Presenting HDFC Cash Management Fund Treasury Advantage Plan (Open - Ended Income Scheme) As on April 30, 2011

Transcription

1 Presenting HDFC Cash Management Fund Treasury Advantage Plan (Open - Ended Income Scheme) As on April 30,

2 Table of Contents Product Rationale and Positioning Investment Strategy Portfolio Composition Product Features, Fund Manager Profile and Asset Allocation Pattern Fund Suitability and Rating Disclaimer 2

3 Product Rationale Positioning between liquid funds and short term plans with respect to risk return matrix The focus would be to optimize portfolio yield through a judicious mix of short duration and mark to market assets The product would have the flexibility to enhance yields in various yield curve scenarios (e.g. Inverted, steep, linear etc.) 3

4 Positioning of HDFC Cash Management Fund Treasury Advantage Plan (HDFC CMF TAP) Gilt Funds RE ETURN Income Funds Medium Term Funds Short Term Plans HDFC CMF - TAP Liquid Funds RISK 4

5 Investment Strategy Maintain portfolio with short- term maturities. Maintain high credit quality Leverage on the pricing inefficiencies between different credits and different tenors Maintain higher current yields with focus on risk adjusted returns Ability to invest in securities having a >1 year duration in order to capture steepness in the yield curve 5

6 Portfolio Composition (As on April 30, 2011) 6

7 Portfolio Composition (As on April 30, 2011) Portfolio Classification by Asset Class (%) Commercial Papers (CP) / Certificate of Deposit (CD) / Bills Rediscounting Cash, Cash Equivalents and Net Current Assets Credit Exposures 1.33 Sovereign Securities 0.09 Average Portfolio Maturity 38 days Modified Duration: 35 days Net Assets ( ` In crores) 16,

8 Portfolio Composition (As on April 30, 2011) Portfolio Classification by Rating Class (%) AAA / AAA(SO) / P1+ / P1+(SO) & Equivalent AA+ / LAA+ & Below 0.67 Cash, Cash Equivalents and Net Current Assets 5.32 Sovereign

9 Product Features Type of Scheme Open Ended Income Scheme Inception Date November 18, 1999 Investment Objective Investment Plan / Options Minimum Application Amount Load Structure To generate regular income through investment in debt securities and money market instruments Retail Option and Wholesale Option: Growth and Dividend Option Dividend Option offers Daily Dividend Option with Reinvestment facility only and weekly and Monthly Dividend option with payout and Reinvestment facility Retail Option Growth, Weekly and Monthly Dividend Option Purchase: ` 5,000 and any amount thereafter Additional Purchase: ` 1,000 and any amount thereafter Daily Dividend Option Purchase / Additional Purchase: ` 1,00,000 and any amount thereafter Wholesale Option (under each option) Purchase: ` 1 crore and any amount thereafter Additional Purchase: ` 1 and any amount thereafter 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: Nil Benchmark Crisil Liquid Fund Index 9

10 Fund Manager s Profile $ Name and Designation Educational Qualifications Mr. Anil Bamboli Senior Fund Manager - Fixed Income (Fund Manager of HDFC Cash Management Fund Treasury Advantage Plan since September 1, 2007) B. Com Grad CWA MMS (Finance) CFA CFA Institute USA Experience Collectively over 16 years of experience in Fund Management and Research Assignments Held July 25, 2003 till Date HDFC Asset Management Company Limited May 1994 July 2003 SBI Funds Management Pvt. Ltd. Last Position Held Asst. Vice President $ Miten Lathia (Dedicated Fund Manager for Overseas Investments) 10

11 Asset Allocation Pattern Under normal circumstances, the asset allocation of the Scheme s portfolio will be as follows: Types of Instruments Normal Allocation (% of Net Assets) Normal Deviation (% of Normal Allocation) Risk Profile Fixed Rate Debt Securities & Money Market Instruments 50 Upto 100% Low to Medium Floating Rate Debt & Money Market Instruments 50 Upto 100% Low to Medium It is the intention of the scheme that the investments in securitised debts will not, normally, exceed 50% of the Net Assets of the Scheme. The Scheme may seek investment opportunity in overseas market in Foreign Debt Securities and Mutual Funds (max. 25% of net assets in case of Treasury Advantage Plan) subject to SEBI (Mutual Funds) Regulations, The scheme may use derivatives mainly for the purpose of hedging and portfolio balancing (max. 50% of the net assets including cash) based on opportunities available subject to SEBI (Mutual Funds) Regulations,

