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]

Aditya Birla Sun Life Frontline Equity Fund - Growth - Direct Plan

Reason for recommendation

The Indian equity market is currently trading at its all-time high and there is no sign of any weakness or slowing down. Also, Large-Cap stocks have grossly underperformed the broader market. Therefore, our recommended mutual fund in this issue is Aditya Birla Sun Life Frontline Equity Fund, which is from this category. The mutual fund has delivered commendable returns across various time periods, outperforming the category average in most cases. Over longer time horizons, such as one year, three years, five years and 10 years, the fund has consistently outperformed the category average. For instance, over the past one year, the fund has returned 29.02 per cent compared to the category average of 31.55 per cent. Similarly, over the past 10 years, the fund has returned 16.40 per cent compared to the category average of 16.35 per cent. The fund has a diversified portfolio across various sectors. The highest allocation is to the financial sector, accounting for 29.11 per cent of the portfolio. This is followed by allocations in the technology, energy, automobile, consumer staples, construction and healthcare sectors, with allocations ranging from 5.95 per cent to 9.79 per cent. 

In terms of individual holdings, the fund has significant exposure to some of the leading companies in the market. The top holdings include HDFC Bank, ICICI Bank, Infosys, Reliance Industries, Larsen and Toubro, Bharti Airtel and Axis Bank. When compared to other funds in the category based on statistical measures such as standard deviation, beta, Sharpe ratio and Sortino ratio, the mutual fund holds its ground. While it may not have the lowest standard deviation or beta among the funds listed, its Sharpe and Sortino ratios indicate good risk-adjusted returns. The fund is suitable for investors with longer duration and medium to higher risk appetite.

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