Skip to main content

Mutual Fund Review: HDFC Core & Satellite Fund

Type: Equity Diversified
Launch Date: 10-Sep-2004
Fund Manager – Dhawal Mehta
 
HDFC Core & Satellite fund was launched in Sep 2004 and has appreciated by 35.08% in the last one year period, and has outperformed its benchmark index BSE 200 by just around 4%.
The primary objective of the scheme is to generate capital appreciation through equity investment in companies whose shares are quoting at prices below their true value.

The fund house defines well established and predominantly large cap companies as the 'core' group, whereas the 'satellite' group comprises predominantly mid/small cap companies that offer higher return potential but carry higher risk. The allocation to core group is proposed to be kept around 60-80% of the portfolio, and would normally have a market capitalisation of more than Rs 2500 crore.
 
The scheme's allocation to core group in Aug 06 has been around 80.24%, and satellite group accounts for 13.9% of the net assets, and historically, the allocation to core group has rarely fallen below 70% of the total net assets.
 
The scheme currently manages a corpus of Rs 741.79 crores, which has seen a sustained increase over the months, inspite of the scheme's indifferent track record. HDFC Core & Satellite fund's performance has not been too encouraging, and the scheme has struggled to outperform its benchmark in most of the selected time frames.
 
The scheme is mandated to invest 90-95% of its assets in equity and equity related instruments and 5-10% in fixed income securities. As on Aug 06, equity investment form 94.16% of the total assets and has remained more or less at the same levels throughout.
 
Technology sector gets the highest allocation in the portfolio with 15.17% weightage followed by Electrical & electrical equipments with 12.35% weightage; other favoured sectors in the portfolio are Auto & auto ancilliaries and Metal, which together account for around 51% of the portfolio.
 
The scheme has exposure to 25 stocks top 5 holdings account for 33.67% of the assets, and top 10 make up around 60.13%. Tata Motors is the scrip with highest weightage of 7.41%, for a scheme with a corpus in excess of 700 crores; the portfolio is a bit concentrated. Other top holdings in the portfolio are Satyam, Infosys, Crompton Greaves and BHEL. The portfolio has remained unchanged over the last month, and only Crompton Greaves saw some buying by the fund manager
 
The scheme has not been successful in playing around the theme of choosing stocks based on their market capitalisation and other criteria's like leadership in their respective sectors and has given a lackluster performance till now. Other equity schemes managed by the fund house are doing quite well, and despite having a good fund size, the restrictive investment policies is not helping the scheme in any way. Investors would be well advised from the scheme to other schemes of the same fund house, which seem to be performing better comparatively.
 

Popular posts from this blog

NPS Investment Choice for Safe Investors

Invest NPS Online       Whether they invested through SIPs or put in a lump sum amount, risk-averse individ uals have earned the highest returns. These are investors who stayed away from stocks and divided their NPS corpus between G class gilt funds and C class corporate debt funds. On average, gilt funds have given 9.75% annualised returns while corporate debt funds have churned out more than 11% in the past five years. As a result, the average return for ultra-safe investors in the past five years is in double digits. Even in the short term, ultrasafe investors have been the biggest gainers among NPS investors. Will the good times continue? The gilt funds of NPS are holding long-term bonds with an average maturity of over 19 years and a modified duration of about 9 years.These funds have done well because interest rate cuts have pushed down bond yields. But experts say this trend will not stay forever. NPS is a long-term investment and the bonds are predominantly held to matu...
Read more

Buy Health Insurance Plan even if you are covered with my Employer

Buy Health Insurance Plan Online Yes, getting a private insurance cover now, which extends beyond your retirement age, is recommended There are a few reasons why buying a health insurance plan may make sense even though you get medical insurance from your employer. Here are the points you need to think about. Firstly, your employer's insurance coverage will only protect you as long as you are employed with the company. The policy will terminate when you quit the job or when you retire. Post retirement is perhaps the phase when one needs it the most but you won't have it then. Moreover, buying a new insurance policy after the age of 50 means that there will be no coverage for pre-existing diseases.   Lastly, health insurance policy you get from your employer may or may not cover your dependants. ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver M...
Read more

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...
Read more

Mutual Fund Review: Taurus Tax Shield

    Taurus Tax Shield has seen a turnaround in performance since 2007, but still remains a volatile offering… The fund has seen a turnaround in its performance since 2007 and has delivered impressively during market rallies since then. The portfolio is also more diversified. It contained its downfall to an average level in 2008 but is still one of the most volatile offerings in this category. Bold investors can look at this fund.   Strategy The fund manager invests across the market capitalisation and sectors. The selection of stocks is made on the basis of long-term business prospects and value creation. Fund Insight Launched in March 1996, the fund was a laggard with just two annual outperformances. Concentrated stock bets and high exposure to mid and small caps led to it being hit harder during market downturns. The number of stocks in the portfolio never exceeded 20 and it was not rare to see the top 5 holdings account for around 60 per cent of the portfolio. After b...
Read more

AXIS Long Term Equity Fund - The Best Tax Saver Fund for 2016

  AXIS Long Term Equity Fund - Invest Online   History:   The open ended mutual fund was launched on December 21 in the year 2009. It is benchmarked against BSE 200 and managed by the fund manager JINESH GOPANI. Initially the scheme was called as Axis tax saver fund but later it was renamed as Axis long term equity fund with effect from September 2, 2011. Nature of investment: As far as asset allocation is concerned, 97.52% of the stocks are equity and 0.02% is debt based. The primary focus of the fund is to invest in diversified equity stocks that have higher growth potential. Total asset size of the fund is in the tune of 4,996 CRORE as of June 30, 2015. Performance: The performance of the fund for one year, 3 years and 5 years are 23.6%, 29.9% and 19.1 respectively which are far greater than 6.4%, 14% and 5.6% benchmark figures. It has also preformed fairly well against SBI magnum Tax Gain (G) and HDFC tax saver (G). The growth comparison is enumerated below;                        ...
Read more
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