HSBC Gilt Fund
Why Debt Funds?
The world of investing can be a cold, chaotic and confusing place. Markets can play havoc with your investments from time to time. It is therefore very critical to be disciplined with your investments so that the downside risk is controlled. This means adopting fundamental financial concepts diligently and consistently while making your investments.
Some of the most important of these are the concepts of risk/return tradeoff, portfolio diversification and asset allocation, and tax planning. These concepts explain the need to diversify investments across various asset classes to minimise risk and improve tax efficiency thereby highlighting the need for investments in Debt Funds.
There are several reasons why one should look at debt as an asset class to invest in. Some of the main reasons are:
- Need to balance risk and return - The risk/return tradeoff
- Need to diversify - portfolio diversification and asset allocation
- Need for tax planning
Gilt funds originate from the requirement of investors to ensure higher safety levels for their invested money. Thus this scheme invests in instruments which are generally considered to be safer than AAA grade investments.
Who should invest in gilt funds?
This scheme is ideal for investors who want higher safety levels for their investments and at the same time can obtain reasonable returns on their investments.
Presenting the HSBC Gilt Fund (HGF)
The scheme is suitable for investors seeking to obtain returns investing in Gilts (including Treasury Bills) across the yield curve with the modified duration of the portfolio normally not exceeding 15 years. Liquidity conditions and other macro-economic factors affecting interest rates shall be taken into account for varying the portfolio duration. However, this can undergo a change in case the market conditions warrant and according to the fund manager's view.
|Name of the scheme||HSBC Gilt Fund|
|Investment Objective||To generate reasonable returns through investments in government securities of various maturities. The AMC's view of interest rate trends and the nature of the plans will be reflected in the maturities of securities in which the plans are invested.|
|Options||Dividend (payout/reinvestment) and growth|
|Date of allotment||05 December 2003|
|Minimum application amount||Rs 10,000 ** Minimum transaction amounts in SIP/STP, as may be available in various schemes may differ from the amounts mentioned herein.|
|Minimum additional investment||Rs 1,000 and in multiples of Rs 1 thereafter|
|Load structure (including SIP/STP where applicable)||Entry Load
0.5 % if redeemed/switched out within 6 months from the date of investment.
Nil - Effective from March 01, 2013 for prospective investments
|Transparency||NAV will be determined on every business day. NAV of the Scheme/Option(s) shall be made available at all Investor Service Centers of the AMC. The AMC shall have the NAV published in two daily newspapers and updated on the AMC's website www.assetmanagement.hsbc.com/in|
|Systematic investment plan||Monthly/Quarterly Plan
Monthly - a minimum of 12 cheques of Rs 1,000 each
Quarterly - a minimum of 4 cheques of Rs 3,000 each
|Systematic encashment plan||Monthly/Quarterly. NAV as on first business day of each month.|
^ In respect of purchase of units with amount equal to or more than Rs 1 crore, irrespective of the time of receipt of application, the closing NAV of the day on which the funds are available for utilisation shall be applicable.
|Minimum redemption amount||Rs 1,000 and multiples of Rs 1 thereof
** Minimum transaction amounts in SIP/STP, as may be available in various schemes may differ from the amounts mentioned herein.
|Mode of holding||Single, Joint, Anyone or Survivor|
|Nomination facility||Available to individuals for single/joint holding|
|Redemption||Within 10 working days of the receipt of the redemption request at the Official Points of Acceptance of Transactions of the Registrar and the AMC. The Fund would endeavour to effect redemption payouts (net of applicable taxes) within one business day under normal circumstances|
|Asset allocation||Up to 100 per cent in government securities created and issued by the Central Government and/or state government(s), repos/reverse repos in government securities and/or other similar instruments, as may be permitted from time to time.|
|Dividend frequency||Declaration of dividend and its frequency will inter-alia depend upon the distributable surplus.
Dividend may be declared from time to time at the discretion of the Trustees.
|Purchase redemptions||All business days|
|NAV calculation||All business days|
|Fund manager||Sanjay Shah|