Investments can be considered in HDFC Premier Multi-Cap Fund given its improving scorecard and proven ability to stay ahead of its benchmark across market cycles.

While the fund did not quite have a dream start and had lagged its peers in returns earlier, its performance has seen a marked improvement since.

Over a five-year period, fund has clocked a compounded annualised return of 13 per cent, outpacing its benchmark CNX 500 by over three percentage points.

During the five-year period, it has outdone peers such as Franklin India Flexi Cap and Magnum MultiCap funds too.

Suitability : The fund's mandate to invest in blue-chips across the large and mid-cap universe of stocks makes it suitable for investors looking to build a midcap exposure in a measured manner.

While the ‘blue-chip only' exposure limits the fund's portfolio to fundamentally sound companies – a positive in uncertain times, it could also cap its returns potential as against other mid-cap peers in case of a secular rally.

The fund therefore makes a suitable addition for investors looking to just ‘get their feet wet' in midcaps.

Performance : HDFC Premier Multi-Cap has returned about 12 per cent and 13 per cent over one and three-year periods, comfortably surpassing its benchmark both the times.

It also scored over peers on a three-year and five-year horizon; Franklin India Flexi Cap, however, has outpaced the fund in the last year. Notably, the fund has a decent record of containing downsides. For instance, it fell less than the benchmark in the 2008 carnage. And that it managed this despite being fully invested in equity provides confidence.

A combination of well-timed stock and sector selection, besides a tactical move limiting midcap exposure to 30 per cent, helped the fund to arrest NAV slides then.

The fund's track record of participation in rallies however is a bit chequered. While it had lagged most peers in 2006 and 2007 rally, it managed to improve on that score post the 2008 correction.

From March 2009 lows to December that year, the fund delivered over 140 per cent, higher than most peers. Most funds during this period had failed to replicate the broad market in returns.

Portfolio : The fund's April portfolio, made of up 32 stocks, largely sports a large-cap exposure (56 per cent). Mid- and small-cap stocks account for 28 and 6 per cent respectively. It has, in the last few months, increased its cash exposure; currently at about 10 per cent. IT, media and banks make up its top three sectors.

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