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Fincash » HDFC Balanced Fund Vs HDFC Prudence Fund

HDFC Balanced Fund Vs HDFC Prudence Fund

Updated on June 22, 2022 , 1901 views

HDFC Balanced Fund and HDFC Prudence Fund both belong to the same Fund house, HDFC Mutual Fund. Both the schemes belong to hybrid category equity oriented schemes. These schemes invest their corpus in both equity as well as debt instruments. However, since they are equity-based schemes under balanced category; they invest more in equity instruments as compared to fixed Income instruments. Though both the funds belong to the same fund house, however; they exhibit different characteristics with respect to AUM, their current NAV, returns, and many other related parameters. So, let us understand the differences between HDFC Balanced Fund and HDFC Prudence Fund through this article.

Overview of HDFC Balanced Fund (Merged with HDFC Hybrid Equity Fund)

HDFC Balanced Fund, which is now merged with HDFC Hybrid Equity Fund, is a part of HDFC Mutual Fund under Balanced Fund category. It is an open-ended balanced fund scheme that was launched on September 11, 2000. The objective of the scheme is to generate long-term Capital appreciation along with current income by Investing in a mix of equity and debt instruments. The scheme is suitable for investors who are looking out for long-term capital growth along with current income. HDFC Balanced Fund uses CRISIL Balanced Fund Index along with Nifty 50 Index to construct its portfolio.

As on January 31, 2018, the top constituents forming part of the HDFC Balanced Fund’s portfolio include HDFC Bank Limited, Infosys Limited, ICICI Bank Limited, Axis Bank Limited, and Tata Steel Limited.

The scheme invests around 40% - 60% of its accumulated fund money in equity instruments while the rest in debt instruments.

About HDFC Prudence Fund (Merged with HDFC Balanced Advantage Fund)

HDFC Prudence Fund, now merged with HDFC Balanced Advantage Fund, is also a part of HDFC Mutual Fund and was launched on February 01, 1994. It is an open-ended scheme whose investment objective is to periodic returns along with capital appreciation by investing in a proper mix of equity and debt instruments. This scheme based on its in-line objective invests around 40-75% of its corpus in equity instruments and the remaining funds in Fixed Income instruments. HDFC Prudence Fund is suitable for investors looking out for periodic income combined with a capital appreciation and preventing capital erosion over long-term.

As on January 31, 2018, some of the top 10 constituents of HDFC Prudence Fund’s portfolio include State Bank of India, Larsen & Toubro Limited, NTPC Limited, and Vedanta Limited.

HDFC Balanced Fund Vs HDFC Prudence Fund

Though both the funds belong to the same fund house and same category yet; there exists a difference between them with respect to AUM, current NAV, Fincash Ratings and much more. These differences are divided into four sections, namely, Basics Section, Performance Section, Yearly Performance Section, and Other Details Section. So, let us understand the differences between both the funds based on these sections.

Basics Section

The various comparable parameters in case of basics section are Scheme Category, Fincash Ratings, Current NAV, AUM, expense ratio, and many more. To begin with the Scheme Category, it can be said that both the schemes belong to the same category that is, Hybrid Balanced – Equity.

In Fincash Ratings, we can say that HDFC Balanced Fund is rated as 5-Star, while HDFC Prudence Fund is rated as 3-Star.

The table given below summarizes the elements of this section.

Parameters
BasicsNAV
Net Assets (Cr)
Launch Date
Rating
Category
Sub Cat.
Category Rank
Risk
Expense Ratio
Sharpe Ratio
Information Ratio
Alpha Ratio
Benchmark
Exit Load
HDFC Hybrid Equity Fund
Growth
Fund Details
₹74.022 ↑ 0.54   (0.73 %)
₹17,762 on 31 May 22
6 Apr 05
Hybrid
Hybrid Equity
57
Moderately High
1.79
0.41
0
0
Not Available
0-1 Years (1%),1 Years and above(NIL)
HDFC Balanced Advantage Fund
Growth
Fund Details
₹276.759 ↑ 1.36   (0.49 %)
₹43,836 on 31 May 22
11 Sep 00
Hybrid
Dynamic Allocation
23
Moderately High
1.66
1.01
0
0
Not Available
0-1 Years (1%),1 Years and above(NIL)

Performance Section

This section compares the CAGR or Compounded Annual Growth Rate for both the schemes at various time periods. Some of the time periods for which the performance is compared are 1 Month Returns, 6 Month Returns, 1 Year Returns and Returns Since Inception. On a hindsight, we can say that there is not much difference on the returns generated by both the schemes. In certain time periods, the returns generated by HDFC Balanced Fund is higher while in other HDFC Prudence Fund leads the race. The table given below shows the CAGR performance of both the schemes.

Parameters
Performance1 Month
3 Month
6 Month
1 Year
3 Year
5 Year
Since launch
HDFC Hybrid Equity Fund
Growth
Fund Details
-2%
-5.9%
-4.7%
1.7%
10.7%
9%
15.1%
HDFC Balanced Advantage Fund
Growth
Fund Details
-1.4%
-2.6%
2.2%
8%
10.7%
9.4%
17.7%

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Yearly Performance

Yearly performance between both the schemes compares the absolute returns generated by each scheme for a particular year. In case of yearly performance, there is not much difference between the returns generated between both the schemes. The summary of yearly performance section is tabulated as follows.

