HDFC Ultra Short Term Fund (An open ended ultra-short term debt - - PowerPoint PPT Presentation

HDFC Ultra Short Term Fund

(An open ended ultra-short term debt scheme investing in instruments such that the Macaulay Duration^ of the portfolio is between 3 months and 6 months)

April 2020

1 This product is suitable for investors who are seeking*:

• Income over short term
• income/capital appreciation through investments in debt securities and

money market instruments

Riskometer

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

^Please refer Slide 2 for definition of Macaulay Duration

Give an edge to short term surplus!

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.

Positioning: Debt Funds

Liquid Funds Ultra Short Term Funds Money Market Funds Low Duration Funds Short Duration Funds Medium Duration Funds Medium to Long Duration Funds

RISK (Maturity) RETURN

Upto 91 days$ 3 -6 months^ 6 -12 months^ Upto 1 year$ 1-3 years^ 3-4 years^ (1-4 years in adverse situation) 4-7 years^ (1-7 years in adverse situation)

$

• Maximum

maturity

• f

a security ^

• Portfolio

Macaulay Duration

Macaulay Duration (Duration) measures the price volatility of fixed income securities. It is often used in the comparison of interest rate risk between securities with different coupons and different maturities. It is defined as the weighted average time to cash flows of a bond where the weights are nothing but the present value of the cash flows themselves. It is expressed in years. The duration of a fixed income security is always shorter than its term to maturity, except in the case of zero coupon securities where they are the same.

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• Currently, Portfolio is focused on maintaining superior credit quality with focus on accruals.
• High proportion (100% of Net Assets as of 31st March, 2020) of investments in AAA / A1+ or equivalent

rated securities

• In general, Fund seeks to maintain the Macaulay duration^ of the portfolio between 3 months and 6

months

^Please refer Slide 2 for definition of Macaulay Duration The current investment strategy is subject to change depending on the market conditions. For complete portfolio details refer www.hdfcfund.com. The product positioning and intended duration is based on current view and is subject to change.

HDFC Ultra Short Term Fund : Portfolio Positioning

Portfolio Classification by rating class % of Net Assets AAA/AAA(SO)/A1+/A1+(SO) & Equivalent 99.43 Cash, Cash Equivalents and Net Current Assets 0.57

Average Maturity Modified Duration Macaulay duration Yield To Maturity 237 Days 193 Days 209 Days 6.69%

Portfolio Classification by asset class % of Net Assets CP 26.14 CD 29.72 Credit Exposure 43.57 Cash, Cash Equivalents and Net Current Assets 0.57

For complete portfolio details refer www.hdfcfund.com. Portfolio details provided as on March 31, 2020.

HDFC Ultra Short Term Fund : Portfolio Statistics

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Why Ultra Short Term Fund ?

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• Interbanking liquidity remains in surplus since

past 10 months

• Upward sloping yield curve – giving faster roll

down benefits (Surplus inter-banking liquidity)

• Term spreads are reasonable
• Yield to Maturity likely to be higher than liquid

funds* Other benefits

• Lower interest rate risk vis-à-vis other Debt funds

except Liquid Funds (Macaulay Duration between 3- 6 months)

• No lock-in, no entry / exit load

Reasonably Steep Yield Curve : Attractive Roll down opportunity

CD: Certificate of Deposit Source: Bloomberg, RBI * HDFC AMC/Mutual Fund is not assuring or guaranteeing any returns in the Scheme Updated till 13th April 2020

• 2,000
• 1,000

1,000 2,000 3,000 4,000 5,000 6,000 Jun/18 Aug/18 Oct/18 Dec/18 Feb/19 Apr/19 Jun/19 Aug/19 Oct/19 Dec/19 Feb/20 Apr/20

Interbank Liquidity (INR bn)

(0.25)

• 0.25

0.50 0.75 1.00 1.25 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Spread (%) 6m CD - 3m CD 12m CD - 3m CD

Suitable for investors,

• Desiring a high degree of liquidity and lower

interest rate risk

• Maintained over 90% of AUM in AAA/A1+
• r

equivalent rated securities since inception i.e. September 25, 2018

• Having an investment horizon of 2-6 months
• Investors with a need to park surplus cash

flows

*Investors should consult their financial advisers, if in doubt about whether the product is suitable for them. For complete portfolio details refer www.hdfcfund.com * Spread between month-end YTMs and cut off yield of 91 days T-bill in last auction of the month

HDFC Ultra Short Term Fund : Suitability

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• Using

it as a channel to transfer funds systematically to other schemes.

80 82 84 86 88 90 92 94 96 98 100 % of Net Assets

Allocation to AAA and equivalent securities

2.3

• 0.3

0.3 0.8 1.3 1.8 2.3 2.8 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 %

Spread between Month-end YTM and 91 days Tbills yield*

Fund Facts

Nature of Scheme An open ended ultra-short term debt scheme investing in such that the Macaulay Duration^ of the portfolio is between 3 months and 6 months Category of Scheme Ultra Short Duration Fund Inception Date (Proposed Date of allotment) 25th September, 2018 Investment Objective To generate income/ capital appreciation through investment in debt securities and money market

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

Fund Manager $ Anil Bamboli Investment Plan Regular Plan & Direct Plan Investment Options Options under each plan: Growth and Dividend. Dividend Option offers Daily (Reinvestment), Weekly (Payout and Reinvestment) and Monthly (Payout and Reinvestment) facility. Minimum Application Amount.

• 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: Nil Benchmark CRISIL Ultra Short Term Debt Index

^Please refer Slide 2 for definition of Macaulay Duration.

$ Dedicated Fund Manager for Overseas Investments: Mr Chirag Dagli 7

Disclaimer

• This presentation dated 24th 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. 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. 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 stocks/ sectors. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in the Scheme(s). 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. Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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Thank You

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