Fund of Fortnight
Ninad RamdasiCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Fund of Fortnight, MF - DSIJ Recommendation, Mutual Fund
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.
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 current market conditions are such that there is momentum in every segment. Nonetheless, the Large-Cap has underperformed a bit in the broader market. Therefore, investing in a fund that invests in both large-cap which is likely to do better and Mid-Cap that is currently doing better makes sense. Hence, our choice for this issue is Motilal Oswal Large and Mid-Cap Fund. This mutual fund has been turning heads with its recent performance.
The current market conditions are such that there is momentum in every segment. Nonetheless, the large-cap has underperformed a bit in the broader market. Therefore, investing in a fund that invests in both large-cap which is likely to do better and mid-cap that is currently doing better makes sense. Hence, our choice for this issue is Motilal Oswal Large and Mid-Cap Fund. This mutual fund has been turning heads with its recent performance.
The fund’s strength lies not just in its returns, but also in its diversified holdings. Across sectors, the fund exhibits a balanced approach. The top three sectors – services, capital goods and financials – hold a significant portion of the portfolio at around 15-21 per cent, but no single sector dominates. This diversification helps spread risk and protects the fund from being overly reliant on the performance of any one industry. However, a closer look at the individual holdings reveals a potential concern. While the fund is diversified across sectors, it also has a few individual stocks with relatively high allocations. The top five holdings make up over 30 per cent of the portfolio, with companies like Zomato Ltd. and Trent Ltd. each exceeding 6 per cent allocation. This fund’s recent performance and diversified sectoral holdings are certainly attractive. However, the concentration in a few individual stocks warrants caution. Hence, the fund is suitable for a high-risk investor with a longer investment horizon.