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HDFC Long Term Advantage Fund (ELSS)
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Investment Objective
The primary objective of the Scheme is to generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments.
Basic Scheme Information
| Nature of Scheme |
Open Ended Equity Linked Savings Scheme with a lock-in period of 3 years |
| Inception Date |
January 02, 2001 |
| Option/Plan |
Dividend Option,Growth Option. The Dividend Option offers Dividend Payout and Reinvestment Facility. |
Entry Load
(purchase / additional purchase / switch-in)
(click here for SIP Details)
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NIL
(With effect from August 1, 2009)
Please click here to go through the addendum. |
Exit Load
(as a % of the Applicable NAV)
(click here for SIP Details)
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No Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. |
Minimum Application Amount
(click here for SIP Details)
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For new & existing investors :Rs.500 and in multiples thereafter.
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| Lock-In-Period |
3 years from the date of allotment of the respective Units |
| Net Asset Value Periodicity |
Every Business Day. |
| Redemption Proceeds |
Normally despatched within 3 Business days(subject to completion of Lock-in period, Only Individuals and HUF) |
Tax Benefits
(As per present Laws) |
Please click for details |
Current Expense Ratio (#)
(Effective Date 22nd May 2009) |
On the first 100 crores average weekly net assets 2.50%
On the next 300 crores average weekly net assets 2.25%
On the next 300 crores average weekly net assets 2.00%
On the balance of the assets 1.75% |
| (#) Any change in the expense ratio will be updated within two working days. |
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Plan Name |
NAV Date |
NAV Amount |
| Dividend Option | 29 Jul 2010 | 38.1210 | | Growth Option | 29 Jul 2010 | 130.2300 |
Investment Pattern
The net assets of the Scheme will be invested primarily in equity and equity related instruments. The Scheme may invest a part of its net assets in debt and money market instruments, in order to manage its liquidity requirements from time to time, and under certain circumstances, to protect the interests of the Unit holders.
The asset allocation under the Scheme will be as follows :
| Sr.No. |
Type of Instruments |
Normal Allocation
(% of Net Assets) |
Risk Profile |
| 1 |
Equities & Equity related instruments |
80 |
Medium to High |
| 2 |
Debt Securities, Money Market instruments(including cash/call money) |
20 |
Low to Medium |
Investment Strategy
The funds collected under the Scheme shall be invested in equities, cumulative convertible preference shares and fully convertible debentures and bonds of companies. Investment may be made in partly convertible debentures and bonds including those issued on a rights basis subject to the condition that, as far as possible, the non convertible portion of the debenture so acquired or subscribed shall be disinvested within a period of 12 months.
It shall be ensured that funds of the Scheme shall remain invested to the extent of atleast 80% in securities specified above. In exceptional circumstances, this requirement may be dispensed with by the AMC, in order that the interest of the Unit holders are protected.
Pending investment of funds of the Scheme in the required manner, the AMC may invest the funds of the Scheme in shortterm money market instruments or other liquid instruments or both. After 3 years from the date of allotment of the Units, the Mutual Fund may hold upto 20% of net assets of the Scheme in short-term money market instruments.
The investment approach will be based on a set of well established but flexible principles that emphasise the concept of sustainable economic earnings and cash return on investment as the means of valuation of companies.
Five basic principles serve as the foundation for this investment approach. They are as follows :
- Focus on the long term
There is substantive empirical evidence to suggest that equities provide the maximum risk adjusted returns over the long term. In an attempt to take full advantage of this phenomenon, investments would be made with a long term perspective.
- Investments confer proportionate ownership
The approach to valuing a company is similar to making an investment in a business. Therefore, there is a need to have a comprehensive understanding of how the business operates. The key issues to focus on are growth opportunities, sustainable competitive advantage, industry structure and margins and quality of the management.
- Maintain a margin of safety
The benchmark for determining relative attractiveness of stocks would be the intrinsic value of the business. The Investment Manager would endeavor to purchase stocks that represent a discount to this value, in an effort to preserve capital and generate superior growth.
- Maintain a balanced outlook on the market
The investment portfolio would be regularly monitored to understand the impact of changes in business and economic trend as well as investor sentiment. While short-term market volatility would affect valuations of the portfolio, this is not expected to influence the decision to own fundamentally strong companies.
- Disciplined approach to selling
The decision to sell a holding would be based on either the anticipated price appreciation being achieved or being no longer possible due to a change in fundamental factors affecting the company or the market in which it competes, or due to the availability of an alternative that, in the view of the Investment Manager, offers superior returns.
In order to implement the investment approach effectively, it would be important to periodically meet the management face to face. This would provide an understanding of their broad vision and commitment to the long-term business objectives. These meetings would also be useful in assessing key determinants of management quality such as orientation to minority shareholders, ability to cope with adversity and approach to allocating surplus cash flows. Discussion with management would also enable benchmarking actual performance against stated commitments.
