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.

PGIM India Midcap Opportunities Fund - Direct Plan (Growth)

Reason for recommendation

Change in management has been seen by many investors as a trigger to invest. There are examples in the investment world where the infusion of new management is followed by better returns. Something similar is happening with the funds managed by PGIM India mutual fund, earlier known as DHFL Pramerica Asset Managers. Nine months back, Prudential Global Investment Managers (PGIM) completed the purchase of its previously 50 per cent held joint venture with DHFL. Post the change in management there has been improvement in the performance of the funds managed by them. PGIM India mid-cap opportunity is being one of them. The fund has been at the top of the chart in its category in the last three-month and six-month period. The fund has generated 25 per cent and 14 per cent return in the last six months and three months, respectively. The benchmark (Nifty Mid-Cap 100 – TRI) in the same period has generated negative return. What has helped the fund to perform is better stock selection. Baring a couple of stocks, all the stocks of the fund has changed since its new fund manager, Aniruddha Naha, has taken the charge of the fund. The new portfolio has helped the fund to outperform its peers and benchmark. Going ahead the fund is likely to continue its better performance. It is presently holding best-in-class companies in its portfolio. Companies such as City Union Bank, Tata Global Beverages, Cholamandalam Investment and Finance Company are the top holdings that have remained best in their categories run by good management. This fund belongs to the mid-cap category and hence should be invested with a long-term horizon. It is ideal for investors who are moderate risk-takers.