HDFC Mutual Fund celebrates 26-years of HDFC Flexi Cap Fund’s accomplishment

Chandigarh: HDFC Asset Management Co. Ltd., investment manager to HDFC Mutual Fund, one of India’s leading mutual fund houses with Rs. 4.11 lakh crore in Assets Under Management as on May 31, 2021 announces campaign on HDFC Flexi Cap Fund’s journey and accomplishment over past 26 years - #WealthCreation. HDFC Flexi Cap Fund, (erstwhile HDFC Equity Fund) is one of India’s oldest mutual fund schemes serving the investors with proven track record across market cycles over two and half decades.
 
HDFC Flexi Cap Fund has successfully navigated market meltdowns and market excesses in the past such as – information technology in 2000, power, infrastructure, and real estate in 2007, pharmaceuticals post 2015, midcaps post 2018, etc. On each of these occasions, the Fund navigated the difficult market conditions successfully due to its disciplined approach to investing with a focus on sustainability of businesses and valuations.
 
In its accomplished journey of 26 years, HDFC Flexi Cap Fund has stood the test of time across market cycles by actively managing the portfolio and has created enormous wealth for its investors. Rs 1,00,000 invested on inception of the Fund, i.e. 1st Jan 1995, would have grown to ~Rs 87.60 lakh at CAGR of ~18.44 %^ as on 31st May, 2021. An SIP of Rs 10,000 in the Fund since inception would have grown to Rs 9.57 crore^ as on 31st May, 2021. This period of 26 years has witnessed sharp market corrections of ~50%. The time tested approach of investing in strong businesses, diversification and focus on valuations enabled the fund to recover strongly from these corrections. The current NAV was Rs. 882 (as on June 24, 2021), which translates into CAGR of ~18 % p.a.^ since inception is a testimony to this. This journey also demonstrates how Sound Investment + Time + Patience = Wealth creation. See below complete performance details.
 
The Union Budget with its focus on growth and capex augurs well for a new investment cycle and earnings growth. The economic recovery has been strong post opening up, and the high frequency activity indicators are normalizing at a fast pace supported by fiscal and monetary measures, pent up demand, etc. Given this, the outlook for economy is promising over the next 3-5 years. 
 
Also, while the 2nd wave of COVID-19 has caught India off guard, the economic impact of the second wave has been low relative to the first wave, as businesses were better geared to work under Covid protocols. With easing of lockdowns in June 2021 and vaccination drive picking up, the economy is recovering as suggested by economic indicators and many of them are now near or above pre-Covid levels.
 
Prashant Jain, Executive Director & Chief Investment Officer, HDFC Asset Management Co. Ltd said, “The portfolio of HDFC Flexi Cap Fund is well positioned for the impending economic resurgence and likely improvement in corporate profitability. We have positive outlook on the markets over the long term driven by growth focused budget, low cost of capital, reasonable valuations and strong earnings outlook. Though the market rally is getting broad based, there are select pockets which are still undervalued compared to their long term averages”.
 
HDFC Flexi Cap Fund has the flexibility to invest across market spectrum i.e. large, mid and small cap stocks. The fund is overweight in sectors with prospects of earnings recovery with reasonable valuations and is underweight in expensive sectors generally. The fund aims to invest in stocks/ sectors that are available at reasonable valuations.