Incorporated on December 10, 1999, HDFC Asset Management Company Ltd. is among India’s most popular fund houses. HDFC Mutual Fund launched its first scheme in July 2000, and ever since it has been ambitious about offering a stable performance of funds across all the variants of schemes it offers.
The HDFC Mutual Fund is managed by HDFC Asset Management Company (HDFC AMC) Limited. HDFC Trustee Company Limited is the trustee of the mutual fund.
The HDFC Mutual Fund is sponsored by the Housing Development Finance Corporation Limited (HDFC Ltd.) and Standard Life Investments Limited.
HDFC Small Cap Fund
Investment Objective:
The primary objective is to provide long-term capital appreciation /income by investing predominantly in Small-Cap companies.
Investment Process:
- The stock selection entirely focuses on quality companies with good financial strength and reasonable return on equity.
- Investment is made at sensible valuations in companies trading at reasonable multiples (P/E, P/B, EV/EBITDA, etc.)
- The scheme aims to maintain a reasonably diversified portfolio at all times. The scheme may also invest some of its corpus in debt and money market securities. Credit quality, liquidity, interest rates, and their outlook will guide investment in debt securities.
Portfolio Composition
The portfolio holds significant exposure in equity & equity-related stocks at 92.01%, and significant sectoral exposure is to Banks, which account for roughly 9.75% of the portfolio.
Source: HDFC MF
Top 5 Holdings for HDFC Small Cap Fund
| Name | Weightage % |
| Sonata Software Ltd | 5.25 |
| Bank of Baroda | 4.16 |
| Bajaj Electricals Ltd | 3.89 |
| Firstsource Solutions | 3.34 |
| Green Eastern Shipping Co Ltd | 2.87 |
Source: HDFC MF
Performance
Source: Value Research
Fund manager
- Mr. Chirag Setalvad (Since June 28, 2014) has over 25 years of experience, of which 18 years in Fund Management and Equity Research and three years in Investment Banking. Before HDFC, he worked at New Vernon Advisory Services and started his career at ING Barings in India.
- Mr. Priya Ranjan (Since May 01, 2022) does have a Collectively over 15 years of experience. Senior Equity Analyst and Fund Manager for Overseas Investments. He also holds eight years of experience in Credit Cards and Consumer Finance Collections, Client Relationship Management & Team Management.
Who should invest in HDFC Small Cap Fund?
Investors looking to generate higher returns by taking exposure to small-cap equities can consider this fund. However, investors need to understand the aggressive risk exposure of this fund.
Why invest in this Fund?
- This high-risk, high-return strategy offers the potential to ‘earn big’ returns.
- It can help you beat the impact of rising prices over the long term.
- The fund allows investors to earn good returns as they confer more growth
Time Horizon
- One should look at investing for at least 3-4 years or even more.
- The fund is an open-ended fund. One can invest any time in this fund.
Conclusion
The HDFC Small Cap Fund has a proven track record of over 15 years, with an Asset Under Management of ₹14,962.63 Cr. The fund holding a significant portfolio in equity provides a much higher rate of return in the long run.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
