HDFC Corporate Debt Opportunities Fund: An Income Plan

HDFC Corporate Debt Opportunities Fund is a credit opportunities fund from HDFC Mutual Funds, which is aimed at providing the best income growth to the investors. Ranked “Third” in the “Credit-Opportunities Fund” category by CRISIL for the quarter ended in December 2016, one can evaluate the efficiency of the plan to generate the expected returns. Launched in 2014, this scheme has showcased tremendous performance until now, with its growth style of investing. The scheme has been categorised in the debt mutual funds category due to its nature of generating regular income.

This fund is best suited to the investors who are in the urge of regular income opportunities over medium- to long-term, and want to generate regular profits along with capital appreciation by investing predominantly in the corporate debts. So if you too are among those investors, then here is the brief synopsis of the scheme to help you understand its value for your portfolio and decide whether you should buy it or not.

HDFC Corporate Debt Opportunities Fund: Investment Details

The primary objective of the scheme is to generate regular income and capital growth with investments made in the corporate bonds. HDFC Corporate Debt Opportinuties Fund Growth  is an open-ended growth scheme which tends to endeavour the best growth opportunities to the investors over a period of time. The investors can make either a lump sum or a SIPs purchase in this plan as per their convenience. The minimum investment amount for a lump sum is Rs. 5000, and for making an additional purchase, Rs.1000 is the minimum value payable. Those who want to withdraw funds from their investments, they can redeem an amount equal to or more than Rs.500.

NAV of HDFC Corporate Opportunities Fund amounted to Rs.13.5294 as on March 27, 2017. The exit load of the scheme is chargeable in accordance with certain conditions, viz.:

  • 2% exit load is charged if the funds are redeemed or switched within twelve months of purchase.
  • 1% exit load is chargeable when the funds are redeemed or switched after twelve but before twenty-four months of purchase.
  • 0.5% exit load is charged when the funds are redeemed or switched after twenty-four but before thirty-six months of purchase.

The benchmark of the scheme against which its performance is measured is CRISIL Short Term Bond Fund. The fund manager of the scheme is Mr Shobhit Mehrotra who has adopted the strategic-investing technique for making the best use of investors’ money to let them earn higher returns from the market.

HDFC Corporate Debt Opportunities Fund(G): Performance Analysis

Though past performance does not guarantee future returns, the track record of the schemes is helpful in making a wise decision while considering their capacity of generating expected returns. The absolute annual returns of the scheme have been appreciable in the past three years since its inception. In 2014, the absolute profits were 9.8%, in 2015 they were 8.9% and in the year 2016, their absolute profits were 10.9%. Accordingly, you can analyse that the scheme is a good performer and providing high growth factors even in the initiating years of inception.

The annualised returns of the scheme for one- and three-year investment tenure are 9.80 and 10.50 percent respectively. The scheme is an outperformer in its category and against its benchmark due to which it is highly recommended by the experts. The investors can use the SIP returns calculator to compute the returns on its investment prior to investing.

HDFC Corporate Debt Plan(Growth): Portfolio Review

With an asset size amounting to Rs.10,739 crore as on February 28, 2017, the scheme has made diversified allotment of the funds across different debt instruments which are rated higher by the credit-rating agency. The instruments in which it has major investments are rated AA, A and below, AAA, cash equivalent. The total holdings of the scheme include the following:

  • 1.9.3% Tata International- Bonds
  • 2.8.7% Vedanta 2020- Debenture
  • 3.Tata Power- Bonds/NCDs
  • 4.4% HPCL Mittal Energy 2022- Debenture
  • 5.4% HPCL Mittal Energy 2021- Debenture
  • 6.9.25% Reliance Jio Info-comm 2024- Debenture

The scheme holds a diversified portfolio with a concentration of high-rated instruments which tend to provide greater returns to the investors over a period of time. The total number of securities held by the scheme as per the latest data available are 176. This shows that the fund has a strong market holding and can yield the expected profits easily.

So if you have the desire to earn higher profits on a regular basis from corporate bonds and debentures, then HDFC Corporate Debt Opportunities Fund is an apt choice for your portfolio. You must buy this fund to bring higher worth in your financial stability.

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