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Basket InvestingMade EasyHDFC Exchange Traded Fund (ETF)July 2021MUTUAL F U N D IN V EST M ENTS AR E S U B J ECT TO M AR KE T R IS KS , R EA D A LL S CHEME R EL ATED D OCU MENTS CA R EFU LLY.

Exchange Traded Fund - ETFETF - The ConceptACC LtdICICI BankRelianceIndustriesLtdETFWhat are ETF’s?Exchange Traded Fund (ETF), are mutual funds that tradelike stocks.Like a stock, ETF units are traded on exchanges on which itis listed at market-determined prices and they are boughtand sold at any moment during market hours throughdemat accounts.The most common ETFs are designed to replicate theportfolio and track the performance of a market benchmarkor Index’s total return, subject to tracking errors.The illustration shows how an ETF comprises of a basket of securitiesHDFC Mutual Fund/AMC is not guaranteeing returns on investments made in this scheme(s). Stocks mentioned are illustrative and may/may not form part of the ETF basket.Refer disclaimers on slide 152

Benefits of Exchange Traded FundsDiversification: Fund holds a basket of securitiesLowerInvestmentcorresponding to the underlying index.Lower cost: ETFs generally offer lower expense ratios thanPassive FundManagementLowerCostLower investment: You can buy an ETF for as low as thecost of one unit, which gives you the opportunity to startinvesting in a diversified portfolio with less money.ETFDiversificationactive/conventional mutual funds schemes.Passive fund management: You don't have to keep trackTradingFlexibilityof every single investment your ETF owns. The fund managerendeavors to invest in stocks forming part of the underlyingindex in the same ratio as per the index to the extentpossibleTrading flexibility: ETFs offer you the same intradaypricing you get when trading stocks through a broker.Refer disclaimers on slide 153

Exchange Traded Fund – UsesLiquidityInvestments in ETFs can form a portion of an overall portfolio in a manner to ensure liquidity across the portfolio.Balanced PortfolioOwning a basket of securities in a well diversified manner is often costly.ETF’s give investors the option to invest in a basket of securities at a fraction of the cost of an underlying basketAs broad index ETF baskets consist of multiple stocks in a pre-determined weight calculated periodically, theETF unit holder can aim to hold a balanced portfolio through a single instrumentCost EfficiencyBuying several securities involves a variety of costs like brokerage and taxes.An ETF transaction is a single purchase that gives you access to all the securities within a given basket based onthe individual stock weightage.Risk ManagementOwning a broad based ETF gives access to a diversified portfolio thus aiming to reduce concentration risks on asector specific and stock specific basis.Refer disclaimers on slide 154

Exchange Traded Fund – SuitabilityETFs offers opportunity to invest in adiversified basket of securities withrelatively small amount of capital toinvest ( even 1 unit), thus suitable forinvestors across all age group,income level, risk appetite etc.With several index options availableacross asset class, ETFs can be usedto participate in variety of investmentoptions e.g. as per asset class, marketcapitalisation, sectors , themes etc.ETFs can be bought and soldthroughout the trading hours onreal time basis and thus can also beconsidered for trading activity.The expenses in most of the ETFsare relatively low and thus can beconsidered as a low cost investmentoption.Refer disclaimers on slide 155

Exchange Traded Fund – Unit Creation MakingActivitiesBuy / SellFUNDSubscription/Redemption inCash/PortfolioDepositSTOCK EXCHANGEETF UnitsCASHSELLERRefer disclaimers on slide 15CASHETF UnitsBUYERWho can deal directly withthe fund house?Authorized ParticipantsLarge Investors investing increation unit size as determinedby the AMCAll other investors can invest andredeem units of the ETF directly onthe Stock Exchange on which theyare listed through a registered broker(member of the stock exchange)6

Exchange Traded Fund – key differencesActively Managed Equity Funds Vs. ETFsWhat's the difference?ETFs and actively managed funds both have unique benefits that you will be able to take advantage of. It allcomes down to how you want your investments to work for you.Key AspectsParametersActively Managed Funds*ETFGoalOutperform Benchmark & Peer groupTrack the underlying benchmarkStrategyConstruct a portfolio to generate alphathrough research & analysisMimic the benchmark portfolioOther FactorsTake on risks in an attempt to beat themarketTracking error, Lower costs*Actively managed equity funds do not include index fundsLike Actively managed equity funds, ETFs are subject to market risks. In view of the individual circumstances and risk profile, each investor is advised to consulthis / her professional advisor before making a decision to invest.Refer disclaimers on slide 157

Growth of Global ETFsGlobal ETFs Assets have registered a growth of 24% CAGR in last 10 yearsExchange Traded Products (ETP) are types of securities that track underlying security, index of financial instruments. India Currently does not offer any ETPsSource : ETFGI . Data as on March 31, 2021Refer disclaimers on slide 158

