HDFC Equity Fund

(Open Ended Growth Scheme)

20
YEARS
OF WEALTH
CREATION

Performing consistently^ over two decades and several market cycles

^ The Fund has outperformed benchmark in 18 out of 20 years of existence
This product is suitable for investors who are seeking*

Capital appreciation over long term

Investment predominantly in equity and equity related instruments
of medium to large sized companies
High risk
(BROWN)

The wonders of compounding...

refer pages 4 and 8.

* Investors should consult their nancial advisers if in doubt about whether the product is suitable for them.

Note: Risk is represented as:

Investors understand that their principal will be at:
(BLUE) low risk.

(YELLOW) medium risk.

(BROWN) high risk.

May, 2015

Every journey begins with a small step...

Launched in December 1994 as Centurion Open End Fund, it was renamed as Zurich

India Equity Fund and nally HDFC Equity Fund (The Fund) in June 2003
From a small beginning of ~Rs 52 crores AUM in Jan 1, 95 HDFC Equity Fund is today

the largest* Equity Fund in India with an AUM of ~ Rs 18,000 crores and ~ 6.7 lac
investors as on 31st March, 2015
In this journey of 20 years, Rs 10,000 has become ~Rs 4.7 lacs(~47 times), CAGR of

~21.0% **
Our sincere thanks to all investors, distributors and well wishers in making this

possible. A special thanks to ~5,000 investors who have stayed with the Fund
right through this 20 year journey

A strong belief in India & its entrepreneurs, a disciplined approach to investing and focus on
long term has made this possible.

* Based on data available on AMFI website @ www.amindia.com - Average AUM : Rs 18,721 crs (Jan Mar 2015),
** Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance

HDFC Equity Fund - Standing the test of time

Elections, wars, global crises, bubbles, tapering etc. HDFC Equity Fund has seen it all
Year

Elections, wars, scams, global crisis, tapering, etc.

1996

General elections - Congress loses

1997

Asian currency crisis

1998

Pokhran II - Nuclear tests by India, US sanctions; SENSEX down ~20% in next two months

1999

Kargil war; SENSEX up by 63% in year 1999; 10 yr G Sec yields at 12.3%

2000

Tech Bubble - IT stocks trading at 100 - 200 P/E

2001

9/11; Ketan Parekh scam; UTI Crisis; IT stocks down ~80-90%

2003

BJP India shining campaign; SENSEX up ~73% in year 2003, 10 yr G Sec yields near 5%

2004

General elections - BJP loses; SENSEX down ~12% in one day

2008

Global Financial Crisis; Satyam scam; SENSEX down ~50% in the year; Meltdown in Real Estate stocks, etc.

2009

UPA wins again; SENSEX up ~17% in a day on May 18th; 10 yr G Sec yield at 5.3%

2011

Corruption scandals - 2G, Commonwealth games, Coal Scam; SENSEX down ~25% in 2011

2012

Quantitative Easing 3 (QE3); SENSEX up ~26% in the year

2013

QE taper worry, Slow GDP growth, twin decits of CAD and FD, high ination, 10 Yr Gsec yield at ~9%

2014

Stunning BJP win in General Elections; SENSEX up ~ 30% in the year

HDFC Equity Fund - Adding value across cycles

Rs. in
Lacs

5.0

HDFC Equity Fund

CNX 500

4.5

Value of Rs. 10,000 invested in 1995

HDFC Equity Fund

Rs. 4.7 lacs
Lehman
crises,
Satyam
scam

4
9/11; KP scam;
UTI Crises, IT
down ~80%

3.5
3
Asian Crisis

2nd term
for UPA

BJP loses

2.5

Clear majority for BJP

Tech Bubble
bursts

2
1.5

2G, CG, Coal

Scam, etc.

