About Midcap Opportunities Funds
Investment objective of HDFC Midcap Opportunities Fund
Investment Strategy Overview of HDFC Midcap Opportunities Fund
Risk Profile of HDFC Midcap Opportunities Fund
- Volatility risk is inherent to all equity schemes and equity derivates as these are market-linked. Thus there is the probability of everyday price fluctuations in case of the scheme. Thus the scheme may not be suitable for risk-averse investors.
- Liquidity risk is also applicable to this scheme as a portion of the scheme’s capital may be invested in securities that are not listed on stock exchanges. Such investments would thus increase the overall risk of the scheme significantly.
- The liquidity risk in case of stock-exchange listed securities originates from the fact that high redemption pressure typically observed during market bear runs can limit trading volumes. Thus in such extraordinary situations, the probability of loss from these investments can be significantly high till it is finally sold.
HDFC Midcap Opportunities Fund Information and Statistics
Minimum Investment: For a new investor of this mutual fund scheme, the minimum investment amount on offer is Rs. 5000. Higher amounts are also allowed in multiples of Re.1. In the case of an existing investor, the minimum amount for making an additional investment in the scheme is fixed at Rs. 1000, while higher amounts can be in multiples of Re. 1 over this amount. The minimum application amount for making a SIP investment into this scheme is Rs. 500 each month, while in the case of quarterly SIP, this minimum amount is increased to Rs. 1500.
Risk Category: The fund invests mainly in equities of companies that are designated mid-cap due to the fact that they feature a capitalization value which is less than that beyond which a company is designated as large cap. Many mid-cap companies are emerging ones that can witness further growth to become a large-cap company at a later date. However, not every mid-cap company is a success and as per past track record, a small percentage of companies actually manage to grow to be large cap companies. Thus, the investment in this scheme would be subject to a moderately high level of risk and this extends to not just the potential returns but also the principal amount invested into the scheme.
Entry/Exit Load: As per the SEBI mandate to all mutual fund houses, entry loads for all mutual funds including the HDFC Mid-cap Opportunities Fund have been abolished. However, though entry load is currently zero, exits loads may be applicable at the time of switching or redemption from the scheme. As per existing rules, in case an investor switches or redeems his/her units up to less than 1 year from the date the units were officially allotted to the investor. In case the investor holds units of the scheme for more than 1 year from the date of allotment, the exit load is set at zero.
Fund Manager: Mr. Chetal Setalvad is the current fund manager for the HDFC Midcap Opportunities Fund and he has been operating in this capacity since May 2007. Prior to joining HDFC Mutual Fund AMC, he worked with leading players in the finance sector including ING Barings N.V., HDFC Mutual Fund AMC, and New Vernon Advisory Services Ltd. He is a BSC graduate and an MBA degree holder from the University of North Carolina, United States. The co-manager of this fund is Mr. Rakesh Vyas who holds the position of Fund Manager for Overseas Investments with HDFC Mutual Fund AMC. He has a total experience of 13 years in the financial sector of which 10 years was in equity research, while the remaining 3 years was in Application Engineering (Control & Automation).
Taxation Rules for HDFC Midcap Opportunities Fund
Long-term capital gains in case of an equity fund like HDFC Midcap Opportunities Fund refer to profits earned from the sale of units after completion of 12 months from the date of allocation. These gains at present are completely tax exempt therefore your returns including profits generated through the sale of HDFC Midcap Opportunities Fund units are completely tax-free. Dividends distributed by an equity mutual fund scheme are also currently complete exempt from tax, which makes dividend reinvest a viable option for investment into the scheme.
Plans and Options Available with HDFC Midcap Opportunities Fund
The HDFC Midcap Fund is offered in multiple variants for an individual investor. The broad classification is Direct Plan and Regular Plan. Additionally, each of these plans is available with options of dividend and growth.
Regular Plan: The regular plan sometimes referred to the retail plan is the most commonly available variant for individual investors. These can be opted for by an investor through a range of third party brokers and brokerage houses as well as from the HDFC Mutual Fund AMC. The regular plan features a slightly higher expense ratio as compared to the direct plan. Hence the unit NAV, as well as returns offered, may be slightly lower than those offered by the direct plan.
