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
Canara Robeco Bluechip Equity Fund - Direct Plan
Reason for recommendation: The equity market across the world is at present on slippery ground with the emergence of the new variant of the corona virus. This has also put a question mark on the continuation of the current pace of economic recovery. Therefore, it makes sense to invest in large-cap-dedicated funds as they have more levers to manage any economic downturn. In such a scenario, Canara Robeco Bluechip Equity Fund remains one of the best funds from the large-cap category. What favours the fund is its beta of 0.85 which is lower than that of the market i.e. 1 and also is less than the category average of 0.95.
In a volatile market it helps to contain loss in case the market falls further. The fund has one of the best Sortino ratios of 1.18 as against the category average of 0.89 and S & P BSE 100 TRI which is 0.94. If we look at the fund’s one-year rolling returns spread across the period November 2015 to November 2021, only 10 per cent of the times has it given negative returns whereas 36 per cent of the times it generated return between 10 to 20 per cent. In terms of its portfolio, the fund is quite bullish on financial, technology and energy sectors.
It has the highest weightage of 34 per cent in the financial sector. Even in the financial sector it has allocated more towards banking stocks. Given the underperformance of banks to the market in the last one and half years, we believe that they are going to outperform in the future. Therefore, this fund makes more sense in the current market situation. Moreover, investing in a staggered manner would be more beneficial as investors won’t have to worry about catching bottom of the downward move. Therefore, in view of how the overall economy is developing at present the fund seems to have the highest potential to withstand turbulent times.
