HDFC Select Equity

Yet another "Same But Different" NFO.
Same because of its investment mandate and strategy. Different only by its name.


At a time when fund houses are trying to go one-up on each other by launching unique and different mutual funds, HDFC Mutual Fund has decided to stick to the much tried and tested route. The AMC has filed an offer document with SEBI for its eighth open-ended equity fund.

And hence, HDFC Select Equity will be another plain vanilla equity offering. The fund’s investment strategy is similar to some other funds offered by the same AMC and a lot many others offered by other fund houses. The fund will invest at least 65 per cent of its assets in equity oriented, well managed companies with a proven track record. An upper limit of 35 per cent has been kept for investments in debt, including securitized debt. And of course, the fund has the flexibility of investing across sectors and market capitalizations.

The fund will be benchmarked against BSE 200 and will the third open-ended equity scheme from the HDFC family to have the same benchmark. The other two funds are HDFC Core & Satellite and HDFC Top 200.

During the NFO period, investments of less than one crore will attract an entry load of 2.25 per cent while the ones above one crore will be exempted from entry load. An exit load of two per cent will be charged if the redemption is made before one year, one per cent if redeemed after one year but before two years, while no load will be charged on redemptions after two years.

I feel you are better off by investing in an existing Fund from the same Fund House like HDFC Growth Fund or HDFC Equity Fund.