HDFC Mid cap Opportunities – The fund with a problem

Who doesn’t know about HDFC Mid cap Opportunities fund? It is one of the star funds from the HDFC MF stable.

The fund started its journey in July 2007, almost at the height of the previous bull market. Its current fund managers are Chirag Setalvad and Rakesh Vyas.

The fund seems to have done really well. The regular plan of the fund boasts point to point returns of 28.63%, 20.95%, 26.26% and 17.82% for 1, 3, 5, and 10 years respectively. (see image below)

Compared to its benchmark, Nifty Free Float Midcap 100, the performance of which is 28.32%, 16.91%, 19.25% and 11.49% for the corresponding periods. The benchmark performance excludes dividends.

Even the expense ratio of the regular plan is one of the lowest in what most of its peers charge.

It has been an impressive streak of performance, no doubt.

Yet, every time an investor came asking for advice about this fund, I would say NO.

Why? Where’s the problem?

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