hdfc equity fund (an open ended growth scheme) · outperformance vs benchmark 20 out of 23 years*...
TRANSCRIPT
Positioned for earnings recovery
Please refer page 23 for product labelling.
**Past Performance may or may not be sustained in future. For detailed performance please refer Page 19.
January 2018
HDFC Equity Fund(An Open Ended Growth Scheme)
Wealth has grown 65 timesin 23 years**
19.9% CAGR for 23 years**
Changing colour of pro�t growth
Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance. HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in the Scheme and/or should not be construed as an advice for investing in the above sectors. The Fund may or may not have any present or future positions in the Sector/s. Sector classi�cation is internal. Others includes Infra, Telecom, Media, Agri.
2
Net profit growth of the NIFTY-50 Index across sectors
Sector H1FY17 H1FY18
Autos -3 1
Corporate Banks & Financials* -54 33
Retail Banks & Financials 27 18
Cement 47 -2
FMCG 10 7
Oil & Gas, Petchem 32 -9
Capital Goods 43 57
Metals & Mining -21 52
Pharmaceuticals 23 -42
Technology 7 1
Utilities 14 7
Others 36 -23
Ÿ Capital Goods ,Metals & Mining and Corporate banks reported highest growth in pro�ts across all sectors in H1FY18
Ÿ Pharmaceuticals, Cement reported sharp degrowth in pro�ts in H1FY18
Ÿ FMCG pro�t growth slowed to 7% in H1FY18 from 10% in H1FY17
Ÿ Auto sector de-growth is driven by fall in pro�ts of Tata Motors due to currency hedges and is not indicative of the sector pro�ts
Ÿ Oil & Gas results in Q1FY18 got impacted by inventory losses and are not indicative of trend
Key Observations on H1FY18 results
Sharply changing performance across sectors, falling pro�ts / growth in leaders of last cycle and sharp earnings recovery in underperforming sectors can be witnessed in H1FY18 results.
Source: Kotak Institutional Equities
*SBI number for 1H1FY16 are for standalone entity; for other periods numbers include
merged bank. Indiabulls Housing Finance Limited and Kotak Mahindra Bank numbers
are on consolidated basis. For other banks, numbers are standalone numbers.
New sectoral leadership emerging?
Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance. HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in the Scheme and/or should not be construed as an advice for investing in the above sectors. The Fund may or may not have any present or future positions in the Sector/s. Sector classi�cation is internal, Healthcare includes hospitals, labs etc., Others include Infra, Telecom, Media, Real Estate, Restaurants and Jewellery retail.The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
3
Autos 6.9 12.9
Capital Goods -22 35.7
FMCG 11.7 11.9
Cement -2.0 21.8
Corporate Banks & Financials -15.8 35.9
Retail Banks & Financials 20.5 19.2
Healthcare 20.1 3.5
Metals & Mining -12.5 39.2
Oil & Gas, Petchem 4.2 12.9
Utilities 11.6 9.6
Technology 18.1 6.5
Others 21.0 -8.5
Ÿ Sectors with highest pro�ts growthHealthcare, Retail Banks, Technology
Ÿ Sectors with lowest pro�tability growthCorporate Banks, Metals & Mining, Capital Goods
Key Observations
Pro�ts drive Stock prices.
Source: CLSA, based on CLSA coverage universe, E- CLSA estimates
PAT CAGR %
(March 16 to March 19E)
PAT CAGR %
(March 12 to March 16)
March 12 - March 16
Ÿ Sectors with highest pro�ts growth estimatesCorporate Banks, Metals & Mining, Capital Goods
Ÿ Sectors with lowest pro�tability growth estimatesHealthcare, Technology, Utilities, FMCG
March 16 - March 19(E)
What’s driving the change in fortunes across sectors?
HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in the Scheme and/or should not be construed as an advice for investing in the above sectors. The Fund may or may not have any present or future positions in the Sector/s.The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media. 4
2012 - 2016 2016 - 2019
Pharma
Ÿ Healthy product launches in US, stable pricing
Ÿ INR depreciation
Ÿ Healthy profit growth
Ÿ Price erosion led by faster approvals by US FDA
Ÿ INR appreciation
Ÿ Higher R&D cost
Ÿ Profitability likely to be under pressure
FMCGŸ Healthy volume growth and pricing growth
Ÿ Soft input prices from 2015
Ÿ Weak volume growth
Ÿ Subdued pricing growth due to low inflation
Ÿ Lower inputs price already in base
Metals
Ÿ Low prices in China and rest of World
Ÿ Low demand growth & large imports in India
Ÿ Falling profitability
Ÿ Higher prices led by MIP (Minimum Import Price) in steel and higher
global prices across metals
Ÿ Infra/Housing demand to improve volume growth
Ÿ Sharp improvement in profitability expected
Corporate Banks
& Financials
Ÿ Significant increase in stress in steel, power & infra sectors
Ÿ Higher provisioning on NPAs impacted profitability sharply
Ÿ Lower slippages and resolution of stressed assets likely
Ÿ Provisioning costs expected to fall steadily over next 2-3 years
Ÿ Earnings likely to improve
Capital Goods
Ÿ Weak capex in economy
Ÿ Stretched working capital cycle and high interest rates
Ÿ Low profitability
Ÿ Improving outlook for capex
Ÿ Reducing working capital cycle
Ÿ Improvement in profitability likely
In the long term, equities are slaves of corporate earnings.
HDFC Equity Fund - Right place, Right time
Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance. HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in the Scheme and/or should not be construed as an advice for investing in the above sectors. The Fund may or may not have any present or future positions in the Sector/s.The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
5
Ÿ Corporate Banks, Capex/Industrials, Metals etc. are expected to have faster pro�t growth over the next few yearsŸ FMCG, Pharma etc. are expected to have slower growth
HDFC Equity Fund’s portfolio is well aligned to the current environment
Key changes in the environment
Ÿ Metal prices up sharply
Ÿ Substantial progress in NPA resolution expected by Mar 18
Ÿ INR has an appreciating bias
% Movement CY 2016 and CY 2017
Steel 115
Zinc 106
Aluminium 51
Lead 39
Source: HDFC Equity Fund Portfolio. For latest scheme portfolio visit our website www.hdfcfund.com
70%
10%
20%
30%
40%
50%
60%
0%
Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17
Corp Banks & Fin, Capital Goods, Materials
FMCG, Healthcare, Energy, Telcom
Nov-17Source: Bloomberg
@ For dividend history refer page 9. There is no assurance or guarantee to Unit holders as to rate/quantum of dividend distribution nor that the dividends will be paid regularly. All dividends are on face value of ̀ 10 per Unit. After payment of the dividend, the per Unit NAV falls to the extent of the payout and statutory levy, if any. Please log on to www.hdfcfund.com for Record Date-wise listing of dividends declared. Dividend payout is subject to availability of distributable surplus.
6
HDFC Equity Fund - Key Fund Statistics
Track Record 23 years
Outperformance vs Benchmark 20 out of 23 years* (Refer Page 8)
Alpha generation Close to 9.6% CAGR
(19.9% scheme CAGR vs 10.3% benchmark CAGR)
Wealth creation 65 times vs 9.5 times in benchmark*
SIP of Rs. 10,000 since inception has become Rs. 7.08 crores at a CAGR of 23.3%*
Dividends 21 Dividends in 17 years since 1999 @, Average yield ~10.7%
Annual Portfolio Turnover Ratio 27.5% as on December 29, 2017
Weighted average portfolio Market capitalization th~Rs. 1,64,000 crores (Source: Bloomberg) as on 29 Dec 2017
Large cap exposure th76% as on 29 December, 2017
Top 20 stocks th74% (Focused portfolio) as on 29 December, 2017
* Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR). For detailed performance refer page no. 19 and page 18 for detailed SIP returns. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. In view of the individual circumstances and risk pro�le, each investor is advised to consult his / her professional advisor before taking investment decisions.
Benchmark: NIFTY 500 Index.
Outperformance vis-a-vis benchmark. Past Performance may or may not be sustained in the future. In view of the individual circumstances and risk pro�le, each investor is advised to consult his / her professional advisor before taking investment decisions. Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance. HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in the Scheme and/or should not be construed as an advice for investing in the above stocks/sectors. The Fund may or may not have any present or future positions in the Stocks/Sectors. For detailed performance please refer Page 19.
7
HDFC Equity Fund - Correct positioning in each of 3 different cycles over 23 years
Different cycles, changing leadership, consistent outperformance.
