DHFL Pramerica Tax Plan (D)

Performance

DHFL Pramerica Mutual Fund is sponsored by DHFL, one of India’s leading mortgage finance institutions and Pramerica. The latter is one of the affiliated companies of PFI which is a leading financial services groups in the world. The fund manager of DHFL Pramerica Mutual Fund is DHFL Pramerica Asset Managers Private Ltd. and the fund house has its presence in 19 cities across India. DHFL Pramerica Mutual Fund offers over 20 schemes in various asset classes of equity, debt, hybrid, and international Fund of Funds (FoFs).

The DHFL Pramerica Tax Plan - Dividend is an open-ended equity-linked savings scheme (ELSS) that comes with a 3-year statutory lock-in period. The scheme offers tax benefits to the investor and invests in equity and its related securities. The dividend option of the scheme will entitle investors to receive regular income after the completion of the lock-in period.

Investment Objective

To create capital appreciation for the investor through investments in equity and its related securities while also offering tax benefits under Section 80C of the Income Tax Act, 1961.

Key Features of the Scheme

The DHFL Pramerica Tax Plan is ideal for investors who wish to achieve capital appreciation over a long term through investments in equity and its related securities. The scheme displays the below-given features:

Investment amount for DHFL Pramerica Tax Plan

Asset Allocation for DHFL Pramerica Tax Plan

Who can invest in DHFL Pramerica Tax Plan

The following persons/entities are eligible to subscribe to the units of DHFL Pramerica Tax Plan:

• Adult individuals residing in India, either singly or jointly (cannot exceed 3)
• Resident Indian/Non-Resident Indian minors through a legal guardian/parents
• Hindu Undivided Family through Karta
• Partnership firms and proprietorship in the name of the sole proprietor
• Societies registered under the Societies Registration Act, 1860
• Companies, Public Sector Undertakings (PSUs), Association of Persons (AOPs), and Bodies of Individuals (BOIs)
• Financial institutions and banks
• Persons of Indian Origin/Non-Resident Indians on repatriation or non-repatriation basis
• Scientific and Industrial Research Organisations
• Foreign Institutional Investors or SEBI registered sub-accounts of FIIs
• Government of India approved International Multilateral Agencies
• Pension/Provident/Gratuity and such other funds as and when allowed to invest
• Air Force/Army/Navy and other paramilitary units
• Foreign Portfolio Investors
• AMCs, Trustees, Sponsors and their associates
• Other schemes of DHFL Pramerica Mutual Fund

NAV Disclosure and Benchmark for DHFL Pramerica Tax Plan

The NAV of the DHFL Pramerica Tax Plan is obtained by dividing the scheme’s net assets by the number of outstanding units on the date of valuation and is rounded off to 2 decimal places. The fund house will compute and disclose the scheme’s NAV at the end of every business day to news agencies, press, and to the Association of Mutual Funds in India (AMFI). The official website of the fund house (http://www.dhflpramericamf.com) and the AMFI (www.amfiindia.com) will display the NAV of the scheme. Two newspapers with nationwide circulation will also publish the NAV on a daily basis.

The scheme’s monthly portfolio will also be available on the official website of DHFL Pramerica Mutual Fund on or before the 10th day of succeeding month.

Liquidity: Redemption of the units of the DHFL Pramerica Tax Plan can be done after the 3-year lock-in period. Units can be purchased and redeemed at applicable NAVs.

Benchmark: S&P BSE 200 TR Index

Fund Manager

Mr. Avinash Agarwal

The DHFL Pramerica Tax Plan is managed by Mr. Avinash Agarwal and he has been managing this scheme for over 9 months. Overall, he has an experience of 11 years in the equity market and prior to joining DHFL Pramerica Mutual Fund, he worked with Sundaram Asset Management Company and Irevna Research. Apart from the DHFL Pramerica Tax Plan, Mr. Agarwal also manages the DHFL Pramerica Long Term Equity Fund.

Investment Restrictions on the DHFL Pramerica Tax Plan

The DHFL Pramerica Tax plan will abide by the below-given investment restrictions as laid down by the Securities and Exchange Board of India (SEBI):

• The scheme is not permitted to invest above 5% of its net assets in equity shares or its related securities which are unlisted.
• The scheme cannot invest over 10% of its NAV in the equity shares (or related securities) of any firm.
• The scheme is not allowed to invest above 10% of its NAV in debt instruments that are unrated and issued by a single issuer. The total investment in such securities also cannot be more than 25% of the scheme’s net assets. Any such investments will need to be approved by the Board and Trustee of the AMC.
• The scheme is not permitted to invest in any Fund of Funds (FoFs) schemes.
• If the investments are made for a long term, the fund house will get the securities purchased or transferred in the fund’s name on account of the scheme.
• If the scheme invests in derivatives, the total exposure associated with the option premium paid cannot be more than 10% of the scheme’s net assets.
• For hedging purposes, the mutual fund can swap the plain vanilla interest rates provided the counterparty is recognised by the RBI (Reserve Bank of India) as a market maker. In such transactions, the single counterparty exposure cannot be more than 10% of the scheme’s net assets.
• The scheme is not allowed to borrow except in cases where it needs funds to fulfil the temporary liquidity requirements. However, the borrowing should not exceed 20% of the scheme’s net assets and the duration of the borrowing cannot be more than 6 months.

Dividend Policy of DHFL Pramerica Tax Plan

The dividend option of the scheme will entitle investors to receive dividends which will be declared on the availability of distributable surplus and on the discretion of the Trustee. To be eligible to receive dividends, investors should indicate it in the application form.

Under the dividend option, only the dividend payout option is available which means that unitholders will receive the dividend payouts through a cheque, or electronically through ECS, NEFT, RTGS, etc. to their bank accounts. The dividend warrants will be dispatched within 30 days from the dividend declaration date.

Once the dividend is paid out, the NAV of the units of the scheme will be reduced by the amount of dividend plus the statutory levy and dividend distribution tax, if any.

Why you should invest in DHFL Pramerica Tax Plan

• Lock-in period - Since the DHFL Pramerica Tax Plan has a lock-in period of 3 years, it compels you to stay invested for a longer period. Since the performance of mutual funds is directly proportional to the duration of the investment period, you will be able to enjoy better returns on your investment.
• Tax benefits - Being an equity-linked savings scheme, the scheme offers tax rebate under Section 80C of the Income Tax Act, 1961. An amount of up to Rs.1.5 lakh can be deducted from your taxable income thereby reducing your tax liability.
• Professional management - The fund manager of the scheme, Mr. Avinash Agarwal has around 11 years of experience in equity markets. Hence, you can rest assured that your investments will be handled efficiently to achieve optimal returns.
• Multiple investment options - The DHFL Pramerica Tax Plan comes in regular and direct plans wherein the direct plan will have a lower expense ratio than the regular plan. Also, investors can choose between growth and dividend option. The growth option will allow investors to enjoy capital appreciation over a long term while the dividend option will offer them a regular income (after the 3-years lock-in period).

GST rate of 18% applicable for all financial services effective July 1, 2017.