HDFC Floating Rate Debt Plan (Growth)

HDFC Floating Rate Debt Wholesale Plan Fund (Growth) is an open-ended debt fund that primarily invests in floating-rate instruments (including fixed-rate instruments that have been converted to floating-rate exposures through swaps and derivatives). The Fund will invest primarily in floating rate debt, fixed rate debt securities with floating rate returns swapped in, and money market products. The Scheme will continue to establish a well-diversified debt (including securitized debt) and other instrument portfolios. Credit quality, liquidity, interest rates, and their outlook will all influence debt securities investment. For diversification, the Scheme may invest in hybrid securities, such as REIT and InvIT units, subject to SEBI’s requirements from time to time.

Investment Objective of HDFC Floating Rate Debt Wholesale Plan Fund (Growth)

The investment objective is to generate income/capital appreciation through investment in debt securities and money market instruments

HDFC Floating Rate Debt Wholesale Plan Fund (Growth) primarily invests in bonds whose interest rate fluctuates with the economy’s current interest rates. Such funds are typically less volatile in response to changing interest rates due to their investment mandate. They may be a reasonable option for your portfolio’s fixed-income component.

The scheme invests Floating rate Securities (including fixed rate Securities converted to floating rate exposures using swaps or derivatives. Furthermore, the scheme also invests in Fixed rate debt securities (including securitized debt, money market instruments & floating rate debt securities swapped for fixed rate returns

Scheme Details of HDFC Floating Rate Debt Wholesale Plan Fund (Growth)

HDFC Mutual Fund launched HDFC Floating Rate Debt Wholesale Plan Fund (Growth) on 23rd October 2007. The fund has been in existence for the past 15 years. 

NAV and Returns – As of 14th April 2022, the Net Asset Value (NAV) of the scheme is Rs  39.56. The risk-o-meter of HDFC Floating Rate Debt Wholesale Plan Fund (Growth) is low to moderate risk. While investing an investor must understand that the principal amount invested will be at a low to moderate risk. Since its inception during the past 15 years, the scheme has provided its investors with a return of 7.90%.

Investment Plans – Regular Plan and Direct Plan. Under each Plan: Growth and IDCW Options. The IDCW Option offers Daily IDCW Option (with Reinvestment facility only) and Weekly and Monthly IDCW Options (with Payout and Reinvestment facility).

Minimum Investment – The minimum amount for a lump sum investment is Rs 5,000. However, the minimum investment amount for SIP is Rs 1,000.

Expense Ratio – An expense ratio of 0.48% is charged on the units of the mutual funds. 

Exit Load – No exit load on redemption of the units. Switching between Options within the same Plan within a Scheme will not incur any exit charges. Unless the investment was made directly, without the use of a distributor code, a switch to a Direct Plan within the same Scheme will be subject to the applicable exit load. However, there will be no exit load on any subsequent switch-outs or redemptions of such investments from the Direct Plan. Switching from the Direct Plan to the Non-Direct Plan within the same Scheme has no exit load. Any subsequent switch out or redemption from the non-Direct Plan, on the other hand, will be subject to an exit load depending on the original date of investment in the Direct Plan.

Fund Manager – Mr. Shobhit Mehrotra, Mr. Vikash Agarwal, and Mr. Sankalp Baid are the fund managers of the scheme. Mr. Shobhit Mehrotra is the Fixed Income Senior Fund Manager and Head of Credit. Over 25 years of expertise in Fixed Income Markets, Fixed Income Dealing, Credit Rating, and other related fields. He has been managing the fund since its inception. Mr. Vikash Agarwal is a member of the Vikash Agarwal Group. Over 14 years of expertise dealing in fixed income products, including 12 years in debt and investment and more than one year in Forex trading and research. He has been managing the fund since July 01, 2020. Mr. Sankalp Baid is a Credit Analyst and Backup dealer as Macroeconomic Analyst and Fund Manager for Overseas Investments. He has been managing since January 22, 2021.

Other details – There is no lock-in period for the scheme. So, an investor can redeem an investment anytime without any redemption limit. As of 14th April 2022, the AUM of HDFC Floating Rate Debt Wholesale Plan Fund (Growth) is Rs 17,379.115 cr. The fund benchmarks to NIFTY Low Duration Debt Index TR INR. The suitable investment horizon for an investor is 1 year to 5 years.

Growth Review

Scripbox recommends HDFC Floating Rate Debt Wholesale Plan Fund (Growth) for investment within the floating rate mutual fund category. The nature of the category enables the fund manager to manage interest rate risk by predominantly holding floating rate instruments or fixed coupon instruments which are converted to floating rates by using swaps. The yields of these instruments move in the same direction as the benchmark rates. Launched in 2007, the fund has the highest average assets under the management of Rs. 14,559 crores, among its category peers. The fund has consistently delivered above-average 3 years rolling returns of 7.79% with the best level of return predictability. In our view, the fund has the lowest market determined risk as well. All these elements are put together to make this fund a “Scripbox Recommended Fund” within the floating rate category. 

1. With a past record of 15 years, the fund has a sufficient history for analysis and the track record is good
2. With an AUM of 17,379.115 cr, the fund is a category leader in size.
3. The fund has a higher credit quality in comparison to other debt funds.
4. The scheme is moderately impacted by interest rate fluctuations.

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