Unveiling a consistent champion: How HDFC Flexi Cap Fund beats the rest

HDFC Flexi Cap Fund, launched in January 1995, has consistently ranked in the top 30th percentile of the flexicap fund category in the CRISIL Mutual Fund Ranking (CMFR) for three consecutive quarters through March 2024.

The fund’s assets under management at month-end increased to Rs 50,840 crore in March 2024 from Rs 23,128 crore in March 2021.

Roshi Jain and Dhruv Muchhal have been managing this fund since July 2022 and June 2023, respectively.
 

The fund aims to generate capital appreciation for investors, along with regular income, through a portfolio predominantly invested in equities and equity-related instruments.
 

Trailing returns

The fund has consistently outperformed the benchmark (Nifty 500 TRI) and its peers (funds ranked under the flexicap category in March 2024 CMFR) over various trailing periods: one, two, three, five, seven, and 10 years.

To put this in perspective, an investment of Rs 10,000 in the fund on November 26, 1998 (the inception of the benchmark) would have grown to Rs 21.56 lakh by June 13, 2024, at an annualised rate of 23.39 per cent.
 

In contrast, the same investment in the category and benchmark would have grown to Rs 9.96 lakh (19.72 per cent) and Rs 5.67 lakh (17.12 per cent), respectively.

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

A monthly investment of Rs 10,000 over the past 10 years in the fund, totalling Rs 12 lakh, would have grown to Rs 32.55 lakh (an annualised return of 19.11 per cent) compared with Rs 29.55 lakh (17.31 per cent) in the benchmark as of June 13, 2024.

Portfolio analysis
 

Over the past three years, the fund has maintained a predominantly high exposure to largecap stocks and a lower exposure to midcap and smallcap stocks.

Allocations to midcap and smallcap stocks averaged 9.33 per cent and 6.02 per cent, respectively, while allocations to largecap stocks and non-equity portions averaged 78.25 per cent and 6.4 per cent, respectively.
 

The portfolio was diversified across 17 industries, with financial services dominating at an average allocation of 35.49 per cent, followed by energy (14.31 per cent), information technology (9.26 per cent), pharmaceutical (6.04 per cent), and automotive 

(4.95 per cent).
 

In the period under analysis, the fund held exposure to 86 stocks, with 22 held consistently.
 

Key contributing stocks to the portfolio included State Bank of India, NTPC, ICICI Bank, and Hindustan Aeronautics.