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HDFC Index Fund - SENSEX Plus Plan has a mandate of investing 80 to 90 per cent of its net assets in companies whose securities are included in the Sensex, with the remaining 10-20 per cent of its holdings going into companies whose securities are not included in the Sensex. The fund has a track record of more than 10 years. By taking adept calls on select stocks and moving into cash positions during volatile markets, the fund has delivered an above-average performance when compared to several peers.
The scheme has delivered 10.5 per cent, 7.2 per cent and 8 per cent in the last one-, three- and five-year time periods respectively on an annualised basis. Moreover, the fund has outperformed its benchmark, the Sensex over this timeframe
Sector Trends
The fund held 23 per cent of its portfolio in cash and equivalents during February 2011 as markets went into a downtrend. Subsequently, the fund redeployed its cash at the right time.
The fund has been predominantly overweight in its allocation in sectors such as banks, software and petroleum products. In the past one year the fund has been maintaining its allocations at around 18 per cent in banking stocks. The fund has also favoured thesoftware sector and has 13 per cent holdings in it. The BSE IT index has outperformed the Sensex and is currently hovering at 2013 highs.
During the first quarter of 2011, the fund was underweight on consumer non-durables sector . It increased its holdings to 11.2 per cent in February 2012 which enabled the fund to ride the rally in the theme that lasted the entire year . The scheme also did not take significant exposure to sectors such as pharma, which was an outperformer, and laggards such as power and construction. .
Stock Moves
Infosys was the fund’s favourite stock, during 2011 and 2012. But as the stock underperformed, it switched to ITC and Reliance Industries with allocations of 8.4 per cent and 7.35 per cent respectively. ITC has gained almost 80 per cent the in last two years and 45 per cent in the past one year. Solar Industries found a berth in the fund’s portfolio in April 2012 and it currently holds 3.4 per cent. The stock has gained 16 per cent in the past one year. The fund has trimmed its holdings in State Bank of India from 4 per cent year ago to 2.8 per cent. Most of the picks are from the Sensex basket. SJVN, Navneet Publications and GAIL are other stocks which found a place in the fund’s portfolio in the past one year. On the other hand, it has exited its holdings from DLF .
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