Funds of Fortnight

MF Select

BNP Paribas Multi Cap Fund - Direct Plan



Reason for recommendation 

The nature of the stock market is such that it is very hard for anyone to predict its future course. Moreover, historically we have seen that different categories of stocks perform differently in different periods. For a common investor, it becomes even harder to analyse cyclicality of the markets and invest accordingly. Therefore in time of uncertainties, it is better to have a multi-cap fund where you will have exposure to companies of different sizes and you will be reasonably diversified with simplicity. This is best suited to the current market situation when markets are choppy with downward bias and nobody is sure where the market is headed.



BNP Paribas Multi-Cap Fund, which was earlier known as BNP Paribas Dividend Yield, is one such multi-cap fund that is suited for a conservative investor. This is because the fund is a multi-cap fund that has 73 per cent of its total assets invested in large-cap stocks against 68 per cent by its category. Large-cap tilt has helped the fund to perform even in a falling market. With the current portfolio, the fund is likely to do better going ahead as its portfolio is highly tilted towards cyclical sectors. At the end of January 2019, cyclicals form 62 per cent of the fund's portfolio. Going ahead, the fund is well-placed to perform better than the market due to the concentration of its portfolio towards company belonging to private banks and IT sector. The fund holds best companies in these sectors that have outperformed till now and are likely to continue their performance. Hence, a conservative investor with an investment horizon of 1-3 years can invest in this fund.




This might not be top ranked fund, however, looking at risk-reward opportunity we recommend this fund.
* Expected one year return is based on the assumption that current holdings remain constant.