Professional Documents
Culture Documents
20
YEARS
OF WEALTH
CREATION
* Investors should consult their nancial advisers if in doubt about whether the product is suitable for them.
May, 2015
India Equity Fund and nally HDFC Equity Fund (The Fund) in June 2003
From a small beginning of ~Rs 52 crores AUM in Jan 1, 95 HDFC Equity Fund is today
the largest* Equity Fund in India with an AUM of ~ Rs 18,000 crores and ~ 6.7 lac
investors as on 31st March, 2015
In this journey of 20 years, Rs 10,000 has become ~Rs 4.7 lacs(~47 times), CAGR of
~21.0% **
Our sincere thanks to all investors, distributors and well wishers in making this
possible. A special thanks to ~5,000 investors who have stayed with the Fund
right through this 20 year journey
A strong belief in India & its entrepreneurs, a disciplined approach to investing and focus on
long term has made this possible.
* Based on data available on AMFI website @ www.amindia.com - Average AUM : Rs 18,721 crs (Jan Mar 2015),
** Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
1996
1997
1998
Pokhran II - Nuclear tests by India, US sanctions; SENSEX down ~20% in next two months
1999
2000
2001
2003
BJP India shining campaign; SENSEX up ~73% in year 2003, 10 yr G Sec yields near 5%
2004
2008
Global Financial Crisis; Satyam scam; SENSEX down ~50% in the year; Meltdown in Real Estate stocks, etc.
2009
UPA wins again; SENSEX up ~17% in a day on May 18th; 10 yr G Sec yield at 5.3%
2011
Corruption scandals - 2G, Commonwealth games, Coal Scam; SENSEX down ~25% in 2011
2012
2013
QE taper worry, Slow GDP growth, twin decits of CAD and FD, high ination, 10 Yr Gsec yield at ~9%
2014
5.0
4.5
4
9/11; KP scam;
UTI Crises, IT
down ~80%
3.5
3
Asian Crisis
2nd term
for UPA
BJP loses
2.5
Tech Bubble
bursts
2
1.5
Pokhran II
CNX 500
Rs. 0.7 lacs
0.5
0
95
S&P BSE
Sensex Levels ~4,000
96
97
98
99
00
~5,000
01
02
03
04
05
06
~10,000
07
08
09
~20,000
10
~9,000
11
12
~20,000
13
14
15
~29,000
HDFC Equity Fund : Rs 10,000 invested at inception has become ~Rs 470,000 in ~20 years at a CAGR of 21.0%
CNX 500 : Rs 10,000 invested at inception has become ~Rs 70,000 in ~20 years at a CAGR of 10.1%
Reference made to S&P BSE SENSEX in this document is only for easy understanding of market movement and must not be construed as future
performance of S&P BSE SENSEX. The Benchmark for this FUND is CNX 500.
** Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
Mar-12
Mar-13
Mar-14
Mar-15
78
75
75
75
82
FY 12
FY 13
FY 14
FY 15
44
29
32
37
39
portfolio turnover
We don't have to be smarter than the rest. We have to be more disciplined than the rest.
- Warren Buett
happen much faster and a loss of just 80% makes Rs. 20 of Rs. 100. Thus, one large mistake can
have a big impact in the wealth creation journey
The key to wealth creation over long periods is thus, not aiming for highest returns every year,
Period
Textile
1995-97
60-70
Cement
1999-00
70
FMCG
1999-09
IT
2000-01
90-95
Media
2000-01
80-90
Realty
2007-08
70
Power
2007-08
90
Metals
2008-09
70
HDFC Equity Fund Focused on not just returns, but also on managing risk by avoiding big mistakes
Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / HDFC Asset Management Company Ltd. HDFC Mutual Fund/AMC
is not guaranteeing any returns on investments made in this Fund. Past performance may or may not be sustained in future.
