IDFC India GDP Growth Fund

IDFC India GDP Growth fund is being managed by Ankur Arora since April 2013.The fund has barely completed three years of existence and if you are already invested in it, you may want to stick around for some more time and watch if performance picks up. Not more than 30% of your total investment portfolio must be allocated to this fund. New investors might rather want to enter a fund that invests in a sector that is in the boom phase now.

Where does IDFC India GDP Growth fund invest your money?

IDFC India GDP Growth fund is a thematic cap fund which means your money will be invested in giant, large, medium and small companies. IDFC India GDP Growth fund has 77.75% exposure to large size companies, 15.84% exposure in mid size companies and 6.41% is exposed to small sized companies. Large cap companies tend to be stable compared to mid cap and small cap companies. Small and mid size companies have the potential to become large companies and when that happens you are expected to get bumper returns. Unfortunately it does not happen too frequently.

Suitable for what?
  • Wealth Creation
  • Lifestyle needs
Not suitable for?
  • Retirement Corpus
  • Child's Education
  • Child's Marriage
  • Buying home
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 2000 per month. You can make IDFC India GDP 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 IDFC India GDP Growth Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Feb 2009, your value of investments would be around Rs 1.88 lakhs. The fund has been giving at around 16.34% every year for those who stayed invested for last 4 years.

Assume you had invested Rs 10,000 every month in IDFC India GDP through SIP from the month of launch today you would have had around Rs 5.84 lakhs.

How will IDFC India GDP 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 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 IDFC India GDP Growth Fund is 3.00%. 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 closer to achievement. Do not remove the money during 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 do not withdraw within 1 year. IDFC India GDP Growth does not qualify for sec 80C ELSS benefits.

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