Every month, HDFC Asset Management Company publishes a detailed breakdown of exactly where it has parked investor money in the HDFC Flexi Cap Fund. FinancialExpress.com reviewed the February 2026 portfolio statement along with the scheme’s long-term performance disclosures.
At the time of writing this report, the fund’s Direct Plan NAV stood at Rs 2,167.68 with a fund size of Rs 1,00,455.32 crore and an expense ratio of 0.70%.
The fund has a portfolio mix of more than 50 stocks, REIT units, government securities and liquid assets. At a surface level the portfolio looks like a standard diversified flexi-cap strategy. A closer reading of the data shows several structural characteristics in how the fund is positioned.
HDFC Flexi Cap Fund portfolio breakdown
Here are the most notable findings from the February 2026 portfolio and performance data.
- Over one-third of the portfolio sits in banks
The most visible pattern inside the portfolio is the weight of banking stocks.
As of February 2026, 34.16% of the fund’s NAV is invested in banks. ICICI Bank, Axis Bank, HDFC Bank, State Bank of India and Kotak Mahindra Bank together account for roughly Rs 34,300 crore of the portfolio.
For a flexi cap fund that can move across sectors, this level of allocation suggests a strong tilt toward the banking sector. Financial stocks dominate most broad Indian market indices, which often leads diversified equity funds to carry significant banking exposure.
Investors who also hold banking-focused funds or index funds tracking the Nifty Bank may want to review their combined exposure.
- Portfolio turnover and sharpe ratio
The portfolio disclosure shows a portfolio turnover ratio of 9.45%.
In a fund managing Rs 1,00,455.32 crore, that turnover implies trading activity equivalent to about Rs 9,493 crore of the portfolio over the previous year.
A turnover ratio at this level means the majority of the portfolio holdings remain unchanged for long periods. This is consistent with a strategy built around longer holding periods rather than frequent portfolio reshuffling.
The fund’s Sharpe ratio of 1.46 indicates the returns generated relative to the level of volatility experienced.
- Rs 6,770 crore remains in cash and liquid instruments
The February disclosure shows 6.74% of NAV held in cash equivalents (around Rs 6,770 crore), mainly through Tri-Party Repo (TREPS) and net current assets.
That translates to roughly Rs 6,770 crore not deployed in equities.
Large diversified funds frequently maintain liquidity buffers to manage inflows, redemptions and investment opportunities. In funds that receive continuous SIP inflows, a portion of cash can accumulate before deployment.
- Debt exposure is limited to three government securities
The scheme’s debt allocation is small. As of February 28, 2026, the fund holds three Government of India bonds representing 0.51% of NAV.
The largest of these is the 7.38% GOI bond maturing in 2027, accounting for about 0.30% of the portfolio.
Two additional bonds, the 7.32% GOI 2030 security and the 7.37% GOI 2028 bond, account for 0.11% and 0.10% of NAV, respectively.
Government securities inside equity funds typically serve liquidity and portfolio management purposes.
- REIT holdings represent 2.32% of the portfolio
Two real estate investment trusts appear in the portfolio disclosure. Nexus Select Trust REIT represents 1.77% of NAV, while Embassy Office Parks REIT accounts for 0.55%. Together they amount to 2.32% of the fund’s assets, or about Rs 2,330 crore. REIT allocations give the portfolio exposure to income-generating commercial real estate while remaining listed securities.
- The portfolio includes exposure to new-age internet companies
Several digital and consumer internet businesses appear in the lower part of the holdings list.
These include Eternal (Zomato), FSN Ecommerce Ventures (Nykaa), Swiggy and PB Fintech.
Together these companies account for around 3.64% of NAV.
While relatively small positions within the broader portfolio, the presence of these businesses shows participation in India’s growing digital consumer sector.
- Long-term returns
Performance data indicates that the Direct Plan – Growth option of HDFC Flexi Cap Fund has delivered strong returns across multiple market cycles. According to the scheme’s performance disclosure, the Direct Plan has generated around 18.3% compounded annual returns over the past 10 years, compared with 14.69% for the Nifty 500 TRI benchmark.
Over shorter time horizons the fund has also maintained a return gap over the benchmark, delivering a 19.5% CAGR over five years versus 12.81% for the index, and 21.3% CAGR over three years compared with 15.61% for the benchmark. In the most recent one-year period, the Direct Plan returned 13.11% against 9.59% for the Nifty 500 TRI.
| Period | Direct plan return | Benchmark (NIFTY 500 TRI) |
| 1 year | 13.11% | 9.59% |
| 3 years | 21.3% CAGR | 15.61% |
| 5 years | 19.5% CAGR | 12.81% |
| 10 years | 18.3% CAGR | 14.69% |
Returns for periods longer than one year are calculated on a compounded annual basis.
The fund has operated since 1995, although the Direct Plan structure was introduced in 2013 following SEBI’s introduction of direct mutual fund plans.
These numbers show how the scheme has performed relative to its benchmark over different market cycles, while also indicating the effect of lower expense ratios in the Direct Plan.
- Stock holding breakdown
The February 2026 portfolio shows a concentration in a handful of large-cap financial and blue-chip companies. ICICI Bank is the single largest holding at 8.78% of NAV, followed by Axis Bank at 7.44% and HDFC Bank at 7.25%. Other major financial holdings include State Bank of India at 5.26% and Kotak Mahindra Bank at 3.76%.
Outside financials, the portfolio includes large allocations to companies from automobiles, IT and telecom. Maruti Suzuki represents 4.76% of the portfolio, while Bharti Airtel accounts for around 3.06%. In the technology segment, HCL Technologies holds a weight of about 3.24%, indicating the fund’s participation in the IT services sector. The portfolio also includes exposure to infrastructure and capital goods through Larsen & Toubro, which remains one of the significant non-financial holdings.
Beyond these large positions, the portfolio spreads the remaining allocation across more than 50 stocks across sectors such as pharmaceuticals, insurance, retail and consumer businesses. While the top financial holdings dominate the portfolio, the broader set of stocks helps maintain diversification across multiple sectors and industries.
Investors’ takeaway
The February 2026 portfolio suggests a strategy built around long holding periods with a significant allocation to banking stocks and limited trading activity. While the fund maintains small exposures to REITs, government securities and newer digital businesses, equities remain the dominant driver of returns. The fund combines a concentrated sector tilt with a long-term investment approach that has historically delivered returns above its benchmark.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.