HDFC CRISIL-IBX Financial Services 9-12 Months Debt Index Fund-Reg (G)

The Scheme will employ an investment approach designed to track the performance of the Underlying Index, subject to tracking difference. The Scheme will be considered to be replicating the Index if:  Investment in securities of issuers accounting for at least 60% of weight in the index, represents at least 80% of net asset value (NAV) of the Scheme.  At no point of time the securities of issuers not forming part of the index exceed 20% of NAV of the Scheme.  At least 8 issuers from the Underlying Index form part of the portfolio of the Scheme.  The investment in various securities are aggregated at issuer level for the purpose of exposure limits.  For AAA rated securities, exposure to a single issuer by the Scheme shall not be more than 15% weight in the portfolio.  For AA rated securities, exposure to a single issuer by the Scheme shall not have more than 12.5% weight in the portfolio.  For A and below rated securities, exposure to a single issuer by the Scheme shall not have more than 10% weight in the portfolio.  Total exposure of the Scheme in a particular group (excluding investments in securities issued by PSUs, PFIs and PSBs) shall not exceed 25% of NAV of the Scheme. For the purpose of this provision, roup` shall have the same meaning as defined in Clause 12.9.3.3 of Master circular.  The Macaulay Duration (hereinafter referred as "duration") of the portfolio of the Scheme replicates the duration of the Underlying Index within a maximum permissible deviation of +/- 10%. The annualized tracking difference averaged over one year period shall not exceed 1.25% upon completion of 1 year. In case the average annualized tracking difference over one year period for the Scheme is higher than 1.25%, the same shall be brought to the notice of trustee`s with corrective actions taken by the AMC, if any.