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HDFC Medium Term Opportunities Fund

The HDFC Medium Term Opportunities Fund is an income scheme that aims to offer regular income through debt and money market instrument investments of maturities not more than 5 years. 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 and government securities with maturities not more than 60 months.

Fund information

Inception date 29/06/2010
CRISIL rank Ranked 2nd in Debt Short Term category
Schemes
  • Direct Option – Normal Dividend Option
  • Direct Plan – Growth Option
  • Direct Plan – Quarterly Dividend Option
  • Quarterly Dividend Option
  • Regular Option – Normal Dividend Option
Entry load 0%. Any upfront commissions to be paid by investor directly to ARN holder.
Exit load 1% if redeemed within 1 year
Minimum investment
  • Rs.5,000 for new investors
  • Rs.1,000 additional purchase and any amount thereafter
SIP
  • Minimum Rs.500 for monthly subscription
  • Min. Rs.1,500 for quarterly subscription
Product label – Risk and target investors Moderately low risk. Meant for investors looking to generate regular income over the medium to long term through debt and money market investments and government securities investments.
Benchmark CRISIL Composite Bond Fund Index. This index aims to track performance of a debt portfolio consisting of AAA/AA rated corporate bonds and government securities.
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.
Taxation (on investment and on redemption) As per applicable sections under the Income Tax Act.

Fund manager(s)

Mr Shobhit Mehrotra is the Senior Fund Manager and Head of Credit and has over 18 years of experience in fixed income markets, credit ratings etc. He has an MBA from Clemson University, USA and has previously worked with Templeton AMC and ICRA. He manages other funds from HDFC AMC including HDFC Corporate Debt Opportunities Fund, HDFC Liquid Direct Plan, HDFC High Interest Short Term Direct Plan and HDFC Fixed Maturity 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 application engineer. He handles several funds for HDFC Mutual Funds including HDFC Balanced Fund, HDFC Multiple Yield Fund Plan 2005, HDFC Infrastructure Fund and HDFC Short Term Opportunities Fund etc. He has a B.E. Electrical degree and a PGDM from XLRI Jamshedpur. His past experiences have been in Lehman Brothers and Nomura.

Investment philosophy

The scheme aims to generate regular income for investors through investments primarily in government securities and debt/money market instruments of maturities no more than 5 years or 60 months. The investments are in diverse credit ratings’ debt/money market instruments so as to maximize income and maintain a balance of liquidity, safety and yield. The scheme works towards a diversified and high credit portfolio of debt and related securities to minimize credit risk and liquidity.

Portfolio – Sector / Top 10 holdings*

Name Sector Class Allocation (%)
8.56% Rural Electrification Corp Ltd 2019 Financial Bonds 4.31
9.05% Petronet LNG Ltd 2019 Financial Bonds/NCD 2.72
8.49% IDFC Ltd 2016 Financial Debenture 2.67
Canara Bank 2016 Financial CD 2.58
8.56% Rural Electrification Corp Ltd 2017 Financial Bonds 2.18
8.36% Power Finance Corp. Ltd 2017 Financial Debenture 2.05
8.77% Hindustan Petroleum Corp. Ltd 2018 Energy Debenture 2.03
9.22% Tata Motors Ltd 2015 Auto Debenture 2.01
National Bank For Agriculture and Rural Development Financial CP 1.93
8.56% Rural Electrification Corp Ltd 2016 Financial Bonds 1.89

*As on 31st July 2015

Risk measures

Standard Deviation 0.93%
Sharpe Ratio NA
Alpha NA
Beta NA

Performance*

AUM Rs.3,737 crores (Regular Growth)
NAV
  • Direct Option – Normal Dividend Option: Rs.10.8172
  • Direct Plan – Growth Option: Rs.15.7621
  • Direct Plan – Quarterly Dividend Option: Rs.10.3821
  • Quarterly Dividend Option: Rs.10.3054
  • Regular Option – Normal Dividend Option: Rs.10.6942
Expense Ratio
  • 0.27%
  • Direct Plan will have lower expense ratio by 0.10%

*As on 11th September 2015

Benchmark comparison*

Compounded Annualised Returns Scheme Returns (%) Benchmark Returns (%)
Returns since Inception 5.62 3.82

*As on 31st March 2011

Expert view of the fund

The Medium Term Opportunities Fund is low risk debt based scheme which offers medium to long term investors a relatively safer bet. The fund has consistently beaten the benchmark ratings and has one of the lowest expense ratio in its category of funds. It is ideal for investors looking toward a low cost fund with a conventional investment approach. Mutual fund investments should only be done after due considerations with your financial advisor.

How to apply

You can apply for the HDFC Medium Term Opportunities Fund through online or offline routes.

  • Online

    Online investors can register with the HDFCMFOnline portal and apply directly for a scheme of their choice if they have existing folios with the fund house. You can generate a HPIN number once you have satisfied the KYC norms, which will be used to log into the portal. Alternatively, you may also use third party websites if available, though this should only be done once you have verified the service provider’s credentials.

  • Offline

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

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