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HDFC Prudence Fund Review

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HDFC Prudence Fund Review

A hybrid mutual fund which is also known as a balanced fund is one of the mutual fund schemes that is characterized by diversification amongst two or more asset classes. These funds usually invest in a mixture of bonds or stocks. They are also known as ‘Asset Allocation Funds’.  

Hybrid Equity Oriented Funds allocate 65%-80% of a fund to equity & assign remaining to debt and similar instruments. Therefore, HDFC Prudence Fund is the right example for this. Also, these funds allow you to enjoy low-risk rates and good returns as per their significant allocation in debt funds. If you are looking to moderate your risk with a fair return under high-risk portfolio.  

HDFC Prudence Fund – Review 

HDFC Prudence Fund is considered as one of the best mutual funds; It is ranked 3 in the balanced category by CRISIL. Talking about its return, then the fund has returned an excess of almost 19% plus since its launch.  

Looking forward to investing? Open an account with Gulaq and start investing in Direct Mutual Funds with ZERO commission.  

In the year 2016, the fund started attracting investors due to its dividend payout policy. Since, January 2016 the fund has been paying a dividend of 0.3 every month which means- A yield of 12% p.a. on a face value of INR 10.  

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A Quick Read 

Minimum SIP  INR 500 
Fund Category  Hybrid: Equity Oriented 
Turnover  61% 
Risk Level  High 

Source: groww.in

Investing in HDFC Prudence Fund is a Good Decision? 

The 23rd year old fund invests in a mixture of debt and equity. It has a stellar long-time performance record with a 10year return of 16.87%. Whilst its peers gave an average of 12.47% return & its benchmark, CRISIL Balanced Fund Aggressive of 10.85%.  

In spite of its phenomenal performance over the years, the fund has shown low strength in recent years. Though, it has adopted a lot more aggressive approach as compared to its peers falling under the same category. Managed by Prashant Jain, one of the best fund managers; It has a very high-risk component; therefore, the fund volatility is on the higher side.  

To summarize, this fund is not appropriate for conservative investors.  

Applicable Charges, if any? 

Here: 

  • ENTRY: NO entry load 
  • EXITAn exit load of 1% for redemption within 365 days. 
  • EXPENSE RATIO: The fund has an expense ratio of 2.26% 

Entry Mode? 

It is the job of the fund manager who needs to decide the right time to enter the market. The investor just needs to decide the fund & amount he/she wants to invest. 

Exit Mode? 

Withdrawing of money can be done only when your goals are achieved. Make sure you don’t panic & withdraw due to market fluctuations.  

Any Tax Implications? 

They are taxed as Equity Mutual Funds. Therefore, they attract a tax of 15% only if the investment is redeemed before a year & NIL after a year. 

For more information, hop on to www.gulaq.com or you can talk to the experts.  

 

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.

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