HDFC Balanced Advantage Fund^ The 10 10 100 Fund * (An open-ended - - PowerPoint PPT Presentation

HDFC Balanced Advantage Fund^

(An open-ended Balanced Advantage Fund)

The 10 – 10 – 100 Fund *

(* refer slide 10 for details)

Well suited for the current environment *

March 2020 Riskometer

This product is suitable for investors who are seeking* :

• To generate long-term capital appreciation/income
• Investments in a mix of equity and debt instruments

* Investors should consult their financial advisers, if in doubt about whether the product is suitable for them. * * Past Performance may or may not be sustained in future. For detailed performance please refer Slide 19-20

17.62% CAGR for 26 Years (Since inception Feb,1, 1994 ** Wealth has grown over 69 times in 26 years**

^ Effective close of business hours of June 1, 2018, HDFC Prudence Fund merged with HDFC Growth Fund (HDFC Balanced Advantage Fund after changes in

fundamental attributes). As the portfolio characteristics and the broad investment strategy of HDFC Balanced Advantage Fund is similar to that of erstwhile HDFC Prudence Fund, the track record (i.e. since inception date, dividend history, etc.) / past performance of erstwhile HDFC Prudence Fund have been considered, in line with SEBI circular on Performance disclosure post consolidation/ merger of scheme dated April 12, 2018.)

1

Current market environment is characterized by

• Attractive equity market valuations and positive equity markets outlook (Refer slide 4)
• Healthy Dividend Yields : With removal of DDT in current budget, Dividend Yields are likely to improve further.
• Strategic sale route for PSU divestment. ETF route to be less preferred & Removal of DDT– Positives for PSUs (Refer slide 6)
• Attractive credit spreads – Corporate Bonds spreads look attractive over 3Y Gsec’s
• Low Interest rates which are positive for equities (Refer slide 5), Fund is overweight in Equities currently (Refer slide 16)

HDFC Balanced Advantage Fund has a proven track record of more than 26 years since inception (February 1, 1994) across market cycles, several crises, bubbles, market excesses etc. Scheme has generated CAGR of ~ 18% since scheme inception vs ~ 9% CAGR of S&P BSE SENSEX during the same period (As of 29th Feb 2020) ^

2 Refer disclaimers on slide 21. For complete performance please refer slide no.19-20 ^ S&P BSE SENSEX used for comparison as Benchmark (NIFTY 50 Hybrid Composite 65:35 Index) and Additional Benchmark (NIFTY 50 TRI) are not available since inception of the scheme (Feb 01, 1994)

HDFC Balanced Advantage Fund – Aims at an optimal Debt / Equity Mix

3

HDFC Balanced Advantage Fund – A fund that has performed across market cycles, crises, market bubbles etc. !

* Since Sep’01 (Inception date of NIFTY 50 Hybrid Composite 65:35 Index) , HDFC Balanced Advantage Fund NAV is up ~ 29 times vs ~ 10 times for benchmark (NIFTY 50 Hybrid Composite 65:35 Index) during the same period.. ^ S&P BSE SENSEX used for comparison as Benchmark (NIFTY 50 Hybrid Composite 65:35 Index) and Additional Benchmark (NIFTY 50 TRI) are not available since inception of the scheme (Feb 01, 1994). For detailed performance, please refer Slide 19-20. Refer disclaimers on slide 21

Period Event Market Reaction / Correction July 97 - Nov 98 Asian Crisis Sensex down 35%, INR depreciated by 19%, Crude down by 45% Feb 00 - Apr 01 Tech Bubble Sensex down 46%, IT Index down 83% Dec 07 - Mar 09 Lehman crisis, GFC Sensex down 52%, Real Estate Index down 88%, Power, Capital Goods indices down 60-65%, Crude down 48% Dec 10 - Mar 11 PIIGS, European crisis Sensex down 25%, Capital Goods, Metal indices down 45-50% Oct 15 - Sep 19 Correction in Pharma sector Auto Index down 31%, largest Pharma company in India down 55% Dec 17 - Jul 19 Correction in Midcaps / Smallcaps, Auto 25% correction in Midcap Index, Smallcap down 34%. Auto Index down 42%, Dec 17 - Dec 19 NBFC Crisis Banks / NBFCs down 60-90%,

