Skip to main content

Mutual Fund Review: HDFC MIP Long-term

 

 

 

HDFC MIP Long Term has traditionally had a high exposure to equity, which makes it an aggressive but fruitful pick

This fund takes risks but does not leave investors unrewarded. Over the 5-year period ended June 30, 2010, it has delivered an annualised return of 13.35 per cent (category average: 9%).

 

The fund's aggression arises from its high exposure to equity. It was this stance that led it to be the best performer in its category with a return of 31 per cent in 2009 (category average: 15%). When the equity market took a dramatic turn in March, the fund held 25 per cent of its assets in equity, while the category had an average allocation of just 12.14 per cent. Naturally this put the fund in an enviable position and it delivered 18 per cent in the June 2009 quarter (category average: 8.15%). But make no mistake; it is well within its investment mandate which permits an aggressive equity allocation of up to 25 per cent. Since 2005, the allocation has never dipped below 20 per cent.

 

However, in 2008 its investors were tested. That year when the equity market was in turmoil, the fund manager boldly decided to stick to his high equity allocation which averaged 25 per cent. The fund shed 8.24 per cent against the category's -3.42 per cent. That was also the year when the average maturity of its debt portfolio was high, which was surprising since historically the fund's average maturity has largely remained in line with its category. The brazen moves resulted in 2008 being the only year when the fund underperformed the category average.

 

While the equity exposure with a mid-cap bent gives it an aggressive tilt, the fund manager has turned very cautious and currently holds an extremely diversified portfolio of 73 stocks. One wonders at such a bloated portfolio - the result of insignificant allocations to a large number of stocks.

 

The aggressive stance is balanced with a diversified equity portfolio and quality investment on the debt side. The fund won't go heavy on G-Secs, but prefers debentures and Certificates of Deposit (CDs) and even takes exposure to structured obligations (SOs).

 

The rising asset base has resulted in the expense ratio falling from 1.82 per cent (March 2009) to 1.58 per cent (March 2010). Moreover, the fund has been consistent in dividend distribution. Of the total 78 months, it has distributed dividend in 71 months. Since April 2009, the fund has declared 0.60 per cent as dividend every month. All this makes it a compelling pick in its category.

 


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 ...

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...

Why credit history is critical?

Will you need a loan to buy a car or a house? Do you know why some people get their loans sanctioned quickly without any hassle, whereas others find that their approval is delayed or their application is rejected? If you want a loan, you will need to work to build a solid credit history because this can have a bearing on the ease with which you get loans. Read on to learn more about what is a credit history and how to build a good credit score. What is a credit history? Your credit history is a way of tracking your credit behaviour and habits — basically it shows how disciplined and regular you are when it comes to repaying your dues on loans that you have taken. It will show a complete record of your past borrowing and repayment record including details about any late payments or if you have defaulted on a loan. This track record is readily accessible to lenders and is used by them to when reviewing your loan application. Borrowers who have historically had a bad record of managing...

Birla Sun Life MIP II Savings 5

  Birla Sun Life MIP II Savings 5 - Invest Online   Have you traditionally been a debt investor but now wish to test waters in equities? Then, debt-oriented funds such as Birla Sun Life MIP II Savings 5 (Birla Savings 5), which have limited exposure to equities, may fit your requirement. With a five year return of 10.5 per cent compounded annually, the fund managed a good 3-3.5 percentage points more than its benchmark Crisil MIP Blended Index, as well as its category average. The fund appears well poised to capitalise on a falling interest rate scenario and has increased the average portfolio duration of its debt instruments in recent times. Suitability Birla Savings 5 is suitable only for conservative investors. If you want to make a beginning in equities and cannot take any short-term declines in your stride, then this fund will suit you. If you are already an equity investor and want to use a debt-oriented fund merely as a diversifier, then you may prefer peers from the HDFC and Re...
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