12 Dividend Distribution Tax (DDT) Comparative Analysis Dividend Distribution Tax (%) Category of Investors Liquid Fund / Money Market Mutual Funds HDFC Cash Management Fund Treasury Advantage Plan Difference Individuals / HUF %$ %$ Others %$ %$ $ Including applicable surcharge, education cess and secondary and higher education cess. Investors should be aware that the fiscal rules / tax laws may change and there can be no gurantee that the current tax position may continue indefinitely. In view of the individual nature of tax consequences, each investor is advised to consult his / her professional tax advisor. 12

13 Fund Suitability and Rating 13

14 Why HDFC Cash Management Fund Treasury Advantage Plan? Lower incidence of DDT as compared to Liquid Funds / Money Market Mutual Funds Higher running yield by positioning the maturity at around 6-12 months; ability to take benefit of the yield pickup by moving beyond 1 year segment (in normal conditions) Focus on current yield and liquidity Rated Credit Risk Rating mfaaa by ICRA Limited; the rating is the highest credit quality rating assigned by ICRA Limited to debt funds# Credit Risk Rating mfaaa signifies the highest-credit-quality rating assigned by ICRA to debt funds. The rated debt fund carries the lowest credit risk, similar to that associated with long-term debt obligations rated in the highest-credit-quality category. # Past Performance is no guarantee of future results. Please refer to the slide: 22 on disclaimer. 14

15 HDFC Cash Management Fund Treasury Advantage Plan is suitable for investors Desiring a product which offers them the safety and return potential similar to a liquid fund with a lower tax incidence Having a short term investment horizon Seeking high levels of liquidity for their investments 15

16 Awards HDFC Cash Management Fund-Treasury Advantage Plan - Retail Option has been ranked a "Five Star Fund"# indicating performance among top 4.6% in the category of Open Ended Liquid for one year period ending December 31, 2010 (from amongst 54 schemes) at ICRA Mutual Fund Awards Five Star Fund Ranking indicates funds with composite score in the top 4.6% confidence* interval in the respective category. * Based on the positioning of a scheme in the category's normal distribution. # Past performance is no guarantee of future results. Please refer to the slide: 20 on Award /Ranking / Rating methodology 16

17 Awards CNBC TV18 - CRISIL Mutual Fund Awards 2011 HDFC Cash Management Fund - Treasury Advantage Plan won the "Best Performing Mutual Fund of the Year - Ultra Short Term Funds - Retail" Award # for the calendar year 2010 (from amongst 31 schemes) at the CNBC TV18 - CRISIL Mutual Fund Awards # Past performance is no guarantee of future results. Please refer to the slide: 20 on Award /Ranking / Rating methodology 17

18 Fund Rating HDFC Cash Management Fund Treasury Advantage Plan - Growth Option was assigned CRISIL Mutual Fund Rank 1 # in the Open End Ultra Short Term Debt Schemes Category (out of 39 schemes) for the 1 year period ending March 31, 2011 by CRISIL. HDFC Cash Management Fund Treasury Advantage Plan - Wholesale Plan - Growth Option was assigned CRISIL Mutual Fund Rank 1 # in the Open End Ultra Short Term Debt Institutional Schemes Category (out of 32 schemes) for the 1 year period ending March 31, 2011 by CRISIL. CRISIL Mutual Fund Rank 1 means that the composite performance of the Scheme is Very Good performance and ranks within the Top 10 percentile of the schemes ranked in the category. # Past performance is no guarantee of future results. Please refer to the slide: 20 on Award /Ranking / Rating methodology 18

