HDFC Top 100 Fund: The top 30% ranking and steady asset growth

HDFC Top 100 Fund, launched in October 1996, featured in the top 30th percentile of the largecap funds category of CRISIL Mutual Funds Ranking (CMFR) for three consecutive quarters through December 2023.

The fund’s month-end assets under management (AUM) increased from Rs 17,715 crore in January 2021 to Rs 30,980 crore in January 2024. Rahul Baijal has been managing this fund since July 2022.

The scheme’s investment objective is to generate long-term capital and enable income distribution to investors through a portfolio that predominantly invests in equity and equity-related securities of largecap companies.

Trailing returns

The fund has consistently outperformed its peers (funds ranked under the largecap funds category in December 2023 CMFR) in all the trailing periods under analysis. It has outperformed the benchmark (NIFTY 100 total return index or TRI) in the past 1-, 2-, 3-, 5-, and 10-year trailing periods.

To put this in perspective, an investment of Rs 10,000 in the fund on January 1, 2003, would have grown to Rs 581,832 on March 13, 2024, at an annualised rate of 21.12 per cent.

In contrast, the same investment in the category and benchmark would have grown to Rs 375,384 (18.64 per cent) and Rs 301,678 (17.42 per cent), respectively.

A systematic investment plan (SIP) is a disciplined mode of investment offered by mutual funds through which one can invest a certain amount at regular intervals.

A monthly investment of Rs 10,000 for the past 10 years in the fund, totalling Rs 12 lakh, would have grown to Rs 26.65 lakh (15.38 per cent annualised return) compared with Rs 25.76 lakh (14.74 per cent) in the benchmark, as on March 13, 2024.

Portfolio analysis

Over the past three years, the fund has taken a higher exposure predominantly in largecaps stocks.

Allocations to mid and smallcap stocks averaged 6.78 per cent and 0.38 per cent, respectively. Those to largecap stocks averaged 89.30 per cent.

The portfolio was diversified across 15 industries. Financial services dominated the portfolio, with an average allocation of 36.89 per cent. It was followed by oil & gas (15.90 per cent), information technology (11.25 per cent), consumer durables (6.43 per cent) and healthcare (5.86 per cent). During the period under analysis, the fund took exposure to 76 stocks and held 29 consistently.

Key contributing stocks to the portfolio were NTPC, ICICI Bank, State Bank of India, Coal India and Larsen & Toubro.