HDFC MF Monthly Income Plan - Long Term Plan
The primary objective of Scheme is to generate regular returns through investment primarily in Debt and Money Market Instruments. The secondary objective of the Scheme is to generate long-term capital appreciation by investing a portion of the Scheme`s assets in equity and equity related instruments. However, there can be no assurance that the investment objective of the Scheme will be achieved.
Basic Scheme Information
|Nature of Scheme
||An open-ended income scheme. Monthly income is not assured and is subject to availability of distributable surplus |
||December 26, 2003|
Existing Plan : Growth Option,Quarterly Dividend Option,Monthly Dividend Option. Dividend Option offers Dividend Payout and Reinvestment Facility.
Direct Plan (w.e.f. 01 Jan 2013) : Growth Option,Quarterly Dividend Option,Monthly Dividend Option. 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.
Please click here to go through the addendum.
(as a % of the Applicable NAV)
- In respect of each purchase / switchin of Units, an Exit Load of 1.00% is payable if Units are redeemed / switched-out 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.
- Introduction of Direct Plan - modification in the Exit Load provisions, click here to read
|Minimum Application Amount
(click here for SIP Details)
|For new investors : (Growth & Quarterly Dividend Option) – Rs.5000 and any amount thereafter under each option. |
(Monthly Dividend Option) . Rs. 25000 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 October 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 net 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 0.41%.
(#) Any change in the expense ratio will be updated within two working days.
|Long Term Growth Plan||20 May 2013||27.4123|
|Long Term Monthly Dividend Option||20 May 2013||13.4918|
|Long Term Quarterly Dividend Option||20 May 2013||13.9547|
|Direct Plan - Growth Option||20 May 2013||27.4585|
|Direct Plan - Monthly Dividend Option||20 May 2013||13.5139|
|Direct Plan - Dividend Quarterly Option||20 May 2013||13.9783|
The asset allocation under the Scheme will be as follows :
||Type of Instruments
(% of Net Assets)
(% of Normal Allocation)
||Debt instruments (including securitised debt) & Money Market instruments (including cash/call money)
||Low to Medium|
||Equities & Equity related instruments
||Medium to High|
The investments in central and state government securities will not exceed 75% of the net assets of the respective Plans.
It is the intention of the Scheme that the investments in securitised debt will not, normally exceed 75% of the net assets of the respective Plans.
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 net assets of the respective Plans will be invested primarily in Debt and Money market instruments. The respective Plans seeks to generate regular returns through investment primarily in Debt and Money Market Instruments. The secondary objective of the Scheme is to generate long-term capital appreciation by investing a portion of the Scheme's assets in equity and equity related instruments.
- 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 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 AMC's view regarding current market conditions, interest rate outlook and the stability of ratings.
- Equity Investments :
The investment approach would be based on the concept of economic earning power and cash return on investments. Five basic principles would serve as the foundation for this investment approach. They are as follows :
- Focus on long term growth.
- View 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 probable; or
- Alternative investments offer superior total return prospects; or
- A fundamental change has occurred in the company or the market in which it competes.
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 allows us to identify businesses with superior growth prospects and good management, at a reasonable price.
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. Discussions with management would also enable benchmarking actual performance against stated commitments.
Pursuant to the SEBI Regulations, the respective Plans shall not make any investment in :
- Any unlisted security of an associate or group company of the Sponsors; or
- Any security issued by way of private placement by an associate or group company of the Sponsors; or
- The listed securities of group companies of the Sponsors which is in excess of 25% of the net assets.
The respective Plans may invest in other schemes managed by the AMC or in the schemes of any other mutual funds, provided it is in conformity with the investment objectives of the Scheme and in terms of the prevailing SEBI Regulations. As per the SEBI Regulations, no investment management fees will be charged for such investments and the aggregate inter scheme investment made by all the schemes of HDFC Mutual Fund or in the schemes of other mutual funds shall not exceed 5% of the net asset value of the HDFC Mutual Fund.
The respective Plans may also invest in suitable investment avenues in overseas financial markets for the purpose of diversification, commensurate with the Scheme objectives and subject to necessary stipulations by SEBI / RBI. Towards this end, the Mutual Fund may also appoint overseas investment advisors and other service providers, as and when permissible under the regulations.
Investments made from the corpus of the respective Plans would be in accordance with the investment objective of the respective Plans and the provisions of the SEBI Regulations. The AMC will strive to achieve the investment objective by way of a judicious portfolio mix comprising of debt and money market instruments. Every investment opportunity would be assessed with regard to credit risk, interest rate risk and liquidity risk.
A detailed credit evaluation of each investment opportunity will be undertaken. The AMC will utilise ratings of recognised rating agencies as an input in the decision making process. Investments in bonds and debentures will usually be in instruments that have been assigned high investment grade ratings by a recognised rating agency. In line with 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 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 security does not fall under the parameters, the prior approval of Board of AMC and Trustee shall be sought.
Interest Rate Risk
An interest rate scenario analysis would be performed on an ongoing basis, considering the impact of the developments on the macro-economic front and the demand and supply of funds. Based on the above analysis, the AMC would manage the investments of the Scheme on a dynamic basis to exploit emerging opportunities in the investment universe and manage risks at all points in time.
The AMC will attempt to reduce liquidity risk by investing in securities that would result in a staggered maturity profile of the portfolio, investment in structured securities that provide easy liquidity and securities that have reasonable secondary market activity. In the event of a requirement to liquidate all or a substantial part of these investments in a very short duration of time, the AMC may not be able to realize the full value of these securities to an adverse impact on the Net Asset Value of the Scheme. Please refer to clauses on "Right to Limit Redemptions" and "Suspension of Sale / Redemption / Switching Options of the Units", in the Offer Document.
Mr. Prashant Jain (Equity) (since Dec 26, 03)
Mr. Shobhit Mehrotra. (Debt) (since Sep 1, 07)
Mr. Rakesh Vyas - Dedicated Fund Manager - Foreign Securities
Portfolios - Holdings
Please click here
to view complete Scheme Portfolios