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

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 ...

What are the factors affect the changes in Interest Rate of Fixed Deposits?

  What are the factors affect the changes in rate of Fixed Deposits? Fixed Deposits are now considered to be a very old fashioned method of saving, but still attract many investors since they have guaranteed returns at the end of the tenure of the investment at a decent interest rate. There are various factors that affect the rates of interest for a Fixed Deposit. Policies of the Reserve Bank of India   - The several norms and restrictions posed by the Reserve Bank of India , in order to gain optimum control over credit and inflow and outflow of fund throughout the country. The repo rate changes, cash reserve ration tends to change and these changes affect the banking products like Fixed Deposits, loans etc. Recession   - When unemployment in a country crosses the benchmark set Recession hits, and slowly the country faces an economic slow movement, affecting the purchasing power of the people in the country, forcing the Reserve Bank of India to release more funds in the financial marke...

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...

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...

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