Sensex is inching towards a record high of 39,000 points. It is therefore a good idea to place your money through systematic investment plans (SIPs), which will provide a hedge against any downside risk.

Monthly inflows from mutual funds have more than doubled in the past two years and they now stand at ₹7,658 crore, or well over a billion dollars.

This has brought the Indian stock market into a realm it has never seen before, and one that has interesting effects on stock valuations.

HDFC Mutual Fund provides good option for investors, who are looking to invest small sums of let’s say ₹500 or ₹1,000 through SIPs.

Why choose HDFC Mutual Funds?

HDFC Mutual Fund is one of the largest and well-established fund houses in the country with a focus on delivering consistent fund performance across different categories.

HDFC Asset Management Company Ltd.(HDFC AMC) is a privately owned investment manager of HDFC Mutual funds.

According to CRISIL, as of December 31, 2017, HDFC AMC has been the most profitable AMC of the country in terms of net profits since Fiscal 2013, with a total AUM (Assets Under Management) of ₹2,932.54 billion.

Its profits have grown every year since 2002.

HDFC offers a wide range of saving and investment products across asset classes.

As of December 31, 2017, it has127 schemes categorized into:

  • 28 equity-oriented schemes
  • 91 debt schemes
  • 3 liquid schemes
  • 5 other schemes (including exchange-traded schemes and funds of fund schemes).

Some key competitive strengths of HDFC AMC are:

  1. Consistent market leadership position in the Indian mutual fund industry.
  2. Trusted brand and strong parentage.
  3. Strong investment performance supported by comprehensive investment philosophy and risk management.
  4. Superior and diversified product mix distributed through a multi-channel distribution network.
  5. Focuses on individual customers and adopts a customer-centric approach.
  6. Consistent growth.

HDFC AMC believes in offering products that cater to varied investor needs.

Why is an SIP ideal for you?

Mutual fund schemes offer various easy, smart and convenient options of investment, to meet investor needs

The most famous scheme is lump sum and systematic investment plan (SIP).

A lump sum is a single, large investment done by an investor in any mutual fund scheme.

But the ideal method to invest in them is staggering your investments over the whole financial year.

And this can be done using the SIP mode of investing in mutual funds.

SIP is an option of investing a fixed sum in a mutual fund scheme on a regular basis i.e. predefined regular interval. It is similar to a regular saving scheme, like a recurring deposit.

The ideal way of investing in mutual funds is through SIP. Reason being:

1.It is one of the best ways to invest and is a tested method of minimizing risk. Apart from this, you can enjoy good returns, by regular, periodic investment, over a long horizon.

2.The obvious benefit of SIP is that it helps investors to average the rupee cost of a unit and thereby helps them to earn higher returns in the long-term.

3.It also helps them to invest in a disciplined manner no matters what the current market conditions are. SIPs enforce financial discipline without any effort.

Read More: 13 Things to Know About SIP.

So, to save yourself from the stress, you should always opt for an SIP to invest in mutual funds, especially for equity oriented funds.

5 Best HDFC Mutual Funds for SIPs

HDFC has been the largest AMC in equity-oriented Asset Under Management (AUM) since the last quarter of fiscal 2011 and has consistently been among the top two asset management companies in India in terms of total average AUM since the month of August 2008.

Here are  few SIPs offered by HDFC that you must definitely look to explore.

1.HDFC Equity Savings Fund – Direct – Growth

This is one of the best equity savings fund which invests in equity, arbitrage, and debt.

Key Information

Launch Date 1 January 2013
NAV (7 Sep 2018) ₹37.9
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹7,445 Cr
Riskometer Moderately High
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark NIFTY 50 Arbitrage TRI (40), NIFTY 50 Total Return (30) and CRISIL Short-Term Bond (30) since its launch.
Age of the fund 5 years old
Expense Ratio 0.28%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Returns per annum

Duration Returns
1 year 7.9%
3 years 13.4%
5 years 12.3%
Since launch 10.8%

Investment Objective

The investment objective of the scheme is to provide capital appreciation and income distribution to investors using arbitrage opportunities, investment in equity / equity related instruments and debt / money market instruments.

However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved.

Holding Analysis

To retain equity taxation, this fund will restrict the fixed income (debt) exposure to 35%.

Also, This scheme endeavors to increase equity allocation when markets go down and to decrease equity allocation when markets go up.

2.HDFC Small Cap Fund – Direct – Growth

This is one of the most popular small cap mutual fund in the market right now.

Key Information

Launch Date 1 January 2013
NAV (7 Sep 2018) ₹48.8
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹4,143 Cr
Riskometer Moderately High
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark NIFTY Small-cap 100 TRI since its launch.
Age of the fund 5 years old
Expense Ratio 0.49%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Returns per annum

Duration Returns
1 year 23.4%
3 years 25.0%
5 years 26.1%
Since launch 21.41%

Investment Objective

The investment objective of the scheme is to generate long-term capital growth from an actively managed portfolio of equity and equity-related securities including equity derivatives by investing predominantly in small-cap companies.

