Wealth Multiplier! Rs 10,000/month SIP in this HDFC fund would have turned to Rs 7 crore in over 20 years
economictimes.indiatimes.com
Ask any fund manager today and he/she would mostly recommend a retail investor to go for staggered investments into equities through the SIP route.
Such consistent investment in one of HDFC Asset Management’s leading funds has managed to multiply investors’ returns manifold in the last more than two decades.
An SIP of Rs 10,000 invested systematically every month in HDFC Top 100 Fund would have grown to Rs 6.88 crore by September.
The HDFC Top 100 fund, which predominantly invests in largecap stocks, has completed 27 years since its launch.
The scheme has given around 14% returns on SIP investments made for a period of 10-15 years.
The investment strategy of the fund is to construct a portfolio through a bottom-up approach with a blend of top-down sectors and macro trends. The fund follows a diversified style with a blend of growth at reasonable price (GARP) and value.
More than 80% of the portfolio always remains invested in well-established largecap companies. The core of the portfolio construction is from a medium to long-term perspective.
Historically, largecap stocks have demonstrated stability during economic fluctuations and have had better risk-reward ratios.
Data shows that the largecap index has outperformed mid and smallcap indices in 7 out of the last 17 calendar years.
Given the recent sharp outperformance of mid and smallcap stocks over large caps, the largecap segment seems to be relatively attractive in terms of valuations, the fund house believes.
The S&P BSE Midcap and Smallcap indices have given 25% and 30% returns, respectively year-to-date, whereas the largecap index has given just 5% returns.