Parameters
Yearly Performance2021
2020
2019
2018
2017
HDFC Hybrid Equity Fund
Growth
Fund Details
25.7%
13.4%
7.5%
-2.8%
27.5%
HDFC Balanced Advantage Fund
Growth
Fund Details
26.4%
7.6%
6.9%
-3.1%
27.9%

Other Details Section

This is the last section of comparing funds. The comparable parameters that form part of Other Details Section include Minimum SIP and Lumpsum Investment. Being a part of the same fund house, the Minimum SIP and Lumpsum Investment for both HDFC Balanced Fund and HDFC Prudence Fund are the same. Here, the Minimum SIP investment is INR 500 while the lumpsum investment is INR 5,000.

Mr. Rakesh Vyas and Mr. Prashant Jain are the fund managers for HDFC Balanced Fund scheme.

Mr. Rakesh Vyas and Mr. Prashant Jain together are the fund managers of HDFC Prudence Fund.

The table given below summarizes the other details section.

Parameters
Other DetailsMin SIP Investment
Min Investment
Fund Manager
HDFC Hybrid Equity Fund
Growth
Fund Details
₹300
₹5,000
Chirag Setalvad - 15.18 Yr.
HDFC Balanced Advantage Fund
Growth
Fund Details
₹300
₹5,000
Prashant Jain - 18.96 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
HDFC Hybrid Equity Fund
Growth
Fund Details
DateValue
31 May 17₹10,000
31 May 18₹10,804
31 May 19₹11,533
31 May 20₹9,580
31 May 21₹15,086
31 May 22₹16,093
Growth of 10,000 investment over the years.
HDFC Balanced Advantage Fund
Growth
Fund Details
DateValue
31 May 17₹10,000
31 May 18₹10,418
31 May 19₹11,649
31 May 20₹9,089
31 May 21₹14,378
31 May 22₹16,230

Detailed Assets & Holdings Comparison

Asset Allocation
HDFC Hybrid Equity Fund
Growth
Fund Details
Asset ClassValue
Cash8.94%
Equity72.7%
Debt18.36%
Equity Sector Allocation
SectorValue
Financial Services25.63%
Industrials12.75%
Technology8.1%
Energy7.44%
Consumer Defensive3.91%
Basic Materials3.54%
Utility3.1%
Communication Services2.82%
Health Care2.74%
Consumer Cyclical2.21%
Real Estate0.46%
Debt Sector Allocation
SectorValue
Government9.96%
Cash Equivalent8.94%
Corporate8.4%
Credit Quality
RatingValue
AA20.74%
AAA79.26%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Nov 10 | ICICIBANK
8%₹1,397 Cr18,800,000
↑ 1,400,000
Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 18 | RELIANCE
6%₹1,025 Cr3,675,000
Infosys Ltd (Technology)
Equity, Since 31 Jan 03 | INFY
5%₹881 Cr5,623,368
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Aug 13 | HDFCBANK
4%₹817 Cr5,900,000
↓ -870,000
State Bank of India (Financial Services)
Equity, Since 31 Oct 11 | SBIN
4%₹774 Cr15,597,000
Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Nov 11 | LT
4%₹762 Cr4,500,000
ITC Ltd (Consumer Defensive)
Equity, Since 31 May 15 | ITC
4%₹695 Cr26,767,500
Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 30 Nov 16 | HDFC
4%₹669 Cr3,000,000
4.26% Govt Stock 2023
Sovereign Bonds | -
3%₹572 Cr57,500,000
Axis Bank Ltd (Financial Services)
Equity, Since 30 Apr 15 | AXISBANK
3%₹528 Cr7,250,000
Asset Allocation
HDFC Balanced Advantage Fund
Growth
Fund Details
Asset ClassValue
Cash9.35%
Equity68.26%
Debt22.4%
Equity Sector Allocation
SectorValue
Financial Services25.31%
Industrials9.32%
Energy8.97%
Utility8.77%
Consumer Defensive3.45%
Health Care3.19%
Communication Services2.37%
Real Estate2.17%
Technology1.86%
Consumer Cyclical1.77%
Basic Materials1.01%
Debt Sector Allocation
SectorValue
Government18.17%
Cash Equivalent9.35%
Corporate4.23%
Credit Quality
RatingValue
AA13.29%
AAA86.71%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
State Bank of India (Financial Services)
Equity, Since 31 May 07 | SBIN
8%₹3,673 Cr74,007,351
↓ -7,981,058
Coal India Ltd (Energy)
Equity, Since 31 Jan 18 | COALINDIA
5%₹2,282 Cr124,787,984
NTPC Ltd (Utilities)
Equity, Since 31 Aug 16 | NTPC
5%₹2,269 Cr145,276,536
↓ -17,185,711
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK
5%₹2,037 Cr27,406,000
182 Dtb 12102022
Sovereign Bonds | -
4%₹1,962 Cr200,000,000
↑ 200,000,000
91 Dtb 13072022
Sovereign Bonds | -
4%₹1,597 Cr161,000,000
↑ 161,000,000
ITC Ltd (Consumer Defensive)
Equity, Since 30 Apr 18 | ITC
3%₹1,518 Cr58,495,082
↓ -7,300,000
4.68% Govt Stock 2034
Sovereign Bonds | -
3%₹1,458 Cr150,000,000
↑ 150,000,000
Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Jun 12 | LT
3%₹1,352 Cr7,980,415
↓ -263,333
Power Finance Corp Ltd (Financial Services)
Equity, Since 30 Apr 17 | PFC
2%₹1,077 Cr91,445,390
↓ -8,223,655

Thus, from the above pointers, it can be said that both the schemes are different in case of various parameters though they belong to the same category and fund house. Therefore, individuals should always do a detailed study about a scheme before investing in it. They should check whether the fund’s objective is in-line with their objective. If required, people can consult a financial advisor for advice. This will ensure that their investment is safe and it paves way for wealth creation.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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