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
Multi-asset allocation funds, which invest in a combination of equities, fixed income and other assets such as gold and silver, have the potential to outperform a majority of the general equity schemes over the long run. These funds provide a diversified investment approach that many single-asset equity funds lack. Hence, our choice of fund this time is ICICI Prudential Multi Asset Fund. The fund has consistently posted superior returns compared to its category average in the longer investment horizon. For instance, in the one-year period, the fund posted a return of 18.37 per cent above the category average of 17.70 per cent. Similarly, for the three-year and five-year periods, the fund achieved returns of 20.46 per cent and 21.16 per cent, respectively, outperforming the category averages of 15.46 per cent and 18.59 per cent. 

The fund holds a well-diversified portfolio with largest exposure to the financial sector (19.24 per cent). This is followed by the energy sector (8.73 per cent). Additionally, its automobile sector (7.74 per cent) allocation highlights its investment in one of the key drivers of India’s manufacturing growth and consumer spending. The fund’s top individual holdings is towards blue-chip and high-growth companies. 

ICICI Bank (4.76 per cent) and HDFC Bank (3.52 per cent) are among its top holdings, This fund stands out with a significantly higher outperformance against the benchmark. It boasts an outperformance metric of 9.5 per cent (alpha), far exceeding the category benchmark of 2.82 per cent. The fund’s strong historical performance, well-diversified sectoral allocation and strategic focus on leading companies makes it an excellent choice for investors. It offers a simple way to diversify across multiple asset classes and is recommended for moderate risk investors with a long-term investment horizon.

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