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

Retirement planning from a long-term perspective

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds     `HOW green was my valley'. This title comes from a movie I had watched many years ago. A little boy's journey into adulthood and the story of a Welsh valley's turn of-the-century descent from pristine paradise to despoiled coal mining.   I thought of the title because it is comparatively reflective of a person's life ­ the glorious years when he is earning and the sun down years when he is not having his regular job and, hence, his living standards comes down. The reason is a combination of things. Inflation of food items, transport, increase in health related costs in the later years of life and increase in expenses in almost all basic amenities of life. In India, the social security system is almost non-existent. In some states, wherever it is available, the scales of benefits are extremely modest...

LIC's JEEVAN SHIKHAR

  LIC's Jeevan Shikhar is a participating, non-linked, saving cum protection single premium plan wherein the risk cover is ten times of Tabular Single Premium. The proposer will have an option to choose the Maturity Sum Assured. The premium payable shall depend on the chosen amount of Maturity Sum Assured and age at entry of the life assured. This plan also takes care of liquidity need through its loan facility. The plan will be open for sale for a maximum period of 120 days from the date of launch. 1.   BENEFITS   : a) Death Benefit: On death during first five policy years: Before the date of commencement of risk   :   Refund of Single Premium without interest. Single Premium mentioned above shall not include any extra amount if charged under the policy due to underwriting decision and taxes. After the date of commencement of risk   : "Sum Assured on Death" equal to 10 times the tabular single premium shall be payable. On death after completion of five policy years but b...

Investment Strategy - What is Sector Rotation Theory?

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India)   The economy goes through cycles : it expands for a few years and then contracts. Study of historical data suggests that different sectors tend to perform well on the stock markets during different stages of the economic cycle. While history never repeats itself exactly, some broad patterns tend to recur. Investors can take advantage of the sector rotation theory to move their money from those sectors that have seen their best times to those that are likely to do well in future.   The person who developed the sector rotation theory is Sam Stovall, chief investment strategist at Standard & Poor's. He developed this theory by studying data on economic cycles going as far back as 1854 provided by the National Bureau of Economic Research ( NBER ) of the US.   When trying to correlate stock-market perfor...

Rajiv Gandhi Equity Savings Scheme (RGESS) set for launch this week

The finance ministry is set to notify the Rajiv Gandhi Equity Savings Scheme ( RGESS ) this week.   Though Finance Minister PChidambaram had approved on September 21, the scheme announced in this year's Budget, and had said that the revenue department will notify the scheme and the Securities and Exchange Board of India ( Sebi ) would issue relevant circulars within two weeks, it is yet to become operational.   A senior finance ministry official said the revenue department was expected to notify the scheme any day now to attract retail investors to the equity segment.   He added that Sebi was not required to issue any circular for the operationalisation of the scheme and that after the issuance of the revenue department's notification, investors would be able to avail of the benefits of the scheme.   The official accepted that implementation of the scheme had been delayed due to the deliberations on inclusion of mutual funds ( MF ) in it.   ...

CNX Midcap vs BNP Paribas Midcap Fund

BNP Paribas Midcap Fund - Invest Online   Te  performance of BNP Paribas Midcap Fund  – which has across the last 3 years generated superior returns over the benchmark – especially when the markets have gone down the fund has handsomely outperformed the benchmark preserving the capital of the investors. The fund has been able to do this only due to the superior stock selection process ( BMV approach) that is diligently followed at BNPP.   Highlights of BNP Paribas Mid Cap Fund:   Investment Objective : BNP Paribas Mid Cap Fund gives an investor exposure to invest in the various quality midcap stocks. The fund also has some exposure to large as well as small cap stocks.   Investment Approach : BMV ( Quality and scalability of Business →Good Management → Reasonable Valuation ) with Bottom-up stock picking.   Most of the investors are way happier if the fund that they have invested in is a significant Outperformer in tough times than in Good ti...
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