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- Rated 2 stars
- HDFC Top 200 Fund
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HDFC Top 200 Fund is one of the oldest equity mutual funds with 99.60 percent exposure in equities and the rest in debt. Let us get an in-depth detail about the HDFC Top 200 mutual fund, to know if we should buy, hold or sell it.
Basic information and costs:
The fund has been a part of the mutual fund landscape for a long time, it was launched in September 1996. This large-cap equity fund has an AUM (Assets Under Management) of Rs. 12,568 crore (as per June 2016). The expense ratio is 2.07 percent with an exit load of 1 percent if you redeem your investment within 365 days.
The minimum investment is Rs. 5000 through lump-sum method, and Rs.500 through SIP. The fund managers are Prashant Jain and Rakesh Vyas.
The top 5 sectors that HDFC Top 200 Fund concentrates on are finance (34.43 percent), energy (14.16 percent), technology (13.79 percent), diversified (8.34 percent) and automobile (8.02 percent). The top stocks in its portfolio are Infosys (6.77 percent), HDFC Bank (6.59 percent), State Bank of India (6.5 percent), ICICI Bank (6.18 percent) and Larsen & Toubro (5.83 percent). These figures are per data available on June 30, 2016.
As on July 2016, HDFC Top 200 Fund has delivered 15.15 percent in a 10-year period, outperforming the S&P BSE 200 benchmark of 11.21 percent. The returns have been 2.64 percent, 21.38 percent and 11.43 percent on a 1, 3 and 5-year horizon. Since launch, the return has been at 20.94 percent.
On a peer-based comparison, HDFC Fund hasn’t delivered much in the past 5 years. It ranks 28 for the funds within its category in the 3 and 5-year period and 56th in the one-year period. Funds like Birla Sun Life Frontline Equity Fund, Franklin India Bluechip Fund, Tata Large Cap Regular Plan and Kotak 50 Regular Plan have beaten HDFC Top 200 Fund in a five-year horizon. Among these, you may invest in Birla Sun Life Frontline Equity Fund; it has been around since 2003 and has given 15.56 percent in the five-year period, trumping HDFC Top 200 Fund in the previous years as well.
Increasing degree of concentration in holdings may go either way; it can be superb if pulled off well, it can also bring down returns if the investment calls go wrong. In case of HDFC Top 200 Fund, increased exposure to banking stocks like ICICI and SBI saw the returns plunging down in the past few years. State Bank of India was a contrarian pick for the fund manager. The banking sectors especially the ones which are government-owned like SBI are continually weighed down by non-performing assets and the poor macro-economic environment. Investors are also none too pleased with the fees that have to be paid despite the non-performance of the fund.
As on July 2016, the standard deviation (indicator that measures how much the return on the fund deviates from the expected return, based on historical performance) for HDFC Top 200 Fund is 19.59 percent while the category average is 15.26 percent. The Alpha (which measures the surplus returns of the investment above the benchmark index) has also reduced in the past few years. The Beta, which measures the risk of a fund in comparison to the market, is 1.22 for this fund, while the category average is 0.97 percent.
Should I buy, sell or hold?
Though the fund manager Prashant Jain has an enviable track record, we cannot say the same about HDFC Top 200 Fund. Our recommendation – Sell!
Good Fund Size
Good Fund House
Good Fund Manager
Average Expense Ratio