Skip to main content

Mutual Fund Review: HDFC Growth

 

 

Savvy stock selection has helped the fund emerge as a good long-term bet

 

This fund may not have had a smooth ride but has emerged as one of the better players in this category.

 

After an uneventful start in its initial years, the fund began to get noticed in 2006, when the current manager assumed charge. It turned out to be a category outperformer over the following years and even contained the downside well in 2008.

 

Savvy sector selection has been a testament to Srinivas Rao Ravuri's skills. In 2006, while his peers were neutral towards Healthcare, the fund's increased allocation to it on the back of concentrated bets in Sun Pharma and Divi's Laboratories helped. Similarly, the fund defied popular trend and pruned allocation to Financial Services while increasing it to Automobiles.

In 2007, the fund was more into Healthcare and Basic-Engineering while its peers were into Metals. As the category as a whole increased exposure to diversified companies, this fund moved out of them altogether. A similar pattern followed in 2008.

But in 2009, the fund lagged behind with a return of 75 per cent (category average: 83%). The recovery caught Ravuri off guard. Despite the equity market starting its upward journey in March 2009, the fund barely lowered exposure to defensive sectors (Healthcare and FMCG) last year. Besides Tisco or Infosys, he kept away from Metals or IT. To add to it he held an average 12 per cent in cash for the three months ended July 2009. "I was focussed on companies that depend on domestic demand and have strong balance sheets. I was cautious on sectors dependent on the global market recovery," he says. "Commodities are extremely volatile and prices were dependent on economies in Europe and China. In IT, I was wary of exposure to companies that got the bulk of their revenues from the global financial services sector."

 

Besides sector bets that set him apart, he also has holdings in stocks which are not too popular, such as C&C Constructions, Solar industries, Ahmednagar Forgings, KNR Constructions and Technocraft Industries India. "Since I am also an analyst and we have a strong research team, we are capable of coming up with good stock ideas that are not covered by broking firms. Stock selection is based on attractiveness of business, quality of management and valuations," he says. The small size of his fund helps by allowing greater flexibility.

 


Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...

About CRISIL IPO Grading

CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy / sell or hold the graded instrument, or a comm...

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...

Capital Protection Oriented Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Capital Protection Oriented Funds   Erosion of capital is one of the key concerns for investors wanting to invest in equity mutual funds. To address this concern, asset management companies have launched Capital Protection Oriented Funds (CPOFs). What are CPOFs? CPOFs are generally three to five-year, closed-ended funds where 70-80% of the portfolio is invested in fixed income securities, which mature on or before the scheme's tenure. The investment in fixed income securities grows to 100% at the end of the tenure, providing the investor with capital protection. The remaining portion (20-30%) is used to take exposure to equity, which provides the upside. Exposure to equities is either by directly buying equity stocks (plain vanilla CPOFs) or by b...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now