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1 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
COMBINED SCHEME INFORMATION DOCUMENT(EQUITY ORIENTED SCHEMES
& FUND OF FUNDS SCHEME)
The particulars of the Scheme(s) have been prepared in
accordance with the Securities and Exchange Board of
India (Mutual Funds) Regulations, 1996, (herein after referred
to as SEBI (MF) Regulations) as amended till date,
and filed with SEBI, along with a Due Diligence Certificate from
the AMC. The units being offered for public
subscription have not been approved or recommended by SEBI nor
has SEBI certified the accuracy or adequacy
of the Scheme Information Document.
The Scheme Information Document sets forth concisely the
information about the Scheme(s) that a prospective investor
ought to know before investing. Before investing, investors
should also ascertain about any further changes to this Scheme
Information Document after the date of this Document from the
Mutual Fund / Investor Service Centres (ISCs) / Website /
Distributors or Brokers.
The investors are advised to refer to the Statement of
Additional Information (SAI) for details of HDFC Mutual
Fund, Tax and Legal issues and general information on
www.hdfcfund.com
SAI is incorporated by reference (is legally a part of the
Scheme Information Document). For a free
copy of the current SAI, please contact your nearest Investor
Service Centre or log on to our
website - www.hdfcfund.com
The Scheme Information Document should be read in conjunction
with the SAI and not in isolation.
This Combined Scheme Information Document is dated April 30,
2017.
Name of Mutual Fund : HDFC Mutual Fund
Name of Asset Management Company : HDFC Asset Management Company
Limited
Name of Trustee Company : HDFC Trustee Company Limited
Addresses, Website of the entities:
Address:
Asset Management Company (AMC) :HDFC Asset Management Company
LimitedA Joint Venture with Standard Life Investments
Registered Office :HDFC House, 2nd Floor, H.T. Parekh Marg,
165-166,Backbay Reclamation, Churchgate, Mumbai - 400 020.
CIN No: U65991MH1999PLC123027
Trustee Company :HDFC Trustee Company Limited
Registered Office :HDFC House, 2nd Floor, H.T. Parekh Marg,
165-166,Backbay Reclamation, Churchgate, Mumbai - 400 020.
CIN No. U65991MH1999PLC123026
Website:
www.hdfcfund.com
Continuous Offer of Units at Applicable NAV
Product Labeling
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2HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
*Investors should consult their financial advisers if in doubt
about whether the product is suitable for them.
PRODUCT LABELING:
To provide investors an easy understanding of the kind of
product /scheme they are investing in and its suitabilityto them,
the product labeling for the following schemes is as under:
NAME OF SCHEME
Moderate
Low
High
Mode
ratel
y
Low
ModeratelyHigh
Investors understand that their principal will be atmoderately
high risk
LOW HIGH
THIS PRODUCT IS SUITABLE FOR INVESTORS WHOARE SEEKING*
RISKOMETER
HDFC Growth Fund
Open-ended Growth Scheme
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedinstruments
HDFC Equity Fund
Open-ended Growth Scheme
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedinstruments of medium to large sized companies
HDFC Top 200 FundOpen-ended Growth Scheme
• capital appreciation over long term
• investment in equity and equity linked instruments
includingequity derivatives primarily drawn from the companies
inthe S&P BSE 200 Index.
HDFC Capital Builder Fund
Open-ended Growth Scheme
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedinstruments of strong companies.
HDFC Core & SatelliteFund
Open-ended Growth Scheme
• capital appreciation over long term.
• investment primarily in equity and equity related
instrumentsof companies whose shares are quoting at prices
belowtheir true value.
HDFC Premier Multi-CapFund
Open-ended Growth Scheme
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedinstruments of Mid Cap and Large Cap 'blue
chip'companies.
HDFC Large Cap Fund
Open-ended Equity Scheme
• capital appreciation over long term.
• investment in equity and equity related instruments oflarge
cap companies
HDFC Index Fund - NiftyPlan
Open-ended Index LinkedScheme
• returns that are commensurate with the performance ofthe
NIFTY, subject to tracking errors over long term
• investment in equity securities covered by the NIFTY
HDFC Index Fund - SENSEXPlan
Open-ended Index LinkedScheme
• returns that are commensurate with the performance ofthe
SENSEX, subject to tracking errors over long term
• investment in equity securities covered by the SENSEX
HDFC Index Fund - SENSEXPlus Plan
Open-ended Index LinkedScheme
• capital appreciation over long term.
• investment in equity securities of 80% to 90% of the netassets
of the Plan in companies whose securities areincluded in SENSEX and
between 10% & 20% of the netassets in companies whose
securities are not included inthe SENSEX.
HDFC Long TermAdvantage Fund
Open-ended Equity LinkedSavings Scheme with lock-inperiod of 3
years
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedinstruments.
HDFC TaxSaver
Open-ended Equity LinkedSavings Scheme with lock-inperiod of 3
years
• growth of capital over long term.
• investment predominantly in equity and equity
relatedinstruments.
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3 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
PRODUCT LABELING:
To provide investors an easy understanding of the kind of
product /scheme they are investing in and its suitabilityto them,
the product labeling for the following schemes is as under:
NAME OF SCHEME
Moderate
Low
High
Mode
ratel
y
Low
ModeratelyHigh
Investors understand that their principal will be atmoderately
high risk
LOW HIGH
THIS PRODUCT IS SUITABLE FOR INVESTORS WHOARE SEEKING*
RISKOMETER
HDFC Balanced Fund
Open-ended Balanced Scheme
• capital appreciation along with current income over
longterm.
• investment predominantly in equity and equity
relatedinstruments with balance exposure to debt and moneymarket
instruments.
HDFC Prudence Fund
Open-ended Balanced Scheme
• periodic income with capital appreciation and preventionof
capital erosion over long term.
• investment predominantly in equity and equity
relatedinstruments with balance exposure to debt and moneymarket
instruments.
HDFC Dynamic PE RatioFund of Funds
Open-ended Fund of FundsScheme
• capital appreciation over long term.
• investment in specified equity and debt schemes of HDFCMutual
Fund based on PE Ratios
HDFC Mid-CapOpportunities Fund
Open-ended Equity Scheme
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedinstruments of Small and Mid Cap companies.
HDFC Small Cap Fund
Open-ended Equity Scheme
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedinstruments of Small-Cap and Mid-Cap companies
HDFC Equity Savings Fund
An Open-ended Equity Scheme
• Capital appreciation while generating income over mediumto
long term.
• Provide capital appreciation and income distribution to
theinvestors by using equity and equity related
instruments,arbitrage opportunities, and investments in debt and
moneymarket instruments.
HDFC Arbitrage Fund
Open-ended Equity Fund
• income over short term.
• income through arbitrage opportunities between cashand
derivative market and arbitrage opportunities withinthe derivative
segment
Moderate
Low
High
Mode
ratel
y
Low
ModeratelyHigh
Investors understand that their principal will be atmoderately
low risk
LOW HIGH
Moderate
Low
Hig
h
Mode
ratel
y
Low
ModeratelyHigh
Investors understand that their principal will be at high
risk
LOW HIGH
HDFC Infrastructure Fund
Open-ended Equity Scheme
• capital appreciation over long term.
• investment predominantly in equity and equity
relatedsecurities of companies engaged in or expected to
benefitfrom the growth and development of infrastructure.
*Investors should consult their financial advisers if in doubt
about whether the product is suitable for them.
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4HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
1. Highlights/Summary of the Scheme(s) ................. 5
I. INTRODUCTION
A. Risk Factors
................................................. 14
B. Requirement of Minimum Investors
in the Scheme(s) ..........................................
20
C. Special Considerations ................................
20
D. Definitions
................................................... 22
E. Abbreviations ..............................................
26
F. Due Diligence by the Asset Management
Company .....................................................
27
II. INFORMATION ABOUT THE SCHEME(S)
A. Type of the Scheme(s) .................................
28
B. What is the Investment Objective of
the Scheme(s)? ............................................
28
C. How will the Scheme(s) allocate its assets? . 28
D. Where will the Scheme(s) invest? ................ 36
E. What are the Investment Strategies? ........... 43
F. Fundamental Attributes ............................... 57
G. How will the Scheme(s) Benchmark its
Performance? ..............................................
58
H. Who manages the Scheme(s)? ..................... 60
I. What are the Investment Restrictions? ......... 64
J. How has the Scheme(s) Performed? ............ 66
K. Additional Scheme Related Disclosure(s) ..... 76
III. UNITS AND OFFER
A. NEW FUND OFFER (NFO) ...................... 87
B. ONGOING OFFER DETAILS
l Plans / Options offered ....................... 87
l Ongoing Offer Period ......................... 89
l Dividend Policy .................................... 90
l Allotment ............................................. 91
l Who Can Invest ................................... 91
l How to Apply ...................................... 93
l Listing ..................................................
93
l Policy regarding re-issue of
repurchased units ................................ 94
l Restrictions, if any, on the right to freely
retain or dispose of units being offered 94
TABLE OF CONTENTS
Page No. Page No.
l Ongoing Price for subscription ............ 94
l Ongoing Price for redemption ............. 95
l Cut off timing ...................................... 95
l Where can the applications for
purchase / redemption / switches
be submitted? ...................................... 96
l Minimum amount for purchase /
redemption / switches .......................... 96
l Minimum balance to be maintained .... 97
l Special Products available ................... 97
l Account Statements .............................. 113
l Dividend ..............................................
