HDFC Children Gift Fund-Investment

HDFC Children’s Gift Fund-Investment is a balanced mutual fund. This fund is managed by Chirag Setalvad. Coming from a fund house of repute this fund’s performance bettered since Chirag took over in 2007. It has outperformed the average returns of all funds in its category for most periods considered. This is a good fund to hold on to for the long term.

Where does HDFC Children’s Gift Fund-Investment invest your money?

HDFC Children’s Gift Fund-Investment is a balanced fund which invests your money in both equity securities and debt securities. It has close to 70% exposure to equity. Its equity portion has a balanced mix of stocks of large sized and medium sized companies. Large cap companies are more stable but mid cap companies can give bumper returns. HDFC Children’s Gift Fund-Investment has 41% exposure to mid size companies and 8% exposure to small size companies.

Suitable for what?

The following needs if occurring between 3 and 5 years:

  • Child's Education
  • Marriage
  • Home Purchase
Not suitable for?
  • Wealth creation
  • Long term goals
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. Do not make the mistake of investing in too many mutual fund schemes. One or at the most two good funds are sufficient to take care of your needs. If you have more than 5 years to spare before your need realizes we advise you to keep not more than 30% of funds allocated for the need in this fund. Choose a good diversified equity fund for goals to reach after 5 years.

Our recommendation for fresh investment
Our recommendation for existing investment
How has HDFC Children’s Gift Fund-Investment performed in the past?

If you had invested Rs 1 lakh when the fund was launched at Mar 2001, your value of investments would be around Rs 4.5 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.9 lakhs. The performance has been better or similar to other equity oriented hybrid mutual funds. The fund has been giving at around 15% every year for those who stayed invested since inception.

Assume you had invested Rs 10,000 every month in HDFC Children’s Gift Fund-Investment through SIP from the last five years today you would have around Rs 8.9 lakhs.

How will HDFC Children’s Gift Fund-Investment perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 8% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. So if you expect the economy to grow at 8% then you can expect top performing equity mutual funds to give you returns in excess of 12%. Debt securities are expected to give anywhere between 0.5%-3% higher returns than Fixed Deposits.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What charges apply?

A onetime fee of Rs 100 is charged on investments over Rs 10,000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of HDFC Children’s Gift Fund-Investment fund is 2.56%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio. 

When to enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially so if it is an SIP. Do not follow news channel and other experts to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when your goals are close to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

Returns on equity oriented hybrid funds are absolutely tax-free provided you do not withdraw within a year of buying the units. HDFC Children’s Gift Fund-Investment fund does not qualify for sec 80C ELSS benefits.

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