1 Year
3 Years
5 Years
10 Years
15 Years
20 Years
more than 20
55
55
67
98
100
100
more than 15
62
66
85
100
100
100
more than 10
65
76
92
100
100
100
more than 0
73
88
100
100
100
100
80
99
100
100
100
100
88
100
100
100
100
100
12
Performance data computed till Mar, 2015. Where NAV as on the end of a particular month is not available, NAV of the nearest date available is considered. Returns are
monthly rolling. The holding periods in the above simulation is purely an assumption and not the actual holding period of investors in the Fund.
It can be clearly seen, that as the holding period increases, return prole improves
This is consistent with the belief that equities are a long term asset class and that risk
Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
Fund
NAV
CNX
500
Jan 95
10
974
Dec 95
Dec 96
Dec 97
1 Year
3 Years
Fund
5 Years
CNX 500
Fund
10 Years
CNX 500
Fund
15 Years
Fund
CNX 500
CNX 500
Fund
CNX 500
647
-29
-34
627
-23
-3
667
23
-13
Dec 98
609
38
-9
-2
Dec 99
24
1292
156
112
63
27
19
Dec 00
19
908
-20
-30
41
11
22
Dec 01
18
701
-3
-23
26
27
Dec 02
23
773
24
10
-1
-16
28
Dec 03
52
1531
126
98
40
19
41
20
Dec 04
66
1805
28
18
53
37
23
21
Dec 05
107
2464
63
37
67
47
41
22
31
14
Dec 06
145
3323
36
35
41
29
51
37
39
18
Dec 07
223
5355
54
61
50
44
58
47
42
23
Dec 08
112
2296
-50
-57
-2
17
28
14
Dec 09
231
4329
106
89
17
29
19
26
13
23
10
Dec 10
299
4941
29
14
10
-3
23
15
32
18
28
15
Dec 11
219
3603
-27
-27
25
16
28
18
28
12
Dec 12
293
4743
34
32
-2
29
20
29
14
Dec 13
305
4915
22
16
19
12
26
15
Dec 14
468
6774
54
38
29
23
15
22
14
22
12
20 Years
Fund
CNX 500
-12
21
10
14/20
16/18
16/16
11/11
6/6
1/1
18/20
17/18
16/16
11/11
6/6
1/1
Past performance may or may not be sustained in Future. Returns for periods more than 1 year are shown on a compounded annualized basis.
Since Inception
15 Year SIP
10 Year SIP
5 Year SIP
3 Year SIP
1 Year SIP
1.01 crs
28.83
6.24
1.95
1.09
0.26
4.8 lacs
3.60
2.40
1.20
0.72
0.24
25.22
24.64
18.17
19.45
29.05
19.44
25.80
13.71
4.62
1.78
1.01
0.27
14.47
16.22
12.57
15.78
23.60
20.67
22.92
12.66
4.60
1.73
0.97
0.26
13.52
15.30
12.48
14.55
20.64
15.75
Albert Einstein
Past performance may or may not be sustained in the future. The above investment simulation is for illustrative purposes only and should not be construed as a
promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not assure a
prot or guarantee protection against a loss in a declining market. Inception date of HDFC Equity Fund is January 01, 1995. 1. Benchmark 2. Additional
Benchmark. Returns as on March 31, 2015. The above SIP investment is assumed to be invested on the 1st business day of every month over a period of time.
10
Year
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Equity Fund
-28.8
-23.5
22.6
38.0
156.0
-20.0
-2.8
24.2
126.3
27.5
62.7
35.9
53.6
-49.7
105.6
29.2
-26.7
34.1
3.8
53.8
CNX 500
-33.6
-3.1
6.5
-8.7
112.1
-29.7
-22.8
10.3
98.1
17.9
36.5
34.9
61.1
-57.1
88.6
14.1
-27.1
31.7
3.6
37.8
Excess Return
4.8
-20.3
16.1
46.8
43.9
9.7
20.0
13.9
28.2
9.7
26.2
1.0
-7.5
7.4
17.0
15.1
0.4
2.5
0.2
16.0
Past performance may or may not be sustained in the future.Where NAV as on the end of a particular month is not available, latest released NAV is considered, Year- Calendar Year.
