Hdfc Asset Management Co. Ltd. · NSE:HDFCAMC
Hdfc Asset Management — Debt Investor Presentation (January 2023)
28 slides from Hdfc Asset Management's debt investor presentation, January 2023
Slide 1: Aim to build a strong foundation
Aim to build a strong foundation NFO Dates: HDFC Long Duration Debt Fund 6th-17th January 2023 For Product labelling refer slide 26 For disclaimer refer slide 27
Slide 2: India - Conducive Environment for Long Duration Debt
India - Asset Introducing Conducive Allocation HDFC Long Environment for and Fund Duration Long Duration Suitability Debt Fund Debt For disclaimer refer slide 27 02
Slide 3: India – A Structural Growth Story
India – A Structural Growth Story Average Annual Nominal GDP Growth 16.0 14.9 15.3 14.0 11.8 12.4 12.0 Average Annual Real 10.0 9.2 9.5 GDP Growth 5.5 6.6 % 8.0 Average Annual 6.0 inflation 4.0 5.7 5.8 6.3 5.7 2.0 0.0 1980-89 1990-99 2000-09 2010-21 1980-89 1990-99 2000-09 2010-22 Operation Blue Star
Slide 4: India’s Growth: An oasis in the slowing world
India’s Growth : An oasis in the slowing world 8.0 Average Expected GDP growth over 2023-27 6.5 6.0 5.2 4.6 Of all the major economies, India is likely to see % 4.0 3.1 2.4 highest growth over the next 5 years 2.0 2.1 2.0 2.0 1.9 1.8 1.8 1.6 1.5 1.4 1.0 0.3 - India Indonesia China Arabia Korea Spain
Slide 5: Growth Outlook: Stars aligned for sustained growth
Growth Outlook: Stars aligned for sustained growth Macro economic Manufacturing and Corporates and Infrastructure Consumption environment China plus one Banks in good shape Capex and Housing Discretionary Steady growth with Favorable government Corporate profitability Central government consumption d
Slide 6: India projected to come in top three economies by 2050
India projected to come in top three economies by 2050 Ranking 1980 2000 2022 2050 2075 1 United States United States United States China China 2 Japan Japan China United States India 3 Germany Germany Japan India United States 4 France United Kingdom Germany Indonesia Indonesia 5 United Kingdom Fra
Slide 7: Interest rates generally fall as countries move up the economic ladder
Interest rates generally fall as countries move up the economic ladder USA (lower by 8.8%) South Korea (lower by 3.4%) 30,000 14.0 2,000 8.00 25,000 12.0 7.00 12.4 10.0 1,500 7.1 6.00 20,000 8.0 5.00 15,000 1,000 6.0 4.00 10,000 4.0 500 3.00 5,000 2.0 3.7 3.6 2.00 0 0.0 0 1.00 1980 1985 1990 1995 20
Slide 8: Global Inflation and Rates – Is the worst behind?
Global Inflation and Rates – Is the worst behind? Last year’s sharp rise in inflation Global inflation has likely Central banks policy rates (worst since 1980s) resulted in peaked in view of close to peak? synchronized tightening of Broad based decline in commodity Growth slowdown and softening monetar
Slide 9: India inflation and RBI – likely to follow global trends?
India inflation and RBI – likely to follow global trends? Post pandemic, India’s CPI remained high Emerging signs of inflation RBI likely to take foot off the driven by food, fuel and commodity momentum losing pace accelerator in 2023? prices; Core inflation was elevated too on back of sustained supply
Slide 10: Yield curve flattening: Largely done?
