Performance review: HDFC Infrastructure Fund
Launched in March 2008, HDFC Infrastructure Fund is a sectoral offering from HDFC Mutual Fund. The objective of the scheme is to invest predominantly in a diversified portfolio of equity and equity-related securities of companies, which are either engaged in or expected to benefit from the growth and development of the infrastructure space. Having said, the scheme may also invest up to 35 per cent of the fund in non-infrastructure-related companies. In this article, we are going to review the performance of this scheme.
Source: Value Research
Source: Value Research
As we can see from the above graphs, in the first six-year period since its launch, it did well and performed better than the infrastructure sector index (S&P BSE India Infrastructure TRI). Having said, right from the beginning, it underperformed S&P BSE 500 Total Returns Index (TRI). In the next six-year period, that is, from May 2014 to December 2020, its performance started to deteriorate even when compared to S&P BSE India Infrastructure TRI. Though in the initial period, it was performing in-line with the indices but started to fade off post 2018.
In fact, its performance was nowhere near its peers and the benchmark. The table below would show you the same.
|
Trailing Returns (per cent)
|
|
Particulars
|
YTD
|
1-Year
|
3-Year
|
5-Year
|
7-Year
|
10-Year
|
|
HDFC Infrastructure Fund
|
-13.56
|
-13.00
|
-15.81
|
-3.50
|
5.37
|
0.54
|
|
S&P BSE India Infrastructure TRI
|
8.82
|
10.11
|
-5.75
|
5.45
|
7.13
|
4.35
|
|
Category
|
3.64
|
4.41
|
-4.61
|
5.64
|
11.49
|
5.20
|
The table above clearly shows that the performance of the scheme is quite poor compared to its category as well as S&P BSE India Infrastructure TRI. In fact, you would have been better off investing in S&P BSE India Infrastructure TRI index as in every trailing period, it was able to outperform the scheme.