19 Fund Rating HDFC Cash Management Fund -Treasury Advantage Plan- Wholesale Growth option has been rated Five Stars by Morningstar in the Morningstar India Open Ended Ultra Bond category (from amongst 247 schemes) for the overall (3/5/10 year- as applicable) period ending April 30, 2011# Five Stars indicate that the fund is in the top 10 percent of its category in terms of historical risk adjusted returns HDFC Cash Management Fund - Treasury Advantage Plan Wholesale Option Value Research Rating * * * * (Four Stars) in Debt: Ultra Short Term Category (from amongst 134 schemes) for 18 months period ending April 30, 2011# Four stars indicate that the fund is in the 11 to 32.5% of its category in terms of historical risk adjusted returns # Past performance is no guarantee of future results. Please refer to the slide: 21 on Award /Ranking / Rating methodology 19

20 Award/Ranking/Rating Methodology ICRA Mutual Fund Awards 2011 Ranking Methodology: HDFC Cash Management Fund-Treasury Advantage Plan-Retail has been ranked as a Five Star Fund in the category of Open Ended Liquid schemes for its 1 year performance till December 31, The rank is an outcome of an objective and comparative analysis against various parameters, including: risk adjusted return, fund size, company concentration and portfolio turnover. The ranking methodology did not take into account loads imposed by the Fund. There were 54 schemes considered in Open Ended Liquid category for the ranking exercise. The rank is neither a certificate of statutory compliance nor any guarantee on the future performance of HDFC Mutual Fund. Please refer to for further information on the Ranking Methodology. Ranking Source & Publisher: ICRA Online Limited CNBC TV18 - CRISIL Mutual Fund Awards 2011 Best Performing Fund in Ultra Short Term Funds - Retail category - HDFC Cash Management Fund - Treasury Advantage Plan Award Methodology HDFC Cash Management Fund - Treasury Advantage Plan won the CNBC TV18 - CRISIL Mutual Fund Awards 2011 in the Ultra Short Term Funds - Retail category. In total 31 schemes were eligible for the award universe. Schemes present in all four quarterly CRISIL Mutual Fund Ranking were considered for the award. The award is based on consistency of the scheme s performance in the four quarterly CRISIL Mutual Fund Rankings released during the calendar year The individual CRISIL Mutual Fund Ranking parameter scores averaged for the four quarters were further multiplied by the parameter weights as per the CRISIL Mutual Fund Ranking methodology to arrive at the final scores. A detailed methodology of the CRISIL Mutual Fund Ranking is available at Past performance is no guarantee of future results. Crisil Mutual Fund Ranks Ranking Methodology The criteria used in computing the CRISIL Mutual Fund Rank are Superior Return Score based on NAVs over the 1-year period ended 31 March 2011, Sectoral concentration, Company concentration and Liquidity of the scheme. The methodology does not take into account the entry and exit loads levied by the scheme. The CRISIL Mutual Fund Rank is no indication of the performance that can be expected from the scheme in future. Rankings and Award Source: CRISIL FundServices, CRISIL Ltd. 20

21 Morning Star Rating Rating Methodology: The Morningstar fund rating methodology is based on a fund s risk-adjusted return within a given Morningstar category. For each fund with at least a three-year history, Morningstar ratings are calculated every month for the 3 year, 5 year and 10 year period. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three, five and 10 year (if applicable) Morningstar Rating metrics. Within each rating period, the top 10% funds receive a five star rating, the next 22.5% earn a four star rating, the next 35% get three stars, the next 22.5% receive two stars, and the bottom 10% get one star. Loads are not considered for the rating purpose. The rating is based on NAV provided by respective funds. The current fund rating is for the overall (3 year / 5 year/ 10 year as applicable) period as of April 30, HDFC Cash Management Treasury Advantage Plan- Wholesale Growth option has been rated 5-Star by Morningstar in the Morningstar India Open Ended Ultra Short Bond Category. 247 funds which completed 3 years of performance were considered for rating. Rating Source and Publisher: Morningstar. The ratings are subject to change every month. Please refer for detailed information on the Rating Methodology. Value Research Ratings: This rating is based on weekly returns for the last 18 months. These ratings do not take into consideration any entry or exit load. Each category must have a minimum of 10 funds for it to be rated. Effective, July 2008, an additional qualifying criteria has been included, whereby a fund with less than ` 5 crore of average AUM in the past six months will not be eligible for rating. Five-stars indicate that a fund is in the top 10% of its category in terms of historical risk-adjusted returns. Four stars indicate that a fund is in the next 22.5%, middle 35% receive three stars, the next 22.5% are assigned two stars while the bottom 10% receive one star. HDFC Cash Management Fund Treasury Advantage Plan- Wholesale option has been rated 4 stars, the number of schemes in Debt: Ultra Short Term Category is 134. These Fund Ratings are as on April 30, The Value Research Ratings are published in Monthly Mutual Fund Performance Report and Mutual Fund Insight. The Ratings are subject to change every month. The Rating is based on primary data provided by respective funds, Value Research does not guarantee the accuracy. 21

