Who says Mutual funds are not predictable?

Research Courtesy  – By Waves Strategy Advisors:  It is a myth in the market that mutual funds are considered as complex investments dependent on their underlying and the fund manager who is  particularly in charge of the scheme. Below is the example which opens up the eyes of the herd and shows a prediction made in 2015 and the results of the same till date.

L&T India Value Growth Fund – weekly chart (Anticipated on 21st October 2015)

L&T anticipated 20160219

L&T India Value Growth Fund – weekly chart (Happened on 20/01/2016)

L&T happened 20160219

L&T India Value Growth Fund is an open ended scheme launched in January 2009. This belongs to a Diversified category as the fund has exposure across Largecap, Midcap and Smallcap. This fund is ranked 1 in Diversified category by Crisil.

 

Portfolio Analysis: As per the sectoral holdings Banking/Finance have been most favored sector for this fund as it is contributing more than 15% to the entire portfolio followed by Manufacturing and Cement Sector. Top Holdings and Sector Allocation for this fund are shown below.

L&T top holdings, sector and returns 20160219

Risk Profile: This fund belongs to the high risk category given complete exposure only to equity. However, by way of SIP the risk can be reduced and also prudent asset allocation across different scheme including debt and balanced fund can provide optimum mix and reduce the risk. Also as we think long term trend for Nifty is on upside this fund offers good opportunity to ride the next wave of up move.

 

Investment Perspective: Small investments can be made in this scheme and once the correction is complete the exposure can be increased to capitalize on the next big move. Parking your fund by way of SIP offers good option for now.

 

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