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HDFC Mutual Fund Top 200 Equity Fund April 2011
 

HDFC Mutual Fund Top 200 Equity Fund April 2011

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HDFC Mutual Fund Top 200 Equity Fund April 2011

HDFC Mutual Fund Top 200 Equity Fund April 2011

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    HDFC Mutual Fund Top 200 Equity Fund April 2011 HDFC Mutual Fund Top 200 Equity Fund April 2011 Presentation Transcript

    • PresentingHDFC Top 200 Fund (An Open-Ended Growth Scheme) As on April 30, 2011 1
    • Table of ContentsProduct Rationale and Investment StrategyPortfolio CompositionProduct Features and Asset Allocation PatternPerformance, Risk Ratios and Fund RatingFund SuitabilityDisclaimer 2
    • Investment StylesActive Management: Refers to the use of a human element, such as a singlemanager, co-managers or a team of managers, to actively manage a fund’sportfolio. They rely on analytical research, forecasts and their own judgementand experience in making investment decisions. They believe it is possible toprofit from the stock market through any number of strategies that aim toidentify mispriced securitiesPassive Management: An investing strategy that mirrors a market index anddoes not attempt to beat the market 3
    • Product RationaleIn the nature of an Index + Fund (active + passive); internal guidelines ofmatched positions with the index (refer slides 7&8)Focus on GARP (growth at reasonable price) for active positionsLimited exposure to mid-caps; avoids large individual positions in mid-capsOffers portfolio diversification comparable to market indices 4
    • Investment StrategyThe investment portfolio for equity and equity linked instruments will beprimarily drawn from the companies in the BSE 200 IndexThe fund may also invest in listed companies that would qualify to be in the top200 by market capitalisation on the BSE even though they may not be listed onthe BSEThis includes participation in large IPO’s wherein the market capitalisation of thecompany based on issue price would make the company a part of the top 200companies listed on the BSE based on market capitalisation 5
    • Investment StrategyThe fund seeks to invest in higher quality, competitive, sustainable businessesby primarily restricting the equity portfolio to the BSE 200 Index scrips; this isintended to reduce risks while maintaining steady growthFocuses on secular growth companies compared to cyclicals; this strategyreduces risk on one hand and improves chances of positive returns over thelong term 6
    • Investment Strategy (Matching Principle)There are primarily two sources of returns for a fund – Index returns andreturns from active management; over periods of time, index returns areexpected to form a large portion of total returnsThe fund targets to capture a large part of index returns by maintaining around60% of the portfolio in matched positions with the BSE 200 index; positions arenot matched on a stock-to-stock basis but on an aggregate levelActive management in the scheme is done on two level: Selection of matched postions Selection of the balanced portfolioSelection of the matched positions with the index and the selection of otheractive positions are aimed to deliver returns above the BSE 200 index withoutincreasing the risk to the levels of active managed funds 7
    • Matching Explained (An illustration) Name of the Company Weight in BSE 200 (%) % of NAV Matched Weight (%) ONGC 2.70 1.86 1.86 HDFC 3.56 3.25 3.25 SBI 3.16 4.57 3.16 ITC 4.55 1.74 1.74 | | | | | | 200 ~ 50 ~ 60%Stocks referred to in the pictorial above are purely illustrative and are not recommended by HDFC Mutual Fund / HDFCAsset Management Company Ltd. The Fund may or may not have any present or future position in these stocks. 8
    • Portfolio Composition (As on April 30, 2011) 9
    • Industry Allocation - % of Net Assets (As at April 30, 2011) Banks 22.65 Consumer Non Durables 10.42 Software 10.24 Petroleum Products 8.15 Pharmaceuticals 7.40 Auto 5.24 Oil 4.25 Power 4.00 Minerals/Mining 3.25 Others 3.20 Industrial Capital Goods 3.05 Gas 2.94 Finance 2.92 Construction Project 2.65 Telecom - Services 2.32 Ferrous Metals 2.27 Non - Ferrous Metals 1.91Others include: Media & Entertainment (1.25%), Construction(0.96%), Transportation( 0.53%), Hardware(0.46%). 10
