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
A lot has changed for DSP in last one and half year. In May, 2018, BlackRock pulled out of its joint venture and there was a change in the equity investment team as well, with chief investment officer (CIO), S Naganath, quitting the fund house. Soon enough, Anup Maheshwari, another CIO of the company, followed the suit. However, what has not changed about the mutual fund company is the performance of its funds.
DSP Equity is one of such funds, which has continued to perform well over the last few terms. It is categorised in the large and mid cap fund. Over last one year, the fund has been able to beat its category and benchmark by a good margin. What has helped the fund to perform, is its tilt towards the large cap stocks. At the end of September 2019, the fund has allocated 58 per cent of its total assets towards large cap stocks and 34.23 per cent to mid cap ones.
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Going ahead, the fund is likely to continue its performance due to its strong and diversified portfolio. The fund holds best of the financial companies, including HDFC Bank and ICICI Bank. Besides, it also holds Reliance Industries in its top four holdings. As of September 31, 2019, the fund is well diversified with 64 stocks, alongside strong companies. the large number of stocks helps the fund in mitigating any risk, arising due to any problem in any of the company. The fund is well suited for moderate risk taking investors.