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HDFC Prudence Fund

This is a hybrid mutual fund that is aimed at current income and long term capital appreciation through investments in a judicious mix of equity and equity related instruments as well as debt and money market instruments.

Type of fund

This is an open ended balanced mutual fund scheme.

Investment objective

The objective here is to offer capital appreciation and periodic returns over the long term with the aim to minimize capital erosion.

Fund information

Inception date 01/02/1994
CRISIL rank Rank 4 out of 5
Schemes
  • Direct Plan – Growth Option
  • Direct Plan – Dividend Option
  • Growth Option
  • Dividend Option
Entry load 0%
Exit load 1% if redeemed within 1 year
Minimum investment
  • Rs.5,000 for new investors
  • Rs1,000 for existing investors
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 investors looking for periodic returns in a balanced fund with long term capital growth.
Benchmark CRISIL Balanced Fund Index. This benchmark is primarily 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 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 a seasoned 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 Prashant Jain also manages the fund and comes with over 20 years of experience in the mutual fund industry. He manages several other funds from HDFC Mutual Funds including HDFC Infrastructure Fund, HDFC Monthly Income Long Term Plan and HDFC top 200 Fund etc. He is a celebrated fund manager overseeing some of the best products from HDFC AMC. His educational qualifications are CFA – AIMR, USA; PGDM – IIM Bangalore; B. Tech – IIT Kanpur. He has previously worked with Zurich AMC and SBI Mutual Fund.

Investment philosophy

This fund invests in both equity and debt instruments with a scattering of money market instrument investments. The percentage of portfolio for each class of funds depends on various variables such as interest rates, market volatility etc. The investments are designed to provide long term capital appreciation and periodic returns.

Portfolio – Sector / Top 10 holdings*

Name Sector Class Allocation (%)
Infosys Ltd Tech Equity 5.53
State Bank of India Financial Equity 5.32
ICICI Bank Ltd Financial Equity 5.26
Larsen & Toubro Ltd Diversified Equity 4.95
8.3% GOI 2042 Sovereign Central Govt. Loan 4.22
Maruti Suzuki India Ltd Auto Equity 3.11
Aarti Industries Ltd Chemicals Equity 3.09
Aurobindo Pharma Ltd Healthcare Equity 2.42
8.97% GOI 2030 Sovereign Central Govt. Loan 2.26
Bharti Airtel Ltd Telecom Equity 2.24
 

*As on 2nd Sept 2015

Risk measures

Standard Deviation 16.37
Sharpe Ratio 0.84
Alpha 5.79%
Beta 1.24
 

Performance*

AUM Rs.8,711 crores (Growth)
NAV
  • Direct Plan – Dividend Option: Rs.33.9060
  • Direct Plan – Growth option: Rs.366.5450
  • Dividend Option: Rs.30.7080
  • Growth Option: Rs.360.6530
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
 

*As on 2nd Sept 2015

Benchmark comparison*

Compounded Annualised Returns Scheme Returns (%) Benchmark Returns (%)
Returns for last 1 year 17.50 9.37
Returns for last 3 years 18.75 8.13
Returns for last 5 years 17.53 10.59
Returns since inception 21.33 NA
 

*As on 31st March 2011

Expert view of the fund

The HDFC Prudence Fund is one of the oldest and best performing balanced or hybrid funds in the country. It is being managed by the able minds of Mr Prashant Jain accompanied by Mr Rakesh Vyas. The fund is ideally suited for investors looking at medium to long term balanced investments in mutual funds, such as retirement planners. The fund offers long term benefits and customers can also opt for systematic investment option or lump sum payments with the long horizon in mind. It is advisable to consult your personal financial advisor before investing in any mutual fund.

How to apply

Investors and use both online and offline routes to invest in HDFC Prudence Fund.

  • Online

    To invest online, you must register with HDFCMFOnline and generate your personal HPIN. You will get all the forms and documents online to fill and submit. You can use multiple payment avenues to start investing in this fund. You may also approach independent agents however you should be careful when choosing a dealer.

  • Offline

    You can approach any HDFC branch servicing mutual fund customers with your details and KYC form to start investing. The branch will provide you with forms and list out the details required from your end, which can then be submitted in the same location. Third party vendors can also be approached for completing the registration process, though you should do a background check first.

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Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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