I had invested one time in HDFC Balanced Fund and also in HDFC Income Fund. I would like to know whether to stay invested or exit. Both the funds are rated two-star. I invested in these funds in September 2000. The money has been left untouched for over five years now. Is it the right time to make an exit?
- Prasad Burli
HDFC Balanced has been a laggard and has failed to beat the category average in each of the last three calendar years. We think that HDFC Prudence, another balanced fund of the same fund house, is a far better option and you can consider switching your money to it.
As for HDFC Income, tough times prevailing in the debt markets have taken their toll on the fund. There have been dramatic changes in the fortunes of this fund which used to be a category beater. The performance in the last two years has been quite poor and it has pushed its rating further down to one-star now. Though there is nothing wrong with the credit quality of its portfolio, but its aggressive bets on interest rates have not worked.
The fund has not kept pace with the changes in the debt markets and it seems that it has lost touch. In the wake of its continued poor run, you can consider exiting this fund as well.