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 Balanced Scheme)
December, 2017
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 – Guwahati , Manipal University– Mangalore.Costs depicted based on the education costs for the PGDM course at Indian Institute of Management – Ahmedabad, B. Tech 4 year programme at IIT – Guwahati (Fees extrapolated for 4 year course) & MBBS program at Manipal University - Mangalore. 2032 �gures based on In�ation �gures assumed at 10% p.a. Monthly investment needed to build such corpus by 2032 calculated based on a 15 Year SIP investment returning 12% p.a.
MBA 19.5 Lakhs 81.5 Lakhs
Engineering 9.6 Lakhs 40.1 Lakhs
Medical 45.6 Lakhs 1.9 Crore
Rs. 16,314
Rs. 8,027
Rs. 38,032
2017 2032 Monthly savings needed for professional education in 2032?
The above �gures are rounded off to the nearest hundred.
The above investment simulation is for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital.
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. 19.5 lakh* today
¦ 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 program in IIM Ahmedabad. Source : Business Standard
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!
6
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
7
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
8
Mental Accounting
Parents want their children to have a better life than theirs; Education is the foundation for a better life.
9
Equities - A Powerful tool against In�ation
st stReturns from 31 March, 1997 to 31 March, 2017.Source : Bloomberg, RBI Handbook of Statistics on Indian Economy.*Average Returns of all open-ended equity mutual funds that were launched on or before 31st March, 1997.#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)
¦ Equity Mutual Funds has delivered higher returns than other Asset Classes
¦ Have equities beaten in�ation? Equities have beaten in�ation and have compounded faster than other major asset classes over the last 20 years.
Equity Mutual Funds*
(S&P BSE SENSEX) Equity
Gold
Bank FD
Avg Inflation#
5.0 10.0 15.0 20.0 25.0
20.14
11.5
9.2
7.5
5.6
¦ 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.
Professional Fund Management
¡ Expert fund management
¡ In depth research
¡ Conscious portfolio management to optimize returns
10
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
11
SIP or Lump Sum?
Can there be a better gift to your child than investing to secure his/her future?
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
12
Strategy to Smart Investing
Children grow fast; Make sure your Savings do too!
Presenting...
HDFC Children’s Gift Fund(An Open-ended balanced scheme)
13
HDFC Children’s Gift Fund - Weathered it all
HDFC Children’s Gift Fund
Rs. 114,961.00
NIFTY 50
Rs. 78,283.39
CRISIL Balanced Fund
- Aggressive Index
Rs. 64,234.50
Valu
e o
f R
s. 1
0,0
00
in
vest
ed
in
20
01
2G Scam News
Source: Publicly available information
CRISIL Balanced Fund - Aggressive Index
¦ Meant for all children below the age of 18 years
¦ Balanced strategy with 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
14
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!*
15
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.
16
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.
$ Dedicated Fund Manager for Overseas Investments: Mr Rakesh Vyas.For further details, please refer to the Scheme Information Document.
Fund Facts
Investment Objective The primary objective is to generate long-term capital appreciation.
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 Units subject to Lock-in Period: NIL
For Units not subject to Lock-in Period:
Lock in Period If opted: Until the Unit Holder (being the beneficiary child) attains the age of 18 years or until completion of 3 years from date of
allotment, whichever is later
Benchmark Index CRISIL Balanced Fund - Aggressive Index
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.
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.
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.
17
HDFC Children’s Gift Fund(An Open-ended Balanced Scheme)
Perf
orm
ance
18
Period Scheme Returns (%)$ Benchmark Returns (%)#Additional Benchmark
Returns (%)##
Value of investment of ` 10,000
Scheme (`) $ Benchmark (`) #Additional Benchmark
(`)##
Last 1 Year 24.47 16.88 24.34 12,447 11,688 12,434
Last 3 Years 12.25 7.35 5.98 14,157 12,378 11,908
Last 5 Years 18.53 11.02 11.70 23,404 16,871 17,393
Since Inception 17.51 N.A. 13.06 149,449 N.A. 78,283
Performance of HDFC Children’s Gift Fund NAV as at November 30, 2017 ` 114.961
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR). #
CRISIL Balanced Fund - Aggressive Index ## NIFTY 50 Index.
N.A. Not Available. Inception Date: March 02, 2001. The Scheme is managed by Mr. Chirag Setalvad since April 02, 2007.
Other funds managed by Chirag Setalvad, Fund Manager of HDFC Children’s Gift Fund
Performance of Top 3 schemes by Chirag Setalvad
Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%)
HDFC Long Term Advantage Fund ~ 02-Apr-07 30.85 11.91 18.95
1S&P BSE SENSEX 24.37 4.92 11.37
HDFC Retirement Savings Fund - Hybrid Equity Plan+ 25-Feb-16 23.71 N.A. N.A.
1CRISIL Balanced Fund - Aggressive Index 16.88 N.A. N.A.
HDFC Small Cap Fund 27-Jun-14 49.12 20.69 23.22
1NIFTY Free Float Smallcap 100 Index 49.16 18.81 19.07
Performance of Bottom 3 schemes by Chirag Setalvad
Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%)
HDFC Retirement Savings Fund - Equity Plan+ 25-Feb-16 31.10 N.A. N.A.1NIFTY 500 Index 29.31 N.A. N.A.
HDFC Retirement Savings Fund - Hybrid Debt Plan+ 26-Feb-16 10.43 N.A. N.A.1CRISIL MIP Blended Index 6.76 N.A. N.A.
HDFC Multiple Yield Fund - Plan 2005 ^ 02-Apr-07 10.50 8.39 10.391CRISIL MIP Blended Index 6.76 8.91 9.60
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 Plan. +The Scheme is co-managed by Chirag Setalvad (Equities) and Shobhit Mehrotra (Debt). ̂ The Scheme is
co-managed by Chirag Setalvad (Equities) and Anil Bamboli (Debt).~Open Ended Equity Linked Savings Scheme with a lock-in period of 3 years. 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
November 30, 2017. 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.
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.
19
Asset Allocation
* Investment in Securitized debt, if undertaken, would not exceed 20% of the net assets of the Scheme.
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 net assets)
Equities and Equity
linked Instruments40 75 High
Debt securities and
Money Market
Instruments*
25 60 Low to Medium
Units issued by
REITs & InvITs
0 10 Medium to High
Product Labelling
20
* 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 & Risk Factors
21
thThe presentation dated 30 November 2017 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.