Presenting

HDFC Income Fund

(An Open-Ended Income Scheme)
(December 2012)

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 Table of Contents

Product Rationale and Positioning

Investment Strategy

Portfolio Composition

Product Features, Asset Allocation Pattern & Fund Manager Profile

Fund Suitability

Disclaimer

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 Product Rationale

Invest in the entire range of debt and money market instruments to take
advantage of various interest rate scenarios

Target enhanced returns commensurate with a higher risk profile of the product

Maintain a balance of yield and liquidity

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 Positioning of HDFC Income Fund

Gilt Funds
RETURN

Income Funds

Short Term Plans

Ultra Short Term Funds

Liquid Funds

RISK (Maturity)

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Investment Strategy

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 Current Investment Strategy

Actively manage the portfolio based on interest rate outlook

Manage interest rate risk by altering:

Portfolio composition

Maturity of the portfolio (duration)

Maintain reasonable exposure to G-secs to ensure efficient execution of interest

rate outlook

Trade on spreads across asset class, ratings, sectors and maturities

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Portfolio Composition
(As on November 30, 2012)

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 Portfolio Composition
(As on November 30, 2012)

Portfolio Classification by Asset Class (%)

Government Securities 60.22

Credit Exposure 34.05

Cash, Cash Equivalents and Net Current Assets 5.73

Average Portfolio Maturity *– 9.46 years

Modified Duration*: 5.64 years
Yield to Maturity*: 8.61%
Net Assets (`` in crore) – 631.95**

** Average AUM for the quarter ended September 30, 2012

* Computed on the invested amount

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 Portfolio Composition
(As on November 30, 2012)

Portfolio Classification by Rating Class (%)

Sovereign 60.22

AAA / AAA(SO) / A1+ / A1+(SO) & Equivalent 28.60

AA + & below 5.45

Cash, Cash Equivalents and Net Current Assets 5.73

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 Product Features, Asset
Allocation Pattern & Fund
Manager Profile

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 Product Features
Type of Scheme An open-ended Income Scheme

Investment Objective To optimize returns while maintaining a balance of safety, yield and liquidity

Inception Date September 11, 2000

Load Structure Entry Load: Not Applicable

Upfront 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.
Exit Load
In respect of each purchase / switch-in of units, an exit load of 0.50 % is payable if units are
redeemed / switched-out within 6 months from the date of allotment.
No exit load is payable if units are redeemed / switched-out after 6 months from the date of allotment.
Investment Plan / Options Growth Option and Dividend Option (Quarterly). The Dividend Option offers Dividend Payout and
Reinvestment facility
Minimum Application Amount Purchase:
` 5,000 and any amount thereafter
Additional Purchase:
` 1,000 and any amount thereafter
Benchmark Index CRISIL Composite Bond Fund Index

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 Asset Allocation Pattern
Under normal circumstances, the asset allocation (% of net assets) of the Scheme’s portfolio will be as
follows:

Types of Instruments Normal Allocation Normal Deviation Risk Profile

(%) (%)

Debt instruments (including 80 – 100 50 Low to Medium

securitised debt)

Money Market instruments 0 - 20 50 Low

(including Cash / CBLO /
Reverse Repo)

The scheme may seek investment opportunity in Foreign Debt Securities (max. 50% of net assets) subject to SEBI
(Mutual Funds) Regulations, 1996. The scheme may use derivatives mainly for the purpose of hedging and portfolio
balancing (max. 20% of net assets including cash) based on the opportunities available subject to SEBI (Mutual Funds)
Regulations, 1996. The scheme will not invest in Foreign Securitised Debt.
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 Tax benefits / consequences
HDFC Income Fund (the “Scheme”) is classified as an ‘Income Scheme’ and hence is not
impacted by the DDT applicable for ‘Liquid Schemes / Money Market Mutual Funds’

Income distributed by the Scheme will be exempt from Income-tax in the hands of
investors

On income distribution if any made by the Scheme, additional income tax is payable under
section 115 R of the Income tax Act, 1961, at the following rates:

Category of Investors Dividend Distribution Tax (%)

Individuals / HUF 13.519% $

Others 32.445% $

$ including applicable surcharge, education cess and secondary and higher education cess.
Investors should be aware that the fiscal rules / tax laws may be changed and there can be no guarantee that the
current tax position may continue indefinately
In view of the individual nature of tax consequences, each investor is advised to consult his / her professional tax advisor
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 Fund Manager’s Profile $
Name and Designation Mr. Shobhit Mehrotra - Senior Fund Manager – Fixed Income and Head of Credit
(Fund Manager of HDFC Income Fund since September 1, 2007)

Educational Qualifications B. Text

M.S. MBA (Clemson University, Sc, USA)

Experience Collectively over 18 years of work experience in Fixed Income Markets, credit rating
etc.

Assignments Held Feb 16, 2004 till Date

HDFC Asset Management Company Limited
Feb 1997 to Feb 2004
Templeton Asset Management (India) Pvt. Ltd.
Last Position Held – AVP and Portfolio Manager (Fixed Income)
July 1992 to January 1997
ICRA Ltd.
Last Position Held – Business / Investment Analyst, Member Executive Rating
Committee

$ Dedicated Fund Manager for Overseas Investments: Mr. Rakesh Vyas since May 10, 2012.

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Fund Suitability

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 Why HDFC Income Fund?

Exposure to a diversified portfolio of debt securities

Strong emphasis on risk control – credit, interest rate and liquidity risk

Emphasis on superior credit quality; no investments in instruments below

investment grade as per internal norms

Flexibility to invest in the entire range of debt and money market instruments to
take advantage of various interest rate scenarios

Units of HDFC Income Fund are declared as “Public Securities” under the
Bombay Public Trust Act, 1950

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HDFC Income Fund is suitable for
investors:
With a longer term investment horizon

Willing to tolerate a higher MTM component in return for potentially higher

returns

Such as Public Trusts registered in Maharashtra

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 Disclaimer & Risk Factors

DISCLAIMER: This presentation has been prepared by HDFC Asset Management Company Limited (“HDFC AMC”) on the basis of internal data,
publicly available information and other sources believed to be reliable. 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. The same should not be construed as
investment advice to any party. Neither HDFC AMC and HDFC Mutual Fund (the 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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THANK YOU

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