HDFC Balanced Advantage Fund has navigated through market cycles, crises, market excesses etc. with its disciplined approach to investing, focus

• n long term & effective portfolio diversification. It has generated a CAGR return of ~ 18% vs BSE SENSEX return of ~9% since inception of

the scheme (i.e. February 1, 1994). HDFC Balanced Advantage Fund NAV is up ~ 69 times since inception in Feb 94’ vs BSE SENSEX which is up ~ 10 times in the same period. (As of 29th February 2020) ^

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Value of Rs 100 invested in 1994 HDFC Balanced Advantage Fund - Reg - Growth(Adjusted-NAV) NIFTY 50 Hybrid Composite Debt 65:35 Index* S&P BSE SENSEX

Indian equities – Attractive Valuations

• Over the long term, stock market indices in India are growing around the same rate as the

nominal GDP ‒ Historically, whenever indices have grown significantly less than nominal GDP in any extended period of, say 10 years, they have delivered higher returns in next 10 years & vice versa. Interestingly, we are in a similar situation presently (Table 1 grown significantly less)

• Marketcap to GDP at 61% and CY21(E) P/E of ~15x is attractive, specially at a time when

NIFTY50 profit growth is estimated at 18% CAGR over FY19-22E and interest rates are low

• 1Y-Forward NIFTY 50 Earning yield [i.e. 100/ (one year forward P/E)]

less 10Y Gsec yield is ~ (0.4%) vs 10 year average of (1.7%). This indicates that equities are attractively valued relative to current bond yields.

India market cap to GDP ratio, calendar year-ends 2005-21E (%)

Low Marketcap to GDP, Bond yields equal to Earnings yield and recovery in profit growth make us optimistic on equity markets over medium to long term

Year Previous 10 year NIFTY Return (CAGR) Nominal GDP Growth (Previous 10 year CAGR) Next 10 year NIFTY Return (CAGR) 2001 7% 13% 16% 2002 4% 13% 18% 2003 6% 12% 13% 2004 6% 12% 15% 2006 16% 12% 8% 2007 19% 12% 6% 2016 8% 14% ? 2017 6% 13% ? 2018 14% 13% ? 2019 9% 13% ? Table 1 – Periods when10 year NIFTY Return trailed / exceeded Nominal GDP Growth materially Source: Kotak Institutional Equities, updated till 3rd March 2020, From 2005-18, NIFTY50 PE is based on 12 month forward estimated EPS. For 2019E, by Kotak Institutional Equities has calculated PE based on EPS numbers as of Mar-20 end, 2020E based on EPS of Mar-21 end and for 2021E based on EPS of Mar-22 end. Refer disclaimers on slide 21

4

• Equities benefit in several ways from lower interest rates:
• Lower interest rates mean lower interest expense & higher profits
• Lower interest rates imply higher fair P/E multiples
• Lower interest rates improve economic growth prospects
• HDFC Balanced Advantage Fund with an overweight position in equities is positioned well for current environment

with a medium to long term view. “ Low rates reduces the discount factor used in calculating the net present value of future cash flows. Thus, all else being equal, there is a direct connection between declining interest rates and rising asset prices ” – Howard Marks

Lower interest rates: Positive for equities

5 Refer disclaimers on slide 21

• BSE PSU Index was performing broadly in line with/ outperforming the BSE Sensex

Index for 18 years from 2000 to end 2017 (see adjacent chart). However, since then in last 2 years there has been sharp divergence with BSE PSU Index underperforming by 50% vs BSE SENSEX

• In our opinion, Divestment through ETF’s has impacted PSU stocks performance as:

‒ Regular supply of PSU shares through various ETFs distorts market demand and supply ‒ Discount offered on ETF’s creates interest amongst arbitragers & short term investors as against long term investors.

• An announcement of a strategic sale in BPCL, Air India, Cochin Shipyard, Shipping

Corporation suggests a significant shift in strategy with ETF utility as disinvestment took on the decline Will strategic sale route preferred over ETFs for divestment change things going forward ?

• Between FY02 & FY05 a large number of disinvestments took place through strategic route or

an offer for sale route. The market reaction to the same was positive with BSE PSU Index

• utperforming BSE SENSEX by ~170% in 3 years as can be seen from adjacent chart.

