HDFC Capital Builder Fund - Consistent Wealth Builder!

Swapnil Suvarna feels the fund is suitable for long term investors looking to generate superior returns

Launched in February 1994, HDFC Capital Builder Fund is among the oldest open-ended funds and is benchmarked under S&P CNX 500. Chirag Setalvad and Miten Lathia are the joint fund managers. Over the years, the fund has been investing in quality large-cap equities by capturing those opportunities that are below fair value in the opinion of the fund manager or out-of-favor. In addition, the fund has also regularly favored mid-caps which exhibit potential for earnings momentum and attractive valuations.

This approach has helped them to generate decent returns over a longer period. The fund has outperformed its benchmark consistently and has shown good downside protection generating reasonable alpha. At times, the fund performance has been subdued during mid-cap rally due to considerable holding in large-caps but overall its significant exposure in mid-caps augments its returns.

The fund portfolio is high on liquidity and quality, mainly due to its focus on promising large-caps. The fund has always maintained a portfolio of less than 40 stocks with large-caps accounting for more than 60 percent and mid-caps accounting for another 25-30 percent.

The fund managers conviction and focus of maintaining a quality portfolio helps the fund to outperform the benchmark consistently across market cycles. Moreover, its major holding in promising large-cap space brings stability in the long term making it a good investment product for long term.