The Money Today-Plexus Management new fund evaluation analyses the HDFC Infrastructure Fund and brings you the report.
Offer open: Till 21 February
Scheme type: 3-year closed-ended equity
Minimum investment: Rs 5,000 and multiples of Re 1 thereafter; unit price: Rs 10
Loads: Entry load: Nil, Exit load: Nil (after three years)
Options: Growth and dividend (reinvestment and payout)
Investor grievances: John Mathews. Tel: (022) 66316300. Fax: (022) 22821144. E-mail: cliser@hdfcfund.com
Objective: To seek long-term capital appreciation by investing in equity and equityrelated securities of companies engaged in or expected to benefit from the growth in the infrastructure sector.
Benchmark: S&P CNX 500
Fund manager: Prashant Jain and Srinivas Rao Ravuri
Asset allocation: 65-100% equity in infrastructure | 0-35% equity other than infrastructure | 0-35% debt
Comparable existing scheme:
Fund name: SBI Infrastructure Series 1
NAV* (Rs): 14.92
3-month return(%): 11.51
6-month return(%): 46.56
*NAV as on 15 January. Source: NAVIndia
Idea distiller: The rapid growth of the infrastructure sector has led many fund houses to pump money into the sector. There is a lot of opportunity and potential to encash on this growth.
Fund house report: HDFC Mutual Fund manages funds worth Rs 48,561 crore (as on 31 December 2007).
Track record:
Returns profile: 4/5 | Risk profile: 4/5
Fund manager report: Performance of fund manager
Returns profile: 5/5 | Risk profile: 3/5
Scheme DNA: Four fundamentals of the fund scheme
Unique idea: Medium
Return possibility: Medium
Risk: Medium
Operability/Complexity: High
Who should apply: With many funds seeing opportunity in infrastructure, the sector is getting crowded. But this is a Prashant Jain fund and can be expected to generate good returns. Invest if you are a late entrant to make the most of this sector, but have the patience to wait for three years.
Remember: The infrastructure story sounds similar to the technology story, so make sure you keep an eye on the warning signals. The sector is not as disciplined as some of the better organised ones such as steel, but the fund house and manager have an impeccable track record.
