitrage

– The scheme will generate income through arbitrage opportunities arising out of implied cost ofcarry and mis-pricing across the spot, futures and options markets which can lead to profitablearbitrage opportunities

• Debt

– The investment strategy involves investing in a range of debt and money market instruments ofvarious credit ratings with a view to maximizing income while maintaining an optimum balanceof yield, safety and liquidity.

– The Scheme shall endeavor to develop a well- diversified, portfolio of debt (including securitizeddebt) and other securities that minimizes liquidity and credit risk.

13The current investment strategy is subject to change depending on the market conditions. For complete details on investment strategy referSID/KIM

Asset Allocation Pattern

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Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows:

Types of InstrumentsMinimum

(% of Net Assets)Maximum Risk Profile

Equities & Equity related instruments 65 90 Medium to High

Of which net long equity* 15 40 Medium to High

Of which Derivatives including index futures, stock futures, index options etc.**

25 75 Low to Medium

Debt instruments & Money Market instruments #$ 10 35 Low to Medium

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* This net long equity exposure is aimed to gain from potential capital appreciation and thus is a directional equity exposure which will not be hedged. Thisequity exposure means exposure to equity shares alone without a corresponding equity derivative exposure. ** The exposure to derivative shown in the aboveasset allocation table would normally be the exposure taken against the underlying equity investments and in such case, exposure to derivative will not beconsidered for calculating the gross exposure. # Investments in securitised debt, if undertaken, shall not exceed 35% of net assets of the Scheme.

$ Investments in derivatives shall not exceed 50% of the asset allocation stipulated above. Exposure to Derivatives may be taken to hedge the portfolio,rebalance the same or to undertake any other strategy as permitted under SEBI (MF) Regulations from time to time. The margin money deployed on thesepositions (both equity and / or debt derivatives) would be included in Money Market category. ^The Scheme may seek investment opportunity in ADR / GDRand Foreign Securities, in accordance with guidelines stipulated in this regard by SEBI and RBI from time to time. Under normal circumstances, the Scheme shallnot have an exposure of more than 50% of its assets in foreign ADR / GDR and Foreign Securities. The cumulative gross exposure through debt, equity andderivative positions shall not exceed 100% of the net assets of the scheme in accordance with SEBI Cir/IMD/DF/11/2010 dated August 18, 2010.

For further details refer SID/KIM

Asset Allocation Pattern

15

Under defensive circumstances, the asset allocation of the scheme’s portfolio will be as follows:

Types of InstrumentsMinimum

(% of Net Assets)Maximum Risk Profile

Equities & Equity related instruments 15 65 Medium to High

Of which net long equity* 15 40 Medium to High

Of which Derivatives including index futures, stock futures, index options etc.**

0 50 Low to Medium

Debt instruments & Money Market instruments #$ 35 85 Low to Medium

15

* This net long equity exposure is aimed to gain from potential capital appreciation and thus is a directional equity exposure which will not be hedged. Thisequity exposure means exposure to equity shares alone without a corresponding equity derivative exposure. ** The exposure to derivative shown in the aboveasset allocation table would normally be the exposure taken against the underlying equity investments and in such case, exposure to derivative will not beconsidered for calculating the gross exposure. # Investments in securitised debt, if undertaken, shall not exceed 35% of net assets of the Scheme.

$ Investments in derivatives shall not exceed 50% of the asset allocation stipulated above. Exposure to Derivatives may be taken to hedge the portfolio,rebalance the same or to undertake any other strategy as permitted under SEBI (MF) Regulations from time to time. The margin money deployed on thesepositions (both equity and / or debt derivatives) would be included in Money Market category. ^The Scheme may seek investment opportunity in ADR / GDRand Foreign Securities, in accordance with guidelines stipulated in this regard by SEBI and RBI from time to time. Under normal circumstances, the Scheme shallnot have an exposure of more than 50% of its assets in foreign ADR / GDR and Foreign Securities. The cumulative gross exposure through debt, equity andderivative positions shall not exceed 100% of the net assets of the scheme in accordance with SEBI Cir/IMD/DF/11/2010 dated August 18, 2010.

For further details refer SID/KIM

Product Features

16

Name HDFC Equity Savings Fund ( Erstwhile HDFC Multiple Yield Fund)#

Type of Scheme Open-ended equity scheme.

Inception Date

(Date of allotment)September 17, 2004

Investment ObjectiveThe investment objective of the scheme is to provide capital appreciation and income distribution to theinvestors using arbitrage opportunities, investment in equity / equity related instruments and debt / moneymarket instruments. There is no assurance that the investment objective of the Scheme will be realized

Fund Manager Vinay Kulkarni (Equities), Anil Bamboli (Debt)

Investment PlansDirect Plan

Regular Plan

Investment Option 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. 1,000 and any amount thereafter

Load Structure

Entry Load: Not Applicable

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 by theARN Holder.

Exit Load:

In respect of each purchase / switch-in of units, an exit load of 1% is payable if units are redeemed /switched-out within 1 year from the date of allotment.

No exit load is payable if units are redeemed / switched-out after 1 year from the date of allotment.

Benchmark 30% Nifty 50 + 40% CRISIL Liquid Fund Index + 30% CRISIL Short Term Bond Fund Index

For Complete details refer KIM/SID.# Due to change in fundamental attributes of the scheme and scheme name, w.e.f. Dec 16th 2015 the scheme shall be managed as an open ended equity scheme

DISCLAIMER

This presentation dated 16th December 2015, has been prepared by HDFC Asset Management CompanyLimited (HDFC AMC) based on internal data, publicly available information and other sources believed tobe reliable. Any calculations made are approximations, meant as guidelines only, which you mustconfirm before relying on them. The information contained in this document is for general purposesonly. The document is given in summary form and does not purport to be complete. The document doesnot have regard to specific investment objectives, financial situation and the particular needs of anyspecific person who may receive this document. The information/ data herein alone are not sufficientand should not be used for the development or implementation of an investment strategy. Thestatements contained herein are based on our current views and involve known and unknown risks anduncertainties that could cause actual results, performance or events to differ materially from thoseexpressed or implied in such statements. Past performance may or may not be sustained in future.Neither HDFC AMC and HDFC Mutual Fund nor any person connected with them, accepts any liabilityarising from the use of this document. The recipient(s) before acting on any information herein shouldmake his/her/their own investigation and seek appropriate professional advice and shall alone be fullyresponsible / 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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Thank You