HDFC Top 100 Fund, an open-ended equity scheme predominantly investing in large-cap stocks (“the Fund”), has successfully completed 27 years in 2023. Over the past 27 years, the Fund has delivered Compound Annual Growth Rate (CAGR) of ~19%. Further, a SIP of Rs 10,000 invested systematically on the first business day of every month (total investment Rs 32.90 Lacs) in HDFC Top 100 Fund would have grown to Rs. 7.98 crores by February 29, 2024 (See complete performance details given at the end). This performance is a testament to the fund’s ability to navigate market fluctuations and deliver growth to investors.
The portfolio construction follows a bottom up approach to stock picking blended with top down sector and macro trends. The Fund follows a diversified style with a blend of GARP (growth at reasonable price) and value. In stock selection, the focus is on quality of business models, management and financial metrics. Portfolio construction is based on risk-reward of opportunities available at any given point in time. As per the mandate, more than 80% of the portfolio always remains invested in the well-established large cap companies. The core of the portfolio construction is from a medium to long term perspective. The strategy will be in line with our philosophy of maintaining a disciplined approach of looking for quality companies at reasonable valuations.
There is lot of focus on risk management with active positions being taken in a controlled manner while ensuring compliance with regulatory and internal risk guidelines. Any high conviction bets are taken after a considered evaluation of the company’s positioning in the industry and the business cycle and regularly evaluated. The portfolio is well diversified in number of stocks and the fund manager takes measured sector deviations calls vs benchmark.
Large-cap stocks have historically demonstrated stability during economic fluctuations and have had better risk reward ratios. Further, the large cap index has outperformed mid and small cap indices in 7 out of last 18 calendar years. Also, given the recent sharp outperformance of mid and small caps over large caps, the large cap segment now seems to be relatively attractive in terms of valuations and investors with medium to long term view may consider investing in HDFC Top 100 Fund.
Mr. Navneet Munot, MD & CEO – HDFC AMC, said, ” Sound Investment + Time + Patience has been the time-tested principle for wealth creation in equities. HDFC Top 100 Fund, which has stood the test of time bears testimony to this. Wealth creation journey of HDFC Top 100 Fund over 27 years is also a shining example of our robust research and investment processes which has helped the fund withstand multiple market cycles over the years.
Mr. Rahul Baijal, Senior Fund Manager – Equities, HDFC AMC, said “HDFC Top 100 Fund’s performance over the past 27 years is a testament to our rigorous research, disciplined investment approach, and a focus on well-established businesses. Large-cap stocks offer stability and better risk adjusted return, making them an attractive option for investors looking for investment opportunities over the long term.”
