HDFC Nifty Next 50 Units Exchange Traded Fund · NSE:HDFCNEXT50
HDFC Nifty Next 50 Units Exchange Traded Fund — HDFC Floating Rate Debt Fund — Investor Presentation (September 2021)
20 slides from HDFC Nifty Next 50 Units Exchange Traded Fund's investor presentation, Sep 6, 2021
Slide 1: HDFC Floating Rate Debt Fund: Float with the rising tide
HDFC Floating Rate Debt Fund An open ended debt scheme predominantly investing in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps / derivatives) “Float” with the rising tide !! September 2021 Riskometer# This product is suitable for invest
Slide 2: Global and domestic economy: Primed for recovery
Global and domestic economy: Primed for recovery 10.0 Global HH Savings rate (4QMA, % of Global Real GDP Growth (%) • Global economy is recovering strongly in CY21 GDP) 7.0 6.0 20.0 US Japan • Aided by pent up demand, supportive fiscal and monetary policies, 4.1 4.4 3.4 15.0 EU easing of restriction
Slide 3: Supply chain disruption keeps Inflation at elevated level
Supply chain disruption keeps Inflation at elevated level 80% 15% 60% • Wholesale price inflation (WPI) has risen sharply, partly due to low base effect CRB Index, YOY 10% 40% WPI,RHS Core WPI, RHS 5% • Core WPI is also near multi-year highs in line with rise in international 20% commodity prices, i
Slide 4: Gradual normalization of liquidity more likely
Gradual normalization of liquidity more likely • RBI is expected to gradually reduce the abundant liquidity provided as part of Covid-19 measures followed by normalization of LAF^ corridor • Normalization of liquidity/LAF corridor is expected to reduce the steepness of yield curve; short term rates
Slide 5: What are Natural Floating Rate Instruments?
What are Natural Floating Rate Instruments? • Floating Rate Instruments are debt securities which pay coupon linked to benchmark rates like Repo Rate, 3m T-bill, SBI MCLR1, FBIL Overnight MIBOR2 , etc. • The coupon resets periodically to factor in changes in interest rates, as reflected by movement
Slide 6: What are Synthetic Floating rate instruments?
What are Synthetic Floating rate instruments? • Floating rate instruments can also be created Synthetically using combination of Fixed Rate Instruments with Interest Rate Swaps (IRS). • An IRS is a derivative contract whereby the holder of a fixed rate bond can convert a fixed rate exposure into a f
Slide 7: Impact of rise in interest rates on floating rate bonds
Impact of rise in interest rates on floating rate bonds • Given the expectation of upward bias in short term interest rates, floating rate bonds are likely to provide better returns v/s fixed rate bonds as: • Rising rate levels of underlying benchmarks leads to higher coupons • Lower duration of the
Slide 8: HDFC Floating Rate Debt Fund
HDFC Floating Rate Debt Fund • In the current environment of expectations of rising rates - floating rate products offer good investment opportunity • HDFC Floating Rate Debt Fund aims to generate income / capital appreciation through investment in : • Natural Floaters • Synthetic Floaters • Short M
Slide 9: Investment Strategy
Investment Strategy HDFC Floating Rate Debt Fund uses multipronged strategy to optimize returns Invest in natural Tactically enter Invest in short maturity Invest in non-AAA Floating Rate Interest Rate Swaps assets instruments Instruments Convert fixed rate Capture yield exposure to floaters movemen
Slide 10: Portfolio Characteristics
Portfolio Characteristics Portfolio Classification by Rating Class (%) Portfolio Classification by Asset Class (%) AAA/AAA(SO)/A1+/A1+(SO) & G-Sec, SDL, T-Bills 24.19 56.83 Equivalent Securitized Debt Instruments 0.41 Sovereign 24.19 Commercial Papers 5.63 AA+/AA/AA- 12.89 Certificate of Deposits 7.
Slide 11: Analysis of Distribution of Returns since inception
Analysis of Distribution of Returns since inception 6 Month Daily Rolling Returns 1 Year Daily Rolling Returns Annualised Returns (%) % of times Annualised Returns (%) % of times Less than and equal to 5% 7% Less than and equal to 5% 2% More than 5% 93% More than 5% 98% More than 6% 83% More than 6%
Slide 12: Summary
Summary Interest rate cycle in India appears to have bottomed out As growth revives over next 6 to 12 months, RBI could gradually normalize liquidity and LAF corridor, which could lift short term rates & act as yield curve flattener. Floating rate fund is well positioned to take advantage of r
Slide 13: Performance
Performance 13 Refer Disclaimer on Slide 19
Slide 14: Scheme Performance: HDFC Floating Rate Debt Fund
Scheme Performance : HDFC Floating Rate Debt Fund Value of Rs 10,000 invested Additional Additional Scheme Returns Benchmark Benchmark Period Benchmark Scheme Benchmark (%) Returns (%) # (Rs)# Returns (%) ## (Rs)## Last 1 year 6.21 3.64 4.68 10,621 10,364 10,468 Last 3 years 7.83 5.48 9.10 12,540 11
Slide 15: Performance Summary of other Scheme(s) managed by the Fund Manager
Performance Summary of other Scheme(s) managed by the Fund Manager Performance Managing scheme 3 year 5 year since 1 year (in %) Scheme CAGR (in %) CAGR (in %) Mr Shobhit Mehrotra manages 15 schemes excluding HDFC Floating Rate Debt Fund, which have completed 1 year Performance of Top 3 schemes mana
Slide 16: Performance Summary of other Scheme(s) managed by the Fund Manager
Performance Summary of other Scheme(s) managed by the Fund Manager Managing scheme Performance since 3 year 5 year 1 year (in %) Scheme CAGR (in %) CAGR (in %) Mr Vikash Agarwal manages 1 scheme excluding HDFC Floating Rate Debt Fund which have completed 1 year Performance schemes managed by Mr. Vik
Slide 17: Fund Facts
Fund Facts An open-ended debt scheme investing predominantly in floating rate instruments (including fixed rate Type of Scheme instruments converted to floating rate exposures using swaps/ derivatives) Category of Scheme Floating Rate Fund Inception Date October 23, 2007 To generate income / capital
Slide 18: Asset Allocation Pattern
Asset Allocation Pattern Under normal circumstances, the asset allocation (% of net assets) of the Scheme’s portfolio will be as follows: Allocation (% of Total Assets) Types of Instruments Risk Profile Min Max Floating rate Securities* (including fixed rate Securities converted to floating rate 58.
Slide 19: Disclaimer & Risk Factors
Disclaimer & Risk Factors This presentation dated September 6, 2021 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 on
Slide 20: Thank You
Thank You 20 Refer Disclaimer on Slide 19
HDFC Floating Rate Debt Fund — Investor Presentation (September 2021) on 6ix