Yield curve flattening: Largely done? Yield curve has flattened considerably during 2022 and remains above RBI inflation target 8.0 7.0 ~0.3% 6.0 % 5.0 ~3.1% 4.0 3.0 2.0 3M 6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 11Y 12Y 13Y 14Y 15Y 30Y Maturity bucket Dec-20 Dec-21 Dec-22 RBI Inflation Target RBI Inflation Ta
Slide 11: Historically, yields tend to peak before policy rates
Historically, yields tend to peak before policy rates US 10Y Yields vs US Fed fund rates India 10Y Yields vs RBI Repo Rate 10.0 10.0 9.0 9.0 8.0 US 10Y Yield US Fed fund target rate 7.0 8.0 ?? 6.0 % 7.0 % 5.0 6.0 4.0 3.0 5.0 India 10Y Gsec 2.0 4.0 RBI Repo rate 1.0 0.0 3.0 91 92 93 94 95 96 97 98 99
Slide 12: Asset Allocation and Fund Suitability
02 India - Conducive Asset Asset Introducing environment for Allocation Allocation HDFC Long India Story and Duration long duration andFund Fund Debt Fund debt Suitability Suitability For disclaimer refer slide 27 12
Slide 13: Asset allocation is the key to wealth creation
Asset allocation is the key to wealth creation Asset Allocation refers to distributing Long duration debt should be at What is Asset your investible surplus across various the core of asset allocation Allocation asset classes according to risk tolerance, risk appetite and investment time frame. Mid
Slide 14: Long Duration Debt Fund - Ideally suited to meet long term goals
Long Duration Debt Fund - Ideally suited to meet long term goals Young Investor Middle Aged Investor Seasoned Investor (Age 20-40 yrs) (Age 40-50 yrs) (Age 50+ yrs) Prudent asset allocation Create passive income Create tax efficient* strategy to create passive source to augment retirement annuity in
Slide 15: Passive/Retirement Income using long term debt (7% return)
Passive/Retirement Income using long term debt (Assuming 7% return) 10 80 70 Young 8 6 Investment of Rs. 10,000/month for 20 years ie Rs. 24 lakhs Withdrawal of ~Rs. 30,000/month for 20 years from age 51; Plus residual corpus of ~Rs. 43 lakhs 60 50 Investment (LHS) Investor 40 Annuity using SWP (LHS
Slide 16: Passive/Retirement Income using long term debt (6% return)
Passive/Retirement Income using long term debt (Assuming 6% return) 10 40 Young 8 30 Investment (LHS) Investment of Rs. 10,000/month for Withdrawal of ~Rs. 30,000/month for 20 years from age 51; 6 Investor 20 years ie Rs. 24 lakhs Plus residual corpus of ~Rs. 9 lakhs 20 Annuity using SWP (LHS) 4 10
Slide 17: Comparison with various traditional Long-term investments
Comparison with various traditional Long-term investments Long Duration Debt Fund Public Provident Fund (PPF) Endowment Plan Tax Free Bond High liquidity and flexibility High tax efficiency High tax efficiency High tax efficiency due to open ended fund. Tenure is 15 years but can Wide ranges of investme
Slide 18: Introducing HDFC Long Duration Debt Fund
India - Conducive Asset Introducing environment for Allocation HDFC Long long duration and Fund Duration debt Suitability Debt Fund For disclaimer refer slide 27 18
Slide 19: HDFC Long Duration Debt Fund – Product Features
HDFC Long Duration Debt Fund – Product Features Overview Current Positioning Investment horizon Risks HDFC Long Duration Debt Plans to invest in 30+ Best suited as part of Given the relatively longer fund is an open-ended years residual maturity long-term core duration of the scheme, debt scheme inv
Slide 20: Benefits of HDFC Long Duration Debt Fund
Benefits of HDFC Long Duration Debt Fund Flexible Opportunity product to Very low to invest in meet long term credit risk the longer end investment (PRC A-III) of the yield Aims to needs Tax Tax efficient* curve provide hedge Deferral – regular cash against long Avoid tax flows through term expected le
Slide 21: Product Positioning – Duration based Funds
Product Positioning – Duration* based Funds Long Medium to Duration Long Fund Medium Expected Return Duration Duration Short Term Fund Fund Fund Low Money Duration Market Fund Ultra Short Term Fund Liquid Fund Fund Overnight Fund 1 day Upto 91 days 3-6 months Upto 1 year 6-12 months 1-3 years 3-4 ye
Slide 22: Summary
Summary India Structural Growth Story Yield Curve India projected to be amongst top 3 economies in the Yield curve has flattened substantially during last 1 year world by 2050 Rise in long term yields has been much lower than short term yields Historically, transition from low income economy to middl
Slide 23: Fund Facts
Fund Facts Particulars HDFC Long Duration Debt Fund Type of Scheme An open-ended debt scheme investing in instruments such that the Macaulay Duration of the portfolio is greater than 7 years. A Scheme with Relatively High Interest Rate Risk and Relatively Low Credit Risk. To generate income / capita
Slide 24: Benefits of Indexation (10 years)
Benefits of Indexation (10 years) Particulars Traditional Savings such as Fixed Deposits Taxation on Long Duration Debt Funds(with Indexation) Amount Invested (in Rs.) (A) 100,000 100,000 Annualized Rate of Interest (%) 6% 7% 8% 6% 7% 8% Gross value at Maturity (in Rs.) (B) 179,085 196,715 215,892 17
Slide 25: Asset Allocation
Asset Allocation Under normal circumstances, the asset allocation of the scheme’s portfolio will be as follows: Minimum Allocation Maximum Allocation Type of Instruments Risk Profile of the Instrument (% of Total Assets) (% of Total Assets) Debt (including securitized debt* other Structured Obligatio
Slide 26: Product labelling
Product labelling 1 HDFC Long Duration Debt Fund An open ended debt scheme investing in instruments such that the Macaulay Duration of the portfolio is greater than 7 years, A Relatively High Interest Rate Risk and Relatively Low Credit Risk This product is suitable for investors Riskometer # who ar
Slide 27: Disclaimer
Disclaimer This presentation dated January 2nd, 2023 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 m
Slide 28: Thank You
Thank You
HDFC Asset Management Company — Debt Investor Presentation (January 2023) on 6ix