What to do with HDFC MF schemes formerly managed by Prashant Jain

Mumbai: Three equity-oriented schemes of Mutual Fund with assets under management of close to ₹1 lakh crore that were managed by its former chief investment officer Prashant Jain have been assigned to multiple fund managers. HDFC Balanced Advantage Fund, a dynamic asset allocation fund with a mix of equity and debt with assets of ₹43,080 crore, will be managed by Gopal Agarwal, Srinivasan Ramamurthy and Anil Bamboli. HDFC Flexicap Fund with assets of ₹26,511 crore will be managed by Roshi Jain; while HDFC Top 100, a large-cap fund with ₹19,910 crore, will be managed by Rahul Baijal.

Wealth managers said the change in fund managers warrants caution among investors. Unitholders of these schemes must hold back from making fresh investors but should not exit, said Roopali Prabhu, CIO, Sanctum Wealth.

“Prashant Jain had the conviction and the ability to hold on to his bets even in the face of performance pressures owing to his long standing track record and vintage at ,” said Prabhu.

“The new fund managers will need to prove themselves afresh and that could change the complexion and risk characteristics of the schemes managed by Prashant Jain.”

Jain has managed HDFC Balanced since 1994. He has overseen Flexicap and Top 100 schemes since 2003. Despite patches of underperformance, these schemes have returned 17-21% on an annualised basis during Jain’s tenure.

The three schemes are considered important for HDFC Mutual Fund because of the large asset base and good track.

Some financial planners believe the fund house is unlikely to make any major changes to the way these funds have been managed, at least in the short term.

“Investors can hold on to their existing investments and continue with their SIPs but for new lump sum investments they can wait for 3-6 months to see how the portfolio evolves under the new managers before investing,” said Arun Kumar, head of research, Fundsindia.

“All the new fund managers come with a good track record of managing money. There is unlikely to be any drastic portfolio change in the schemes in the near term.”

Some analysts believe the transition within the organization began since the new chief executive officer Navneet Munot joined in February 2021. In the past two decades, Jain has been the face of HDFC Mutual Fund. After Munot’s entry, the listed asset manager has grown its fund management team and has begun offering a wider suite of products.

Vidya Bala, co-founder, Prime investor, a retail research platform, does not think investors should make changes to their investments in these schemes on account of this event.