Good years, bad years, dividends each year (for those who prefer cash)
Since 1999
1999
1999
2000
2000
2002
2003
2003
2004
2004
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
1.6
2.0
3.0
1.7
1.2
2.0
2.5
1.5
3.0
5.0
5.0
5.5
3.0
4.0
4.0
4.0
4.0
4.0
5.5
16.0
19.1
21.5
12.7
13.5
17.1
18.8
20.8
23.4
41.9
40.4
45.4
23.3
46.9
49.0
44.0
41.4
43.8
59.8
10
10
14
13
12
13
13
12
12
12
13
10
It's not what we do once in a while that shapes our lives. It's what we do consistently.
Anthony Robbins
^Past performance may or may not be sustained in the future. All dividends are on face value of Rs 10 per unit. After payment of the dividend, the per Unit NAV
falls to the extent of the payout and statutory levy (if applicable). There is no assurance or guarantee to Unit holders as to rate/quantum of dividend distribution or
that the dividends will be paid regularly. NAV of the Regular Plan-Dividend Option
11
Year
CY 05
CY 06
CY 07
CY 08
CY 09
CY 10
CY 11
CY 12
CY 13
CY 14
Largest Funds / Q1
47.9
38.6
57.7
-53.6
84.3
18.9
-24.6
33.5
3.3
52.5
Q2
48.2
36.2
60.9
-55.5
85.8
17.6
-24.6
33.5
3.7
53.8
Q3
48.1
33.9
55.9
-55.1
83.9
19.4
-22.8
31.4
6.3
51.2
Smallest Funds / Q4
41.8
34.0
60.8
-54.8
81.1
18.1
-25.1
29.4
4.1
45.0
Number of Schemes
107
138
165
200
239
260
278
285
294
308
Choose a Fund by its track record, investment discipline, consistency of performance and not by size.
For those who still value size, bigger Funds have done better !
The above table shows simple average returns of all equity funds arranged in dierent quartiles basis the descending order of AUM at the beginning of the year.
Loads have not been taken into consideration for calculation of returns.The investment objective, asset allocation and investment strategy of the schemes
considered for the above simulation may dier. Where AUM as on the end of a particular month is not available, AUM of the nearest date available is considered.
This simulation is only an illustration should not be construed as a recommendation or an investment advice. In view of the individual circumstances and risk
prole, each investor is advised to consult his / her professional advisor before making a decision to invest. Source: Bloomberg, Capitaline, NAV India
12
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
10
The above data illustrates the calendar year performance of 11 largest diversied Equity / Balanced funds
as on Dec 31, 2014 for last 11 years
It is evident that avor of the season investing does not work. There is merit in sticking with funds that
have a disciplined approach to investments and have performed across cycles
If investing is entertaining, if you're having fun, you're probably not making any money
George Soros
13
FY14
Q1FY15
Q2FY15
CPI (Avg %)
9.5
7.9
6.7
4.1
5.2
5.2
WPI (Avg %)
5.9
5.8
3.9
0.3
-1.8
-2.3
-0.1
4.5
1.3
1.9
3.8
5.0
147.6
34.7
38.6
39.2
27.0
NA
Invisibles ($ bn)
115.2
26.8
28.5
30.9
30.9
NA
CAD ($ bn)
-32.4
-7.9
-10.1
-8.3
3.9
NA
Q3FY15 Q4FY15/E
Mar 15
FY13
FY14
FY15
FY16
5.1
6.9
7.4
8.1
Fiscal Decit
4.8
4.6
4.1
3.9
By 2020, India is likely to be 5th largest economy in the world and fastest growing as well
Source: Morgan Stanley, Kotak, BOAML
14
Roll PE (LHS)
average (LHS)
**
BSE (RHS)
22.0
20.0
18.0
16.0
14.0
90
92
94
Source: CLSA
96
98
00
02
04
06
08
10
12
14
93
95
97
99
01
03
05
07
09
11
13
15E
Source: BAML
Despite the run up in 2014, since 2008 equity markets are up only ~40% vs. nominal GDP growth of ~100%
EBITDA margins to improve from 17 year lows due to improving economy, lower ination, lower wage growth
and lower commodity prices
Opportunities are like sunrises, if you wait too long you can miss them.
