This is a really unique mutual fund by HDFC precisely because of what the name suggests. The HDFC Debt Fund for Cancer Cure is a closed ended mutual fund that will have a term of 3 years, and it will donate 50% or 100% of the dividend income to the Indian Cancer Society.
At the time of subscription you will have the option to tell them whether you want to donate half of your dividend income or all of it, and HDFC mutual fund will donate your dividend according to your wish.
While I’m not entirely sure what to make of this philanthropic mutual fund offering – I applaud HDFC for coming up with this idea, and most of all for not charging any expenses on this fund.
It would have been really lame if they were to profit out of such an undertaking, but they are not charging any expenses to the investors, and that’s a great thing.
The mutual fund NFO will close on the 4th March 2011, and the mutual fund is only going to invest in highly rated debt instruments.
The dividend that is donated on your behalf enjoys tax benefit under section 80G, so you can use that money as a deduction from your taxable income.
The minimum investment needed in this fund is quite high at Rs. 1,00,000, and I’m not sure why they have kept the minimum limit so high, but that’s how much you need if you want to invest in this NFO.
Since this is a close ended fund you won’t get an opportunity to invest after the NFO closes, so the barrier to entry is aÂ bit high.
What do you make of this mutual fund? Would you like to invest in something like this if the minimum investment were less than a lakh rupees?