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.[EasyDNNnews:PaidContentStart]

Reason for recommendation
In the wake of the abatement of domestic volatility, global events are now causing a disruption in the Indian equity market. We are not out of the woods yet, which makes the present market quite dicey and volatile. In such a scenario it makes sense to adopt a conservative approach without losing sight of growth. Therefore, a large & Mid-Cap fund is an ideal category to be placed in. We have identified Canara Robeco Emerging Equities Fund from such a category. In terms of rolling return, the fund’s three-year rolling return over 10 years is 19.04 per cent while that of the category is 12.4 per cent during the same period. The fund’s outperformance can be seen even in its one-year and five-year rolling returns as well. If we look at its long term i.e. 10-year capture ratio, it works out to 114 per cent while the down-capture is 96 per cent. As a rule, up-capture above 100 per cent and down-capture below 100 per cent suggests that the fund provides better returns against the benchmark but also contains downside risk compared to its benchmark. This fund has lower risk compared to its peers as measured by standard deviation, which stands at 21.92 per cent as against 22.8 per cent exhibited by its category.



When it comes to the portfolio of the fund, on the sectoral front this fund is overweight on financial, automobile and capital goods while being underweight on technology, healthcare and energy. Looking at its latest Quarterly Results, we believe these are the sectors that will continue to do well. The fund is welldiversified with 58 stocks and its top 10 stocks hold only 38.85 per cent of the portfolio. As stated earlier, given the current volatile scenario in the equity market, this fund is suitable for moderate to aggressive investors with an investment horizon of more than one year. 

[EasyDNNnews:PaidContentEnd] [EasyDNNnews:UnPaidContentStart]

[EasyDNNnews:UnPaidContentEnd]