The HDFC Balanced Fund is a hybrid equity-oriented mutual fund scheme with sizable investments in debt and money market instruments. It comes from the HDFC asset management company, which is the largest AMC in the country.
Type of fund
This is an open ended balanced/hybrid mutual fund.
Investment objective
The objective here is to generate current income and capital appreciation through investments in equities and debt and market instruments.
Fund information
| Inception date | 11/09/2009 |
| CRISIL rank | Rank 3 in Balanced Funds |
| Schemes |
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| Entry load | 0%. Any upfront commissions to be paid by investor directly to ARN holder. |
| Exit load | 1% if redeemed within 1 year |
| Minimum investment |
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| SIP |
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| Product label – Risk and target investors | Moderately High risk. Meant for long term investors looking at capital appreciation and current income. |
| Benchmark | CRISIL Balanced Fund Index. This benchmark is mainly used to track performance of equity-oriented balanced mutual funds. The index has a blend of CNX Nifty Index (65%) and CRISIL Bond Fund Index (35%). |
| SWP | Yes. Available in Fixed and Variable variants. Frequency of withdrawals are monthly, quarterly half yearly and yearly for Fixed SWP and quarterly, half yearly and yearly for Variable SWP. |
| STP | Yes. Available in two variants namely Fixed Systematic Transfer Plan (FSTP) and Capital Appreciation Systematic Transfer Plan (CASTP). Daily, Weekly, Monthly and quarterly transfer plans are available. |
| Redemption | Proceeds to be dispatched within 3-4 days |
| Taxation (on investment and on redemption) | As per applicable sections under the Income Tax Act. |
Fund manager(s)
Mr Rakesh Vyas has over 8 years of experience with 5 years in equity research and 3 years in application engineering. He is the dedicated fund manager for overseas investments. He is an experienced fund manager and manages several funds for HDFC Mutual Funds including HDFC Capital Builder Fund, HDFC Balanced Fund, HDFC Multiple Yield Fund Plan 2005, HDFC Mid Cap Opportunities Fund and HDFC Short Term Opportunities Fund etc. He has a B.E. Electrical degree and a PGDM from XLRI Jamshedpur. He has previously worked with Lehman Brothers and Nomura.
Mr Chirag Setalvad is a seasoned fund manager with over 14 years of collective experience in the financial sector, of which 11 years consist of fund management and equity research and 3 years in investment banking. Mr Setalvad manages several funds for HDFC Mutual Funds including HDFC Mid Cap Opportunities, HDFC Long Term Advantage Fund and HDFC Capital Builder Fund, among others. He holds a B.Sc. degree and MBA from North Carolina University. He has previously worked with Vernon Advisory Services Ltd and ING Barings N.V.
Investment philosophy
The fund invests in a portfolio made up of equity and equity related investments as well as debt and money market investments. The equity investments are based on economic earning power and cash return on investments with focus on the long term. Debt class investments are made in instruments that have been rated as “high investment grade” by at least one credit rating agency. Investments in debt securities and money market instruments are assessed w.r.t liquidity risk, interest rate risk and credit risk.
Portfolio – Sector / Top 10 holdings*
| Name | Sector | Class | Allocation (%) |
| ICICI Bank Ltd | Financial | Equity | 4.23 |
| HDFC Bank Ltd | Financial | Equity | 4.13 |
| Infosys Ltd | Tech | Equity | 4.05 |
| 8.30% GOI 2040 | Sovereign | Central Govt. Loan | 3.85 |
| Reliance Industries Ltd | Energy | Equity | 3.56 |
| 8.28% GOI 2027 | Sovereign | Central Govt. Loan | 3.50 |
| Larsen & Toubro Ltd | Diversified | Equity | 3.29 |
| 8.32% GOI 2032 | Sovereign | Central Govt. Loan | 3.28 |
| State Bank of India | Financial | Equity | 3.16 |
| Aurobindo Pharma Ltd | Construction | Equity | 2.31 |
*As on 31st July 2015
Risk measures
Performance*
| AUM | Rs.4,360.98 crores (Growth) |
| NAV |
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| Expense Ratio |
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*As on 31st July 2015
Benchmark comparison*
| Compounded Annualised Returns | Scheme Returns (%) | Benchmark Returns (%) |
| Returns for last 1 year | 16.17 | 9.37 |
| Returns for last 3 years | 16.87 | 8.13 |
| Returns for last 5 years | 13.68 | 10.59 |
| Returns since inception | 17.49 | NA |
*As on 31st March 2011
Expert view of the fund
HDFC Balanced Fund has consistently beaten the benchmark returns since its inception in 2000. With a judicious mixture of equities, debt and money market instrument investments, the balanced fund is good for generating recurring income as well as long term capital appreciation. The fund is handled by seasoned mutual fund industry veterans and is among the largest funds in its category. If your risk profile and objectives are aligned with that of the fund, it is a good bet in the long run. Mutual fund investments are risky avenues in general, and you should consult with your personal financial advisor before making any investments.
How to apply
New and existing investors can apply for this fund through both online and offline means.
- Online
For online customers, you can directly go to the official website and register in the HDFCMFOnline portal. Once you have filled out all the details and submitted the KYC documents, you will be able to generate your HPIN number, which is used to login and invest in HDFC mutual funds. Payments can be made from multiple avenues. Alternatively some third-party providers also offer online investment options. You can invest through them after ensuring the offers are legitimate.
- Offline
For offline customers, you can approach the nearest HDFC mutual funds branch and complete the KYC norms. After this, you will be required to fill up documents and submit details. Once your application has been processed, your account will become active without any delay. Some third-party distributors are also selling mutual fund products and you can approach them to complete the registration on your behalf. Once again, it advisable to establish the credentials of a third-party vendor.
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