"The best way to own common stocks is through an index fund." HDFC Index Funds - NIFTY 50 Plan & Sensex Plan - Warren Buffet, Chairman of ...
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“The best way to own common stocks is through an index fund.”
Warren Buffet, Chairman of Berkshire Hathaway
HDFC Index Funds – NIFTY 50 Plan & Sensex Plan
October 2020
1
What does Index Fund mean ?
An Index Fund is a mutual fund scheme that endeavors to track/replicate the constituents of its
target benchmark index (such as S&P BSE SENSEX, NIFTY 50).
An Index Fund aims to maintain a portfolio of investments that is weighted the same as its benchmark
index in order to mirror its performance.
Index Funds are passively managed funds :
There is no active selection of stocks by the Fund Manager
The portfolio is rebalanced periodically only when companies enter/exit the index
The expense ratio of index funds are generally lower than than actively managed equity funds
Index funds in India, generally track the two major broad based indices i.e NIFTY 50 & S&P BSE Sensex
Indices
2Benefits of Investing in Index Funds
Index Funds are an easy and convenient way to invest in an index
Exact Exposure to the markets as per the underlying benchmark index, subject to tracking error
Index funds aims to minimize unsystematic risk(risk pertaining to companies, sectors etc) in the investor’s portfolio
Diversification – Generally tracks broad based indices thus reducing the impact of decline in value of any one stock or
industry, sector
Low Costs – Since index funds are passively managed, cost are kept relatively low
Transparency – As indices are pre-defined, investors know the securities and proportion in which their money will be
invested
3 3Presenting
HDFC Index Funds
HDFC Index Fund - NIFTY 50 Plan HDFC Index Fund – Sensex Plan
An open ended scheme replicating/tracking S&P BSE SENSEX Index
An open ended scheme replicating/tracking NIFTY 50 Index
Name of Scheme This product is suitable for investors who are seeking* Riskometer
• Returns that are commensurate with the performance of the NIFTY 50,
HDFC Index Fund - NIFTY 50 Plan subject to tracking errors over long term
• Investment in equity securities covered by the NIFTY 50
• Returns that are commensurate with the performance of the S&P BSE
HDFC Index Fund - SENSEX Plan SENSEX, subject to tracking errors over long term
• Investment in equity securities covered by the S&P BSE SENSEX
Investors understand that their principal will be at moderately high risk
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
4HDFC Index Fund – NIFTY 50 plan
Investment Objective :
The investment objective of the Scheme is to generate returns that are commensurate with the performance of the NIFTY 50 Index,
subject to tracking errors. There is no assurance that the investment objective of the Scheme will be realized.
Product Features
The scheme has NIFTY 50 Total Return Index as the underlying Benchmark Index
The scheme invests 95% to 100% of its total assets in constituents of NIFTY50 Index in the same proportion as their weights in
the index.
The fund has low expense ratio as compared to other actively managed equity funds
Ideal for those investors who would like to participate in the India growth story by investing in well-diversified portfolio of well
known large cap companies comprising the index
5About the Benchmark index : NIFTY 50 Index
The NIFTY 50 index is a well-diversified 50 companies index accounting for 13 broad sectors of the economy, reflecting overall market
conditions. NIFTY 50 Index is computed using free float market capitalization method.
The NIFTY 50 Index represents about 66.8% of the free float market capitalization of the stocks listed on NSE as on March 29, 2019.
The total traded value of NIFTY 50 index constituents for the last six months ending March 2019 is approximately 53.4% of the traded
value of all stocks on the NSE.
Impact cost^ of the NIFTY 50 for a portfolio size of Rs.50 lakhs is 0.02% for the month March 2019.
Eligibility Criteria for Selection of Constituent Stocks:
i. For a stock to qualify for possible inclusion into the NIFTY50, have traded at an average impact cost of 0.50% or less during the last six
months for 90% of the observations, for the basket size of Rs. 100 Million.
ii. The company should have a listing history of 6 months.
iii. Companies that are allowed to trade in F&O segment are only eligible to be constituent of the index.
iv. A company which comes out with an IPO will be eligible for inclusion in the index, if it fulfills the normal eligibility criteria for the index for
a 3 month period instead of a 6 month period.
Index Re-Balancing: Index is re-balanced on semi-annual basis.
^Impact cost represents the cost of executing a transaction in a given stock, for a specific predefined order size, at any given point of time.