115
l Redemption ......................................... 115
l Delay in payment of redemption /
repurchase proceeds ............................ 118
C. PERIODIC DISCLOSURES
l Net Asset Value ........................................
119
l Monthly Portfolio Disclosure ...................... 119
l Monthly Average Asset under Management
(Monthly AAUM) Disclosure ....................... 119
l Half yearly Disclosures .............................. 119
l Annual Report ...........................................
119
l Associate Transactions ............................... 119
l Taxation ....................................................
120
l Investor services ........................................
121
D. COMPUTATION OF NAV ......................... 121
IV. FEES AND EXPENSES
A. Annual Scheme Recurring Expenses ........... 122
B. Transaction Charges ...................................
127
C. Load Structure ............................................
127
D. Waiver of Load for Direct Applications ....... 128
V. RIGHTS OF UNITHOLDERS ............................. 128
VI. PENALTIES & PENDING LITIGATIONS ............ 129
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5 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
HIGHLIGHTS/SUMMARY OF THE SCHEME(S)
Name of theScheme
HDFC Growth Fund(HGF)
HDFC EquityFund (HEF)
HDFC CapitalBuilder Fund (HCBF)
InvestmentObjective
To generate long termcapital appreciation froma portfolio that
is investedpredominantly in equityand equity
relatedinstruments.
To achieve capitalappreciation.
To achieve capitalappreciation in thelong term.
Benchmark Index
Loads Entry Load: Not Applicable.
Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09
dated June 30, 2009, no entry load willbe charged by the Scheme to
the investor.
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:
l 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.
l No Exit Load is payable if Units are redeemed / switched-out
after 1 year from the date of allotment.
No Entry / Exit Load shall be levied on bonus units and units
allotted on dividend reinvestment.
In respect 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.
For further details on load structure refer to the section 'Load
Structure' on Page 127.
S&P BSE SENSEX NIFTY 500 NIFTY 500
Type of Scheme Open-ended GrowthScheme
Open-ended GrowthScheme
Open-ended GrowthScheme
HDFC Top 200 Fund(HT200)
To generate long term capitalappreciation from a portfolioof
equity and equity linkedinstruments. The investmentportfolio for
equity and equitylinked instruments will beprimarily drawn from
thecompanies in the S&P BSE200 Index. Further, theScheme may
also invest inlisted companies that wouldqualify to be in the top
200by market capitalisation onthe BSE even though they maynot be
listed on the BSE. Thisincludes participation in largeIPOs where in
the marketcapitalisation of the companybased on issue price
wouldmake the company a part ofthe top 200 companies listedon the
BSE based on marketcapitalisation.
S&P BSE 200
Open-ended GrowthScheme
Plans/Options
• Regular Plan• Direct Plan
• Regular Plan• Direct Plan
• Regular Plan• Direct Plan
• Regular Plan• Direct Plan
MinimumApplicationAmount
Purchase: Rs. 5,000 and any amount thereafter.
Additional Purchase: Rs. 1,000 and any amount thereafter.
The Scheme(s) offers two Plans:
Each Plan offers two Options (i) Growth Option and (ii) Dividend
Option with Payout and Reinvestmentfacility.
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6HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
MinimumApplicationAmount
Purchase: Rs. 5,000 and any amount thereafter.
Additional Purchase: Rs. 1,000 and any amount thereafter.
Name of theScheme
HDFC Core & SatelliteFund (HC&SF)
HDFC PremierMulti-Cap Fund (HPMCF)
HDFC Mid-Cap OpportunitiesFund (HMCOF)
InvestmentObjective
To generate capitalappreciation through equityinvestment in
companieswhose shares are quoting atprices below their true
value.
To generate capital appreciation inthe long term through
equityinvestments by investing in adiversified portfolio of Mid Cap
andLarge Cap 'blue chip' companies.
To generate long-term capitalappreciation from a portfolio that
issubstantially constituted of equity andequity related securities
of Small andMid-Cap companies.
Benchmark Index S&P BSE 200 NIFTY 500 Nifty Free Float
Midcap Index
Loads Entry Load: Not Applicable.
Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09
dated June 30, 2009, no entry load willbe charged by the Scheme to
the investor.
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:
l 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.
l No Exit Load is payable if Units are redeemed / switched-out
after 1 year from the date of allotment.
No Entry / Exit Load shall be levied on bonus units and units
allotted on dividend reinvestment.
In respect 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.
For further details on load structure refer to the section 'Load
Structure' on Page 127.
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)
Plans/Options The Scheme(s) offers two Plans:
Each Plan offers two Options (i) Growth Option and (ii) Dividend
Option with Payout and Reinvestmentfacility.
• Regular Plan
• Direct Plan
• Regular Plan
• Direct Plan
• Regular Plan
• Direct Plan
Open-ended GrowthScheme
Open-ended Growth Scheme Open-ended Equity SchemeType of
Scheme
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7 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
Loads Entry Load: Not Applicable.
Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09
dated June 30, 2009, no entry load willbe charged by the Scheme to
the investor.
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:
l In respect of each purchase /switch-in of units, an Exit
Loadof 0.25% is payable if Unitsare redeemed / switched-outwithin 1
month from the dateof allotment.
l No Exit Load is payable if Unitsare redeemed /
switched-outafter 1 month from the date ofallotment.
Exit Load: NIFTY Plan
l In respect of each purchase /switch-in of Units, an Exit
Loadof 1.00% is payable if Unitsare redeemed / switched-outwithin 3
months from the dateof allotment.
l No Exit Load is payable if Unitsare redeemed /
switched-outafter 3 months from the dateof allotment.
Exit Load:
l In respect of each purchase /switch-in of Units, an Exit
Loadof 1.00% is payable if Unitsare redeemed / switched-outwithin 1
year from the date ofallotment.
l No Exit Load is payable if Unitsare redeemed /
switched-outafter 1 year from the date ofallotment.
Name of theScheme
InvestmentObjective
Benchmark Index
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)
HDFC Infrastructure Fund(HINF)
To seek long-term capitalappreciation by investingpredominantly
in equity and equityrelated securities of companiesengaged in or
expected to benefitfrom the growth and developmentof
infrastructure.
NIFTY 500
HDFC Index Fund
HDFC Index Fund:
The Scheme offers investors 3Plans, each with its own NAV,namely
the:
l Nifty Plan
l SENSEX Plan
l SENSEX Plus Plan
Nifty Plan:
The objective of this Plan is togenerate returns that
arecommensurate with theperformance of the NIFTY, subjectto
tracking errors.
SENSEX Plan:
The objective of this Plan is togenerate returns that
arecommensurate with theperformance of the SENSEX,subject to
tracking errors.
SENSEX Plus Plan:
The objective of this Plan is toinvest 80% to 90% of the net
assetsof the Plan in companies whosesecurities are included in
SENSEXand between 10% & 20% of thenet assets in companies
whosesecurities are not included in theSENSEX.
HDFC Arbitrage Fund (HAF)
To generate income througharbitrage opportunities betweencash
and derivative market andarbitrage opportunities within
thederivative segment and bydeployment of surplus cash in
debtsecurities and money marketinstruments.
CRISIL Liquid Fund Index l Nifty Plan:NIFTY 50(Total Returns
Index)
l SENSEX Plan:
S&P BSE SENSEX(Total Returns Index)
l SENSEX Plus Plan:S&P BSE SENSEX(Total Returns Index)
Type of Scheme Open-ended Equity Scheme Open-ended Index Linked
SchemeOpen-ended Equity Fund
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8HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)
MinimumApplicationAmount
Purchase: Rs. 5,000 and anyamount thereafter.
Additional Purchase: Rs. 1,000and any amount thereafter.
Wholesale Plan - Purchase /Additional Purchase:Rs. 1,00,000 and
any amountthereafter.
Name of theScheme
HDFC Index FundHDFC Arbitrage Fund (HAF)HDFC Infrastructure
Fund(HINF)
Purchase: Rs. 5,000 and anyamount thereafter.
Additional Purchase:Rs. 1,000 and any amountthereafter.
Plans/Options The Scheme offers two Plans:
• Regular Plan
• Direct Plan
Each Plan offers two Options -(i) Growth Option and (ii)Dividend
Option with Payout andReinvestment facility.
The Scheme offers two Plans:
HDFC Arbitrage Fund(Wholesale Plan)
• Regular Plan
• Direct Plan
Each Plan offers two Options -
(i) Growth Option and
(ii) Dividend Option
Dividend Option offers MonthlyDividend Option and NormalDividend
Option with Payout andReinvestment facility.
The Scheme offers followingPlans:
HDFC Index Fund - Nifty Plan
• Regular Plan
• Direct Plan
HDFC Index Fund - SENSEX Plan
• Regular Plan
• Direct Plan
HDFC Index Fund - SENSEX PlusPlan
• Regular Plan
• Direct Plan
Each Plan offers Growth Optiononly.
No Entry / Exit Load shall be levied on bonus units and units
allotted on dividend reinvestment.
In respect 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.
For further details on load structure refer to the section 'Load
Structure' on Page 127.
Exit Load: SENSEX ANDSENSEX Plus Plan
l In respect of each purchase /switch-in of Units, an Exit
Loadof 1.00% is payable if Unitsare redeemed / switched-outwithin
30 days from the dateof allotment.
l No Exit Load is payable if Unitsare redeemed /
switched-outafter 30 days from the date ofallotment.
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9 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
MinimumApplicationAmount
Purchase/Additional Purchase: Rs. 500 andin multiples of Rs. 500
thereafter.
