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
At the current market juncture, when markets are quite volatile, aggressive Hybrid Funds can offer a balanced approach by combining equity participation with debt allocation. These funds aim to capture long-term wealth creation potential through equities while using debt exposure to provide stability during periods of market volatility. Hence, our choice of MF Select from this issue is Bank of India Aggressive Hybrid Fund Direct Growth. The fund has delivered returns above the category average across all analysed periods. Over the one-year period, the fund generated 16.30 per cent returns compared with the category average of 2.18 per cent. The outperformance continued over longer periods, with three-year returns at 17.26 per cent versus 10.34 per cent for the category, while the five-year performance stood at 14.82 per cent compared with 9.26 per cent. The fund’s equity portfolio is spread across multiple sectors. Capital Goods has the highest allocation at 12.72 per cent, followed by Financials at 11.85 per cent and Healthcare at 11.37 per cent. Services account for 7.53 per cent of the portfolio, while Automobile stocks contribute 4.73 per cent, providing exposure across different segments of the economy. On risk-adjusted parameters, Bank of India Aggressive Hybrid Fund has a standard deviation of 15.82 and a beta of 1.13. Its Sharpe ratio of 0.80 indicates efficient return generation for the risk taken, while its Sortino ratio of 1.09 reflects downside risk-adjusted performance. Overall, the fund has two-thirds of its assets allocated to equity, with the remaining assets in debt and cash. The fund’s top holdings include Abbott India Ltd. at 2.27 per cent, Bank of Maharashtra at 2.15 per cent, Mankind Pharma Ltd. at 2.15 per cent, UNO Minda Ltd. at 2.12 per cent, and Shreeji Shipping Global Ltd. at 2.07 per cent, indicating diversification across companies and sectors.

Overall, the fund combines equity growth potential with hybrid allocation benefits. Its consistent long-term outperformance, diversified portfolio, and competitive risk-adjusted metrics make it a fund that investors seeking a balanced equity-oriented allocation may consider as part of their portfolio.

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