hdfc children’s gift fund · 2020-04-30 · hdfc children’s gift fund empower and strengthen...
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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
3Higher 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 in�ation 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.
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 in�ation
Cost of education
Inflation
5What 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 signi�cantly more
¦ Premium institutes have the pricing power and in�ation 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
Source: Internal CalculationThe 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
Goal Based Investing
¦ Targets a speci�c amount of corpus for your child’s education
¦ Money is earmarked for a speci�c 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 on 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 speci�c goals like children’s education
¦ Investors can get irrational in allocation of funds for various purposes and may resort to premature withdrawals
¦ “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 In�ation
¦ 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 or Sytematic Investment Plan with a Mutual Fund. As your income increases, do a SIP Top Up.
¦ Have equities beaten in�ation? Equities have beaten in�ation and have compounded faster than other 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 in�ation 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
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 bene�ts
¡ Diversi�cation even with a small investment
¡ Liquidity
¡ Tax bene�ts
SIP
¦ Investments at a prede�ned 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 or your child’s birthday
¦ 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 FundAn 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)
^
^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 informationstData 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 of 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
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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
nd2 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
¦ 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
¦ Bene�t 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.
¦ 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 ParentsŸ Grand ParentsŸ FriendsŸ Other Relatives
*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.
¦ 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.
Perf
orm
ance
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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).
$ Dedicated Fund Manager for Overseas Investments: Mr Chirag Dagli.For further details, please refer to the Scheme Information Document.
Fund FactsInvestment 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.
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HDFC Children’s Gift FundAn 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
Instruments65 80 High
Debt Securities (including
securitised debt) and money
market instruments
20 35 Low to Medium
Units issued by REITs &
InvITs0 10 Medium to High
Non-convertible preference
shares
0 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)
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
Disclaimer
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thThe 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.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.