In the dynamic landscape of investment opportunities, technology funds have emerged as a popular choice for investors seeking exposure to the rapidly evolving tech sector. Among these funds, HDFC Technology Fund stands out as a compelling option, offering investors the potential for significant growth and diversification. In this comprehensive review, we will delve into various aspects of HDFC Technology Fund, including its share price performance, NAV (Net Asset Value), portfolio composition, growth options, and more.

About Fund

To provide long-term capital appreciation by investing predominantly in equity and equity related securities of Technology & technology related companies There is no assurance that the investment objective of the Scheme will be realized.

The HDFC Technology Fund Regular Growth has an AUM of 986.21 crores & has delivered CAGR of 0.00% in the last 5 years. The fund has an exit load of 1.00% and an expense ratio of 2.27%. The minimum investment in HDFC Technology Fund Regular Growth is Rs 100 and the minimum SIP is Rs 100.

As per morningstar the risk & return rating of the fund are – & – respectively.

The fund has a present cash holding of 3.45%. The top holdings of the fund include Infosys, Tata Consultancy Services, HCL Technologies & Bharti Airtel.

The major sectors where the fund is invested are Software & Programming, Computer Services, Communications Services & Computer Peripherals.

Some of the similar funds are SBI Technology Opportunities Fund Regular Growth, Franklin India Technology Fund Growth, HDFC Technology Fund Regular Growth, Quant Teck Fund Regular Growth, Kotak Technology Fund Regular Growth. HDFC Technology Fund Regular Growth has a sharpe ratio of 0.00 & a standard deviation of 0.00%.

HDFC Technology Fund Share Price and NAV Today

One of the primary considerations for investors when evaluating a mutual fund is its share price and Net Asset Value (NAV). The share price of HDFC Technology Fund reflects the market value of its units, which can fluctuate based on various factors such as market conditions, performance of underlying assets, and investor sentiment. On the other hand, NAV represents the per-unit value of the fund’s assets after deducting liabilities and expenses. As of today, HDFC Technology Fund has maintained a competitive share price and NAV, making it an attractive choice for investors looking to capitalize on the potential growth of the technology sector.

Fund type:

Equity

AUM (in crores):

₹ 986.21

Fund category:

Sector Funds

Fund manager(s):

Balakumar B

Benchmark:

S&P BSE TECk Index – TRI

Minimum investment:

₹ 100

Launch date:

08 Sep 2023

Min. additional investment:

₹ 100

Expense ratio:

1.01 %

Exit load:

1% on or before 30D, Nil after 30D

HDFC Technology Fund Review: Performance and Track Record

A critical aspect of assessing any mutual fund is its performance track record. HDFC Technology Fund has demonstrated strong performance over the years, delivering competitive returns to its investors. The fund’s investment strategy focuses on identifying opportunities within the technology sector, including companies involved in software development, IT services, e-commerce, telecommunications, and other technology-driven industries. This targeted approach has contributed to the fund’s success in generating value for investors and outperforming benchmark indices.

Investment objective & Benchmark

1. The investment objective of the fund is that ” The scheme seeks to provide long-term capital appreciation by investing predominantly in equity and equity related securities of Technology & technology related companies.”

2. It is benchmarked against S&P BSE Teck Total Return Index.

Asset Allocation & Portfolio Composition

1. The asset allocation of the fund comprises around 96.56% in equities, 0.0% in debts and 3.44% in cash & cash equivalents.
2. While the top 10 equity holdings constitute around 80.25% of the assets, the top 3 sectors constitute around 96.56% of the assets.
3. The fund largely follows a Growth oriented style of investing and invests across market capitalisations – around 0.0% in giant & large cap companies, 0.0% in mid cap and 0.0% in small cap companies.

