HDFC Childrens Gift Fund Empower and strengthen your childs future, - - PowerPoint PPT Presentation

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HDFC Childrens Gift Fund Empower and strengthen your childs future, today. Dont let nances get in the way of your childs dream! Please refer page 20 for product labelling An open ended fund for investment for children having a

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HDFC Children’s Gift Fund

Empower and strengthen your child’s future, today. Don’t let nances get in the way of your child’s dream!

Please refer page 20 for product labelling

An open ended fund for investment for children having a lock-in for at least 5 years or till the child attains age of majority (whichever is earlier)

April, 2020

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“Education is not preparation for life, education is life itself.”

John Dewey

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3 Higher education is not the privilege of the elite. Do you agree?

How Much Will It Cost You Tomorrow?

Source: Indian Institute of Management – Ahmedabad, IIT – Bombay, Manipal University – Mangalore. Costs depicted based on the education costs for the Post Graduate Programme in Management at Indian Institute of Management – Ahmedabad, B. Tech 4 year programme at IIT – Bombay (Fees extrapolated for 4 year course) & MBBS program at Manipal University - Mangalore. 2035 gures based on ination assumed at 10% p.a. Monthly investment needed to build such corpus by 2035 calculated based on a 15 Year SIP investment returning 12% p.a. The above investment simulation is for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital.

MBA 28 Lakh 116.9 Lakh Engineering 9.5 Lakh 39.6 Lakh Medical 64.4 Lakh 2.69 Crore

Rs. 23,412
Rs. 7,943
Rs. 53,890

2020 2035 Monthly savings needed for professional education in 2035

The above gures are rounded off to the nearest hundred.

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4 “The roots of education are bitter, but the fruit is sweet” - Aristotle

How Much is Enough?

With rising education costs across all professional degrees, saving for education becomes even more imperative

Child care costs also include additional costs of housing, transportation, clothing, food, health care, etc.

Long term equity investing is a suitable medium to combat ever increasing costs

The above chart is only an illustrative example to show rising cost of education and not based on actual data.

Cost of Education is rising much faster than ination

Cost of education Inflation

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5 What If your Child Aspires To Go To Harvard? Are You Prepared?

Prepare For The Best

The best professional degree courses in India cost up to

Rs. 28 lakh*

Similar courses abroad can cost signicantly more

Premium institutes have the pricing power and ination will take these numbers higher year after year

The cost of education should not come as a surprise to you

So, prepare for the best, though you may have options to choose from!

Save regularly with a goal in mind

Finances should not get in the way of your child’s dreams

* Fees for a 2 year (2020) program in IIM Ahmedabad. Source : IIM Ahmedabad

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Source: Internal Calculation The above is an illustration using assumed rate of return of 12% p.a. (monthly compounding) only to explain the concept of Power of Compounding. It does not forecast or guarantee the returns in any mutual fund scheme.

The road to Rs. 50 Lakhs!

Anirvan starts early and saves Rs. 10,008/month for 15 years

Nicole and Sachin are late starters and will have to contribute a higher amount on a monthly basis to accumulate the same amount as Anirvan

Nicole: Rs. 21,735/month for 10 years

Sachin: Rs. 61,222/month for 5 years

The later you start, the less your money works for you!

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The Cost of Procrastination - Don’t delay the inevitable

Anirvan Nicole Sachin ` 36,73,334 ` 13,26,666 ` 26,08,257 ` 23,91,743 ` 18,01,513 ` 31,98,487 Contributions Earnings

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Goal Based Investing

Targets a specic amount of corpus for your child’s education

Money is earmarked for a specic purpose. For instance, investors do not touch PF corpus for buying a car (as the money is earmarked for retirement)

Investors tend to rationalize their spending

n other personal / social requirements

Investing with a goal brings discipline

Balances your current aspirations vs future

requirements. A sizeable corpus can be

built over time

Mental Accounting is involved, ensuring long-term holding of investments

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Goal based Investing towards Child’s Education

Build a corpus meant for your Child’s Education! Investing without a Goal

Savings are kept in a “common savings pool” without any goal in mind

Money gets withdrawn from the “common savings pool” for all nancial requirements

Tend to overspend on other commitments

What is left after spending gets saved

What is left out of the “common savings pool” may not be adequate to tackle specic goals like children’s education

Investors can get irrational in allocation of funds for various purposes and may resort to premature withdrawals

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“Mental Accounting” is an economic concept as per which investors divide their current and future savings into separate, non-transferable portions affecting their consumption decisions and other behaviours

Mental accounting leads to long term thinking and nancial discipline

Since children`s education expenses are substantial and important, a corpus meant for the same needs to be saved separately

Such investments are to be withdrawn only when nearing the goal

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Mental Accounting

Parents want their children to have a better life than theirs; Education is the foundation for a better life.

