MF Tracker: HDFC Flexi Cap Fund turns Rs 10,000 SIP to nearly Rs 21.50 crore in 31 years

Economic Times

6 days ago

HDFC Flexi Cap Fund, the second largest flexi cap fund, has turned Rs 10,000 monthly SIP to Rs 21.50 crore since its inception in January 1995.This flexi cap fund is given five star rating by Value Research and Morningstar both.A monthly SIP of Rs 10,000 made in this fund 10 years ago would have been 31.84 lakh now with an XIRR of 18.78%. The similar amount made five years ago would have been Rs 10.42 lakh with an XIRR of 22.91%. And lastly, the similar amount invested three years ago would have been Rs 4.81 lakh now with an XIRR of 20.86%.
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If an investor chose to invest in this fund through lumpsum investment, the value of Rs 1 lakh invested since inception would have been Rs 1.96 crore now with a CAGR of 18.83%. Similar investment made 10 years ago would have been Rs 4.01 lakh with a CAGR of 14.90%.
A lumpsum investment of Rs 1 lakh made in this flexi cap fund five years ago would have been Rs 3.49 lakh with a CAGR of 28.44% and in the last three years, the value would have been Rs 1.85 lakh now with a CAGR of 22.83%.This Rs 80,000 crore fund, is benchmarked against NIFTY 500 Index (TRI) and is managed by Roshi Jain.Based on trailing returns across different horizons, the fund has outperformed its benchmark and category average in the last six months, nine months, one year, three years, and five years. On the other hand, it has just underperformed its benchmark and category average in the last three months.In the last six months, the fund has offered 7.12% return against a return of 5.89% by its benchmark and 4.87% as the category average. In the last nine months, the flexi cap fund posted a return of 5.07% compared to 2.32% by the benchmark and 0.63% as the category average. In the last one year, where the fund lost 0.71% and the category on an average lost 0.71%, the fund gained 6.22%. In the last three years, the fund posted a return of 22.88% against 16.44% by the benchmark and 16.66% as the category average. The fund delivered a return of 28.49% in the last five years, whereas the fund gave 21.53% and the category on an average gave 20.67%.On the basis of daily rolling returns, the fund has offered a CAGR of 14.15% in the last 10 years, and a CAGR of 16.57% and 25.77% in the last five years and three years respectively. In the last three years, the CAGR offered by HDFC Flexi Cap Fund was the second highest in the flexi cap category. In the last 10 years based on yearly rolling returns, the fund has delivered negative annual returns in 2015 and 2018 only where the fund lost 5.09% and 3.53% respectively. The highest annual returns in the last 10 years were offered in 2017 of around 36.86%. The annual returns offered by the fund in 2022 were the highest in the flexi cap category. The fund gave 18.29% annual return in 2022.
Also Read | Only 3 equity MF categories offer positive average returns in July. International funds lead return chart An expert mentions that the fund adopts a dynamic investment approach, allocating assets across large-cap, mid-cap, and small-cap stocks based on market valuations and economic cycles although large cap stocks dominate the portfolio to account for over 70% of assets. That said, the flexibility of moving across market segments allows the fund to capitalize on emerging opportunities and several factors have contributed to the fund's superior track record over the years, the expert added.'In recent times the emphasis has been on investing in quality stocks with strong growth prospects and reasonable valuations, enhancing consistency and reducing volatility. The fund has strategically invested in stocks from sectors such as industrials, utilities, energy and consumer cyclicals, which have delivered pleasing results over the last few years. Also, by maintaining a diversified portfolio and adjusting allocations based on market conditions, the fund has managed risks effectively, providing investors with stable returns over the long term,' Himanshu Srivastava, Associate Director, Morningstar Investment Research India.The investment objective of the fund is to generate capital appreciation / income from a portfolio, predominantly invested in equity and equity related instruments. In respect of each purchase / switch-in of units, an exit load of 1.00% is payable if units are redeemed/ switched-out within 1 year from the date of allotment. The minimum application amount, minimum additional purchase amount and minimum redemption amount is Rs 100 and any amount thereafter.
The fund allocates 65-100% in equity and equity related instruments, 0-35% in debt securities and money market instruments and fixed income derivatives, 0-10% in units issued by REITs and InvITs, 0-10% in non-convertible preference shares, and 0-20% in units of mutual funds. Being a flexi cap fund, the fund holds 73.56% in large cap funds, 3.52% in mid caps, 13.15% in others, and 9.77% in small caps. In comparison to the flexi cap category, the fund is overweight on large caps, others, and small caps. The flexi cap category on an average holds 65.93% in large caps, 12.79% in mid caps, 11.88% in others, and 9.40% in small caps.