Tax Implications on HDFC Technology Fund Direct – Growth

1. Gains are taxed at a rate of 15% (Short-term Capital Gain Tax – STCG) if units are redeemed within 1 year of investment.
2. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.
3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long-term Capital Gain Tax – LTCG).
4. For Dividend Distribution Tax, the dividend income from this fund will get added to the income of an investor and taxed according to his/her respective tax slabs.
5. Also, for dividend income in excess of Rs 5,000 in a financial year; the fund house shall deduct a TDS of 10% on such income.

HDFC Technology Fund NFO and Growth Options

When HDFC Technology Fund was initially launched during its New Fund Offering (NFO) phase, it attracted considerable attention from investors seeking exposure to the technology sector. The NFO phase allows investors to subscribe to units of the fund at an initial offering price, providing an opportunity to enter the fund early and benefit from potential future growth. Additionally, HDFC Technology Fund offers different growth options, including Direct Growth and Regular Growth, catering to investors with varying risk appetites and investment preferences.

Performance (As on 21 Mar 2024)

Investing Strategy:

• Performance: HDFC TECHNOLOGY FUND REGULAR PLAN IDCW REINVESTMENT trailing returns over different times are 0% (1 year), 0% (3 year), 0% (5 year). The average annual return of this fund stands at 0%, doubling the money invested in it every 4 years.
• Fund Manager & Portfolio Manager: Dhruv Muchhal, Balakumar B are the current fund managers of this mutual fund. The fund has a majority of its money invested in the top 5 holdings such as Infosys Ltd., Tata Consultancy Services Ltd., Bharti Airtel Ltd., HCL Technologies Ltd., Mphasis Ltd. holdings. First five sectors of this fund are Technology, Services, Communication.

HDFC Technology Fund Portfolio Composition

The strength of any mutual fund lies in its portfolio composition, and HDFC Technology Fund is no exception. The fund’s portfolio is carefully curated to include a diversified mix of high-potential technology stocks across market segments. This diversification helps mitigate risk while capturing the growth potential of various technology-driven industries. Some of the key sectors represented in HDFC Technology Fund’s portfolio include information technology, healthcare technology, fintech, artificial intelligence, cloud computing, and digital services.

Taxation

Short-term: Holding period is less than 12 months.

Taxation: Capital gains are taxed at 15%Long-term: Holding period is 12 months or more.

Taxation: Capital gains up to Rs 100,000 each financial year is tax-exempt. Remaining capital gains is taxed at 10%. For investments made on or before January 31st, 2018: Capital gain up to this date is tax-free.

Analyzing HDFC Technology Fund Direct Growth NAV

For investors opting for the Direct Growth option of HDFC Technology Fund, understanding the Net Asset Value (NAV) becomes crucial. NAV reflects the per-unit value of the fund’s assets and is calculated daily based on market prices. Investors in HDFC Technology Fund Direct Growth NAV benefit from lower expense ratios compared to Regular Growth, as there are no distributor commissions involved. This can potentially enhance overall returns for investors over the long term.

Portfolio

Top 10 stock holdings

Allocation (%)

Infosys Limited

21.37%

Tata Consultancy Services Ltd.

19.01%

HCL Technologies Ltd.

9.76%

Bharti Airtel Ltd.

9.35%

MphasiS Limited.

4.74%

Tech Mahindra Ltd.

3.72%

INFO EDGE (INDIA) LIMITED

3.47%

Firstsource Solutions Ltd.

3%

Zomato Ltd

2.92%

Redington Ltd.

2.91%

79.2%Top sectors in portfolio IT Telecom Others Retailing Trading Others – Calculated

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Conclusion: Is HDFC Technology Fund Worth Investing In?

In conclusion, HDFCTechnology Fund offers investors a compelling opportunity to tap into the growth potential of the technology sector. With a track record of strong performance, competitive share price and NAV, diversified portfolio composition, and multiple growth options, HDFC Technology Fund stands out as a worthy investment choice for those looking to capitalize on the evolving landscape of technology-driven industries. However, as with any investment decision, investors should conduct thorough research, assess their risk tolerance, and consult with financial advisors to determine if HDFC Technology Fund aligns with their investment goals and objectives.