Fund of Fortnight

Sayali Shirke / 12 Jun 2025/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Fund of Fortnight, MF - DSIJ Recommendation, Mutual Fund

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.


 

Reason for recommendation [EasyDNNnews:PaidContentStart]
The past month has seen improvement in the broader Indian markets, with Mid-Cap and Small-Cap indices achieving double-digit gains. Given this positive momentum, we've chosen the Invesco India Mid Cap Fund Direct Growth as our Mutual Fund Select. This fund has consistently outperformed its category average across all time frames. Over the past year, it delivered an impressive 22.36 per cent return, significantly surpassing the category average of 9.92 per cent. This strong showing continues over longer periods, with 2-year returns of 36.88 per cent (vs. 29.78 per cent category average) and 3-year returns of 32.25 per cent (vs. 26.79 per cent category average). Even over a 10-year horizon, the fund has maintained its lead, returning 19.89 per cent against the category's 17.81 per cent, reflecting adept portfolio management and strong alpha generation. The fund employs a diversified investment strategy with a strong focus on highgrowth sectors. The Services sector leads its allocation at 21.58 per cent, closely followed by Healthcare at 18.64 per cent and Financials at 18.31 per cent. This strategic allocation positions the fund to effectively capture structural tailwinds in these burgeoning sectors, particularly healthcare and financial inclusion. While the fund exhibits a moderate risk profile, indicated by a standard deviation of 16.84 and a beta of 0.94, its strong risk-adjusted returns are highlighted by a Sharpe ratio of 

1.26 and a Sortino ratio of 1.61. Among its top five holdings, BSE Ltd. (5.33 per cent) provides a robust anchor in the services sector. The financials segment is well-represented by L&T Finance Ltd. (4.58 per cent) and Federal Bank Ltd. (4.07 per cent), both solid mid-cap financial institutions. Additionally, Prestige Estates Projects Ltd. (4.31 per cent) strengthens the fund's exposure to the construction and real estate sectors. This composition reflects a balanced investment approach, betting on stability, growth, and long-term secular trends. This fund is well-suited for high-risk investors with a long-term investment horizon seeking exposure to the growth potential of Indian mid-cap companies. 

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