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Equities - A Powerful tool against Ination

Equities have delivered higher returns than other Asset Classes!

Aren’t equities risky? Having a short term view or investing directly in equities without adequate knowledge can be risky. Volatility reduces with time in

equity. Hence choose the right mutual fund scheme.

Should I put all my money in equities? Not entirely. When you have a lot of time to achieve your goals, invest predominantly into equities. As you near your goals, you need to shift gradually to lesser volatile asset class like debt.

How do I invest in equities? Lumpsum investments

r Sytematic Investment Plan with a Mutual Fund. As

your income increases, do a SIP Top Up.

Have equities beaten ination? Equities have beaten ination and have compounded faster than

ther major asset classes over the last 20 years.

Returns from March 31,1980 to March 31, 2020. Source: Bloomberg, RBI Handbook of statistics on Indian Economy, MFI, World Gold Council. #Average ination is shown for comparison with returns from various asset classes. Above asset classes are not strictly comparable. Above chart is for illustrative purpose only. Past performance may or may not be sustained in the future. (% CAGR Returns)

4.0 8.0 12.0 16.0 Equity (S&P BSE SENSEX TRI) Gold

Bank FD

Avg Inflation

2.0 6.0 10.0 14.0 14.6 8.8 8.2 7.4

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Professional Fund Management

Expert fund management

In depth research

Conscious portfolio management to optimize returns

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How Mutual Funds help?

Long term nancial goal planning

Meet nancial goals by investing in products catering to a wide array of investment goals

Options to invest regularly in small doses or lump sum

Other benets

Diversication even with a small investment

Liquidity

Tax benets

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SIP

Investments at a predened monthly or quarterly frequency

For a salaried individual, the income is monthly and so should be the savings

Ideal way to develop a savings habit

As the income increases, do SIP Top Up

This would inculcate discipline as to spending what is left after saving

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SIP or Lump Sum?

Can there be a better gift to your child than investing very early on in their lives? Lump Sum

Lump sum when you receive large ows like a bonus

Ad hoc investments on special occasions like festivals

r your child’s birthday

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Have a target corpus in mind

Start early and invest regularly toward the goal - Keep time on your side!

Focus long-term and stay invested

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Strategy to Smart Investing

Children grow fast; Make sure your Savings do too! Presenting...

HDFC Children’s Gift Fund

An open ended fund for investment for children having a lock-in for at least 5 years

r till the child attains age of majority (whichever is earlier)

^

^with effect from May 23, 2018, the Scheme has undergone changes in fundamental attributes and other changes.

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HDFC Children’s Gift Fund - Weathered it all

Source: Publicly available information

Data as on 31 March 2020. ^The performance of the Scheme is benchmarked to the Total Return Index (TRI) Variant of the Indices (Equity Assets). *NIFTY 50 Hybrid Composite Debt 65:35 Index is available from September 01, 2001. Note - Values for the HDFC Children's Gift Fund and additional benchmark, i.e., NIFTY 50 TRI, have been rebased to Rs. 10 since March 02, 2001, i.e., the inception

f the fund. The benchmark, NIFTY 50 Hybrid Composite Debt 65:35 index has been rebased to 10.07 since its inception (September 1, 2001), which is the

rebased value of the fund as on that date.

HDFC Children’s Gift Fund - Through the Tough Times

Value of Rs. 10,000 invested in 2001 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 180 160 140 120 100 80 60 40 20

2G Scam, Coal Scam, etc.

NIFTY 50 Hybrid Composite Debt 65:35 Index

Rs. 86,738

NIFTY 50 TRI

Rs. 86,470

HDFC Children's Gift Fund

Rs. 1,27,600

Demonetization, GST, Brexit, Trump as US President Clear majority for BJP

2 Term for UPA Lehman Crises, Satyam Scam BJP Loses 9/11, KP Scam

HDFC Children’s Gift Fund NIFTY 50 TRI^ (Additional Benchmark) NIFTY 50 Hybrid Composite Debt 65:35 Index*

US Rate Hike, Slowdown in US & Commodity crash QE3 Taper Worry

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Meant for all children below the age of 18 years

Healthy allocation towards equities which is an ideal long-term asset class coupled with debt allocation which provides stable returns

Personal accident insurance for parent/guardian of up to Rs 10 lakhs*

Investments can be made on a lump sum or SIP basis and there is no limit to the number of transactions in any given year. No maximum limit on investment

Easy hassle free withdrawal options

Benet from the long term potential of equity while maintaining the stability of debt

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HDFC Children’s Gift Fund

“Education is the most powerful weapon which you can use to change the world” - Nelson Mandela

*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.