Pokhran II

QE3 taper worry

CNX 500
Rs. 0.7 lacs

0.5
0
95

S&P BSE
Sensex Levels ~4,000

96

97

98

99

00

~5,000

01

02

03

04

05

06
~10,000

07

08

09

~20,000

10
~9,000

11

12
~20,000

13

14

15

~29,000

HDFC Equity Fund : Rs 10,000 invested at inception has become ~Rs 470,000 in ~20 years at a CAGR of 21.0%
CNX 500 : Rs 10,000 invested at inception has become ~Rs 70,000 in ~20 years at a CAGR of 10.1%

Reference made to S&P BSE SENSEX in this document is only for easy understanding of market movement and must not be construed as future
performance of S&P BSE SENSEX. The Benchmark for this FUND is CNX 500.
** Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance

HDFC Equity Fund - Investment Philosophy

Steadfast adherence to few principles has worked well for HDFC Equity Fund over medium to long periods

A predominantly large cap portfolio with

limited exposure to mid caps

Preference for strong & growing companies -

Strong companies not only survive, but emerge

stronger in challenging times, reducing
permanent losses

Large Cap (%)

Mar-11

Mar-12

Mar-13

Mar-14

Mar-15

78

75

75

75

82

Eective diversication of portfolio The

portfolio has always been diversied across key

sectors and variables across the economy to
reduce risk

Annual Portfolio turnover ratio (in %)

FY 11

FY 12

FY 13

FY 14

FY 15

44

29

32

37

39

A long term approach to investing and a Low

portfolio turnover
We don't have to be smarter than the rest. We have to be more disciplined than the rest.
- Warren Buett

For latest scheme portfolio visit our website www.hdfcfund.com

Avoiding big mistakes - Key to wealth creation

It takes several years and a 400% return for Rs. 20 to become Rs. 100; the reverse however can

happen much faster and a loss of just 80% makes Rs. 20 of Rs. 100. Thus, one large mistake can
have a big impact in the wealth creation journey
The key to wealth creation over long periods is thus, not aiming for highest returns every year,

but in avoiding big mistakes each year

HDFC Equity Fund has successfully navigated several bubbles / meltdowns i.e. IT, media, real

estate, power, cement sector, etc. in this journey of 20 years

Bubble / Meltdown

Period

Indicative % Fall in stock prices

Textile

1995-97

60-70

Cement

1999-00

70

FMCG

1999-09

Near 0 CAGR returns in 10 years

IT

2000-01

90-95

Media

2000-01

80-90

Realty

2007-08

70

Power

2007-08

90

Metals

2008-09

70

HDFC Equity Fund Focused on not just returns, but also on managing risk by avoiding big mistakes

Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / HDFC Asset Management Company Ltd. HDFC Mutual Fund/AMC
is not guaranteeing any returns on investments made in this Fund. Past performance may or may not be sustained in future.

Equities work better over long term

Illustrative Study based on return distribution of HDFC Equity Fund
Following table represents rolling returns of HDFC Equity Fund since inception distributed over dierent holding periods and
return brackets, e.g., returns have been more than 20% p.a. in ~55% of 1 year holding periods, more than 20% p.a. in ~55% of 3
year holding periods, more than 20% p.a. in ~67% of 5 year holding periods , more than 20% p.a. in ~98% of 10, more than 20%
p.a. in ~100% of 15 & 20 years holding periods (Row 1) etc.
CAGR (%)

1 Year

3 Years

5 Years

10 Years

15 Years

20 Years

more than 20

55

55

67

98

100

100

more than 15

62

66

85

100

100

100

more than 10

65

76

92

100

100

100

more than 0

73

88

100

100

100

100

more than -10

80

99

100

100

100

100

more than -20

88

100

100

100

100

100

less than -20

12

Performance data computed till Mar, 2015. Where NAV as on the end of a particular month is not available, NAV of the nearest date available is considered. Returns are
monthly rolling. The holding periods in the above simulation is purely an assumption and not the actual holding period of investors in the Fund.

