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 

Investor interest in responsible investing is on the rise with an increasing number of people seeking not only financial returns but also striving to make a positive impact on the world. Aligning investments with personal values can contribute to a more sustainable future, and environmental, social and governance (ESG) funds offer a powerful way to achieve this. For this issue, our choice of mutual fund is Quant ESG Equity Fund, a thematic fund dedicated to ESG investing. 

This fund has delivered an impressive performance, often outpacing its category average. Over six months, the fund returned 12.84 per cent compared to the category average of 14.39 per cent. Over a three-year period, it posted a CAGR of 24.41 per cent versus a category average of 13.54 per cent. When looking at the rolling returns, the fund has generated a one-year return of 30.7 per cent compared to a 14.7 per cent category median, and over three years, it has achieved a median return of 34.1 per cent, far above the 14.6 per cent for its peers. 

However, in shorter time frames, the fund has underperformed due to its exposure to high-volatility stocks, which can deliver strong returns in bullish markets but may underperform during downturns, which is the case currently. The portfolio also has lower exposure to dividend-paying companies and share buybacks compared to its peers, reflecting its focus on capital growth over yield. 

The fund is overweight in consumer defensive and energy sectors relative to the category, while underweight in technology and industrials. As of now, the fund holds 19 positions in its portfolio, resulting in a concentrated portfolio. This fund is best suited for investors interested in ESG-focused investments and prepared for a long-term horizon, given its concentrated, high-volatility profile.

[EasyDNNnews:PaidContentEnd] [EasyDNNnews:UnPaidContentStart]

[EasyDNNnews:UnPaidContentEnd]