First the caveat: Markets have run up sharply and the Sensex has rallied almost 50 per cent in the last one year. If you buy a mutual fund scheme like the HDFC Top 200, you would have to invest at a very high net asset value. In any case, if you are a long term investor, here are 5 reasons why we feel you could still get returns in the long term.
Super returns of 22 per cent since launch
Since its launch in 1996, the scheme has given returns slightly in excess of 22 per cent. Very few instruments across asset classes can deliver such kind of returns. In most cases it has outshone peers, thanks to some astute handling of its portfolio.
Blue chips in its bag
The fund has a solid portfolio comprising stocks like State Bank of India, Infosys, ICICI Bank, Larsen and Toubro, Tata DVR, ITC, Reliance Industries, etc. The mix of economy related stocks and defensives ensures that the portfolio is well balanced.
Riding the Sensex wave
The fund has beaten returns of the benchmark indices and has delivered a return of 66 per cent in the last one year. That's phenomenal by any standards.
Markets may continue to rally
Should the Indian markets continue to rally, the net asset value could rise considering that the company has high quality stocks, especially from the banking and defensive sectors.
Invest in small amounts
The fund offers a chance to invest through the Systematic Investment Plans (SIPs) in small sums as low as Rs 500. This offers investors the chance to look at regular investment through SIPS in small amounts.