Growth of ETF in India300,000289,602CAGR Growth for last 10 years 21Mar-1150,000Mar-12AUM in Rs. Crore250,000-ETFs in India witnessed a considerable Growth in last 5 years.The primary reason for growth is EPFO participation in Equities via Equity ETF.Source: MFI Explorer. Data as on Mar 31, 2021Refer disclaimers on slide 159

Categories of ETF in ernationalNIFTY Next 50ITOthersTotalDebtGOILiquidSDLGiltTotalAssets (Rs. Cr)% of Category% of 16,225100%5%GoldGoldNIFTY & Sensex ETF represents 76% of the total Equity Asset & 63% of total ETF Assets.The GOI debt ETF represents the Bharat Bond ETF, a GOI initiative.Source : MFI Explorer. Data as on June 30, 2021Refer disclaimers on slide 1510

Our OfferingsHDFC MF ETFsEquityBroad BasedDiversifiedIndexSectoral/ThematicBased IndexRefer disclaimers on slide 15CommodityHDFC NIFTY 50 ETFHDFC Sensex ETFGoldHDFC GoldExchangeTraded FundHDFC Banking ETF11

HDFC MF – Equity ETFsProduct DetailsScheme NameHDFC NIFTY 50 ETFHDFC SENSEX ETFHDFC Banking ETFInvestmentObjectiveThe investment objective of HDFC NIFTY50 ETF is to generate returns that arecommensurate with the performance ofthe NIFTY 50 Index, subject to trackingerror. *The investment objective of HDFC SensexETF is to generate returns that arecommensurate with the performance ofthe S&P BSE SENSEX Index, subject totracking error. *To provide investment returns that,before expenses, closely correspondto the total returns of the Securities asrepresented by the NIFTY Bank Indexsubject to tracking errors.*BenchmarkNIFTY 50 Index (Total Returns Index)S&P BSE SENSEX Index (Total Returns Index)NIFTY Bank Index (Total Returns Index)About theIndexThe NIFTY 50 index is a well-diversified 50companies index reflecting overall marketconditions account for 13 broad sectors ofthe economy. NIFTY 50 Index is computedusing free float market capitalizationmethod.The S&P BSE SENSEX is India’s most trackedbellwether index. It reflects the performanceof the 30 largest, most liquid and financiallysound companies across key sectors of theIndian economy that are listed at BSE Ltd.The NIFTY Bank Index comprises ofthe most liquid and large IndianBanking stocks. The Index comprisesof maximum 12 companies listed onNational Stock Exchange of India(NSE).Fund ManagerKrishan Kumar Daga & Arun AgarwalKrishan Kumar Daga & Arun AgarwalKrishan Kumar Daga & Arun AgarwalExit LoadNILNILNILExpense Ratio#0.05% p.a0.04% p.a0.15% p.a*There is no assurance that the investment objective of the scheme will be realized.# Details as on June 30, 2021For further details on investment strategy, asset allocation and scheme facts refer Scheme Information Document/ Key Information MemorandumRefer disclaimers on slide 1512

HDFC MF – Commodity ETFsProduct DetailsScheme NameHDFC Gold Exchange Traded FundType of SchemeAn open ended scheme replicating / trackingperformance of GoldInvestmentObjectiveThe investment objective of the Scheme is to generatereturns that are in line with the performance of gold,subject to tracking errors. There is no assurance that theinvestment objective of the Scheme will be realized.Fund Manager Krishan Kumar DagaExit LoadNILBenchmarkDomestic Price of Physical Gold.Expense Ratio0.60% p.a **Details as on June 30, 2021.For further details on investment strategy, asset allocation and scheme facts refer Scheme Information Document/ Key Information MemorandumRefer disclaimers on slide 1513

HDFC MF ETFs – Product LabellingName of SchemeHDFC NIFTY 50 ETF(An open ended scheme replicating/ tracking NIFTY 50 index)HDFC SENSEX ETF(An open ended scheme replicating/ tracking S&P BSE SENSEX index)HDFC Banking ETF(An open ended scheme replicating/ tracking NIFTY Bank Index)HDFC Gold ExchangeTraded Fund(An open ended scheme replicating/ tracking performance of Gold)This product is suitable for investors who are seeking*Riskometer# Returns that are commensurate with the performance ofthe NIFTY 50, subject to tracking errors over long term Investment in equity securities covered by the NIFTY 50. Returns that are commensurate with the performance of theS&P BSE SENSEX, subject to tracking errors over long term Investment in equity securities covered by the S&P BSE SENSEX. Returns that are commensurate with the performance of theNIFTY Bank Index, subject to tracking errors over long termInvestors understand that their principal will be atvery high risk Investment in equity securities covered by the NIFTY Bank Index. Returns that are commensurate with the performance of thegold, subject to tracking errors over long term Investment predominantly in Gold bullion of 0.995 fineness.Investors understand that their principal will be atmoderately high risk*Investors should consult their financial advisers, if in doubt about whether the product is suitable for them.# For latest Riskometer, investors may refer to the Monthly Portfolios disclosed on the website of the Fund viz. www.hdfcfund.com14