HDFC Children's Gift Fund - HDFC Mutual Fund
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HDFC Children’s Gift Fund
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)
Empower and strengthen your child’s future, today. Don’t let nances get in the way of your child’s dream!
October, 2018 Please refer page 20 for product labelling
“Education is not preparation for life, education is life itself.”
- John Dewey
2
How Much Will It Cost You Tomorrow?
2018 2033 Monthly savings needed for
professional education in 2033?
MBA 17.42 Lakhs 72.8 Lakhs Rs. 14,566
Engineering 10 Lakhs 41.8 Lakhs Rs. 8,362
Medical 50.13 Lakhs 2.09 Crore Rs. 41,916
The above gures are
rounded off to the
nearest hundred.
Source: Indian Institute of Management – Ahmedabad, IIT – Bombay , 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 – Bombay (Fees extrapolated for 4 year course) & MBBS program at Manipal University - Mangalore. 2033 gures based on In ation gures
assumed at 10% p.a. Monthly investment needed to build such corpus by 2033 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.
Higher education is not the privilege of the elite. Do you agree?
3
How Much is Enough?
¦ With rising education costs across all professional degrees, Cost of education
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
Cost of Education is rising
much faster than in ation
Inflation
The above chart is only an illustrative example to show rising cost of education and not based on actual data.
“The roots of education are bitter, but the fruit is sweet” - Aristotle
4
Prepare For The Best
¦ The best professional degree courses in India cost up to
Rs. 17.50 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 (2018) program in IIM Ahmedabad. Source : IIM Ahmedabad
What If your Child Aspires To Go To Harvard? Are You Prepared?
5
The Cost of Procrastination - Don’t delay the inevitable
The road to Rs. 50 Lakhs!
¦ Anirvan starts early and saves Rs. 10,008/month for 15 years Anirvan
¦ Nicole and Sachin are late starters and will have to ` 18,01,513 ` 31,98,487
contribute a higher amount on a monthly basis to
accumulate the same amount as Anirvan
Nicole
¡ Nicole: Rs. 21,735/month for 10 years
` 26,08,257 ` 23,91,743
¡ Sachin: Rs. 61,222/month for 5 years
Sachin
The later you start, the less your money works for you!
` 36,73,334 ` 13,26,666
Contributions Earnings
Source: Internal Calculation
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.
6
Goal based Investing towards Child’s Education
Goal Based Investing Investing without a Goal
¦ Targets a speci c amount of corpus for ¦ Savings are kept in a “common savings
your child’s education pool” without any goal in mind
¦ Money is earmarked for a speci c purpose. ¦ Money gets withdrawn from the “common
For instance, investors do not touch PF savings pool” for all nancial requirements
corpus for buying a car (as the money is
earmarked for retirement)
¦ Investors tend to rationalize their spending ¦ Tend to overspend on other commitments
on other personal / social requirements
¦ Investing with a goal brings discipline ¦ What is left after spending gets saved
¦ Balances your current aspirations vs future ¦ What is left out of the “common savings
requirements. A sizeable corpus can be pool” may not be adequate to tackle
built over time speci c goals like children’s education
¦ Mental Accounting is involved, ensuring ¦ Investors can get irrational in allocation of
long-term holding of investments funds for various purposes and may resort
to premature withdrawals
Build a corpus meant for your Child’s Education!
7
Mental Accounting
¦ “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
Parents want their children to have a better life than theirs; Education is the
foundation for a better life.
8
Equities - A Powerful tool against In ation
¦ Equity Mutual Funds has delivered higher returns than ¦ Aren’t equities risky? Having a short term view or
other Asset Classes investing directly in equities without adequate knowledge
can be risky. Volatility reduces with time in equity. Hence
Equity Mutual Funds^ 18.7
choose the right mutual fund scheme.
¦ Should I put all my money in equities? Not entirely.
Equity (S&P BSE SENSEX TRI)* 13.1
When you have a lot of time to achieve your goals, invest
Gold** 10.2 predominantly into equities. As you near your goals, you
#
need to shift gradually to lesser volatile asset class like
Bank FD 7.3 debt.
Avg Inflation # 5.6 ¦ How do I invest in equities? Lumpsum investments or
Sytematic Investment Plan with a Mutual Fund. As your
0 5 10 15 20 income increases, do a SIP Top Up.
(% CAGR Returns) ¦ Have equities beaten in ation? Equities have beaten
in ation and have compounded faster than other major
Returns from March 31, 1998 to March 28, 2018.
asset classes over the last 20 years.
Source:
^MFI - Average Returns of all open-ended equity mutual funds that were launched on or before 31st
March, 1998.
*MFI
** World Gold Council INR prices
# Bloomberg, RBI Handbook of statistics on Indian Economy. Average in ation is shown for
comparison with returns from various asset classes.
The performance of the Scheme(s) is benchmarked to the Total Return Index (TRI) Variant of the
Indices (Equity Assets).
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.
9
How Mutual Funds help?
Professional Fund Management
¡ Expert fund management
¡ In depth research
¡ Conscious portfolio management to optimize returns
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
10SIP or Lump Sum?
SIP Lump Sum
¦ Investments at a prede ned monthly or quarterly frequency ¦ Lump sum when you receive large ows like a bonus
¦ For a salaried individual, the income is monthly and so ¦ Ad hoc investments on special occasions like festivals
should be the savings or your child’s birthday
¦ 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
Can there be a better gift to your child than investing very early on in their lives?
11Strategy to Smart Investing
¦ 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
Presenting...
^
HDFC Children’s Gift Fund
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)
^with effect from May 23, 2018, the Scheme has undergone changes in fundamental attributes and other changes.
