HDFC Hybrid Equity Fund for Your Child’s College Savings

Know all about HDFC Hybrid Equity Fund and HDFC AMC in this article.

HDFC Asset Management Company Ltd. (HDFC AMC) is one of India’s largest mutual fund companies. It is among one of the most profitable asset management companies (AMC) in the country. The company manages assets of over Rs. 5.24 Lakh crores (excluding domestic fund of funds) as of 30^th September 2023. 

Let us talk about the consumer product – HDFC Hybrid Equity Fund. 

About HDFC Hybrid Equity Fund

Investment Objective  

The investment objective of the scheme is to generate capital appreciation/income from a portfolio, predominantly of equity & equity-related instruments. The scheme will also invest in debt and money market instruments. 

Investment Strategy 

1. Equity –  

The fund assets are predominantly invested in equity and equity-related instruments (65%-80%) and the balance in debt instruments. Equity strategy will aim to build a portfolio of companies across market capitalization. 

While selecting stocks, the fund follows a bottom-up stock-picking strategy, focusing on reasonable quality businesses, and prefers companies available at acceptable valuations. 

The scheme aims always to maintain a reasonably diversified portfolio. 

2. Debt – 

Credit quality, liquidity, interest rates, and their outlook will guide investment in debt securities. Here, duration management is based on the fund manager’s view on the interest rate outlook. 

Portfolio Composition 

The fund holds 67.04% equity, 31.06% debt, 1.01% real estate, and 0.89% in Cash and cash equivalents. The significant sectoral exposure is to Financials, which account for 24.84% of the equity portfolio. The top five sectors hold more than 50% of the equity portfolio. 

Note: Data as of 30^th November. 2023.                                                                

Source: Value Research                                                                                   

Top 5 Holdings for HDFC Hybrid Equity Fund 

Note: Data as of 30^th November. 2023. 

Source: Value Research 

Past Performance of Regular Plan as of 30^th November 2023. 

Benchmark Composition – Nifty 50 Hybrid Composite Debt 65:35 Index 

Source: Value Research 

Fund Managers for HDFC Hybrid Equity Fund 

The following fund managers manage the HDFC Hybrid Equity Fund. 

• Mr Chirag Setalvad (Since 2^nd April 2007) has been managing Equity Assets for this fund. 
• Mr Anupam Joshi (Since 6^th October 2022) has been managing Debt Assets for this fund. 
• Mr Dhruv Muchhal  (Since 22^nd June 2023) is an Equity Analyst and Fund Manager for Overseas Investments. 

Who Should Invest in HDFC Hybrid Equity Fund? 

• Investors looking to generate long-term capital appreciation/income by taking exposure to both debt and equity can consider this fund. 

Why Invest in this Fund? 

• It helps to achieve twin objectives through one fund: 

1. Growth of Capital by investing in Equities 

2. Stability of Capital by investing in debt 

• Equities have the potential to create long-term wealth and beat inflation over the long term. 
• The debt component makes the fund comparatively less volatile than Equity funds. 
• Defined asset allocation between Equity and Debt 
• Benefits of equity taxation  

Conclusion 

The HDFC Hybrid Equity Fund is an open-ended hybrid scheme that has been in existence for nearly two decades. The fund has consistently performed throughout its existence. Also, it has delivered better risk-adjusted returns depicted by lower standard deviation and higher Sharpe ratio than the category. Hence, investors who wish to allocate their funds for capital appreciation with a moderate level of risk can consider this fund. 

Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.