HDFC Growth Fund

HDFC Growth Fund is managed by Srinivas Rao Ravuri since 2006 and Rakesh Vyas since May 2012. The fund has been consistent in its performance. The fund has a solid investment process. This fund is a good choice for long term investors.

Where does HDFC Growth Fund invest your money?

HDFC Growth Fund is a large and mid-cap fund which means money will be invested in large and medium sized companies. About 61.89% of the fund’s money is allocated to stocks of large size companies, 19.96% to stocks of mid-size companies and 14.07% to those of small companies. Large cap companies tend to be stable compared to mid-cap and small cap companies. Yet mid caps are not avoided since they can give kicker returns as they transform into large cap companies.

Suitable for what?
  • Child's education
  • Child's marriage
  • Planning for retirement
  • Home Purchase
Not suitable for?
  • Creating wealth
  • Short term needs
  • Lifestyle needs
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. You can make HDFC Growth Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Do not make the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio. 

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Recommended
How has HDFC Growth Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Sep 2000, your value of investments would be around Rs 9.29 lakhs. If you had invested Rs 1 lakh for 5 years, your value of investments would be around Rs 1.37 lakhs. The performance has been better or similar to other large cap mutual funds. The fund has been giving at around 6.5% returns every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in HDFC Growth Fund through SIP for the past 5 years today you would have around Rs 7.97 lakhs.

How will HDFC Growth Fund 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 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid-size companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review?

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 Growth Fund is 2.44%. 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 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?

The returns in a mutual fund are absolutely tax free, provided you did not withdraw within 1 year. HDFC Growth Fund does not qualify for sec 80C ELSS benefits.

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