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HDFC Balanced Fund Merged with HDFC Hybrid Equity Fund: Fund Review

HDFC Balanced Fund and HDFC Premier Multi-Cap Fund are merged to form a new scheme called HDFC Hybrid Equity Fund. This new fund will be categorized as an aggressive hybrid scheme. HDFC Equity Hybrid Fund is the same as HDFC Balanced Fund. It’s just the same fund with a different name. The strategy, the fund manager and benchmark remain unchanged. So basically the change is non-existent. This newly formed fund is will invest 65-80% in equity, 20-35% in debt, 0-10% in REITs and InvITs and 0-10% in Non-convertible Preference Shares.

Performance

HDFC Hybrid Equity Fund is an above average performer in the category. The fund has outperformed its benchmark average return all the time.

 

The fund’s performance is in line with its peers. The fund performed ahead of its category average in the long-term. The fund has consistently outperformed its benchmark most of the time.

 

Fund1 Year Return (%)3 Year Return (%)5 Year Return (%)
HDFC Hybrid Equity Fund1.73%13.52%15.51%
Principal Hybrid Equity Fund2.49%16.72%15.09%
ICICI Pru Equity and Debt Fund2.21%13.91%15.02%
Mirae Asset Hybrid Equity Fund7%14.57%-
HDFC Balanced Advantage Fund3.81%16.41%14.62%

 

A SIP of Rs 5,000 started 5 years ago is worth Rs 3.54 lakhs (Rs 3 lakhs investment). In the short-term, the fund’s return took a hit but in the long-term, the fund performed well.

 

Fund Information

HDFC Hybrid Equity Fund is the same as HDFC Balanced Fund. It’s just the same fund with a different name. The strategy, the fund manager and benchmark remain unchanged. So basically the change is non-existent.

For its equity strategy, the fund follows a balanced mix between consumption and investment themes. It uses a bottom-up stock picking to pick stocks. The fund increased its allocation to economically sensitive investment themes. For its debt strategy, the fund reduced G-sec exposure over time and increased the exposure to accrual based debt instruments. The fund reduced its average maturity period. The fund provides diversification across assets classes.

In equity, the top five holding sectors constitute 47.86% of the portfolio. These include financials (25.28%), technology (7.66%), energy (5.94%), FMCG (4.57%) and chemicals (4.41%). In deb, the fund invests majorly in AAA (17.49%), sovereign securities (8.21%) and AA (2.9%).

Recommendation

HDFC Hybrid Equity Fund is suitable for investors with moderate risk appetite. Invest in HDFC Hybrid Equity Fund with a minimum of 3 years horizon for your medium to long term goals like Retirement, Children’s education etc. One can invest in this fund through both SIP and lump sum. However, it is recommended to invest in this fund through SIP.

 

Fund NameHDFC Hybrid Equity Fund
Original Fund NameHDFC Premier Multi-Cap and HDFC Balanced
Launch DateSeptember 11th, 2000
AUMRs 21,403 Cr
Return (Returns greater than 1 year are annualized)Since Launch: 15.73%
1 Year: 1.73%
3 Year: 13.52%
5 year: 15.51%
Expense Ratio2.03%
Fund Category RiskModerate
Investment PlanGrowth
Minimum Investment Horizon5+ years
Minimum InvestmentRs 5,000
Minimum Additional InvestmentRs 1,000
Exit Load1% if withdrawn within 1 year
Fund ManagerChirag Setalvad
Mr. Amar Kalkundrikar
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