Purchase: Rs. 5,000 and any amountthereafter.
Additional Purchase: Rs. 1,000 and anyamount thereafter.
Name of theScheme
HDFC LongTerm AdvantageFund* (HLTAF)
HDFC TaxSaver* (HTS) HDFC BalancedFund (HBF)
Benchmark Index S&P BSE SENSEX NIFTY 500
To generate longterm capitalappreciation from aportfolio that
isi n v e s t e dpredominantly inequity and equityrelated
instruments.
To achieve long termgrowth of capital.
InvestmentObjective
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)HDFC Prudence
Fund
(HPF)
To provide periodic returns andcapital appreciation over a
longperiod of time, from a judiciousmix of equity and
debtinvestments, with the aim toprevent/ minimise any
capitalerosion. Under normalcircumstances, it is envisagedthat the
debt : equity mix wouldvary between 25:75 and 40:60respectively.
This mix may achievethe investment objective, mayresult in regular
income, capitalappreciation and may alsoprevent capital
erosion.
CRISIL Balanced FundAggressive Index
To generate capitalappreciation alongwith current incomefrom a
combinedportfolio of equity &equity related and debtand money
marketinstruments.
CRISIL Balanced FundAggressive Index
Loads Entry Load: Not Applicable
Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09
dated June 30, 2009, no entry load willbe charged by the Scheme to
the investor.
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
No Entry / Exit Load shall be levied on bonus units and units
allotted on dividend reinvestment.
In respect 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.
For further details on load structure refer to the section 'Load
Structure' on Page 127.
Exit Load:l In respect of each purchase / switch-in of
Units,
upto 15% of the units may be redeemed withoutany exit load from
the date of allotment.
l Any redemption in excess of the above limit shallbe subject to
the following exit load: Exit load of1.00% is payable if Units are
redeemed / switched-out within 1 year from the date of allotment
ofunits.
l No Exit Load is payable if Units are redeemed /switched-out
after 1 year from the date of allotment.
Plans/Options The Scheme(s) offers two Plans:
• Regular Plan• Direct Plan
• Regular Plan• Direct Plan
• Regular Plan• Direct Plan
• Regular Plan• Direct Plan
Open-ended equitylinked savingsscheme with a lock-in period of 3
years
Open-ended equity linkedsavings scheme with a lock-in period of
3 years)
Type of Scheme Open-ended BalancedScheme
Open-ended BalancedScheme
*HDFC TaxSaver and HDFC Long Term Advantage Fund are launched as
an open-ended Equity Linked Savings Scheme(s) (ELSS)having a
lock-in period of 3 years (with no assured returns) and are
formulated as per the Notification dated December 28, 1992as
amended on December 22, 1998 and Notification dated November 3,
2005 as amended on December 13, 2005 issued by theDepartment of
Economic Affairs, Ministry of Finance, Government of India.
Each Plan offers two Options (i) Growth Option and(ii) Dividend
Option with Payout facility.
Each Plan offers two Options (i) Growth Option and(ii) Dividend
Option with Payout and Reinvestmentfacility.
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10HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
MinimumApplicationAmount
Purchase: Rs. 5,000 and any amount thereafter.
Additional Purchase: Rs. 1,000 and any amount thereafter.
Name of theScheme
HDFC Large Cap Fund
(HLCF)
HDFC Small Cap Fund(HSCF)
HDFC Dynamic PE Ratio
Fund of Funds (HDPEFOF)
InvestmentObjective
To provide long-term capitalappreciation by
investingpredominantly in large capcompanies.
To provide long-term capitalappreciation by
investingpredominantly in Small-Cap andMid-Cap companies
To seek capital appreciation bymanaging the asset
allocationbetween specified equity and debtschemes of HDFC Mutual
Fund
Benchmark Index NIFTY 50 Index NIFTY Free Float Smallcap100
Index
CRISIL Balanced Fund - AggressiveIndex
Loads Entry Load: Not Applicable.Pursuant to SEBI circular no.
SEBI/IMD/ CIR No.4/ 168230/09 dated June 30, 2009, no entry load
willbe charged by the Scheme to the investor.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.
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)
Plans/Options The Scheme(s) offers two Plans:
Each Plan offers two Options (i) Growth Option and (ii) Dividend
Option with Payout and Reinvestmentfacility.
• Regular Plan
• Direct Plan
• Regular Plan
• Direct Plan
• Regular Plan
• Direct Plan
Type of Scheme An open ended equityscheme
An open ended equity scheme An open ended fund of funds
scheme
Exit Load:l 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.l No Exit
Load is payable if Units are redeemed / switched-out after 1 year
from the date of allotment.
No Entry / Exit Load shall be levied on bonus units and units
allotted on dividend reinvestment.In respect of Systematic
Transactions such as SIP, GSIP, STP, Flex STP, Swing STP,
Flexindex, Exit Load, ifany, prevailing on the date of registration
/ enrolment shall be levied.
For further details on load structure refer to the section 'Load
Structure' on Page 127.
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11 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
Minimum ApplicationAmount
Purchase: Rs. 5,000 and any amount thereafter.Additional
Purchase: Rs. 1,000 and any amount thereafter.
Name of the Scheme HDFC Equity Savings Fund (HESF)
Investment Objective To provide capital appreciation and income
distribution to the investors using arbitrage
opportunities,investment in equity / equity related instruments and
debt / money market instruments.
There is no assurance that the investment objective of the
Scheme will be realized.
Benchmark Index 40% CRISIL Liquid Fund Index, 30% Crisil Short
Term Bond Fund Index and 30% NIFTY 50
Loads Entry Load: Not Applicable.
Pursuant to SEBI circular no. SEBI/IMD/ CIR No.4/ 168230/09
dated June 30, 2009, no entry loadwill be charged by the Scheme to
the investor.
Upfront commission shall be paid directly by the investor to the
ARN Holder (AMFI registeredDistributor) based on the investors'
assessment of various factors including the service rendered bythe
ARN Holder.
Exit Load:
l In respect of each purchase / switch-in of Units, upto 15% of
the units may be redeemed withoutany exit load from the date of
allotment.
l Any redemption in excess of the above limit shall be subject
to the following exit load:
Exit load of 1.00% is payable if Units are redeemed /
switched-out within 1 year from the dateof allotment of units.
l No Exit Load is payable if Units are redeemed / switched-out
after 1 year from the date of allotment.
No Entry / Exit Load shall be levied on bonus units and units
allotted on dividend reinvestment.
In respect 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.
For further details on load structure refer to the section 'Load
Structure' on Page 127.
Plans/Options The Scheme(s) offers two Plans:
• Regular Plan
• Direct Plan
Each Plan offers two Options (i) Growth Option and (ii) Dividend
Option with Payout andReinvestment facility.
Type of Scheme Open-ended Equity Scheme
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)
Transparency /NAV Disclosure
The AMC will calculate and disclose the NAV, Sale and Repurchase
price of the Scheme at the closeof every Business Day in the
following manner:
i) Published in atleast 2 daily Newspapers.
ii) Displayed on the website of the Mutual Fund
(www.hdfcfund.com)
iii) Displayed on the website of Association of Mutual Funds in
India (AMFI) (www.amfiindia.com).
iv) Displayed at the ISCs
The AMC shall update the NAVs on the website of the Mutual Fund
(www.hdfcfund.com) and onthe website of AMFI (www.amfiindia.com) by
9.00 p.m. on every Business Day. In case of any delay,the reasons
for such delay would be explained to AMFI in writing. If the NAVs
are not available
before commencement of Business Hours on the following day due
to any reason, the Mutual Fundshall issue a press release giving
reasons and explaining when the Mutual Fund would be ableto publish
the NAVs.
The Mutual Fund/ AMC shall disclose portfolio under the Scheme
as on the last day of each monthon its website viz.
www.hdfcfund.com on or before the tenth day of the succeeding month
in theprescribed format. As presently required by the SEBI (MF)
Regulations, a complete statement of theportfolio under the Scheme
would also be published by the Mutual Fund as an advertisement
inone English daily Newspaper circulating in the whole of India and
in a newspaper published inthe language of the region where the
Head Office of the Mutual Fund is situated within one monthfrom the
close of each half year (i.e. March 31 & September 30) or
mailed to the Unit holders.
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12HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
Dematerializationof Units
The Unit holders would have an option to hold the Units in demat
form or account statement (non-demat) form. Units held in Demat
Form are freely transferable. The Applicant intending to hold
Unitsin demat form will be required to have a beneficiary account
with a Depository Participant (DP) of theNSDL/CDSL and will be
required to mention in the application form DP's Name, DP ID No.
and BeneficiaryAccount No. with the DP at the time of purchasing
Units.
Transparency /NAV Disclosure
The AMC will calculate and disclose the NAVs, Sale and
Repurchase price of the Scheme(s) at the closeof every Business Day
and send for publication to atleast 2 daily newspapers.NAVs, Sale
and Repurchaseprice will also be displayed on the website of the
Mutual Fund and the Association of Mutual Fundsin India (AMFI). In
addition, the ISCs would also display the NAVs, Sale and Repurchase
price.
The AMC shall update the NAVs on the website of the Mutual Fund
(www.hdfcfund.com) and on thewebsite of AMFI (www.amfiindia.com) by
9.00 p.m. on every Business Day. In case of any delay, thereasons
for such delay would be explained to AMFI in writing. If the NAVs
are not available beforecommencement of Business Hours on the
following day due to any reason, the Mutual Fund shallissue a press
release giving reasons and explaining when the Mutual Fund would be
able to publishthe NAVs.