Source: Bloomberg

Underperformance of PSUs – Is this an Opportunity ?

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 2,000 4,000 6,000 8,000 10,000 12,000 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 BSE PSU index SENSEX (RHS)

6 Refer disclaimers on slide 21

Most Preferred & Most Avoided sectors / themes – What does history tell us ?

Period Most Preferred Sector / Themes Previous 10 year CAGR return % Next 10 year / return till CY19 CAGR % FY92 - Whole Market, SENSEX 35%

• 2%

CY00 IT (Eg: Large IT Company, since 1991) 117% 9% CY00 FMCG (Eg: Large FMCG Company) 36% 3% CY07 Power (Eg: Large Power Utility since 2004) 45%

• 1%

CY07 Real Estate (Eg: Large Real estate company) 112%

• 32%

CY07 Capital Goods / Infra (Eg: Large EPC company) 42% 4% CY10 Oil Exploration (Eg: Large Oil Exploration company) 38%

• 2%

CY10 Corporate Banks (Eg: Large PSU Bank) 34% 3% CY19 FMCG (Eg: Large FMCG Company) 24% ?? Period Most Avoided Sector / Themes Previous 10 year CAGR return % Next 10 year / return till CY19 CAGR % CY00 Capital Goods (Eg: Large Capital Goods company since 1992)

• 5%

46% CY00 Metals (Eg: Large Metal company since 1991)

• 4%

30% CY01 Auto (Eg: Large Auto export company)

• 4%

27% CY02 Cement (Eg: Large Cement company) 3% 27% CY07 FMCG (Eg: Large FMCG Company) 7% 23% CY17 PSU Index

• 3%

??

Investment success doesn’t come from “buying good things’, but rather from ‘buying things well’ - Howard Marks

Source: Bloomberg, Trends ; Above data is illustrative in nature. Refer disclaimers on slide 21. 7

HDFC Mutual Fund/AMC is not guaranteeing any returns. Refer disclaimers on slide 21

• For several years now, strong growth in profits has been elusive
• For all the noise, slowdown in NIFTY 50 profit growth was led almost

entirely by falling profits in Corporate Banks (Table 1). Share of Corporate Banks in NIFTY 50 profits fell from 12% to 3% between FY13 & FY19 (Table 2)

• With profitability of Corporate Banks normalizing, the overall NIFTY 50

profit growth is expected to bounce back

• Normalization in profitability and RoE of Corporate Banks is expected by

FY22E as slippages and provision costs are falling and recoveries are increasing.

NIFTY profit growth of 18% CAGR is expected between FY19 and FY22E led by recovery in profitability of Corporate Banks 8 Source: Kotak Institutional Equities, E- Kotak Institutional Equities Estimates as on 3rd March 2020

Profit after Tax (Rs crs) CAGR % FY13 FY19 FY22E FY13-19 FY19-22E NIFTY 50 ex Corporate Banks 213,301 361,259 502,952 9% 12% Corporate Banks 28,911 10,622 93,475

• 15%

106% NIFTY 50 242,212 371,881 596,427 7% 17%

• 4%

1% 6% 11% 16%

RoE of Corporate Banks

0% 5% 10% 15% GNPL of Corporate Banks Slippagesof Corporate Banks Sector contribution to NIFTY 50 profits (%) FY13 FY19 FY22E Consumer Discretionary 10% 7% 6% Consumer Staples 5% 6% 5% Corporate Banks & Financials 12% 3% 16% Energy 29% 30% 21% Information Technology 15% 19% 15% Materials 8% 11% 9% Retail Banks & Financials 7% 13% 15% Others 15% 13% 13% Total 100 100 100 Table 1 Table 2

NIFTY 50 profits growth – Recovery in sight

HDFC Balanced Advantage Fund – Positioning of the Equity Portfolio

• Marketcap to GDP at 61% and CY21(E) P/E of ~15x is attractive, specially at time when NIFTY50 profit growth is estimated at 18% CAGR over FY19-22E
• HDFC Balanced Advantage Fund has a predominantly large cap portfolio as of 29th February 2020
• With removal of DDT in current budget, Dividend Yields are likely to improve further

