HDFC Mutual Fund is planning to launch an open-ended diversified equity scheme - HDFC Core and Satellite Fund. The objective of the scheme is to generate capital appreciation through equity investment in companies whose shares are quoting at prices below their true intrinsic value.
The equity portfolio of the scheme would be divided into two groups: Core and Satellite. The Core group will comprise of well-established and predominantly large-cap companies with a long and successful track record whereas the Satellite group will comprise of predominantly small and mid-cap companies that offer higher potential returns but also carry higher risk.
The Core portion would constitute between 60-80 per cent of the portfolio while the satellite portion will make up the balance 20-40 per cent. Through this innovative investment strategy, the fund expects to deliver above average returns with an average risk profile.
The scheme will be benchmarked against BSE 200 index.