Source : www.nseindia.com
6Why to Invest in NIFTY 50 Index
NIFTY 50 Index is one of the best market representatives of Indian Markets: Largest traded index in India and among the top 5 traded
indices in the world
Diversification: Buying a single unit currently offers diversification of 50 stocks across 13 broad sectors
Transparency: NIFTY 50 Index constituents are made available in public domain on a daily basis by NSE
Hedging option available: The Index has a derivative listed on NSE called “NIFTY” which can be utilized to hedge the investment during
extreme volatility
Index track Record: Base date Nov 1995, the index has a track record of over 24 years, NIFTY 50 index consist of the 50 most liquid stocks
traded on the National Stock Exchange
7Product Features – NIFTY 50 Plan
Type of Scheme An open ended scheme replicating/tracking NIFTY 50 Index
Inception Date July 17, 2002
Mr. Krishan Kumar Daga (Since October 19, 2015) and Arun Agrawal (Since August 24, 2020)
Fund Manager
Investment Plans Regular Plan & Direct Plan
Investment Options Each Plan offers Growth option only
Minimum Application Amount Purchase: Rs. 5,000 and any amount thereafter
(Under Each Plan/Option) Additional Purchase: Rs. 1,000 and any amount thereafter
Total Expense Ratio Regular: 0.30%
(As on Sept 30, 2020) Direct: 0.10%
Tracking Error
0.31% (Annualised tracking error is calculated based on daily rolling returns for the last 12 months)
(As on Sept 30, 2020)
• In respect of each purchase / switch-in of units, an exit load of 0.25% is payable if units are redeemed / switched – out within 3 days
from the date of allotment
• No exit load is payable if units are redeemed / switched – out after 3 days from the date of allotment
• In respect of systematic transactions such as SIP , STP etc exit load prevailing on the date of registration/enrolment shall be levied.
Exit Load
No Entry/ Exit Load shall be levied on bonus units and units allotted on dividend reinvestment.
For further details on load structure, please refer to the Scheme Information Document.
Benchmark NIFTY 50 Total Return Index
For further details refer Scheme Information Document/Key Information Memorandum available on our website www.hdfcfund.com
8Top 10 Stocks & Sectors – NIFTY50 Plan
Name Of the Instrument Industry % to NAV
Reliance Industries Ltd. Petroleum Products 14.93
HDFC Bank Ltd. Banks 9.69
Infosys Limited Software 7.63
Housing Development Fin. Corp. Ltd.£ Finance 6.44
Tata Consultancy Services Ltd. Software 5.41
ICICI Bank Ltd. Banks 5.06
Kotak Mahindra Bank Limited Banks 3.84
Hindustan Unilever Ltd. Consumer Non Durables 3.82
ITC Ltd. Consumer Non Durables 3.10
Larsen and Toubro Ltd. Construction Project 2.28
$ Sponsor
For complete portfolio details refer www.hdfcfund.com. The portfolio composition as on September 30, 2020 . Industry Classification as recommended by AMFI, Data is as of June 30, 2020 unless otherwise specified.
9HDFC Index Fund – Sensex plan
Investment Objective :
The investment objective of the Scheme is to generate returns that are commensurate with the performance of the S&P BSE SENSEX
Index, subject to tracking errors There is no assurance that the investment objective of the Scheme will be realized.
Product Rationale
The scheme has S&P BSE Sensex Total Return Index as the underlying Benchmark Index
The scheme invest 95% to 100% of its total assets in constituents of S&P BSE Sensex Index in the same proportion as their
weights in the index.
The fund has low expense ratio as compared to other actively managed equity funds
Ideal for those investors who would like to participate in the India growth story by investing in well-diversified portfolio of well
known large cap companies comprising S&P BSE Index
10About the Benchmark index : S&P BSE Sensex Index
The S&P BSE Sensex index is designed to measure the performance of the 30 largest, most liquid and financially sound companies across
key sectors of the Indian economy that are listed at BSE
The Index represents the large-cap companies and is calculated on a float-adjusted market-cap-weighted methodology.
The S&P BSE Sensex index has a long history of more than 34 years and cover more than 40% of total market cap of the listed universe at
BSE Ltd.
The index generally attempts to maintain index sector weights that are broadly line with the overall market
Eligibility Criteria for Selection of Constituent Stocks:
Eligible Universe. The index is derived from the constituents of the S&P BSE 100. The inclusion of DVRs in the index will result in more than 30
stocks in the index. However, the number of companies in the index remains fixed at 30. Stocks in the eligible universe must satisfy the
following eligibility factors in order to be considered for index inclusion:
i. Listing History. Stocks must have a listing history of at least six months at BSE.
ii. Trading Days. The stock must have traded on every trading day at BSE during the six month reference period.
iii. Multiple Share Classes. DVRs satisfying the above eligibility criteria are aggregated with the company’s common stock and index
construction is done based on the aggregated company data as detailed below.
