HDFC Banking & Financial Services Fund

The HDFC Banking & Financial Services Fund is a sectoral equity scheme launched on 1st July 2021 by HDFC Mutual Fund.

The HDFC Banking & Financial Services Fund invests in a diverse range of companies within the banking and financial services sector, including banks, NBFCs, life insurance companies, non-life insurance companies, housing finance companies, and capital market players. It is managed by Anand Laddha and Priya Ranjan.

The scheme’s objective is to achieve long-term capital appreciation by investing in equity and related securities of companies engaged in banking and financial services. It aims to achieve its objective by investing in companies that are market leaders or growing their market share through superior execution, scale, and better adoption of technology.

The HDFC Banking & Financial Services Fund invests at least 80% of its assets in equity and related instruments. It has the flexibility to invest up to 20% of its assets in debt, money market instruments, non-convertible preference shares, fixed-income derivatives, REITs, and InvITs.

Pros & Cons

How to invest in HDFC Banking & Financial Services Fund?

5paisa makes it simple and convenient for users to invest in the HDFC Banking & Financial Services Fund Direct-Growth. The procedure is straightforward, can be finished quickly, and does not include any paperwork at any point. Invest a few minutes in carrying out the steps listed below:

Step 1: Log in to your 5Paisa Account. In case you do not have one, click the link to register and create a new 5Paisa account in 3 easy steps. Alternatively, you can also download the 5Paisa app on your smartphone for Android or IOS and log in from your device.

Step 2: Search for the HDFC Mutual Fund scheme that you wish to invest in

Step 3: Select the suitable option as per your specific requirement and risk appetite

Step 4: Select the investment type from SIP (Systematic Investment Plan) or Lumpsum investment

Step 5: Put the amount that you’d like to invest and proceed with the payment option by clicking on the ‘Invest Now’ button

This completes the investment process on the 5Paisa platform. Once your payment is successfully debited, you can see the HDFC Mutual Fund reflected in your 5Paisa account In approximately 3-4 working days. If you selected the SIP option, the amount chosen will get deducted every month starting from the date you made the initial payment.

What is the expense ratio of the HDFC Banking & Financial Services Fund?

When referring to the HDFC Banking & Financial Services Fund Direct-Growth or any other mutual fund, the word “Expense Ratio” refers to the fund’s annual operating expenses as a percentage of its total assets, which can impact a scheme’s returns for investors. A lower expense ratio usually means the fund is less costly and may generate higher returns for the investors.

Who should invest in HDFC Banking & Financial Services Fund?

The HDFC Banking & Financial Services Fund is suitable for investors seeking long-term capital appreciation through investment in equity and equity-related instruments. The scheme is specifically designed for investors interested in the banking and financial services sector and looking to invest in companies operating in this sector.

The scheme has outperformed the NIFTY Financial Services TRI in the past year. Since its inception, it has had a historical annualised growth rate of 7.8% as measured by its Compound Annual Growth Rate (CAGR).

The HDFC Banking & Financial Services Fund is appropriate for investors with a long-term investment horizon of at least 3 years. Investors seeking to invest in the scheme should not be risk-averse as the performance of the fund is heavily influenced by the performance of the banking and financial services sector, which can be more volatile than the overall market.

What are the benefits of investing in the HDFC Banking & Financial Services Fund?

● One benefit of investing in HDFC Banking & Financial Services Fund is the favourable growth trend of India’s banking and financial services sector. The sector has grown faster than the country’s nominal GDP over the last two decades, providing an attractive investment opportunity for those interested in this sector.
● The scheme has outperformed its benchmark and category average in the last year.
● Investing in HDFC Banking & Financial Services Fund provides the opportunity to benefit from the low penetration and increasing adoption of financial services in India.
● It is managed by one of India’s largest asset management companies, HDFC Asset Management Company, with a strong track record, extensive resources, and a deep pool of investment expertise.
● The HDFC Banking & Financial Services Fund has a suggested investment period of 3 years compared to the typical 5 years for most other funds. This shorter suggested investment horizon can provide greater flexibility for investors who may need to access their funds sooner or with a shorter investment horizon.