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An open-ended debt fund, the HDFC Money Market Fund invests in money market securities including commercial papers, certificates of deposits, commercial bills, Treasury bills, and government securities for a total maturity of less than one year. The fund has been rated 4-star by Morningstar and 3-star by Value Research. The fund has now functioned for 23 years since being introduced on November 18, 1999. The investment strategy employs money market products with a maximum one-year maturity. Money market securities have durations of less than a year, therefore the scheme has a minimal interest rate risk and, as the fund house recommends, is best suited for an investment term of three to twelve months. Let’s now examine how the fund has done during the course of its existence based on returns documented as of October 31, 2022, provided that the fund has provided a CAGR of 7.06% since inception.
Performance of HDFC Money Market Fund
Your total investment of Rs. 1.20 lakh would have become Rs. 1.23 lakh if Rs. 10,000 had been invested through a SIP in this fund throughout the previous year, thanks to the fund’s 4.41% return. A monthly SIP of ₹10,000 would have enhanced your total investment of ₹3.60 lakh to ₹3.85 lakh according to the fund’s three-year return of 4.36%. A monthly SIP of ₹10,000 would have grown your total investment of ₹6.00 lakh to ₹6.86 lakh due to the fund’s 5-year return of 5.30%.
The fund has given a return of 6.36% in the last 10 years, hence a monthly SIP of ₹10,000 would have turned your total investment of ₹12 lakh into ₹16.63 lakh. A monthly SIP of ₹10,000 would have converted your total investment of ₹18 lakh into ₹31.20 lakh considering the fund’s 15-year return of 6.97%. Your total investment of ₹27.60 lakh would have become ₹67.09 lakh with a monthly SIP of ₹10,000 based on the fund’s return of 7.06% since inception.
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Key details of HDFC Money Market Fund
As on October 31, 2022, the fund recorded a total AUM of ₹13,947.34 Cr and an average AUM for the month of October 2022 of ₹13,530.49 Cr. The fund is managed by Vikash Agarwal (since July 1, 2020) having a total experience of over 16 years. As on October 31, 2022, the regular plan posted a NAV of ₹4704.03 and the direct plan recorded a NAV of ₹4775.32. The fund is benchmarked against NIFTY Money Market Index B-I and the fund’s additional benchmarked index is CRISIL 1 year T-Bill Index.
The fund’s top 5 holdings are Reserve Bank of India, Small Industries Development Bank of India Ltd., LIC Housing Finance Ltd., Axis Bank Ltd., and Canara Bank and the fund has an expense ratio of 0.21% for direct plan and 0.41% for regular plan. The fund’s portfolio classification by asset class is allocated 19.16% into G-Sec STRIPS, SDL, T-Bills, 45.60% into CP, 29.19% into CD and 6.05% into Cash, Cash Equivalents and Net Current Assets.
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