Index Re-Balancing: Index is re-balanced on semi-annual basis.
Source : www.bseindia.com
11Why to Invest in S&P BSE Sensex Index
Index History: Launched in January 1986, the S&P BSE SENSEX is the oldest and one of the most prominent broad based benchmark in
India
Diversification: Buying a single unit currently offers diversification of 30 stocks across broad sectors
Transparency: S&P BSE Sensex Index constituents are made available in public domain on a daily basis by BSE
Hedging option available: The Index has a derivative listed on NSE called “S&P BSE SENSEX® Futures” which can be utilized to
hedge the investment during extreme volatility
12Product Features – Sensex Plan
Type of Scheme An open-ended scheme replicating/ tracking S&P BSE SENSEX Index
Inception Date July 17, 2002
Fund Manager $ Mr. Krishan Kumar Daga (Since October 19, 2015) and Arun Agrawal (Since August 24, 2020)
Investment Plans Regular Plan & Direct Plan
Investment Options Each Plan offers Growth option only
Minimum Application Amount Purchase: Rs. 5,000 and any amount thereafter
(Under Each Plan/Option) Additional Purchase: Rs. 1,000 and any amount thereafter
Total Expense Ratio Regular: 0.30%
(As on Sept 30, 2020) Direct: 0.10%
Tracking Error
0.19% (Annualised tracking error is calculated based on daily rolling returns for the last 12 months)
(As on Sept 30, 2020)
• In respect of each purchase / switch-in of units, an exit load of 0.25% is payable if units are redeemed / switched – out within 3 days
from the date of allotment
• No exit load is payable if units are redeemed / switched – out after 3 days from the date of allotment
• In respect of systematic transactions such as SIP , STP etc exit load prevailing on the date of registration/enrolment shall be levied.
Exit Load
No Entry/ Exit Load shall be levied on bonus units and units allotted on dividend reinvestment.
For further details on load structure, please refer to the Scheme Information Document.
Benchmark S&P BSE SENSEX TR Index
For further details refer Scheme Information Document/Key Information Memorandum available on our website www.hdfcfund.com
13Top 10 Stocks & Sectors – Sensex Plan
Name Of the Instrument Industry % to NAV
Reliance Industries Ltd. Petroleum Products 17.37
HDFC Bank Ltd. Banks 10.57
Infosys Limited Software 8.96
Housing Development Fin. Corp. Ltd.£ Finance 7.50
Tata Consultancy Services Ltd. Software 6.30
ICICI Bank Ltd. Banks 5.89
Hindustan Unilever Ltd. Consumer Non Durables 4.45
Kotak Mahindra Bank Limited Banks 3.99
ITC Ltd. Consumer Non Durables 3.61
Axis Bank Ltd. Banks 2.69
$ Sponsor
For complete portfolio details refer www.hdfcfund.com. The portfolio composition as on September 30, 2020 . Industry Classification as recommended by AMFI, Data is as of June 30, 2020 unless otherwise specified
14Why HDFC Index Funds – NIFTY50 & Sensex Plan
Opportunity to invest in a diversified portfolio of most liquid and Large cap companies representing the broad economy
Minimize unsystematic risk(risk pertaining to companies, sectors etc) of an investor’s portfolio to a certain extent
Less expensive as compared to actively managed funds – Lower transaction costs and expense ratio
One of the most experienced fund management and research teams in the country with a track record of managing equity
assets across market cycles
One of the established index funds in category with a track record of over 16 years.
Strong emphasis on timely and efficient replication of the benchmark index , so as to minimize the tracking error
HDFC Mutual Fund/AMC is not guaranteeing returns on investments made in this scheme. The current investment strategy is subject to change depending on the market conditions.
