Skip to main content

Mutual Fund Review: HDFC Mid-Cap Opportunities

HDFC Mid-Cap Opportunities' increased allocation to value stocks in 2010 helped it check volatility in returns…

Strategy


The fund aims to generate appreciation by investing predominantly in mid-cap stocks. The risk of holding such stocks is reduced by maintaining a well diversified portfolio. While the portfolio will primarily focus on a buy-and-hold strategy at most times, it will balance the same with a rational approach to selling when the valuations become too demanding even in the face of reasonable growth prospects in the long run. The key will be to identify stocks with room for PE multiples to expand if the company transitions from a small to mid and eventually a large-cap stock. The fund may also seek investment opportunity in the ADR / GDR / foreign equity and debt securities up to a maximum 25 per cent of net assets.

 

Our View


This fund is mandated to invest at least 70 per cent in mid-cap stocks and 5 per cent in small-cap stocks to generate capital appreciation. It may also take derivatives positions based on the opportunities available.


Launched in June 2007, it made its mark the very next year by simply not collapsing like a pack of cards. It contained the 2008 downside a lot better than its peers because of its then closed-end status. That year the fund also managed to outperform its benchmark, the CNX Midcap. And, with no redemption pressure, the fund retained over 92 per cent equity allocation throughout 2008, before the market started to turn around in 2009. In 2010, the fund turned open ended.


If one looks at the long-term return as well as the annual returns of 2009 and 2010, this fund has emerged a winner.

 

The Verdict


The fund increased its exposure to value stocks in 2010. That helped it turn in a good performance last year and also checked volatility in its returns.

 

Portfolio Insight


• Banking, Capital Goods, Pharmaceuticals and Auto & Auto ancillaries are the top sectors.
• The fund was heavy on Consumer Goods up to April 2009 but steadily reduced exposure, a strategy contrary to peers. The profits from the sector, though, were handsome.
• The portfolio comprises around 50 stocks.
• On an average 60 per cent of the portfolio is in mid caps and 30 per cent in small caps.
• Stock selection is key to this fund's success. Vesuvius India is a case in point. It is a niche player in molten metal, glass and renewable energy. Other picks that have aided growth are NRB Bearings and Grindwell Norton.

 

Popular posts from this blog

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...

Reliance Health Total

  Reliance Life Insurance has launched Reliance Health Total, a non-linked, non-participating and non-variable health insurance plan . It provides a fixed benefit cover for hospitalisation, critical illnesses and surgeries. The customer can also make a claim for over-the-counter health-related expenses. This is a regular-pay, five-year plan that can be renewed till the age of 99. The plan comes with two options: customers can choose a higher medical reimbursement benefit or a higher sum insured. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - I...

Some tips for individual investors for investment planning

These days, the stock markets are quite volatile in nature with a bearish bias. Rallies do not last long in the markets and peaks of market rallies are reducing. The markets are hitting fresh lows in every fall. Many blue chip stocks are trading 50 percent lower than their high levels. Many stocks are currently trading at their year's low prices or all-time low prices. Many investors have lost their hard-earned money and many others are stuck with stocks that have corrected heavily in the last few weeks. Here are some tips for investors already invested in the stock markets: 1) Hold fundamentally strong options The domestic macroeconomic fundamentals are strong. The GDP growth rate is expected to slow down slightly from the nine percent last year to around 7 - 7.5 percent this year. This is still quite good and encouraging in comparison to other developed countries. The current market crash can be attributed largely to foreign institutional investors' ( FIIs ) outflows but...

Good Loan

Why Is It A Good Loan?: Loans against gold are cheaper and better than personal loans as the former are available at lower interest rates. In contrast, the interest rates on personal loans are not standardised and can vary from bank to bank. Also, a personal loan depends on a host of factors including, the borrower's salary, profession and the purpose for which the loan is being taken.      For instance, the interest rate on a personal loan of 5 lakh falls in a wide range of 15-30%. But loans against gold are available for as low as 11%. Secured borrowing such as a loan against gold, investments or property is cheaper because it is backed by some assets, which command a good value at any point of time. If the borrower defaults on the loan, the banks can liquidate the assets to settle the loan account.    Being a secured loan, the risk of default and credit losses is significantly lower in this loan compared to other forms of loan for personal use. Given the lower risk, gold loa...

Save Tax With Mutual 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       Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes ·        Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. ·        First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...
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