9 As per prevailing tax laws, which may change from time to time. Refer disclaimers on slide 21

Key overweight sectors / themes Corporate Banks & Financials

• Gross NPA and net NPA have peaked and are declining. Resolution of

NPA’s through IBC is gaining traction

• Slippages and provision costs are falling and recoveries are increasing

resulting in normalization in profitability and RoE

Utilities

• New

generation capacity addition has moderated while demand continues to grow. PLF of coal-based plants is thus improving

• Attractive Valuation compared to past as well as global peers
• Healthy dividend yields which are higher than / near bond yields

Key underweight sectors / themes Consumer Discretionary

• Sharp de-growth in 2W/4W wholesale volumes due to weak

demand and inventory correction

• The transition to BSVI will lead to higher vehicle prices and is a

near term headwind. EVs are likely to emerge as a threat in 3Ws followed by 2Ws over the next few years

• Rich valuations compared to past as well as global peers

Consumer Staples

• Penetration of key segments has improved significantly over past 2
• decades. Thus, Growth rates have come down in the last 5 years
• Valuations are high relative to past

• HDFC Balanced Advantage Fund has delivered more than 10% CAGR over 10 year periods in 100% instances (10-10-100 Fund), since inception in 1994
• 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 generally reduces as holding period increases.
• HDFC Balanced Advantage Fund maintains significant exposure to equities (At least 65% of Total Assets) and is therefore suited for long term investors

with investment horizon of 5 years or more.

CAGR (%) 1 Year 3 Years 5 Years 10 Years 15 Year more than 15 51% 60% 75% 82% 100% more than 10 61% 79% 96% 100% 100% more than 5 70% 89% 100% 100% 100% more than 0 78% 97% 100% 100% 100% Less than 0 22% 3%

• “Time spent in markets is more important than timing the markets”

HDFC Balanced Advantage Fund – 10-10-100 Fund – Ideal for long term Investments

10 Source :MFI Explorer. Above returns are calculated on daily rolling basis. Past Performance may not be sustained in future. HDFC Mutual Fund/AMC is not guaranteeing any returns. Refer disclaimers on slide 21. For detailed performance, refer slide 19 and 20.

HDFC Balanced Advantage Fund – Past vs Future

• HDFC Balanced Advantage Fund has a Proven track record of more than

26 years since inception (i.e. February 1, 1994) across market cycles, several crisis, bubbles, market excesses etc.

• In the past, every year of sub 10% returns has been followed by better

returns in next 3 / 5 years (see adjacent table)

• Fund has generated CAGR of ~ 18% since scheme inception (i.e. February

1, 1994) vs ~ 9% CAGR of BSE SENSEX during the same period (As of 31st

Jan 2020)

Since 3rd Sep 2001, HDFC Balanced Advantage Fund has a CAGR of ~ 20% vs ~ 14% CAGR of the benchmark-NIFTY 50 Hybrid Composite Debt 65:35 Index (As of 31st Jan 20).*

HDFC Balanced Advantage Fund (G) 1 year Return Next 3 year returns Next 5 year returns 12/22/1995

• 23%

11% 20% 12/24/1996 2% 40% 19% 12/31/1997 19% 28% 20% 12/31/1998 12% 22% 34% 12/30/1999 105% 3% 22% 12/29/2000

• 9%

32% 34% 12/31/2001

• 3%

44% 43% 12/31/2002 25% 53% 47% 12/31/2003 92% 35% 15% 12/31/2004 25% 41% 25% 12/30/2005 48% 3% 21% 12/29/2006 33% 15% 10% 12/31/2007 43% 11% 8% 12/31/2008

• 42%

25% 21% 12/31/2009 85% 11% 16% 12/31/2010 26% 4% 11% 12/30/2011

• 16%

26% 17% 12/31/2012 30% 16% 17% 12/31/2013 2% 19% 16% 12/31/2014 52% 12% 8% 12/31/2015 0.3% 11% ? 12/31/2016 9% 10% ? 12/31/2017 28% ? ? 12/31/2018

• 3%

? ? 12/31/2019 7% ? ?

