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.
ICICI Prudential Large & Mid Cap Fund - Direct Plan
Reason for recommendation-
The Indian market seems to have absorbed and imbibed the war between Russia and Ukraine and appears to have seen its bottom in recent times. Even the selling pressure from FIIs has, in all likelihood, abated and turning positive. The current outperformance of the Indian equity market compared to its global peers captures that. Nonetheless, we are not yet out of the woods and hence we need to be cautiously optimistic. It is for this reason that we are recommending a fund from the large-cap and Mid-Cap category that has the ability to provide stability as well as upside potential. ICICI Prudential Large and Mid-Cap Fund is one such fund that has been performing quite well when compared to its benchmark as well as its category. In the last one year it has generated return of 31.17 per cent compared to 20.87 per cent from its benchmark and 24.66 per cent from its category. The main reason for its performance can be attributed to its beta of more than 1. So, it is likely to generate better returns in a bull market. Nonetheless, it will also fall when the market falls. The portfolio of the fund looks quite strong. It is well-diversified and had invested in 70 stocks at the end of February 2022 with the top 10 stocks contributing around 42 per cent of the overall assets. The top three sectors contribute 51 per cent of the overall portfolio. Besides, the maximum weight given to a single stock is not more than 7 per cent. On the sectoral front, this fund is overweight on financial, technology, communication, automobile and energy sectors, while it is underweight on healthcare, services and capital goods. In terms of stocks, it holds quality names and industry leaders such as Bharti Airtel, ICICI Bank, NTPC and HCL Technologies, among others. Having said that, this fund is one that contributes well while in a rally and can be a good option to accumulate gradually. However, only moderately aggressive to aggressive investors can consider investing in it as the risk undertaken by the fund is at the higher end.
