Skip to main content

HDFC Multiple Yield Fund – Plan 2005

 

With equity markets running up a fair bit thus far in 2014, some of you wanting to make an entry now may be hesitating a bit. For first-time investors into mutual funds, or for those who want a bit of equities in their portfolio (but not too much), HDFC Multiple Yield Fund – Plan 2005 can be an option.

With a return of 11 per cent annually in the last five years and around 10 percent since its launch in August 2005, this debt-oriented fund is amongst the top performers in the monthly income scheme / debt-oriented category. This return is also a good three percentage points over its benchmark Crisil MIP Blended Index.

 

 

With a very low average portfolio maturity compared with quite a few peers, the fund's portfolio could deliver stable returns with lesser volatility.

Suitability

If you are a first time investor in equity, you may consider this fund by taking a little equity exposure. This fund is also a good choice if you wish to diversify your equity-laden portfolio with some debt.

If you can stomach risks that are somewhat higher than holding pure debt funds, and if you're expecting slightly better returns than such funds, then HDFC Multiple Yield Fund – Plan 2005 (MIP) is a good option.

Even though it is a debt-oriented fund, it can invest up to 20 per cent in equities as well. That means in times of steep equity declines, the fund can slip in to negative returns. Still, thus far, it has compensated investors with returns for the risk assumed.

Performance

performance_hdfc_Oct14

Within the debt-oriented conservative category performance chart, HDFC Multiple Yield Fund Plan 2005 is in the top 5 over the last five-years, and it is in the top 10 over the last three years. The fund's three-year rolling return is an average 9.5 per cent compounded annually. That means, irrespective of when you invested, your average three-year returns would have been around this figure.

Franklin MIP comes close to this number on a rolling return basis. However, it is to be noted that Franklin MIP, sometimes, goes over 20 per cent on equities. However, HDFC Multiple Yield Fund Plan 2005 sticks to its mandate of up to 20% in equities.

 
 

Among the universe of MIP funds, HDFC Multiple Yield Fund Plan 2005 scores well on a risk-adjusted basis too, measured by the sharpe ratio. Over a five-year period, HDFC Multiple Yield would have delivered an yield of 12 per cent annually had you invested through an SIP. Lump sum returns over this period were around 11 per cent.

That said, HDFC Multiple Yield Fund Plan 2005 has had a taste of the bitter pill too. It did not have a great period in late 2008, besides being hurt by the equity downfall in 2008. As a result, it suffered negative returns in the last quarter of 2008. However, it recovered smartly in the 2009 equity rally and outperformed its peers.

The above is an illustration of the risky call the fund took, albeit delivering in the end.

Portfolio

portfolio_hdfc_Oct14

The fund invested 82% of its portfolio in debt instruments. Its current portfolio average maturity stands at 0.4 years. This is much lower compared with the 8-9 years average maturity of debt portfolio funds such as Reliance MIP or HDFC MIP Long Term.

The fund normally sticks to the low average portfolio maturity of up to one year. This makes its debt portfolio less volatile and risky (in terms of exposure to interest rate movements) compared with the above-mentioned peers.

The fund seeks to invest the balance of nearly 18% of the net assets of the scheme in stocks where the dividend yields are moderate to high. Currently, the investment focus appears to be on mid-cap stocks some of which have above-average dividend yield.

 
 

The fund has a majority of its assets in corporate bonds with an exposure of 68 percent, and about 32 per cent in short-term money market instruments. Majority of the portfolio is AAA-rated with some exposure in AA papers of quality companies such as Tata Motors, Sundaram BNP Paribas Home Finance, Shriram City Union Finance and Cholamandalam Investment and Finance Company.

The fund is managed by Anil Bamboli and Chirag Setalvad. An exit load of 1 per cent will be charged by the fund for redemptions made within 15 months.

Best Tax Saver Mutual Funds 2016 or Top ELSS Mutual Funds for 2016

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 -

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

Popular posts from this blog

Mutual Fund MIPs can give better returns than Post Office MIS

Post Office MIS vs  Mutual Fund MIPs   Post office Monthly Income Scheme has for long been a favourite with investors who want regular monthly income from their investments. They offer risk free 8.5% returns and are especially preferred by conservative investors, like retirees who need regular monthly income from their investments. However, top performing mutual fund monthly income plans (MIPs) have beaten Post Office Monthly Income Scheme (MIS), in terms of annualized returns over the last 5 years, by investing a small part of the corpus in equities which can give higher returns than fixed income investments. The value proposition of the mutual fund aggressive MIPs is that, the interest from debt investment is supplemented by an additional boost to equity returns. Please see the chart below for five year annualized returns from Post office MIS and top performing mutual fund MIPs, monthly d...
Read more

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
Read more

Benefits Of Repo Rate & CRR Rate Cut On Consumers

  How Reduction In Repo Rate & CRR Affects Customers Finally  RBI announced slashing of repo rate by 25 basis points (bps ) and cash reserve ratio (CRR) by 25 bps which industry experts believe will fuel the economic growth to some extent. Although experts were expecting higher rate cut this year. This lowering of the rate cuts has taken place for the first time in nine months. Now let's see how reducing the repo rate (defined in economic term as the rate at which RBI lends money to the banks) relates to the following individuals and sectors: Banking:   Lowering of repo rate directly reduces borrowing costs of a bank. Banks in turn reduces interest rates on different types of loans such as home, auto, business etc. Similarly trimming down of CRR allows banks to unlock money for lending to the customers i.e. with 0.25 rate cut banks are estimated to lend more than INR. 17 Crores. Consumers:   Lower repo rate does not necessarily benefit existing loan borrowers but new loan se...
Read more

Zero Coupon Bonds or discount bond or deep discount bond

A ZERO-COUPON bond (also called a discount bond or deep discount bond ) is a bond bought at a price lower than its face value with the face value repaid at the time of maturity.   There is no coupon or interim payments, hence the term zero-coupon bond. Investors earn return from the compounded interest all paid at maturity plus the difference between the discounted price of the bond and its par (or redemption) value. In contrast, an investor who has a regular bond receives income from coupon payments, which are usually made semi-annually. The investor also receives the principal or face value of the investment when the bond matures. Zero-coupon bonds may be long or short-term investments.   Long term zero coupon maturity dates typically start at 10 years. The bonds can be held until maturity or sold on secondary bond markets.
Read more

NRI Corner: The process of remittances abroad

The process of remittances abroad, and back, is cumbersome. Here’s how you can wade through without hassles Approach The Right Place Outward remittances or the process of sending money abroad is governed by many regulations. In India, outward remittances are made mainly through banks. At the outset, you need to remember that you just cannot trust any individual or a financial firm with the responsibility of sending your money. Experts recommend that you should always try to choose a bank with an international footprint, which will make your job easier. Choose Mode Of Transfer The next step is to choose the mode of transfer. One option is to get a Foreign Currency Demand Draft ( FCDD ). This draft will be denominated in foreign currency and should be drawn in favour of the recipient/ beneficiary. The beneficiary does not necessarily need to have an account with the same bank. The other option is to send money via wire transfer. Do not be puzzled if the bank official uses the word SWIFT ...
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