Fund of Fortnight

Ninad Ramdasi / 23 Feb 2023/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Fund of Fortnight, MF - DSIJ Recommendation, Mutual Fund

Fund of Fortnight

This is our mutual fund recommendation. Every fortnight, we recommend one open-ended equity diversified fund that has the best potential of returns for the next one year considering its constituents remain the same.

This is our mutual fund recommendation. Every fortnight, we recommend one open-ended equity diversified fund that has the best potential of returns for the next one year considering its constituents remain the same.[EasyDNNnews:PaidContentStart]

Reason for recommendation


After gaining from its lows of January, the equity indices have been trading within a range, which is likely to breach in the downward direction looking at the recent macroeconomic data. We believe that in such a scenario it makes sense to have a balanced approach about investing in a fund that has exposure to both equity as well as fixed income. Hence, investing in a balanced advantage fund would be a prudent thing to do. Therefore, we recommend Tata Balanced Advantage Fund. Launched in January 2019, this fund has successfully accumulated an AUM of Rs 6,376 crore in the last four years.

Moreover, since its launch this fund has delivered 13 per cent returns annually, which is better against its category that generated return of 11 per cent in the same period. One of the reasons for such a performance is its expense ratio, which remains one of the lowest in the category. In terms of risk measured through drawdown, it has been observed that this fund has successfully reduced the downside risk. Compared to industry average of 15.22 per cent, this fund saw drawdown of 13.35 per cent. Moreover, in terms of risk-adjusted returns as measured by Sharpe and Sortino ratios, this fund falls in the first quartile in its category.

The best part of the fund is that it has been able to generate alpha by keeping beta under control. Looking at its asset allocation, at present 47 per cent is into equity, 31 per cent in debt and 22 per cent in cash as at the end of December 2022.

On the sectoral front, it is overweight on financial, energy and construction sectors while being underweight on technology and consumer staples. Looking at its top holdings, it has invested in ICICI Bank, Reliance Industries and HDFC. This fund is more suitable for conservative to moderate investors.

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