HDFC Equity Direct Plan-Growth

What is HDFC Equity Fund?

HDFC Equity Fund is an open ended multi-cap equity fund scheme that invests in stock equities of different capitalizations. It invests in emergent stocks that are likely to achieve above average growth, have superior financial strength and distinct competitive advantages.

Mutual funds that allocate a major section of the corpus to the shares are equity funds. HDFC Equity Fund is a multi-cap fund as it invests in multiple companies of varying capitalizations i.e. across large cap, mid cap and small cap stocks. SEBI classifies the companies, based on their capital into the aforementioned categories.

Who Should Invest?

• Investors who can bear moderate market risks
• Investors with long term investment horizon
• Investors looking for a diverse portfolio spanning entire market capitalisations and various sectors

What You Gain?

• Although HDFC Equity Fund is a multi-cap fund but it invests a major portion of the fund in large cap that can emerge when the market is low while almost a quarter is invested in mid-cap stocks that can bear the poor market conditions
• Fund is allocated to different economic sectors with concentration in some of the most trusted sectors, such as Banks and IT that offer good returns and risk balance

What You Could Lose?

As an equity fund that takes an aggressive approach, the fund has moderately high risks. Also, it focuses on wealth generation in the long-term, therefore an investor may face short-term deficit.

Investment Portfolio – More Details about the Fund

HDFC Equity Fund invests at least 70% in major companies with large capitalization and is suggested for minimum 3 years. Aiming for wealth creation, it invests significantly in Public and Private Banks, Construction, Refineries, IT and Software. Its major holdings include ICICI Bank, SBI, Larsen and Toubro Ltd., Reliance Industries and Infosys. The scheme comes with regular and direct plan. The expense ratio is lower in direct plan. Under each plan, it offers both the growth and dividend options.

There is 1% exit load only if the investor redeems his fund within 12 months. There is no Exit load above the duration of 1 year.

Taxation-How will they be taxed?

As per the taxation rules, the long term capital gains from mutual funds, over and above Rs 1 lakh, made on sale of units after 1 year from the date of allotment are to be taxed at the rate of 10% (without indexation). On the other hand, the short-term capital gains made on sale of units within 1 year from the date of allotment are to be taxed at the rate of 15%.

How to Invest?

• Sign Up/Sign In to Paisabazaar.com and go to ‘Direct Mutual Funds’
• Click on the section of ‘Equity Funds’
• Type and search directly by the name of HDFC Equity Fund. Once it opens up, look at the details. You can also compare similar funds as well as use Returns Calculator
• Click on ‘Invest Now’, select either Lump sum or SIP

Why Paisabazaar?

• Trusted website, no commission charges and no paperwork. Only direct plans, no regular ones
• You can compare more than 1,700 Funds at one platform instead of visiting the website of each AMC (Asset Management Company) and then searching for numerous funds
• Easy to browse as Funds are segregated under Equity, Debt, Large Cap, ELSS, etc. You can further add filters of ratings, returns, fund houses.

FAQs

Q. What does multi cap mean?
A. Companies are categorised by SEBI into large, mid and small cap on the basis of their capitalizations. Fund investing in various companies that fall under all these categories or at least more than one is called a Multi-Cap Fund.

Q. Does HDFC Equity Fund come under Section 80C or offers tax benefits?
A. HDFC Equity Fund is not a tax saver fund and does not come under Section 80C. The taxation rules apply to it as applicable for all capital gains via mutual funds in long term and short term.

Q. Is it beneficial to invest via open-ended (lumpsum) or SIP?
A. SIP is considered efficient and convenient mode of investment that is good for long term investment. It also reduces financial burden as one needs to invest periodically and one can start with amount as low as Rs. 500 per month.

Q. What is Exit Load?
A. Exit Load is the fee charged from an investor when he decides to quit the scheme and redeem his money. Generally, there is some penalty charged only if funds are redeemed in less than 365 days, otherwise there are usually no charges.

Q. What is Expense Ratio?
A. It is the fee charged from the investor for managing his fund money and allocating it to the stocks that can help him earn returns.

Q. What is a Direct Mutual Fund?
A. A Direct Mutual Fund is where there is no broker/mediator involved to help the investor select the fund for investing. In a Regular Plan, the Expense Ratio is more than in a Direct Plan, as there are additional charges for the mediator.