However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

Holding Analysis

This fund has exponential growth potential and gives high returns on investment.

This fund is best suited for investors with a high-risk appetite and even for seasoned investors.

Investors who have a very good idea of mutual funds and the risks associated with them can opt for this fund

This fund is best for long-term investments

3.HDFC Short Term Debt Fund – Direct – Growth

This popular HDFC debt fund is a short-term fund which invests in debt & money market instruments, such that duration of the portfolio is between 1 year – 3 years.

Key Information

Launch Date 1 January 2013
NAV (7 Sep 2018) ₹19.8
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹9,490 Cr
Riskometer Moderately Low
Minimum SIP ₹1,000
Minimum SWP NIL
Performance w.r.t its Benchmark Has consistently outperformed its benchmark CRISIL Short-Term Bond since its launch.
Age of the fund 5 years old
Expense Ratio 0.25%
Exit Load NIL
Type  Open Ended

Returns per annum

Duration Returns
1 year 5.5%
3 years 7.7%
5 years 8.8%
Since launch 8.5%

Investment Objective

The investment objective of this scheme is to generate regular income through investments in debt/money market instruments and government securities with maturity not exceeding 30 months.

However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

Holding Analysis

Remember, this being a debt fund cannot give you superlative returns and most returns would be linked to how the interest rate in the economy moves.

When interest rates drop you will attain a lower yield and when interest rates climb, your yields will be higher.

4.HDFC Capital Builder Value Fund – Direct – Growth

This fund belongs to a value fund category and therefore follows a value investment strategy.

Key Information

Launch Date 1 January 2013
NAV (7 Sep 2018) ₹321.4
Plan Type Direct
Rating by Groww 4 Star
AUM (Fund Size) ₹2,310 Cr
Riskometer Moderately High
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark NIFTY 500 TRI since its launch.
Age of the fund 5 years old
Expense Ratio 0.68%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Returns per annum

Duration Returns
1 year 16.9%
3 years 19.4%
5 years 23.8%
Since launch 19.11%

Investment Objective

The investment objective of the scheme is to achieve capital appreciation/income in the long-term by primarily investing in undervalued stocks.

However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

Holding Analysis

The focus of this fund is on identifying stocks that are currently priced at a discount to their intrinsic value or at a price that is not reflective of their true worth.

By buying a stock at a high margin of safety, the risk is mitigated to some extent, while enhancing the return potential.

5.HDFC Balanced Advantage Fund – Direct – Growth

HDFC Balanced Advantage Fund is the most popular fund among HDFC mutual funds.

You can see that by looking at the size of its AUM.

This is a hybrid mutual fund which changes its equity exposure based on market conditions

Key Information

Launch Date 1 January 2013
NAV (7 Sep 2018) ₹1199.8
Plan Type Direct
Rating by Groww 4 Star
AUM (Fund Size) ₹36,415 Cr
Riskometer Moderately High
Minimum SIP ₹500
Minimum SWP ₹500
Performance w.r.t its Benchmark Has consistently outperformed its benchmark NIFTY 50 Hybrid Composite Debt 65:35I since its launch.
Age of the fund 5 years old
Expense Ratio 0.90%
Exit Load If redeemed bet. 0 Year to 1 Year; Exit Load is 1%;
Type  Open Ended

Returns per annum

Duration Returns
1 year 13.6%
3 years 15.2%
5 years 21.1%
Since launch 13.8%

Investment Objective

The scheme seeks to provide long-term capital appreciation / income from a dynamic mix of equity and debt investments.

However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

Holding Analysis

Conclusion

The best thing about mutual funds is that they enable you to invest with very small amounts.

Many people what the minimum amount to invest in mutual funds are? And trust me, there is no other way you can invest with reasonable diversification with an amount as low as ₹100 and ₹ 500.

SIP is an instrument which helps you avoid risk of timing the markets and facilitates wealth creation in a disciplined manner by averaging cost of investments.

Small savings create the big corpus for future.

And if the SIP is from a top AMC like HDFC, it will add cherry to your investment cake.

A few things one should remember before starting your SIPs in HDFC Mutual Fund is that the markets are currently trading at very high levels.

So, it is best to stay invested in HDFC SIPs rather than invest lumpsum. Systematic Investment Plans have become a flavor of the season, but, they can never provide you instant returns.

Investing in mutual funds online is very simple and paperless. Simply log in to your Groww account, choose a fund, and invest using net banking – exactly like you would when shopping online.

Happy Investing!

Disclaimer: The views expressed in this post is that of the author and not those of Groww