Looking for stability amid volatility? Opt for HDFC Top 200

HDFC Top 200 is a Large cap fund which invest in equity and equity-linked instruments primarily drawn from the companies in BSE 200 index. According to Financial Advisor Arnav Pandya, this fund suits small investor seeking exposure in Large cap sector with a Buy and Hold strategy. 

Nature: Equity oriented open ended
Inception: September 1996
Assets under Management: Rs 11,381 crore at the end of March 2012
Fund Managers: Prashant Jain & Miten Lathia
Analysis:

• The fund focuses on a diversified range of high quality stocks and it had the highest exposure to banks at 23 per cent of the portfolio at the end of March 2010. Consumer non durables, Pharma and software were the other three sectors where the exposure was around 8 per cent of the portfolio for each of the areas.  In terms of the individual stocks it was no surprise to find that three of the top five holdings were banks. ICICI Bank and SBI occupied the top two positions followed by Infosys, L&T and Bank of Baroda. The fund was an outperformer over the benchmark the BSE 200 over the one, three and five year periods.
• The fund managed to keep its turnover ratio at around 30 per cent of the portfolio so this was a good thing and it was reflected in the portfolio composition. Banks continued to be the top sector with around 24 per cent of the portfolio at the end of September 2010. This was followed by consumer non durables, software and Pharma. When it came to individual holdings SBI was at the top with nearly 9 per cent of the portfolio followed by Infosys, ICICI Bank, Bank of Baroda and ONGC.  The fund was comfortably outperforming its benchmark over the one, three and five year time periods.
• Six months later there was not much change in the portfolio as the fund continued with its investment strategy. Banks were the top sector holdings with a 23 per cent share followed by software, consumer non durables and petroleum products. SBI remained the top individual holding followed by Infosys, ICICI Bank, Reliance Industries and Bank of Baroda.  The fund kept a very small amount of less than 3 per cent in the cash and cash equivalents but was still outperforming the benchmark over all time periods.
• The portfolio turnover ratio of the fund dipped further to just around 20 per cent at the end of September 2011. Banks remained the top sector followed by Consumer non durables, software and petroleum products.  This position and performance was commendable given the large size of the fund. The top individual holding was SBI followed by Infosys, ICICI Bank, Reliance Industries and ITC.  The fund was continued to outperform the benchmark over the one and three year time periods.
• Banks made up one fourth of the portfolio of the fund followed by software, consumer non durables and Pharma. The portfolio turnover and the cash and cash equivalents component remained low in the portfolio.  SBI was the top holding followed by ICICI Bank, Infosys, ITC and Tata Motors DVR.  The fund continued its outperformance over the one and three year time periods.
• This is a fund that can form a part of the core portfolio of an investor. It is consistent in performance and follows a buy and hold strategy which will suit small investors so it is an ideal holding for those who are looking for a large cap investment in their portfolio.