Cycle 1 CY 1995 - 2000 Cycle 2 CY 2001 - 2007 Cycle 3 CY 2008 - 2015
CY 2016 - till
Dec 17
Total 1995 -
Dec 17
(23 years)Leading sectors IT stocks Leading sectorsAuto/Capex/Banking/
CommoditiesLeading sectors
Auto/Pharma/
FMCG
(x) times (x) times (x) times (x) times (x) times
NIFTY 500 0.9 NIFTY 500 5.9 NIFTY 500 1.3 1.41 9.5
HDFC Equity Fund 1.9 HDFC Equity Fund 11.8 HDFC Equity Fund 2.0 1.47 65.3
1995- 2000 : IT lead the market, Infosys/ Wipro up 96 times, old economy stocks out of �avor; L&T down 20% !HDFC Equity Fund stance – The Fund was an early investor in IT, NAV up 1.9 times vs. 0.9 times of benchmark.
2001- 2007 : Capex/Banking/Commodities lead the market, BHEL up 32 times. L&T up 28 times; HUL �at over this cycle !HDFC Equity Fund stance – The Fund was overweight in old economy stocks, NAV up 11.8 times vs. 5.9 times of benchmark.
2008- 2015 : Pharma/FMCG stocks lead the market. HUL, ITC up 4 times, Lupin up 12 times; Tata Steel, Reliance etc. down !HDFC Equity Fund stance – The Fund was an early investor in Pharma/FMCG, NAV up 2 times vs. 1.3 times of benchmark.
8
HDFC Equity Fund - Adding value in each cycle
Disclaimer:thPast Performance may or may not be sustained in the future. Returns as on 29 Dec 2017. For detailed performance please refer page 19. The above returns are of regular plan - growth
option. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. In view of the individual circumstances and risk pro�le, each investor is advised to consult his / her professional advisor before taking investment decisions. Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance. HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in the Scheme and/or should not be construed as an advice for investing in the above stocks/sectors. The Fund may or may not have any present or future positions in the Stocks/Sectors.
Chart plotted on log scale
Rs 10,000 invested in HDFC Equity Fund at inception has grown to ~Rs 6.5 lacs at a CAGR 19.9%
Rs 10,000 invested in NIFTY 500 Index at the same time would have grown to ~Rs 0.95 lacs at a CAGR 10.3%
Usage of logarithmic scale :
When using a logarithmic scale, the vertical distance between the values in the scale is equal when the percent change between the values is the same.
Log scale charts re�ect movement on percent basis and not on absolute basis as shown in a linear chart.
The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
10.0
1.0
0.1
0.0
Valu
e o
f R
s. 1
0,0
00
in
vest
ed
in
19
95
Rs. in Lacs
Cycle 1 2 3 4?
Next
cycle-
Infra/
Banking/
Capex??
IT sector outperforms Capex/Banking/commodities
sectors outperform
Pharma/FMCG sectors outperform
NIFTY 500 Index
HDFC Equity Fund
A track record of consistent dividends
9
All dividends are on face value of Rs 10 per unit. After payment of the dividend, the per Unit NAV falls to the extent of the payout and statutory levy (if applicable). There is no assurance or guarantee to Unit holders as to rate/quantum of dividend distribution or that the dividends will be paid regularly. Dividend payout is subject to availability of distributable surplus. Past performance may or may not be sustained in future.
NAV of the Regular Plan - Dividend Option. Dividend was declared twice in year 2000 (March and December), 2003 (July and September) and 2004 (March and November)
“It's not what we do once in a while that shapes our lives. It's what we do consistently.” - Anthony Robbins
Good years, bad years, 21 Dividends in 17 years since 1999.