    • Portfolio Composition (As at April 30, 2011) % to Net AssetsTop 10 equity holdings 43.76Total Equity & Equity Related Holdings 96.86Cash margin 0.17Other Cash, Cash Equivalents and Net Current Assets 2.97Grand Total 100.00Net Assets (` In crore) 10,529.02No. of companies in the portfolio 67 11
    • Product Features Type of Scheme Open-ended Growth Scheme Inception Date (Date of allotment) October 11, 1996 Investment Objective To generate long term capital appreciation from a portfolio of equity and equity-linked instruments primarily drawn from the companies in the BSE 200 index Fund Manager $ Prashant Jain (since June 19, 2003)* Options Growth and Dividend – The Dividend Option offers Dividend Payout and Reinvestment facility Minimum Application Amount Purchase: ` 5,000 and any amount thereafter (Under Each Option) Additional Purchase: ` 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 registered Distributor) based on the investor’s assessment of various factors including the service rendered by the ARN Holder. Exit Load: 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 No exit load is payable if units are redeemed / switched – out after 1 year from the date of allotment Benchmark BSE 200*Date of migration from Zurich India Mutual Fund.$ Dedicated Fund Manager for Overseas Investments: Miten Lathia 12
    • Asset Allocation Pattern Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows: Types of Instruments Normal Allocation Risk Profile (% of Net Assets) Equity & Equity linked Upto 100% (including use of derivatives for hedging and Medium to High other uses as permitted by prevailing SEBI Regulations) Debt and money Balance in debt and money market instruments Low to medium market instruments**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 netassets) subject to SEBI (Mutual Funds) Regulations, 1996. The scheme may use derivatives mainly for the purpose ofhedging and portfolio balancing (max 25% of net assets) based on the opportunities available subject to SEBI (MutualFunds) Regulations, 1996. 13
    • Performance & Fund Rating(As on April 29, 2011) 14
    • Relative Performance HDFC Top 200 Fund (Growth Option) (As on April 29, 2011) The fund has outperformed its benchmark in all of the following time periods^ Period Returns (%) $$ ^ BSE 200 Returns (%) # Last 1 Year (365 Days) 15.52 6.62 Last 3 Years (1095 Days) 14.56 2.94 Last 5 Years (1827 Days) 16.89 9.89 Last 10 Years (3654 Days) 31.57 20.92 Since Inception (5313 Days) 25.17 14.89^ Past performance may or may not be sustained in the futurePerformance of the Dividend Option for the investor would be net of Distribution Tax as applicable.Above returns are compounded annualized (CAGR.)# Benchmark Index$$ All dividends declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be reinvested in theunits of the Scheme at the then prevailing NAV (ex- dividend NAV). 15Inception Date – October 11, 1996
    • Systematic Investment Plan Returns (As on April 29, 2011) This is how your investments would have grown if you had invested say ` 1,000 systematically on the first business day of every month over a period of time. Since 10 Year 5 Year 3 Year 1 Year SIP Investments Inception $ SIP SIP SIP SIP SIP Total Amount 175,000 120,000 60,000 36,000 12,000 Invested (`) Market Value (`) 16,08,800 6,28,170 98,340 53,330 12,460 Returns (annualised) 27.04 31.15 19.91 27.41 7.24 (%) *$$ Benchmark Returns 17.09 20.43 11.77 18.85 1.36 (annualised) (%) #Past Performance may or may not be sustained in the future.# BSE 200 $ Inception Date: October 11, 1996 *Load is not taken into consideration and the Returns are of Growth Option. Investors are advisedto refer to Relative Performance table on slide 15 for Non – SIP Returns$$ All dividends declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be reinvested in the units of theScheme at the then prevailing NAV (ex- dividend NAV).Disclaimer: The above investment simulation is for illustration purpose only and should not be construed as a promise on Minimum returns andsafeguard of capital. HDFC Mutual Fund / HDFC Asset Management Company Ltd. is not guaranteeing Or promising or forecasting any returns. 16SIP does not assure a profit or guarantee protection against loss in a declining market. Entry / Exit Load is not taken into consideration in the aboveinvestment simulation. Please refer SIP enrolment form or contact nearest ISC for SIP load structure.
