HDFC Hybrid Equity Fund offers a balanced approach, combining significant equity exposure with a stable debt component. Its diversified portfolio and active management strategy aim to deliver robust long-term returns. However, its higher volatility and aggressive risk profile make it suitable for investors with a higher risk tolerance and a long-term investment perspective. The fund’s strong performance and improved Crisil ranking underscore its potential as a viable investment option in the aggressive hybrid category.
Overview
Fund Type: Aggressive Hybrid Fund
Fund Size: ₹52,874.12 Cr
Expense Ratio: 0.8% (Category average: 0.74%)
Crisil Rank: Updated from 3 to 2 in the previous quarter
NAV (may 2024): 105.91
Benchmark: NIFTY 50 Hybrid Composite Debt 65:35 Index
Risk-O-Meter: Very High
HDFC Hybrid Equity Funds Investment Strategy
HDFC Hybrid Equity Fund follows an aggressive hybrid strategy by maintaining a significant allocation to equities while holding a substantial portion in debt securities.
- Equity Investments (68.55%):
- Large Cap Stocks: 45.98%
- Small Cap Stocks: 13.65%
- Debt Investments (27.86%):
- Government Securities: 8.33%
- Low Risk Securities: 18.99%
HDFC Hybrid Equity Funds Growth Performance
Comparative
| Category | 1 D | 1 M | 3 M | 6 M | YTD | 1 Y | 2 Y | 3 Y | 5 Y |
| This Fund | 0.13% | 0.89% | 3.85% | 12.38% | 6.48% | 19.97% | 18.19% | 14.22% | 14.27% |
| Nifty 50 | 0.19% | -0.33% | 2.49% | 11.91% | 3.68% | 21.50% | 16.53% | 13.06% | 13.56% |
| Benchmark: NIFTY 50 Hybrid Composite Debt 65:35 Index | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Category Average | 0.25% | 0.88% | 4.94% | 14.54% | 8.68% | 27.98% | 19.48% | 14.86% | 14.69% |
| Category Rank | 18/28 | 18/30 | 23/30 | 22/30 | 23/30 | 28/30 | 17/30 | 14/30 | 12/27 |
| Best in Category | 1.07% | 2.74% | 8.94% | 24.33% | 18.40% | 52.23% | 33.99% | 23.12% | 24.07% |
| Worst in Category | -0.02% | -0.88% | 2.07% | 8.80% | 4.29% | 15.79% | 11.85% | 9.09% | 10.39% |
1-Month Performance
- Absolute Returns: 0.76%
- Rank within Category: 13 out of 30
Over the past month, HDFC Hybrid Equity Fund has exhibited a modest growth of 0.76%. This performance outpaces the category average of 0.64%, placing the fund in the upper half of its peer group. The short-term performance indicates the fund’s ability to generate returns even in a relatively brief investment horizon.
2-Year Performance
- Absolute Returns: 39.24%
- Rank within Category: 17 out of 30
When evaluating the fund over a 2-year period, it shows a substantial growth of 39.24%. This translates to an annualised return of 17.97%, demonstrating the fund’s ability to deliver strong performance over a medium-term horizon. Although the fund’s returns are slightly below the category average of 19.32%, it still ranks relatively well within its category, securing the 17th position out of 30.
5-Year Performance
- Absolute Returns: 94.60%
- Rank within Category: 12 out of 27
Over the long term, specifically a 5-year investment period, HDFC Hybrid Equity Fund has delivered impressive returns. An initial investment of ₹10,000 has grown to ₹19,460.10, resulting in an absolute return of 94.60%. This equates to an annualised return of 14.23%. While these returns are slightly below the category average of 14.63%, the fund remains competitive, ranking 12th out of 27 in its category. This indicates the fund’s potential for long-term wealth creation, making it an attractive option for investors seeking substantial returns over a longer horizon.
HDFC Hybrid Equity Funds Portfolio Analysis (as of 30th April 2024)
Portfolio Turnover Ratio: 40.54% (Category average: 234.47%)
Number of Stocks: 40 (Category Avg: 54.10)
Equity Holdings: 68.55%
Debt Holdings: 27.86%
Other Holdings: 3.59%
Top Equity Holdings:
- ICICI Bank Ltd. (7.27%)
- HDFC Bank Ltd. (6.54%)
- Larsen & Toubro Ltd. (4.88%)
- Reliance Industries Ltd. (4.67%)
- State Bank of India (4.47%)
Risk Ratios
- Standard Deviation: 8.47 (Category Avg: 8.41)
- Beta: 1.38 (Category Avg: 0.82)
- Sharpe Ratio: 1.05 (Category Avg: 0.93)
- Treynor’s Ratio: 0.06 (Category Avg: 0.13)
- Jensen’s Alpha: 4.63 (Category Avg: 2.9)
HDFC Hybrid Equity Funds Growth Strategies
HDFC Hybrid Equity Fund implements several strategies to achieve growth and stability:
- Diversified Equity Portfolio: The fund invests in a mix of large-cap and small-cap stocks to balance growth potential and stability.
- Debt Allocation for Stability: Nearly 28% of the portfolio is allocated to debt securities, including government and low-risk securities, to provide a buffer against market volatility.
- Long-Term Investment Horizon: The fund’s strategy is suitable for investors with a long-term horizon, ideally 3–4 years, aiming for high returns while being prepared for moderate losses.
Tax Treatment
- Long-Term Capital Gains (LTCG): If held for more than one year, LTCG tax of 10% applies on gains exceeding ₹1 lakh.
- Short-Term Capital Gains (STCG): If held for less than one year, STCG tax of 15% applies.
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 does not indicate future results, and investors should research and consult with a financial advisor before making investment decisions. Investing in mutual funds involves risks, including the possible loss of principal invested.
