HDFC Top 100 Fund: A fund with focus on long-term performance

HDFC Top 100 Fund (erstwhile HDFC Top 200 Fund) provides an opportunity to generate long-term capital appreciation by predominantly investing in large-cap stocks with a minimum exposure of 80%. It has been a rank 2 fund in the large-cap funds category of CRISIL Mutual Fund Rankings (CMFR) for the past two quarters ended December 2018. Prashant Jain, the Chief Investment Officer (Equity) at HDFC Asset Management, has been managing the scheme for over 14 years. He has over 27 years of experience in fund management and research, and manages two open-ended equity schemes at the AMC with assets under management (AUM) of Rs 35,629 as of February 2019.

The fund's month-end AUM increased from Rs 11,717 crore in March 2016 to Rs 15,163 crore in February 2019.

Trailing returns

The fund outperformed its peers in the large cap funds category in CMFR across all the trailing periods under analysis. It outperformed its benchmark, Nifty 100 TRI, during all the trailing periods except over two years.

An investment of Rs 10,000 in the fund on January 01, 2003 (since inception of the benchmark) would have grown to Rs 2,91,738 (23.05% CAGR) on April 02, 2019, versus the benchmark's Rs 1,51,073 (18.17% CAGR) and the category's Rs 1,89,270 (19.82% CAGR).

SIP returns

A monthly investment of Rs 10,000 through a Systematic Investment Plan (SIP) for 10 years since May 2009 would have grown to Rs 23.67 lakh (XIRR 13.21%) on April 02, 2019. A similar investment in the benchmark would have grown to Rs 22.96 lakh (XIRR 12.64%).

Risk-reward matrix

During the past three years, the fund delivered higher returns than its peers and the benchmark, while maintaining higher volatility.

Portfolio analysis

During the past three years, the fund invested in 87 stocks and maintained average allocation of 88.42% to large cap stocks, 10.35% to mid-caps with almost no allocation to small caps. The fund's allocation to large-cap stocks ranged from 85.11% to 92.61% over the last three years.

The fund invested in 25 sectors during the past three years, of which major investment was in banks (average allocation of 30.3%), followed by software (12.5%), petroleum products (7.4%), power (6.6%) and construction projects (6.0%).

The fund invested in 88 stocks in the past three years and held 34 stocks consistently. They accounted for 78.44% of the portfolio, indicating a low portfolio churn and high conviction of the fund manager. HDFC Bank, Reliance Industries, ICICI Bank, State Bank of India have been key contributors to the fund's performance among the consistently held stocks. The other key performers in the portfolio over the last one year include Axis Bank, Infosys and TCS.