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HDFC + HSBC SIP Reviews

December 16, 2008

We have been recommending SIPs in HDFC Funds and one HSBC Fund too. I am not sure how this review got slipped even though the required data was ready in Mid October.

The Sensex has been at the same levels when compard on Sept-30 of 2006 and Sept-30th of 2008 – 12,454 and 12,860 levels. So neat enough to compare the performance of fund managers ?

HDFC Equity Fund:
In Sept-06, 10 years SIP returns was 40.22%, while the same has fallen to 30.31% in Sept-08.

HDFC Top 200 Fund:
In Sept-06, 10 years SIP returns was 33.5%, while the same has fallen to 27.35% in Sept-08.

Now does this means the fund manager underperformed ? No, Not yet. What has happened is during the course of our SIP investments, we continued to BUY units when the SENSEX was 18,000, 20,000 etc. The carnage in the equity markets was really bad and personally I would have expected the fund manager to anticipate and move towards cash. However, he did not, but held on to Good Companies except ICICI Bank which has led to some under performance.

Here is the performance of other 3 funds at the end of Sept-08 and Sept-06,
HDFC Tax Saver Fund Growth – 2008 and 2006
HDFC Long Term Advantage Fund Growth – 2008 and 2006
HSBC Equity Fund Growth – 2008

HSBC Equity Fund is fairly new compared to the other four, but SIP should help one to get comparable returns in the long run as their fund manager is equally smart and experienced.

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