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 current situation in the equity market is globally unprecedented. There are a lot of uncertainties and the situation remains fluid and very hard to predict in terms of short-term movement. During such times it makes sense to remain invested in large-cap companies as they have more levers to deal with such volatile periods on account of their dominant market share, pricing power and low debt. Moreover, the sharp downfall in the equity market has created a lot of opportunities. Not all the funds will be in a position to derive the benefits of such a fall. Only funds with cash on their books can exploit this opportunity. One such large-cap-dedicated fund that is in a perfect position to reap advantages out of this situation is Axis Bluechip Fund that held 18.33 per cent cash at the end of February 2020. The balance of about 80 per cent has been invested in large-cap stocks. The track record of the fund also puts it in a pole position. The fund has been able to handle both downside and upside in the market with equal ease. It has remained in the top quartile in terms of performance in both falling and rising markets. In 2017, when there was a bullish phase, the fund was able to generate return of 40 per cent. In 2018, which was not too good for the equity market, the fund generated return of 8 per cent. The fund has seen improvement in its performance among its categories after Shreyash Devalkar took over the management of the scheme from November 23, 2016. The fund is well-suited for a conservative investor who is looking to invest for a period of more than three years. However, we advise investors to park their funds in a staggered manner till the present crisis is resolved.