22 ICRA Rating Disclaimer: For each of the debt security in the portfolio, ICRA assigns a credit score. This credit score is derived from ICRA s database of historical experience of credit risk for various rating categories and maturity buckets. The portfolio credit score is calculated by considering the weighted average credit risk of the portfolio and is compared against benchmark for various rating categories and ratings are assigned accordingly. The rating assigned by ICRA Ltd. should not be treated as a recommendation to buy, sell or hold the units issued by the Scheme. ICRA Ltd. does not assume any responsibility on its part, for any liability, that may arise consequent to HDFC Mutual Fund not complying with any guidelines or directives issued by SEBI or any other mutual fund regulatory body. The Rating should not be construed as an indication of the performance of the Scheme or of volatility of its return. ICRA reserves the right to suspend, withdraw or revise the rating at any time on the basis of new information or unavailability of information or such circumstances, which ICRA believes, may have an impact on the rating assigned to the Scheme. DISCLAIMER: This presentation has been prepared and issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact and terms and conditions and features of HDFC Cash Management Fund Treasury Advantage Plan. The information/ data herein alone is not sufficient and shouldn t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions 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. The recipient alone shall be fully responsible / liable for any decision taken on the basis of this presentation. The content of this presentation is confidential and intended solely for the use of the addressee. If you are not the addressee, or the person responsible for delivering it to the addressee, any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it is prohibited and may be unlawful. No part of this document may be duplicated in whole or in part in any form and/or redistributed without prior written consent of the HDFC Mutual Fund/ HDFC Asset Management Company Limited. The recipient(s) should before investing in the Scheme(s) make his/their own investigation and seek appropriate professional advice. Risk Factors: All mutual funds and securities investments are subject to market risks and there can be no assurance that the Scheme objectives will be achieved and the NAV of the Scheme may go up or down depending upon the factors and forces affecting the securities market. Past performance of the Sponsors and their affiliates / AMC / Mutual Fund and its Scheme(s) do not indicate the future performance of the Scheme of the Mutual Fund. There is no assurance or guarantee to unit holders as to the rate of dividend distribution nor that dividends will be paid regularly. Investors in the Scheme are not being offered any guaranteed / assured returns. The NAV of the units issued under the Scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities. The NAV will inter-alia be exposed to Price / Interest Rate Risk and Credit Risk. HDFC Cash Management Fund Treasury Advantage Plan, an openended income scheme, is only the name of the Scheme and does not in any manner indicate either the quality of the scheme, its future prospects and returns. Please read the Scheme Information Document and Statement of Additional Information before investing. Investment objective: To generate regular income through investment in debt securities and money market instruments. Asset Allocation: Fixed Rate Debt Securities & Money Market Instruments: 50% and Floating Rate Debt & Money Market Instruments: 50%. Investment in Securitised Debt: Max. 50% of the net assets. 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: Nil. Statutory Details: HDFC Mutual Fund has been set up as a trust sponsored by Housing Development Finance Corporation Limited and Standard Life Investments Limited (liability restricted to their contribution of ` 1 lakh each to the corpus) with HDFC Trustee Company Limited as the Trustee (Trustee under the Indian Trusts Act, 1882) and with HDFC Asset Management Company Limited as the Investment Manager. 22

23 Thank You 23