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)
October, 2019
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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?
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. 2034 �gures based on infation assumed at 10% p.a. Monthly investment needed to build such corpus by 2034 calculated based on a 15 Year SIP investment returning 12% p.a.
Source: Indian Institute of Management – Ahmedabad, IIT – Bombay, Manipal University – Mangalore.
MBA 23 Lakh 96 Lakh
Engineering 9.5 Lakh 39.6 Lakh
Medical 58.5 Lakh 2.44 Crore
Rs. 19,231
Rs. 7,943
Rs. 48,915
2019 2034 Monthly savings needed for professional education in 2034
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?
¦ 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
¦ With rising education costs across all professional degrees, saving for education becomes even more imperative
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
¦ Similar courses abroad can cost signi�cantly more
¦ Finances should not get in the way of your child’s dreams
¦ Save regularly with a goal in mind
¦ So, prepare for the best, though you may have options to choose from!
¦ The best professional degree courses in India cost up to Rs. 23 lakh*
¦ 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
* Fees for a 2 year (2019) program in IIM Ahmedabad. Source : IIM Ahmedabad
The 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.
Source: Internal Calculation
The road to Rs. 50 Lakhs!
¦ 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
¦ Anirvan starts early and saves Rs. 10,008/month for 15 years
¡ 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
¦ Balances your current aspirations vs future requirements. A sizeable corpus can be built over time
¦ Investing with a goal brings discipline
¦ 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
¦ Since children`s education expenses are substantial and important, a corpus meant for the same needs to be saved separately
¦ “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
¦ 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, 1998 to March 29, 2019.
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) 13.4
Gold 10.1
-
Bank FD 7.3
Avg Inflation 6.5#
2.0 6.0 10.0 14.0
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
¡ Options to invest regularly in small doses or lump sum
¡ Meet �nancial goals by investing in products catering to a wide array of investment goals
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
HDFC Children’s Gift Fund
Rs. 1,57,268
NIFTY 50 TRI
Rs. 1,14,805
CRISIL Hybrid 35:65 -
Aggressive Index
Rs. 97,921
^The performance of the Scheme is benchmarked to the Total Return Index (TRI) Variant of the Indices (Equity Assets).
thData as on 30 September 2019.
*NIFTY 50 Hybrid Composite Debt 65:35 Index is available from September 01, 2001.Note - All values have been rebased to Rs. 10 from 03 Sep 2001 i.e. the inception date of NIFTY 50 Hybrid composite Debt 65:35 Index
Source: Publicly available information
NIFTY 50 Hybrid Composite Debt 65:35 Index*
NIFTY 50 TRI (Additional Benchmark)
HDFC Children’s Gift Fund - Through the Tough Times
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¦ Bene�t from the long term potential of equity while maintaining the stability of debt
¦ Easy hassle free withdrawal options
¦ Meant for all children below the age of 18 years
¦ Personal accident insurance for parent/guardian of up to Rs 10 lakhs*
¦ Healthy allocation towards equities which is an ideal long-term asset class coupled with debt allocation which provides stable returns
¦ 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
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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.
¦ In-built Personal Accident cover up to Rs. 10 lakhs!*
¦ Investment will be made in the name of a minor
¦ Investment can be made as many times till the minor turns 18
¦ Parent/Guardian will operate the folio till the child attains majority
¦ No limit on investment
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Key Features
“Education gives you wings to �y” - APJ Abdul Kalam
Who can invest?
Ÿ FriendsŸ Other Relatives
Ÿ Grand ParentsŸ Parents
*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
¦ 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.
¦ 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
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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
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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 6.25 9.03 6.31 10,625 10,903 10,631
Last 3 Years 8.86 10.15 11.49 12,900 13,366 13,858
Last 5 Years 9.66 9.13 8.93 15,859 15,480 15,344
Since Inception 15.97 N.A. 14.03 1,57,268 N.A. 1,14,805
HDFC Children's Gift Fund - Performance - Regular Plan - Growth Option NAV as on September 30, 2019 ` 120.975 (Per Unit)
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. 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.$
Common notes for all the above tables:
~ Open Ended Equity Linked Savings Scheme with a lock-in period of 3 years. 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 was a debt oriented scheme till May 22, 2018. ^Hence past performance may not strictly be comparable with that of the new benchmark.
Past performance may or may not be sustained in the future. TRI - Total Returns Index. N.A. - Not Applicable. Returns as on September 30, 2019. 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).
Performance of other funds managed by Chirag Setalvad, Fund Manager of HDFC Children’s Gift Fund
(who manages total of 9 schemes which have completed one year)
Performance of Top 3 schemes by Chirag Setalvad
Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%)
HDFC Small Cap Fund 28 June 2014 -6.47 8.55 10.97
Benchmark - NIFTY Smallcap 100 TRI -8.10 -2.11 3.53
HDFC Long Term Advantage Fund ~ 2 April, 2007 6.18 10.05 9.44
Benchmark - S&P BSE SENSEX TRI 8.03 12.92 9.16
HDFC Mid-Cap Opportunities Fund 25 June, 2007 -0.50 4.38 10.12
Benchmark - NIFTY Midcap 100 (Total Returns Index) -5.61 2.43 8.17
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 (Equity Assets) 25 Feb, 2016 4.44 8.56 N.A.
Benchmark - NIFTY 500 TRI 3.69 9.44 N.A.
HDFC Retirement Savings Fund - Hybrid Debt Plan (Equity Assets) 26 Feb, 2016 7.83 6.33 N.A.
Benchmark - NIFTY 50 Hybrid Composite Debt 15:85 Index 12.63 7.86 N.A.
HDFC Multi-Asset Fund ^(Equity Assets) 2 April, 2007 4.88 4.90 6.28
+ 10% Domestic Price of Gold
Benchmark - 90% NIFTY 50 Hybrid Composite Debt 65:35 Index10.69 9.90 9.10
$ Dedicated Fund Manager for Overseas Investments: Mr Chirag Dagli.For further details, please refer to the Scheme Information Document.
Fund FactsInvestment Objective
There is no assurance that the investment objective of the Scheme will be realized.
To generate capital appreciation / income from a portfolio of equity & equity related instruments and debt and money market instruments.
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
- 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)
Existing investments by investors including SIP/ SWAP registrations, etc (until May 22, 2018):
Lock-in period (if opted), shall be later of
- Until the Unit Holder (being the beneficiary child) attains the age of 18 years
Lock-in period will be compulsory. Lock-in period shall be earlier of
- 3 Years from the date of allotment
Fresh investments by investors including SIP/ SWAP registrations, etc (effective May 23, 2018):
Benchmark Index NIFTY 50 Hybrid Composite Debt 65:35 Index
In case of Systematic Transactions such as Systematic Investment Plan (SIP), Systematic Withdrawal Advantage Plan (SWAP), etc.
No Entry / Exit Load shall be levied on bonus units.
Nil if the Units are redeemed / switched -out after third year from the date of allotment.
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.
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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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)
HDFC Children’s Gift Fund^
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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 Investment in equity and equity related instruments as well as debt and money market instruments
Ÿ Capital appreciation over long term
Riskometer
Disclaimer
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thThe presentation dated 15 October 2019 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.