MF Select

Reason for recommendation 

This is an open-ended equity scheme, which seeks to generate long-term capital appreciation by investing in small-cap companies. The scheme currently invests around 65 per cent of its corpus in the small-cap companies which suggest that the fund is for aggressive investors. The portfolio of the fund shows that, it invests in a diversified manner and has allocated assets in a very calculated manner. Around 16 per cent of the assets are invested in the financial sector which is the highest allocation towards a single sector whereas scheme also bets on the sectors like FMCG, construction, chemical and engineering and invested the corpus between 12-14 per cent among each of these sectors. 

The major holdings of the fund are in Balaji Amines, Vinati Organics, Kaveri Seeds Company and Graphite India. The Indian Chemical industry is growing leaps and bounds and expected to continue its dominance. National Chemical policy in India is being considered to be tabled for long, which shall enable the chemical industry in India to consolidate for giving thrust to exports and reduce the dependency on imports. With this, Balaji Amines and Vinati Organics are expected to perform better in the upcoming period. Going ahead, growing EAF production and growing demand environment is expected to bode well for Graphite India. Further, the presence of stocks like Sonata Software, Indiabulls Housing Finance strengthens the ability to reap returns. Therefore, we see the fund as a potential BUY for our valued investors.