HDFC Balanced Fund
The primary objective of the Scheme is to generate capital appreciation along with current income from a combined portfolio of equity and equity related and debt and money market instruments.
Basic Scheme Information
|Nature of Scheme
||Open Ended Balanced Scheme |
||September 11, 2000|
Existing Plan : Dividend Option,Growth Option. The Dividend Option offers Dividend Payout and Reinvestment Facility.
Direct Plan (w.e.f. 01 Jan 2013) : Dividend Option, Growth Option. The Dividend Option offers Dividend Payout and Reinvestment Facility.
(For Lumpsum Purchases and investments through SIP/STP)
Unfront 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.
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(as a % of the Applicable NAV)
- In respect of each purchase /
switch-in of Units, an Exit Load of
1.00% is payable if Units are
redeemed / switched-out within
18 months from the date of allotment.
- No Exit Load is payable if Units are
redeemed / switched-out after
18 months from the date of allotment.
|Minimum Application Amount
(click here for SIP Details)
|For new investors :Rs.5000 and any amount thereafter.|
For existing investors : Rs. 1000 and any amount thereafter.
|Net Asset Value Periodicity
||Every Business Day.|
||Normally dispatched within 3-4 Business days|
(As per present Laws)
|Please click for details|
|Current Expense Ratio (#)
(Effective Date 01st Oct 2012)
On the first 100 crores daily net assets 2.25%
On the next 300 crores daily net assets 2.00%
On the next 300 crores daily net assets 1.75%
On the balance of the assets 1.50%
In addition to the above a charge of 20 bps on the daily net assets plus a proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net assets
Excluding Service Tax on Investment Management Fees, if any.
Direct Plan shall have a lower expense ratio by 0.70%.
(#) Any change in the expense ratio will be updated within two working days.
|Direct Plan - Dividend Option||22 Aug 2014||27.6820|
|Direct Plan - Growth Option||22 Aug 2014||94.8670|
|Dividend Option||22 Aug 2014||25.7770|
|Growth Option||22 Aug 2014||94.0360|
The Scheme will be invested in equity and equity related instruments as well as in debt and in money market instruments in normal circumstances. The following table provides the asset allocation of the Scheme's portfolio.
The asset allocation under the Scheme will be as follows :
||Type of Instruments
(% of Net Assets)
(% of Normal Allocation)
|Risk Profile of |
||Equity and Equity Related Instruments
||Medium to High|
||Debt Securities (including securitised debt) and Money Market instruments
||Low to Medium|
Pending deployment of funds of the Scheme in securities in terms of the investment objective of the Scheme, the AMC may invest the funds of the Scheme in short term deposits of scheduled commercial banks.
The balanced product is positioned as a lower risk alternative to a pure equities scheme, while retaining some of the upside potential from equities exposure. The Scheme provides the Investment Manager with the flexibility to shift allocations in the event of a change in view regarding an asset class.
Asset allocation between equities and debt is a critical function in a balanced fund. It is proposed to continuously monitor the potential for both debt and equities to arrive at a dynamic allocation between the asset classes.
The equity and debt portfolios of the Scheme would be managed as per the respective investment strategies detailed herein.
- Equity Investments :
The investment approach would be based on the concept of economic earning power and cash return on investments.
Five basic principles serve as the foundation for this investment approach. They are as follows :
In summary, the assessment of investment value is a function of extensive research and based on data and reasoning, rather than current fashion and emotion. The idea is to develop a model that allow us to identify "businesses with superior growth prospects and good management, at a reasonable price".
- Focus on the long term
- View our investments as conferring a proportionate ownership of the business.
- Maintain a margin of safety (i.e. the price of purchase represents a discount to the intrinsic value of that business).
- Maintain a balanced outlook on the market by regularly monitoring economic trends and investor sentiment.
- The decision to sell a holding would be based on one of three reasons :
- The anticipated price appreciation has been achieved or is no longer probabe.
- Alternative investments offer superior total return prospects, or
- A fundamental change has occurred in the company or the market in which it competes.
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 thei 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. Discussions with management would also enable benchmarking actual performance against stated commitments.
- Debt Investments :
Debt securities (in the form of non-convertible debentures, bonds, secured premium notes, zero interest bonds, deep discount bonds, floating rate bond / notes, securitised debt, pass through certificates, asset backed securities, mortgage backed securities and any other domestic fixed income securities including structured obligations etc.) include, but are not limited to:
- Debt obligations of / Securities issued by the Government of India, State and local Governments, Government Agencies and statutory bodies (which may or may not carry a state / central government guarantee).
- Securities that have been guaranteed by Government of India and State Governments.
- Securities issued by Corporate Entities (Public / Private sector undertakings).
- Securities issued by Public / Private sector banks and development financial institutions.
- Money Market Instruments Include
- Commercial papers
- Commercial bills
- Treasury bills
- Government securities having an unexpired maturity upto one year
- Call or notice money
- Certificate of deposit
- Usance bills
- Permitted securities under a repo / reverse repo agreement
- Any other like instruments as may be permitted by RBI / SEBI from time to time
Investments will be made through secondary market purchases, initial public offers, other public offers, placements and right offers (including renunciation). The securities could be listed, unlisted, privately placed, secured / unsecured, rated / unrated of any maturity.
The AMC retains the flexibility to invest across all the securities / instruments in debt and money market.
Investment in debt securities will usually be in instruments which have been assessed as "high 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 instruments will be selected in accordance with the Fund Managers view regarding current market conditions, interest rate outlook and the stability of ratings.
Investments made from the net assets of the Scheme(s) would be in accordance with the investment objective of the Scheme(s) and the provisions of the SEBI (MF) Regulations. The AMC will strive to achieve the investment objective by way of a judicious portfolio mix comprising of Debt Securities and Money Market Instruments and equity / equity related instruments. Every investment opportunity in Debt Securities and Money Market Instruments would be assessed with regard to credit risk, interest rate risk and liquidity risk.
Mr. Chirag Setalvad (since April 2, 07)
Mr. Rakesh Vyas - Dedicated Fund Manager - Foreign Securities
Portfolios - Holdings
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