CY (Since 1999) 1999 1999 2000 2000 2002 2003 2003 2004 2004 2006 2007 2008 2009
Dividend Per Unit (Rs) (A) 1.6 2.0 3.0 1.7 1.2 2.0 2.5 1.5 3.0 5.0 5.0 5.5 3.0
NAV (Record Date) (B) 16.0 19.1 21.5 12.7 13.5 17.1 18.8 20.8 23.4 41.9 40.4 45.4 23.3
Dividend Yield (%) (A/B) 10.0 10.5 13.9 13.4 8.9 11.7 13.3 7.2 12.8 11.9 12.4 12.1 12.9
CY (Since 1999) 2010 2011 2012 2013 2014 2015 2016 2017
Dividend Per Unit (Rs) (A) 4.0 4.0 4.0 4.0 4.0 5.5 4.5 5.0
NAV (Record Date) (B) 46.9 49.0 44.0 41.4 43.8 59.8 41.9 54.9
Dividend Yield (%) (A/B) 8.5 8.2 9.1 9.7 9.1 9.2 10.7 9.1
For complete dividend history details, visit www.hdfcfund.com
10
Investment Philosophy of HDFC Equity Fund
The current investment strategy is subject to change without prior noti�cation. For latest scheme portfolio visit our website www.hdfcfund.comPast Performance may or may not be sustained in the future. For detailed performance please refer page 19. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. In view of the individual circumstances and risk pro�le, each investor is advised to consult his / her professional advisor before taking investment decisions.
Steadfast adherence to few principles has worked well for HDFC Equity Fund over medium to long periods.
Ÿ Preference for strong & growing companies - Strong companies not only survive, but emerge stronger in challenging times, reducing permanent losses
Ÿ A predominantly large cap portfolio with dynamic allocation to mid caps
Ÿ Effective diversi�cation of portfolio – The portfolio always remains diversi�ed across key sectors and economic variables to reduce risk
Ÿ Low portfolio turnover – a result of the Fund’s long term approach to investing
Portfolio Turnover (%)
FY11 FY12 FY13 FY14 FY15 FY16 FY17
44 29 32 37 39 37 23
11
Investment discipline - The key to success over cycles of HDFC Equity Fund
The current investment strategy is subject to change without prior noti�cation. For latest scheme portfolio visit our website www.hdfcfund.comPast Performance may or may not be sustained in the future. For detailed performance please refer page 19. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. In view of the individual circumstances and risk pro�le, each investor is advised to consult his / her professional advisor before taking investment decisions. Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance. The Fund may or may not have any present or future positions in the Stocks/Sectors.The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
¦ Focus on value: The Fund avoids excessively valued sectors, HDFC Equity Fund has successfully navigated IT and Power / Infra etc. meltdowns in the past
¦ Consistent Focus on quality: HDFC Equity Fund has sailed through bubbles in Real estate sector, TMT (Tech-Media-Telecom), Infra etc.
¦ Controlled exposure to midcaps: Depending on attractiveness (currently HDFC Equity Fund has only ~24% exposure thto midcaps, as on 29 December, 2017)
¦ Diversi�ed yet focussed approach to investing: HDFC Equity Fund while maintaining effective diversi�cation maintains a focussed portfolio. Top 20 stocks comprise 74% of Fund currently. This aids higher alpha generation over the medium to long term
% of AUM Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Dec 17
Top 20 Holdings 67 65 65 76 76 77 75 74
Indian Economy : Strong fundamentals, improving growth outlook
12
Ÿ In FY17 and FY18 growth has been adversely impacted due to demonetisation and GST reforms
Ÿ Economic growth should accelerate in FY19 and beyond
Ÿ Acceleration in economic growth should be led by acceleration in infra capex, housing and private capex
Ÿ Industrial capex is also likely to improve within a year led by steel, fertilizer, re�neries, etc.
Ÿ December Manufacturing PMI at 5 year high, November IIP at 2 year high, recovery in Medium and Heavy Commercial Vehical sales, improving credit growth and exports indicate improving economy
Source: CEIC, CSO, RBI, Morgan Stanley Research ; Economic Survey, E-Estimates, * Morgan Stanley Research
FY13 FY14 FY15 FY16 FY17 FY18E FY19E
GDP at market price (%YoY) 5.5 6.4 7.5 8.0 7.1 6.7 7.5
Centre’s fiscal deficit (%GDP) 4.9 4.5 4.1 3.9 3.5 3.2 3.2
Current Account Deficit (CAD) (%GDP) 4.7 1.7 1.3 1.1 0.7 1.2 1.5
Net FDI (% of GDP) 1.1 1.2 1.5 1.7 1.6 1.4* 1.4*
Consumer Price Inflation (CPI) (Avg) 10.2 9.5 6.0 4.9 4.5 3.4 4.6
India 10 year Gsec Yield (at year end) 8.0 8.8 7.7 7.5 7.4 - Dec 31 N.A. N.A.
