Skip to main content

Mutual Fund Review: HDFC Top 200

 

 

WE LIKE this fund for its solid long-term record and skilled management. Its historical performance has been impressive.

But its performance in recent years has kept investors worried.

In 2006, it was a very average performer due to high exposure to defensives.

In 2007, its category underperformance was a result of wrong sector moves. Energy was offloaded even when the going was good.

"The portfolio moves were, in my opinion, consistent with our investment approach. The criteria that go into selecting stocks/sectors are quality, our understanding, growth prospects, valuation of businesses and the composition of the benchmark — BSE 200," says fund manager Prashant Jain.

So why do we continue to think highly of this offering? Ever since Jain took over in early 2002, the fund shed less than the category average in all declining quarters, barring June 2004 when the fall was in line with the average.

The fund's success in standing upright in a bear market, such as 2008, without resorting to debt or high cash levels, is testimony to the manager's skill.

Here it was the large-cap bias and exposure to FMCG and healthcare that restricted the fall to 45 per cent (category average: -53%).

In the recent rally (March 9, 2009-May 31, 2010), it gained a striking 111 per cent (category average: 82%).

Since Jain took over, the fund has a large-cap orientation and greater diversification.

Earlier, a single sector accounted for nearly 40 per cent and a single stock 17 per cent, but in the past three years, no sector and stock has crossed the 27 per cent or 10 per cent threshold, respectively.

The number of stocks also rose to touch a high of 65 (April 2009). Those comfortable with a well-diversified, large-cap oriented portfolio that contains the downside should consider this fund.

 

Popular posts from this blog

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- 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 Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...

RBI frees savings rates in cooperative banks

Tax Saving Mutual Funds Online Current open Infra Bond Application form The central bank had deregulated rates for commercial banks in October THE Reserve Bank of India (RBI) on Monday deregulated interest rate on savings accounts in all state and central cooperative banks, a move that will fetch better returns for depositors. RBI had freed these rates for the scheduled commercial banks in October. In a notification addressed to all state and central cooperative banks, RBI said they are free to determine their savings bank deposit interest rate subject to two conditions. Under the first condition, the notification said, "Each bank will have to offer a uniform interest rate on savings bank deposits up to Rs 1,00,000, irrespective of the amount in the account within this limit." The other condition states that for savings bank deposits over Rs 1,00,000, a bank may provide differential rates of interest, if it so chooses. This would, howev er, be subje...
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