The Hindu Business Line : HDFC Equity Fund: Invest

HDFC Equity Fund appears to be a good investment option for investors looking for a diversified large cap fund. The fund has consistently outpaced its benchmark, the CNX 500, over a five-year period. Over a three-year period, it has generated an annualised return of 53 per cent, which is 11 percentage points over the benchmark. However, the fund has trailed peers such as Reliance Vision, to a marginal extent.

Suitability: The fund has been a consistent performer across different market cycles, making it well-suited to an investor’s core portfolio. It has a predominantly large-cap portfolio with marginal exposure to mid-cap stocks to b oost returns. It is suitable for conservative investors, given that it is not an aggressive churner of its portfolio. The fund carries a risk profile similar to most diversified funds.

Performance: HDFC Equity Fund’s NAV has grown by 48 per cent over the past year and it outpaced the benchmark CNX 500 by three percentage points. However, it has trailed Reliance Vision Fund by eight percentage points. On an aver age, close to 16 per cent of the assets were invested in the IT sector. The fund’s large-cap orientation and its IT exposure could partly explain its recent underperformance. The fund’s performance record over the years appears to have built greater confidence with investors and the asset under management has grown from Rs 2,814 crore to Rs 4,516 crore over the past one year. Based on its track record and the flexibility to invest across market caps, the expansion in asset size may not be a drag on its performance.

Portfolio Overview: HDFC Equity Fund has 47 stocks in its latest portfolio. The top three sectors accounted for 40 per cent of the assets and the 10 preferred stocks make up 41 per cent of the portfolio. The fund stepped up exposure to capital goods stocks over the past quarter.

Fund facts: HDFC Equity Fund was launched in October 1996. Mr Prashant Jain manages it. The NAV per unit is Rs 169.20.

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