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
Value funds tend to come into their own in volatile markets because they usually hold fundamentally sound businesses available at reasonable valuations, giving investors a margin of safety when sentiment turns shaky. At the current juncture, this makes the category particularly relevant, as investors are looking for downside resilience without giving up long-term upside. HSBC Value Fund stands out well on performance. Over 1 year, the fund delivered 11.31 per cent versus the category average of 8.82 per cent, an outperformance of 2.49 percentage points. Over 2 years, it returned 9.07 per cent against 5.84 per cent; over 3 years, 21.69 per cent against 16.19 per cent; over 4 years, 17.19 per cent against 12.26 per cent; over 5 years, 19.36 per cent against 14.23 per cent; over 7 years, 17.31 per cent against 13.55 per cent; and over 10 years, 16.31 per cent against 13.14 per cent.

This shows consistent alpha generation across market cycles rather than just a short-term burst.The portfolio is tilted towards sectors where value opportunities are meaningful. Financials form the largest allocation at 30.51 per cent, followed by Energy at 10.02 per cent, Metals and Mining at 8.63 per cent, Technology at 6.87 per cent, and Consumer Staples at 6.42 per cent. This mix gives the fund a balance of cyclical recovery, earnings visibility, and defensive support. Its risk-return profile is alsoimpressive. HSBC Value Fund has posted a mean return of 19.64 per cent in three years, ahead of both the category average of 16.66 per cent and the BSE 500 TRI’s 13.24 per cent. Although standard deviation at 15.71 per cent is slightly above the category’s 15.23 per cent, the Sharpe ratio of 0.87 and Sortino ratio of 1.07 indicate superior risk-adjusted returns. Its alpha of 6.25 further underlines strong stock selection. The top holdings, including State Bank of India, NTPC, Karur Vysya Bank, Reliance Industries, and HDFC Bank, reflect a portfolio built around established franchises. Overall, HSBC Value Fund looks suitable for investors seeking consistent long-term wealth creation through a disciplined value strategy.

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