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    HDFC Equity Fund Is An Open-Ended Growth Scheme, Which Aims To Generate Long-Term

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    shreedhar mohta
    HDFC Equity Fund is an open-ended growth scheme that aims to generate long-term capital appreciation through a focused portfolio of large cap stocks with some exposure to mid caps. The fund maintains diversification across sectors to reduce risk. It has outperformed its benchmark consistently since inception in 1995. As of September 2010, the fund had a weighted beta of 0.949, indicating lower risk than the overall market. Over the past year, the fund returned 39.4% compared to a required return of 27.84%, outperforming both its benchmark and the expected market return.

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    HDFC Equity Fund Is An Open-Ended Growth Scheme, Which Aims To Generate Long-Term

    Uploaded by

    shreedhar mohta
    35 views8 pages
    HDFC Equity Fund is an open-ended growth scheme that aims to generate long-term capital appreciation through a focused portfolio of large cap stocks with some exposure to mid caps. The fund maintains diversification across sectors to reduce risk. It has outperformed its benchmark consistently since inception in 1995. As of September 2010, the fund had a weighted beta of 0.949, indicating lower risk than the overall market. Over the past year, the fund returned 39.4% compared to a required return of 27.84%, outperforming both its benchmark and the expected market return.

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    HDFC Equity Fund is an open-ended growth scheme that aims to generate long-term capital appreciation through a focused portfolio of large cap stocks with some exposure to mid caps. The fund maintains diversification across sectors to reduce risk. It has outperformed its benchmark consistently since inception in 1995. As of September 2010, the fund had a weighted beta of 0.949, indicating lower risk than the overall market. Over the past year, the fund returned 39.4% compared to a required return of 27.84%, outperforming both its benchmark and the expected market return.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    35 views8 pages

    HDFC Equity Fund Is An Open-Ended Growth Scheme, Which Aims To Generate Long-Term

    Uploaded by

    shreedhar mohta
    HDFC Equity Fund is an open-ended growth scheme that aims to generate long-term capital appreciation through a focused portfolio of large cap stocks with some exposure to mid caps. The fund maintains diversification across sectors to reduce risk. It has outperformed its benchmark consistently since inception in 1995. As of September 2010, the fund had a weighted beta of 0.949, indicating lower risk than the overall market. Over the past year, the fund returned 39.4% compared to a required return of 27.84%, outperforming both its benchmark and the expected market return.

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    HDFC Equity Fund is an open-ended growth scheme, which aims to generate long-term

    capital appreciation. The Scheme maintains a focused portfolio predominantly of large


    cap stocks, though there is controlled exposure to mid caps. The Scheme however
    always remains diversified across sectors. Moreover, the sectoral allocation is done with
    a view to diversify across sectors that are weakly co-related with each other to reduce
    risk.

    Details about the Fund:


    Objective: To achieve capital appreciation by investing primarily in equity oriented
    securities.
    Structure: Open-ended Growth Scheme
    Inception Date: January 01, 1995
    Plans and Options under the Plan: 
    Growth & Dividend Option.
    Face Value (Rs/Unit): Rs. 10
    Minimum Investment: 
    For new investors: Rs.5000 and in multiples of Rs.100 thereafter. For existing investors:
    Rs. 1000 and in multiples of Rs. 100 thereafter
    Entry Load : For investments below Rs. 5 crores, Entry load is 2.25%. For Investments of
    Rs. 5 crores and above, Entry Load is Nil.
    Exit Load : Nil.

    Investment Pattern
    The corpus of the Scheme will be invested primarily in equity and equity related
    instruments. The Scheme may invest a part of its corpus in debt and money market
    instruments, in order to manage its liquidity requirements from time to time, and under
    certain circumstances, to protect the interests of the Unit holders.

    The asset allocation under the Scheme will be as follows :


    Sr.No Type of Instruments Normal Normal Deviation Risk
    . Allocation (% of Normal Profile
    (% of Net Allocation)
    Asset)
    1 Equity & Equity 80 - 100 0 Medium
    related instruments to High
    2 Debt Securities, Money 0 - 20 0 Low to
    Market instruments & Medium
    Cash
    (including money at
    call)

    Returns of the fund:

    Mean : 0.14

    Standard Deviation: 0.85

    Upper Limit: 1.84

    Lower limit: -1.55

    120

    100

    80

    60

    40

    20

    0
    -4 -3 -2 -1 0 1 2 3

    The normal Distribution of HDFC Equity Growth Mutual Fund


    30

    25

    20

    HDFC Index Fund Sensex Plan


    15
    HDFC Equity Fund (growth)
    LIC MF Equity Fund( growth)

    10

    0
    -6 -4 -2 0 2 4 6 8
    Composition of HDFC Equity Growth Fund:

    Portfolio Composition

    Total assets as on 30-Sep-10 is Rs. 14234.02 million

    Portfolio Details as on 30-Sep-2010


    % of
    No. of Mkt. Asset Weighte
    Company Sector Shares Value* s Beta d Beta
    EQUITY SHARES 97.48

