HDFC Banking & PSU Debt Fund (“the Scheme”), with an AUM of Rs. 3,888 Cr as of 31st October 2019 focuses on generating income/capital appreciation by investing (a minimum of 80%) in debt securities issued by Public Sector Undertakings (PSUs), Public Financial Institutions (PFIs), banking companies, and municipal bonds. The defined universe of securities ensures relatively high credit quality of the portfolio.
As of 31st October 2019, HDFC Banking & PSU Debt Fund has ~73% exposure to AAA and cash/cash equivalents. The Scheme has an attractive portfolio yield of 7.22%# and has consistently maintained portfolio duration lower than average modified duration of schemes in the category^. Low Modified Duration of the portfolio reduces sensitivity to changes in interest rates, thereby reducing the volatility of returns. The Scheme is well diversified with exposure to ~30-35 issuers and residual maturity of instruments ranging from ~ 120 days to ~10 years.
The Scheme can be considered by risk averse investors looking to allocate a portion of their portfolio in debt with reasonable credit quality. While the ideal investment horizon is 6-12 months, suggested holding period is 3 years due to tax efficiency on account of indexation.
^ Schemes with AUM> Rs 1,000 Cr as of October 31, 19. Source: MFI Explorer
# Past performance may or may not be sustained in future. There is no assurance or guarantee of returns.
For complete portfolio details, refer www.hdfcfund.com Stocks/Sectors referred above are illustrative and not recommended by HDFC Mutual Fund / AMC. The Fund may or may not have any present or future positions in these sectors. The views are not an investment advice. Please seek professional advice before taking any investment decisions.
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