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
DSP Value Fund stands out as a strong pick in volatile markets because value funds focus on buying quality businesses at reasonable prices instead of chasing expensive, momentum-driven stocks. When market sentiment turns sharply, overpriced stocks often fall harder, while fundamentally strong but under-owned 'value' stocks tend to cushion downside better and support long-term compounding.

On performance, the fund has consistently beaten its category average across timeframes. Over the last 3 months, it delivered 2.86 per cent versus the category’s -0.54 per cent, an outperformance of 3.40 percentage points. This trend continues even over longer periods like 4 years (14.45 per cent vs 11.65 per cent) and 5 years (16.70 per cent vs 15.06 per cent). It stays ahead, reflecting consistent execution rather than short-term luck.

Sector-wise, the portfolio is well-balanced, with exposure led by Technology (12.37 per cent), Automobile (10.10 per cent), and Energy (8.44 per cent), followed by Healthcare (7.78 per cent) and Metals & Mining (7.78 per cent). Together, these top five sectors make up roughly 46 per cent of the portfolio, offering diversification across defensive, cyclical, and consumptionlinked themes, useful during uncertain market cycles.

From a risk-return lens, DSP Value Fund offers a smoother ride. It has the lowest volatility among peers with a standard deviation of 9.67 and also the lowest beta at 0.64, indicating lower sensitivity to market swings. Its Sharpe ratio (1.33) and Sortino ratio (2.10) remain healthy, showing efficient riskadjusted performance. Top holdings include HDFC Bank (4.48 per cent), Bharti Airtel (3.54 per cent), Larsen & Toubro (3.20 per cent) and Infosys (3.00 per cent). With the top five forming only about 16.8 per cent, the portfolio is not overly dependent on a few names. Overall, DSP Value Fund combines categorybeating returns with lower volatility. It is well suited for moderate risk investors in choppy markets.

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