    • Dividend History (Since 2000) Record Date Cum Dividend NAV per Unit (`) Dividend ^Per Unit (`) January 7, 2000 25.810 2.50 March 24, 2000 24.810 2.50 August 25, 2000 16.030 2.10 February 23, 2001 13.840 2.00 March 15, 2002 12.440 1.20 July 15, 2003 16.272 2.00 October 31, 2003 19.899 2.50 March 8, 2004 21.959 1.50 December 15, 2004 24.066 3.00 February 17, 2006 36.409 4.50 February 7, 2007 42.968 5.00 February 7, 2008 48.129 5.00 March 5, 2009 23.364 3.00 March 11, 2010 46.578 4.00 March 10, 2011 48.000 4.00^Past performance may or may not be sustained in the future.All dividends are on face value of ` 10 per unit. After payment of the dividend, the per Unit NAV falls to the extent of thepayout and Statutory levy (if applicable) 17
    • Fund Rating HDFC Top 200 Fund- Growth Option has been assigned “Elite” Qualitative Rating™ by Morningstar #. ‘Elite’ Rating: These funds represent Morningstar analysts’ highest conviction picks. Morningstar awards the rating to funds that it believes are capable of outperforming their peers over the long term. To earn this rating, a fund must be significantly better than its peers in most key respects.#Past performance is no guarantee of future results. Please refer to the slides: 24 & 25 on Award /Ranking / Rating methodology. 18
    • Fund Rating HDFC Top 200 Fund – Growth Option was assigned ‘CRISIL Mutual Fund Rank 1’ # in the ‘Open End Large Cap Oriented Equity Schemes’ Category (out of 34 schemes) for the 2 year period ending March 31, 2011 by CRISIL. HDFC Top 200 Fund was assigned ‘CRISIL Mutual Fund Rank 1’ # in the ‘Open End Consistent Equity’ Category (out of 40 schemes) for the 5 year period ending March 31, 2011 by CRISIL. CRISIL Mutual Fund Rank “1” means that the composite performance of the Scheme is “Very Good performance “and ranks within the Top 10 percentile in the category.# Past performance is no guarantee of future results. Please refer to the slide: 26 on Award /Ranking / Rating methodology. 19
    • Fund Rating HDFC Top 200 Fund – Growth and Dividend Option has been rated 5 - Star by Morningstar in the Morningstar India Open Ended Large Cap category from amongst (266 schemes) for the overall (3/5/10 year- as applicable) period ending April 30, 2011# Five Stars indicate that the fund is in the top 10 percent of its category in terms of historical risk – adjusted returns Value Research Rating - * * * * * (Five Stars) in Equity – Large and Mid Cap Category (from amongst 61 schemes) for the 3 and 5 year periods ending April 30, 2011# Five – stars indicate that fund is in the top 10 per cent of its category in terms of historical risk – adjusted returns#Past performance is no guarantee of future results. Please refer to the slides: 26 on Award /Ranking / Rating methodology. 20
    • Fund Suitability 21
    • Why HDFC Top 200 Fund? The fund is by design well diversified, hence is a lower risk product compared to less diversified funds Well defined investment universe primarily comprising BSE 200 companies and Top 200 capitalised companies ONLY supports good quality of portfolio, which also reduces risk Well established track record of over 13 years**Past performance may or may not be sustained in the futurePlease refer relative performance table on slide 15. 22
    • HDFC Top 200 Fund is suitable for investors:Looking for a large cap oriented, well diversified core holding within their mutualfund portfolioPreferring a active + passive investment management approachPreferring a fund with a disciplined investment strategy by mandatePlanning for long term financial goals such as retirement, children’s educationand marriage etc. 23
    • Award/Ranking/Rating MethodologyMORNINGSTAR QUALITATIVE RATINGTM:Morningstar analysts assign a Morningstar Qualitative Rating™ to funds using a five-point scale ranging from ‘Elite’ to ‘Impaired’.‘Elite’ Rating: These funds represent Morningstar analysts’ highest conviction picks. Morningstar awards the rating to funds that it believes are capable of outperforming their peers over the long term. To earn this rating, a fund must be significantly better than its peers in most key respects.HDFC Top 200 Fund (“the Fund”) is from the India Open Ended (OE) Large Cap Category and the number of funds in the category is 169. ThisMorningstar Qualitative Rating™ is as of December 2, 2010. The Rating of the Fund is subject to change by Morningstar based on evaluationof the five key pillars – People, Parent, Process, Performance and Price. For the latest Rating of the Fund, refer to the websitewww.morningstar.co.inDISCLAIMER:The Morningstar Qualitative Rating™ represents Morningstar analysts’ opinion of a fund’s relative investment merit. It is a forward lookingmeasure and identifies analyst conviction in a fund’s long-term performance prospects relative to a relevant pan-European & Asian peer group,which is usually but not always the fund’s Morningstar category. The Morningstar Qualitative Rating™ scale is ‘Elite,’ ‘Superior,’ ‘Standard,’‘Inferior,’ and ‘Impaired.’For detailed information on the Rating Methodology, refer to www.morningstar.co.in 24
