HDFC Equity’s Stock Selection Strategy

HDFC Equity Fund, one of the top performers in the Indian market has been around for 13 years now. [Originally from ITC Threadneedle then to Zurich and then into HDFC AMC] The silent and soft-spoken Sr. Fund Manager, Prashant Jain who rarely comments in the media has released a note celebrating 13 years of HDFC Equity Fund.

One thing that is worth noticing in the note is the stock selection procedure adopted by the company sticking to its internal process of “Avoiding the Big Mistakes” [ Real Estate, Brokerage Houses etc]. He further said,

Owning strong businesses, that are likely to grow earnings at above market rates. Focusing on long term prospects and valuations and ignoring short to medium term market aberrations i.e ignoring momentum stocks / stocks with excessive valuations if not justified by fundamentals. Remain diversified with exposure to mid-caps varying between a third to fourth of portfolio.

You can read the complete article by Mr. Jain here. [PDF]