Considering an investment in mid-cap funds? Read on for a quick HDFC Mid Cap Opportunity Fund review.

The fund has had a spectacular growth curve since its inception in 2007. From an AUM of just Rs. 3000 crores in 2014, it has crossed Rs. 22,000 crores in just five years. This 700% growth rate makes it one of the fastest-growing funds in the Indian mutual fund space.

Fund’s portfolio allocation strategy

The fund invests across multiple sectors. The top three being - Financial (22%), Chemical (11%) and Engineering (10%). The portfolio allocation strategy centres around stocks with:

·       Sustainable business model

·       Robust growth potential

·       Reasonable valuation

Life is a roller coaster. The same can be said for the journey of the fund too. Just like any other mid-cap fund, it has witnessed great highs as well as lows. For instance, in 2008 when the global economy was going through a weak phase, the fund’s value went down by 51%. However, it bounced back the next year with a 95% growth.

The USP of this fund is the constant monitoring of the portfolio by the fund managers. They continuously re-jig the allocation basis the market sentiments. For instance, they have brought down the allocation in the automobile sector from 16% in 2018 to 6% this year, due to the slump in the industry. Changes like these have enabled the fund to have a well-diversified portfolio in sync with the economic scenario.

Performance so far…

The HDFC Mid Cap Opportunity Fund review will remain incomplete without the performance numbers. A performance like a salary can never be only looked in absolute terms. It is always relative. So, we will compare the performance of the fund with other available investment opportunities. Assuming we invested Rs. 10,000 in 2007, here is what it would grow to in different options:

 Final Verdict

Investors who want to reap the benefits of a fund with a well-defined investment approach should definitely invest in this fund. It has the armour to battle tough times along with the foresight of when to take higher risks and generate superior returns. And most importantly, stay invested for a longer duration to make the best out of the investment.