15Scheme Performance Summary :
HDFC Index Fund – NIFTY50 Plan
Value of Rs 10,000 invested
Additional Additional
Scheme Returns Benchmark Benchmark
Benchmark Scheme Benchmark
(%) Returns (%) # (Rs)#
Returns (%) ## (Rs)##
Last 1 year -1.85 -0.97 -0.44 9,815 9,903 9,956
Last 3 years 5.44 6.02 8.00 11,727 11,921 12,602
Last 5 years 7.92 8.53 9.15 14,647 15,064 15,502
Since inception
13.44 15.61 16.28 99,552 140,559 156,232
(July 17, 2002)
Past performance may or may not be sustained in the future. The above returns are of Regular plan - growth option. Returns greater than 1 year period are compounded annualized (CAGR). Since inception returns
are calculated on Rs. 10.3260 (allotment price). Load is not taken into consideration for computation of performance. # Benchmark Index: NIFTY 50 (Total Returns Index), ## Additional Benchmark Index : S&P BSE
Sensex (Total Returns Index). Different plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution
expenses / commission charged in the Regular Plan. Returns as Sept 30, 2020. The Scheme is managed by Krishan Kumar Daga since Oct 19, 2015. Returns greater than 1 year period are compounded annualized
(CAGR).
16SIP: Performance as on September 30, 2020
HDFC Index Fund – NIFTY50 Plan
Particulars 1 year 3 Years 5 Years 10 Years 15 Years Since Inception$
Total Amount Invested (` ) 120,000 360,000 600,000 1,200,000 1,800,000 2,190,000
Mkt Value As on Sept 30, 2020 (`) 125,878 377,192 704,443 1,859,637 3,541,755 6,352,334
Returns (Annualised) (%) 9.23% 3.05% 6.36% 8.48% 8.50% 10.64%
Benchmark Returns (Annualised) (%) # 10.15% 3.74% 7.00% 9.12% 9.72% 12.52%
Addl. Benchmark Ret. (Annualised) (%) ## 9.64% 4.83% 8.07% 9.64% 10.07% 13.10%
HDFC Index Fund – NIFTY50 Plan – Assuming Investment of `10,000 invested systematically on the first Business Day of every Month over a period of time.
Past performance may or may not be sustained in the future. Returns are XIRR. CAGR returns are computed after accounting for the cash flow by using XIRR method (investment internal rate of return) for Regular
Plan - Growth Option. Load is not taken into consideration for computation of performance. Different plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under
the Scheme will be lower to the extent of the distribution expenses / commission charged in the Regular Plan. The Scheme is managed by Krishan Kumar Daga since Oct 19, 2015. The above investment simulation is
for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital. # Benchmark Index: NIFTY 50 (Total Returns Index), ## Additional Benchmark Index : S&P BSE
Sensex (Total Returns Index). $ Scheme Inception Date : October 19, 2015. Returns greater than 1 year period are compounded annualized (CAGR).
17Scheme Performance Summary :
HDFC Index Fund – Sensex Plan
Value of Rs 10,000 invested
Additional Additional
Scheme Returns Benchmark Benchmark
Benchmark Scheme Benchmark
(%) Returns (%) # (Rs)#
Returns (%) ## (Rs)##
Last 1 year -1.28 -0.44 -0.97 9,872 9,956 9,903
Last 3 years 7.36 8.00 6.02 12,378 12,602 11,921
Last 5 years 8.65 9.15 8.53 15,145 15,502 15,064
Since inception
13.81 16.28 15.61 105,575 156,232 140,559
(July 17, 2002)
Past performance may or may not be sustained in the future. The above returns are of Regular plan - growth option. Returns greater than 1 year period are compounded annualized (CAGR). Since inception returns
are calculated on ` 32.1610 (allotment price). Load is not taken into consideration for computation of performance. # Benchmark Index S&P BSE Sensex (Total Returns Index), ## Additional Benchmark Index : NIFTY50
(Total Returns Index). Different plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution expenses /
commission charged in the Regular Plan. Returns as on Sept 30, 2020. The Scheme is managed by Krishan Kumar Daga since Oct 19, 2015. Returns greater than 1 year period are compounded annualized (CAGR).
18SIP: Performance as on September 30, 2020
HDFC Index Fund – Sensex Plan
Particulars 1 year 3 Years 5 Years 10 Years 15 Years Since Inception$
Total Amount Invested (` ) 120,000 360,000 600,000 1,200,000 1,800,000 2,190,000
Mkt Value As on September 30, 2020 (`) 125,609 383,428 723,814 1,911,502 3,646,139 6,657,174
Returns (Annualised) (%) 8.80% 4.14% 7.44% 9.01% 8.84% 11.07%
Benchmark Returns (Annualised) (%) # 9.64% 4.83% 8.07% 9.64% 10.07% 13.10%
Addl. Benchmark Ret. (Annualised) (%) ## 10.15% 3.74% 7.00% 9.12% 9.72% 12.52%
HDFC Index Fund – Sensex Plan – Assuming Investment of `10,000 invested systematically on the first Business Day of every Month over a period of time.
