HDFC Large and Mid Cap Fund SIP : Magic of Compounding :More than Rs 1 crore was accumulated by investing just Rs 2000 per month! This is the magic of compounding, a great example of which is a 30-year-old scheme of HDFC Mutual Fund. This scheme named HDFC Large and Mid Cap Fund has transformed a monthly Systematic Investment Plan (SIP) of Rs 2000 into a fund of Rs 1 crore 20 lakh in 30 years. Not only this, if someone had invested Rs 1 lakh at the beginning of the scheme, then that amount would have become around Rs 45 lakh by now. We will see its complete calculation later, but before that let us know the main points of this scheme of HDFC Mutual Fund.
What is special about HDFC Large and Mid Cap Fund
HDFC Large and Mid Cap Fund is an open-ended equity scheme that invests in large and mid cap stocks. The fund aims to generate capital appreciation in the long term. The fund was launched on February 18, 1994 and since then it has given an average annual return of 13.31%. The average annualised return of this fund in the last 30 years has been 15.35%. The assets under management (AUM) of this fund is Rs 23,712.31 crore as of August 31, 2024, making it a strong fund. Initially it was a large cap fund, named HDFC Growth Opportunities Fund. On 23 May 2018, it was changed to Large and Mid Cap Fund. After this, on 28 June 2021, the name of this fund was also changed to HDFC Large and Mid Cap Fund.
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This is how a fund of Rs 1.20 crore was created
Here is the calculation of how HDFC Large & Mid Cap Fund converted the previous monthly SIP of Rs 2000 into Rs 1.20 crore:
- Name of the Scheme:HDFC Large and Mid Cap Fund (Regular Plan)
- Monthly SIP amount: Rs 2000
- Investment period: 30 years
- Total Investment in 30 Years:Rs 7,20,000
- Annualized return on SIP over 30 years: 15.35%
- Fund Value of SIP Investment after 30 Years: ₹1,20,83,038 (Rs 1.20 crore)
Also read: HDFC Mutual Fund’s retirement plan gave the best return in 5 years, this is how a fund of Rs 16 lakh was created with an SIP of Rs 10,000
Highlights of the scheme
, Investment Objective:Long Term Capital Growth
, Risk Level:Very High
, Benchmarks: NIFTY Large Midcap 250 TRI
, Expense Ratio (Regular Plan): 1.66%
, Fund Manager:Gopal Agarwal, (over 17 years of experience in fund management)
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Portfolio and Asset Allocation of the Fund
HDFC Large & Mid Cap Fund’s portfolio is spread across several large and mid cap companies. Its top 10 holdings include leading banks and IT companies, making it a strong and stable fund.
Top 10 holdings of the scheme
- HDFC Bank : 4.71 %
- ICICI Bank : 3.58 %
- State Bank of India : 1.83 %
- Infosys Limited : 1.76 %
- Axis Bank : 1.72 %
- Indusind Bank : 1.61 %
- Larsen & Toubro : 1.59 %
- Reliance Industries : 1.57 %
- Trent Limited: 1.38 %
- Power Finance Corporation : 1.37 %
Asset Allocation
- Equity: 97.67% (Large Cap: 63.49%, Mid Cap: 33.94%, Small Cap: 2.57%)
- Real estate: 0.38%
- Cash: 1.95%
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Who should invest?
This fund is suitable for investors who want to invest for the long term. For this, the investment period should be more than 5 years so that good returns can be obtained despite market fluctuations. This fund invests in large and mid cap companies, which gives investors the benefit of diversification in different segments of the market.
Also consider these things
This fund is not suitable for investors who are investing for a period of less than 5 years. The risk level of the fund is very high, so check your risk taking capacity before investing. SIP is considered a better way to invest in equity funds, as it provides the benefits of both averaging (Rupee Cost Averaging) and compounding in a better way.
(Disclaimer: The purpose of this article is only to provide information, not to recommend investment in any scheme. Past returns of equity mutual funds cannot be considered as a guarantee of similar performance in future. Take any investment decision only after getting complete information and taking advice from your investment advisor.)
