HDFC Asset Management Company Ltd. (HDFC AMC) is one of the largest mutual fund companies in India. It is among one of the most profitable asset management companies (AMC) in the country.
The company manages assets worth Rs. 4,48,493.89 crores as of 31st Dec. 2022. Let us talk about the consumer product – HDFC Top 100 Fund.
About the HDFC Top 100 Fund
Investment objective:
To provide long-term capital appreciation/income by investing predominantly in large-cap companies.
Investment process:
The fund follows the investment style of a blend of growth at a reasonable price and value, wherein the stocks are selected using a bottom-up approach.
The stocks are filtered based on factors such as Business Models, Management, Financial Metrics, Valuations, etc.
Portfolio composition:
HDFC Top 100 Fund holds significant exposure in large-cap equity at 94%, and only 6% is invested in mid-cap stocks.
The significant sectoral exposure is Banks, which account for over one-fourth of the portfolio. The top five sectors hold more than 60% of the portfolio.
Source: HDFC Mutual Fund
Top 5 Holdings for HDFC Top 100 Fund
| Name | Weightage % |
| ICICI Bank Ltd. | 8.97 |
| HDFC Bank Ltd. | 8.84 |
| Reliance Industries Ltd. | 6.34 |
| Infosys Ltd. | 6.13 |
| HDFC Ltd. | 5.58 |
Source: HDFC Mutual Fund
Performance:
| Fund name | 1Y | 3Y | 5Y | 7Y | 10Y |
| HDFC Top 100 Fund Direct-Growth (%) | 5.86 | 28.16 | 11.58 | 14.04 | 13.82 |
| S&P BSE 100 TRI | -0.17 | 26.67 | 11.88 | 13.71 | 13.26 |
Note: Returns over one year are annualized
Source: Value Research Online
Fund Managers for HDFC Top 100 Fund
- Mr. Rahul Baijal (Since 29th Jul. 2022) – Senior Fund Manager – Collectively over 21 years of experience in equity research and fund management.
- Mr. Priya Rajan (Since 01st May 2022) – Senior Equity Analyst and Fund Manager for overseas Investments – Collectively over 15 years of experience.
Who should invest in HDFC Top 100 Fund?
Investors looking to invest in an equity portfolio without the very high risk and seeking better returns than the debt instruments can consider this fund.
However, investors should remain invested long-term to witness wealth creation.
Why invest in this Fund?
- Large-cap funds are relatively lesser risky than mid-cap and small-cap stocks. Since this fund invests most of its funds in large-cap stocks, the downside risk is comparatively less than the other actively managed funds.
- Large-cap funds provide an excellent opportunity to generate high returns over the long term.
- As per the data released by AMFI for Oct-Dec. 22 quarter, HDFC AMC is the third largest AMC in India.
- This fund has consistently generated good returns and outperformed the S&P BSE 100 TRI.
Time Horizon
- One should look at investing for a minimum of three years or more.
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
The HDFC Top 100 Fund is one of the oldest funds with a track record of over 25 years and has delivered over 18% CAGR since its launch.
Thus, it is best for investors willing to take some additional risk for good returns over the long term.
Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.