    • RATING METHODOLOGY AND DISCLAIMER FOR THE MORNINGSTAR QUALITATIVE RATINGTM. RATING METHODOLOGY: Morningstar qualitative research provides forward-looking insight and assumptions into how a fund might behave under different market conditions, helping investors to maintain realistic performance expectations and manage their portfolios more wisely. Morningstar’s principles of qualitative research are Independence, Investors First, Relevant Coverage, Comprehensive scale and Local & Global Expertise. Morningstar evaluates funds based on five key pillars – People, Parent, Process, Performance and Price. PROCESS Morningstar uses a detailed process to evaluate each fund receiving a research report and rating, including: — Acquire basic information via a Fund Company Questionnaire sent to all potential funds to be included in the research and ratings — Analyse holdings and returns using Morningstar tools — Assess the five pillars systematically, using all available sources — Interview the fund manager, usually conducted face to face and with multiple analysts present — Consult Morningstar’s team of global analysts — Ensure the consistent application of standards through a ratings committee meeting, in which a group of senior analysts from across Europe review the analysis and collectively decide upon the Morningstar Qualitative Rating™ — Construct a report with robust analytical content, as well as regularly updated risk and returns statistics, Morningstar proprietary holdings based graphics, and data points — Issue reports through regional and global distribution channels — Track ratings systematically and continually review for consistency and unwanted bias.Contd. 25
    • Crisil Mutual Fund Ranks – Ranking Methodology HDFC Top 200 Fund has been assigned “CRISIL Mutual Fund Rank 1’’ in the Open End Large Cap Oriented Equity Schemes Category for period endingMarch 31, 2011 denoting that the composite performance HDFC Top 200 Fund – Growth is “Very Good performance" performance in the the Open End Large CapOriented Equity Schemes Category, and ranks within the Top 10 percentile of the 34 schemes ranked in this category. HDFC Top Fund has also been assigned “CRISIL Mutual Fund Rank 1’’ in the Open End Consistent Equity Category for period ending March 31, 2011 denotingthat the composite performance HDFC Equity Fund is “Very Good performance" performance in the the Open End Consistent Equity Category and ranks withinthe Top 10 percentile of the 40 schemes ranked in this category. The criteria used in computing the CRISIL Mutual Fund Rank are Superior Return Score based on NAVs over the 2-year & 5 – year period ended 31 March 2011respectively, Sectoral concentration, Company concentration and Liquidity of the scheme. The methodology does not take into account the entry and exit loads levied bythe scheme. The CRISIL Mutual Fund Rank is no indication of the performance that can be expected from the scheme in future.Morning Star Rating – Rating Methodology: The Morningstar fund rating methodology is based on a fund’s risk-adjusted return within a given Morningstar category.For each fund with at least a three-year history, Morningstar ratings are calculated every month for the 3 year, 5 year and 10 year period. The Overall Morningstar Ratingfor a fund is derived from a weighted average of the performance figures associated with its three, five and 10 year (if applicable) Morningstar Rating metrics. Withineach rating period, the top 10% funds receive a five star rating, the next 22.5% earn a four star rating, the next 35% get three stars, the next 22.5% receive twostars, and the bottom 10% get one star. Loads are not considered for the rating purpose. The rating is based on NAV provided by respective funds. The current fundrating is for the overall / 3 year / 5 year/ 10 year period as of April 30, 2011. HDFC Top 200 Fund has been rated 5-Star by Morningstar in the Morningstar India (IndiaOpen Ended Large Cap Category) 266 funds which completed 3 years of performance were considered for rating. Rating Source and Publisher: Morningstar. The ratingsare subject to change every month. Please refer www.morningstar.co.in for detailed information on the Rating Methodology.Value Research Fund Ratings – Rating MethodologyValue Research Fund Ratings are a composite measure of historical risk-adjusted returns. In the case of equity and hybrid funds this rating is based on the weightedaverage monthly returns for the last 3 and 5-year periods. These ratings do not take into consideration any entry or exit load. Each category must have a minimum of 10funds for it to be rated. Effective, July 2008, an additional