HDFC Credit Risk Fund Summary
The HDFC Credit Risk Fund was launched on 25th March 2014. It is an open ended debt scheme which generates income/ capital appreciation by investing predominantly in AA and below rated corporate debt. The fund is moderately risky as there is no assurance that the investment objective of the scheme will be realized.
Portfolio Diversification (as on 30th Sept, 2020)
| Assets Allocation | |
| Credit Exposure | 93.3% |
| CD | 0.48% |
| Net Cash and Cash Equivalent | 6.22% |
| Rating Allocation | |
| AAA/AAA(SO)/A1+/A1+(SO) & Equivalent | 31.62% |
| AA+ | 1.41% |
| AA/AA- | 40.07% |
| A+ & Below | 20.68% |
| Cash, Cash Equivalents and Net Current Assets | 6.22% |
Top 10 Holdings on 30th Sept, 2020)
| Vedanta Ltd. | 8.29% |
| Pipeline Infrastructure Pvt. Ltd. | 7.26% |
| Power Finance Corporation Ltd | 7.07% |
| DLF Ltd. | 6.45% |
| Tata Motors Ltd. | 6.19% |
| Punjab National Bank(AT1, BASEL III, Perpetual) | 6.08% |
| IndInfravit Trust | 5.71% |
| Shriram City Union Finance Ltd | 5.54% |
| REC Ltd. | 5.03% |
| Dilip Buildcon Ltd. | 4.09% |
HDFC Credit Risk Fund Performance
Performance (as on 30th Sept, 2020)
| Period | Fund Return | Benchmark Return |
| 1 Y | 9.16% | 9.87% |
| 3 Y | 7.12% | 8.23% |
| 5 Y | 8.08% | 8.81% |
| Since Inception | 8.78% | 9.33% |
Scheme Strategy
- The Scheme proposes to invest in AA and below rated corporate debt.
- This fund invests in debt funds which have low-credit quality debt securities so they have higher risks since they invest in low- quality instruments.
- The borrowers pay higher interest charges as a way to compensate for their lower credit rating, which translates into a higher risk for the lender due to an increased possibility of default.
Fund Management
The fund has been managed by Mr. Shobhit Mehrotrasince March 25, 2014. He has done B. Text., M.S., and MBA from Clemson University, SC, USA. He has collective experience of over 20 years in Fixed Income markets, Fixed Income dealing and credit rating etc. He is with HDFC AMC since Feb 2004. Prior to this he has worked with Templeton Asset Management (India) Pvt Ltd. And ICRA Ltd.
Important Measures (As on 30th June, 2020)
| Component | Value |
| Yield to Maturity | 9.59% |
| Modified Duration | 2.43 Years |
| Average Maturity | 3.20 Years |
Benchmark Index: Nifty Credit Risk Bond Index
Net AUM: ₹ 6,189.36crores
Expense Ratio: Regular plan- 1.68% Direct plan- 1.13%
Entry Load: N/A
Exit Load: 1% if redeemed on or before 12 months from the date of allotment.
0.5% if redeemed after 12 months but within 18 months from the date of allotment
Nil if redeemed after 18 months from the date of allotment
HDFC Credit Risk NAV (in Rs)*as per fund fact sheet 30th Sept, 2020
| Direct plan | 18.18 |
| Regular plan | 17.31 |
Investment Risk: Moderately Risky
Minimum investment Amount: ₹ 5000
Minimum SIP Amount: ₹ 500
Scheme suitable only if you are an investor-
- Who seeks income over short to medium term
- Who can take moderately high risk as the bond ratings are low
- Who are seeking to generate income/capital appreciation by investingpredominantly in AA and below rated corporate debt (excluding AA+ rated corporate bonds)
Tarrakki’s View
HDFC Credit risk fund is suitable for those investors who want to invest their money for longer period of time and prefer less risky assets as compared to equity securities. This fund mostly invests in bonds which are below AA+ grade rating. However, lower rated bonds offer higher interest rates, and thus returns. In case of HDFC Credit Risk Debt Fund, returns are less volatile than peers. Also, its portfolio is quite diversified which helped them to handle redemption pressure during recent event. This fund has provided better returns as compared to its peers in last 5 years.
About HDFCMF
Established in 1999, HDFC AMC has set up a joint venture between Housing Development Finance Corporation Limited (“HDFC”) and Standard Life Investments Limited (“SLI”).It is India’s largest and most profitable mutual fund manager with RS. 3.5 Trillion in asset under management. In FY 18-19 they carried out an IPO and became publicly listed company in August 2018
Address (Head Office): HDFC Asset Management Company Limited, “HDFC House”, 2nd floor, H.T. Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai – 400020
Email ID: cliser@hdfcfund.com
Phone No: 1800 3010 6767 / 1800 419 7676
Website: https://www.hdfcfund.com
