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 
The equity market is currently turning very volatile, the reason being both domestic as well as international. We have the general election starting this week and there is heightened geopolitical tension in the Middle East. Nonetheless, if you have a slightly longer investment horizon, it would be best to remain patient till the present tense situation subsides and the market regains lost ground. One of the sectors that are likely to do better going ahead is infrastructure. Hence, our choice this issue is Kotak Infrastructure and Economic Reform Fund. The fund has consistently outperformed its category average across various time periods. In the short term of one month, the fund has delivered a return of 9.76 per cent, surpassing the category average of 9.13 per cent. Over longer periods of six months, three years, five years and 10 years, the fund has exhibited a superior performance, boasting returns of 28.33 per cent, 36.57 per cent, 25.88 per cent and 21.68 per cent, respectively, compared to the category averages. The fund has diversified exposure across various sectors. The largest allocations are towards capital goods (23.3 per cent), energy (14.65 per cent) and construction (14.2 per cent). Analysing the individual holdings of the fund, it is apparent that the portfolio comprises well-established companies from diverse sectors.


Larsen and Toubro Ltd., Bharti Airtel Ltd., Solar Industries India Ltd. and Ultratech Cement Ltd. are the fund’s top holdings. Furthermore, when comparing the fund’s risk metrics against its peers, it exhibits a lower beta of 0.41 compared to the category average of 1.59, indicating lower sensitivity to market fluctuations. Additionally, the fund demonstrates a lower standard deviation of 12.07 compared to the category average of 14.4, suggesting more stable returns. The fund’s consistent outperformance, diversified sector allocation and lower risk metrics make it an attractive investment option for investors seeking stable returns.

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