It can be clearly seen, that as the holding period increases, return prole improves
This is consistent with the belief that equities are a long term asset class and that risk

reduces as holding period increases

Time spent in markets is more important than timing the markets

Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance

Getting more from Equity Funds - Patience is the key

Illustrative Study based on return distribution of HDFC Equity Fund over 20 Years
Returns (%)
Date

Fund
NAV

CNX
500

Jan 95

10

974

Dec 95

Dec 96
Dec 97

1 Year

3 Years
Fund

5 Years

CNX 500

Fund

10 Years

CNX 500

Fund

15 Years

Fund

CNX 500

CNX 500

Fund

CNX 500

647

-29

-34

627

-23

-3

667

23

-13

Dec 98

609

38

-9

-2

Dec 99

24

1292

156

112

63

27

19

Dec 00

19

908

-20

-30

41

11

22

Dec 01

18

701

-3

-23

26

27

Dec 02

23

773

24

10

-1

-16

28

Dec 03

52

1531

126

98

40

19

41

20

Dec 04

66

1805

28

18

53

37

23

21

Dec 05

107

2464

63

37

67

47

41

22

31

14

Dec 06

145

3323

36

35

41

29

51

37

39

18

Dec 07

223

5355

54

61

50

44

58

47

42

23

Dec 08

112

2296

-50

-57

-2

17

28

14

Dec 09

231

4329

106

89

17

29

19

26

13

23

10

Dec 10

299

4941

29

14

10

-3

23

15

32

18

28

15

Dec 11

219

3603

-27

-27

25

16

28

18

28

12

Dec 12

293

4743

34

32

-2

29

20

29

14

Dec 13

305

4915

22

16

19

12

26

15

Dec 14

468

6774

54

38

29

23

15

22

14

22

12

20 Years
Fund

CNX 500

Short term returns in equities

are volatile; hence equity
investments should be made
with a long term horizon

-12

Long term returns are less

volatile; risk in equities reduces
as holding period increases

Benets of compounding are

bigger over longer periods

21

10

@@HDFC Equity Fund

Ratio of gain

14/20

16/18

16/16

11/11

6/6

1/1

@HDFC Equity Fund Ratio

of Outperformance

18/20

17/18

16/16

11/11

6/6

1/1

For detailed calculation

process & disclaimer
please refer next page

Past performance may or may not be sustained in Future. Returns for periods more than 1 year are shown on a compounded annualized basis.

Calculation process & detailed disclaimer of Page 8

Getting more from Equity Funds Patience is the key
Rolling Returns as on 31st December, 2014. Benchmark; CNX 500, Return for 1 year is absolute and above 1 year is CAGR (The rate
at which an investment grows annually over a specied period of time). Values of NAV and Benchmark are as on 31st of every
month of the respective period excluding inception date. Returns column represents the return earned on the investment for the
referred period. For e.g. If you invested in Jan-95 when NAV was Rs10, then 1 year returns (in Dec-95) would have been -27%, 3
years returns (in Dec-97) would have been -13%, 5 years returns (in Dec-99) would have been 20%, 10 year returns (in Dec-04)
would have been 21%, 15 year returns (in Dec-09) would have been 23% and 20 year returns (in Dec-14) would have been 21% .
The above gures are rounded o to the nearest decimals. @ Number of times the scheme has outperformed the benchmark.
@@ Number of times the investor has made positive returns. Past performance may or may not be sustained in the future. The
AMC / Mutual Fund is not guaranteeing or promising or forecasting any returns. # Inception date of HDFC Equity Fund is January
01, 1995. Returns shown are annualised rolling returns with a yearly frequency.

No investment too small, No dream too big

A SIP of just Rs 2,000 per month (total investment ~Rs 4.8 lacs) in HDFC Equity Fund has grown to ~1.01 crores by Mar 15
(refer below table)

Start early, stay invested, Patience pays!!