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According to Srivastava, given the current market volatility, investing in a flexi cap fund can be a strategic choice due to its flexibility in allocating across large, mid, and small-cap stocks and with market fluctuations and uncertainties, Systematic Investment Plans (SIPs) are generally recommended as they help average the purchase cost over time and reduce the risk of market timing.'SIPs are particularly suited for long-term investors, allowing them to ride out short-term market volatility. However, there is no harm in making Lump-sum investments as well if investors have investible surplus to invest. That said, SIPs are a more disciplined form of investing in mutual funds and offer a balanced approach in uncertain market conditions,' he added.The second largest flexi cap fund has the highest allocation in banks of around 35.07%, followed by 14.39% in automobile and ancillaries. With respect to the flexi cap category, the fund is overweight on banks, automobile & ancillaries, healthcare, insurance, iron & steel, and aviation among the top 10 stock holdings whereas is underweight in IT, telecom, power, and construction materials.The PE and PBV ratio of the multi asset allocation fund were recorded at 35.95 times and 5.42 times respectively whereas the dividend yield ratio was recorded at 1.03 times as of June 2025. ETMutualFunds analysed the other key ratios of the fund in a three year period. Based on the last three years, the scheme has offered a Treynor ratio of 1.97 and an alpha of 0.59. The sortino ratio of the scheme was recorded at 1.22.The return due to net selectivity was recorded at 0.55 and return due to improper diversification was recorded at 0.04 in the last three years.The investment style of the fund is to invest in growth oriented large cap stocks.Apart from HDFC Flexi Cap Fund, there are around 29 funds in the category which have a track record of three years. Out of these 30 funds, Motilal Oswal Flexi Cap Fund offered the highest return of 24.16% in the last three years, followed by Invesco India Flexi cap Fund which gave 22.91% return in the same time period. Parag Parikh Flexi Cap Fund, the largest flexi cap fund based on assets managed, offered 20.74%. Samco Flexi Cap Fund offered the lowest return of around 3.02% in the said time period.Looking at the past performance, Sagar Shinde, VP Research at Fisdom told ETMutualFunds that the outlook for flexi cap funds remains constructive and given their mandate to shift between market caps, they are well-positioned to benefit from sectoral and cyclical shifts.'As markets evolve and valuation gaps emerge across segments, skilled fund managers can take advantage of these opportunities. However, performance will depend on the manager's ability to read market signals and rebalance effectively. Over the medium to long term, flexi cap funds should continue to deliver competitive returns, especially for investors seeking diversification and active management,' he added.
Also Read | Mutual funds allocate Rs 5,294 crore into IPOs, backing small cap growth stories: Ventura Another expert, Chirag Muni, Executive Director at Anand Rathi Wealth Limited shared this with ETMutualFunds that flexi cap funds are designed to offer the advantage of diversification and active management and by allowing fund managers the freedom to shift allocations across large, mid, and small-cap stocks, these funds aim to deliver better risk-adjusted returns and according to their earnings estimates, the Nifty 50 is expected to deliver an EPS growth of around 10% for FY26. 'We expect this earnings to be reflected in price appreciation as well. Given this, we can expect flexi cap funds to deliver returns in the range of 13–15% over the coming year. Investors can consider investing in flexi cap funds, however, that should not be the sole equity component in your portfolio as they are largely tilted towards large cap stocks which can limit diversification,' Chirag said.According to the Sebi mandate, flexi cap funds should have a minimum investment in equity and equity related instruments of around 65% of total assets and these are open ended dynamic equity schemes investing across large cap, mid cap, small cap stocks.Flexi cap mutual funds offer the fund managers the freedom to invest across market capitalisations and sectors/themes. It means the fund managers can invest anywhere based on his outlook on the market.Flexi cap schemes are typically recommended to moderate investors to create wealth over a long period of time. Ideally, one should invest in these schemes with an investment horizon of five to seven years.One should always consider risk appetite, investment horizon, and goals before making any investment decisions.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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