This edition of the fund performance report looks at the HDFC Children’s Gift Fund. Launched in Mar 2001, the fund has an AUM of over 6,000 Crores. In Oct 2017, HDFC MF merged HDFC Children’s Gift Fund Savings Plan into HDFC Children’s Gift Fund Investment Plan and then renamed the resulting fund as HDFC Children’s Gift Fund. This is an open-ended fund for investment for children having a lock-in for at least five years or till the child becomes a major. (whichever is earlier).
Disclaimer: Fund performance reports present return and risk analysis of a fund with representative benchmarks and not investment recommendations. It must be expressly understood that the data below reflect only past performance and is in no way an indication of future performance. Our investment recommendations are Handpicked List of Mutual Funds (PlumbLine).
As one can see below, the fund dabbles in quite a few small cap stocks but holds a steady 40% large cap allocation.
The asset type history is shown below.
We find out how consistently the HDFC Children’s Gift Fund has performed wrt Crisil 65% Equity 35% Debt index and Nifty 100 TRI. We will use three metrics to analyze performance consistency versus benchmarks. Analysis such as this can be found for 350+ equity funds in our monthly equity mutual fund screener.
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1 Rolling return outperformance consistency: the fund returns are compared with category benchmark returns over every possible 1Y, 2Y, 3Y,4Y, and 5Y period. Higher the outperformance consistency, the better. Suppose 876 fund returns were compared with 876 benchmark returns, and the fund has beaten the benchmark 675 times. The consistency score will be 675/876 ~ 77%.
| Metric | Crisil6535 | Nifty 100 TRI |
| No of rolling return entries Index (1 Year) | 2194 | 2180 |
| No of rolling return entries Fund (1 year) | 2194 | 2180 |
| No of times fund has outperformed the index (1 year) | 1601 | 1361 |
| rolling return outperformance Consistency Score (1 year) | 73% | 62% |
| No of rolling return entries Index (2 Years) | 1948 | 1934 |
| No of rolling return entries Fund (2 years) | 1948 | 1934 |
| No of times the fund has outperformed the index (2 years) | 1464 | 1182 |
| rolling return outperformance Consistency Score (2 years) | 75% | 61% |
| No of rolling return entries Index (3 Years) | 1699 | 1694 |
| No of rolling return entries Fund (3 years) | 1699 | 1694 |
| No of times the fund has outperformed the index (3 years) | 1382 | 1097 |
| rolling return outperformance Consistency Score (3 years) | 81% | 65% |
| No of rolling return entries Index (4 Years) | 1455 | 1455 |
| No of rolling return entries Fund (4 years) | 1455 | 1455 |
| No of times the fund has outperformed the index (4 years) | 1303 | 978 |
| rolling return outperformance Consistency Score (4 years) | 90% | 67% |
| No of rolling return entries Index (5 Years) | 1210 | 1210 |
| No of rolling return entries Fund (5 years) | 1210 | 1210 |
| No of times the fund has outperformed the index (5 years) | 1110 | 852 |
| rolling return outperformance Consistency Score (5 years) | 92% | 70% |
That is a fairly reasonable and consistent outperformance wrt both indices.
2 Upside performance consistency over every possible 1Y,2Y,3Y,4Y, 5Y: Higher the better. A score of 70% means, 7 out of 10 times, the Fund performed better than the category benchmark when the benchmark was moving up. This is a measure of reward. It is computed from rolling upside capture data (see link below).
| Metric | Crisil6535 | Nifty 100 TRI |
| upside performance consistency (1 year) | 81% | 3% |
| upside performance consistency (2 years) | 92% | 0% |
| upside performance consistency (3 years) | 99% | 0% |
| upside performance consistency (4 years) | 100% | 0% |
| upside performance consistency (5 years) | 100% | 0% |
HDFC Children’s Gift Fund tends to better the Crisil index when it moves up.
3 Downside performance consistency over every possible 1Y, 2Y, 3Y,4Y, and 5Y. Higher, the better. A score of 60% means 6 out of 10 times; the Fund performed better than the category benchmark when the benchmark was moving down. This is a measure of risk protection. It is computed from rolling downside capture data. Read more: An introduction to Downside and Upside Capture Ratios.
| Metric | Crisil6535 | Nifty 100 TRI |
| downside protection consistency (1 years) | 38% | 100% |
| downside protection consistency (2 years) | 34% | 100% |
| downside protection consistency (3 years) | 26% | 100% |
| downside protection consistency (4 years) | 32% | 100% |
| downside protection consistency (5 years) | 28% | 100% |
The nos wrt Nifty 100 TRI does not count as HDFC Children’s Gift Fund is a hybrid fund. It is one of the rare funds with good upside performance consistency and poor downside protection consistency. So this may frustrate investors when the markets are falling.
In summary, HDFC Children’s Gift Fund is a fairly consistent performer, but it seems to do better when the market is moving up rather than down. So investors will have to be wary of this as it can be frustrating. That said, it is a good buy for those who wish to stay invested the long-term and do not mind the lock-in conditions (see opening para).
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