Type of fund
This is an open-ended Large & Mid Cap diversified equity mutual fund.
Investment objective
This mutual fund aims to offer long term capital growth.
Investment philosophy and strategy
The fund offer capital appreciation through investments primarily in stellar growth companies that are ahead of their competitors and are backed by solid financial strengths. The HDFC Equity Fund has a diversified portfolio across sectors and industries to mitigate volatility risks, and retains flexibility in terms of investments in money market and debt instruments.
Technicalities
| Options | Growth, Dividend |
| Inception Date | 01/01/1995 |
| CRISIL Rank | 2.5 (below average) |
| AUM | Rs.18466.10 cr (as on 26-08-15) |
| NAV | Rs.449.10 (as on 26-08-15) |
| Entry Load | 0.00% |
| Exit Load | 1% if redeemed within 1 year |
| Expense Ratio | 2.17% |
Plans
- Direct Plan – Growth Option
- Direct Plan – Dividend Option
- Growth Option
- Dividend Option
Product label – Risk and target investors
The fund is categorized as Principal at High Risk. Long term investors are primarily targeted.
Fund manager(s)
Prashant Jain
- Education: CFA – AIMR, USA; PGDM – IIM Bangalore; B. Tech – IIT Kanpur
- Past Experience: Zurich AMC, SBI Mutual Fund
- Other funds managed: HDFC Infrastructure Fund, HDFC Monthly Income Long Term Plan, HDFC top 200 Fund, HDFC Prudence Growth and 5 other schemes from HDFC Mutual Funds.
Rakesh Vyas
- Education: PGDM – XLRI Jamshedpur; B.E. Electrical
- Past Experience: Lehman Brothers, Nomura
- Other funds managed: HDFC Capital Builder Fund, HDFC Balanced Fund, HDFC Multiple Yield Fund Plan 2005, HDFC Mid Cap Opportunities Fund, HDFC Short Term Opportunities Fund and 284 other schemes from HDFC Mutual Funds.
Benchmark
The benchmark used for HDFC Equity Fund is the 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. Base date is 01-01-1995 and base value is 1000.
Portfolio – Sector / Top 10 holdings
| Name | Sector | Class | Allocation (%) |
| State Bank of India | Financial | Equity | 8.64 |
| ICICI Bank Ltd | Financial | Equity | 7.99 |
| Infosys Ltd | Tech | Equity | 7.49 |
| Larsen & Toubro Ltd | Diversified | Equity | 7.41 |
| Maruti Suzuki India Ltd | Auto | Equity | 5.65 |
| Aurobindo Pharma Ltd | Healthcare | Equity | 3.91 |
| Bharat Petroleum Co Ltd | Energy | Equity | 3.70 |
| Bharti Airtel Ltd | Telecom | Equity | 3.31 |
| Bank of Baroda | Financial | Equity | 3.23 |
| Tata Motors DVR | Auto | Equity | 3.20 |
Risk measures
| Standard Deviation | 18.34% |
| Sharpe Ratio | 0.88 |
| Alpha | 3.09% |
| Beta | 1.23 |
Fund performance
The fund has performed averagely in last 3 years’ and 5 years’ returns, while 1 year returns have been well below average performance compared to other funds in its category.
| 1 year | 3 years | 5 years | |
| Returns | 2.72% p.a. | 21.05% p.a. | 10.36% p.a. |
| Avg. Returns in Category | 11.61% | 20.15% | 10.83% |
| Benchmark | 4.8% p.a. | 28.0% p.a. | 7.9% p.a. |
| Growth of Rs.10,000 | Rs.10272.42 | Rs.17738.31 | Rs.16369.41 |
| % appreciation sa(overall)* | 2.72% | 77.38% | 63.69% |
*% appreciation is the overall capital gain at maturity as per given time-frame.
Peer + benchmark comparison
| 6 months (%) | 1 year (%) | YTD (%)* | |
| HDFC Equity Fund | -6.42 | 2.72 | -4.13 |
| Benchmark | -7.77 | 4.8 | -15.35 |
| IDBI Diversified Equity Fund Direct | -0.59 | 25.30 | 7.58 |
| Motilal Oswal MO St Focussed 25 Fund Direct | -1.65 | 20.90 | 7.38 |
| Franklin India Prima Plus Direct Fund | -0.40 | 22.45 | 5.37 |
| SBI Magnum MultiCap Fund Direct | -0.06 | 19.98 | 5.07 |
| Birla Sun Life Special Situations Direct Fund | -0.94 | 19.35 | 4.83 |
*As on 26th August 2015
Taxation
Taxes are levied under Sections 54EA, 54EB, 54EC, 54ED, 10(33), 112(1) and 94(7) of the Income Tax Act.
Purchase/Redemption
- Purchase: Cut off time 3 P.M. Repurchase and resell options available.
- Redemption: Redemption time 3 days.
- Minimum investment/subsequent investment: Rs.5,000 minimum investments, Minimum subsequent investment of Rs.1,000.
- Minimum withdrawal/balance: Minimum withdrawal of Rs.500, minimum balance of Rs.1,000.
SIP, SWP and STP
- SIP: Systematic Investment Plan is available. Minimum 12 cheques are required.
- SWP: Systematic Withdrawal Plan is available. Minimum SWP withdrawal of Rs.500.
- STP: Systematic Transfer Plan is available.
How to apply – online + distributors
Both online and offline routes can be taken to buy the HDFC Equity Fund (G).
- Online
For online customers, you can register with HDFCMFOnline and proceed with form filling and transactions once you have generated the HPIN. Customers can also buy units of the Mutual Fund from Visa/Maestro debit cards. Independent online MF agents can also help you with applying for purchase of units.
- Offline
Offline means include approaching the MF branch or registered bank branch and submitting the KYC (Know Your Customers) forms for first time mutual fund buyers. In case you have already submitted KYC forms for any mutual fund, then simply select a fund, scheme, option etc. and fill and submit the mutual fund form to the respective counter. SIP option allows the fund house to automatically debit money from your bank account.
Expert view of the fund + outlook
HDFC Equity Fund is among the best performing and oldest mutual funds in the country. It has a significantly large AUM and is steered by the able mind of Prashant Jain along with Rakesh Vyas. The fund is great for investors looking toward long term investments, as its portfolio is carefully consolidated to include strong companies with long-term growth potential. Short term investors may not be suited for this fund as the fund manager is known to hold onto equities during short-term downsides, resulting in underperformance among peers in the short term.
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