The Mutual Fund/ AMC shall disclose portfolio under the
Scheme(s) as on the last day of each monthon its website viz.
www.hdfcfund.com on or before the tenth day of the succeeding month
in the prescribedformat. As presently required by the SEBI (MF)
Regulations, a complete statement of the portfolio underthe
Scheme(s) would also be published by the Mutual Fund as an
advertisement in one English dailyNewspaper circulating in the
whole of India and in a newspaper published in the language of
theregion where the Head Office of the Mutual Fund is situated
within one month from the close of eachhalf year (i.e. March 31
& September 30) or mailed to the Unit holders.
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)
Liquidity The Scheme(s) being offered are open-ended scheme(s)
and will offer Units for Sale / Switch-in andRedemption /
Switch-out (subject to completion of Lock-in Period, if any), on
every Business Dayat NAV based prices. As per SEBI (MF)
Regulations, the Mutual Fund shall despatch redemption
proceedswithin 10 Business Days from the date of redemption. A
penal interest of 15% p.a. or such other rateas may be prescribed
by SEBI from time to time, will be paid in case the payment of
redemption proceedsis not made within 10 Business Days from the
date of redemption. However under normal circumstances,the Mutual
Fund would endeavour to pay the redemption proceeds within 3-4
Business Days (asapplicable) from the date of redemption. Further,
in case of HDPEFOF, the processing of redemptionrequests within 10
Business Days of the Redemption date will be subject to the ability
of the Schemeto liquidate units of the underlying Scheme(s) The
payment of redemption proceeds under the Schemewill be subject to
receipt of redemption proceeds from the underlying Scheme(s).
Units of HDFC Long Term Advantage Fund and HDFC TaxSaver
(including units allotted under dividendre-investment) cannot be
assigned/ transferred / pledged / redeemed / switched-out until
completionof three years from the date of allotment of the
respective Units. Please refer to section 'Redemption'on Page 115
for details.
Default Plan Investors should indicate the Plan (viz. Direct
plan/ Regular Plan) for which the subscription is made byindicating
the choice in the appropriate box provided for this purpose in the
application form. In caseof valid applications received without
indicating any choice of Plan, the application will be processedfor
the Plan as under:
Scenario ARN Code mentioned Plan mentioned Default Plan toby the
investor by the investor be captured
1 Not mentioned Not mentioned Direct Plan
2 Not mentioned Direct Direct Plan
3 Not mentioned Regular Direct Plan
4 Mentioned Direct Direct Plan
5 Direct Not Mentioned Direct Plan
6 Direct Regular Direct Plan
7 Mentioned Regular Regular Plan
8 Mentioned Not Mentioned Regular Plan
In cases of wrong/ invalid/ incomplete ARN codes are mentioned
on the application form, the applicationshall be processed under
Regular Option. The AMC shall contact and obtain the correct ARN
codewithin 30 calendar days of the receipt of the application form
from the investor/ distributor. In case,the correct code is not
received within 30 calendar days, the AMC shall reprocess the
transaction underDirect Option from the date of application without
any exit load.
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13 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
TransactionCharges
In accordance with SEBI circular No. Cir/ IMD/ DF/13/ 2011 dated
August 22, 2011, as amendedfrom time to time, HDFC Asset Management
Company Limited ("the AMC")/Mutual Fund shall deductthe Transaction
Charges on purchase / subscription received from the investors
investing through avalid ARN Holder i.e. AMFI registered
Distributor (provided the distributor has opted-in to receive
theTransaction Charges for the scheme type) as under:
(i) First Time Mutual Fund Investor (across Mutual Funds):
Transaction Charge of Rs. 150/- per purchase / subscription of
Rs. 10,000/- and above will bededucted from the purchase /
subscription amount for payment to the distributor of such
investorand the balance shall be invested.
(ii) Investor other than First Time Mutual Fund Investor:
Transaction Charge of Rs. 100/- per purchase / subscription of
Rs. 10,000/- and above will bededucted from the purchase/
subscription amount for payment to the distributor of such
investorand the balance shall be invested.
TRANSACTION CHARGES IN CASE OF INVESTMENTS THROUGH SIP:
Transaction Charges in case of investments through SIP are
deductible only if the total commitmentof investment (i.e. amount
per SIP installment x No. of installments) amounts to Rs. 10,000 or
more.In such cases, Transaction Charges shall be deducted in 3-4
installments.
Identification of investors as "first time" or "existing" will
be based on Permanent Account Number (PAN)/PAN Exempt KYC Reference
Number (PEKRN) at the First/ Sole Applicant/ Guardian level. Hence,
Unitholders are urged to ensure that their PAN/ PEKRN/ KYC is
updated with the Fund. Unit holders mayapproach any of the Official
Points of Acceptances of the Fund i.e. Investor Service Centres
(ISCs) ofthe Fund/ offices of our Registrar and Transfer Agent,
M/s. Computer Age Management Services Pvt.Ltd in this regard.
It may be noted that Transaction Charges shall not be
deducted:
(a) where the distributor of the investor has not opted to
receive any Transaction Charges;
(b) for purchases / subscriptions / total commitment amount in
case of SIP of an amount less thanRs. 10,000/-;
(c) for transactions other than purchases / subscriptions
relating to new inflows i.e. through Switches/Systematic Transfers/
Dividend Transfers/ Dividend Reinvestment, etc.;
(d) for purchases / subscriptions made directly with the Fund
(i.e. not through any distributor);
(e) for purchases / subscriptions routed through Stock
Exchange(s) as applicable.
HIGHLIGHTS/SUMMARY OF THE SCHEME(S) (CONTD.)
COMMON PROVISIONS (AS APPLICABLE)
IMPORTANT
Before investing, investors should also ascertain about any
further changes pertaining to scheme such as features,
loadstructure, etc. made to this Scheme Information Document by
issue of addenda / notice after the date of this Documentfrom the
AMC / Mutual Fund / Investor Service Centres (ISCs) / Website /
Distributors or Brokers.
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14HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
I. INTRODUCTION
A. RISK FACTORS
n Standard Risk Factors:
l Investment in Mutual Fund Units involves investment riskssuch
as trading volumes, settlement risk, liquidity risk,default risk
including the possible loss of principal.
l As the price / value / interest rates of the securities in
whichthe Scheme(s) invests fluctuates, the value of your
investmentin the Scheme(s) may go up or down depending on
thevarious factors and forces affecting the capital marketsand
money markets.
l Past performance of the Sponsors and their affiliates/AMC/
Mutual Fund does not guarantee future performanceof the Scheme(s)
of the Mutual Fund.
l The name of the Scheme(s) do not in any manner indicateeither
the quality of the Scheme(s) or their future prospectsand
returns.
l The Sponsors are not responsible or liable for any
lossresulting from the operation of the Scheme(s) beyond theinitial
contribution of Rs. 1 lakh each made by themtowards setting up the
Fund.
l The present Scheme(s) are not guaranteed or assuredreturn
scheme(s).
n Scheme Specific Risk Factors
Some of the specific risk factors related to the
Scheme(s)include, but are not limited to the following:
(i) Risk factors associated with investing in equitiesand equity
related instruments
l Equity shares and equity related instruments are volatileand
prone to price fluctuations on a daily basis. Investmentsin equity
shares and equity related instruments involve adegree of risk and
investors should not invest in theScheme(s) unless they can afford
to take the risks.
l Securities, which are not quoted on the stock exchanges,are
inherently illiquid in nature and carry a larger amountof liquidity
risk, in comparison to securities that are listedon the exchanges.
Investment in such securities may leadto increase in the scheme
portfolio risk.
l While securities that are listed on the stock exchange
carrylower liquidity risk, the ability to sell these investments
islimited by the overall trading volume on the stock exchangesand
may lead to the Scheme(s) incurring losses till thesecurity is
finally sold.
(ii) Risk factors associated with investing in FixedIncome
Securities
l The Net Asset Value (NAV) of the Scheme(s), to the
extentinvested in Debt and Money Market instruments, will
beaffected by changes in the general level of interest rates.The
NAV of the Scheme(s) is expected to increase from afall in interest
rates while it would be adversely affectedby an increase in the
level of interest rates.
l Money market instruments, while fairly liquid, lack a
welldeveloped secondary market, which may restrict the
sellingability of the Scheme(s) and may lead to the
Scheme(s)incurring losses till the security is finally sold.
l Investments in money market instruments involve creditrisk
commensurate with short term rating of the issuers.
l Investment in Debt instruments are subject to varyingdegree of
credit risk or default (i.e. the risk of an issuer'sinability to
meet interest or principal payments on itsobligations) or any other
issues, which may have theircredit ratings downgraded. Changes in
financial conditionsof an issuer, changes in economic and political
conditionsin general, or changes in economic or and
politicalconditions specific to an issuer, all of which are
factorsthat may have an adverse impact on an issuer's creditquality
and security values. The Investment Manager willendeavour to manage
credit risk through in-house creditanalysis. This may increase the
risk of the portfolio. TheInvestment Manager will endeavour to
manage credit riskthrough in-house credit analysis.
l Government securities where a fixed return is offered
runprice-risk like any other fixed income security. Generally,when
interest rates rise, prices of fixed income securitiesfall and when
interest rates drop, the prices increase. Theextent of fall or rise
in the prices is a function of the existingcoupon, days to maturity
and the increase or decreasein the level of interest rates. The new
level of interest rateis determined by the rates at which
government raises newmoney and/or the price levels at which the
market isalready dealing in existing securities. The price-risk is
notunique to Government Securities. It exists for all fixedincome
securities. However, Government Securities areunique in the sense
that their credit risk generally remainszero. Therefore, their
prices are influenced only bymovement in interest rates in the
financial system.
l Different types of fixed income securities in which
theScheme(s) would invest as given in the Scheme
InformationDocument carry different levels and types of risk.
