Swapnil Suvarna finds that this fund deserves to be a core holding in every portfolio for its brilliant and consistent long term performance
HDFC Equity Fund is among the oldest open end equity funds and the most impressive in terms of consistency. It was launched in January 1995 and is benchmarked under S&P CNX 500. Prashant Jain and Miten Lathia are the joint fund managers. The fund predominantly focuses on investing in diverse quality growth companies that are reasonably valued.
The fund performance has been consistent in generating reasonable alpha to its investors during the bull phase and has also moderated losses in the major bear phase. This is largely due to its portfolio which has been high on liquidity and quality. The fund portfolio is mainly large cap and emerging mega cap oriented. In addition, it has favored quality mid caps on a consistent basis which are expected to maintain growth and profitability in future. However, the investment in mid caps has been limited to control risk during unforeseen market conditions.
The fund has shown decent downside protection and has benefited with the management’s conviction and focus of maintaining a quality portfolio thus helping it to outperform the benchmark consistently across various market cycles.
Period NAV S&P CNX 500 Since Inception 22.18 5-years 19.13 11.64 3-year 21.56 8.01 1-year 4.44 -1.83 6-month 3.1 2.04 Returns as on August 1, 2011. Returns less than 1 year are absolute, while greater than 1 year is annualised. Source: Accord Fintech
