Mutual funds are proving to be solid wealth creators for patient investors, and HDFC Capital Builder Value Fund is a shining example. Launched on February 1, 1994, this open-ended equity scheme has rewarded investors handsomely, converting a monthly Systematic Investment Plan (SIP) of just Rs. 2,000 into a corpus of Rs. 2.12 crore over 30 years.
Alongside SIPs, lump sum investments have also grown significantly, with Rs. 1 lakh invested at launch now valued at Rs. 76.41 lakh. This multi-cap value fund showcases how long-term investing can multiply wealth.
What Makes HDFC Capital Builder Value Fund Successful?
The scheme follows a value investing strategy, focusing on buying undervalued stocks trading below their fair value. It spreads its investments across companies with low P/E (Price-to-Earnings) or P/B (Price-to-Book) ratios relative to the benchmark, NIFTY 500 Total Returns Index.
To manage risk, the fund applies sectoral diversification, investing across industries such as financial services, IT, healthcare, FMCG, and automobiles. This diversification ensures a balanced portfolio that reduces exposure to market fluctuations.
The scheme’s multi-cap approach means it invests in large, mid, and small-cap companies, giving investors exposure to different segments of the market.
How Rs. 2,000 SIP Became Rs. 2.12 Crore
If you had invested Rs. 2,000 per month through SIP since the fund’s inception 30 years ago, the total investment would amount to Rs. 7.2 lakh. With an annualized return of 18.11%, the final value would be Rs. 2.12 crore, according to Value Research’s SIP calculator.
Key SIP Details:
- Monthly SIP: Rs. 2,000
- Investment Period: 30 years
- Total Investment: Rs. 7.2 lakh
- Fund Value: Rs. 2.12 crore
- Annualized Return: 18.11%
76x Growth with One-Time Investment
The scheme has also performed well for lump sum investors. A Rs. 1 lakh investment made 30 years ago would have grown to Rs. 76.41 lakh, delivering a 76x return. This highlights the fund’s ability to generate consistent wealth over the long run, thanks to its value-based stock selection strategy.
Past Performance (CAGR):
- 1 Year: 48.00%
- 3 Years: 21.12%
- 5 Years: 22.55%
- 10 Years: 15.53%
- Since Launch: 15.18%
Portfolio and Top Holdings
As of September 2024, the fund holds 66.8% of its equity portfolio in large-cap stocks, 13.7% in mid-cap stocks, and 19% in small-cap stocks.
Top 10 Equity Holdings:
- ICICI Bank: 6.62%
- HDFC Bank: 6.37%
- Bharti Airtel: 5.13%
- Infosys: 4.52%
- Axis Bank: 3.99%
- NTPC: 3.49%
- State Bank of India: 3.30%
- Sun Pharma: 2.69%
- L&T: 2.56%
- HCL Technologies: 2.28%
Fund Details at a Glance
- Fund Type: Value Fund
- AUM (as of Sept 2024): Rs. 7,883.25 crore
- Minimum SIP Amount: Rs. 100
- Expense Ratio (Regular Plan): 1.83%
- Expense Ratio (Direct Plan): 0.97%
- Benchmark: NIFTY 500 Total Returns Index
- Fund Manager: Anand Laddha (since Feb 1, 2024)
Who Should Invest in This Fund?
HDFC Capital Builder Value Fund is ideal for investors with a long-term horizon and a high-risk appetite, as it focuses on equities that may fluctuate in the short term but can deliver substantial returns over time. Investors looking to build wealth through value investing will find this fund suitable.
However, like any equity mutual fund, the scheme’s returns are subject to market risks. Past performance does not guarantee future returns, and investors should consult their financial advisor before making any investment decisions.
Exit Load and Other Conditions
- Exit within 1 year: 1.00%
- Exit after 1 year: No charge
HDFC Capital Builder Value Fund continues to demonstrate that discipline and long-term investment can lead to significant wealth accumulation, making it a reliable choice for those willing to stay invested through market cycles.
