Diversified Equity Fund – A kick to Volatility!

By Rahul Pithadia: Looking at the amount of uncertainty or the changes in stocks, investments by common individuals have reduced as there is always a fear of capital loss or lower returns.  Under such conditions it is better to switch to diversification as putting all eggs in one basket is the job of a fool.

Diversification is a process of allocation of capital in a way that reduces the risk of exposure in a particular asset class. Here the portfolio contains a good mix of large cap, mid cap and small cap stocks. Here the real challenge lies in finding those funds which are worthy enough to be a part of a wealthy portfolio. As there are a large number of diversified schemes available in this universe which confuses the investors, hence we have come up with the best from this category which is mentioned below:

 

ICICI prudential vallue discovery fund 20151218

ICICI Prudential Value discovery fund is an open ended diversified equity fund, which aims at stock which are available at a discount to their intrinsic value through a process of ‘discovery’ this process is called as Fundamental research. This process involves indentifying companies that are well managed, fundamentally strong and are available at bargained price.

Portfolio Analysis: As per the sectoral holdings Banking/Finance have been most favored sector for this fund as it is contributing 15.22% to the entire portfolio followed by Automotive and Technology Sector. Top Holdings and Sector Allocation for this fund are shown below.
Top Holdings:

top holdings 20151218

Sector Allocation:

Returns 20151218

Returns as on 16th December, 2015

Returns 20151218

Risk Profile: The risk is moderate in this fund as the investment is diversified among various assets. Average returns can be expected from this fund once the corrective phase of the Indian market completes. Investors looking forward for good returns with moderate risk should consider this fund for investments in staggered fashion or through SIP route.

In a nutshell, corrective action in this fund can continue towards 23.6% retracement zone. However investments in staggered fashion is advisable and SIP should turn out to be the best way as it will provide excellent cost averaging opportunities.

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