HSBC Ultra Short Term Bond 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 Trade-off, 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 Trade-off
- Need to diversify - Portfolio Diversification and Asset Allocation
- Need for Tax Planning
HSBC Ultra Short Term Bond Fund
HSBC Ultra Short Term Bond Fund is an open-ended scheme that seeks to provide a high degree of liquidity, along with generation of reasonable returns, by investing in a portfolio consisting primarily in a range of short term debt and money market instruments.
The fund is positioned between a liquid and a short term debt product. The average maturity of the portfolio would be longer than a typical Liquid scheme but shorter than a typical Debt-STP scheme. Correspondingly, the risk-return magnitude would also be higher than liquid but lower than STP.
It would be the endeavour of the scheme to maintain the overall portfolio modified duration at around 6-12 months but it may undergo changes in accordance with interest rate movements.
This product is suitable for investors who are seeking*:
- Liquidity over short term
- Investment in Debt/Money Market Instruments
- Low risk (BLUE)
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Note: Risk may be represented as:
|Name of the scheme||HSBC Ultra Short Term Bond Fund|
|Investment objective||To provide liquidity and reasonable returns by investing primarily in a mix of short term debt and money market instruments.|
|Plans||Regular, Institutional and Institutional Plus|
|Options||Regular Option with daily and weekly dividend reinvestment and growth sub-options. Institutional and Institutional Plus Options with daily, weekly and monthly dividend and growth sub-options.
Daily and weekly dividend will be reinvested whereas an investor in monthly dividend can opt for payout/reinvestment.
|Date of allotment||17 October 2006|
|Minimum application amount||Regular - Rs 10,000
Institutional - Rs 5,000,000
Institutional Plus - Rs 50,000,000
|Minimum additional investment||Rs 1,000 and multiples of Rs 1 thereafter for Regular Option.
Rs 10,000 and multiples of Rs 1 thereafter for Institutional and Institutional Plus Option.
|Load structure (including SIP/STP where applicable)||Entry Load
0.25% if redeemed/switched out within 15 days from date of allotment)
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 Centres of the AMC. The AMC shall have the NAV published in, a daily newspaper 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.|
|Minimum redemption amount||Rs 1,000 and multiples of Rs 1 thereafter for Short Regular Option.
Rs 10,000 and multiples of Rs 1 thereafter for Institutional and Institutional Plus Options.
**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 or 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||70-100 per cent in money market and debt instruments with maturity/average maturity/interest rate reset not greater than one year.
0-30 per cent in debt instruments with maturity greater than one year.
|Dividend frequency||Declaration of dividend and its frequency will inter-alia depend upon the distributable surplus.
Dividend shall be generally decided daily and weekly in the Regular Option and shall be declared daily, weekly and monthly in the Institutional and Institutional Plus Options.
|Purchase redemptions||All business days|
|NAV calculation||All business days|
|Fund manager||Sanjay Shah and Ruchir Parekh|