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Fund of Fortnight

Fund of Fortnight

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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.

Mirae Asset Hybrid Equity Fund - Direct Plan (Growth)



Reason for recommendation

Despite some key announcements made by the government, the equity market is failing repeatedly to conquer new highs. The wait to hit new highs seems to be little bit longer now for the equity market. At the same time, we see the debt funds performing better and are generating double digit returns. This may continue for some time, considering the benign interest rate environment. Therefore, it makes sense to invest in funds that have exposure to both equity and debt.

Mirae Asset Hybrid Equity Fund (earlier known as Mirae Asset Prudence Fund), launched in July 2015, is such a fund that has exposure to both equity and debt. At the end of August 2019, the fund had a total corpus of around Rs. 2500 crore, out of which 72 per cent is invested in equity, around 20 per cent is invested in debt and rest is held as cash or cash equivalents. What's good about the fund is most of its equity investment exposure is in large cap stocks. HDFC Bank, ICICI Bank and Reliance Industries are the top 3 holdings under equity portfolio. The fund's large cap exposure will help it overcome the volatility in the market in a better way. Under the debt part, the fund holds 12.77 per cent in the government securities. The fund has been able to perform better in both rising as well as falling market. For example in year 2018, when the category generated negative returns, the fund was able to generate positive returns. Even in 2017 when the market was good, fund had beaten the category average returns. Therefore, the fund is recommended for those conservative investors who want decent return from their investment in a highly volatile market.

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