“HDFC Top 200- has the Sun set now?”

POSTED BY SK ON August 2, 2013 3:35 pm COMMENTS (12)

Don’t they say ” Don’s sleep over your investments in MF but review quaterly, and if the MF performs consistantly bad, then its time to move-on” ?

Its performamnce has been average or below average consistantly for last 3 years. I don’t bother about the absolute returns (knowing fully well that the equity hasn’t performed too well in last 3 years, but what bothers me is that Top 200 ‘s rank among peers has been towards the trailing end as far as the last 1 year, 2 year and 3 year performamnce is concerned. Far more Nos. of funds have done better that Top200 and few have done worse that it.

(Source -Moneycontrol. Moneycontrol now views it as ‘below average’ and advises to exist).

My question –   is 3 years’ non-performmance can be considered a constant non-performamnce?  Should an exist be considered now? If no, for how much more time shall I keep on watching it?

12 replies on this article ““HDFC Top 200- has the Sun set now?””

  1. Amit Karpe says:

    What is opinion for “HDFC Top 200” for current returns ?

    Is it still best if compare to its Peers ?

  2. ashalanshu says:

    Dear Mustafizur, please check the CY performance of the fund in last 5 CY and you ‘ll know the answer for your query.

    Thanks

    Ashal

  3. Mustafizur Rahaman says:

    Thanks SK for this post. HDFC Top 200 is one of the fund that is so confusing for me. I ask anyone, they say it is a very good fund but with my limited knowledge when I try to compare fund’s performance from Moneycontrol/VRO, I am not convinced that it is doing well. But at times people also tell that not only the past performance figure, but the future prospect and lot of other parameters also count. Anyway, if others are also getting same kind of questions like me, may be I will take it as it is I am not completely wrong & it is better to be proven wrong following my own conviction. So, for time being I will not invest anything on this fund…

  4. Dear Manish, the trailing return is counting from today to a past date whereas CY returns are actual return in that CY. so trailing return can changed based upon the input date but CY return can not change. 🙂

    Thanks

    Ashal

  5. Dear SK, please check the link given by Manish. Is it really non performing? I do not thinik so. Look at the yly return figure for CY 2010, 2011, 2012. It has performed better than Sensex & Nifty in each year. It’s performing better than category average also. Where is the so called underperformance?

    Thanks

    Ashal

    1. Ashal

      I looked at the trailing returns on that page link

      Returns and Risk Aggregates

      Rating & Risk Modern Portfolio Stat Volatility Measures
      Fund Rating R-Squared 0.94 Mean 2.06
      Fund Risk Grade High Alpha -1.93 Standard Deviation 19.59
      Fund Return Grade Above Average Beta 1.00 Sharpe Ratio -0.21

      Best and Worst Performance

      Best (Period) Worst (Period)
      Month 33.09 (11/05/2009 – 10/06/2009) -30.45 (26/09/2008 – 27/10/2008)
      Quarter 88.14 (09/03/2009 – 10/06/2009) -42.90 (21/02/2000 – 22/05/2000)
      Year 154.57 (24/04/2003 – 23/04/2004) -48.09 (14/01/2008 – 13/01/2009)

      Relative Performance (Fund Vs Category Average)

      Trailing Returns

      As of 02 Aug 2013 Fund Return Category Return S&P BSE Sensex CNX Nifty

      Year-to-Date -13.20 -4.69 -1.35 -3.85

      1-Week -4.54 -3.13 -2.96 -3.54

      1-Month -7.64 -2.92 -1.54 -3.07

      3-Month -12.12 -5.09 -2.90 -5.36

      1-Year -0.31 7.06 11.26 8.61

      2-Year -2.54 1.59 2.87 2.01

      3-Year -0.89 1.44 1.96 1.49

      5-Year 9.14 6.04 5.50 5.16

      Return less than 1-year are absolute and over 1 year are annualised

  6. Karthik says:

    Most HDFC funds have lots of SBI shares and no HDFC bank shares. I am exiting the HDFC fund house.

  7. I disagree with Manish on this. The sun will set for a few years for every fund.

    Investors should be clear about their mental framework before investing. For a 10+ year such periods are common and part of the game.

    So you think top 200 is doing badly and move over to another fund. Six months later the sun ‘starts’ to set on that while top 200 picks up. This is not unlikely at all. What will you do?

    Personally I will wait at least until the next elections to make a call on top 200 or equity for that matter. I am invested in top 200 and that is what I am going to do.

    The main reason for this is my goals are more than 15 years away, and I can afford the wait. If someones need money in another 5 or so years then best to cut losses and exit and invest in safer venues.

    Constant churning can be costly in many ways.

    Look at Quantum Long Term Equity. It did exceedingly well a couple of year ago. Last year its performance was not that great. So is the beginning of the Sun set for this?

    1. SK says:

      Thanks all for a varied range of views. However, I am now bothered with a bigger question, especially after reading about FFC’s ’15+ year’ horizon (a good 40% of a salaried person’s earning period of 30-35 years)!!

      Are 9 years (which was my investment horizon) not ‘long enough’ for a Large-cap equity fund? Is equity only for retirement-planning and not for any other needs?

      I could never have made myself to believe that for a 9 years horizon, FDs were a better option than a large-cap equity fund from a trusted fund-house and with a reputed fund-manager!!!

      Is someone with a 9 year investment horizon be advised to shelve his plans to start an SIP in equity (that too of a comparatively safer form of it, i.e. MF) in favour of starting an RD in SBI or Post office?

      Searching for answers!!!

      1. Are 9 years (which was my investment horizon) not ‘long enough’ for a Large-cap equity fund? Is equity only for retirement-planning and not for any other needs?

        ==> NO if you put in 60% or so in equity. Yes if you have only 30-40% or so. For goals less than 10 years i will recommend not more than 40% equity even for someone with high risk appetite. Lesser the better.

        I could never have made myself to believe that for a 9 years horizon, FDs were a better option than a large-cap equity fund from a trusted fund-house and with a reputed fund-manager!!!

        ==> That is the way equity works. Read the results here:

        http://freefincal.wordpress.com/2013/04/21/comprehensive-mutual-fund-investment-mode-comparator/

        Is someone with a 9 year investment horizon be advised to shelve his plans to start an SIP in equity (that too of a comparatively safer form of it, i.e. MF) in favour of starting an RD in SBI or Post office? Searching for answers!!!

        Someone with less than 9 year is better off with income debt funds, MIPs with about 25% equity exposure (my personal choice). For someone with higher risk appetite I will say definitely not more than 40% exposure.

        For those in 10% or even 20% slab a RD is a great choice. In fact,it is not a bad choice at all even for those in the 30% slab if they cannot handle volatility. Tax advantage be damned.

        1. SK says:

          Thanks FFC for our view which make sense to me since these look like from an ‘investor’ (and hence sound different than that of Fund Manager, broker or alike).

          I tend to agree that given the behaviour of equities, anything less than 10 years may not be correctly called long-term.

          Looks like the ‘Long-term’ (in the background of equity investment) is consistantly misused by the Fund Managers, broker or alike to lure people into investing in their funds. I have seen anything from 2 year to 5 years being passed-off as long-term by various people.

  8. If you see its trailing returns in http://www.valueresearchonline.com/funds/fundperformance.asp?schemecode=104

    You can see how badly it has done compared to its category average and even benchmark . I would say if this is what it has done in last 1 yr, 2 yr and 3 yr consistently. its better to avoid it now .

    Manish

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