Accordingly,the Scheme(s) risk may increase or decrease
dependingupon its investment pattern. e.g. corporate bonds carrya
higher level of risk than Government securities. Furthereven among
corporate bonds, AAA rated bonds arecomparatively less risky than
AA rated bonds.
l The AMC may, considering the overall level of risk of
theportfolio, invest in lower rated / unrated securities
offeringhigher yields as well as zero coupon securities that
offerattractive yields. This may increase the absolute level ofrisk
of the portfolio.
l As zero coupon securities do not provide periodic
interestpayments to the holder of the security, these securities
aremore sensitive to changes in interest rates and are subjectto
issuer default risk. Therefore, the interest rate risk ofzero
coupon securities is higher. The AMC may chooseto invest in zero
coupon securities that offer attractiveyields. This may increase
the risk of the portfolio. Zerocoupon or deep discount bonds are
debt obligations thatdo not entitle the holder to any periodic
payment ofinterest prior to maturity or a specified date when
thesecurities begin paying current interest and therefore,
aregenerally issued and traded at a discount to their facevalues.
The discount depends on the time remaining untilmaturity or the
date when securities begin paying currentinterest. It also varies
depending on the prevailing interestrates, liquidity of the
security and the perceived credit riskof the Issuer. The market
prices of zero coupon securitiesare generally more volatile than
the market prices ofsecurities that pay interest periodically.
l Scheme's performance may differ from the benchmarkindex to the
extent of the investments held in the debtsegment, as per the
investment pattern indicated undernormal circumstances.
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15 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
l Prepayment Risk: Certain fixed income securities give anissuer
the right to call back its securities before theirmaturity date, in
periods of declining interest rates. Thepossibility of such
prepayment may force the Scheme toreinvest the proceeds of such
investments in securitiesoffering lower yields, resulting in lower
interest income forthe Scheme(s).
l Reinvestment Risk: This risk refers to the interest ratelevels
at which cash flows received from the securities inthe Schemes are
reinvested. The additional income fromreinvestment is the "interest
on interest" component. Therisk is that the rate at which interim
cash flows can bereinvested may be lower than that originally
assumed.
l Settlement risk: Different segments of Indian financialmarkets
have different settlement periods and such periodsmay be extended
significantly by unforeseen circumstances.Delays or other problems
in settlement of transactionscould result in temporary periods when
the assets of theScheme are uninvested and no return is earned
thereon.The inability of the Scheme to make intended
securitiespurchases, due to settlement problems, could cause
theScheme to miss certain investment opportunities. Similarly,the
inability to sell securities held in the Scheme's portfolio,due to
the absence of a well developed and liquid secondarymarket for debt
securities, may result at times in potentiallosses to the Scheme in
the event of a subsequent declinein the value of securities held in
the Scheme's portfolio.
l The Scheme(s) at times may receive large number ofredemption
requests, leading to an asset-liability mismatchand therefore,
requiring the investment manager to makea distress sale of the
securities leading to realignment ofthe portfolio and consequently
resulting in investment inlower yield instruments.
(iii) Related to HDFC Long Term Advantage Fundand HDFC
TaxSaver
Units of HDFC Long Term Advantage Fund and HDFCTaxSaver
(including Units allotted under Dividend Reinvestment)cannot be
assigned/transferred/pledged/redeemed/switchedout until completion
of three years from the date of allotmentof the respective
Units.
(iv) Related to HDFC Mid-Cap Opportunities Fund
While Small & Mid-cap stocks gives one an opportunity to
gobeyond the usual large blue chip stocks and present
possiblehigher capital appreciation, it is important to note that
Small& Mid-cap stocks can be riskier and more volatile on a
relativebasis. Therefore, the risk levels of investing in Small
& Mid-cap stocks are more than investing in stocks of large
well-established companies. It should be noted that over a periodof
time, Small, Mid and Large cap stocks have demonstrateddifferent
levels of volatility and investment returns. And it isimportant to
note that generally, no one class consistentlyoutperforms the
others.
(v) Related to HDFC Infrastructure Fund
The investments under the Scheme are predominantly
orientedtowards equity/equity related instruments of
Companiesengaged in the area of growth and development of
infrastructureand hence will be affected by risks associated with
suchcompanies. Further, amongst the infrastructure sector as
definedunder the investment strategy, the majority of the equity/
equityoriented investments could be under a single sector. Henceif
the said sector does not perform positively as expected bythe Fund
Manager of the Scheme, the Scheme's performancemay be adversely
affected due to a risk associated with non-diversification and thus
could affect the value of investments.
Given that the Scheme seeks to invest in equity/ equity
relatedinstruments of the Companies belonging to the
infrastructuresector and that the investment concentration may be
high incertain companies belonging to the said sector, the
volatilityand/or performance of the said sector and/or of the
scripsbelonging to this sector can have a material adverse
bearingon the performance of the Scheme.
Although the Scheme seeks to make investments in equity
andequity related instruments of the Infrastructure sector,
thisscheme will not be a sector specific scheme for the purposeof
monitoring the investment restrictions applicable to theScheme and
hence investments per issuer under the Schemewill not exceed 10%
(at the time of investment) of the net assetsof the Scheme.
As the Scheme may hold securities that are not in the NIFTY500
Index and may invest in limited number of sectors withhigher
concentration to certain sectors and industries, it mayperform
differently from the general stock market. FurtherScheme's
performance may differ from the benchmark indexto the extent of the
investments held in the debt segment, asper the investment pattern
indicated under normalcircumstances.
(vi) Related to HDFC Index Fund
Except for the actively managed part of the SENSEX Plus Plan,the
Scheme attempts to track the respective indices and it
wouldprimarily invest in the securities included in its
Underlyingindices regardless of their investment merit. The Scheme
maybe affected by a general decline in the Indian markets.
The performance of the SENSEX Plus Plan may not be in linewith
S&P BSE SENSEX as 10-20% of the net assets will beinvested in
non-index scrips.
Performance of the S&P BSE SENSEX / NIFTY 50 Index will
havea direct bearing on the performance of the respective Plans.In
the event the S&P BSE SENSEX / NIFTY 50, as the case maybe, is
dissolved or is withdrawn or is not published due toany reason
whatsoever, the Trustee reserves the right to modifythe respective
Plans so as to track a different and suitable indexor to suspend
tracking the S&P BSE SENSEX / NIFTY 50 till suchtime it is
dissolved / withdrawn or not published and appropriateintimation
will be sent to the Unit holders of the respectivePlans. In such a
case, the investment pattern will be modifiedsuitably to match the
composition of the securities that areincluded in the new index to
be tracked and the respective Planswill be subject to tracking
errors during the intervening period.
Tracking errors are inherent in any index fund and such
errorsmay cause the respective Plans to generate returns which
arenot in line with the performance of the S&P BSE SENSEX /
NIFTY50 or one or more securities covered by / included in the
S&PBSE SENSEX / NIFTY 50 and may arise from a variety of
factorsincluding but not limited to:
l Any delay in the purchase or sale of shares due toilliquidity
in the market, settlement and realisation of salesproceeds, delay
in credit of securities or in receipt andconsequent reinvestment of
dividends, etc.
l The Indices reflect the prices of securities at a point in
time,which is the price at close of business day on BSE /National
Stock Exchange of India Limited (NSE). Therespective Plans,
however, may trade these securities atdifferent points in time
during the trading session andtherefore the prices at which the
respective Plans trade maynot be identical to the closing price of
each scrip on thatday on the BSE / NSE. In addition, the respective
Plansmay opt to trade the same securities on different exchangesdue
to price or liquidity factors, which may also result in
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16HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
traded prices being at variance, from BSE / NSE
closingprices.
l IISL undertakes periodic reviews of the fifty securities
thatare represented in the NIFTY 50 and from time to timemay
exclude existing securities or include new ones.Similarly, the BSE
may exclude existing securities or includenew ones in the S&P
BSE SENSEX. In such an event, therespective Plans will endeavor to
reallocate its portfolio tomirror the changes. However, the
reallocation processmay not occur instantaneously and permit
precise mirroringof the S&P BSE SENSEX / NIFTY 50 during this
period.
l The potential of trades to fail may result in the
respectivePlans not having acquired the security at the price
necessaryto mirror the index.
l Transaction and other expenses, such as but not limitedto
brokerage, custody, trustee and investment managementfees.
l Being an open-ended scheme, the respective Plans mayhold
appropriate levels of cash or cash equivalents tomeet ongoing
redemptions.
l The respective Plans may not be able to acquire or sellthe
desired number of securities due to conditions prevailingin the
securities market, such as, but not restricted to:circuit filters
in the securities, liquidity and volatility insecurity prices.
Due to the reasons mentioned above and other reasons thatmay
arise, it is expected that the NIFTY Plan and the SENSEXPlan may
have a tracking error in the range of 2-3% per annumfrom their
respective Benchmarks. However, it needs to beclearly understood
that the actual tracking error can be higheror lower than the range
given.