An illustration of the advantage of SIP investments. This is how a SIP of Rs. 2,000 p.m. would have grown over a period of time.
HDFC Equity Fund - Growth Option

Since Inception

15 Year SIP

10 Year SIP

5 Year SIP

3 Year SIP

1 Year SIP

Market Value of HDFC Equity Fund (Rs. in lacs)

1.01 crs

28.83

6.24

1.95

1.09

0.26

Total Amount Invested (Rs. in lacs)

4.8 lacs

3.60

2.40

1.20

0.72

0.24

HDFC Equity Fund Annualised Returns (%)

25.22

24.64

18.17

19.45

29.05

19.44

Market Value of SIP in CNX 500 Index (Rs. in lacs)

25.80

13.71

4.62

1.78

1.01

0.27

Annualised Returns (%) CNX 500 Index1

14.47

16.22

12.57

15.78

23.60

20.67

Market Value of SIP in CNX Nifty Index (Rs. in lacs)

22.92

12.66

4.60

1.73

0.97

0.26

Annualised Returns (%) of CNX Nifty Index2

13.52

15.30

12.48

14.55

20.64

15.75

Compound interest is the eighth wonder of the world.

He who understands it, earns it ... he who doesn't ... pays it.

Albert Einstein

Past performance may or may not be sustained in the future. The above investment simulation is for illustrative purposes only and should not be construed as a
promise on minimum returns and safeguard of capital. The AMC / Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not assure a
prot or guarantee protection against a loss in a declining market. Inception date of HDFC Equity Fund is January 01, 1995. 1. Benchmark 2. Additional
Benchmark. Returns as on March 31, 2015. The above SIP investment is assumed to be invested on the 1st business day of every month over a period of time.

10

HDFC Equity Fund - Consistency in performance & dividends

Outperformed benchmark in 18 out of 20 years across cycles

Year

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Equity Fund

-28.8

-23.5

22.6

38.0

156.0

-20.0

-2.8

24.2

126.3

27.5

62.7

35.9

53.6

-49.7

105.6

29.2

-26.7

34.1

3.8

53.8

CNX 500

-33.6

-3.1

6.5

-8.7

112.1

-29.7

-22.8

10.3

98.1

17.9

36.5

34.9

61.1

-57.1

88.6

14.1

-27.1

31.7

3.6

37.8

Excess Return

4.8

-20.3

16.1

46.8

43.9

9.7

20.0

13.9

28.2

9.7

26.2

1.0

-7.5

7.4

17.0

15.1

0.4

2.5

0.2

16.0

Past performance may or may not be sustained in the future.Where NAV as on the end of a particular month is not available, latest released NAV is considered, Year- Calendar Year.

Good years, bad years, dividends each year (for those who prefer cash)
Since 1999

1999

1999

2000

2000

2002

2003

2003

2004

2004

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Dividend per unit (Rs) (A)

1.6

2.0

3.0

1.7

1.2

2.0

2.5

1.5

3.0

5.0

5.0

5.5

3.0

4.0

4.0

4.0

4.0

4.0

5.5

NAV (Record Date) (B)

16.0

19.1

21.5

12.7

13.5

17.1

18.8

20.8

23.4

41.9

40.4

45.4

23.3

46.9

49.0

44.0

41.4

43.8

59.8

Dividend Yield (%) (A/B)

10

10

14

13

12

13

13

12

12

12

13

10

It's not what we do once in a while that shapes our lives. It's what we do consistently.
Anthony Robbins

^Past performance may or may not be sustained in the future. All dividends are on face value of Rs 10 per unit. After payment of the dividend, the per Unit NAV
falls to the extent of the payout and statutory levy (if applicable). There is no assurance or guarantee to Unit holders as to rate/quantum of dividend distribution or
that the dividends will be paid regularly. NAV of the Regular Plan-Dividend Option

11

Bigger Funds or Smaller - Figures dont lie!

Bigger Funds have done better than smaller!!