* 3rd Sep 2001 is the inception date of the benchmark –NIFTY 50 Hybrid Composite Debt 65:35 Index .For complete performance details, refer slide 19 to 20. S&P BSE SENSEX used for comparison as Benchmark (NIFTY 50 Hybrid Composite 65:35 Index) and Additional Benchmark (NIFTY 50 TRI) are not available since inception of the scheme (Feb 01, 1994). Refer disclaimers on slide 21. 11

It is Investments made in TOUGH times that could yield GOOD returns

• Investments done during uncertain times, often tends to yield good

returns over next one year

• Amount invested in 9 out of 10 major crisis in last 20 years, has

yielded double digit returns over next one year * Dates are month-end date of a month during the crisis 12

Time period Date of Investment * Crisis Next One year return 1998 30-06-1998 Asian Financial Crisis 26.1% 1999 30-06-1999 Kargil War 23.9% 2001 30-09-2001 Attack on World trade Center, US 5.4% 2002-2003 30-06-2003 SARS Outbreak 32.8% 2003 30-06-2003 Iraq war 32.8% 2004 31-05-2004 BJP unexpectedly losing election 40.7% 2008 31-12-2008 Global Financial Crisis 75.8% 2011-12 31-12-2011 European Debt crisis 27.7% 2013 28-02-2013 Taper tantrum 10.3% 2016 30-06-2016 BREXIT announcement 14.9% 2020 Corona virus / Major private sector bank defaults ?

“ Be Fearful When Others Are Greedy and Greedy When Others Are Fearful ” - Warren Buffet

Interest Rates Outlook – Factors tilted towards lower yields

Factors supporting lower yields

• Concerns over global growth due to disruption caused by spread of coronavirus
• Sharp rate cuts by major central banks; easing bias likely to continue; Potential

for rate cuts in India as well

• Sharp fall in commodity prices especially crude oil to soften inflation
• Sharp fall in crude price to ease pressure on Centre’s fiscal deficit; room to

augment revenue by raising excise duty on petrol & diesel

• Accommodative stance to remain till “it is necessary to revive growth” - RBI
• Unconventional tools used by RBI to improve transmission of rate cuts

(Operation TWIST & LTROs)

• Muted credit growth vs. deposit growth; Ample global and domestic liquidity

Factors opposing lower yields

• Excess SLR securities holding of PSU banks
• Risk of fiscal slippage for next year
• Continued forex intervention can lead to lower OMOs
• Food prices may keep near term inflation over 6%
• Domestic growth possibly bottoming out

Yields are likely to trade with a downward bias

* Month-end 10Y benchmark yield less headline inflation for the month 13

As of 29th Feb 2020, Source: Bloomberg, For complete portfolio details, refer www.hdfcfund.com 14

HDFC Balanced Advantage Fund – Fixed Income Portfolio Positioning

Issuers % of Debt AUM Public Sector Banks 68.1 HDFC Bank Ltd. 7.0 ICICI Bank Ltd. 6.2 Axis Bank Ltd. 0.3 Tata Sons Ltd. 18.4 Total 100.0 Portfolio Characteristics Average Portfolio Maturity 2.6 years Macaulay Duration 2.3 years Modified Duration 2.1 years Fund YTM 7.77% 2 Year Gsec Yield 5.47

HDFC Balanced Advantage Fund’s YTM has a spread of 230 bps over GSec

Why HDFC Balanced Advantage Fund – The 10 – 10 – 100 Fund

• Proven track record of 26 years since inception (i.e. February 1, 1994) across market cycles, several crisis, bubbles, market excesses etc. (Refer slide 3)
• It has generated a CAGR return of 18% vs SENSEX return of ~9% since scheme inception, NAV is up ~69 times vs SENSEX which is up ~10

times during the same period. For detailed performance please refer Slide 19-20.

• Provides tax efficient asset allocation. The scheme targets to remain invested in equity in the range of 65%–100 % of its corpus, thus qualifying for equity

taxation*

• Fund structure provides diversification across debt & equity; Equity targets higher returns, Debt reduces volatility of Equity
• Fund is thus well suited for the current environment, for investors with moderately high risk appetite with a medium to long term view.

