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.
Invesco India Growth Opportunities Fund - Direct Plan (Growth)
Reason for recommendation
Even after a change in its name and category, nothing much has changed for Invesco India Growth Opportunities Fund in the last one and half years. It continues with its better performance. The fund, which was earlier known as Invesco India Growth Fund and was put under the multi-cap category, has now been re-categorized as a large and mid-cap fund. It has continued to beat the category and the benchmark performance in the last one year and a 2-year timeframe. What has helped the fund to outperform is its inclination towards large-cap stocks. Against the mandatory 35 per cent, the fund holds almost 58 per cent in large-cap stocks. In general, the fund has been able to contain its losses during the downturn. For example, in 2018, when the fund's benchmark gave a negative return of -7.24 per cent, the fund contained losses below 1 per cent. This is achieved through the bottom up approach picking up of stocks, with equal stress given to the growth and value themes, both. However, during the bull market, the fund largely lagged behind its category. For example in year 2009 and 2014 overall equity market gained, in both the years, the fund, although generated better returns, was not able to beat its category average returns. Going ahead, the fund is likely to put a good performance on display. By Octoberend, the fund was well-diversified and has 44 stocks. The presence of value stocks, such as ITC, and growth companies, such as HDFC Bank and ICICI Bank, instills confidence in the long term performance of the fund. In terms of sectoral allocation, the fund is overweight on the FMCG and the Healthcare sectors while underweight on the Financial industry compared to its benchmark. It is well suited for conservative investors with lower risk appetite.