    1006.6
    INFOSYS TECH I T - Software 330000 7 7.07 0.667 4.716
    STATE BANK O Banks 278000 900.85 6.33 1.15 7.280

    Consumer Non 483261


    I T C LTD Durables 0 861.65 6.05 0.529 3.200
    ONG CORP LTD Oil 596353 837.34 5.88 0.87 5.116
    ICICI BANK Banks 707397 787.3 5.53 1.56 8.627

    Petroleum 102505
    BHARAT PETRO Products 7 768.33 5.4 0.486 2.624
    HOUS DEV FIN Finance 912500 669.05 4.7 1.02 4.794

    Industrial Capital 199940


    CROMPTON GR. Goods 8 625.22 4.39 1.12 4.917
    BK OF BARODA Banks 669151 583.83 4.1 0.973 3.989

    SUN PHARMA Pharmaceuticals 272365 550.31 3.87 0.557 2.156

    Media And 181300


    ZEE ENTER Entertainment 3 544.26 3.82 1.05 4.011

    SOLAR IND Chemicals 983257 497.53 3.5 0.707 2.475


    Media And 230700
    HT MEDIA Entertainment 0 371.2 2.61 1.42 3.706
    101900
    BIOCON LTD Pharmaceuticals 6 366.13 2.57 0.94 2.416

    Petroleum
    RELIANCE Products 358500 353.93 2.49 1.47 3.660
    COROM INTER Fertilisers 555818 341.69 2.4 0.89 2.136

    Telecommunicatio
    BHARTI ARTL ns -Service 922517 337.92 2.37 0.79 1.872
    155000
    NTPC LTD Power 0 336.27 2.36 0.71 1.676
    300000
    PETRONET LNG Gas 0 317.85 2.23 0.99 2.208

    Consumer Non
    NESTLE LTD Durables 75268 254.57 1.79 0.36 0.644

    Construction 161173
    NAG CONS COM Projects 8 252.88 1.78 1.57 2.795

    Industrial Capital
    THERMAX Goods 317366 254.07 1.78 1.07 1.905
    OIL INDIA Oil 155785 234.02 1.64 1.14 1.870

    Auto And 281306


    APOLLO TYRE Ancillaries 9 228.14 1.6 0.82 1.312

    C & C CONSTR Construction 796496 203.35 1.43 1.08 1.544

    Auto And
    AMARA RAJA B Ancillaries 872454 185.18 1.3 1.23 1.599
    142860
    PURAVANKARA Construction 0 183.86 1.29 1.73 2.232

    MAYTAS INFRA Construction 761912 171.81 1.21 1.36 1.646

    IL&FS TRANS Engineering 497649 158.45 1.11 1.17 1.299


    435430
    NHPC Power 2 138.03 0.97 0.53 0.514
    396728
    BALLARPUR IN Paper Products 7 137.07 0.96 0.873 0.838

    KNR CONST Construction 710597 132.03 0.93 1.08 1.004


    GAIL Gas 195087 93.16 0.65 0.67 0.436

    Industrial Capital
    EIMCO ELECON Goods 276428 84.82 0.6 1.12 0.672
    117566
    ISMT LTD Ferrous Metals 8 58.84 0.41 0.67 0.275
    TECHNOCRAFT Ferrous Metals 538745 47.11 0.33 0.97 0.320
    Cash and Other Assets NA NA 359.31 2.54 92.481
     

    Grand Total 100.00%

    Weighted Beta of the


    Portfolio 0.949

    With the individual weights and individual beta we can find the weighted beta which
    is .949 less than market beta of 1.

    Comparison between the returns of HDFC Growth Fund with the Benchmark
    Returns.

    HDFC Growth (NAV as at evaluation date 30-Sep-10, Rs.93.228 Per unit)


    Fund
    Date Period NAV Per Unit Returns Benchmark Returns
    (Rs.) (%) ^ (%) #
    March 30, 2007 Last 1280 days 45.461 22.73** 13**
    March 30, 2010 Last Six months (184 74.504 25.13* 14.09*
    days)
    September 30, Last 1 Year (365 68.47 36.16* 17.18*
    2009 days)
    September 28, Last 3 Years (1098 63.818 13.43** 5.08**
    2007 days)
    September 30, Last 5 Years (1826 31.382 24.31** 18.36**
    2005 days)
    September 29, Last 10 Years (3653 9.724 25.34** 17.22**
    2000 days)
    September 11, Since Inception (3671 10.000 24.85** 15.54**
    2000 days)

    We see the fund has outperformed the benchmark return consistently since its
    inception.

    The required rate of return for the last year is

    Ke = Rf+B(Rm-Rf)
    Where Rf = Risk free rate based on the last 91 days

    T-Bill cut off of = 6.2735%.

    B=.949

    Rm = The Market(Nifty) Return for 1 year is 29%

    So the Ke is 27.84%.

    From Date NAV(Rs.) To Date NAV(Rs.)


    09-11-2009 69.652 04-11-2010 97.110

    Absolute Returns* = 39.4%


    So HDFC Mutual Fund has given higher return than the market in the last 1 year.

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