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 second wave of corona virus has once again made the equity market nervous and put a spoke into the nascent recovery of India’s economy. The entire nation is going through a partial lockdown, which will definitely have repercussions on the demand side of the economy if not the supply side. In such a situation, investing in a fund calls for some deep thought. The best fund in such a situation is one that invests in both large-cap and mid-cap stocks as it will help in stabilising the returns without sacrificing on capital appreciation.
Mirae Asset Emerging Bluechip, which comes under the large-cap and mid-cap category, is one such fund that you can invest in now. It has invested almost 57 per cent of its corpus in large-cap stocks, around 40 per cent in mid-cap stocks and the remaining in small-cap stocks as of end of April 2021. In terms of sector allocation the fund is overweight on financials, healthcare, automobile and energy. Even within these sectors the fund holds shares of leading companies such as ICICI Bank, HDFC Bank, Infosys, TCS and Reliance Industries. These are companies that are best placed to navigate through difficult times and hence can give you better returns.
The fund is well-diversified with 62 stocks and its top five stocks hold only 25.6 per cent of the total portfolio while the top 10 stocks hold 38.63 per cent of the portfolio. The fund has maintained this ratio for a while now and it has helped it to remain a consistent performer – in fact it has been among the top quartile performers in its category. Every year since 2011 the fund has been able to beat its category returns in both rising (2014, 2017, 2020) as well as failing (2011, 2018) markets. This fund is suitable for a moderate risk-taking investor and you can invest a maximum of up to Rs2,500 per month through a systematic investment plan.