Year

CY 05

CY 06

CY 07

CY 08

CY 09

CY 10

CY 11

CY 12

CY 13

CY 14

Largest Funds / Q1

47.9

38.6

57.7

-53.6

84.3

18.9

-24.6

33.5

3.3

52.5

Q2

48.2

36.2

60.9

-55.5

85.8

17.6

-24.6

33.5

3.7

53.8

Q3

48.1

33.9

55.9

-55.1

83.9

19.4

-22.8

31.4

6.3

51.2

Smallest Funds / Q4

41.8

34.0

60.8

-54.8

81.1

18.1

-25.1

29.4

4.1

45.0

Number of Schemes

107

138

165

200

239

260

278

285

294

308

In reality, there are no large funds in India

i.e. HDFC Equity Fund, the largest equity Fund is just ~0.2% of market capitalization

Choose a Fund by its track record, investment discipline, consistency of performance and not by size.
For those who still value size, bigger Funds have done better !

The above table shows simple average returns of all equity funds arranged in dierent quartiles basis the descending order of AUM at the beginning of the year.
Loads have not been taken into consideration for calculation of returns.The investment objective, asset allocation and investment strategy of the schemes
considered for the above simulation may dier. Where AUM as on the end of a particular month is not available, AUM of the nearest date available is considered.
This simulation is only an illustration should not be construed as a recommendation or an investment advice. In view of the individual circumstances and risk
prole, each investor is advised to consult his / her professional advisor before making a decision to invest. Source: Bloomberg, Capitaline, NAV India

12

Fund Selection - Lane Changing does not work!

RANK

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

10

The above data illustrates the calendar year performance of 11 largest diversied Equity / Balanced funds
as on Dec 31, 2014 for last 11 years

It is evident that avor of the season investing does not work. There is merit in sticking with funds that
have a disciplined approach to investments and have performed across cycles

If investing is entertaining, if you're having fun, you're probably not making any money
George Soros

Internal Computation of the above table

^Past performance may or may not be sustained in Future.

13

Economic Outlook & positioning of HDFC Equity Fund

Economy : Ready, set,...go
A stable, proactive, long term focussed Government : Coal & telecom auctions, gas pooling, DBT, GST (FY16), MMRDA,
Bankruptcy act likely, diesel deregulation, resolving stalled projects, roads and railway spending increased, etc.

Falling ination low commodity prices,

stable INR, improving supplies; Real rates of
3% indicate lower yields going forward

Recent IIP readings are encouraging

CAD Q4FY15/FY16 likely to be surplus

after 11 years

FY14

Q1FY15

Q2FY15

CPI (Avg %)

9.5

7.9

6.7

4.1

5.2

5.2

WPI (Avg %)

5.9

5.8

3.9

0.3

-1.8

-2.3

IIP growth (%)

-0.1

4.5

1.3

1.9

3.8

5.0

Trade Decit ($ bn)

147.6

34.7

38.6

39.2

27.0

NA

Invisibles ($ bn)

115.2

26.8

28.5

30.9

30.9

NA

CAD ($ bn)

-32.4

-7.9

-10.1

-8.3

3.9

NA

Steadily improving growth; Capex should

revive in FY16

Q3FY15 Q4FY15/E

Mar 15

FY13

FY14

FY15

FY16

GDP Growth (%)

5.1

6.9

7.4

8.1

Fiscal Decit

4.8

4.6

4.1

3.9

By 2020, India is likely to be 5th largest economy in the world and fastest growing as well
Source: Morgan Stanley, Kotak, BOAML

14

Equity Markets : A positive outlook

Reasonable P/Es * despite markets ** run up

Roll PE (LHS)

EBITDA margins bottoming out

24.0

average (LHS)

S&P BSE Sensex EBITDA margin (%)

**

BSE (RHS)

22.0
20.0

18.0
16.0
14.0

90

92

94

Source: CLSA

96

98

00

02

04

06

08

10

12

14

93

95

97

99

01

03

05

07

09

11

13

15E

Source: BAML

Despite the run up in 2014, since 2008 equity markets are up only ~40% vs. nominal GDP growth of ~100%

EBITDA margins to improve from 17 year lows due to improving economy, lower ination, lower wage growth
and lower commodity prices

Opportunities are like sunrises, if you wait too long you can miss them.
William Arthur

Reference made to S&P BSE SENSEX in this document is only for easy understanding of market movement and must not be construed as future performance of
S&P BSE SENSEX. The Benchmark for this FUND is CNX 500.

