A fund with a charitable difference

Imagine a route to donate money that’s not bothersome and where you’re sure that the funds are being properly used.

Consider HDFC Debt Fund for Cancer Cure 2014, which has tied up with the Indian Cancer Society (ICS).

The minimum investment in this fund is set at ₹50,000. You can opt to donate to ICS either half, or the entire dividend that the fund declares.

With the fund taking care of the actual donations and their monitoring, all you have to do is make a simple one-time investment.

At the end of the fund’s tenure you will be returned the capital (and dividend, if you opted to donate only half of it).

And in keeping with the charitable spirit, “The expenses in managing the fund will be absorbed by the HDFC asset management company — that is, the HDFC Debt Fund for Cancer Cure fund itself will have a nil expense ratio. Overall returns will thus receive a boost.

This aside, the AMC will also donate to ICS an amount equal to the dividend donated from the fund,” says Milind Barve, MD, HDFC AMC.

The ICS is a public charitable trust, providing financial aid for cancer treatment to underprivileged patients.

It also supports their rehabilitation. It has tied up with seven hospitals in various cities — Tata Memorial Hospital (Mumbai), Cancer Institute Adyar (Chennai), Tata Medical Centre (Kolkata), and CMC (Vellore) — for providing the aid.

Apart from the credibility the HDFC tag brings, there is a governing panel to monitor where and how the proceeds are utilised.

So, where will this fund invest? To start with, the fund is a three-year close-ended scheme. Your investment will be locked for that time. Corporate bonds and money market instruments will make up 60-100 per cent of the portfolio. The scheme can also invest in Government securities up to a maximum of 40 per cent of the portfolio.

Given the nature of the fund, investments cannot be risky since regular returns and their safety are vital. So, the fund will stick to investing in AAA or A1-rated debt instruments. Next, to minimise interest rate risk, the maturity profile of the investments will be maintained at three years. This also means that portfolio churn will be kept to a minimum. There will not be heavy concentration in a single sector. The CRISIL Short-Term Bond Fund Index is the benchmark for the fund.

This HDFC Cancer Cure fund follows a similar fund that was opened earlier, and matures this month. The first cancer cure fund series netted around ₹10.8 crore in dividends, and over 500 patients were treated.

Returns from inception until end-December stood at 8.7 per cent, just ahead of the benchmark’s (CRISIL Short-Term Bond Fund Index) 8.6 per cent.

The HDFC Cancer Cure fund will be managed by Anil Bamboli who also looks after several debt funds from the HDFC stable, such as HDFC Multiple Yield Fund, HDFC Gilt Fund and HDFC Short term Opportunities Fund.

Donations are eligible for tax deductions under Section 80G. Certificates will be provided directly by the ICS. The fund offer is open till March 11.

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