Past performance may or may not be sustained in the future. Returns are XIRR. CAGR returns are computed after accounting for the cash flow by using XIRR method (investment internal rate of return) for Regular
Plan - Growth Option. Load is not taken into consideration for computation of performance. Different plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under
the Scheme will be lower to the extent of the distribution expenses / commission charged in the Regular Plan. The Scheme is managed by Krishan Kumar Daga since Oct 19, 2015. The above investment simulation is
for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital. # Benchmark Index S&P BSE Sensex (Total Returns Index), ## Additional Benchmark Index :
NIFTY50 (Total Returns Index). $ Scheme Inception Date : October 19, 2015. Returns greater than 1 year period are compounded annualized (CAGR).
19Performance of Other Schemes managed by Krishan Kumar Daga & Arun Agarwal, Fund Manager of
HDFC Index Fund - NIFTY 50 Plan & Sensex Plan
Performance
Managing Scheme since Last 3 years Last 5 years
Last 1 year (%)
Scheme CAGR (in %) CAGR (in %)
Krishan Kumar Daga manages 7 other schemes & Arun Agarwal manages 5 other schemes which have completed more than 1 year
Performance of Top 3 schemes managed by Krishan Kumar Daga & Arun agarwal
HDFC Equity Savings Fund ( Arbitrage Assets) $ January 08, 16 -0.39 2.62 7.08
40% Nifty 50 Arbitrage Index + 30% CRISIL Short Term Bond Fund Index + 30% Nifty 50 TRI 4.83 6.61 7.42
HDFC Sensex ETF $ Dec 09, 15 -0.59 7.91 NA
S&P BSE Sensex TRI -0.44 8.00 NA
HDFC Arbitrage Fund – Wholesale $ September 10, 15 4.15 5.20 5.61
NIFTY 50 Arbitrage Index 2.96 4.64 5.04
Performance of Bottom 3 schemes managed by Krishan Kumar Daga
HDFC Gold Fund October 19, 15 33.30 17.82 12.62
Domestic Prices of Physical Gold 31.91 19.00 13.93
HDFC Gold Exchange Fund October 19,15 30.44 17.66 12.66
Domestic Prices of Physical Gold 31.91 19.00 13.93
HDFC Multi - Asset Fund ( Krishan Daga -Gold Assets) & ( Arun Agarwal – Arbitrage Assets) May 23, 18 10.08 5.59 7.03
90% NIFTY 50 Hybrid Composite Debt 65:35 Index + 10% Domestic Price of Gold 7.59 8.85 9.73
Performance of scheme co-managed by Arun Agarwal & Krishan Daga not forming of Top 3 & Bottom 3 Schemes
HDFC NIFTY ETF $ Dec 09, 2015 -1.32 5.87 NA
NIFTY 50 TRI -0.97 6.02 NA
Past performance may or may not be sustained in the future. The above returns are of Regular plan - growth option. Load is not taken into consideration for computation of performance. On account of difference in
the type of the Scheme, asset allocation, investment strategy, inception dates, the performance of these schemes is strictly not comparable. Top 3 and bottom 3 schemes managed by the Fund Manager have been
derived on the basis of returns since inception vis-à-vis the benchmark. In case the benchmark is not available on the Scheme’s inception date, the returns for the concerned scheme is considered from the date the
benchmark is available . Returns/ Data as on Sept 30, 2020. Different plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses of the Direct Plan under the Scheme will be lower to the
extent of the distribution expenses/ commission charged in the Regular Plan . Returns greater than 1 year period are compounded annualized (CAGR). Load is not taken into consideration for computation of above
performance(s). $ Co-Managed with Krishan Kumar Daga since August 24, 2020
20Disclaimer & Risk Factors
This presentation, dated 16th October 2020, has been prepared by HDFC Asset Management Company Limited (HDFC AMC) based on
internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as
guidelines only, which you must confirm before relying on them. The information contained in this document is for general purposes only.
The document is given in summary form and does not purport to be complete. The document does not have regard to specific investment
objectives, financial situation and the particular needs of any specific person who may receive this document. The information/ data herein
alone are not sufficient and should not be used for the development or implementation of an investment strategy. Past performance may or
may not be sustained in future. Neither HDFC AMC and HDFC Mutual 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.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
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