Fund of Fortnight

This is our mutual fund recommendation. 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. 
 

Reason for recommendation
The equity market in the last few months has shown a remarkable movement. Both Large-Cap and Mid-Cap stocks have witnessed an upward spiral and we believe this pace may remain for some more time. Given this scenario, our choice for this issue is Quant Large and Mid-Cap Fund. The fund has shown competitive returns across various time periods compared to its category average. Over the past month, the fund delivered a return of 5.86 per cent, outperforming the category average of 4.415 per cent. The trend continued over a three-month period with the fund achieving a return of 12.77 per cent, which was higher than the category average of 14.54 per cent. Looking at longer durations, the fund has demonstrated solid performance. Over the past year, it achieved a return of 21.55 per cent, exceeding slightly the category average of 20.93 per cent. Similarly, over three years and 10 years, the fund’s returns of 28.26 per cent and 21.25 per cent, respectively, were higher than the respective category averages of 27.05 per cent and 17.94 per cent. Analysing the sectoral holding of the fund, it is evident that it maintains a diversified portfolio. The largest sectoral allocation is in financials, constituting 15.21 per cent of the portfolio, followed by energy at 11.82 per cent and healthcare at 11.81 per cent.

Other significant holdings include construction (7.72 per cent) and metals and mining (6.38 percent) while technology holds just 5.66 per cent. This sectoral diversification suggests that the fund is well-positioned across various industries, potentially providing stability and growth opportunities. An analysis of the fund’s strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and volatility exposure compared with its category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. Taking into account the fund’s portfolio and the fund manager’s strategy, it is recommended for moderate risk investors with an investment horizon of one to three years.