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
With the Government of India recently signing trade arrangements with the United States and the EU, the export cycle could get an incremental tailwind as market access improves and services trade deepens. A thematic way to participate is the ICICI Prudential Exports and Services Fund, which aims to capture earnings durability from companies that benefit (directly or indirectly) from India’s export and services strength. On performance, the fund has consistently beaten the category average across timeframes. Over 1 year, it delivered 8.48 per cent versus 4.49 per cent for the category; over 2 years, 12.01 per cent versus 6.19 per cent; over 3 years, 18.54 per cent versus 15.68 per cent. Even on longer horizons, the edge holds. 5-year returns are 17.34 per cent versus 14.31 per cent, 7-year 17.30 per cent versus 14.53 per cent, and 10-year 13.80 per cent versus 12.45 per cent, suggesting steadier compounding rather than a one-off spike. Portfolio Construction shows a diversified, export-sensitive mix: Financials (24.56 per cent) provide balance-sheet strength and domestic leverage, Technology (13.70 per cent) and Services (12.19 per cent) bring global revenue linkages, while Healthcare (11.47 per cent) and Energy (10.54 per cent) add defensiveness and scale. On risk-adjusted quality versus peers, the fund stands out with lower volatility (Std. dev. 11.19) and below-market sensitivity (Beta 0.83); it also posts the best Sharpe (1.07) and best Sortino (2.09) among its peers.

The top holdings—HDFC Bank Ltd. (7.47 per cent), Infosys Ltd. (7.23 per cent), ICICI Bank Ltd. (6.46 per cent), Reliance Industries Ltd. (6.06 per cent), and NTPC Ltd. (4.48 per cent)— tilt the portfolio toward scale, cash flows, and resilience. If you want a relatively lower-beta way to ride an exports-and-services thesis, this fund’s mix of consistent outperformance and strong risk-adjusted metrics makes it a compelling core thematic allocation. It is best suited to investors with a 5+ year horizon (and comfort with theme cycles).

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