15

Lower interest rates are good for equities

There is near consensus about lower rates in India in 2015 & beyond

Equities benet in several ways from lower interest rates:

Lower rates means lower interest expense & higher prots
Lower rates lead to higher fair P/E multiples
Lower rates improves economic growth prospects

Interest rates are like gravity Warren Buett

This implies, lower rates improve valuations of assets and vice versa

HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund. Past performance may or may not be sustained in future.

16

Time to say bye bye to Gold and buy buy to equities

The table below summarises the returns of Gold and S&P BSE SENSEX (Sensex) since 1979, when the Sensex commenced with a
base value of 100

in last 36 years...

Sensex

Gold

CAGR (%)

16.9

10.6

Rs. 10,000 has become

27.96 lac

3.7 lac

Source: World Bank, Bloomberg, Data pertains from March 31, 79 to Mar 31, 15

As can be seen from the table above, long term returns on equities are much higher than returns

on gold
A dierence of ~6.3% in CAGR over long term (36 years) resulted in ~8 times higher wealth
Equities over time grow in line with the nominal growth of the economy (real growth plus

ination), while gold returns close to ination

Equities - The Real Gold?

*Disclaimer: Above referred asset classes are not strictly comparable. The views expressed may hold true in the context of prevailing economic
conditions and is subject to change. HDFC Mutual Fund/AMC is not guaranteeing returns on equities.
Past performance may or may not be sustained in Future. Refer page no. 22 for detailed performance

17

Who is smarter? Indians or FIIs?

Year ending March 31st 1992 ... 2001 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Total

FII ownership (%)

0 ... 12

13

13

16

17

19

20

18

15

17

18

19

21

23

FII ows ($ bn)

0 ... 2

10

11

13

-11

23

25

26

29

154

Net Gold Import ($ bn)

0 ... 4

12

14

17

25

35

49

41

19

245

(FIIs were allowed to invest from September 1992 onwards; shareholding of FII not available from 1992 2000)

Source: SEBI

FII ownership increased from 0 to 23% in 22 years (~1% per annum)

While, FIIs have invested $154 bn in Indian equities between 2001-14, locals have bought gold worth $245 bn in
same period

Thus, the dollars received by the locals & more have been invested in gold. Gold as was pointed out in previous
page (page 17) has yielded near ination (9-10%) returns vs ~17% CAGR for the Sensex.

In eect, locals have been exchanging a ~17% CAGR asset for a 9-10% CAGR one. This certainly is not a smart
thing to do.
Decadal GDP (average % change)

Why are FIIs so positive on India:

7.7

8
7

India oers signicantly higher growth than World growth

Favourable demographics, rising aordability, low penetration

of consumer goods, rich natural resources, large size are key
drivers of growth

Barring 2008-09 (Lehman crisis), FIIs have been net buyers of

Indian equities

th

By 2020 India is expected to be the 5 largest economy in the

world

Source: IMF

5.7

5.4

5.3

5.3
3.8

3.8
3.2

3.2

2.8

2.6

2.5

0
1961-1970

1971-1980

1981-1990

Real India GDP

1991-2000

2001-2010

2010-2013

Real World GDP

Source: BOAML

18

HDFC Equity Fund - Portfolio positioning

Steady reduction in exposure to midcaps in FY15

Midcaps have outperformed largecaps by highest margin in CY14 in last 10 years

(% Return)

