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.

Reason for recommendation

The proposed GST rationalisation in India, which aims to simplify the tax structure to two slabs of 5 per cent and 18 per cent (eliminating the current 12 per cent and 28 per cent brackets), while introducing a higher 40 per cent rate for sin or luxury goods, is anticipated to significantly boost consumption-related stocks. By effectively reducing taxes on a wide range of mass-market goods and services, this move is expected to enhance price affordability and increase disposable income, particularly in the run-up to the festive season. Consequently, our MF Select choice this time is the ICICI Prudential Bharat Consumption Fund.

Since its inception in April 2019, the fund has consistently demonstrated a strong performance, making it an attractive option for those interested in India's long-term consumption growth. It has achieved an impressive annualised return of approximately 16.85 per cent, showcasing its wealth-creation potential. Over a three-year period, the fund has delivered a robust 16.39 per cent CAGR, outperforming the thematic category average. Its five-year return of about 20.6 per cent CAGR further underscores the portfolio's ability to capitalise on India's increasing discretionary spending and consumption upgrades. Although the past year saw a muted return of -1.30 per cent, the fund has managed volatility better than many ofits peers. From a risk-return perspective, the fund maintains a Sharpe ratio of 0.75, a Sortino ratio of 1.05, and a Standard Deviation of approximately 13.8 per cent, indicating a favourable balance between returns and risk. With a Moderate Beta of 0.92, it tends to be slightly less volatile than the broader market, providing some protection during turbulent periods.

its peers. From a risk-return perspective, the fund maintains a Sharpe ratio of 0.75, a Sortino ratio of 1.05, and a Standard Deviation of approximately 13.8 per cent, indicating a favourable balance between returns and risk. With a Moderate Beta of 0.92, it tends to be slightly less volatile than the broader market, providing some protection during turbulent periods.