Fund of Fortnight

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 volatility in the equity market increases, investors are looking for options that not only promise respectable returns but also mitigate risks. In this context, Multi-Asset Allocation Funds (MAAFs) are becoming a popular choice. These funds typically invest across equities, debt, and commodities—primarily gold—within a single portfolio. This diversified approach offers balanced riskadjusted returns, making them an appealing option. For this issue, we have selected the ICICI Prudential Multi Asset Fund, the largest player in this category in terms of assets.

The fund has consistently outperformed its category average across various time frames. Over the past six months, it delivered a return of 5.27 per cent, significantly exceeding the category average of 2.33 per cent. This outperformance is not a recent phenomenon. Over the past year, the fund achieved a return of 12.74 per cent, surpassing the category's 10.21 per cent. The five-year return is an impressive 26.73 per cent, compared to the category's 21.95 per cent. Even over ten years, the fund has consistently outperformed its peers. The fund's sector allocation reveals a well-diversified portfolio with a notable concentration in financials, which make up 16.5 per cent of the total portfolio. It is also heavily invested in the energy sector, constituting 8.74 per cent. This distributionunderscores the fund's balanced exposure across multiple sectors. ICICI Prudential Multi Asset Fund excels in riskadjusted performance. Its Sharpe ratio of 1.55 is the highest in its category, indicating superior returns per unit of risk compared to its peers. Additionally, its Sortino ratio of 2.79— also the highest in the category—demonstrates that the fund has effectively minimised downside risk while maximising returns. With consistent outperformance across various periods and a well-balanced, diversified portfolio, the ICICI Prudential Multi Asset Fund is an excellent choice for investors seeking a well-managed, diversified multi-asset fund with a proven track record.

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