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
Momentum investing tends to work best when market leadership persists, as stocks displaying strong relative price trends can continue to attract capital. Union Active Momentum Fund is designed around this principle, using proprietary screens to select, weight and rebalance stocks with strong momentum. Its recent performance suggests that the strategy has been effective in capturing prevailing trends. The fund has delivered 15.58 per cent YTD versus the category average of 2.70 per cent, an outperformance of 12.88 percentage points. Over six months, it returned 16.92 per cent compared with 4.38 per cent for the category, beating it by 12.54 percentage points. The one-year return stands at 16.65 per cent against the category’s 6.12 per cent, translating into an outperformance of 10.53 percentage points. The portfolio’s sector positioning is distinctive. Healthcare is the largest allocation at 31.51 per cent, followed by Automobile at 12.89 per cent, Capital Goods at 11.50 per cent, Financials at 10.77 per cent and Metals & Mining at 7.15 per cent.

This reflects the momentum model’s willingness to move away from conventional benchmark weights and concentrate in sectors where price strength is stronger. At the stock level, Torrent Pharmaceuticals is the largest holding at 4.80 per cent, followed by Laurus Labs at 3.00 per cent and RR Kabel at 2.88 per cent. Craftsman Automation, Avalon Technologies, Rashi Peripherals, Ather Energy, Apar Industries and Astra Microwave Products each carry weights of roughly 2.61–2.66 per cent. The moderate individual stock weights reduce dependence on any single company. Overall, Union Active Momentum Fund has demonstrated strong recent category relative performance and offers a disciplined way to participate in the momentum factor. However, momentum can reverse sharply during market rotations. Therefore, this fund should be treated as a satellite allocation rather than a core holding. Exposure should be limited, and it is better suited to aggressive investors with a high risk tolerance and a long-term investment horizon.

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