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 

After a superb rally in the last 10 months, the momentum in the equity market in India looks stretched and also the valuation. As most of the events that would have impacted the market are behind us, the equity market is looking for direction, and hence is struggling at a higher level. In such a situation it makes sense to invest in funds that not only invest in equity but also debt. Edelweiss Aggressive Hybrid Fund is one such fund that invests both in equity and debt. At the end of December 31, 2023, the fund held 73 per cent in equity and around 27 per cent in debt. This fund has consistently outperformed its category average across most timeframes. Over the past six months, it delivered a return of 16.12 per cent, exceeding the category average by 2.4 per cent. Its one-year return of 30.95 per cent is impressive, surpassing the average by 3.65 per cent.

While the three-year and five-year returns too are above average, they remain competitive at 19.41 per cent and 18.26 per cent, respectively. Diving into the fund’s sectoral allocation, it is strategically positioned with 21.56 per cent in the financial sector, showcasing a keen focus on stability and growth. Energy, technology, healthcare and consumer staples also constitute significant portions, ensuring a diversified portfolio that can weather market fluctuations effectively. Comparing this fund with peers in its category, it stands out with a standard deviation of 9.19, indicating lower volatility compared to its counterparts. A beta of 0.73 signifies less sensitivity to market movements, providing a shield against abrupt fluctuations. The impressive Sharpe ratio of 1.75 and Sortino ratio of 3.07 further underscore the fund’s ability to generate risk-adjusted returns. Hence, this fund is suitable to a conservative to moderate risk-taking investor having an investment horizon of more than one year. 

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