New fund offer: HDFC Debt Fund for Cancer Cure 2014

Investing with a social intent

If you would like to keep your capital protected but give away a part or whole of your income generated for a social cause, then HDFC Debt Fund for Cancer Cure 2014 is a fund you must consider. This 3-year closed-end fund will donate 50% or 100% of the dividend (the choice being yours) declared in the fund to Indian Cancer Society (ICS). The latter in turn funds some of the leading organizations in the country offering treatment for cancer.

About the fund

HDFC Debt fund for Cancer Cure will invest 95-100% of the funds in government securities and AAA-rated bonds and may park about 5% in money market instruments. The scheme is classified as low risk (SEBI-mandated classification). Minimum amount for investing in the fund is Rs 50,000. The investment will automatically be redeemed at the end of 3 years.

There is only a dividend payout option and no growth option. There are 2 scheme options to choose from – one, that will donate 50% of the dividends to ICS and the other half paid out to you. The second option wherein 100% of the dividends will be donated to ICS.  The dividends that are donated to ICS will be eligible for deduction under Section 80G of the Income Tax Act as per the provisions.

HDFC Mutual had in 2011 launched a similar fund and donated Rs 10.87 crore up to December 2013. With this new fund, HDFC Mutual will match the donation of dividends made by investors and thus double the corpus that goes out as donation to ICS.

It is noteworthy that the fund shall not levy any investment and advisory fee. The total expense ratio is estimated to be 0.05% (that will have only the trustee fees including all tax and levies and cost towards investor education mandated by SEBI). The rest of the cost will be borne by the AMC, given that this is a philanthropic initiative by the AMC.

About ICS and funding

ICS is a public charitable trust and an anti-cancer NGO established in 1951.

The rising number of people suffering from cancer in the country and the astronomical treatment cost has made it increasingly difficult to provide quality treatment, especially to the underprivileged. The money raised by the HDFC fund is used for treatment costs of needy and underprivileged patients.

The beneficiaries are identified by an advisory council and are typically patients with an annual income of less than Rs 1 lakh. Hospitals are selected and empanelled with the ICS Cancer fund depending on their medical facilities and sophistication. The Tata Memorial Hospital in Mumbai, Regional Cancer Centre in Trivandrum, the Cancer Institute, Adyar in Chennai, and other hospitals in cities such as Kolkata, Ahmedabad, Srinagar, Vellore and New Delhi are all empanelled to fund treatment of identified patients.

The fund will close for subscription On March 11. This may be a good chance for those looking to give back to the society. Since the fund is channelized through an established NGO route, you would also have the assurance of your money being put to good use.

Click here to view a presentation by HDFC Mutual on how your investment can help the cause:HDFC ppt