– Refer Slide 9 for Equity Positioning – Refer Slide 14 for Debt Positioning 15 * As per prevailing tax laws, which may change from time to time. S&P BSE SENSEX used for comparison as Benchmark (NIFTY 50 Hybrid Composite 65:35 Index) and Additional Benchmark (NIFTY 50 TRI) are not available since inception of the scheme (Feb 01, 1994). Refer disclaimers on slide 21

Fund has delivered more than 10% CAGR over 10 year periods in 100% instances (10-10-100 Fund), since inception in 1994 (refer slide 10). For detailed performance refer Slide 19-20

Data is As of 29th February 2020 For complete portfolio, please refer www.hdfcfund.com The Fund may or may not have any present or future positions in these stocks/sectors. The above statements / analysis should not be construed as an investment advice or a research report or a recommendation to buy or sell any security covered under the respective sector/s .

Company Name % to NAV

State Bank of India 9.25 ICICI Bank Ltd. 8.76 Infosys Limited 7.24 Larsen and Toubro Ltd. 6.85 ITC Ltd. 4.44 Coal India Ltd. 4.30 NTPC Limited 4.09 Power Grid Corporation of India Ltd 3.85 Power Finance Corporation Ltd 3.16 Axis Bank Ltd. 2.38

Top 10 Holdings (Feb’ 20)

Top 5 Holding (% of Net Assets) 36.54% Top 10 Holding (% of Net Assets) 54.32% AUM (Rs Cr) ~ 40,920 Portfolio Turnover Ratio (Last 1 Year) 21.96%

Portfolio Statistics

Segment % of Equity Exposure Large Cap 89.5 Mid Cap 3.5 Small Cap 7.0

Segment-wise break up of equity holding Portfolio Classification by Asset Class

Segment % of Total Assets Equity 80.09 Credit Exposure 18.41 Cash / Cash equivalents 1.50

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Portfolio Statistics

Type of the Scheme An open ended balanced advantage fund Inception Date (For Performance) February 01, 1994 Investment Objective The investment objective of the Scheme is to provide long term capital appreciation/income from a dynamic mix of equity and debt investments. There is no assurance that the investment objective of the scheme will be realized Fund Manager Prashant Jain Investment Plan Regular & Direct Investment 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. 1,000 and any amount thereafter Load Structure Entry Load:

• Not Applicable

Exit Load:  In respect of each purchase / switch-in of Units, up to 15% of the units may be redeemed without any exit load from the date of allotment.  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 date of

allotment of units  No Exit Load is payable if Units are redeemed / switched out after 1 year from the date of allotment  In case of Systematic Transactions such as SIP, GSIP, STP, Flex STP, Swing STP, Flex index; Exit Load, if any, prevailing on the date of registration / enrolment shall be levied. Benchmark NIFTY 50 Hybrid Composite Debt 65:35 Index $ Fund Manager Overseas investment – Mr Chirag Dagli For further details, refer SID and KIM available on www.hdfcfund.com and at Investor Service Centres of HDFC Mutual Fund 17

Fund Facts

Type of Instruments Minimum Allocation (% of Total Assets) Maximum Allocation (% of Total Assets) Risk Profile of the Instrument Equity and equity related instruments # 65 100 High Debt Securities (including securitised debt) and money market instruments 35 Low to Medium Units issued by REITs and InvITs 10 Medium to High Non-convertible preference shares 10 Low to Medium Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows:

The Scheme may invest up to 100% of its total assets in Derivatives. The Scheme may invest up to 35% of its total assets in foreign securities.

For further details, refer SID, KIM available on website www.hdfcfund.com and at Investor Service Centres (ISCs) of HDFC Mutual Fund.

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# Unhedged equity exposure shall be limited to 90% of the portfolio value. Unhedged equity exposure means exposure to equity shares alone without a corresponding equity derivative exposure.

Asset Allocation

Value of Rs 10,000 invested Scheme Returns (%) Benchmark Returns (%) # Additional Benchmark Returns (%) ## Scheme Benchmark (Rs)# Additional Benchmark (Rs)## Last 1 year 1.53 8.03 4.99 10,153 10,803 10,499 Last 3 years 4.50 9.19 9.46 11,412 13,018 13,116 Last 5 years 5.67 7.14 6.18 13,181 14,123 13,502 Since inception (Feb 1 ,1994) 17.62 N.A. N.A. 690,455 N.A. N.A.

