Long and solid track record

The fund, which has been around for more than 24 years, has been a steady per­former


If you are look­ing for a fund that bets mostly on large-caps, does not churn its port­fo­lio too fre­quently and has a long and sound track record, HDFC Eq­uity would fit your needs per­fectly.

The scheme has been around for more than 24 years and has been a steady per­former vis-à-vis the broader mar­kets over this pe­riod.

It has de­liv­ered a solid 18.7 per cent an­nu­ally since its in­cep­tion.

Over three-, five- and 10-year time-frames, HDFC Eq­uity has de­liv­ered bet­ter re­turns than its bench­mark — Nifty 500 TRI.

The ex­tent of out­per­for­mance has been to the tune of 1-3 per­cent­age points.

In an en­vi­ron­ment where most eq­uity schemes have strug­gled to keep pace with their bench­marks, the scheme’s steady per­for­mance is a pos­i­tive.

To be sure, HDFC Eq­uity does have bouts of un­der­per­for­mance, some­times for pe­ri­ods last­ing for even a year or more.

But it does bounce back, and par­tic­i­pates in most mar­ket ral­lies. It has out­per­formed peers such as DSP Eq­uity, ICICI Pru­den­tial Mul­t­i­cap and L&T Eq­uity over the long term.

The scheme is suit­able for a long term of 7-10 years and can form an im­por­tant part of an in­vestor’s port­fo­lio. For in­vestors with a medium risk ap­petite, tak­ing the SIP (sys­tem­atic in­vest­ment plan) route to park sums in the fund will be a good op­tion.

Port­fo­lio and strat­egy

HDFC Eq­uity has a large-cap bias in choos­ing the stocks within its port­fo­lio. More than 75 per cent of the stocks at any point in time are from the Sen­sex, Nifty or BSE 100 bas­kets.

As the mar­kets had turned volatile over the past one year and mid-caps had crashed, the fund has in­creased the pro­por­tion of large-caps to 85 per cent of its port­fo­lio cur­rently.

Though the fund does not in­dulge in whole­sale churn­ing of its port­fo­lio, it does man­age to tweak ex­po­sures to sec­tors to latch on to mar­ket-favoured trends. In the last 2-3 years, HDFC Eq­uity has re­duced ex­po­sure to au­to­mo­biles and petroleum prod­ucts, while up­ping stakes in seg­ments such as soft­ware and se­lect pri­vate sec­tor banks.

Though the mas­sive ex­po­sure, of nearly a third of its port­fo­lio, to the fi­nan­cial seg­ment does hurt dur­ing poor cy­cles, the choice of stocks has kept it rel­a­tively in­su­lated.

In the last year or so, the fund’s key hold­ings have in­cluded names such as Reliance In­dus­tries, In­fosys, Axis Bank, L&T, ITC and HDFC Bank.

HDFC Eq­uity re­mains fully in­vested across mar­ket cy­cles. The scheme does not take sig­nif­i­cant cash po­si­tions.

While such a strat­egy can hurt dur­ing heavy cor­rec­tions, there is a bet­ter chance of par­tic­i­pa­tion dur­ing ral­lies.

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