William Arthur
Reference made to S&P BSE SENSEX in this document is only for easy understanding of market movement and must not be construed as future performance of
S&P BSE SENSEX. The Benchmark for this FUND is CNX 500.
15
HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. Past performance may or may not be sustained in future.
16
in last 36 years...
Sensex
Gold
CAGR (%)
16.9
10.6
27.96 lac
3.7 lac
Source: World Bank, Bloomberg, Data pertains from March 31, 79 to Mar 31, 15
As can be seen from the table above, long term returns on equities are much higher than returns
on gold
A dierence of ~6.3% in CAGR over long term (36 years) resulted in ~8 times higher wealth
Equities over time grow in line with the nominal growth of the economy (real growth plus
*Disclaimer: Above referred asset classes are not strictly comparable. The views expressed may hold true in the context of prevailing economic
conditions and is subject to change. HDFC Mutual Fund/AMC is not guaranteeing returns on equities.
Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance
17
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total
0 ... 12
13
13
16
17
19
20
18
15
17
18
19
21
23
0 ... 2
10
11
13
-11
23
25
26
29
154
0 ... 4
12
14
17
25
35
49
41
19
245
(FIIs were allowed to invest from September 1992 onwards; shareholding of FII not available from 1992 2000)
Source: SEBI
While, FIIs have invested $154 bn in Indian equities between 2001-14, locals have bought gold worth $245 bn in
same period
Thus, the dollars received by the locals & more have been invested in gold. Gold as was pointed out in previous
page (page 17) has yielded near ination (9-10%) returns vs ~17% CAGR for the Sensex.
In eect, locals have been exchanging a ~17% CAGR asset for a 9-10% CAGR one. This certainly is not a smart
thing to do.
Decadal GDP (average % change)
7.7
8
7
th
Source: IMF
5.7
5.4
5.3
5.3
3.8
3.8
3.2
3.2
2.8
2.6
2.5
0
1961-1970
1971-1980
1981-1990
1991-2000
2001-2010
2010-2013
Source: BOAML
18
CY 05
CY 06
CY 07
CY 08
CY 09
CY 10
CY 11
CY 12
CY 13
CY 14
NIFTY
36.3
39.8
54.8
(51.8)
75.8
17.9
(24.6)
27.7
6.8
31.4
CNX Midcap
35.0
29.0
76.9
(59.4)
99.0
19.2
(31.0)
39.2
(5.1)
55.9
Outperformance
(1.3)
(10.8)
22.2
(7.6)
23.2
1.2
(6.4)
11.5
(11.9)
24.5
17.0
15.0
13.0
11.0
9.0
2010
2011
2012
2013
2014
2015
Jun-14
Sep-14
Dec-14
Mar-15
Midcaps (%)
28
27
23
18
Given the NIL discount of midcaps vs. largecaps and a predominantly largecap
portfolio, HDFC Equity Fund is well positioned in the current market environment
Source: Bloomberg, CY- Calendar Year, The current investment strategy is subject to change depending on the market conditions
19
Improving economic outlook, peaking interest rates, improving outlook for asset quality
Overweight Capex
Underweight FMCG
Exposure to large caps is ~80%, Fund has reduced exposure to midcaps in 2014
HDFC Equity Fund is well positioned for improving economic outlook and lower interest rates
Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / HDFC Asset Management Company Ltd. The Fund may or may
not have any present or future positions in these sectors. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund.
Past Performance may or may not be sustained in the future
20
The best time to invest was yesterday, the second best is today !
* Past Performance may or may not be sustained in the future. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this
Fund. In view of the individual circumstances and risk prole, each investor is advised to consult his / her professional advisor before making a decision
to invest in the Scheme. Refer page no. 22 for detailed performance
21
Value of
investment of Rs.
10,000 Since
Inception (Rs.)