The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
13
Non Performing Loans (NPLs) of banks - The worst is behind
¦ Recognition of NPLs is largely behind; provisioning, resolution in progress
¦ Progress under NCLT should reduce provisioning sharply (more clarity by Jan-Mar 18)
¦ Large capital infusion by government
¦ Sharp increase in metal prices
Gross NPLs and provision costs expected to decline meaningfully in FY19 and FY20
Corporate banks should witness steady increase in RoA / RoE in FY19 & FY20
% Movement CY 2016 and CY 2017
Steel 115
Zinc 106
Aluminium 51
Lead 39
Source: Bloomberg
The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
Positive developments
14
Equity Markets - Marketcap to GDP near lows
a) From 2005-16, S&P BSE SENSEX PE is based on 12 month forward estimated EPS
b) For 2017 and 2018, S&P BSE SENSEX PE is based on estimates as of Mar 18 and Mar 19 end and used market cap as of December 31, 2017.
Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance. HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in the Scheme and/or should not be construed as an advice for investing in the above sectors. The Fund may or may not have any present or future positions in the Sector/s.The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
stSource: World Bank, Kotak Institutional Equities, updated till 31 December, 2017
¦ In last 10 years, SENSEX has grown at a CAGR of close to 6% vs Nominal GDP growth rate of close to 14%
¦ Improving EBITDA margins, lower interest rates should lead to improved EPS/Pro�t growth in coming years
Source: BofAML
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
24.0%
23.0%
22.0%
21.0%
20.0%
19.0%
18.0%
17.0%
16.0%
15.0%
14.0%97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18E
160
140
120
100
80
60
40
20
02005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20162017E2018E
Current Current
25
20
15
10
5
13.215.1 149
88
6956
10.9 99
16.8 16.3
12.614.2
15.9
20.018.1
17.418.8 17.9
98
6171 64
8176 72
9383
India market cap to GDP ratio, calendar year-ends 2005-18 (%)
22.8
Mcap/GDP (%) S&P BSE SENSEX PE - 12 month forward Consumer Healthcare S&P BSE SENSEX ex �nancial RHS
Equity Markets Outlook
15
Historical performance indications and �nancial market scenarios are not the reliable indicator for current or future performance.HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. In view of the individual circumstances and risk pro�le, each investor is advised to consult his / her professional advisor before taking investment decisions.The above analysis should not be construed as a research report or a recommendation to buy or sell any security covered under the respective sector/s and that the same has been prepared on the basis of information, which is already available in publicly accessible media.
¦ Forward P/E is a better parameter to evaluate markets compared to trailing P/E, especially when earnings are recovering
¦ Earnings outlook is improving with improvement in operating margins, lower interest rates, peaking NPA’s and higher metal prices
¦ Steel, that accounts for 20-25% of GNPA, has high interest from bidders under NCLT process; Conclusion of this process will positively impact banks, private capex and steel
¦ Markets are trading at CY18(e) p/e of ~17.5x and CY19(e) p/e of ~14.5x, which is reasonable, especially given improving economic and earning outlook
¦ Bunching of new issuances in January - March ; global events can create short term volatility
(Bloomberg consensus)
S&P BSE SENSEX valuations
PE for CY17E CY18E CY19E
as on Dec 31 22.2 17.5 14.5
How global CEOs are looking at India
16Source: Publicly available information
“We’re really happy with how that’s going”. “And so we’re bringing all of our energies to bear there...And so I’m very, very bullish and very, very optimistic about India.”
- Tim Cook, CEO, Apple Inc.
"I �nd India on the progressive side. I think they approach it the right way. The emphasis is on encouraging innovation, building infrastructure and taking it to as many people as possible.”
- Sundar Pichai, CEO, Google
"India is pushing towards digitisation in a big way. The scale of the country means that once India gets there, the amount of digital innovation here will be greater than anywhere else in the world“
- Bill Gates, Founder, Microsoft
“India has the best opportunity" given the democratic form of governance, huge population base and rapid pace of adoption of new technologies.”