CY 05

CY 06

CY 07

CY 08

CY 09

CY 10

CY 11

CY 12

CY 13

CY 14

NIFTY

36.3

39.8

54.8

(51.8)

75.8

17.9

(24.6)

27.7

6.8

31.4

CNX Midcap

35.0

29.0

76.9

(59.4)

99.0

19.2

(31.0)

39.2

(5.1)

55.9

Outperformance

(1.3)

(10.8)

22.2

(7.6)

23.2

1.2

(6.4)

11.5

(11.9)

24.5

Midcaps discount to largecaps is lowest in last 5 years

17.0

CNX MIDCAP (3M Moving Avg. PE)

NIFTY (3M Moving Avg. PE)

15.0
13.0
11.0
9.0
2010

HDFC Equity Fund has steadily reduced exposure to midcaps

2011

2012

2013

2014

2015

HDFC Equity Fund

Jun-14

Sep-14

Dec-14

Mar-15

Midcaps (%)

28

27

23

18

Given the NIL discount of midcaps vs. largecaps and a predominantly largecap
portfolio, HDFC Equity Fund is well positioned in the current market environment
Source: Bloomberg, CY- Calendar Year, The current investment strategy is subject to change depending on the market conditions

19

HDFC Equity Fund - Strongly positioned for improving

economic outlook
Overweight Banks

Improving economic outlook, peaking interest rates, improving outlook for asset quality

Overweight Capex

Early signs of capex recovery

Overweight Oil & Gas

Sharp fall in subsidies

Neutral IT & Pharma

Reasonable valuations, INR appreciation is a key risk

Underweight FMCG

Slowing growth, expensive valuations

Large Cap exposure

Exposure to large caps is ~80%, Fund has reduced exposure to midcaps in 2014

HDFC Equity Fund is well positioned for improving economic outlook and lower interest rates

Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / HDFC Asset Management Company Ltd. The Fund may or may
not have any present or future positions in these sectors. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this Fund.
Past Performance may or may not be sustained in the future

20

Why HDFC Equity Fund? Whom is it suited for?

HDFC Equity Fund is a good investment vehicle for those who believe in the growth

prospects of India and understand the power of compounding

The Fund oers:
Best in class returns across several economic & market cycles
Long term oriented, disciplined and consistent approach to investments
Unbroken dividend track record for last 10 years (7-13% dividend yield) (Refer page 11)

The best time to invest was yesterday, the second best is today !

* Past Performance may or may not be sustained in the future. HDFC Mutual Fund/AMC is not guaranteeing any returns on investments made in this
Fund. In view of the individual circumstances and risk prole, each investor is advised to consult his / her professional advisor before making a decision
to invest in the Scheme. Refer page no. 22 for detailed performance

21

Scheme Performance Summary

Discrete Returns (%)

Value of
investment of Rs.
10,000 Since
Inception (Rs.)

NAV/Index
Value as on
31st Mar 15

Mar 31, 14 to
Mar 31, 15

Mar 28, 13 to
Mar 31, 14

Mar 30, 12 to
Mar 28, 13

Since Inception
CAGR (in %)

469.724

41.49

22.25

3.61

20.93

469,724

CNX 500 Index

6978.15

33.56

17.56

5.13

10.07

69,781

CNX Nifty Index2

8491.00

26.65

17.82

7.31

N.A.

N.A.

Scheme
HDFC Equity Fund
1

Other Funds managed by Prashant Jain, Fund Manager of HDFC Equity Fund
HDFC Top 200 Fund$

342.678

35.11

20.31

4.52

22.38

417,830

S&P BSE 2001

3537.55

31.93

17.04

6.03

14.01

112,823

S&P BSE SENSEX2

27957.49

24.89

18.68

8.23

12.52

88,459

HDFC Prudence Fund$@

376.12

41.84

19.03

3.29

20.13

486,125

CRISIL Balanced Fund Index1

5230.30

22.53

13.29

8.18

N.A.

N.A.

