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  • Category: Mutual Funds

    Query about HDFC Equity Direct Growth Mutual Fund

    Worried about investing in mutual funds? Confused whether to stay or exit from HDFC mutual fund investment? Here, on this Ask Expert page get answers to your questions and resolve your worries.

    I am new in the financial market and have started my journey today from 1500 SIP monthly in HDFC Equity Direct Growth Mutual Fund
    I think its NAV is too high. What should I do?
    I could only purchased 2 units.

    If by your view I should exit, then which fund will be suitable for me?
    I will take for 5 year and 1500 to 2000 monthly SIP.
  • Answers

    4 Answers found.
  • Do not be impatient and do not take any action in haste. HDFC equity fund is one of the good MF schemes and it's performance has been excellent.

    Do not judge it by present NAV. In fact a big NAV today is itself a sign that it is one of the top schemes.

    For example, let us assume that there are two schemes which were launched 10 years back at a NAV of Rs 10. As on today one of them is having a NAV of Rs 120 while the other one is Rs 230. So clearly the latter is the better one.

    Anyway if you want to do serious investment, check the portfolio of your scheme - what are the companies in which this particular MF is investing. If those sectors or companies are doing good then this MF schrme will also prosper. It is one to one relationship.

    Sometimes equity markets slide down much so to counter it some MF funds invest a part (say 60%) in equity and another part in debt instruments (say 40%). These are called balanced funds. These are also good investment avenues for a cautious investor.

    Today seeing the business environment and Govt policies, it is likely that markets may go up. So hold your MF units to get good returns.

    Knowledge is power.

  • HDFC mutual fund investment is the most talked of in the market now. HDFC bank plays the business very safe. Their growth plans are good and their approach is the very careful approach. Their mutual fund schemes are doing good. HDFC MF Scheme is doing good. So the investment decision you have taken is wise in the present scenario and I advise you to continue with the same scheme.

    always confident

  • My comments are as under:-

    (a) HDFC Equity Fund-Direct (Growth) is a trusted and very old scheme. Present asset value of this scheme (as on 30.06.2018) is Rs. 20352 crore.
    (b) Return since launch of Direct scheme is 14.49% p.a.(w.e.f 1.1.2013).
    (c) It is an equity multi-cap fund. This means that this fund invests in large-cap, mid-cap and small-cap stocks. The investment percentage depends upon the market condition.
    (d) The fund manager is Prashant Jain, a very well-known and respected personality in the mutual fund industry.
    (e) Of late, the fund is lagging behind its competitors. The YTD return is minus 7.57%. But the standard deviation is very satisfactory. Other parameters are also good.
    (f) The negative return is due to current market volatility and huge corpus of the fund. The SIP investors must take this opportunity to invest in this fund.
    (g) Under no circumstances, SIP must be discontinued at this stage. If your time horizon is five years or more, be patient and continue investing via SIP route. But avoid lump-sum investment. You will accumulate a substantive corpus after 5-7 years.

    "If you are killed in action, you go to Heaven. If you win, you rule this Earth (as beautiful as Heaven). That is why, O son of Kunti, take a firm resolve and fight!"-- Shrimad Bhagwad Gita

  • The major misconception is higher NAV means that a particular scheme is more expensive than a fund with low NAV. A higher NAV fund means you get lesser number of units hence low profits. You should not short list a mutual fund scheme based on NAV(Net Asset Value) figure.
    A NAV is just a number and when you are short listing MF schemes, you need to compare their performances(returns) and not the NAVs. NAV does not matter in Selecting MF. Do not take any action in haste because HDFC mutual fund is one of the best mutual fund in india in banking sector you can enjoy upto 18% of interest in HDFC mutual fund. HDFC MF is one of that fund which is less risk and give ls a good return. If you calculate at the end you get the value you want. So NAV does not matter anymore.

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