Skip to main content

HDFC Children Gift Fund – Savings Plan

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

Are you saving for your child's future but cannot take high exposure to equities at this point? Then, HDFC Children's Gift Savings Plan may be a superior option to traditional debt options if you have a time span of not less than three years. The fund is one of the top performers over three and five-year periods in the debt-oriented category.

With an exposure of about 20 per cent to equities and rest in debt, this debt-oriented fund has delivered an annual return of 9.9 per cent in the last three years, higher than the 8.4-8.9 per cent returns generated by some of the top MIP funds. Its benchmark Crisil MIP Blended index managed an annual return of 7.5 per cent during this period.

Suitability

Please recall that we recommended HDFC Children's Gift – Investment Plan, an equity-oriented balance fund in our October news letter. HDFC Children's Gift – Savings Plan is a sister fund but with majority exposure to debt. Which one should you choose?

The equity fund (Investment Plan) is suitable if you have a longer time frame of say 5-10 years and you are not averse to taking high exposure to equities. The Savings Plan, on the other hand, is more suitable if you have limited time frame of say less than five years (which does not allow you to take too much risk) or you simply want to find an option that would provide superior returns to traditional debt products.

You can also hold the Saving Plan scheme with a combination of other equity funds, as its debt-laden portfolio will provide some hedge. It can also deliver returns higher than regular debt in times of an equity rally.

There are two options that this scheme offers: one, without a lock-in period and two with a lock-in of three years or until the child reaches 18, whichever is later. You can opt for the option without lock-in.

Even then, please note that this fund discourages early exits with high exit loads up to three years from the date of investment. In all, it is ideal that you have not less than a three-year view when you invest in this fund.

You can invest in this fund only in the name of a minor. At FundsIndia, you can invest in this fund only through a minor account.

Performance

A lump sum investment in HDFC Children's Gift – Savings would have delivered a compounded annual return of 9.5 per cent in the last 5 years. An SIP in the fund would have generated a superior 10.5 per cent IRR over the above period.

The fund's three-year rolling return (since launch in 2001) is at a compounded annual rate 9.9 per cent.

That means had you invested at point in time since the fund's inception, your three-year return would have averaged at close to 10 per cent. This is higher than Reliance MIP's average of 8.5 per cent as well as superior to other sister funds such as HDFC MIP LTP and HDFC Multiple Yield Plan 2005.

Portfolio

HDFC Children's Gift – Savings Plan has put up a better show than peers by predominantly sticking to a buy and hold strategy.

In the last couple of years, the fund, for most part, had an average portfolio maturity of 2-2.5 years. That means, the instruments it held had an average term of two years-plus. But in the last one year, the fund has been upping its maturity to reach 3.6 years, perhaps to take advantage of the high yield instruments on offer over this period.

Holding these instruments till maturity will provide interest income. But in the last one year, such a hold strategy could have led to the fund underperforming a couple of peers. But then, its risks too are far lesser as a result of not playing the timing game.

As of December, a fifth of its portfolio was in government securities with yield of 8.12-8.2 per cent and about one half of its assets in AAA-rated corporate bonds debentures from companies such as LIC Housing Finance, PFC, IRFC and HDFC. These instruments had yields ranging from 8-11 per cent. The fund's equity portfolio had a mix of large and mid-cap stocks with more weight for the latter.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...
Read more

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Read more

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...
Read more

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now