HDFC Diversified Equity All Cap Active FoF – A Complete Guide
Introduction
HDFC Mutual Fund has launched the HDFC Diversified Equity All Cap Active Fund of Funds (FoF), an open-ended scheme designed to provide investors access to a diversified equity portfolio. The fund seeks to deliver long-term capital appreciation by investing in a basket of domestic equity mutual funds across market capitalizations—large-cap, mid-cap, and small-cap.
This makes it a convenient “one fund, many exposures” option for investors who want a professionally managed, diversified equity allocation without the need to pick multiple schemes individually.
What Exactly Is This Fund?
A Fund of Funds (FoF) doesn’t directly buy stocks but invests in other mutual funds. In this case, the HDFC Diversified Equity All Cap Active FoF will allocate across actively managed equity funds of HDFC Mutual Fund, giving investors broad market exposure through a single investment.
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Launch Date (NFO Period): September 10 – 24, 2025
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Benchmark: NIFTY 500 Total Return Index
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Fund Managers: Srinivasan Ramamurthy, co-managed by Dhruv Muchhal
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Plan Options: Direct and Regular, with Growth and IDCW (Income Distribution) options
Minimum Investment
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Minimum Lumpsum Investment: ₹100
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SIP (Systematic Investment Plan): Starting from ₹100 per installment
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Additional Purchase: ₹100 and in multiples thereafter
This low entry barrier makes the scheme highly accessible, even for beginners who want to start small.
Investment Horizon
The fund is designed with a long-term horizon of 5 years or more. Equity markets tend to be volatile in the short run, and investors should be prepared to stay invested through market cycles to benefit from compounding and active fund management.
If you are looking at short-term goals (1–3 years), this fund may not be suitable. It is better aligned with wealth creation over the long term.
Who Should Invest?
This FoF is suitable for:
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First-time Equity Investors
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Those who don’t want the complexity of selecting between large-cap, mid-cap, or small-cap funds.
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A single diversified solution works best for new investors.
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Long-term Wealth Builders
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Investors aiming for financial goals such as retirement, children’s education, or wealth accumulation over 5–10 years.
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Conservative Allocators
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People who already invest in debt or hybrid funds and want to add equity exposure in a balanced manner.
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Busy Professionals
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Those who want expert fund managers to handle allocation between different caps and sectors instead of tracking multiple schemes.
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Risk Profile
The fund comes under the Very High Risk category as it is 100% equity-oriented. Key risks include:
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Market Volatility: Equity markets can fluctuate sharply in the short term.
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Concentration Risk: While diversified across caps, performance depends on the quality of the underlying schemes.
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Fund of Funds Expense: Since it’s an FoF, the cost includes both this scheme’s expense ratio and that of the underlying funds.
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No Guaranteed Returns: As with all equity funds, returns are market-linked and not assured.
That said, diversification across large, mid, and small caps helps balance risk and reward over the long run.
Why Consider This Fund?
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Diversification Made Simple: Exposure to multiple market caps in one scheme.
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Professional Allocation: Fund managers dynamically adjust allocation based on market outlook.
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Low Entry Point: Minimum investment of just ₹100.
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Convenience: No need to track or rebalance between multiple funds individually.
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Long-term Wealth Creation: Designed for compounding over 5+ years.
Exit Load & Liquidity
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Exit Load: 1% exit load if redeemed within 12 months; no load thereafter.
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Liquidity: Units can be redeemed anytime, subject to exit load, making it flexible for investors.
Final Thoughts
The HDFC Diversified Equity All Cap Active FoF is a thoughtfully designed solution for investors seeking broad-based equity exposure through a single fund. It reduces the hassle of choosing between large-, mid-, or small-cap funds while offering professional active management.
However, investors must remember it carries very high risk, and returns can be volatile in the short term. The fund is best suited for investors with a long-term horizon (5 years or more), who are comfortable with market fluctuations and want to build wealth systematically.
For first-time equity investors or those looking to diversify easily, this fund can be a strong addition to their portfolio.
Disclaimer
This blog is intended for educational and informational purposes only and should not be construed as investment advice or a recommendation to subscribe to the HDFC Diversified Equity All Cap Active FoF NFO. Mutual fund investments are subject to market risks, including possible loss of capital. Past performance of mutual funds or fund managers does not guarantee future returns. Investors are advised to read the Scheme Information Document (SID), Key Information Memorandum (KIM), and consult a certified financial advisor before making any investment decisions.
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