The Hindu Business Line : HDFC Top 200: Invest

Investment can be considered in HDFC Top 200 based on its five-year track record, during which the fund consistently outpaced its benchmark BSE-200. HDFC Top 200 invests predominantly in large-cap stocks and from the BSE-200 basket. With the market favouring select themes such as infrastructure and capital goods, most diversified funds trailed theme-based funds in these segments over the past year.

The fund’s five-year compounded annualised return of 60 per cent places it within the top quartile of diversified funds. HDFC Top 200 has outpaced the BSE 200 by 13 percentage points and the pure large-cap fund Franklin India Bluechip by five percentage points.

Suitability: The portfolio reflects its conservative approach, and the fund is suited to non-aggressive, long-term investors. The fund has also managed declining markets well, making it suitable for conservative investors. .

Performance: The fund’s performance has slowed down in comparison to more aggressive diversified peers as well as the category average during the past one year. Sector and stocks selection have both contributed to this performance.

The exposure to IT and consumer non-durables, which have underperformed during this period, and under weight positions in hot sectors such as telecom, power, construction and ferrous metals, explain the relative performance.

The fund has generated a return of 49 per cent and trailed the benchmark by few percentage points over one year. During the same period, DSPML 100, a fund with a large cap portfolio, has returned 59 per cent. In the past two years, the fund has trailed its benchmark only on eight occasions on a rolling return basis.

Portfolio overview: The fund, on an average, held close to 50 stocks and prefers to adopt a buy and hold strategy; however the fund’s portfolio turnover is marginally higher than HDFC Equity and HDFC Growth. In the latest portfolio, the fund has added afresh stocks such as HDFC, Hindustan Unilever, CMC and recently listed Power Grid Corporation.

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