In case of investments in derivatives like index futures, the
riskreward would be the same as investments in portfolio of
sharesrepresenting an index. However, there may be a cost
attachedto buying an index future. Further, there could be an
elementof settlement risk, which could be different from the risk
insettling physical shares and there is a risk attached to
theliquidity and the depth of the index futures market as it
isrelatively new market.
(vii) Related to HDFC Premier Multi-Cap Fund
While mid cap stocks give one an opportunity to go beyondthe
usual large blue chip stocks and present possible highercapital
appreciation, it is important to note that mid cap stockscan be
riskier and more volatile on a relative basis. Therefore,the risk
levels of investing in mid cap stocks is more thaninvesting in
stocks of large well-established companies. Itshould be noted that
over a time, mid cap and large capstocks have demonstrated
different levels of volatility andinvestment returns. And it is
important to note that generally,no one class consistently
outperforms the others.
(viii) Related to HDFC Equity Savings Fund
An equity oriented fund has been defined under the IncomeTax Act
as a scheme of a mutual fund where the investiblefunds are invested
in equity shares of domestic companies tothe extent of more than 65
per cent of the total assets of suchfund. The percentage of equity
shareholding of the fund shallbe computed with reference to the
annual average of themonthly averages of the opening and closing
figures.
As per the current Income Tax laws, equity mutual funds
areexempt from long term capital gains tax, provided that theequity
allocation in the fund is 65% or more. Given that theequity
allocation may fall below this threshold and up to 15%in extreme
situation, it is possible that the equity allocation
remains below 65 % over a prolonged period.Further indefensive
circumstances where the debt/ money marketinstruments offer better
returns than the arbitrage opportunitiesavailable in cash and
derivatives segments of equity markets,then the investment manager
may choose to have a lowerequity exposure for a prolonged period.
In such a case, thefund may be regarded as a debt oriented fund as
per extantIncome Tax laws and consequently may not enjoy its
taxadvantage available to an equity oriented fund and may besubject
to tax as a debt oriented fund in that particular financialyear. In
such situation, a Unitholder who has redeemed theunits during the
respective financial year may end up payinglong term capital gain
tax as applicable to a debt fund andconsequently would also not be
able to derive any benefit ofSTT paid at the time of redemption. In
view of the forgoingand individual nature of tax consequences, each
Unit holderis advised to consult his / her own professional tax
advisor.
(ix) Related to HDFC Arbitrage Fund
The primary objective of the Fund Manager is to
identifyinvestment opportunities and to exploit price discrepancies
invarious markets. Identification and exploitation of the
strategiesto be pursued by the Fund Manager involve uncertainty.
Noassurance can be given that Fund Manager will be able tolocate
investment opportunities or to correctly exploit pricediscrepancies
in the capital markets. Reduction in mis-pricingopportunities
between the cash market and Future and Optionsmarket may lead to
lower level of activity affecting the returns.As the Scheme
proposes to execute arbitrage transactions invarious markets
simultaneously, this may result in highportfolio turnover and,
consequently, high transaction cost.
There may be instances, where the price spread between cashand
derivative market is insufficient to meet the cost of carry.In such
situations, the fund manager due to lack ofopportunities in the
derivative market may not be able tooutperform liquid / money
market funds.
Though the constituent stocks of most indices are
typicallyliquid, liquidity differs across stock. Due to
heterogeneity inliquidity in the capital market segment, trades on
this segmentdo not get implemented instantly. This often makes
arbitrageexpensive, risky and difficult to implement.
(x) Related to HDFC Small Cap Fund
While Small & Mid-cap stocks gives one an opportunity to
gobeyond the usual large blue chip stocks and present
possiblehigher capital appreciation, it is important to note that
Small& Mid-cap stocks can be riskier and more volatile on a
relativebasis. Therefore, the risk levels of investing in Small
& Mid-cap stocks are more than investing in stocks of large
well-established companies. It should be noted that over a periodof
time, Small, Mid and Large cap stocks have demonstrateddifferent
levels of volatility and investment returns. And it isimportant to
note that generally, no one class consistentlyoutperforms the
others.
(xi) Related to HDFC Dynamic PE Ratio Fund of Funds(HDPEFOF)
Risk Factors related to Underlying Schemes
a) HDPEFOF will invest primarily in a combination of
thespecified equity and debt schemes of HDFC Mutual Fund.Hence,
scheme specific risk factors of the UnderlyingSchemes will be
applicable. All risks associated withUnderlying Schemes, including
performance of theirunderlying stocks, derivative instruments,
stock-lending,investments in foreign securities etc., will
therefore beapplicable in the case of HDPEFOF. The investors
shouldrefer to the Scheme Information Documents and the related
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17 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
addenda for the scheme specific risk factors of therespective
Underlying Schemes. Investors who intend toinvest in HDPEFOF are
required to and deemed to haveunderstood the risk factors of the
Underlying Schemes.
b) Movements in the Net Asset Value (NAV) of the
UnderlyingSchemes may impact the performance of HDPEFOF. Anychange
in the investment policies or fundamental attributesof the
Underlying Schemes will affect the performance ofHDPEFOF.
c) In a rising market, where PE ratio rises and stays
abovehistorical averages, a portfolio constructed based on PEratios
may not outperform a fully invested equity portfolio.
d) The investors of HDPEFOF shall bear the recurring expensesof
HDPEFOF in addition to the expenses of the UnderlyingSchemes
(subject to regulatory limits). Hence the investorunder HDPEFOF may
receive lower pre-tax returns thanwhat they may receive if they had
invested directly in theUnderlying Schemes in the same
proportions.
e) The Portfolio disclosure of HDPEFOF will be limited
toproviding the particulars of the allocation to the
UnderlyingSchemes where HDPEFOF has invested and will not
includethe investments made by the Underlying Schemes.
f) HDPEFOF's investment in any Underlying Scheme shallnot exceed
20% of the net assets of that UnderlyingScheme.
g) Redemptions by HDPEFOF shall not exceed 5% of the netassets
of an Underlying Scheme on a Business Day. Theredemptions will be
staggered to comply with this limiteven in case portfolio
rebalancing is triggered due tochange in PE Ratios.
h) Redemptions by HDPEFOF from the Underlying Schemeswould be
subject to applicable exit loads, which mayimpact performance of
the Scheme.
i) The processing of redemption requests within 10 BusinessDays
of the Redemption date will be subject to the abilityof the Scheme
to liquidate units of the underlyingScheme(s). The payment of
redemption proceeds underthe Scheme will be subject to receipt of
redemptionproceeds from the underlying Scheme(s).
j) Switch-out from an Underlying Scheme and Switch-in toanother
Underlying Scheme will be subject to the provisionsof applicability
of NAV as also the pay-out and pay-incycles applicable to
redemption / purchase under therelevant schemes. In times of
extreme volatility, this mayhave impact on the NAV of HDPEFOF,
particularly at thetime of portfolio rebalancing.
(xii) General Risk factors
l Trading volumes, settlement periods and transferprocedures may
restrict the liquidity of the investmentsmade by the Scheme(s).
Different segments of the Indianfinancial markets have different
settlement periods andsuch periods may be extended significantly by
unforeseencircumstances leading to delays in receipt of
proceedsfrom sale of securities. The NAV of the Units of
theScheme(s) can go up or down because of various factorsthat
affect the capital markets in general.
l As the liquidity of the investments made by the
Scheme(s)could, at times, be restricted by trading volumes
andsettlement periods, the time taken by the Mutual Fund
forredemption of Units may be significant in the event of
aninordinately large number of redemption requests orrestructuring
of the Scheme(s). In view of the above, the
Trustee has the right, in its sole discretion, to
limitredemptions (including suspending redemptions) undercertain
circumstances, as described on Page 94 under"Right to Restrict
Redemption and/ or SuspendRedemption of the Units".
l At times, due to the forces and factors affecting the
capitalmarket, the Scheme(s) may not be able to invest in
securitiesfalling within its investment objective resulting in
holdingthe monies collected by it in cash or cash equivalent
orinvest the same in other permissible securities /
investmentsamounting to substantial reduction in the
earningcapability of the Scheme(s). The Scheme(s) may retaincertain
investments in cash or cash equivalents for its day-to-day
liquidity requirements.
l Securities, which are not quoted on the stock exchanges,are
inherently illiquid in nature and carry a larger amountof liquidity
risk, in comparison to securities that are listedon the exchanges
or offer other exit options to the investor,including a put option.
The AMC may choose to investin unlisted securities that offer
attractive returns. This mayincrease the risk of the portfolio.
l Investment strategy to be adopted by the Scheme(s) maycarry
the risk of significant variance between the portfolioallocation of
the Scheme(s) and the Benchmark particularlyover a short to medium
term period.
l Performance of the Scheme may be affected by political,social,
and economic developments, which may includechanges in government
policies, diplomatic conditions,and taxation policies.
(xiii) Risk factors associated with investing in
ForeignSecurities
l Currency Risk:
Moving from Indian Rupee (INR) to any other currencyentails
currency risk. To the extent that the assets of theScheme(s) will
be invested in securities denominated inforeign currencies, the
Indian Rupee equivalent of the netassets, distributions and income
may be adversely affectedby changes in the value of certain foreign
currenciesrelative to the Indian Rupee.
l Interest Rate Risk:
The pace and movement of interest rate cycles of
variouscountries, though loosely co-related, can differ
significantly.Hence by investing in securities of countries other
thanIndia, the Scheme(s) stand exposed to their interest
ratecycles.
l Credit Risk:
Investment in Foreign Debt Securities are subject to therisk of
an issuer's inability to meet interest and principalpayments on its
obligations and market perception of thecreditworthiness of the
issuer. This is substantially reducedsince the SEBI (MF)
Regulations stipulate investments onlyin debt instruments with
rating not below investment gradeby accredited/registered credit
rating agency.
l Taxation Risk:
In addition to the disclosure related to taxation mentionedunder
section “Special Consideration” on Page 20,Investment in Foreign
Securities poses additional challengesbased on the tax laws of each
respective country orjurisdiction. The scheme may be subject to a
higher levelof taxes than originally anticipated and or dual
taxation.
