Top MFs: HDFC Mid-Cap Opportunities Fund

Objective

HDFC Mid-Cap Opportunities Fund is a Mid Cap mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for around 15 years. The investment objective of the fund is to provide long-term capital appreciation/income by investing predominantly in Mid-Cap companies

Fund Highlights

HDFC Mid-Cap Opportunities Fund has ₹31,442 Crores worth of assets under management (AUM) as on December 31, 2021 and is medium-sized fund of its category.

The fund has an expense ratio of 1.73%, which is higher than what most other Mid Cap funds charge.

HDFC Mid-Cap Opportunities Fund-Growth returns of last 1-year are 37.28%. Since launch, it has delivered 16.52% average annual returns. The fund has doubled the money invested in it every 2 yrs.

It is benchmarked against NIFTY Midcap 100 Total Return Index.

Minimum investment required is Rs 5000 and minimum additional investment is Rs 1000. Minimum SIP investment is Rs 500.

Sector and Stock wise holding

The fund has the majority of its money invested in Financial, Engineering, Chemicals, Healthcare, Automobile sectors. It has taken less exposure in Financial, Engineering sectors compared to other funds in the category.

The fund's top 5 holdings are in Bharat Electronics Ltd., Cholamandalam Investment & Finance Co. Ltd., Balkrishna Industries Ltd., Max Healthcare Institute Ltd., Sundram Fasteners Ltd..

The fund largely follows a blend oriented style of investing and invests across market capitalisations - around 10.17% in giant & large cap companies, 77.71% in mid cap and 12.12% in small cap companies.

Returns

Its trailing returns over different time periods are: 41.33% (1yr), 19.23% (3yr), 15.26% (5yr) and 16.25% (since launch). Whereas, Category returns for the same time duration are: 47.69% (1yr), 22.14% (3yr) and 16.8% (5yr).

Tax Implications

1. Gains are taxed at a rate of 15% (Short-term Capital Gain Tax - STCG) if units are redeemed within 1 year of investment.

2. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.

3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long-term Capital Gain Tax - LTCG).

4. For Dividend Distribution Tax, the dividend income from this fund will get added to the income of an investor and taxed according to his/her respective tax slabs.

5. Also, for dividend income in excess of Rs 5,000 in a financial year; the fund house shall deduct a TDS of 10% on such income.

Fund Manager

HDFC Mid-Cap Opportunities Fund is managed by Chirag Setalvad and Amar Kalkundrikar. Chirag has been managing the fund since June 2007. Kalkundrikar manages the overseas assets.

Expert comment

HDFC Mid-Cap Opportunities Fund’s ability to deliver returns consistently is in-line with most funds of its category. Its ability to control losses in a falling market is below average. Investors with an investment horizon of three years and above may consider investing in HDFC Mid-Cap Opportunities Fund. The scheme is meant for investors with a moderate high risk tolerance and are seeking long-term capital appreciation and income.