- Masayoshi Son, Chairman & CEO, Softbank
"I think the potential for India is incredible“
- Warren Buffett, CEO, Berkshire Hathaway
"India is creating an environment that is congenial for its entrepreneurs to do business"
- Jeff Immelt, Outgoing CEO, General Electric
In Summary
17
¦ Rapid pace of reforms in 2017, focus shifts to implementation
¦ Demonetisation, GST implementation has caused some pain in short term, outlook for economy improving steadily
¦ Domestic institutional �ows continue to be strong in equities
¦ Improving EBITDA margins, low interest rates should lead to EPS / pro�t growth moving to >15% from FY19 onwards
¦ Attractive Marketcap to GDP at 83% CY18e (Source: Kotak Institutional Equities)
¦ Reasonable P/E, markets are trading at CY18(e) p/e of ~17.5x and CY19(e) p/e of ~14.5x (Source: Bloomberg consensus)
¦ Large supply of stocks, global developments are key risks in near term
¦ Increasing credit growth, reducing deposit growth of banks could lead to higher bond yields
Past Performance may or may not be sustained in the future. For detailed performance please refer page 19. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. In view of the individual circumstances and risk pro�le, each investor is advised to consult his / her professional advisor before taking investment decisions.
HDFC Equity Fund has delivered CAGR of 19.9% vs 10.3% CAGR of benchmark across three market cycles in 23 years. thNAV of the Fund is up 65 times vs 9.5 times in benchmark between 1995-2017, as on 29 December, 2017.
The Fund is now well positioned for improving economic outlook and changing outlook of sectoral pro�ts (refer pages 4, 5).
SIP Returns - HDFC Equity Fund
Past performance may or may not be sustained in the future. # Nifty 500 Index ## NIFTY 50 Index. Assuming Rs. 10,000 invested systematically on the �rst Business Day of every month over a period of time. CAGR returns are computed after accounting for the cash �ow by using XIRR method (investment internal rate of return) for Regular Plan - Growth Option. Load is not taken into consideration for computation of performance. The above investment simulation is for illustrative purposes only. The AMC / Mutual Fund is not guaranteeing or promising or forecasting any returns.
SIP InvestmentsSince
Inception15 year SIP 10 year SIP 7 year SIP 5 year SIP 3 year SIP 1 year SIP
Total Amount Invested (Rs.) 2,760,000 18,00,000 12,00,000 8,40,000 6,00,000 3,60,000 1,20,000
Market Value as on December
29, 2017 (Rs.)7,08,96,530.32 92,90,043.34 29,22,413.98 15,71,365.80 9,73,363.60 4,80,158.55 1,38,480.93
Returns Annualised 23.30% 19.68% 16.97% 17.59% 19.47% 19.69% 30.08%
Market Value of SIP in
Benchmark # (Rs.)1,79,71,592.88 58,00,029.37 24,21,118.46 14,51,410.00 9,16,909.17 4,68,463.77 1,37,670.38
Benchmark Returns
(Annualised) #14.05% 14.30% 13.46% 15.36% 17.01% 17.93% 28.71%
Market Value of SIP in
Additional Benchmark ## (Rs.)1,46,17,655.26 52,12,027.65 21,68,585.79 13,03,269.95 8,31,217.51 4,40,891.46 1,33,477.40
Additional Benchmark
Returns (Annualised) ##12.63% 13.06% 11.40% 12.35% 13.02% 13.66% 21.70%
18
Scheme Performance Summary
19
Value of Investment of ` 10,000
PeriodScheme Returns
(%)
Benchmark
Returns (%) #
Additional
Benchmark
Returns ## (%)
Scheme (`) Benchmark #(`)Additional
Benchmark (`) ##
Last 1 year 36.86 35.91 28.65 13,674 13,580 12,856
Last 3 years 11.70 11.91 8.34 13,933 14,011 12,714
Last 5 years 17.35 14.89 12.27 22,244 20,008 17,833
Since inception 19.91 10.27 N.A. 6,52,681 94,906 N.A.
Past performance may or may not be sustained in the future. Returns greater than 1 year period are Compounded Annualised (CAGR). Load is not taken into consideration for computation of above performance(s). #NIFTY 500 Index ##NIFTY 50 Index. N.A. Not Available. Inception date of the scheme
st th1 January, 1995. The scheme has been managed by Mr. Prashant Jain since 19 June, 2003. 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
thRegular Plan. Returns as on 29 December 2017. Above returns are of Regular Plan - Growth Option.