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18HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
The Scheme may be subject to withholding or other taxeson income
and/or gains arising from its investmentportfolio. Further, such
investments are exposed to risksassociated with the changing /
evolving tax / regulatoryregimes of all the countries where the
Scheme invests. Allthese may entail a higher outgo to the Scheme by
wayof taxes, transaction costs, fees etc. thus adversely
impactingits NAV; resulting in lower returns to an Investor.
l Legal and Regulatory Risk:
Legal and regulatory changes could occur during the termof the
Scheme which may adversely affect it. If any of thelaws and
regulations currently in effect should change orany new laws or
regulations should be enacted, the legalrequirements to which the
Scheme and the investors maybe subject could differ materially from
current requirementsand may materially and adversely affect the
Scheme andthe investors. Legislation/ Regulatory guidelines
couldalso be imposed retrospectively.
l Country Risk:
The Country risk arises from the inability of a country, tomeet
its financial obligations. It is the risk encompassingeconomic,
social and political conditions in a foreigncountry, which might
adversely affect foreign investors'financial interests. In
addition, country risks would includeevents such as introduction of
extraordinary exchangecontrols, economic deterioration, bi-lateral
conflict leadingto immobilisation of the overseas financial assets
and theprevalent tax laws of the respective jurisdiction for
executionof trades or otherwise.
l To manage risks associated with foreign currency andinterest
rate exposure, the Mutual Fund may use derivativesfor efficient
portfolio management including hedging andin accordance with
conditions as may be stipulated bySEBI/ RBI from time to time.
(xiv) Risk factors associated with investing inDerivatives
l The AMC, on behalf of the Scheme(s) may use variousderivative
products, from time to time, in an attempt toprotect the value of
the portfolio and enhance Unit holders'interest. Derivative
products are specialized instrumentsthat require investment
techniques and risk analysis differentfrom those associated with
stocks and bonds. The use ofa derivative requires an understanding
not only of theunderlying instrument but of the derivative itself.
Otherrisks include, the risk of mispricing or improper valuationand
the inability of derivatives to correlate perfectly withunderlying
assets, rates and indices.
l Derivative products are leveraged instruments and canprovide
disproportionate gains as well as disproportionatelosses to the
investor. Execution of such strategies dependsupon the ability of
the fund manager to identify suchopportunities. Identification and
execution of the strategiesto be pursued by the fund manager
involve uncertaintyand decision of fund manager may not always be
profitable.No assurance can be given that the fund manager willbe
able to identify or execute such strategies.
l The risks associated with the use of derivatives are
differentfrom or possibly greater than, the risks associated
withinvesting directly in securities and other
traditionalinvestments.
l Credit Risk:
The credit risk in derivative transaction is the risk that
thecounter party will default on its obligations and is
generally
low, as there is no exchange of principal amounts in aderivative
transaction.
l Illiquidity risk:
This is the risk that a derivative cannot be sold or
purchasedquickly enough at a fair price, due to lack of liquidity
inthe market.
(xv) Risk factors associated with investing in SecuritisedDebt
(except HDFC Index Fund, HLTAF & HGF)
The Risks involved in Securitised Papers described below arethe
principal ones and does not represent that the statementof risks
set out hereunder is exhaustive.
l Limited Liquidity & Price Risk
There is no assurance that a deep secondary market willdevelop
for the Certificates. This could limit the ability ofthe investor
to resell them.
l Limited Recourse, Delinquency and Credit Risk
The Credit Enhancement stipulated represents a limitedloss cover
to the Investors. These Certificates represent anundivided
beneficial interest in the underlying receivablesand do not
represent an obligation of either the Issueror the Seller or the
originator, or the parent or any affiliateof the Seller, Issuer and
Originator. No financial recourseis available to the Certificate
Holders against the Investors'Representative. Delinquencies and
credit losses may causedepletion of the amount available under the
CreditEnhancement and thereby the Investor Payouts to
theCertificate Holders may get affected if the amount availablein
the Credit Enhancement facility is not enough to coverthe
shortfall. On persistent default of a Obligor to repayhis
obligation, the Servicer may repossess and sell theAsset. However
many factors may affect, delay or preventthe repossession of such
Asset or the length of timerequired to realise the sale proceeds on
such sales. Inaddition, the price at which such Asset may be sold
maybe lower than the amount due from that Obligor.
l Risks due to possible prepayments and ChargeOffs
In the event of prepayments, investors may be exposedto changes
in tenor and yield. Also, any Charge Offswould result in the
reduction in the tenor of the PassThrough Certificates (PTCs).
l Bankruptcy of the Swap Bank
If the Swap Bank, becomes subject to bankruptcyproceedings then
an Investor could experience losses ordelays in the payments due
under the Interest Rate SwapAgreement.
l Risk of Co-mingling
With respect to the Certificates, the Servicer will depositall
payments received from the Obligors into the CollectionAccount.
However, there could be a time gap betweencollection by a Servicer
and depositing the same into theCollection account especially
considering that some of thecollections may be in the form of cash.
In this interimperiod, collections from the Loan Agreements may not
besegregated from other funds of originator. If originatorin its
capacity as Servicer fails to remit such funds due toInvestors, the
Investors may be exposed to a potential loss.
(xvi) Risk factors associated with Securities Lending
As with other modes of extensions of credit, there are
risksinherent to securities lending, including the risk of failure
of
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19 HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
the other party, in this case the approved intermediary,
tocomply with the terms of the agreement entered into betweenthe
lender of securities i.e. the Scheme and the approvedintermediary.
Such failure can result in the possible loss ofrights to the
collateral put up by the borrower of the securities,the inability
of the approved intermediary to return the securitiesdeposited by
the lender and the possible loss of any corporatebenefits accruing
to the lender from the securities depositedwith the approved
intermediary.
(xvii)Risk factors associated with processing oftransaction
through Stock Exchange Mechanism
The trading mechanism introduced by the stock exchange(s)is
configured to accept and process transactions for mutualfund units
in both Physical and Demat Form. The allotmentand/or redemption of
Units through NSE and/or BSE or anyother recognised stock
exchange(s), on any Business Day willdepend upon the modalities of
processing viz. collection ofapplication form, order
processing/settlement, etc. upon whichthe Fund has no control.
Moreover, transactions conductedthrough the stock exchange
mechanism shall be governed bythe operating guidelines and
directives issued by respectiverecognized stock exchange(s).
(xviii) Disclaimer of indices
S&P BSE 200 Index, S&P BSE SENSEX Index and S&P
BSESENSEX (Total Returns) Index (the "S & P BSE Indices") :The
S & P BSE Indices is published by Asia Index Private
Limited("AIPL"), which is a joint venture among affiliates of
S&P DowJones Indices LLC ("SPDJI") and BSE Limited ("BSE"), and
hasbeen licensed for use by HDFC Asset Management CompanyLimited
(HDFC AMC)/the Scheme(s) of HDFC Mutual Fund("the Schemes").
Standard & Poor's® and S&P® are registeredtrademarks of
Standard & Poor's Financial Services LLC ("S&P")and Dow
Jones® is a registered trademark of Dow JonesTrademark Holdings LLC
("Dow Jones"). BSE® and SENSEX®are registered trademarks of BSE.
The trademarks have beenlicensed to AIPL and have been sublicensed
for use for certainpurposes by HDFC AMC / Schemes. The
Schemesbenchmarked to S & P BSE Indices are not
sponsored,endorsed, sold or promoted by AIPL, SPDJI, Dow Jones,
S&P,any of their respective affiliates (collectively, "S&P
Dow JonesIndices") or BSE. None of AIPL, S&P Dow Jones Indices
or BSEmakes any representation or warranty, express or implied,
tothe owners of the Scheme or any member of the publicregarding the
advisability of investing in securities generallyor in the Schemes
particularly or the ability of the Index totrack general market
performance. AIPL's, S&P Dow JonesIndices' and BSE's only
relationship to HDFC AMC/the Schemeswith respect to the Indices is
the licensing of the Indices andcertain trademarks, service marks
and/or trade names of AIPL,S&P Dow Jones Indices, BSE and/or
their licensors. The S &P BSE Indices is determined, composed
and calculated byAIPL or its agent without regard to HDFC AMC/the
Schemes.None of AIPL, S&P Dow Jones Indices or BSE are
responsiblefor and have not participated in the determination of
the prices,and amount of the Schemes or the timing of the issuance
orsale of the Schemes or in the determination or calculation ofthe
equation by which the Schemes is to be converted intocash,
surrendered or redeemed, as the case may be. AIPL,S&P Dow Jones
Indices and BSE have no obligation or liabilityin connection with
the administration, marketing or tradingof the Schemes. There is no
assurance that investment productsbased on the indices will
accurately track index performanceor provide positive investment
returns. AIPL and S&P DowJones Indices LLC are not investment
advisors. Inclusion of asecurity within an index is not a
recommendation by AIPL,S&P Dow Jones Indices or BSE to buy,
sell, or hold such security,nor is it considered to be investment
advice.
