Exceptional Growth Performance of HDFC Focused 30 Fund
1-Year Growth
Over the past year, the HDFC Focused 30 Fund yielded a return of 43.04%. This impressive performance surpasses the benchmark return of 37.99% and the category average of 36.79%.
2-Year Growth
With a return of 74% over this period, the HDFC Focused 30 Fund has outpaced the category average of 24.77% by a significant margin.
On an annualised basis, this translates to a noteworthy return of 31.89%, reaffirming the fund’s capability to deliver substantial returns consistently.
5-Year Growth
Looking at a longer-term perspective, the HDFC Focused 30 Fund has continued to excel in wealth creation. Over five years, the fund has delivered remarkable growth, yielding a return of 144.90%.
This translates to an annualised return of 19.6%, surpassing the category average of 16.8%. Such consistent growth over the years reaffirms the fund’s ability to create substantial wealth for investors over the long haul.
Robust Performance for SIP Investors
| Period Invested for | ₹1000 SIP Started on | Investments | Latest Value | Absolute Returns | Annualised Returns |
| 1 Year | 26-May-23 | 12000 | 14739.51 | 22.83 % | 44.75 % |
| 2 Year | 27-May-22 | 24000 | 33583.46 | 39.93 % | 36.04 % |
| 3 Year | 27-May-21 | 36000 | 55682.89 | 54.67 % | 30.47 % |
| 5 Year | 27-May-19 | 60000 | 121470.31 | 102.45 % | 28.64 % |
| 10 Year | 27-May-14 | 120000 | 303271.15 | 152.73 % | 17.64 % |
For investors leveraging the systematic investment plan (SIP) route, the HDFC Focused 30 Fund offers a compelling investment opportunity. A SIP initiated a year ago with a monthly investment of ₹1,000 would now be valued at ₹14,739.51, reflecting an absolute return of 22.83% and an impressive annualised return of 44.75%. Such robust performance highlights the effectiveness of SIPs in harnessing the power of compounding for wealth creation.
Some of the top holdings include (Fund Portfolio):
- ICICI Bank Ltd. (Private bank): With a substantial investment, ICICI Bank represents a cornerstone of the fund’s portfolio, reflecting its confidence in the banking sector’s growth prospects.
- HDFC Bank Ltd. (Private bank): Another major player in the banking industry, HDFC Bank’s inclusion underscores the fund’s bullish outlook on the banking sector.
- Axis Bank Ltd. (Private bank): Axis Bank’s presence in the portfolio reflects the fund manager’s conviction in private sector banks’ resilience and growth potential.
- Hindustan Aeronautics Ltd. (Aerospace & defence): As a prominent player in the aerospace and defence sector, HAL represents a strategic bet by the fund on India’s defence capabilities.
- Cipla Ltd. (Pharmaceuticals): With its focus on pharmaceuticals, Cipla’s inclusion underscores the fund’s belief in the long-term growth potential of the healthcare sector.
Assessing Risk and Performance Metrics
- Despite sector valuations at a discount to the long-term average, better-than-historical profitability has been observed. However, challenges like deposit growth lagging loan growth and tightened regulations around unsecured retail loans by RBI pose risks to the sector’s growth trajectory.
- Standard Deviation – With a standard deviation of 10.76 over the past three years, the Fund demonstrates low volatility compared to the category average of 11.78. This indicates a more predictable performance, offering investors a level of stability amidst market fluctuations.
- Beta – The fund’s beta value of 0.83, lower than the category average of 0.92, suggests that it delivers more predictable performance compared to similar funds in the market.
- Sharpe Ratio – Ratio of 1.83 for the HDFC Focused 30 Fund surpasses the category average of 0.98. This indicates that the fund has been able to generate better risk-adjusted returns, effectively utilising the level of risk undertaken to deliver superior performance.
- Treynor’s Ratio – With a Treynor’s ratio of 0.24, exceeding the category average of 0.13, the HDFC Focused 30 Fund has demonstrated its ability to generate excess returns for each unit of risk taken.
- Jension’s Alpha – Jension’s Alpha of 9.03 signifies that the fund has consistently outperformed its benchmark index, thereby adding significant value for investors seeking superior returns.
Portfolio Turnover Ratio
The HDFC Focused 30 Fund maintains a conservative portfolio turnover ratio of 30.07%, significantly lower than the category average of 167.21%. This indicates that the fund manager holds stocks and bonds in the portfolio for longer durations compared to peers, reflecting a strategy focused on stability and long-term growth rather than frequent trading.
Equity Allocation
- Equity holdings constitute the majority of the portfolio, comprising 85.5% of total assets.
- The fund has exposure to a diversified range of stocks across different market capitalisations, with large-cap investments accounting for 51.82%, mid-cap investments at 7.67%, and small-cap investments representing 3.52% of the total holdings.
- With investments in 28 stocks, the fund slightly exceeds the category average of 27.46, further enhancing its diversification strategy.
Sector and Stock Allocation
- The fund maintains a concentrated portfolio, with the top 5 stocks accounting for 36.25% of total holdings and the top 10 stocks representing 55.07%.
- In terms of sector allocation, the top 3 sectors comprise 44.71% of the portfolio, indicating a focused approach towards specific industries.
- Key sectors include private sector banking, pharmaceuticals, aerospace & defence, telecom, and IT, reflecting a balanced exposure to various segments of the economy.
Disclaimer: The information provided in this article is for educational and informational purposes only. It should not be considered as investment advice or a recommendation to invest in any particular mutual fund or asset class. Past performance is not indicative of future results, and investors should conduct their own research and consult with a financial advisor before making any investment decisions. Investing in mutual funds involves risks, including the possible loss of principal invested.
