The HDFC Capital Builder Fund is an equity-oriented growth mutual fund that targets long term investors by offering them with capital appreciation. It is offered by HDFC Asset Management Company, which is one of the largest mutual fund houses in the country.
Type of fund
This is an open ended diversified equity-oriented growth mutual fund.
Investment objective
The objective here is to generate long term capital appreciation through investments in the equities of fundamentally strong companies also known as blue chip companies.
Fund information
| Inception date | 01/02/1994 |
| CRISIL rank | Rank 3 in Diversified Equities |
| Schemes | •Direct Plan – Growth Option •Direct Plan – Dividend Option •Growth Option •Dividend Option |
| 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 | •Rs.5,000 for new investors and any amount thereafter •Rs1,000 for existing investors and any amount thereafter |
| SIP | •Minimum Rs.500 for monthly subscription •Min. Rs.1,500 for quarterly subscription |
| Product label – Risk and target investors | Moderately High risk. Meant for long term investors aiming for long term capital gain through equity based investments in strong companies. |
| Benchmark | CNX 500. CNX 500 Index represents close to 96% of all the free float market capitalization of stocks listed on the National Stock Exchange (NSE) till 31st March 2015. CNX 500 index constituents have trading value of close to 92% of the overall traded value on NSE. |
| 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 Chirag Setalvad has overall 14 years of past experience of which 11 years were in the fund management and equity research sector and 3 years as an investment banker. Mr Setalvad manages other funds for HDFC Mutual Funds including HDFC Mid Cap Opportunities, HDFC Long Term Advantage Plan and HDFC Balanced Fund, among others. He holds a B.Sc. degree and MBA from North Carolina University. His past experiences have been in Vernon Advisory Services Ltd and ING Barings N.V.
Mr Rakesh Vyas has overall 8 years of past experience with 5 years in the field of equity research and 3 years as an application engineer. He handles several funds for HDFC Mutual Funds including 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. His past experiences have been in Lehman Brothers and Nomura.
Investment philosophy
The fund will invest in equities of fundamentally strong or blue chip companies. These include companies that have a strong management and are characterized by their integrity and competence. These companies are usually in market leadership positions and have significant working capital and operations efficiency. The companies invested in tend to have surplus cash generation and have provided good profitability on previous fund investments.
Portfolio – Sector / Top 10 holdings*
| Name | Sector | Class | Allocation (%) |
| ICICI Bank Ltd | Financial | Equity | 6.22 |
| State Bank of India | Financial | Equity | 4.58 |
| Infosys Ltd | Tech | Equity | 4.43 |
| Reliance Industries Ltd | Energy | Equity | 4.12 |
| Grasim Industries Ltd | Diversified | Equity | 3.82 |
| Larsen & Toubro Ltd | Diversified | Equity | 3.68 |
| HDFC Bank Ltd | Financial | Equity | 3.43 |
| BPCL | Energy | Equity | 3.35 |
| IndusInd Bank Ltd | Financial | Equity | 3.29 |
| Axis bank Ltd | Financial | Equity | 3.24 |
*As on 31st July 2015
Risk measures
| Standard Deviation | 14.59% |
| Sharpe Ratio | 1.05 |
| Alpha | 7.50% |
| Beta | 0.96 |
Performance*
| AUM | Rs.972 crores (Growth) |
| NAV | •Direct Plan – Dividend Option: Rs.26.1230 •Direct Plan – Growth option: Rs.188.6820 •Dividend Option: Rs.25.6930 •Growth Option: Rs.186.1760 |
| Expense Ratio | •2.50% on first Rs.100 crores daily net assets •2.25% on next Rs.300 crores •2.00% on next Rs.300 crores •1.75% on remaining daily net assets Direct plans have a lower expense ratio by 0.90% |
*As on 31st July 2015
Benchmark comparison*
| Compounded Annualised Returns | Scheme Returns (%) | Benchmark Returns (%) |
| Returns for last 1 year | 14.94 | 7.26 |
| Returns for last 3 years | 13.73 | 6.54 |
| Returns for last 5 years | 13.17 | 9.71 |
| Returns since inception | 15.09 | 8.94 |
*As on 31st March 2011
Expert view of the fund
The fund has consistently beaten benchmark returns as well as average category returns and has done well in times of market corrections and rallies. The fund has been operational for more than 20 years attesting to its popularity among investors. Banks form a good portion of its portfolio apart from technology and diversified companies, with a sizable chunk of the portfolio consisting of large cap investments. As such the fund is good for long term investors looking for moderately risky investment opportunities. Investors can apply for this fund if they are looking to fulfil long term goals such as retirement planning, child’s marriage or education or home purchase. Mutual funds are risky investments and you should always consult with your personal financial advisor before investing in such instruments.
How to apply
You can apply for the HDFC Capital Builder Fund via online or offline avenues.
- Online
- Offline
The online application process is painless and can be done from the comfort of your home. You simply need to register with the HDFCMFOnline portal after satisfying KYC norms as asked for by every mutual fund house. You will be able to generate your personal HPIN number which will give you access to the portal so that you can apply for funds or do transactions as you see fit. You can also use third party websites for applying for mutual funds once you have established their credentials with surety.
You can go to any of HDFC MF registered branches and fill up the application form. You need to submit this form along with any supporting documents as required for completing the application process. You will also be required to satisfy KYC norms. Alternatively, you can approach third party distributors though choosing one should be accompanied with good research on their credentials from your end.
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