CNX Nifty Index

8491.00

26.65

17.82

7.31

9.55

69,036

HDFC Infrastructure Fund#

16.711

58.70

10.91

-8.57

7.54

16,711

CNX 500 Index1

6978.15

33.56

17.56

5.13

8.48

17,766

CNX Nifty Index

8491.00

26.65

17.82

7.31

8.41

17,688

HDFC MF MIP Long Term Plan +^

34.5855

21.49

8.50

8.07

11.64

34,586

2936.22

16.45

6.46

9.06

7.84

23,420

2630.54

14.57

-0.95

11.25

5.03

17,385

CRISIL MIP Blended Index

CRISIL 10 Year Gilt Index2

Past performance may or may not be sustained in the future. $All dividends declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be
reinvested in the units of the Scheme at the then prevailing NAV (ex-dividend NAV). #The Scheme is co-managed by Prashant Jain and Srinivas Rao Ravuri. +The Scheme is comanaged by Prashant Jain (Equities) and Shobhit Mehrotra (Debt). @Scheme performance may not strictly be comparable with that of its Additional Benchmark in view of the
balanced nature of the scheme where a potion of scheme's investments are made in debt instruments. ^Scheme performance may not strictly be comparable with that of its
Additional Benchmark in view of hybrid nature of the scheme where a portion of scheme's investments are made in equity instruments. 1. Benchmark. 2. Additional Benchmark.

22

Product Features
Type of Scheme

Open Ended Growth Scheme

Inception Date (Date of allotment)

January 1, 1995

Investment Objective

To achieve capital appreciation

Fund Manager $

Prashant Jain

Plans

HDFC Equity Fund, HDFC Equity Fund - Direct Plan

Options

Under Each Plan: Growth & Dividend. The Dividend Option oers Dividend Payout and Reinvestment facility

Minimum Application Amount

(Under Each Plan/Option)

Purchase: Rs. 5,000/- and any amount thereafter

Additional Purchase : Rs 1000/- and any amount thereafter

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 / switchin of units, an Exit load of 1.00% is payable if units are redeemed / switchedout within 1 year
from the date of allotment
No exit load is payable if units are redeemed / switched out after 1 year from the date of allotment.

For further details on load structure, please refer to the Scheme Information Document / Key Information Memorandum of the Scheme
Benchmark Index

CNX 500 Index

$ Dedicated Fund Manager for Overseas Investments: Mr. Rakesh Vyas.

For complete Scheme details refer SID/KIM.

Asset Allocation Pattern

Under normal circumstances, the asset allocation of the schemes portfolio will be as follows:
Type of Instruments
Equity & Equity related instruments
Debt and Money Market instruments *

Normal Allocation (% of Net Assets)

Risk Prole of the Instrument

80 - 100

Medium to High

0 - 20

Low to medium

*Investment in Securitised debt, if undertaken, would not exceed 20% of the net assets of the Scheme.
The scheme may seek investment opportunity in the ADR / GDR / Foreign Equity and Debt Securities (max. 40% 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 25% of net assets) based on the opportunities available subject to SEBI (Mutual Funds) Regulations, 1996.

23

Disclaimer
The views expressed herein are based on the basis of internal data, publicly available information and other sources believed to be
reliable. Any calculations made are approximations, meant as guidelines only, which you must conrm before relying on them. The
information contained in this document is for general purposes only and is not an oer to sell or a solicitation to buy/sell any
mutual fund units/securities. The document is given in summary form and does not purport to be complete. The document does
not have regard to specic investment objectives, nancial situation and the particular needs of any specic person who may
receive this document. The information/ data herein alone are not sucient and should not be used for the development or
implementation of an investment strategy. The same should not be construed as an investment advice to any party. The
statements contained herein are based on our current views and involve known and unknown risks and uncertainties that could
cause actual results, performance or events to dier materially from those expressed or implied in such statements. Neither HDFC
Asset Management Company (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.
24