Direct Plan: The direct plan of the HDFC Midcap Opportunities Fund is available to investors choosing to invest directly with the HDFC Mutual Fund AMC. This plan features a lower expense ratio along with a slightly higher NAV and investors can look forward to marginally higher returns in this case as compared to the regular plan. This is plan can be availed by an investor through the online as well as the offline route.
Growth Option: The growth option is available to investors of both the direct plan and the regular plan of the HDFC Midcap Opportunities Fund. In the case of this variant, the investor does not receive a dividend even if there are profits or distributable surplus available with the fund. Any and all such profits of the scheme are invested back into the scheme to increase the NAV of the fund as well as the AUM or assets under management. The growth option is considered ideal for investors seeking long-term capital appreciation at the time of redemption/switching the mutual fund units.
Dividend Option: The dividend option provides investors with a payout depending on the profits made and distributable surplus available with the scheme. The payouts do lead to a decrease in the NAV of the mutual fund units specifically because they are calculated on the basis of the individual mutual fund units. This makes the dividend option slightly less viable for investors seeking medium to long term capital gains. There are two variants of the dividend option – dividend reinvests and dividend payout. In the case of payout the dividend declared is sent to the investor either through cheque or bank transfer. In the case of dividend reinvest, the dividend earned is automatically converted into units of equal value and added to the existing number of units available to the investor.
Top Holdings of the HDFC Midcap Opportunities Fund
In the following table we have a list of the top equity holdings of the HDFC Midcap Opportunities Fund *:
|Investment Sector||Top Holdings|
|Banking and Financial Services||IndusInd Bank, Yes Bank, Federal Bank, Indian Bank, Punjab National Bank, Bank of Baroda, Cholamandalam Investment and Finance Company, Axis Bank, Bajaj Finance, City Union Bank, Power Finance, Union Bank, Karur Vysya Bank, Capital First, Allahabad Bank, Delta Corp, etc.|
|Engineering and Capital Goods||Adani Ports and Special Economic Zone, Carborundum Universal, SKF India, Lakshmi Machine, FAG Bearings, Cummins, Havells India, AIA Engineering, Sadbhav Engineering, Grindwell Norton, Thermax, KEC International, CG Power and Industrial Solutions, etc.|
|Pharmaceuticals||Aurobindo Pharma, Torrent Pharma, IPCA Labs, Divis Labs, Strides Shasun, Wockhardt, etc.|
|Chemicals||UPL, Aarti Industries, Atul, Solar Industries India, Dhanuka Agritech, etc.|
|Oil and Gas||Hindustan Petroleum Corporation Limited, Petronet LNG, Oil India, etc.|
|Information Technology||Hexaware Technologies, Redington (India), NIIT Technologies, Oracle Financial Services Software, Persistent Systems, eClerx Services, etc.|
|Manufacturing||Sundram, Bharat Electronics, Supreme Industries, Vardhman Textiles, Max Financial Services, Huhtamaki PPL, etc.|
|Automotive||Balkrishna Industries, Madras Rubber Factory, Exide India, Apollo Tyres, etc.|
|Miscellaneous||Tube Investment, Voltas, VST, Navneet, Blue Star, Trent, Jagran Prakashan, KNR Construction, Greenply Industries, Whirlpool, DB Corporation, Greenlam Industries, Mahindra Holidays, Bata India, Zee Entertainment, etc.|
*The above list is for illustrative purposes only and is subject to periodic change.
How to Invest through Paisabazaar.com
Paisabazaar.com offers a free, powerful and very easy to use investment platform that allows you to make mutual fund investments from the comfort of your home or office. The platform operates throughout the day and we have dedicated well-trained support personnel to help you make the best possible financial decisions for you. Our portal is interlinked with the Aadhar-based eKYC system, which ensures that you can get your account set up in minutes and start investing in order to make your wealth grow. The payment for your investment can be made online through the net banking platform offered by major Indian Banks.