HDFC Business Cycle Fund
Direct · GrowthAI Summary
HDFC Business Cycle Fund has delivered consistent alpha over NIFTY 50 across all measured periods, with a 3Y alpha of 4.59% (Fund CAGR 9.92% vs Benchmark 5.26%) and positive alpha stretching out to 15 years. However, its SIP XIRR of 7.86% over 3Y trails the category average of 16.26% by a wide margin, and the 1Y XIRR of 8.89% also lags the 10.68% category average. The fund's lump-sum 3Y rolling return of 13.26% shows stronger performance for non-SIP investors.
The fund exhibits strong downside protection with downside capture of 81.84% (1Y) and 81.34% (long-term), meaning it falls significantly less than the benchmark in weak markets. Beta of roughly 0.91-0.96 indicates lower volatility than the index, and only one drawdown event exceeding 10% has occurred. The maximum drawdown duration of 546 days with a 133-day recovery suggests investors may need patience during prolonged flat periods, though the Calmar ratios of 0.73-0.79 reflect reasonable risk-adjusted returns.
The portfolio holds 53 stocks with a well-diversified top 10, where the largest position (Bharti Airtel at 5.69%) is modestly sized. Banks dominate at 16.5% of the portfolio, followed by Finance at 8.4%, giving a combined financials exposure of nearly 25%. The fund spreads across consumer-facing sectors like retailing (5.8%), telecom (5.7%), and consumer durables, consistent with its business cycle mandate of rotating across sectors.
Against sectoral/thematic peers, the fund underperforms on SIP XIRR at both 1Y (8.89% vs 10.68%) and 3Y (7.86% vs 16.26%), a notable gap for systematic investors. Its lump-sum performance is more competitive, beating NIFTY 50 across 1Y, 3Y, 5Y, 7Y, 10Y, 12Y, and 15Y horizons with positive alpha throughout. Calendar year returns show uneven consistency, ranging from 29.51% in 2023 to -1.0% in 2022 and -0.63% in 2026.
This fund suits lump-sum or value-oriented investors seeking benchmark-beating returns with lower downside capture, rather than SIP investors chasing category-leading XIRR. A horizon of at least 5 years is advisable given the 546-day maximum drawdown duration and the cyclical nature of the strategy. Investors should have moderate-to-high risk tolerance, as sectoral/thematic funds carry concentration risk and the fund's SIP returns currently trail peers.
- Consistent positive alpha over NIFTY 50 across all periods from 1Y to 15Y, including 4.59% over 3Y
- Strong downside protection with downside capture of 81.34% long-term and beta near 0.91
- Diversified 53-stock portfolio with no single holding above 5.69% of NAV
- SIP XIRR significantly trails category averages — 7.86% vs 16.26% over 3Y and 8.89% vs 10.68% over 1Y
- Prolonged recovery periods, with maximum drawdown duration of 546 days and uneven calendar year returns including losses in 2022 and 2026
Generated on 23-10-2026, 2:53 AM. Verify before investing.
Gives more importance to longer time periods (10Y, 20Y) than shorter ones (1Y, 3Y). This balances out recent outperformance and gives a more realistic picture of what long-term returns might look like.
The largest peak-to-trough decline in the fund's NAV. Shows the worst-case loss an investor would have experienced at any point in the fund's history.
If you invested ₹1,00,000 every month via SIP, here's how this fund has historically performed across different time horizons.
| Duration | Invested | Median Value | XIRR | Min XIRR | Max XIRR |
|---|---|---|---|---|---|
| 1 Year | ₹12.00 L | ₹12.64 L | 14.2% | -25.2% | 45.8% |
| 3 Years | ₹36.00 L | ₹40.59 L | 8.1% | -1.8% | 15.7% |
SIP returns vs benchmark & category
Annualised SIP return (XIRR) over each rolling horizon — like-for-like, not lump-sum.
| Duration | Fund SIP XIRR | NIFTY 50 | Category avg | Fund edge |
|---|---|---|---|---|
| 1 Year | 14.2% | 14.3% | 10.6% | -0.1% |
| 3 Years | 8.1% | 11.0% | 16.2% | -2.9% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 14.2% | 6.9% | -6.2% | 40.0% | 0.55 | 2.27 | 91% | — | — |
| 3 Years | 13.2% | 12.9% | 9.3% | 16.4% | 3.87 | — | 100% | — | — |
Calmar Ratio by Duration
Compared against NIFTY 50
| Duration | Alpha | Beta | Upside Capture | Downside Capture | Fund CAGR | Bench CAGR |
|---|---|---|---|---|---|---|
| 1 Year | +5.81 | 0.96 | 91.6% | 84.9% | -6.2% | -12.7% |
| 3 Years | +3.82 | 0.95 | 92.8% | 87.3% | 9.3% | 5.4% |
| 5 Years | +4.00 | 0.91 | 90.5% | 82.3% | 8.0% | 3.7% |
| 7 Years | +2.64 | 0.91 | 90.5% | 82.3% | 5.6% | 2.7% |
| 10 Years | +1.65 | 0.91 | 90.5% | 82.3% | 3.9% | 1.9% |
| 12 Years | +1.27 | 0.91 | 90.5% | 82.3% | 3.3% | 1.5% |
| 15 Years | +0.89 | 0.91 | 90.5% | 82.3% | 2.6% | 1.2% |
| # | Stock | % of NAV |
|---|---|---|
| 1 | Bharti Airtel Ltd. | 5.69% |
| 2 | Kotak Mahindra Bank Limited | 5.31% |
| 3 | ICICI Bank Ltd. | 5.21% |
| 4 | Titan Company Ltd. | 4.46% |
| 5 | PEARL GLOBAL INDUSTRIES LIMITED | 3.28% |
| 6 | HDFC Bank Ltd.£ | 3.24% |
| 7 | Eternal Limited | 2.86% |
| 8 | Vishal Mega Mart Limited | 2.52% |
| 9 | Clean Max Enviro Energy Solutions Limited | 2.38% |
| 10 | Cholamandalam Investment & Finance Co. Ltd. | 2.28% |