Children grow fast; Make sure your Savings do too!
12HDFC Children’s Gift Fund - Weathered it all
HDFC Children’s Gift Fund - Through the Tough Times
Demonetization,
180.00 GST, Brexit, Trump as
^
NIFTY 50 TRI (Additional Benchmark) US President HDFC Children’s Gift Fund
NIFTY 50 Hybrid Composite Debt 65:35 Index* (Benchmark) Rs. 147,969.00
160.00
Value of Rs. 10,000 invested in 2001
140.00
NIFTY 50 TRI
Rs. 107,959.00
120.00
100.00 NIFTY 50 Hybrid Composite
Debt 65:35 Index
Rs. 92,481.00
80.00
60.00
40.00
20.00
Source: Publicly available information
Data as on 30th September 2018.
^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 - 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 13HDFC Children’s Gift Fund
¦ 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
*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.
“Education is the most powerful weapon which you can use to change the world” -
Nelson Mandela
14Key Features
¦ 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 Who can invest?
¦ Investment can be made as many times till the minor turns 18
Ÿ Parents
¦ In-built Personal Accident cover up to Rs. 10 lakhs!* Ÿ Grand Parents
Ÿ Friends
Ÿ Other Relatives
*Subject to the terms and conditions of the Scheme & the Group Personal Accident Insurance Policy.
“Education gives you wings to y” - APJ Abdul Kalam
15Free Personal Accident Insurance Cover of up to Rs. 10 Lakh*
¦ 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.
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.
16HDFC Children's Gift Fund - Performance - Regular Plan - Growth Option NAV as on September 28, 2018 ` 113.822 (Per Unit)
Value of investment of ` 10,000
Additional Benchmark
Period Scheme Returns (%)$$ Benchmark Returns (%)# Additional Benchmark
Returns (%)## Scheme (`) $$ Benchmark (`) #
(`)##
Last 1 Year 5.64 8.93 13.20 10,564 10,893 11,320
Last 3 Years 11.49 10.59 12.69 13,853 13,523 14,304
Last 5 Years 17.78 12.95 15.19 22,652 18,378 20,274
Since Inception 16.56 N.A. 14.49 147,969 N.A. 107,959
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR).
N.A. Not Available. Inception Date: March 02, 2001. The Scheme is managed by Mr. Chirag Setalvad since April 02, 2007.
$$ Adjusted for bonus units declared under the scheme. # Benchmark Index: NIFTY 50 Hybrid Composite Debt 65:35 Index.
## Additional Benchmark Index: NIFTY 50 TRI.
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 Small Cap Fund 27-Jun-14 9.78 17.49 22.86
Performance
Benchmark - NIFTY Smallcap 100 TRI -18.13 6.55 18.83
HDFC Long Term Advantage Fund ~ 02-Apr-07 7.44 14.29 19.07
Benchmark - S&P BSE SENSEX TRI 17.13 12.96 14.90
HDFC Mid-Cap Opportunities Fund 25-Jun-07 -2.31 11.55 25.54
Benchmark - Nifty Midcap 100 TRI -4.32 11.00 21.02
Performance of Bottom 3 schemes by Chirag Setalvad
Managing Scheme since Last 1 Year (%) Last 3 Years (%) Last 5 Years (%)
HDFC Retirement Savings Fund - Hybrid Debt Plan (Equity Assets) 26-Feb-16 1.13 N.A. N.A.
Benchmark - NIFTY 50 Hybrid Composite Debt 15:85 Index 2.61 N.A. N.A.
HDFC Retirement Savings Fund - Equity Plan (Equity Assets) 25-Feb-16 2.49 N.A. N.A.
Benchmark - NIFTY 500 TRI 7.30 N.A. N.A.
HDFC Multi-Asset Fund^ 02-Apr-07 1.94 6.75 9.72
Benchmark - 90% NIFTY 50 Hybrid Composite Debt 65:35 Index
8.27 10.14 11.76
+ 10% Domestic Price of Gold
Returns greater than 1 year period are compounded annualised (CAGR). The above returns are of Regular Plan - Growth Option. Load is not taken into consideration for
computation of performance. ~Open Ended Equity Linked Savings Scheme with a lock-in-period of 3 years. ^The scheme is co-managed by Chirag Setalvad (Equities),
Krishan Kumar Daga (Gold) and Anil Bamboli (Debt). 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. N.A. - Not Applicable.
Past performance may or may not be sustained in the future. Load is not taken into consideration for computation of performance. TRI - Total Returns Index.
Returns as on September 28, 2018.
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.
17^
HDFC Children’s Gift Fund
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)
Fund Facts
Investment 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:
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.
Exit Load:
- For investments until May 22, 2018
For Units subject to Lock-in Period: NIL
For Units not subject to Lock-in Period:
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.
- For investments on or after May 23, 2018: NIL
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.
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
$ Dedicated Fund Manager for Overseas Investments: Mr Rakesh Vyas.
For further details, please refer to the Scheme Information Document.
18Fund Facts (continued)
Asset Allocation
Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows:
Minimum Maximum Risk Profile
Allocation Allocation
Type of Instruments
(% of Total Assets)
Equities and Equity related
65 80 High
Instruments
Debt Securities (including 20 35 Low to Medium
securitised debt) and money
market instruments
Units issued by REITs &
0 10 Medium to High
InvITs
Non-convertible preference 0 10 Low to Medium
shares
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.
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.
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.
^with effect from May 23, 2018, the Scheme has undergone changes in fundamental attributes and other changes.
19Product Labelling
Riskometer
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
* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
20Disclaimer
The presentation dated 15th October 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 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.
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