AIPL, S&P DOW JONES INDICES, BSE AND THEIR THIRD
PARTYLICENSORS DO NOT GUARANTEE THE ADEQUACY,ACCURACY, TIMELINESS
AND/OR THE COMPLETENESS OFTHE INDEX OR ANY DATA RELATED THERETO.
AIPL, S&PDOW JONES INDICES, BSE AND THEIR THIRD PARTYLICENSORS
SHALL NOT BE SUBJECT TO ANY DAMAGES ORLIABILITY FOR ANY ERRORS,
OMISSIONS, OR DELAYS THEREIN.AIPL, S&P DOW JONES INDICES, BSE
AND THEIR THIRD PARTYLICENSORS MAKE NO EXPRESS OR IMPLIED
WARRANTIES,AND EXPRESSLY DISCLAIM ALL WARRANTIES, OFMERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSEOR USE OR AS TO RESULTS TO BE
OBTAINED BY LICENSEE,OWNERS OF THE PRODUCT, OR ANY OTHER PERSON
ORENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TOANY DATA
RELATED THERETO. WITHOUT LIMITING ANY OFTHE FOREGOING, IN NO EVENT
WHATSOEVER SHALL AIPL,S&P DOW JONES INDICES, BSE OR THEIR THIRD
PARTYLICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL,INCIDENTAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGESINCLUDING BUT NOT LIMITED TO,
LOSS OF PROFITS,TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF
THEYHAVE BEEN ADVISED OF THE POSSIBLITY OF SUCHDAMAGES, WHETHER IN
CONTRACT, TORT, STRICT LIABILITY,OR OTHERWISE. THERE ARE NO THIRD
PARTY BENEFICIARIESOF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN
AIPLAND LICENSEE, OTHER THAN THE LICENSORS OF AIPL(INCLUDING
S&P DOW JONES INDICES AND/OR BSE)."
NIFTY 500 Index, NIFTY 50 Index, NIFTY 50 (Total ReturnIndex),
NIFTY Free Float Midcap 100 Index and NIFTYFree Float Smallcap 100
Index ("the NIFTY Indices"): TheScheme(s) of HDFC Mutual Fund (the
"Product(s)") are notsponsored, endorsed, sold or promoted by India
Index Services& Products Limited ("IISL"). IISL does not make
any representationor warranty, express or implied, to the owners of
the Product(s)or any member of the public regarding the
advisability ofinvesting in securities generally or in the
Product(s) particularlyor the ability of the NIFTY Indices to track
general stock marketperformance in India. The relationship of IISL
with HDFC AssetManagement Company Limited ("the Issuer/Licensee")
is onlyin respect of the licensing of the Indices and certain
trademarksand trade names associated with such Indices which
isdetermined, composed and calculated by IISL without regardto the
Issuer /Licensee or the Product(s). IISL does not haveany
obligation to take the needs of the Issuer/Licensee or theowners of
the Product(s) into consideration in determining,composing or
calculating the NIFTY Indices. IISL is notresponsible for or has
participated in the determination of thetiming of, prices at, or
quantities of the Product(s) to be issuedor in the determination or
calculation of the equation by whichthe Product(s) is to be
converted into cash. IISL has no obligationor liability in
connection with the administration, marketingor trading of the
Product(s).
IISL is engaged in the business of developing,
constructing,compiling, computing and maintaining various equity
indices.The relationship of IISL to HDFC AMC is only in respect of
therights granted to use certain trademarks and trade names ofthe
Index in connection with the utilisation of the Index datarelating
to such Index. The Index is determined, composedand calculated by
IISL without regard to HDFC AMC. IISL hasno obligation to take the
needs of HDFC AMC intoconsideration in determining, composing or
calculating theNIFTY Indices.
IISL do not guarantee the accuracy and/or the completenessof
NIFTY Indices or any data included therein and they shallhave no
liability for any errors, omissions, or interruptionstherein. IISL
make no warranty, express or implied, as to resultsto be obtained
by HDFC AMC or any other person or entityfrom the use of NIFTY
Indices or any data included therein.
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20HDFC MF COMBINED EQUITY SID - DT. APRIL 30, 2017
IISL make no express or implied warranties, and
expresslydisclaim all warranties of merchantability or fitness for
aparticular purpose or use with respect to the Index or anydata
included therein. Without limiting any of the foregoing,IISL
expressly disclaim any and all liability for any damagesor losses
arising out of the use of NIFTY Indices or any dataincluded therein
by any third party, including any and alldirect, special, punitive,
indirect, or consequential damages(including lost profits), even if
notified of the possibility ofsuch damages.
An investor, by subscribing or purchasing an interest in
theProduct(s), will be regarded as having acknowledged,understood
and accepted the disclaimer referred to in Clausesabove and will be
bound by it.
B. REQUIREMENT OF MINIMUM INVESTORS INTHE SCHEME(S)
The Scheme(s)/Plan(s) shall have a minimum of 20 investorsand no
single investor shall account for more than 25% ofthe corpus of the
Scheme(s)/Plan(s) (at portfolio level). The twoconditions mentioned
above shall be complied within eachsubsequent calendar quarter, on
an average basis, as specifiedby SEBI. In case the Scheme / Plan(s)
does not have a minimumof 20 investors in the stipulated period,
the provisions ofRegulation 39(2)(c) of the SEBI (MF) Regulations
would becomeapplicable automatically without any reference from
SEBI andaccordingly the Scheme / Plan(s) shall be wound up and
theunits would be redeemed at applicable NAV. If there is a
breachof the 25% limit by any investor over the quarter, a
rebalancingperiod of one month would be allowed and thereafter
theinvestor who is in breach of the rule shall be given 15
daysnotice to redeem his exposure over the 25% limit. Failure onthe
part of the said investor to redeem his exposure over the25% limit
within the aforesaid 15 days would lead to automaticredemption by
the Mutual Fund on the applicable Net AssetValue on the 15th day of
the notice period. The Fund shalladhere to the requirements
prescribed by SEBI from time totime in this regard
C. SPECIAL CONSIDERATIONS
l The information set out in the Scheme Information
Document(SID) and Statement of Additional Information (SAI) arefor
general purposes only and do not constitute tax orlegal advice. The
tax information provided in the SID/SAIdoes not purport to be a
complete description of allpotential tax costs, incidence and risks
inherent insubscribing to the Units of scheme(s) offered by
HDFCMutual Fund. Investors should be aware that the fiscalrules/
tax laws may change and there can be no guaranteethat the current
tax position as laid out herein maycontinue indefinitely. The
applicability of tax laws, if any,on HDFC Mutual Fund/ Scheme(s)/
investments made bythe Scheme(s) and/or investors and/ or income
attributableto or distributions or other payments made to
Unitholdersare based on the understanding of the prevailing
taxlegislations and are subject to adverse interpretationsadopted
by the relevant authorities resulting in tax liabilitybeing imposed
on the HDFC Mutual Fund/ Scheme(s)/Unitholders/ Trustee /AMC.
In view of the individual nature of the tax consequences,each
investor is advised to consult his/ her own professionaltax advisor
to determine possible legal, tax, financial orother considerations
for subscribing and/or redeemingthe Units and/or before making a
decision to invest/redeem Units. The tax information contained in
SID/SAIalone may not be sufficient and should not be used forthe
development or implementation of an investmentstrategy or construed
as investment advice. Investors alone
shall be fully responsible/ liable for any investment
decisiontaken on the basis of this document. Neither the MutualFund
nor the AMC nor any person connected with itaccepts any liability
arising from the use of this information.
l The Trustee, AMC, Mutual Fund, their directors or
theiremployees shall not be liable for any of the tax
consequencesthat may arise, in the event that the Schemes are
woundup for the reasons and in the manner provided in SAI.
l Redemption by the Unit holder either due to change inthe
fundamental attributes of the Scheme(s) or due to anyother reasons
may entail tax consequences. The Trustee,AMC, Mutual Fund, their
directors or their employeesshall not be liable for any such tax
consequences that mayarise.
l Subject to SEBI (Mutual Funds) Regulations, 1996 in theevent
of substantial investment by the Sponsors and theirassociates
directly or indirectly in the Scheme(s) of theMutual Fund,
Redemption of Units by these entities mayhave an adverse impact on
the performance of the Scheme(s)because of the timing of any such
Redemptions and thismay also impact the ability of other Unit
holders to redeemtheir Units.
l The Scheme(s) have not been registered in any jurisdiction.The
Scheme(s) may however in future be registered in anyjurisdiction,
as and when the Trustee desires. Thedistribution of this SID in
certain jurisdictions may berestricted or totally prohibited due to
registration or otherrequirements and accordingly, persons who come
inpossession of this SID are required to inform themselvesabout and
observe any such restrictions and/ or legal,compliance requirements
with respect to their eligibility forinvestment in the Units of the
Scheme(s). Any personreceiving a copy of this SID, SAI or any
accompanyingapplication form in such jurisdiction should not treat
thisSID, SAI or such application form as constituting aninvitation
to them to subscribe for Units. Such personsshould in no event use
any such application form unlessin the relevant jurisdiction such
an invitation to subscribecould lawfully be made to them and such
application formcould lawfully be used without complying with
anyregistration or other legal requirements by the AMC/Mutual
Fund/Trustee.
l Any dispute arising out of the Scheme(s) shall be subjectto
the non-exclusive jurisdiction of the Courts in India.Statements in
this SID are, except where other