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.

Mahindra Manulife Large Cap Pragati Yojana

Reason for recommendation : Investing when the market is at the top is very much a tricky affair. This is especially true when the market is trading at an elevated valuation. Hence, it makes sense to invest in a category that has a lower drawdown or falls relatively less. Historically we have seen that large-cap-dedicated funds have exhibited lower drawdown during the time of market stress. Therefore, it would be advisable to remain invested with the market leader. Mahindra Manu Large-Cap Pragati Yojna, one of the youngest funds in the large-cap category is a good option for investors.

The fund is yet to complete three years and was launched in March 2019. In the last one year the fund has remained one of the best performers in its category and garnered return of 56.44 per cent compared to the category average of 51.82 per cent and benchmark return of 52.84 per cent. One of the good aspects of this fund is that it has performed relatively well during the quarter ending March 2020. While the average fall witnessed by the category was 27 per cent and the benchmark fell by 28 per cent, the fund saw its NAV dropping by 26 per cent.

Even during the months of January and March 2021 when the overall market generated negative return, the fund was able to contain its fall. The fund is pure large-cap as 97 per cent of its corpus is in large-cap stocks compared to 93 per cent by the category average. The fund is overweight on financial, technology and construction while underweight on FMCG, healthcare and metals. At the end of July, the fund had 32 stocks in its portfolio and the top 10 stocks corner 60 per cent of the net assets. The fund is well-suited for a moderate risk-taking investor.