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Investment will be made in the name of a minor

Parent/Guardian will operate the folio till the child attains majority

No limit on investment

Investment can be made as many times till the minor turns 18

In-built Personal Accident cover up to Rs. 10 lakhs!*

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Key Features

“Education gives you wings to y” - APJ Abdul Kalam Who can invest?

Ÿ Parents Ÿ Grand Parents Ÿ Friends Ÿ Other Relatives

*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.

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Covers the Parent / Legal Guardian (up to the age of 80 years) of the Unit holder

Cover equivalent to 10 times the cost value of the outstanding units subject to a maximum of Rs.10 lakh per parent / legal guardian across all folios

Valid from the date of allotment of units till the unit holder attains 18 years of age or date of redemption whichever is earlier

Insurance premium will be borne by HDFC Asset Management Co. Ltd.

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Free Personal Accident Insurance Cover of up to Rs. 10 Lakh*

For further details on the terms and conditions of the policy, please refer to Scheme Information Document. *Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.

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Performance

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Period Scheme Returns (%) $ Benchmark Returns (%)# Additional Benchmark Returns (%)## Value of investment of ` 10,000 Scheme (`) $ Benchmark (`) # Additional Benchmark (`)## Last 1 Year

19.51
12.78
24.85

8,049 8,722 7,515 Last 3 Years

0.73

2.60

0.81

9,782 10,802 9,757 Last 5 Years 3.26 4.24 1.56 11,744 12,309 10,807 Since Inception 14.27 N.A. 11.96 1,27,600 N.A. 86,470

HDFC Children's Gift Fund - Performance - Regular Plan - Growth Option NAV as on March 31, 2020 ` 98.154 (Per Unit)

Scheme performance may not strictly be comparable with that of its Additional Benchmark in view of balanced nature of the scheme where a portion of scheme’s investments are made in debt instruments. Adjusted for Bonus units declared under the Scheme. Inception Date: March 02, 2001. The Scheme is managed by Mr. Chirag Setalvad since April $ * 02,2007. # Benchmark Index: NIFTY 50 Hybrid Composite Debt 65:35 Index . Additional Benchmark Index: NIFTY 50 TRI. ## ~ Open Ended Equity Linked Savings Scheme with a lock-in period of 3 years. The Scheme does not accept any further subscriptions. The above returns are of Regular Plan - Growth

Option. Top 3 and bottom 3 schemes managed by the Fund Manager have been derived on the basis of since inception returns vis-à-vis the benchmark. In case the benchmark is not

available on the Scheme’s inception date, the returns for the concerned scheme is considered from the date the benchmark is available. On account of difference in the type of the Scheme, asset allocation, investment strategy, inception dates, the performance of these schemes is strictly not comparable. The Scheme is co-managed by Mr.Chirag Setalvad ^ (Equities) & Mr. Shobhit Mehrotra (Debt). The Scheme was a debt oriented scheme till May 22, 2018. Hence past performance may not strictly be comparable with that of the new +

benchmark. The Scheme is co-managed by Mr.Chirag Setalvad (Equities), Mr. Anil Bamboli (Debt) & Mr. Krishan Kumar Daga (Gold).

Performance of other funds managed by Chirag Setalvad, Fund Manager of HDFC Children’s Gift Fund (who manages total 9 schemes which have completed one year)

Performance of Top 3 schemes managed by Chirag Setalvad Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%) HDFC Small Cap Fund 28 June 2014

41.52
8.21

0.40 Benchmark - NIFTY Smallcap 100 TRI

45.03
18.94
7.55

HDFC Long Term Advantage Fund ~ 2 April, 2007

29.18
4.44

1.53 Benchmark - S&P BSE SENSEX TRI

22.69

1.07 2.41 HDFC Hybrid Equity Fund 2 April, 2007

21.87
2.40

2.55 Benchmark - NIFTY 50 Hybrid Composite Debt 65:35 Index

12.78

2.60 4.24 Performance of Bottom 3 schemes managed by Chirag Setalvad Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%) HDFC Retirement Savings Fund - Equity Plan ^ 25 Feb, 2016

26.73
3.98

N.A. Benchmark - NIFTY 500 TRI

26.44
3.14

N.A. HDFC Retirement Savings Fund - Hybrid Debt Plan ^ 26 Feb, 2016 1.39 4.16 N.A. Benchmark - NIFTY 50 Hybrid Composite Debt 15:85 Index 5.85 6.74 N.A. HDFC Multi-Asset Fund + 2 April, 2007

15.01
1.92

2.11 Benchmark - 90% NIFTY 50 Hybrid Composite Debt 65:35 Index + 10% Domestic Price of Gold

8.43

3.95 5.02 Common notes for all the above tables: Past performance may or may not be sustained in the future. TRI - Total Returns Index. N.A. - Not Applicable. Returns as on March 31, 2020. Different plans viz. Regular Plan and Direct Plan have 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 greater than 1 year period are compounded annualized (CAGR). Load is not taken into consideration for computation of above performance(s).