qualifying criteria, has been included whereby a fund with less than ` 5 crore of average AUM in the past sixmonths will not be eligible for rating.Five-stars indicate that a fund is in the top 10% of its category in terms of historical risk-adjusted returns. Four stars indicate that a fund is in the next 22.5%, middle35% receive three stars, the next 22.5% are assigned two stars while the bottom 10% receive one star. The number of schemes in each category is mentioned in Equity– Large & Mid Cap Category are 61. These Fund Ratings are as on April 30, 2011. The Value Research Ratings are published in Monthly Mutual Fund Performance Reportand Mutual Fund Insight. The Ratings are subject to change every month. The Rating is based on primary data provided by respective funds, Value Research does notguarantee the accuracy. 26
    • DISCLAIMER: This presentation has been prepared and issued on the basis of internal data, publicly available information and other sourcesbelieved to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material factand terms and conditions and features of HDFC Top 200 Fund. The information/ data herein alone is not sufficient and shouldn’t be used for thedevelopment or implementation of an investment strategy. It should not be construed as investment advice to any party. The statements containedherein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptionsand involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from thoseexpressed or implied in such statements. The recipient alone shall be fully responsible / liable for any decision taken on the basis of thispresentation. The content of this presentation is confidential and intended solely for the use of the addressee. If you are not the addressee, or theperson responsible for delivering it to the addressee, any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on itis prohibited and may be unlawful. No part of this document may be duplicated in whole or in part in any form and/or redistributed without priorwritten consent of the HDFC Mutual Fund/ HDFC Asset Management Company Limited. The recipient(s) should before investing in the Scheme(s)make his/their own investigation and seek appropriate professional advice.Risk Factors: All mutual funds and securities investments are subject to market risks and there can be no assurance that the Scheme’sobjectives will be achieved and the NAV of the Scheme may go up or down depending upon the factors and forces affecting the securitiesmarket. Past performance of the Sponsors and their affiliates / AMC / Mutual Fund and its Scheme(s) do not indicate the future performance of the Schemeof the Mutual Fund. There is no assurance or guarantee to unit holders as to the rate of dividend distribution nor that dividends will be paid regularly.Investors in the Scheme are not being offered any guaranteed / assured returns. The NAV of the units issued under the Scheme may be affected, inter-aliaby changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities. The NAV will inter-alia beexposed to Price / Interest Rate Risk and Credit Risk. HDFC Top 200 Fund, an open-ended growth scheme, is only the name of the scheme anddoes not in any manner indicate either the quality of the Scheme, its future prospects and returns. Please read the Scheme InformationDocument and Statement of Additional Information before investing. Investment Objective: To generate long-term capital appreciation from aportfolio of equity and equity linked instruments primarily drawn from the companies in BSE 200 Index. Asset Allocation Pattern: Equity and equity linkedinstruments (upto 100%) and balance in debt & money market instruments. Investment in securitised debt, if undertaken, will not exceed 20% of the netassets of the Scheme. Terms of Issue: Applications for subscriptions/redemptions/switches would be accepted at official points of acceptance on allBusiness Days at NAV based prices. The AMC will calculate and publish NAV on all Business Days. Load Structure: Entry Load: Not Applicable. Upfrontcommission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors’ assessment of various factorsincluding the service rendered by the ARN Holder. Exit Load: In respect of each purchase / switch – in of units, an exit load of 1.00% is payable if units areredeemed / switched – out from the date of allotment. No exit load is payable if units are redeemed / switched – out after 1 year from the date of allotment.Statutory Details: HDFC Mutual Fund has been set up as a trust sponsored by Housing Development Finance Corporation Limited and Standard LifeInvestments Limited (liability restricted to their contribution of ` 1 lakh each to the corpus) with HDFC Trustee Company Limited as the Trustee (Trusteeunder the Indian Trusts Act, 1882) and with HDFC Asset Management Company Limited as the Investment Manager. 27
    • Thank You 28