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
As we approach the general election and earnings season, we may see heightened volatility in the equity market. Aggressive Hybrid Funds can be a compelling option for investors seeking growth potential during volatile markets, but with some built-in safeguards. Hence our choice of mutual fund for this issue is Baroda BNP Paribas Aggressive Hybrid Fund. This fund invests in both equities and fixed income instruments. Let’s go into details to understand why it might be a good fund to consider for long-term investment for moderate to conservative investors. Over the past months, the fund has not just outperformed its peers but has done so convincingly. The fund’s one-year return of 36.45 per cent shines in comparison to the category average of 32.28 per cent. Even in the longterm horizon of five years, the fund has proven its mettle with a trailing return of 18.27 per cent, significantly ahead of the category average at 15.87 per cent. If consistent performance is what you seek, the fund’s rolling returns offer further evidence of its reliability.

Over a one-year period, the fund’s median rolling return is 16.26 per cent. The best part is that 60 per cent of the time the fund has generated return in excess of 15 per cent and only 0.38 per cent of the time it has generated negative returns. This consistent outperformance is a strong testament to the fund’s long-term potential. The fund also has one of the lowest expense ratios of 0.55 per cent. The fund is well-diversified in terms of asset allocation where equity holds 73.77 per cent, debt 22.75 per cent and the rest 3.48 per cent. Out of 73.77 per cent in equity, 78 per cent is in Large-Caps and 17.76 per cent in Mid-Caps and only 4.30 per cent is in Small-Caps, which is considered to be very good asset allocation as the market is trading at an all-time high.

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