Returns are for Regular Plan-Growth option. The above scheme has been managed by Mr Prashant Jain, the fund manager since June 20, 2003. The performance of the Scheme is benchmarked to the Total Return Index (TRI) Variant of the Indices. Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR). Load is not taken into consideration for computation of performance. #NIFTY 50 Hybrid Composite Debt 65:35 Index ## NIFTY 50 (TRI). Different plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution expenses / commission charged in the Regular Plan. Returns as on 29th February 2020. Effective close of business hours of June 1, 2018, HDFC Prudence Fund merged with HDFC Growth Fund (HDFC Balanced Advantage Fund after changes in fundamental attributes). As the portfolio characteristics and the broad investment strategy of HDFC Balanced Advantage Fund is similar to that of erstwhile HDFC Prudence Fund, the track record (i.e. since inception date, dividend history, etc.) / past performance of erstwhile HDFC Prudence Fund have been considered, in line with SEBI circular on Performance disclosure post consolidation/merger of scheme dated April 12, 2018. 19

Scheme Performance Summary – HDFC Balanced Advantage Fund

Scheme Managing scheme since Performance 1 year (in %) 3 year 5 year CAGR (in %) CAGR (in %) Mr Prashant Jain manages 3 other schemes HDFC Top 100 Fund Jun 20, 03

• 1.45

5.56 5.46 NIFTY 100 (TRI) $ 4.46 8.68 6.46 HDFC Equity Fund Jun 20, 03

• 0.89

5.89 5.65 NIFTY 500 (TRI) $ 4.30 7.52 6.33 HDFC Hybrid Debt Fund Dec 26, 03 7.68 5.89 6.92 NIFTY 50 Hybrid Composite Debt 15:85 Index $ 12.06 8.40 8.12

On account of difference in type of scheme, asset allocation, investment strategy, inception dates, the performance of these schemes is strictly not comparable. $ Benchmark. Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR).Load is not taken into consideration for computation of above performance(s). Different plans viz. Regular Plan and Direct Plan have different expense structures. The expenses of the Direct Plan under the scheme will be lower to the extent of the distribution expenses/commission charged in the Regular Plan. Returns as on February 29, 2020. The above returns are of Regular Plan- Growth Option. N.A.: Not Available

Scheme Managing Portfolio since Performance 1 year (in %) 3 year 5 year CAGR (in %) CAGR (in %) Permitted Category I-FPI Portfolio (managed Under a bilateral agreement under regulation 24(b) and subject to applicable laws) Mar 22, 16 2.19 7.24 N.A. Benchmark – MSCI India (TRI) 3.19 7.76 N.A.

Performance return of Permitted Category I – FPI Portfolio(s) managed by the Fund Manager (Mr Prashant Jain)

Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR). The above returns are computed using the Time Weighted Rate of Return (TWRR) methodology, to make them more comparable with the mutual fund scheme's returns. FPI Portfolio: Inception date is 22nd March, 2016. The performance is not comparable with the performance of the aforementioned scheme(s) of HDFC Mutual Fund due to differing investment objective/s and fundamental differences in asset allocation, investment strategy and the regulatory environment. The said disclosure is pursuant to SEBI Circular no. Cir/IMD/DF/7/2012 dated 28th February, 2012 pertaining to Regulation 24(b) of SEBI (Mutual Funds) Regulations, 1996. N.A. Not Applicable. FPI - Foreign Portfolio Investor.

20

Performance of other schemes managed by the Fund Manager

This presentation dated 12th March, 2020 has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based on internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only. The document is given in summary form and does not purport to be complete. The document does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. The information/ data herein alone are not sufficient and should not be used for the development

• r implementation of an investment strategy.

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed

• r

implied in such statements. Stocks/Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / AMC. The Fund may or may not have any present or future positions in these sectors. The above has been prepared on the basis of information which is already available in publicly accessible media. The above should not be construed as an investment advice or a research report or a recommendation by HDFC Mutual Fund/HDFC AMC to buy or sell the stock or any other security covered under the respective sector/s. Past performance may or may not be sustained in future. Investors should be aware that the fiscal rules / tax laws may change and there can be no guarantee that the current tax position may continue indefinitely. In view of individual nature of tax consequences, each investor is advised to consult his / her own professional tax advisor. Neither HDFC AMC and HDFC Mutual Fund nor any person connected with them, accepts any liability arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their

• wn investigation

and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein. For complete portfolio/details refer to our website www.hdfcfund.com

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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Disclaimers and other risk factors

Thank You

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