Performance of HDFC Equity Fund
20
Scheme Performance Summary
Managing Scheme Since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%)
$HDFC Top 200 Fund June 19, 2003 31.97 10.39 15.45
1S&P BSE 200 33.26 10.94 14.06
$HDFC Prudence Fund June 19, 2003 27.88 11.97 16.81
1CRISIL Balanced Fund - Aggressive Index 19.82 8.7 11.29
HDFC MF MIP - Long Term Plan+ December 26, 2003 10.81 9.15 10.95
1CRISIL MIP Blended Index 8.04 8.78 9.45
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 of Regular Plan - Growth Option. $All dividends declared prior to the splitting of the Scheme into dividend & Growth Options are assumed to be reinvested in the units of the Scheme at the then prevailing NAV (ex-dividend NAV). +The Scheme is co-managed by Prashant Jain (Equities) and Shobhit Mehrotra (Debt). Load is not taken into consideration for computation of performance. 1. Benchmark. NAV at Inception for all the above schemes was Rs. 10. Data as on December 29, 2017. 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.
Performance of other schemes managed by Prashant Jain, Fund Manager of HDFC Equity Fund
Performance return of Category I - FPI Portfolio(s) managed by the Fund Manager (Prashant Jain)
Managing Portfolio
Since
stReturns (%) as on 31 December, 2017
Last 1 Year Last 3 Years Last 5 Years
Category I - FPI Portfolio (managed under a
bilateral agreement under Regulation 24(b)
and subject to applicable laws)
nd22 March, 2016 31.26 N.A. N.A.
Benchmark - MSCI India (Total Returns) 30.34 N.A. N.A.
ndPast performance may or may not be sustained in the future. FPI Portfolio: Inception date is 22 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,
thinvestment strategy and the regulatory environment. The said disclosure is pursuant to SEBI Circular no. Cir/IMD/DF/7/2012 dated 28 February 2012 pertaining to Regulation 24(b) of SEBI (Mutual Funds) Regulations, 1996. N.A. Not Applicable.
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Scheme Facts
$ Dedicated Fund Manager for Overseas Investments: Mr. Rakesh Vyas.
Type of Scheme Open-ended Growth Scheme
Inception Date (Date of Allotment) January 1, 1995
Investment Objective To achieve capital appreciation
Fund Manager $ Prashant Jain
Plans Direct Plan, Regular Plan
Options Under Each Plan: Growth & Dividend. The Dividend Option offers Dividend Payout and Reinvestment facility
Minimum Application AmountPurchase: Rs. 5000 and any amount thereafter
Additional Purchase: Rs. 1,000 and any amount thereafter
Load Structure
Ÿ 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
Ÿ 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.
Ÿ 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, Flexindex; Exit Load, if any, prevailing on the date of registration /
enrolment shall be levied
Benchmark NIFTY 500 Index
Entry Load:
Exit Load:
For further details on load structure, please refer to the Scheme Information Document / Key Information Memorandum
of the Scheme.
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Asset Allocation Pattern
Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows:
*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 net assets) subject to SEBI (Mutual Funds) Regulations, 1996. The scheme may use derivatives mainly for the purpose of hedging and portfolio balancing (max 25% of net assets) based on the opportunities available subject to SEBI (Mutual Funds) Regulations, 1996.
Types of InstrumentsNormal Allocation
(% of Net Assets)Risk Profile
Equities & Equity related instruments 80 - 100 Medium to High
Debt and money market instruments* 0 - 20 Low to medium
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
This product is suitable for investors who are seeking*
Ÿ Capital appreciation over long term
Ÿ Investment predominantly in equity and equity related instruments of
medium to large sized companies
Product Labelling
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Riskometer
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stThe presentation dated 31 January 2018 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 given is for general purposes only. Past performance may or may not be
sustained in future. The statements are given in summary form and do not purport to be complete. The views / information provided do not have
regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. 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. Stocks/Sectors referred herein 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. HDFC Mutual Fund/AMC is not guaranteeing returns on any investments. The data/statistics are given on the basis of
information which is already available in publicly accessible media to explain general market trends in the securities market. The same
should not be construed as any research report/research recommendation to buy or sell any security covered under the respective
sector/s. Neither the 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.
Disclaimer