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$ Dedicated Fund Manager for Overseas Investments: Mr Chirag Dagli. For further details, please refer to the Scheme Information Document.

Fund Facts

Investment Objective To generate capital appreciation / income from a portfolio of equity & equity related instruments and debt and money market instruments. There is no assurance that the investment objective of the Scheme will be realized. Inception Date (Date of allotment) March 2, 2001 Fund Manager $

Mr. Chirag Setalvad

Investment Plan Regular Plan, Direct Plan. Investment Options Growth Option Minimum Application Amount Purchase : Rs. 5,000/- and any amount thereafter Additional Purchase : Rs 1000/- and any amount thereafter Load Structure Entry Load: Exit Load:

For investments until May 22, 2018

For Units subject to Lock-in Period: NIL For Units not subject to Lock-in Period:

For investments on or after May 23, 2018: NIL

Lock in Period Existing investments by investors including SIP/ SWAP registrations, etc (until May 22, 2018): Lock-in period (if opted), shall be later of

3 Years from the date of allotment
Until the Unit Holder (being the beneficiary child) attains the age of 18 years

Fresh investments by investors including SIP/ SWAP registrations, etc (effective May 23, 2018): Lock-in period will be compulsory. Lock-in period shall be earlier of

5 Years from the date of allotment; or
Until the Unit holder (being the beneficiary child) attains the age of majority (i.e. completion of 18 years)

Benchmark Index NIFTY 50 Hybrid Composite Debt 65:35 Index 3% if the Units are redeemed / switched-out within one year from the date of allotment, 2% if the Units are redeemed / switched-out between the first and second year of the date of allotment, 1% if Units are redeemed /switched-out between the second and third year of the date of allotment. Nil if the Units are redeemed / switched -out after third year from the date of allotment. No Entry / Exit Load shall be levied on bonus units. In case of Systematic Transactions such as Systematic Investment Plan (SIP), Systematic Withdrawal Advantage Plan (SWAP), etc. Exit Load, if any, prevailing on the date of registration / enrolment shall be levied. Not Applicable. 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.

18 HDFC Children’s Gift Fund

An open ended fund for investment for children having a lock-in for at least 5 years or till the child attains age of majority (whichever is earlier)

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Asset Allocation

The Scheme may invest in the schemes of Mutual Funds in accordance with the applicable extant SEBI (Mutual Funds) Regulations as amended from time to time. For complete details please refer SID (Scheme Information Document)/KIM (Key Information Memorandum) available on the website www.hdfcfund.com or with Investor Service Centers (ISCs)/Distributors.

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

Type of Instruments Minimum Allocation Maximum Allocation Risk Profile (% of Total Assets) Equities and Equity related Instruments 65 80 High Debt Securities (including securitised debt) and money market instruments 20 35 Low to Medium Units issued by REITs & InvITs 10 Medium to High Non-convertible preference shares 10 Low to Medium

1) The Scheme may invest up to 35% of its total assets in foreign securities. 2) The Scheme may invest upto 100% of its total assets in Derivatives.

^with effect from May 23, 2018, the Scheme has undergone changes in fundamental attributes and other changes.

Fund Facts (continued)

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Product Labelling

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

HDFC Children’s Gift Fund is suitable for investors who are seeking*

Ÿ Capital appreciation over long term Ÿ Investment in equity and equity related instruments as well as debt and money market instruments

Riskometer

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Disclaimer

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The presentation dated 28 April 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. Any calculations made are approximations, meant as guidelines only, which you must confirm before relying on them. The information contained in this document is for general purposes only. The document is given in summary form and does not purport to be complete. The document does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. The information/data herein alone are not sufficient and should not be used for the development or implementation of an investment strategy. The statements contained herein are based on our current views and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Past performance may or may not be sustained in future. Neither HDFC AMC and HDFC Mutual Fund nor any person connected with them, accepts any liability arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible/liable for any decision taken on the basis of information contained herein.