HDFC Banking and PSU Debt Fund

The HDFC Banking and PSU Debt Fund is an income scheme that aims to offer regular income through debt and money market instrument investments. The scheme is offered by HDFC Asset Management Company, among the largest fund houses in India.

Type of fund

This is an open ended income mutual fund.

Investment objective

The objective here is to generate regular income through debt and money market investments predominantly in securities from Scheduled Commercial Banks and PSUs.

Fund information

Inception date 25/03/2014
CRISIL rank Not Ranked
Schemes
  • Direct Plan – Dividend Option
  • Direct Plan – Growth Option
  • Dividend Option
Entry load 0%. Any upfront commissions to be paid by investor directly to ARN holder.
Exit load Nil
Minimum investment Rs.5,000 for new investors and any amount thereafter
SIP No minimum amount
Product label – Risk and target investors Moderately low risk. Meant for investors looking to generate regular income over the medium to long term through PSU and SCB oriented debt based investments.
Benchmark CRISIL Short Term Bond Fund Index. This index aims to track performance of a debt portfolio consisting of AAA/AA rated corporate bonds, government securities, Certificates of Deposit and Commercial Papers.
SWP Yes. Available in Fixed and Variable variants. Frequency of withdrawals are monthly, quarterly half yearly and yearly for Fixed SWP and quarterly, half yearly and yearly for Variable SWP.
STP Yes. Available in two variants namely Fixed Systematic Transfer Plan (FSTP) and Capital Appreciation Systematic Transfer Plan (CASTP). Daily, Weekly, Monthly and quarterly transfer plans are available.
Redemption Proceeds to be dispatched within 10 days. Minimum redemption amount of Rs.1,000 or 100 units.
Taxation (on investment and on redemption) As per applicable sections under the Income Tax Act.

Fund manager(s)

Mr Anil Bamboli is a CFA qualified professional from AIMR, USA. He has a Master’s degree in Management Studies in Finance and graduation in Cost and Works Accountant from ICWAI. His erstwhile employer was SBI Fund management. He handles other funds from HDFC AMC such as HDFC Short term Direct Plan, HDFC Multiple Yield Fund Plan, HDFC Cash Mgmt. Savings and HDFC Gilt Short Term Plan, among others.

Mr Rakesh Vyas has overall 8 years of past experience with 5 years in the field of equity research and 3 years as an applications engineer. He handles several funds for HDFC Mutual Funds including HDFC Balanced Fund, HDFC Multiple Yield Fund Plan 2005, HDFC Mid Cap Opportunities Fund and HDFC Short Term Opportunities Fund etc. He has a B.E. Electrical degree and a PGDM from XLRI Jamshedpur. His past work experiences have been with Lehman Brothers and Nomura.

Investment philosophy

The fund aims to provide regular income over the medium to long term duration through investments in securities issued by PSUs and Scheduled Commercial Banks. The scheme targets higher levels of yield at lower risk levels. The quality of securities is focussed upon before making any investments. The PSU and SCB investments are aimed at maintaining high credit quality as well as timely interest payments and maturity proceeds. 80-100% of net assets will be invested in debt/money market instruments of SCBs and PSUs while 0-20% investments can be made in other types of debt and money market instruments.

Portfolio – Sector / Top 10 holdings*

Name Sector Class Allocation (%)
Corporation Bank 2016 Financial CD 30.28
Canara Bank 2016 Financial CD 28.71
Andhra Bank 2015 Financial CD 28.13
UCO Bank 2015 Financial CD 4.06
Yes Bank Ltd 2016 Financial CD 2.15

*As on 31st July 2015

Risk measures

Standard Deviation NA
Sharpe Ratio NA
Alpha NA
Beta NA

Performance*

AUM Rs.29 crores (Regular Growth)
NAV
  • Direct Plan – Dividend Option: Rs.10.1457
  • Direct Plan – Growth Option: Rs.11.4337
  • Dividend Option: Rs.10.1457
Expense Ratio
  • 0.15%
  • Direct Plan will have lower expense ratio by 0.05%

*As on 31st July 2015

Benchmark comparison*
Compounded Annualised Returns
Scheme Returns (%)
Benchmark Returns (%)
Growth Option Direct Plan – Growth Option Growth Option Direct Plan – Growth Option
Returns for last 1 year 9.87 9.92 10.18 10.18
Returns since inception 9.95 10.01 10.16 10.16

*As on 30th April 2015

Expert view of the fund

The Banking and PSU Debt Fund is aimed at investors looking at moderate medium to long term capital gain through debt/money market investments in PSU and SCB based securities. The scheme is ideal for medium to long term investors looking to generate income in a low risk environment. The fund is relatively new and has matched the benchmark returns through its short period of existence. Passive investors can opt for this fund as a means of income growth. You should consult with your personal financial advisor first before making any risky investments such as mutual funds.

How to apply

You can apply for the HDFC Banking and PSU Debt Fund through online or offline routes.

  • Online

    Online investors can log into the HDFCMFOnline portal and apply directly for the scheme if they have existing folios with the fund house. You will be required to generate a HPIN number which can be used to log into the portal. Alternatively, you may also use third party websites if available, though this should only be done if you are very sure about the legitimacy of the provider.

  • Offline

    Offline investors can approach any of the Investor Service Centres of HDFC fund house and complete all the formalities by filling up forms and submitting documents. You can also use the services of third party distributors or dealers after checks on their background and genuineness of their claims.

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