NAV/Index
Value as on
31st Mar 15
Mar 31, 14 to
Mar 31, 15
Mar 28, 13 to
Mar 31, 14
Mar 30, 12 to
Mar 28, 13
Since Inception
CAGR (in %)
469.724
41.49
22.25
3.61
20.93
469,724
6978.15
33.56
17.56
5.13
10.07
69,781
8491.00
26.65
17.82
7.31
N.A.
N.A.
Scheme
HDFC Equity Fund
1
Other Funds managed by Prashant Jain, Fund Manager of HDFC Equity Fund
HDFC Top 200 Fund$
342.678
35.11
20.31
4.52
22.38
417,830
3537.55
31.93
17.04
6.03
14.01
112,823
27957.49
24.89
18.68
8.23
12.52
88,459
376.12
41.84
19.03
3.29
20.13
486,125
5230.30
22.53
13.29
8.18
N.A.
N.A.
8491.00
26.65
17.82
7.31
9.55
69,036
16.711
58.70
10.91
-8.57
7.54
16,711
6978.15
33.56
17.56
5.13
8.48
17,766
8491.00
26.65
17.82
7.31
8.41
17,688
34.5855
21.49
8.50
8.07
11.64
34,586
2936.22
16.45
6.46
9.06
7.84
23,420
2630.54
14.57
-0.95
11.25
5.03
17,385
Past performance may or may not be sustained in the future. $All dividends declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be
reinvested in the units of the Scheme at the then prevailing NAV (ex-dividend NAV). #The Scheme is co-managed by Prashant Jain and Srinivas Rao Ravuri. +The Scheme is comanaged by Prashant Jain (Equities) and Shobhit Mehrotra (Debt). @Scheme performance may not strictly be comparable with that of its Additional Benchmark in view of the
balanced nature of the scheme where a potion of scheme's investments are made in debt instruments. ^Scheme performance may not strictly be comparable with that of its
Additional Benchmark in view of hybrid nature of the scheme where a portion of scheme's investments are made in equity instruments. 1. Benchmark. 2. Additional Benchmark.
22
Product Features
Type of Scheme
January 1, 1995
Investment Objective
Fund Manager $
Prashant Jain
Plans
Options
Under Each Plan: Growth & Dividend. The Dividend Option oers Dividend Payout and Reinvestment facility
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:
In respect of each purchase / switchin of units, an Exit load of 1.00% is payable if units are redeemed / switchedout within 1 year
from the date of allotment
No exit load is payable if units are redeemed / switched out after 1 year from the date of allotment.
For further details on load structure, please refer to the Scheme Information Document / Key Information Memorandum of the Scheme
Benchmark Index
80 - 100
Medium to High
0 - 20
Low to medium
*Investment in Securitised debt, if undertaken, would not exceed 20% of the net assets of the Scheme.
The scheme may seek investment opportunity in the ADR / GDR / Foreign Equity and Debt Securities (max. 40% of net assets) subject to SEBI (Mutual Funds) Regulations, 1996. The scheme may use derivatives
mainly for the purpose of hedging and portfolio balancing (max 25% of net assets) based on the opportunities available subject to SEBI (Mutual Funds) Regulations, 1996.
23
Disclaimer
The views expressed herein are based on the basis of internal data, publicly available information and other sources believed to be
reliable. Any calculations made are approximations, meant as guidelines only, which you must conrm before relying on them. The
information contained in this document is for general purposes only and is not an oer to sell or a solicitation to buy/sell any
mutual fund units/securities. The document is given in summary form and does not purport to be complete. The document does
not have regard to specic investment objectives, nancial situation and the particular needs of any specic person who may
receive this document. The information/ data herein alone are not sucient and should not be used for the development or
implementation of an investment strategy. The same should not be construed as an investment advice to any party. The
statements contained herein are based on our current views and involve known and unknown risks and uncertainties that could
cause actual results, performance or events to dier materially from those expressed or implied in such statements. Neither HDFC
Asset Management Company (HDFC AMC) and HDFC Mutual Fund (the Fund) nor any person connected with them, accepts any
liability arising from the use of this document. The recipient(s) before acting on any information herein should make his/her/their
own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on
the basis of information contained herein.