Housing Development Finance Corporation aka HDFC is one of the largest private sector lenders in India. HDFC was also ranked amongst BrandZ Top 100 Most Valuable Global Brands forum. Being such a prestigious organization, it took no time to set up its mutual fund unit in the year 2000 launched by its subsidiary named, HDFC Asset management company. Since its inception in the year 2000, HDFC has evolved and created products or schemes with objective ranging from, long term to short term, tax savings to retirement and large cap to small cap. This gives investors with well over 30 mutual fund schemes, installed with plethora of choices depending upon risk taking capacities and end objectives. Therefore whatever your objective is, HDFC mutual fund is ever present. HDFC mutual fund is highly rated amongst the rating agencies in terms of risk, hence is always a investor favorite option. Check how much returns you can make by investing in HDFC fund using SIP Calculator of HDFC.
Let us checkout top schemes selected as per objective.
1.HDFC Equity Fund. An open ended scheme with moderately high risk profile is an ideal fund for investors with dual option of dividend as well as growth. This fund has a projected average return of 16.30% annually, with minimum investment of Rs. 1000 for existing investors and 5000 for new comers.
2.HDFC Mid-cap Opportunities Fund. A fund with extra-ordinary return which focuses mainly on equity of mid-cap companies. This is an open ended schemes with minimum capital requirement of Rs. 1000 to Rs. 5000 depending upon old or new investor. The risk pattern is moderately high, however returns are on the higher scale peaking up to 26%.
3.HDFC Corporate Bond Fund. A low risk fund that targets AA+ rated bonds of corporate. This fund is specifically designed for stable income wishers, with return stabilizing at around 7-8% per annum.
4.HDFC Short Term Debt Fund. As the name suggest, this fund is not more than 36 months of investment. With underlying assets comprising of money market instruments, this fund is one the safest bet around. The 5 year return average comes to around 8-9%. Thus this fund is a good option for investors who are in requirement of parking the fund for short term basis. Check the returns using
5.HDFC Liquid Fund. An option for investor who requires funds in emergency but till then has the luxury to earn up to 8% with no exit load. HDFC liquid fund primarily invest in bonds and money market instruments, making the fund’s risk profile very low. In addition to that no exit load helps investors, liquidate their money with no extra cost.
6.HDFC Children’s Gift Fund. Children’s education or marriage being the end objective, it always require huge fund outlay. HDFC Children’s Gift fund is the perfect gift one can give to their children, as this fund primarily invest in equity oriented instruments, which gives average return of around 17-18%. The risk factor as a result of equity oriented scheme is a bit too high, but to counter the same, the fund manager ensures some fund are also invested in debt or money market instruments.
7.HDFC Retirement Savings Fund – Equity Plan. A latest scheme launched by HDFC challenging the likes of LIC and other pension schemes. This fund is again an equity oriented scheme launched in 2016 which makes the payout in the form of lump sum amount or pension income.
8.HDFC Retirement Savings Fund- Hybrid- Equity Plan. If above is purely equity oriented, this scheme proposes to invest in equity as well as to balance the risk profile. The amount is released after attaining the age of 60 year in the form of monthly payments or lump sum amount.
9.HDFC Dynamic PE Ratio – Fund of Fund. This fund comes from the category of fund of fund, which is suitable for investors who prefer investing in various classes of assets having different PE ratios. The main purpose is to achieve capital appreciation by allocation of money in various debt and equity funds floated by HDFC itself. The scheme being hybrid in nature comes with moderately high risk profile.
10.HDFC Gilt Fund. One of the oldest open ended scheme launched in the year 2001, which targets government bonds and securities.This fund offers investors with both growth as well as dividend option. In addition to that there is no entry or exit load to this fund.
The above list is the brief introduction to some of the schemes floated by HDFC mutual fund house and in layman terms it would seem like investment in each one of them is profitable.
However that is not the case, hence here are a few tips to follow before you choose an investment fund.
1.Know your objective. The most essential part before starting an investment is to understand its objective. As without which it is futile to choose the investment option. Therefore if child’s education is the objective, investing is liquid fund will be lame.
2.Risk Profile. Another important aspect is to know, how much loss bearing capacity is possessed by the investor. If the same is on the higher note, investors may look into equity linked fund, if on a medium note, hybrid fund is the answer, while debt fund caters the best for risk averse investors.
3.Diversification. This is an important suggestion, in order to avoid underperformers and counter them with consistent performers. Don’t keep all your eggs in one basket, because if broken all of them become useless.
4.SIP is the way forward. Mutual fund investment provides you with two options of investment, one is SIP (daily, monthly, quarterly..) and the other is lump sum payment. Under SIP each investment is made at a fixed interval, resulting into rupee cost averaging of each investment thus making the purchase cost considerable lower. Whereas in lump sum investment, the timing might be entirely wrong and the investor might be caught in market peak. Thus SIP is always more suitable in the longer run of investment.
5.NAV. Net Asset Value is the price at which any mutual fund unit can be purchased at a given point of time. However it should not be considered as a parameter to judge any mutual fund. To simplify, a mutual fund should be judged by its performance over a period of time and not by whose NAV is higher or lower.