In summary, the Investment Strategy is expected to be a function of extensive research and based on data and reasoning, rather than current fashion and emotion. The objective will be to identify "businesses with superior growth prospects and good management, at a reasonable price".
Subject to limits indicated above for investment in debt and money market instruments, investment in debt securities will usually be in instruments which have been assessed as "investment grade" by at least one credit rating agency authorised to carry out such activity under the applicable regulations. Pursuant to SEBI Circular No. MFD/CIR/9/120/ 2000 dated November 24, 2000, the AMC may constitute committee(s) to approve proposals for investments in unrated debt instruments. The AMC Board and the Trustee shall approve the detailed parameters for such investments. The details of such investments would be communicated by the AMC to the Trustee in their periodical reports. It would also be clearly mentioned in the reports, how the parameters have been complied with. However, in case any unrated debt security does not fall under the parameters, the prior approval of Board of AMC and Trustee shall be sought. Investment in debt instruments shall generally have a low risk profile and those in money market instruments shall have an even lower risk profile. The maturity profile of debt / money market instruments will be selected in accordance with the Fund Managers view regarding current market conditions, interest rate outlook and the stability of ratings.
Fund Manager
Mr. Chirag Setalvad (since April 2, 2007)
Mr. Anand Laddha - Dedicated Fund Manager - Foreign Securities
| Portfolio - Holdings (as on June 30, 2010) | | Company | Industry+ | % to NAV | | EQUITY & EQUITY RELATED | | | | ICICI Bank Ltd. | Banks | 5.94 | | Infosys Technologies Ltd. | Software | 5.33 | | Tata Consultancy Services Ltd. | Software | 5.02 | | State Bank of India | Banks | 4.88 | | Reliance Industries Ltd. | Petroleum Products | 4.09 | | Blue Star Ltd. | Consumer Durables | 3.56 | | Oil & Natural Gas Corporation Ltd. | Oil | 3.25 | | Pidilite Industries Ltd. | Chemicals | 3.10 | | Ipca Laboratories Ltd. | Pharmaceuticals | 3.10 | | Exide Industries Ltd. | Auto Ancillaries | 3.07 | | Total of Top Ten Equity Holdings | | 41.34 | | Total Equity & Equity Related Holdings | | 97.50 | | Total Credit Exposures (aggregated holdings in a single issuer) | | 0.15 | | Cash, Cash Equivalents and Net Current Assets | | 2.35 | | Grand Total | | 100.00 | | Net Assets (Rs. In Lakhs) | | 94279.76 |
Note : $ Sponsor
Returns
| HDFC Long Term Advantage Fund | (NAV as at evaluation date 30-June-2010, Rs. 126.426 Per unit) | | Date | Period | NAV Per Unit (Rs.) | Returns (%) ^ | Benchmark Returns (%) #
| | March 30, 2007 | Last 1188 days | 86.337 | 12.43** | 9.76**
| | December 30, 2009 | Last Six months (182 days) | 114.955 | 9.98* | 2.06*
| | June 30, 2009 | Last 1 Year (365 days) | 90.266 | 40.06* | 22.13*
| | June 29, 2007 | Last 3 Years (1097 days) | 100.695 | 7.87** | 6.5**
| | June 30, 2005 | Last 5 Years (1826 days) | 53.280 | 18.85** | 19.72**
| | June 30, 2000 | Last 10 Years (3652 days) | N.A | N.A. | 14.05**
| | January 2, 2001 | Since Inception (3466 days) | 10.000 | 30.63** | 16.9**
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* Absolute Returns ** Compounded Annualised Returns
# SENSEX
^ Past performance may or may not be sustained in the future
SIP Returns
| SIP Investments | Since Inception | 10 Year | 5 Year | 3 Year | 1 Year | | Total Amount Invested (Rs.) | 114,000 | N.A. | 60,000 | 36,000 | 12,000
| | Market Value as on June 30, 2010 (Rs.) | 524,576.11 | N.A. | 91,293.21 | 51,161.97 | 15,324.77
| | Returns (Annualised)*(%) | 30.46% | N.A. | 16.81% | 24.22% | 55.15%
| | Benchmark Returns (Annualised)(%)# | 20.97% | N.A. | 14.88% | 16.16% | 33.93%
| | Market Value of SIP in Benchmark# | 323,959.61 | N.A. | 87,068.48 | 45,722.68 | 14,094.85
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Past Performance may or may not be sustained in the future Inception Date of HDFC Long Term Advantage Fund is January 2, 2001
* Load is not taken into consideration and the returns are of Growth Plan/Option. In case the SIP date falls on a non business day, the SIP is processed on the next business day
# Benchmark - SENSEX
Disclaimer: 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 profit or guarantee protection against a loss in a declining market. Please refer SIP Enrolment Form or contact nearest ISC for SIP Load Structure.
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